What changed in this filing

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Item 1. Business

2025-02-18 compared with 2024-02-20 · 265 added, 250 removed, 204 unchanged (72% of the section changed)

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(“Medifast,” the “Company,” “we” or “us”) is the health and wellness company known for its habit-based and coach-guided lifestyle solution, OPTA VIA ® .

The Company has initiated its business transformation by expanding into the medically supported weight loss and sports nutrition markets, reflecting its commitment to providing comprehensive health and wellness solutions to customers as both their needs and the industry evolve .

Medifast has created a well-capitalized business and OPTA VIA has grown into a billion-dollar brand under current leadership.

It has a powerful business model, building a network of more than 41,100 active earning Coaches and impacting more than 3 million customers.

Medifast was recognized in 2023 by Financial Times as one of The Americas' Fastest Growing Companies and in 2022 as one of America's Best Mid-Sized Companies by Forbes.

As a physician-founded company with a 40+ year history, Medifast is a leader in the U.S.

weight management industry.

OPTA VIA's lifestyle plans deliver clinically proven health benefits as well as evidence-based tools, including scientifically developed products and a framework for habit creation reinforced by independent Coaches and community support.

The Company continues to innovate and build upon its scientific and clinical heritage to fulfill its mission of offering Lifelong Transformation, One Healthy Habit at a Time ® .

OPTA VIA's holistic lifestyle solution is built around four key components:

The Company is currently executing a comprehensive business transformation that will enable it to succeed in an environment that has been fundamentally impacted by rapid acceptance of GLP-1 weight loss medications.

We are a well-capitalized business with strong and effective leadership that has grown its lifestyle brand, OPTA VIA, into a significant health and wellness brand.

We have a powerful business model, building a network of approximately 27,100 active earning coaches and impacting more than 3 million lives.

Backed by more than 40 years of experience, clinically proven plans, innovative products, and a powerful integrated coach model, Medifast stands at the forefront of evidence-based wellness solutions.

Our business model is differentiated and unique, a scalable coach-based approach that drives both program effectiveness and company growth.

With the integration of access to clinicians through our collaboration with LifeMD, Inc.

LFMD) (“LifeMD”), we provide our customers access to GLP-1 weight loss medications, when clinically appropriate.

Medifast offers a simple, yet comprehensive approach to achieving optimal health and wellbeing.

Our lifestyle program, OPTA VIA, empowers people to make lasting changes.

Through the support of our independent OPTA VIA coaches, about 90% of whom were customers first, our customers are guided through every step of their wellness journey.

OPTA VIA's lifestyle plans deliver proven health benefits as well as evidence-based tools, including scientifically developed products and a framework for habit creation reinforced by independent coaches and community support.

We continue to innovate and build upon our scientific and clinical heritage to fulfill our mission of offering Lifelong Transformation, Making a Healthy Lifestyle Second Nature™.

OPTA VIA coaches are people who are navigating weight loss at different moments in life, providing unparalleled coaching support along with community, nutrition, and healthy habits.

In a world where health and wellbeing are often a difficult and solitary journey, OPTA VIA provides intensely personalized support to people who want to transform their health.

This holistic approach empowers people to master their weight loss journey through each stage of life and gives them the freedom to do it on their terms.

The lifestyle solution is designed for real life and built around four key components:

• Independent Coaches:

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• OPTA VIA Community:

A Community of like-hearted people providing each other with real-time connection and support.

A community of like-minded people providing each other with real-time connection and support.

• The Habits of Health ® Transformational System:

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Clinically proven plans and scientifically developed products, backed by dietitians, scientists and physicians.

OPTA VIA's collaboration with LifeMD, Inc.

LFMD) (“LifeMD”) offers access to a new resource for eligible customers:

• Clinicians as Partners:

Through a collaboration with the national virtual primary care provider LifeMD, OPTA VIA customers have access to board-certified affiliated clinicians and medication, such as GLP-1s, that support treatment plans for obesity and other health conditions.

We help customers achieve their health goals through a network of approximately 41,100 active earning independent OPTA VIA Coaches, about 90% of whom were customers first, and have impacted more than 3 million lives to date.

OPTA VIA Coaches introduce customers to a set of healthy habits, in most cases starting with the habit of healthy eating, and offer exclusive OPTA VIA-branded products, including Fuelings as well as OPTA VIA ACTIVE, a new line of essential amino acid supplements and protein powders.

Fuelings are nutrient-dense, portion-controlled, nutritionally interchangeable and simple to use.

They are formulated with high-quality ingredients and contain probiotic BC 30 ™ cultures, which help support digestive health, as part of a balanced diet and healthy lifestyle, vitamins and minerals, as well as other nutrients essential for good health.

Our products are used as tools and support the process of integrating healthy habits into our customers' daily life.

The OPTA VIA Coaching Model is customer-centric and boasts an energized health and wellness community.

It promotes holistic health and wellness and positions healthy weight as a catalyst to greater lifestyle changes.

OPTA VIA Coaches provide personalized support to customers and motivate them by sharing their passion for healthy living and lifestyle transformation.

The entrepreneurial spirit of our OPTA VIA Coaches is another key to our success, as they create a continuous cycle of growth, activating new customers, many of whom go on to become OPTA VIA Coaches.

We offer economic incentives designed to support each OPTA VIA Coach’s long-term success, which we believe plays an important role in their financial wellness,

providing the opportunity to improve their finances while changing the health trajectory of families, communities and generations.

OPTA VIA Coaches are independent contractors, not employees, who support customers and market our products and services primarily through word of mouth, email and via social media channels such as Facebook, Instagram, X and video conferencing platforms.

As entrepreneurs, OPTA VIA Coaches market our products to friends, family and other acquaintances.

OPTA VIA products are shipped directly to OPTA VIA customers who are working with an OPTA VIA Coach.

To ensure that Medifast continues to thrive as a health and wellness business in the rapidly evolving weight-loss market, we have developed distinct coach-supported program offerings tailored to meet the unique needs of three specific customer categories on their health and wellness journeys:

Those who have never used medications and want to use coach-supported habit-based programs as the core of their weight loss journey;

Individuals using GLP-1 medications as a core element of their weight loss program;

People looking to manage weight loss and improved health when they come off GLP-1 medications for whatever reason, including cost, side effects, or any other cause.

For each of these customer categories, we are taking an intentional and methodical approach to building out our offerings to ensure that we can provide compelling products and services to new, former, and current coaches and clients, regardless of where they are on their personal health and wellness journeys.

Usage of GLP-1 medications continue to accelerate, with research commissioned by Medifast suggesting that the GLP-1 support market alone could be worth $50 billion or more by 2030.

1 For audiences looking for a GLP-1 based solution, we have built a collaboration with national virtual primary care provider, LifeMD.

Eligible OPTA VIA customers have access to board-certified affiliated clinicians and medications, where appropriate, such as GLP-1 medications, that support treatment plans for obesity.

We introduced a specific product line, OPTA VIA ASCEND™, to address these customer needs as discussed below.

As of the fourth quarter of 2024, more than 95% of OPTA VIA coach leaders have completed specialized GLP-1 based training, and over 40% of active coaches are supporting at least one client on a GLP-1 medication.

With the medication having been shown to be highly effective in conjunction with lifestyle changes, we believe there is strong compatibility with our experience of helping people achieve change through habit-based systems.

For those looking to manage weight loss after discontinuing medication usage, we have developed a specific product line, OPTA VIA ASCEND, to address these customer nutritional needs as discussed below.

Recent research showed that about one-third of users quit taking the medication after six months, and that this can rise to half or more after a year.

2 Furthermore, research also shows that two-thirds of weight lost on GLP-1 medications is typically regained within 12 months of stopping treatment, with cardiometabolic benefits often reversing as well.

Finding new customers and reactivating former customers who do not wish to use medications remains an important area of focus for our business.

Our OPTA VIA Fuelings and OPTA VIA ACTIVE ® product line address the needs of these customers as discussed below.

We also continue to work on enhancing our digital tools and improving the customer experience to help us achieve our goals in this area.

Regardless of need state, our integrated coach-supported, lifestyle-based approach helps customers achieve their health goals through a network of approximately 27,100 active earning independent OPTA VIA coaches, about 90% of whom were customers first.

OPTA VIA coaches introduce customers to a set of healthy habits, in most cases starting with the habit of healthy eating, and offer exclusive OPTA VIA-branded products.

OPTA VIA products and plans are one component that support the Company’s mission, and our portfolio of products help make it easier for customers to create healthy, sustainable habits in their lives.

In December 2024, Medifast introduced two science-backed nutrition plans designed specifically for people on GLP-1 medications and people seeking weight management:

the GLP-1 Nutrition Support Plan and the Optimization Plan.

Both plans feature OPTA VIA ASCEND, a new product line of high-protein, fiber-rich mini meals as well as a daily nutrient pack.

The mini meals support muscle, digestive health and long-term wellness, filling a critical gap in the weight management market.

We believe our coach-based model is scalable and drives both customer success and growth, and we continue to work diligently to deliver growth and competitive advantage.

Part of this work included the 2024 launch of new company-led marketing campaigns to drive brand awareness and to facilitate customer acquisition.

With this being a competitive market, we’re finetuning our strategy in this area to yield the highest possible return on our investment.

In all cases, the OPTA VIA coaching model is heavily focused on the needs of the customer and helps put each customer into supportive and energized health and wellness communities that share their challenges and goals.

OPTA VIA coaches provide highly tailored and personalized support to customers and motivate them by sharing their passion for healthy living and lifestyle transformation.

OPTA VIA coaches are central to everything that we do, helping to foster a continuous cycle of growth, and attracting and activating new customers, many of whom go on to become OPTA VIA coaches.

We offer economic incentives designed to support each OPTA VIA coach’s long-term success, which we believe plays an important role in their financial wellness, providing the opportunity to improve their finances while changing the health trajectory of families, communities and generations.

1 Based on research commissioned by Medifast utilizing publicly available expectations of the number of GLP-1 users and internal spend per customer.

2 Real-world persistence and adherence to glucagon-like peptide-1 receptor agonists among obese commercially insured adults without diabetes.

J Manag Care Spec Pharm.

GLP-1 Receptor Agonist Discontinuation Among Patients With Obesity and/or Type 2 Diabetes.

JAMA Netw Open.

Blue Health Intelligence.

Real-World Trends in GLP-1 Treatment Persistence and Prescribing for Weight Management.

Discontinuation and reinitiation of GLP-1 Receptor Agonists among US adults with overweight or obesity.

PRE-PRINT medRxiv July 2024.

3 Wilding JPH, Batterham RL, Davies M, et al.

Weight regain and cardiometabolic effects after withdrawal of semaglutide:

The STEP 1 trial extension.

Diabetes, obesity & metabolism.

4 OPTA VIA makes no guarantee of financial success.

Success with OPTA VIA results from successful sales efforts, which require hard work, diligence, skill, persistence, competence and leadership.

Please see the OPTA VIA Income Disclosure Statement (http://bit.ly/ids OPTA VIA) for statistics on actual earnings of coaches.

OPTA VIA coaches are independent contractors, not employees, who support customers and market our products and services primarily through word of mouth, email, and via social media channels such as Facebook, Instagram, X (formerly known as Twitter), and video conferencing platforms.

As independent contractors, OPTA VIA coaches market our products to friends, family, and other people in their communities.

OPTA VIA products are shipped directly to OPTA VIA customers.

OPTA VIA coaches do not handle or deliver merchandise to customers.

This arrangement frees our OPTA VIA coaches from having to manage inventory and allows them to maintain an arms-length transactional relationship while focusing their attention on support and encouragement.

We believe our coach-based model is scalable and drives both customer success and growth.

We expect our continued investment in fostering a robust community around our OPTA VIA brand and our OPTA VIA Coaching Model will continue to drive a sustainable, repeatable business rhythm.

Our operations are conducted through our wholly owned subsidiaries, Jason Pharmaceuticals, Inc., OPTA VIA LLC, Jason Enterprises, Inc., Jason Properties, LLC, Seven Crondall Associates, LLC, Corporate Events, Inc., OPTA VIA (Hong Kong) Limited, OPTA VIA (Singapore) PTE.

LTD and OPTA VIA Health Consultation (Shanghai) Co., Ltd.

Competition and Macroeconomic Conditions

Certain global economic challenges including the impact of inflation and adverse labor market conditions have caused macroeconomic uncertainty and volatility in markets where we, our suppliers and our OPTA VIA Coaches operate.

We are exposed to market risks from changes in commodity or other raw material prices.

Rising inflation could impact our cost structure and put pressure on consumer spending.

The Company’s integrated approach that combines lifestyle coaching, community support, and access to medical solutions through LifeMD, positions the business to meet the needs of a broader spectrum of customers.

By focusing on innovative products, enhanced customer experiences, and effective marketing strategies, Medifast has created and is continuing to enhance a differentiated and compelling offer.

Its financial strength, operational flexibility, and customer-centric philosophy equip the Company to navigate the changing weight loss market and drive sustainable growth.

Our operations are conducted through our wholly owned subsidiaries, Jason Pharmaceuticals, Inc., OPTA VIA LLC, Jason Enterprises, Inc., Jason Properties, LLC, OPTA VIA (Hong Kong) Limited, and OPTA VIA Health Consultation (Shanghai) Co., Ltd.

Macroeconomic Conditions

Certain global economic challenges, including the impact of inflation, have caused macroeconomic uncertainty and volatility in markets where we, our suppliers, and our OPTA VIA coaches operate.

Like many product-focused companies, we are exposed to market risks from changes in commodity or other raw material prices.

An inflationary economy could impact our cost structure and put pressure on consumer spending.

Increases in commodity prices or food costs, including as a result of inflation, could affect the global and U.S.

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Our variable cost structure can be utilized to adapt to changing market conditions with potential actions including adjustments to our manufacturing, distribution, and customer support infrastructure.

In addition, adverse labor market conditions could constrain our ability to manufacture and deliver products or increase the associated costs.

We continue to take steps to attract, train, and develop personnel.

As a response, we may periodically take incremental pricing actions to offset supply chain costs, inflationary pressures, and adverse labor market conditions.

In response to changing macroeconomic conditions, the Company may take further actions that alter its business operations as may be required by governmental authorities, or that are determined to be in the best interests of employees, OPTA VIA Coaches and customers.

As a response, we may periodically take incremental pricing actions to offset supply chain costs and inflationary pressures.

These macroeconomic uncertainties make it challenging for our management to estimate our future business performance.

However, we intend to continue to actively monitor the impact of these developments on our business and will update our practices accordingly.

The weight loss industry is very competitive and encompasses a diverse array of weight loss products and programs.

The weight loss industry is very competitive and encompasses a multitude of weight loss products and programs.

These include a wide variety of commercial weight loss programs, pharmaceutical products, surgical interventions, books, self-help diets, dietary meal replacements, and appetite suppressants as well as digital tools, app-based health and wellness monitoring solutions, and wearable trackers.

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Recently, it became clear that medical weight loss solutions, such as GLP-1 medications, have become an increasingly key component of the overall health and wellness ecosystem, and the recent surging awareness and popularity of these weight loss medications serve as another major competitor, as these products have prompted a huge change in the way that consumers think about weight loss and lifestyle modification solutions in general.

We recognize that these weight loss medications have attracted significant attention from the market and pose a threat to our interactions with our customer base.

We recognize that these weight loss medications have attracted significant attention from the market and pose a threat to our interactions with our traditional customer base.

Importantly, the efficacy claims of GLP-1 medications for weight loss are based specifically on their incorporation of lifestyle changes that include a reduced calorie diet and increased physical activity.

As a result, under

1 OPTA VIA makes no guarantee of financial success.

Success with OPTA VIA results from successful sales efforts, which require hard work, diligence, skill, persistence, competence and leadership.

Please see the OPTA VIA Income Disclosure Statement (http://bit.ly/ids OPTA VIA) for statistics on actual earnings of Coaches.

Medifast’s offering, weight loss medications become one important element in an overall tailored lifestyle plan that also includes Coaching, community support, nutritionally balanced meals, and exercise.

Medifast’s identified publicly traded peers and competitors in the general health and wellness diet industry include USANA Health Sciences Inc., WW International, Inc.

(formerly Weight Watchers International, Inc.), Herbalife Nutrition Ltd., The Simply Good Foods Co., The Hain Celestial Group, Inc., and BellRing Brands, Inc.

As a result, under Medifast’s OPTA VIA offering, weight loss medications are another important element in overall tailored lifestyle plans that also include coaching, community support, nutritionally balanced meals, and exercise.

We believe we have a competitive advantage over traditional diet companies.

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• Promotes lifelong habit development supported by a proprietary integrated approach to behavior change, the Habits of Health Transformational System.

• Encompasses a vibrant health and wellness community of hundreds of thousands of others.

• Provides customers with access to board-certified affiliated clinicians and weight loss medications, such as GLP-1s, that support treatment plans for obesity and other related health conditions through a collaboration with national virtual primary care provider, LifeMD.

• Encompasses a vibrant health and wellness community.

We also compete with other direct-selling organizations, some of which have a longer operating history and greater visibility, name recognition and financial resources than we do.

We also believe we have advantages over traditional direct selling companies:

• OPTA VIA’s innovative model is customer-centric and has one sales price for both OPTA VIA Coaches and customers.

• OPTA VIA’s innovative model is customer-centric, with one sales price for both OPTA VIA coaches and customers.

There is no tiered pricing.

• OPTA VIA boasts a health and wellness community, where about 90% of OPTA VIA Coaches come from the customer base and have been in their customers’ shoes.

They promote a holistic health and wellness program and are not focused solely on product sales.

• OPTA VIA boasts a health and wellness community, which promotes a holistic health and wellness program and is not focused solely on product sales.

• OPTA VIA offers a differentiated direct-to-consumer model, with 100% of products shipped directly to customers.

• The field promotes a unified Habits of Health training system that aligns its leaders around a common mission of Lifelong Transformation, One Healthy Habit at a Time.

• The field promotes a unified Habits of Health training system that aligns its leaders around a common mission of Lifelong Transformation, Making a Healthy Lifestyle Second Nature.

We believe our scientific and clinical heritage combined with our commitment to evaluating programs, plans, and products through clinical research are primary differentiators that allow us to compete in these markets.

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Medifast has perfected our model over the last 40+ years, with habits, coaches, and community at the core, and we will continue to innovate as the industry evolves.

Recent Initiatives

In response to the competitive landscape, in which acquiring customers has become more difficult due to competitive pressures from GLP-1 medications being sought after by our potential customers, the Company is focusing on a number of new initiatives to aid in increasing revenue and profit growth in the years ahead.

Some of these started in 2023 with others expected to begin in 2024.

These initiatives are expected to be funded internally by the Company’s existing cash position, capital previously utilized for dividends, as well as savings from the Company’s expense reduction efforts.

At the core of the Company’s initiatives is its desire to grow its business by broadening its customer base through increased brand visibility and recognition, and by significantly expanding its total addressable market.

Areas of investment anticipated for the year include instituting a new marketing campaign and upgrading customers’ digital experience to increase brand awareness and drive customer adoption, as well as cultivating new customers through the Company’s collaboration with LifeMD.

In September of 2023, the Company entered the $30 billion sports nutrition market, launching its OPTA VIA ACTIVE line of products.

The initial products consist of essential amino acids and whey protein powders, to aid in supporting healthy muscle in conjunction with both exercise and everyday activities.

In the second half of 2023, the Company conducted pilot programs with several telehealth companies, focused on providing personalized care to support holistic health rather than weight loss alone.

In December of 2023, the Company entered into a collaboration agreement with LifeMD, a leading provider of virtual primary care.

In January of 2024, the Company expanded into the medically supported weight loss market by operationalizing the collaboration with the goal of creating a comprehensive and seamless solution for customers who desire to use medications and OPTA VIA’s lifestyle enhancement program.

This collaboration brings together OPTA VIA’s personalized habit-based, coach-guided approach with medical expertise from board-certified affiliated LifeMD clinicians and access to weight loss medications, including GLP-1s.

GLP-1 medications that meet the FDA weight loss mandate are prescribed along with the recommendation to make lifestyle modifications, such as through a structured program like OPTA VIA, that encourages a reduced-calorie diet and increased physical activity.

Our research shows that most of those who are interested in weight loss medication are also looking for support beyond a prescription, including clarity on how to incorporate healthy eating and exercise into their lifestyles while using these medical solutions.

While medically supported weight loss can be effective, long-term success is dependent on the nutrition and lifestyle changes individuals make in combination with taking medication.

Additionally, loss of lean muscle mass and maintaining proper nutrition while on a reduced-calorie diet are two main areas of concern for patients on medically supported weight loss, with evidence suggesting that the loss of lean body mass can range from 20% to 50% of total weight loss.

Late in the fourth quarter, the Company introduced two new bundles, the OPTA VIA Nutrition Kit for Medically Supported Weight Loss and the OPTA VIA Muscle Health Kit for Medically Supported Weight Loss.

These new bundles include OPTA VIA ACTIVE products, which enable the Company to fill out its product line, making for more comprehensive offerings for those seeking medically-supported weight loss solutions with lifestyle modifications, and offer the opportunity to extend the lifetime value of all OPTA VIA customers, as they transition their lifestyles for sustainable improvement.

In connection with this collaboration the Company purchased 1,224,425 shares of LifeMD’s common stock for $10.0 million and has committed to invest up to an additional $10.0 million to support the collaboration (comprised of $5.0 million paid in December of 2023 and two $2.5 million payments expected in 2024), for enhancements to LifeMD’s platform, operations and supporting infrastructure to bring together customers, coaches, and clinicians, offering personalized care and support.

In addition, the Company plans to undertake a significant program to market and build its brand at the corporate level via a comprehensive Company-led marketing campaign, by utilizing digital advertising and other methods, to aid in bringing in new customers.

In conjunction with these growth initiatives, The Company discontinued its dividend payments effective December 7, 2023, in order to redirect capital to these growth initiatives as it seeks to deliver a superior return to stockholders in the years ahead.

It is expected that much of the funds previously earmarked for dividends will be utilized to grow the business through marketing and technology initiatives that are expected to increase customer acquisition and the lifetime value of customers.

2024 will likely be one of the most pivotal years in Medifast’s history, as we adjust to the paradigm change in the weight loss industry and aggressively execute on bold initiatives to grow our business.

We believe by significantly broadening our customer acquisition activities, through launching our new marketing campaign, upgrading customers' digital experience, and leaning into the medically supported weight loss market through our collaboration with LifeMD, we will be positioned for future success.

The moves we are making don’t come without risks, but we believe a greater risk is not taking action in a rapidly evolving marketplace.

These changes mean that 2024 will be an investment year, one in which we lay the foundation for this future growth.

As such, we don’t expect to see a significant impact, on our operations or revenue, from these actions until late in the year and into 2025 and beyond.

And while we enter 2024 facing similar challenges to 2023, we do expect to exit 2024 well-equipped to seize the opportunities available for growth in the years ahead, supported by a strong balance sheet with no debt and a solid plan for capitalizing on the opportunities we are addressing.

Health & Wellness Consumers

We develop and market products for consumers who want to lose weight and adopt a holistic approach to overall health and wellness.

In the U.S., more than two-thirds of the adult population fall within the overweight or obese categories and more than 30% were obese in 2022 2 .

2 CDC BRFSS Prevalence & Trends Data 2022

According to a proprietary analysis, the addressable market for weight loss is large and growing.

It’s estimated to be worth approximately $20 billion today with a growth rate of approximately 6% per annum 3 .

Obesity is defined as a Body Mass Index (“BMI”) of 30 kg/m 2 or greater, whereas overweight is defined as a BMI ranging between 25 and 29.9 kg/m 2 .

Nearly three-quarters of U.S.

adults are classified as overweight or obese, and between August 2021 and August 2023 more than 40% were classified as obese 5 .

According to a proprietary analysis, the addressable market for weight loss is large and growing, estimated to be worth over $30 billion 6 .

Additionally, roughly 75% of the U.S.

population above 18 wants to lose weight and is open to dieting, and approximately 70% of overweight/obese population considers paid meal plans effective 4 .

population above the age of 18 wants to lose weight and is open to dieting, and approximately 70% of the overweight/obese population considers paid meal plans effective 7 .

The total potential pool of OPTA VIA customers is sizable;

there are about 200 million people in the United States looking to lose weight and willing to consider dieting 8 .

Additionally, in 2023, Medifast entered the $30 billion sports nutrition market and the medically supported weight loss market, which is expected to reach up to $100 billion by 2030 6 .

We offer customers a radically different approach to health, with weight loss and weight management serving as a catalyst for an overall improvement in health, confidence, vitality and general well-being.

We offer customers an approach to health that is designed for real life, with weight loss and weight management serving as a catalyst for an overall improvement in health, confidence, vitality and general well-being.

Consumer Motivation

Our core customers are highly motivated to adopt a healthy lifestyle that is transformative and sustainable.

Many have tried weight loss programs previously but have been unsuccessful at maintaining a healthy weight and embracing healthy habits for the long-term.

Many have tried weight loss programs previously but have been unsuccessful at managing a healthy weight and embracing healthy habits for the long-term.

Lifestyle issues our customers often seek to address and resolve include:

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• mental, emotional and psychological limitations caused by being at an unhealthy weight;

5 Three-Quarters of U.S.

Adults are Now Overweight or Obese.

New York Times.

November 2024.;

Obesity and Severe Obseity Prevalence in Adults:

United States, August 2021 - August 2023.

NCHS Data Brief No.

September 2024.

Weight Loss Market:

2024 Status Report & Forecast.

Marketdata LLC.

7 Consumer and OPTA VIA Customer surveys.

8 Consumer and OPTA VIA Customer surveys.

• triggers that cause chronic “emotional eating” or “comfort eating”;

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• the need for a community of like-minded people for support to achieve their goals.

Experts agree that lifestyle change remains foundational to long-term health and wellbeing, even for those utilizing weight loss medications.

In fact, independent research commissioned by Medifast revealed 96% of people recognized that lifestyle changes are needed for weight loss and maintenance, yet only 17% are confident they can manage on their own.

Experts agree that lifestyle changes remain foundational to long-term health and wellbeing, even for those utilizing weight loss medications.

In fact, independent research commissioned by Medifast revealed 96% of people recognized that lifestyle changes are needed for weight loss and management, yet only 17% are confident they can manage on their own.

Findings also showed most individuals interested in weight loss medications are looking for support beyond prescriptions, including clarity on how to incorporate components of healthy living, such as proper nutrition and exercise, into their lifestyles while utilizing these medical solutions 9 .

Obesity is defined as a Body Mass Index (“BMI”) of 30 kg/m 2 or greater, whereas overweight is defined as a BMI ranging between 25 and 29.9 kg/m 2 .

In the U.S., more than two-thirds of the adult population fall within the overweight or obese categories and more than 30% were obese in 2022 8 .

In 2022, only the District of Columbia had an obesity rate that was less than 25% and forty-one states had an adult obesity rate of 30% or higher 9 .

Direct Sellers

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We support customers through independent OPTA VIA coaches, about 90% of whom were customers first.

3 Internal estimate based on March 2020 McKinsey study, updated for public & syndicated information where available

4 Consumer and OPTA VIA Customer surveys, April 2023

5 Consumer and OPTA VIA Customer surveys, April 2023

6 Terence Flynn, Framing the Mounjaro bull case in diabesity, Morgan Stanley Research, September 14, 2023

Independent IPSOS research commissioned by Medifast, June 2023

8 CDC BRFSS Prevalence & Trends Data 2022

9 CDC Adult Obesity Prevalence Maps, September 21, 2023

Our competitive advantages:

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• the opportunity to complement other business pursuits.

market continues to represent significant potential for growth given the high percentage of overweight or clinically obese adults, more than two-thirds of the adult population fall within the overweight or obese categories and more than 30% were obese in 2022 10 .

market continues to represent significant potential for growth given the high percentage of overweight or clinically obese adults, where nearly three-quarters of U.S.

adults are classified as overweight or obese, and between August 2021 and August 2023 more than 40% were classified as obese 10 .

Industry growth is also being driven by growing consumer awareness and increasing demand for health and wellness products.

The intensified interest in physical fitness, fitness center membership, increased public awareness and incidences of chronic diseases such as type 2 diabetes, heart disease, certain types of cancer, stroke, arthritis, sleep apnea, and depression have increased demand for health and wellness products.

With its recent expansion into medically supported weight loss, Medifast can support even more customers on their health and wellness journeys.

Additionally, the Company also tripled its addressable market by entering the sports nutrition category and is fostering an engaged U.S.

Hispanic Coach Community within the OPTA VIA ecosystem.

OPTA VIA Coaches are focusing on word of mouth and social media marketing toward increasingly younger demographics, reaching out to important and increasingly diverse communities of health and wellness consumers, and identifying and marketing to consumers who are in varying stages of optimal well-being.

In addition, the Company plans to invest in technology and growth initiatives intended to improve customer acquisition and customer experience, including a new marketing campaign designed to increase brand awareness and drive customer adoption.

We have seen advancement within our current business model, but know there are new initiatives, markets, and communities where we have opportunities for growth.

With this in mind, we will continue to invest in important growth initiatives, particularly as we explore the ways in which we can expand the markets we serve and deliver a high-quality experience for more customers.

As we previously disclosed, global expansion is an important component of our long-term growth strategy and our mission of offering the world Lifelong Transformation, One Healthy Habit at a Time.

In July 2019, we entered into the Asia Pacific markets of Hong Kong and Singapore.

As of June 2023, as part of the Company’s Fuel for the Future program, the Company ceased operations in these markets in order to optimize the Company’s spending and investments to prepare for and catalyze sustainable future domestic growth.

This decision was made for the Company to better prioritize resources that were previously dedicated to the Asia Pacific markets, in order to support initiatives that the Company anticipates will have a greater impact on revenues and profitability.

This includes investing in technology and digital capabilities as well as rolling out product offerings that are complementary to existing programs, entering new areas such as sports nutrition and medically supported weight loss, and bringing OPTA VIA to new customer demographics domestically which should all aid in considerably expanding the

10 CDC BRFSS Prevalence & Trends Data 2022

Company’s total addressable market.

We plan to continue to monitor and look for opportunities to expand into other geographic markets in the future.

The Company’s 2023 OPTA VIA Convention offered a Coach-led educational session in Spanish for the third straight year.

To support our growing Hispanic Coach community, our customer support call-center network has a global footprint with infrastructure providing multilingual support from the United States, Guatemala, and Colombia.

This sets the groundwork for both our expansion into other Spanish-speaking communities and our aspirations of eventually developing other markets around the world.

We can clearly see the growth potential, and expansion will be a foundational aspect of our long-term growth strategy for many years to come, as we look to further our impact and advance the global health movement.

With its recent expansion into medically supported weight loss through its collaboration with LifeMD, Medifast can support even more customers on their health and wellness journeys.

9 Independent IPSOS research commissioned by Medifast.

10 New York Times, November 2024, Three-Quarters of U.S.

Adults are Now Overweight or Obese;

NCHS Data Brief No.

508, September 2024, Obesity and Severe Obseity Prevalence in Adults:

United States, August 2021 - August 2023

OPTA VIA coaches are focused on word of mouth and social media marketing toward increasingly younger demographics, reaching out to important and increasingly diverse communities of health and wellness consumers, and identifying and marketing to consumers who are in varying stages of optimal well-being.

In addition, the Company is investing in technology and growth initiatives intended to improve customer acquisition and customer experience.

In addition to our collaboration with LifeMD and new program introductions, we know there are new initiatives, markets, and communities where we have opportunities for growth in the U.S.

With this in mind, we will continue to invest in important growth initiatives, particularly as we explore the ways in which we can expand our business in domestic markets we serve and deliver a high-quality experience for more customers.

Our model, programs, and products resonate with broad swathes of consumers regardless of geography or demographic.

As such, we will continue working in collaboration with coaches across all key markets to reach and acquire new customers, as well as reactivate lapsed customers, as we look to further our impact and advance the global health movement.

Products and Programs

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the results suggested that speaking with their OPTA VIA coach more often may help customers lose up to twice as much weight.

Our clinically proven plans and our scientifically designed products were developed by physicians, dietitians, and have impacted more than 3 million lives and been recommended by thousands of healthcare providers.

11 In 2025, we expect to initiate studies evaluating the outcomes for customers using OPTA VIA programs alongside GLP-1 medications as well as those looking for help in long-term weight management, while also focusing on areas such as lean muscle retention.

Our clinically proven plans and our scientifically designed products were developed by physicians and dietitians, and have impacted more than 3 million lives and been recommended by thousands of healthcare providers.

We work closely with our cross-disciplinary Scientific Advisory Board comprised of physicians and scientists who help guide and provide valuable input into the development of our comprehensive portfolio of offerings.

Our products are individually portioned, calorie and carbohydrate-controlled meal replacements that share a similar nutritional “footprint” provide a balance of protein and good carbohydrates, including fiber, and are fortified with vitamins, minerals and probiotics.

These products are scientifically designed to deliver proper nutrition at every stage of a person’s health journey toward a sustainable, healthy lifestyle.

Our OPTA VIA coaching model offers the personal support of an OPTA VIA coach, who is often a person who has achieved success with OPTA VIA and has turned their success into a business opportunity.

The majority of our OPTA VIA Coaches began as customers and became OPTA VIA Coaches for a number of reasons, including to pay it forward and help others through their transformation journey.

COACH SUPPORT

• OPTA VIA Coach Business Kit .

Coaches are required to purchase a business kit to join our network.

The kits provide new OPTA VIA Coaches with business essentials to successfully start their independent business, including plan and product information and 12 months of access to a personalized OPTA VIA replicated website.

The majority of our OPTA VIA coaches began as customers and became OPTA VIA coaches for a number of reasons, including to pay it forward and help others through their own transformation journey.

• OPTA VIA Fuelings .

OPTA VIA Fuelings contain 24 vitamins and minerals, high quality, complete protein, and no colors, flavors or sweeteners from artificial sources.

Each OPTA VIA Fueling is scientifically formulated with the right balance of carbohydrates, protein, and fat which help promote a gentle, but efficient fat-burning state when on one of our Optimal Weight Plans.

Our Fuelings contain high-quality protein which helps our customers retain lean muscle mass and contain the patented probiotic BC30™ to support digestive health as part of a balanced diet and healthy lifestyle.

Our OPTA VIA Coaches market OPTA VIA Fuelings primarily through clinically proven Optimal Weight Plans.

Each OPTA VIA Fueling is scientifically formulated with a proper balance of carbohydrates, protein, and fat which help promote a gentle, but efficient fat-burning state when on one of our clinically proven Optimal Weight Plans.

Customers purchase kits tailored to their individual needs on the advice and guidance of their OPTA VIA coach.

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OPTA VIA Essential Amino Acid (EAAs) Blend and OPTA VIA ACTIVE Whey Protein are designed to help new and existing customers of all fitness levels optimize their motion habits.

Led by the Company’s team of researchers, food scientists, nutritionists, and other scientific experts, OPTA VIA ACTIVE Essential Amino Acid (EAAs) Blend and OPTA VIA ACTIVE Whey Protein are designed to address age-related muscle mass decline and support overall muscle health.

Formulated to work with or without OPTA VIA nutrition plans and guided by Coach support, OPTA VIA ACTIVE is backed by science, made with no colors, flavors or sweeteners from artificial

The Company’s team of researchers, food scientists, nutritionists, and other scientific experts, led the development of OPTA VIA ACTIVE EAA Blend and OPTA VIA ACTIVE Whey Protein, which are designed to address age-related muscle mass decline and support overall muscle health.

Formulated to work with or without OPTA VIA nutrition plans, and guided by coach support, OPTA VIA ACTIVE is backed by science, made with no colors, flavors or sweeteners from artificial sources and is Informed Sport certified, a global standard in sports nutrition quality control that ensures its certified products contain no banned substances.

• OPTA VIA ASCEND:

OPTA VIA ASCEND mini meals deliver targeted nutrition that gives customers’ body what they need to succeed — whether losing weight on a GLP-1 medication or in weight management mode.

Each mini meal is packed with 20 grams or more of high-quality protein to help retain lean muscle mass, 5–10 grams of fiber to promote digestive health and key nutrients like calcium to support bone health and muscle function.

From sweet to crunchy to hearty, all mini meals are scientifically formulated with macro and micronutrients to help preserve muscle, support digestive health and provide targeted nutrition and are ready to grab, shake, or heat.

The line also includes a

11 Based on the results of a 16-week clinical study, those who participated in at least 75% of their 23 assigned OPTA VIA coaching calls lost 15.2 lbs.

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for those participating in fewer calls.

sources and is Informed Sport certified, a global standard in sports nutrition quality control that ensures its certified products contain no banned substances.

LIFESTYLE PLANS & BUNDLES

Our Optimal Weight plans help customers enter a gentle, but efficient fat-burning state.

Daily Nutrients Pack with multivitamin & minerals and omega-3 fatty acids supplements to support whole body health and fill nutrition gaps.

Lifestyle Plans

Customers’ success is enhanced by the personal attention, accountability, education, advice, and motivation they receive from our OPTA VIA coaches.

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We offer customers incentives to join the OPTA VIA community, including access to the corporate “Nutrition Support” team made up of subject matter experts that provide assistance to our coaches and customers, and exclusive offers through OPTA VIA Premier, our auto-ship service that helps our customers stay on plan, as well as qualifies them for discounts on purchased products and free or discounted shipping.

We encourage our customers to embrace our Six Steps to Optimal Health:

• Prepare for your journey.

• Achieve a healthy weight.

• Transition to healthy eating.

• Live the Habits of Health.

• Optimize health for your age.

• Realize the potential to live a longer healthier life.

In addition, the Company offers product bundles as a complement to balanced nutrition specifically designed to support customers on the medically supported weight loss journey.

The Optimal Weight and Health plans and product bundles we market to customers are:

• Optimal Weight 5 & 1 Plan ® .

Our proven Optimal Weight 5 & 1 Plan encourages customers to eat six small meals a day, an important habit that helps maintain healthy weight.

OPTA VIA is known for its habit-based and coach-guided lifestyle approach to address weight loss and is backed by the long-standing scientific and clinical heritage of its parent company, Medifast.

The OPTA VIA brand has impacted more than 3 million lives with a simple yet comprehensive solution that gives every customer access to:

• A personal (human, not AI) coach who has been in their shoes (about 90% were clients first)

• A community of others on similar journeys

• Healthy habit blueprint

• Tailored nutrition plans

• Nutrient-dense products

• A mobile app with hundreds of healthy recipes, habit trackers and other tools all in one place

OPTA VIA offers a range of nutrition plans tailored to help customers achieve their unique goals.

Each plan is evidence-based backed by a cross-disciplinary group of dietitians, scientists, clinical researchers and other industry experts and is built around two key nutritional pillars:

• Pre-portioned, nutrient-dense products designed for convenience and balance, and

• Simple, self-prepared recipes featuring whole, healthy ingredients.

The plans the company markets to customers include:

• Optimal Weight 5 & 1 Plan ® & Optimal Weight 5 & 1 ACTIVE Plan ® .

Our proven Optimal Weight 5 & 1 Plan encourages customers to eat six small meals a day, an important habit that helps customers maintain healthy weight.

Five daily meals are OPTA VIA Fuelings, offering customers a choice from more than 45 delicious, convenient, nutritionally interchangeable, scientifically-designed products, including shakes, soups, bars, hot beverages, hearty choices, pudding and brownies.

OPTA VIA coaches guide their customers on which Fuelings to select, and on how to develop healthy habits, such as preparing lean and green meals and choosing healthy snacks.

• Optimal Weight 4 & 2 & 1 Plan ® .

For the Optimal Weight 5 & 1 Active Plan, we recommend up to 45 minutes of low to medium intensity exercise most days of the week and two servings of OPTA VIA ACTIVE EAA Blend to support muscle health and post workout recovery.

• Optimal Weight 4 & 2 & 1 Plan ® & Optimal Weight 4 & 2 ACTIVE Plan ® .

The Optimal Weight 4 & 2 & 1 Plan is designed for customers who want to continue eating all food groups or want a flexible meal plan to help them achieve a healthy weight.

Under this plan, OPTA VIA coaches guide their customers to eat four meals of OPTA VIA Fuelings and prepare two lean and green meals and one healthy snack themselves.

• Optimal Health 3 & 3 Plan ® .

The Optimal Health 3 & 3 Plan is designed for customers who want to sustain a healthy weight.

This plan focuses on nutritionally balanced, small meals eaten every two or three hours, similar to our Optimal Weight plans, while integrating more food choices in the right portions.

Customers are guided by their OPTA VIA Coaches to eat three Optimal Health Fuelings and three balanced meals they prepare themselves daily.

• OPTAVIA Nutrition Kit for Medically Supported Weight Loss :

As customers lose weight, getting adequate nutrition and retaining lean muscle is critical.

OPTA VIA’s Nutrition Kit for Medically Supported Weight Loss includes nutrient dense, portion controlled Fuelings and OPTA VIA ACTIVE Whey Protein to help retain lean muscle mass as weight is lost.

Each day, customers will enjoy 2 OPTA VIA Fuelings and 2 servings of OPTA VIA ACTIVE Whey Protein in addition to healthy meals.

• OPTAVIA Muscle Health Kit for Medically Supported Weight Loss:

Evidence suggests that the loss of lean body mass can range from 20% to 50% of total weight loss for those on weight loss medications.

As customers lose weight, getting adequate nutrition and retaining lean muscle is critical.

The OPTA VIA Muscle Health Kit for Medically Supported Weight Loss aids in the retention of lean muscle mass during weight loss.

Each day, customers consume up to three OPTA VIA ACTIVE Whey Protein shakes in addition to healthy meals.

High-quality, complete protein evenly distributed throughout the day helps to activate muscle protein synthesis and supports muscle health.

12 No one can predict how long you are going to live, but research suggests that making an overall lifestyle change by taking an active role in your choices and behavior, including losing weight, eating healthier, moving more, and reducing stress, has the potential to help you live a longer, healthier life.

No matter what plan a customer is on, they learn healthy habits through the Habits of Health Transformational System, which is a crucial tool for customer success and provides the foundation for our community to learn and adopt healthy habits.

For the Optimal Weight 4 & 2 Active Plan, we recommend up to 60 minutes of exercise most days of the week and two servings of OPTA VIA Active EAA Blend to support muscle health and post workout recovery.

• OPTA VIA Optimization Plan.

The Optimization Plan is a personalized approach to help customers’ long-term weight management.

The plan builds on the principles that led to customers’ weight loss success, combining lifestyle strategies, balanced nutrition, exercise guidance, and ongoing coach support to help customers stay at their goal weight and enjoy life to the fullest.

This plan equips customers with the tools to confidently help them keep the weight off.

Under this plan, OPTA VIA coaches guide their customers to eat two OPTA VIA ASCEND mini meals, two Lean & Green+ meals, two or more healthy exchanges (food options around 100 calories and 15 grams of carbs or less) based on the customers energy level, and one multivitamin & mineral and omega-3 supplement from the OPTA VIA ASCEND daily nutrient pack.

• OPTA VIA GLP-1 Nutrition Support Plan :

The perfect nutritional companion to GLP-1 medications, allowing customers to focus on their weight loss without the stress of figuring out what to eat.

The new GLP-1 Nutrition Support Plan combines the effectiveness of the medication with balanced nutrition and lifestyle strategies to help customers lose weight, preserve lean muscle and support energy levels throughout their weight loss journey and into optimization.

Under this plan, OPTA VIA coaches guide their customers to eat three OPTA VIA ASCEND mini meals, one Lean & Green+ meal, and one multivitamin & mineral and omega-3 supplement from the OPTA VIA ASCEND daily nutrient pack.

No matter what plan a customer is on, they can learn healthy habits through the Habits of Health Transformational System, which is a crucial tool for customer success and provides the foundation for our community to learn and adopt healthy habits.

The Habits of Health Transformational System is an innovative, mind and body lifestyle approach that encourages and educates customers to replace unhealthy habits with healthy ones that contribute to their long-term success.

We offer economic incentives designed to support each OPTA VIA Coach’s and customer’s success.

From time to time we offer economic incentives designed to support each OPTA VIA coach’s and customer’s success.

We believe our business is most successful when our coaches can maintain a continuous cycle of growth:

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Once a coach has successfully attracted a new customer, the coach uses personalized coaching and effective digital tools to drive engagement.

As part of this work, beginning in March 2023, the Company introduced a "Client Support Bonus+" incentive for Coaches that was aimed to encourage and incentivize each independent OPTA VIA Coach to acquire new and reactivated customers.

Programs like these are an important driver of our ongoing customer acquisition efforts, focusing on fostering alignment of the Coach network around customer acquisition.

The aim is not just to acquire first-time OPTA VIA customers, but also to reactivate lapsed customers who have already had a positive experience with the brand.

Customer acquisition is important to our growth as customer cohorts utilizing the OPTA VIA program today form future coach cohorts, which in turn drive optimization of the customer and coach tenure mix and the associated improvements in efficiency and productivity.

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No single customer accounted for 10% or more of our consolidated revenue for the year ended December 31, 2024.

Demand for weight management products and programs are typically seasonal.

Demand for weight management products and programs throughout the industry are typically seasonal.

Traditionally, the predisposition of customers refraining from initiating weight loss or management programs during the holiday season typically impacts the fourth quarter with fewer sales of weight management products and services during these months.

January and February generally show sequential increases in sales, as these months are considered the commencement of the “diet season” and "resolution season." We believe our sales pattern does not follow the seasonality of our industry, but rather is predicated on the growth of our OPTA VIA Coach network.

January and February generally show sequential increases in sales, as these months are considered the commencement of the “diet season” and "resolution season." We believe, however, that our sales pattern does not necessarily follow the seasonality of our industry, but rather is predicated on the growth or contraction of our OPTA VIA coach network.

Scientific Advisory Board

Our Scientific Advisory Board consists of seven multi-disciplinary, internationally recognized scientific experts who provide objective insights to guide the Company in making informed decisions based on the latest scientific developments in health and wellness and serve as the foundation for scientifically-valid, evidence-based, customer-centric, high-quality innovations by the Company for lasting health.

Our Scientific Advisory Board consists of six multi-disciplinary, internationally recognized scientific experts who provide objective insights to guide the Company in making informed decisions based on the latest scientific developments in health and wellness and serve as the foundation for scientifically-valid, evidence-based, customer-centric, high-quality innovations by the Company for lasting health.

Its mission is to help guide us in making informed decisions regarding medical, nutritional, food service, and scientific matters by providing expertise and information on research and emerging trends.

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The work of this cross-disciplinary group builds on our scientific heritage and incorporates leading-edge clinical research into the development of our products, plans and programs.

We continue to build and leverage our brands through multiple marketing strategies.

Customer acquisition and retention strategies include word-of-mouth, digital marketing, public relations, social media, email marketing, events and other means.

These mediums are used to target new customers by stressing OPTA VIA’s simple and effective approach to weight loss and management and long-term health.

Many of these programs are also utilized to reactivate, encourage and support existing

customers and OPTA VIA Coaches.

We are constantly working to enhance all of our Company materials and websites.

The Company plans to invest in technology and growth initiatives intended to improve customer acquisition and customer experience, including a new Company-led marketing campaign designed to increase brand awareness and drive customer adoption in 2024.

We continue to develop the OPTA VIA brand through comprehensive marketing strategies that reflect the changing dynamics of the weight loss and wellness markets.

Customer acquisition and retention efforts are designed to attract new customers by emphasizing OPTA VIA’s holistic and effective solutions, including its ability to support those pursuing traditional weight loss through healthy lifestyle changes, individuals using GLP-1 medications, and those transitioning off such medications.

Our coaches are the key component of our marketing efforts and serve as important advocates of our plans and products.

We have a history of launching new products and plans to our coach network first to ensure that we have support from the OPTA VIA community.

In turn, our coaches better understand our products and their benefits and can best meet customers where they are in their weight loss journey.

It is integral to our business that this coach network has the tools to effectively lead our marking approach.

To support this, we are focused on scaling best practices from high-performing teams and leveraging new coach education resources, aimed at driving sustained improvements in new customer acquisition across the network.

To supplement our coach-driven efforts, we introduced a significant Company-led marketing campaign in 2024 to increase brand awareness and drive customer adoption.

The campaign integrates digital and traditional channels to reach new audiences and deepen engagement with existing ones, including initiatives to reactivate former customers and empower OPTA VIA coaches.

These efforts are aimed at expanding customer acquisition channels and demonstrating the value of holistic, medically-supported weight loss programs.

The Company incurred approximately $22.9 million in company led marketing expenses for the year ended December 31, 2024.

Manufacturing

Jason Pharmaceuticals, Inc., our wholly-owned subsidiary with a manufacturing facility in Owings Mills, Maryland, is one of the manufacturers of our products, which account for approximately 25% of our total unit sales.

We purchased the facility in July 2002 and have gradually increased production capacity and improved overall efficiencies with additional investments in blending and packaging equipment.

Jason Pharmaceuticals, Inc., our wholly-owned subsidiary with a manufacturing facility in Owings Mills, Maryland, manufactures our products, and accounts for approximately 40% of our total unit sales.

We purchased the facility in July 2002.

Our Owings Mills manufacturing facility is regulated and inspected by the United States Food and Drug Administration (the “FDA”), the United States Department of Agriculture (the “USDA”), the Maryland State Department of Health and Mental Hygiene, and Office of Food Protection.

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Direct selling is regulated by various national, state and local government agencies in the United States.

These laws and regulations are generally intended to prevent fraudulent or deceptive schemes, including “pyramid” schemes, which compensate participants primarily for recruiting additional participants without significant emphasis on product sales to consumers.

The direct selling industry is also under regular scrutiny by certain non-profit organizations and the Direct Selling Self-Regulatory Council, which is one of the Better Business Bureau's National Programs.

These entities identify perceived violations of laws and regulations by direct sellers in an effort to force companies to change their practices.

If companies do not voluntarily modify practices identified by these reviewing entities, they may report the perceived violations to law enforcement agencies.

Laws and regulations related to direct selling companies are generally intended to prevent fraudulent or deceptive schemes, including “pyramid” schemes, which compensate participants primarily for recruiting additional participants without significant emphasis on product sales to consumers.

The laws and regulations governing direct selling may be modified or reinterpreted from time to time, which may cause us to modify our sales compensation and business models.

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There is often ambiguity and uncertainty with respect to the state of direct selling and anti-pyramid laws and regulations.

In the United States, for example, federal law provides law enforcement agencies, such as the Federal Trade Commission (the “FTC”), broad latitude in policing unfair or deceptive trade practices, but does not provide a bright-line test for identifying a pyramid scheme.

In the United States, for example, federal law provides the Federal Trade Commission (the “FTC”), broad latitude in policing unfair or deceptive trade practices, but does not provide a bright-line test for identifying a pyramid scheme.

Several states have passed legislation that more clearly distinguishes between illegal pyramid schemes and legitimate multi-level marketing (“MLM”) business models.

Recent settlements between the FTC and other direct selling companies and guidance from the FTC have addressed inappropriate earnings and lifestyle claims and the importance of focusing on consumer sales.

These developments have created a level of ambiguity as to the proper interpretation of the law and related court decisions.

For example, in 2016, the FTC entered into a settlement with another multi-level marketing company, requiring the company to modify its business model, including basing sales compensation and qualification only on sales to retail and preferred customers and on purchases by a distributor for personal consumption within allowable limits.

Although this settlement does not represent judicial precedent or a new FTC rule, the FTC has indicated that the industry should look at this settlement, and the principles underlying its specific measures, for guidance.

If the requirements in this settlement lead to new industry standards or new rules, our business could be impacted, and we may need to amend our compensation plan.

In 2018, the FTC released its nonbinding Business Guidance Concerning Multi-Level Marketing (“MLM Guidance”).

The MLM Guidance explains, among other things, the FTC’s views concerning lawful and unlawful compensation structures, whether personal consumption by participants can be used in determining an MLM organization’s compensation structure, and how an MLM organization should approach representations to current and prospective participants.

We believe our current business practices comply with the MLM Guidance.

In 2019, the FTC took aggressive actions against a multi-level marketing company, alleging that the company operated an illegal pyramid scheme that deceived consumers into believing that they could earn significant income as distributors of its health and wellness products.

Settlements between the FTC and other direct selling companies and guidance from the FTC have addressed inappropriate earnings and lifestyle claims and the importance of focusing on consumer sales.

That said, the FTC's enforcement efforts have created a level of ambiguity as to the proper interpretation of the law and related court decisions.

For example, in 2016, the FTC entered into a settlement with another direct selling/multi-level marketing company, requiring the company to modify its business model, including basing sales compensation and qualification only on sales to retail and preferred customers and on purchases by a distributor for personal consumption within allowable limits.

Similarly, in 2019, the FTC took aggressive actions against another direct selling/multi-level marketing company, alleging that the company operated an illegal pyramid scheme that deceived consumers into believing that they could earn significant income as distributors of its health and wellness products.

The company eventually entered into a consent order with the FTC, pursuant to which the company was permanently prohibited from using a multi-level compensation plan in the United States.

We have taken additional steps to educate our Coaches on proper earnings claims.

If our Coaches make improper claims, or if regulators determine we are making any improper claims, this could lead to an FTC investigation and could harm our business.

Additionally, in 2009 the FTC promulgated nonbinding Guides Concerning the Use of Endorsements and Testimonials in Advertising (“Endorsement Guides”) which explained what endorsement practices the FTC views as being unfair or deceptive acts or practices.

In 2020, the FTC sought public comments on whether the Endorsement Guides should be amended.

The last time the FTC sought similar public comments led to a major revision of the Endorsement Guides.

Consequently, the FTC could bring an enforcement action based on practices that are inconsistent with the current Endorsement Guides as it considers revisions.

Although these settlements do not represent judicial precedent or new FTC rules, the FTC has indicated that the industry should look at these settlements, and the principles underlying their specific measures, for guidance.

If the requirements in these settlements lead to new industry standards or new rules, our business could be impacted, and we may need to amend our compensation plan.

Additionally, in 2023 the FTC updated its nonbinding Guides Concerning the Use of Endorsements and Testimonials in Advertising (“Endorsement Guides”) which explain what endorsement practices the FTC views as being unfair or deceptive acts or practices.

The 2023 update was the first revision to the Endorsement Guides since 2009;

it clarified the FTC's views on several issues, including the meaning of "clear and conspicuous" the definition of "endorsement," and how different types of reviews of products should be treated.

Under the current Endorsement Guides, advertisements that feature a consumer and convey his or her atypical experience with a product or service are required to clearly disclose the typical results that consumers can generally expect.

OPTA VIA has adapted its rules regarding the practices of its coaches in order to comply with the current Endorsement Guides, but we cannot be sure that the FTC will not challenge our advertising or other operations in the future.

In 2024, the FTC amended its nonbinding Business Guidance Concerning Multi-Level Marketing (“MLM Guidance”), which was originally released in 2018.

We believe our current business practices comply with the MLM Guidance.

If the FTC withdraws the guidance or chooses to enforce the relevant laws in a manner inconsistent with the guidance, our business could be impacted, and we may need to amend our compensation plan.

In 2024, the FTC issued a Report on Multi-Level Marketing Income Disclosures (“IDS Report”), which outlined findings from the FTC Staff’s review of the public income disclosure statements of seventy different multi-level marketing companies, including OPTAVIA.

According to the IDS Report, FTC staff found a number of issues with the reviewed statements, including that most omitted key information, did not include all participants, and did not identify expenses faced by participants.

The IDS Report does not indicate that the FTC is investigating any of the companies or plans to bring actions against them.

While OPTAVIA believes its practices with regard to its income disclosure statement comply with current laws, we cannot be sure that the FTC will not investigate and potentially challenge our income disclosure practices in the future.

Finally, the FTC is currently considering certain legal and regulatory changes that, if implemented, could impact our business.

For example, in early 2025 the FTC issued a Notice of Proposed Rulemaking for a proposed rule concerning deceptive earnings claims made by MLM organizations that would further regulate how MLM organizations describe certain aspects of their businesses.

The FTC concurrently issued an Advanced Notice of Proposed Rulemaking (ANPR) regarding earnings claims made by the multi-level marketing rule.

The ANPR asks for public comments on whether a new rule should regulate MLM organizations’ statements concerning benefits, expenses and refund claims as well as MLM’s use of non-disparagement clauses.

If the FTC issues an earnings claim rule targeted specifically at MLM organizations, our business could be impacted, and we may need to change our current practices.

While OPTAVIA has taken steps to educate our employees and coaches on proper earnings claims, if an employee or coach makes improper claims or if regulators issue new rules or change current guidance or determine we (or our coaches) are making any improper claims, this could lead to an FTC investigation and could harm our business.

The FTC is also currently reviewing the Business Opportunity Rule, which requires business opportunity sellers to give prospective buyers specific information to help them evaluate a business opportunity or work-at-home program.

While direct sellers are currently exempt from the Business Opportunity Rule and the FTC’s early 2025 Notice of Proposed Rulemaking related to Business Opportunity Rules would preserve that exemption, the FTC could include direct sellers within the scope of the rule as a result of the review.

If direct sellers become subject to the rule, we will have to comply with the rule, which could impact our business and cause us to modify how we currently operate.

We continue to monitor developments to assess whether we should make any changes to our business or compensation plan.

If we are required to make changes or if the FTC seeks to enforce similar measures in the industry, either through rulemaking or an enforcement action against our Company, our business could be harmed.

If we are required to make changes or if the FTC changes current guidance, either through rulemaking or an enforcement action against our Company, our business could be harmed.

Environmental Regulations

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If our collaboration and relationship with LifeMD grows, in the future, we may become subject to the same government regulators that regulate LifeMD’s business operations.

These include federal and state healthcare regulatory laws which include,

but are not limited to, federal and state anti-kickback, false claims, and other healthcare fraud and abuse laws.

These include federal and state healthcare regulatory laws which include, but are not limited to, federal and state anti-kickback, false claims, and other healthcare fraud and abuse laws.

For additional information, see Item 1A.

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Human Capital Management

As of December 31, 2023, the Company employed 634 team members, all employed in the United States, of whom 326 were engaged in manufacturing, logistics, and supply chain support, and 308 in marketing, administrative and corporate support functions.

None of our team members are subject to a collective bargaining agreement with the Company.

At Medifast, we actively foster an organizational culture centered on strong cross-functional relationships and collaborating as one team to support our customers in their health and wellness journey.

2023 has been a year of significant transformation for our company, and now more than ever, we are focused on nurturing a strong community - independent Coaches and corporate team members together - enabling our customers to achieve Lifelong Transformation, One Healthy Habit at a Time.

Internally, this starts with a clear and transparent communication cadence reinforced by the culture tenets that make us a strong team.

To support this significant transformation period, and to reinforce our Success Driver, Innovate, we launched a virtual Innovation Box in 2023 to give team members the opportunity to submit new ideas that support our business strategy with a focus on productivity and customer acquisition.

The Innovation Box is another channel for our team members to participate in influencing the Company’s strategic plan.

As a cross-functional team, we believe our ability to effectively collaborate will be a key enabler to successfully navigate the business transformation ahead of us.

Together, we are building relationships of trust dedicated to lifelong transformation, together we care for each other, prioritizing the mental and physical wellbeing of our people, together we continually improve the ways we work and together we help each other grow, investing in training, encouraging feedback and embracing challenges along the way.

We are focused on attracting and retaining top talent who are eager to participate in our mission.

Our Total Rewards Program is intended to deliver competitive compensation and benefits that align with our company mission and values.

Annually, we review our market reference ranges and pay to ensure we remain competitive, consistent, and equitable.

Our variable pay targets are performance based and tied to organizational results.

As of December 31, 2024, we employed 504 team members, all employed in the United States, of whom 229 were engaged in manufacturing, logistics, and supply chain support, and 275 in marketing, administrative, and corporate support functions.

None of our team members are subject to a collective bargaining agreement with the Company.

In 2024, we continued our business transformation and began executing plans to enable stability and growth.

We continued to strengthen our foundation – our community of independent coaches and corporate team members working hand-in-hand — leveraging our habit-based and coach-guided tailored plans to support customers in Lifelong Transformation, Making a Healthy Lifestyle Second Nature.

During 2024, we reinforced the significance of transparent communication and clear goal alignment to motivate and engage our team members throughout the transformation.

Additionally, we emphasized the importance of navigating change in a challenging business environment, empowering team members to learn, test, and adapt new approaches as they execute against our strategic initiatives.

For select senior leaders highly engaged in leading our transformation initiatives, we provided change planning and resilience training and coaching to ensure they could confidently lead their teams as they navigate the changing business landscape.

Teaming and Partnership continue to be critical core values.

We believe our ability to effectively collaborate with each other as we partner with our Field community is essential for driving increased momentum throughout this transformation.

Together, we are building relationships of trust, nurturing a caring and empathetic environment, and prioritizing the mental and physical wellbeing of our people.

We continually seek new ways to evolve how we work and we each other grow, by investing in training, encouraging feedback and embracing challenges along the way.

We have several resources and tools that help us nurture a “One Team” mindset centered around strong cross-functional teaming and partnering.

Our north star is our Culture Compass that helps us understand the behaviors, values, and ways of working that define our culture today, identifying gaps, areas of growth and where we need to adjust in order to deliver on our strategy more effectively moving forward.

Our north star is our Culture Compass that helps us understand the behaviors, values, and ways of working that define our culture today by identifying gaps, areas of growth, and where we need to adjust in order to deliver on our strategy more effectively.

Our Culture Contract lays out the explicit behaviors that underlie our core values.

It details the commitments we make to one another when we join Medifast and the commitments the Company makes to ensure an excellent work experience for all our team members.

Our Culture Contract Toolkit is a companion piece that provides many tools and activities that team members can bring into their daily work to improve in forming bonds, establishing healthy work/life balance, inclusive leadership and much more.

In 2023, we released phase one of our Culture Contract training aimed at giving team members an opportunity to apply our Core Values or Success Drivers to real world business scenarios and discuss how they can use the Culture Contract to help bring desired behaviors to life.

Our Community is united by our values – we are one team with one mission, guided by clear, shared behaviors that help us stay aligned as we grow and enable us to prioritize our work, plan for the future and harness our combined energy to accomplish our company objectives.

Our culture narrative is fully embedded in our core human capital processes to ensure our team members understand how their success translates to the success of the greater team and ultimately to an amazing Coach & customer experience.

Each year we host a program called Coach Encounters, which gives our team members an opportunity to hear directly from our amazing Coaches about their personal journey and how the Company supports their work in seeking positive health outcomes for our customers.

In 2023, we were recognized by U.S.

It details the commitments we make to one another and the commitments we make as a company to ensure an excellent work experience for all our team members.

Our Culture Contract Toolkit is a companion piece that provides many tools to help improve in forming bonds, establishing healthy work/life balance, inclusive leadership, and much more.

In alignment with nurturing our culture and reinforcing communication, we launched several new Slack® channels in 2024.

Medifast in Motion gives team members a place to share on their health & wellness journeys and the activities they are doing to practice the Habit of Healthy of Motion, whether with their families or their work colleagues.

Our Optimal Impact channel gives team members a place to share volunteer activities in which they are participating in either personally or with their work teams, and about community organizations that are important to them.

Additionally, we supported several volunteer opportunities aligned with our Healthy Habits For All initiative and amended our volunteer time-off policies to give team members up to 16 paid hours per calendar year to volunteer their time in their community.

Ensuring our organization is united by our values and one team, one mission mindset remains a top priority - helping us stay aligned as we grow and enabling us to prioritize our work, plan for the future, and harness our combined energy to accomplish our company objectives.

Each year we host a program called Coach Encounters, which gives our team members an opportunity to hear directly from our inspiring coaches about their personal journeys as well as how our company supports their work in seeking positive health outcomes for our customers.

In 2024, we were once again recognized by U.S.

News & Reports as a Best Place to Work in the Food & Drink Industry, a reflection of the work we have done to nurture our culture and support a strong employee experience.

Building transparency and developing communication channels that allow us to cascade information and connect our teams are critical components of our people strategy.

We leverage our Workplace by Meta platform to connect, collaborate and incite conversations around topics that matter to us (like wellness).

As we have noted, this year more than ever, building transparency and developing communication channels that allow us to cascade information and connect our teams are critical to supporting our people strategy.

We leverage our Workplace by Meta platform to connect, collaborate and ignite conversations around topics that matter to us, like wellness.

We also have a weekly Pulse newsletter to ensure important initiatives and events are communicated in a timely matter.

We leverage Slack, our internal messaging platform, to drive company and senior leadership communications.

We also launched a quarterly video series from our CEO to ensure team members hear directly from him about Company performance and updates on key initiatives.

We leverage our communication channels to remind team members of the significant impact they have on the Coach & customer experience, help them understand our business, get them engaged in learning and increase empathy across functional teams.

Recognition is another key component of our culture.

Our #AcedIt program provides team members with a platform to recognize excellent work that supports our business strategy, applauds behaviors that reinforce our cultural values, and fosters a sense of gratitude — all key components in nurturing strong relationships and building tight-knit communities.

We continued our quarterly

video series from our Chairman & CEO, Dan Chard, to ensure team members hear directly from him about Company performance and progress on key initiatives.

In 2024, we added monthly business transformation update posts from Dan Chard in our All-Company Slack channel.

Ensuring that our team members hear directly from Dan Chard has been critical to them understanding the progress we are making and how their work fits into the bigger picture.

Recognition remains a key component of our culture.

Our #AcedIt program provides team members with a platform to recognize excellent work that supports our business strategy, applauds behaviors that reinforce our cultural values, and fosters a sense of gratitude which are all key components in nurturing strong relationships and building tight-knit communities.

#AcedIt allows for both social and point-based recognition and celebrates team members for achieving important milestones in service.

In 2022, we tied our #AcedIt platform to our wellness platform, LiveWell, to incentivize greater focus on health and wellness.

We see very strong participation in our #Acedit program with a 93% activation rate and 65% actively using the tool on a monthly basis.

Our #AcedIt platform also supports our wellness program, LiveWell, to incentivize greater focus on our team members’ health and wellness.

In 2024, we saw strong engagement with LiveWell with over 85% of employees leveraging the tool.

Diversity is one of Medifast’s Core Values and an important part of our culture.

Diversity is one of Medifast’s Core Values.

As an organization, we are committed to generating an open dialog with our team members and building a more inclusive work environment that enables all our team members to have a voice.

In 2024, we conducted two cycles of our listening initiative, The Loop, which promotes communication transparency, empowers our team leaders to review their employee engagement results and facilitates candid conversations to shape and improve the work experience.

Biannually, we repeat training for our senior leaders to foster inclusive leadership.

In 2023, we welcomed 22 senior leaders to this training to build their leadership toolkits as they foster diversity and inclusion among their teams.

Our Culture Club program, established in 2020, gives all of our team members, whether onsite, hybrid or fully remote, the opportunity to come together to connect, build bonds and learn together in a virtual environment.

Culture Club covers a learning topic related to our culture or ways of working, and always includes a fun element to give team members a moment to relax and deepen bonds.

For the past two years, we have also hosted a Culture Week to celebrate the differences that make our Community special.

In 2024, we added transformation questions, to measure how our team members are experiencing our business evolution and what more we can do to support their success and help them adapt to the changing work demands.

We also hosted our annual Culture Week to celebrate the differences that make our community special, which include activities such as a cooking contest and a special Culture Club event to bring team members together.

Nurturing growth and learning are also key elements of our culture.

In 2023, we enhanced our performance management process (called PEAK) by introducing an improved technology platform which delivered a superior user experience as our team members engage in quarterly conversations on performance and development.

The tool automates 360 feedback which reinforces the role of feedback in developing strong relationships.

Through our Optimal Learning platform, team members have access to online courses.

In 2023, we launched a Culture Journey learning path to further integrate an understanding of our culture for new team members.

Within our supply chain, we continued our Level Up shadow program for a second year, which creates opportunities for our supply chain team members to be cross trained in other areas of the supply chain and learn new skills.

This program is geared towards enabling greater sponsorship of junior talent and an increase of internal mobility.

Medifast is focused on attracting and retaining top talent who are eager to participate in our mission.

Our Total Rewards Program is intended to deliver competitive compensation and benefits that align with our company mission and values.

Annually, we review our market reference ranges and pay to ensure we remain competitive, consistent, and equitable.

Our variable pay targets are performance based and tied to organizational results.

We have a robust technology platform that supports our team members and leaders as they have performance and development conversations each quarter.

On demand and 360-feedback are features that launched in 2023 and give us the opportunity to improve our communal ability in giving and receiving feedback.

In 2024, we were excited to integrate performance ratings to our PEAK (Performance Management Initiative) process, giving leaders another tool to reinforce accountability, another important core value for our company.

Through our learning management system, Optimal Learning, team members have access to online courses such as a Culture Journey learning path to further integrate an understanding of our culture for new team members.

Within our supply chain, we have continued our Level Up shadow program, which creates opportunities for our supply chain team members to be cross trained in other areas of the supply chain and learn new skills.

This program fosters greater sponsorship of junior talent and an increase of internal mobility.

In 2024, we rolled out our Level Up Skills Vault throughout the company.

We encouraged team members to use this repository to showcase the skills and strengths that may be leveraged internally for future projects as well as indicate the skills they would like to build muscle around.

In 2025, we plan to offer more programming to support increased adoption of the Skills Vault and opportunities for job experimentation.

Lastly, in support of nurturing a strong senior leadership team we rolled-out a new senior leader standards guidebook in 2024, which describes skills, competencies, experiences, and internal processes that our senior leaders need to develop as they advance at our company.

We also developed a set of norms and behaviors to ensure our senior leaders are showing up in ways that reinforce our culture and promote the ways of working and relationship building that we believe is fundamental to a strong community.

Wellness is not just what we do, it’s who we are, and our commitment to being a best-in-class wellness company starts with providing team members equal access to all our programs and products.

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Our Wellness Committee oversees a host of programming throughout the year to integrate healthy habits into the lives of our team members, such as incentives through LiveWell, for taking on a step challenge, doing a biometric screening or attending a wellness event among other activities.

In 2023, aligned with the launch of our OPTA VIA ACTIVE products, we challenged our Coaches and team members to get in motion.

Medifast team members took the challenge and the company sponsored special contests and activities related to this event.

To continue to support the adoption of our Work Playbook and further evaluate the effectiveness of our work strategy principles, we conducted several ad-hoc pulse surveys of our senior leaders in 2023.

The Playbook is a tool used to empower our team members to do their best work while sustaining strong collaboration, trust, and effectiveness.

Our surveys continue to show strong support for our work strategies while also highlighting room for improvement in cross-functional teaming.

We are continuing to listen and adjust our plans throughout our work journey.

In 2024, to further support the Healthy Habit of Motion, we launched a new Motion Masters Dance Challenge to encourage team members to adopt a fun way to get their steps in.

In 2024, we won the highest-level Well Workplace Award, Platinum, from the Wellness Council of America, as well as the 2024 Gold Workplace Well-being Award for Making a Difference from Aetna, and was recognized at the Exemplar level by Healthiest Maryland Businesses.

In addition to our team members, our Human Capital also includes our independent contractor OPTA VIA coaches.

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The total number of active earning OPTA VIA coaches as of December 31, 2024 was 27,100.

For information about our OPTA VIA Coaches, see Item 1.

Information Systems & Technology

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The hosting facilities provide carrier-diverse network connectivity, information security technologies, redundant and emergency power, fire prevention and control, and physical security.

We continuously monitor our information systems and infrastructure, and have sufficient polices and committees in place to evaluate if and when an incident occurs and becomes material.

We continuously monitor our information systems and infrastructure, and have sufficient policies and committees in place to evaluate if and when an incident occurs and becomes material.

We also use redundant carrier-diverse networks to interconnect our corporate locations.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business