NHTC

NHT Global is in a multi-year secular decline dressed up as a value stock. Revenue has fallen every year from $60.0M (FY2021) to $39.8M (FY2025, -7.4% YoY), and FY2025 finally tipped into a net loss of -$882K with a -$1.81M operating loss — the first red ink after four profitable years. The MD&A names the cause plainly: active members dropped to 26,650 from 30,870 (down ~14%), and the company itself flags 'our continuing loss of a significant number of members is adversely affecting our business.' A 73.5% gross margin can't save a shrinking top line when the sales force is eroding.

The balance sheet looks superficially safe — $23.4M equity, no meaningful debt (liabilities/equity 0.64x), current assets $34.2M vs. $13.7M current liabilities — but the cash statement tells the real story. Operating cash flow swung to -$6.00M (down 78% YoY) and cash was cut roughly in half to $6.81M. Then the Feb 2026 subsequent event drained it further: the company bought back the founder Broady family trusts' 2,935,227 shares (25.5% of the company) at $2.00 for ~$5.9M in cash 'from existing cash on hand,' leaving well under $1M of the reported year-end balance behind a business that is still burning. Meanwhile it paid $9.21M in dividends in FY2025 — more than half the entire $15.7M market cap — against negative earnings. That dividend is mathematically unsustainable and, in my view, the most likely thing to be cut.