USNA US Equity☆

usna-20260103

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended January 3, 2026

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission file number: 001-35024

______________________________

USANA HEALTH SCIENCES, INC.

(Exact name of registrant as specified in its charter)

3838 West Parkway Blvd.,Salt Lake City,Utah84120

(Address of principal executive offices, Zip Code)

(801) 954-7100

(Registrant’s telephone number, including area code)

______________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol Name of each exchange on which registered

Common Stock, Par Value $0.001 per share USNA New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

______________________________

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes oNox

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes oNox

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesx No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yesx No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Yes x No o

Large Accelerated Filer o Accelerated Filer x

Non-accelerated filer o Smaller reporting company o

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. o

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

The aggregate market value of common stock held by non-affiliates of the registrant as of June 27, 2025, was approximately $328 million based on a closing market price of $31.13 per share.

There were 18,456,935 shares of the registrant’s common stock outstanding as of March 13, 2026.

DOCUMENTS INCORPORATED BY REFERENCE

The registrant incorporates by reference into Part III (Items 10, 11, 12, 13, and 14) of this report certain information contained in its Definitive Proxy Statement to be filed with the Securities and Exchange Commission no later than 120 days after the end of the registrant’s fiscal year ended January 3, 2026, in connection with the registrant’s 2026 Annual Meeting of Shareholders to be held May 20, 2026.

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USANA HEALTH SCIENCES, INC.

FORM 10-K

For the Fiscal Year Ended January 3, 2026

INDEX

Page

Part I

Item 1 Business 4

General 4

Current Focus and Growth Strategy 5

Products 7

Geographic Presence 8

Research and Development 9

Manufacturing and Quality Assurance 10

Distribution and Marketing 11

Operating Strengths 14

Competition 17

Product Returns 17

Major Customers 17

Brand Partner Compliance 18

Information Technology 18

Regulatory Matters 19

Intellectual Property 22

Seasonality 23

Working Capital Practices 23

Environment Laws 23

Our Values and Culture 23

Information About Our Executive Officers and Directors 25

Additional Available Information 26

Item 1A Risk Factors 26

Item 1B Unresolved Staff Comments 47

Item 1C Cybersecurity 47

Item 2 Properties 48

Item 3 Legal Proceedings 48

Item 4 Mine Safety Disclosures 49

Part II

Item 6 Reserved 51

Item 7A Quantitative and Qualitative Disclosures About Market Risk 61

Item 8 Financial Statements and Supplementary Data 62

Item 9A Controls and Procedures 62

Item 9B Other Information 65

Item 9C Disclosure regarding Foreign Jurisdictions that Prevent Inspections 65

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Part III

Item 10 Directors, Executive Officers and Corporate Governance 65

Item 11 Executive Compensation 65

Item 14 Principal Accounting Fees and Services 65

Part IV

Item 15 Exhibits, Financial Statement Schedules 65

Signatures 68

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Cautionary Note Regarding Forward-Looking Statements

This report contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new products; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include, but are not limited to, statements regarding future financial results, long-term value creation goals, focus and strategy, integration of acquisitions and performance expectations regarding such acquisitions, productivity, raw material prices and related costs, supply chain, asset impairment, litigation, sustainability and governance efforts, compliance with current or proposed international laws and regulations, the impact of COVID-19 or other pandemics, or geo-political relationships, trade policies, tariffs, tensions, conflicts or wars on our operations. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “seek,” “believe,” “project,” “estimate,” "target", “expect,” “strategy,” "potential", “future,” “likely,” “may,” “should,” "could", “will” and similar references to future periods, or the negative of these terms, or other similar expressions. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely unduly on forward-looking statements.

Although we believe that the expectations reflected in our forward-looking statements are reasonable, actual results could differ materially from those we project or assume in our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed or incorporated by reference in our filings with the Securities and Exchange Commission (“SEC”). Any forward-looking statement made by us in this report is based only on information currently available to us and speaks only as of the date hereof. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments, the occurrence of unanticipated events or otherwise. Among some of the important factors that could cause our actual results, performance and achievements to differ materially from estimates or projections contained in our forward-looking statements in this report are the following:

•Our dependence upon our core nutritional and direct sales business model to distribute our nutritional, foods and personal care products and the activities of our independent Brand Partners (whom we formerly referred to as "Associates") to grow our business; our core business is referred to in this report as both our core nutritional business and the direct sales business and has declined in net sales, net income and active Customers over the last few years;

•Our dependence on our acquired direct-to-consumer businesses, Hiya Health Products, LLC ("Hiya") and Rise Bar Wellness, Inc. ("Rise"), to grow our business in channels outside of our core nutritional business including direct-to-consumer, retail, and online marketplaces;

•Our ability to invest in R&D, to innovate and produce new products, and to increase the cadence of releasing new products;

•Extensive regulation of our core nutritional business and uncertainties relating to the interpretation and enforcement of applicable laws and regulations governing direct selling and anti-pyramiding in the United States, China, and other markets where we have operations;

•The operation of our core nutritional business in China through our subsidiary, BabyCare Holdings, Ltd. (“BabyCare”), including risks related to (i) operating in China in general, (ii) engaging in direct selling in China, (iii) BabyCare’s business model in China, (iv) data privacy and security laws and regulations in China, and (v) changes in the Chinese economy, marketplace or consumer environment;

•Export control and trade sanctions laws and regulations which could impair our ability to compete in international markets or subject us to liability if we violate those controls;

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•Our Brand Partner Compensation Plan, or changes we may make to it, may be viewed negatively by some Brand Partners, could fail to achieve our desired objectives, and could have a negative impact on our core nutritional business;

•Product liability claims, litigation or other liability associated with our products or the manufacturing of our products by us or third parties;

•Challenges associated with our planned expansion into new international markets, delays in commencement of sales or product offerings in such markets, delays in compliance with local marketing or other regulatory requirements, or changes in target markets;

•Macroeconomic conditions and other factors, including inflationary pressures, slower economic growth or recession, general conditions affecting consumer spending or discretionary income, or disruptions to our supply chain;

•Hiya's ability to adapt to changes in the digital marketing environment to generate customer acquisition, including changes in social media advertising algorithms;

•Rise's dependence on product orders from certain key retailers and the risk that future orders do not meet our forecasts;

•Political events, natural disasters, pandemics, epidemics or other health crises including, and in addition to, COVID-19, or other events that may negatively affect economic conditions, consumer spending or consumer behavior;

•Changes in the legal and regulatory environment including environmental, health and safety regulations, data security and privacy, and trade policies and tariffs, the impact of customs, duties, taxation, and transfer pricing regulations, as well as regulations governing distinctions between and our responsibilities to employees and independent contractors;

•Geopolitical tensions or conflicts, including impacts from the conflicts involving Russian and Ukraine; Israel and Palestine; and the United States, Israel and Iran; deterioration in foreign relations, as well as disputes or tensions among other countries around the world in general or among the United States, China and other countries;

•Volatile fluctuation in the value of foreign currencies against the U.S. dollar;

•Noncompliance by us or our Brand Partners with any data privacy or security laws or any security breach by us or a third-party involving the misappropriation, loss, destruction or other unauthorized use or disclosure of confidential information;

•Shortages of raw materials, disruptions in the business of our contract manufacturers, significant price increases of key raw materials, and other disruptions to our supply chain;

•Our continued compliance with debt covenants in our credit facility agreement;

•Litigation, tax, and legal compliance risk and costs, especially if materially different from the amount we expect to incur or have accrued for, and any disruptions caused by the same;

•Information technology system failures, data security breaches, data security and privacy compliance, network disruptions, and cybersecurity attacks;

•Acquisition, divestiture, and investment-related risks, including risks associated with our acquisition of Hiya Health Products, LLC or other past or future acquisitions;

•Human capital risks associated with our business, including if we are unable to attract or retain Brand Partner leaders to sell our products or if we lose key management personnel or employees in our core nutritional or direct-to-consumer businesses;

•Our ability to adequately protect and enforce our intellectual property and proprietary technology;

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•Our ability to utilize or develop artificial intelligence technology effectively; and

•Other risks and uncertainties, including those listed in the section titled "Item 1A. Risk Factors" in this Annual Report on Form 10-K.

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PART I

Item 1. Business

General

USANA Health Sciences, Inc. develops and manufactures high-quality nutritional supplements, functional foods and personal care products that are sold throughout the world. In 2025, we generated $925 million in net sales and finished the year with approximately 387,000 active Customers in our core nutritional business. We were founded in 1992 by Myron W. Wentz, Ph.D. and since that time, we have developed and manufactured high quality, science-based nutritional, personal care and skincare products with a primary focus on promoting long-term health and wellness. We are committed to continuous product innovation and sound scientific research. We have operations in 25 geographic markets worldwide. Historically, we have distributed our products through the direct selling channel, because we believe it is conducive to our vision of improving the overall health and nutrition of individuals and families around the world. Mainland China (“China”) is our largest market and single largest source of revenue, representing approximately 41.3% of net sales and approximately 49.9% of core nutritional active Customers. As a U.S.-based multi-national corporation with an expanding international presence, our operating results are sensitive to currency fluctuations, as well as economic and political conditions in markets throughout the world. Additionally, we are subject to the various laws and regulations in the United States, China, and the other markets in which we operate with respect to the products that we manufacture, and sell, and our method of distribution. We are a U.S. public company listed on the New York Stock Exchange ("NYSE") and subject to the rules of the SEC.

In December 2024, we acquired a 78.85% ownership interest in Hiya Health Products, LLC ("Hiya"), a leading direct-to-consumer provider of high-quality children's health and wellness products (the "Hiya Acquisition"). We believe that the addition of Hiya to our business promotes our vision and adds a diversified layer of growth in the direct-to-consumer channel. In 2022, we acquired Rise and have expanded Rise's product offering, distribution channel, and customer base over the last three years. Consequently, through our core nutritional business, Hiya and Rise, we now operate and sell products through an omni-channel platform, which includes direct selling, direct-to-consumer, third-party marketplace (i.e., Amazon), and retail channels.

This “Item 1. Business” provides detailed information about our worldwide business, including who we are, what we do and where we are headed. Unless otherwise specified, current information reported in this Annual Report on Form 10-K for the fiscal year ended January 3, 2026 (this “report” or “Annual Report”) is as of or for the fiscal year ended January 3, 2026. We also discuss the development of our company and the geographic areas where we do business. For the year ended January 3, 2026, there were no material changes to our corporate structure or our method of conducting business.

Our Business

We organize our business into two reportable segments: Core nutritional and Hiya direct-to-consumer.

Core nutritional:The customer base for our core nutritional segment is primarily comprised of two types of customers" "Brand Partners" and "Preferred Customers" referred to collectively as "active Customers." Our Brand Partners also sell our products to retail customers. Brand Partners share in our company vision by acting as independent distributors of our products, in addition to purchasing our products for their personal use. We also utilize an Affiliate sales program in the United States, Canada, Mexico, and India and are evaluating introducing the program in other markets. This program offers another sales and compensation opportunity to individuals who are interested in selling USANA products. Affiliates are discussed and reported in this report as part of our Brand Partners. Preferred Customers purchase our products strictly for personal use and are not permitted to resell or to distribute the products. We only count as active Customers those Brand Partners and Preferred Customers who have purchased from us at any time during the most recent three-month period.

Hiya direct-to-consumer:Hiya operates and sells products to customers in the United States and, in 2026, is expanding into Canada and the United Kingdom. Additionally, Hiya will be expanding in the retail channel beginning in the second quarter of 2026. Hiya's customers purchase Hiya products for personal use primarily through a subscription model, which is intended to provide a steady, predictable income stream for the Company. The ongoing nature of subscriptions fosters stronger relationships with customers by making it easier for them to receive products regularly, which we believe leads to retention and loyalty. Hiya's subscription model also provides important data on customer preferences and behaviors, which enables personalized offerings, efficient marketing and data-driven innovation insights. We evaluate Hiya's customer counts and behavior through its monthly subscribers and only count as "active Monthly

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Subscribers" those Hiya customers who have purchased from Hiya at any time during the most recent month. As of January 3, 2026, Hiya had approximately 181,700 active Monthly Subscribers.

Other: The customer base for our "other" category is comprised of customers of Rise and Oola Global, LLC ("Oola"), which are both businesses we acquired in 2022. Rise manufactures and sells high-quality protein bars, powdered protein drinks, and ready-to-drink ("RTD") liquid protein drinks that are formulated to help customers achieve their health goals through clean and simple ingredients. Oola is a direct selling company that offers a personal development framework and nutritional products that helps individuals create a life of balance, growth, and purpose.

For more information relating to our reportable segments, see Note Mto the consolidated financial statements included in Part II, Item 8 of this Annual Report, which is incorporated by reference.

Current Focus and Growth Strategy

Core Nutritional Business: During the third quarter of 2025, we held a successful Global Convention in Salt Lake City where we launched several new and upgraded products, recognized our top sales leaders and held numerous training sessions for our Brand Partners. Our product teams will continue working to roll out these recently launched products to all of our markets globally over the next several quarters. We also launched several enhancements to our Brand Partner compensation plan (“Brand Partner Compensation Plan” or “Compensation Plan”) to strengthen the competitiveness and appeal of our business opportunity in today's competitive and evolving marketplace. We will continue to promote and train our Brand Partners on these Compensation Plan enhancements during 2026. We will also continue to develop, promote and deploy marketing and training materials around these new products and Compensation Plan enhancements as part of our commitment to quality, excellence, and innovation and to benefit our active Customers in all our markets.

In 2026, our commercial team will remain actively engaged in prioritizing in-person meetings with our Brand Partners, with a focus on training and education, to ensure these recent product launches and Compensation Plan enhancements are successful and fully leveraged by our global active Brand Partners. Additionally, our team will continue to strengthen content creation at regional and local levels to enhance our global Brand Partners' ability to share, attract, and recruit new Brand Partners and customers.

Further, we will continue executing our global strategy which focuses on increasing the number of active Customers in each of our markets. Our key priorities include: (i) continuing to enhance the earning opportunity of our Brand Partners through our Compensation Plan; (ii) accelerating the launch of new and upgraded products while driving innovative product development; (iii) strengthening our brand messaging to create a more compelling and consistent market presence; (iv) deepening engagement with our Brand Partners through both in-person and digital initiatives around the world; (v) focusing on China while also implementing more tailored, decentralized solutions to meet the unique needs of each region; and (vi) supporting and expanding our acquired businesses, including the growth and expansion of Hiya and Rise. Further details on these strategies are outlined below.

We are leveraging our strong foundation in the nutrition business and expanding beyond our legacy direct selling channel to connect with a greater number of health-conscious consumers worldwide. We see an opportunity in a growing global health and wellness market to strengthen our brand relevance through an omni-channel platform. By deepening consumer engagement, empowering our Brand Partners, and executing with discipline, we believe we can accelerate profitable growth, extend our competitive advantages, and deliver sustainable long-term value for our shareholders. To facilitate this channel expansion, we intend to accelerate our technology initiatives to modernize our core systems and improve our customer experience and to create future cost efficiencies across our IT infrastructure. We plan to strategically leverage leading third-party IT platforms to move faster and more efficiently.

Enhancing the Earning Opportunity

To enhance the earning opportunity for our Brand Partners, we rolled out our enhanced Brand Partner Compensation Plan during the third quarter of 2025, which represents a strategic move to modernize our business and better position our Brand Partners, and the Company, for long-term success in a competitive landscape. This approach includes optimization of incentives to drive sustainable income, introduction of targeted elements that reward sales, customer, and team growth early in the journey of a new Brand Partner, and providing a more robust system of training, tools, and data to help Brand Partners build and scale their businesses. By aligning our compensation structure with business growth objectives, we aim to create a more rewarding and financially empowering opportunity for our global Brand Partner base.

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Product Development

In 2026, we will continue to lead in the area of cellular nutrition by enhancing our foundational and flagship products where necessary, developing more potent, unique, and differentiated formulations, and accelerating our speed to market for innovative new products. Our three dedicated product teams will continue to focus on delivering world-class nutrition solutions that meet evolving consumer needs and set new standards in the industry. Through continued investment in research, development, and cutting-edge science, we will ensure that USANA remains at the forefront of clinical nutrition, providing products that support optimal health and wellness worldwide.

Strengthening our Brand

We are enhancing and refining our brand messaging to create a more compelling, consistent, and globally recognized identity. Our focus is on clearly communicating our unique and differentiated commitment to world-class cellular nutrition, the strength of our science-backed products, and the life-changing opportunities we offer through our business model. We will continue to elevate our brand presence across digital and traditional channels, ensuring that our messaging resonates with both new and existing customers. By sharpening our positioning and storytelling, we aim to deepen trust, increase brand loyalty, and further differentiate USANA in the health and wellness industry.

Brand Partner Engagement

We are deepening our engagement with Brand Partners worldwide by enhancing both in-person and digital interactions. Our goal is to create a more connected and empowered health community by providing better communication, more personalized support, and expanded training opportunities. We will continue investing in digital tools, events, and mentorship programs that help Brand Partners build successful businesses and foster stronger relationships within their teams. By prioritizing engagement at every level, we aim to strengthen the Brand Partner experience, increase retention, and drive long-term growth across all markets.

China and Regional Support

We will continue executing strategic initiatives to drive growth in China, including: targeting and expanding active Customers through simple, easy-to-use, digitally-based customer acquisition, fulfillment, and service initiatives; enhancing our digital capabilities with continued investments aimed at improving the overall customer experience; expanding our market-leading training, development, and certification programs to empower Brand Partners in health, business, and personal growth, ensuring they have the tools needed to succeed; and enhancing our product portfolio with products specifically designed for the Chinese consumer.

Beyond China, we are strengthening our regional approach by empowering local leaders to develop winning strategies tailored to their unique cultures and market conditions. By providing them with greater authority and influence over product development and incentive creation, we are fostering a more agile, market-responsive organization.

In India, following our market entry at the end of 2023, we continue to execute our long-term growth strategy by expanding our product portfolio, strengthening local marketing efforts, and supporting our Brand Partners with enhanced tools and training. Additionally, we remain committed to evaluating new international markets for potential expansion, ensuring sustainable global growth for USANA.

Hiya and Rise: In 2026, we plan to continue to support and grow Hiya and Rise. Hiya and Rise expand our growth potential into the direct-to-consumer, third-party marketplace and retail channels through their diverse models.

Hiya growth initiatives include: (i) product portfolio expansion, (ii) distribution channel expansion, via online marketplaces and select retail partners, and (iii) geographic expansion in early 2026 into Canada and the United Kingdom. We are also leveraging assets and expertise from our core nutritional business to facilitate operational efficiencies for Hiya. For example, we are now manufacturing Hiya products in-house at our U.S. manufacturing facility to generate savings beginning in the second half of 2026 as efficiencies of scale and integration benefits materialize. We will continue to work with Hiya to capitalize on additional synergies, assets and expertise across both companies to promote overall sales and customer growth.

Rise growth initiatives also include product category expansion and distribution channel expansion. In 2025, Rise expanded its brand and product portfolio through launching Protein Pop, a new clear protein, RTD product line. Rise also expanded its distribution channel in 2025 and will further expand in 2026, largely through certain new key retail partners.

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We will continue to work with Rise to generate additional synergies, assets and expertise across the Company to promote overall sales and customer growth.

We also expect to continue to pursue acquisition opportunities in the health and wellness space that strengthen, diversify, and grow our worldwide business by focusing on: (i) overall nutrition, (ii) vertical integration, (iii) product and category expansion, distribution channel expansion, and (iv) geographic expansion.

For further details of these acquisitions, see Note B to the consolidated financial statements included in Part II, Item 8 of this Annual Report, which is incorporated by reference.

Products

The following table summarizes information concerning the principal product lines of our core nutritional segment:

______________________________

(1) Represents a product line consisting of multiple products.

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In addition to the products described above, we offer products designed specifically for prenatal, infant, and young-child age groups in China. As we continue to focus on innovation, we will look for innovative product opportunities such as our Celavive and Active Nutrition product lines.

Total product sales, as a percentage of net sales, represented by our top-selling products for the last three fiscal years is as follows:

Year Ended

Key Product

Hiya Multivitamins(1) 10% N/A N/A

USANA Essentials/CellSentials(2) 9% 10% 10%

Probiotic 7% 8% 9%

______________________________

(1)2024 and 2023 are not applicable due to the timing of the Hiya acquisition

(2) Represents a product line consisting of multiple products, as opposed to the actual USANA® Essentials / CellSentials product.

The following table summarizes information concerning the principal product lines of Hiya:

(1) For the period following the acquisition date of December 23, 2024.

(2) Kids Daily Hydration was launched in May 2025.

Geographic Presence

We have ongoing operations in the following markets in our core nutritional segment, which are presented in two geographic regions: (1) Asia Pacific, and (2) Americas and Europe. The countries included in these regions are described below:

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Asia Pacific

(1)Asia Pacific is organized into three sub-regions: Greater China, Southeast Asia Pacific, and North Asia. Markets included in each of these sub-regions are as follows:

(i)Greater China - Hong Kong, Taiwan, and China. Our business in China is conducted by BabyCare

(ii)Southeast Asia Pacific – Australia, New Zealand, Singapore, Malaysia, the Philippines, Thailand, Indonesia, and India(1)

(iii)North Asia – Japan and South Korea

Americas and Europe

(2)Americas and Europe – United States, Canada, Mexico, Colombia, and Europe (the United Kingdom, France, Germany, Spain, Italy, Romania, Belgium, and the Netherlands)

(1) We commenced operations in India near the end of the fourth quarter of 2023

Hiya operates and sells products in the United States and is expanding into Canada and the United Kingdom in early 2026. Rise operates and sells products in the United States and is included in our other category.

Impact of Foreign Currency Exchange Rates

Because we have operations in multiple markets, with sales and expenses generated and incurred in multiple currencies, our reported U.S. dollar sales and earnings can be significantly affected by fluctuations in currency exchange rates. In general, our operating results are affected positively by a weakening of the U.S. dollar and negatively by a strengthening of the U.S. dollar. In 2025, net sales outside of the United States represented approximately 75.7% of consolidated net sales.

Research and Development

As a critical driver of our competitive advantage in the global nutritional supplement industry, we focus our research and development (“R&D”) efforts on developing and bringing to market high-quality, science-based products that promote long-term health and wellness. Scientific innovation and rigorous product development enable us to deliver differentiated, high-quality products. Our R&D activities include identifying emerging trends, investigating new ingredients, developing products that are new to USANA and to the industry, and updating existing USANA-brand formulas to keep them current with the latest science and regulations in global markets, all of which ensure products are optimized to meet the changing, diverse needs of our global customer base. USANA R&D also supports product ideation, research, and formulation for our acquired businesses, Hiya and Rise.

Our team is composed of scientists experienced in human nutrition, cellular biology, biochemistry, biostatistics, the microbiome, neuroscience, aging, foods and cosmetic science, clinical research, and product development. Through strategic collaborations with academic institutions, independent research organizations, and healthcare professionals, along with reviewing the latest research on nutrition at scientific conferences and in journals, they work to identify possible new ingredients and product upgrade opportunities. Additionally, we employ experts in quality assurance, quality control, and global regulatory affairs to manage the entire product development lifecycle. These teams work in close partnership to ensure products are consistent, safe, and compliant with international regulations.

When developing and manufacturing our products, we follow the highest applicable industry quality standards across all stages of product development and manufacturing. Our ingredients are selected to ensure purity, potency, and efficacy. Quality control is maintained through controlled sourcing of raw ingredients, manufacturing, packaging, and labeling, as well as testing throughout the manufacturing process. This commitment to quality ensures our products meet or exceed the highest standards in the industry, builds customer trust, and reinforces the value of our brand.

We seek to differentiate ourselves in the marketplace by focusing on proprietary, science-backed formulations that consumers can trust. Our ability to develop innovative solutions tailored to specific regulatory and consumer requirements in diverse global markets, while consolidating formulas and ensuring manufacturing efficiencies, is a key factor in our international growth strategy. We leverage the diverse expertise of our team to address consumer needs while capitalizing on new opportunities in the nutritional supplement space. By combining strong scientific foundations with operational excellence, we enhance our ability to drive growth and deliver value to both our customers and shareholders.

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The R&D team is instrumental in fortifying our proprietary position, employing exclusive ingredients, proprietary formulations, product-specific scientific validation, and patent protection. We maintain an active research pipeline thatcontinues to support our proprietary InCelligence technology and utilize clinical research to drive advances in core health categories. These efforts ensure our product line is continuously evolving to address foundational health needs, including women’s health, cardiovascular support, support for vital body systems and organs, and healthy aging.

In fiscal years 2025, 2024, and 2023, we expended $10.7 million, $11.6 million, and $11.4 million, respectively, on product R&D activities. We launched over 15 new or upgraded products in 2025, continuing our push to accelerate product development timelines through streamlined collaboration and more efficient processes. We expect to continue investing in R&D to advance our expertise and leadership in cellular nutrition, as well as overall health and wellness. In 2026, we plan to continue investing into early-stage research and scientific innovation.

Manufacturing and Quality Assurance

We conduct manufacturing, production, and quality control operations for approximately 56% of our products in-house. We have established and maintain a manufacturing and quality control facility at our corporate headquarters in Salt Lake City, Utah. We utilize a separate 54,000 square foot manufacturing facility located adjacent to our corporate headquarters to manufacture our food products in-house. BabyCare manufactures and produces the majority of its products in-house and maintains manufacturing and quality control facilities in Beijing, China and Tianjin, China.

Manufacturing

Our production process uses automatic and semi-automatic equipment and includes the following activities by type:

TabletManufacturing FoodsManufacturing Personal Care and SkincareManufacturing

Auditing and qualifying suppliers of raw materials x x x

Acquiring raw materials x x x

Analyzing raw material quality x x x

Weighing or otherwise measuring raw materials x x x

Mixing raw materials into batches x x x

Forming mixtures into tablets x

Converting batches into bars and/or finished powders x

Coating and sorting the tablets x

Analyzing tablet quality x

Analyzing bars and/or finished powder quality x

Analyzing liquid batch quality x

Packaging finished products x x x

Analyzing finished product quality x x x

We conduct sample testing of raw materials, in-process materials, and finished products for purity, potency, and composition to determine whether our products conform to our internal specifications, and we maintain complete documentation for each of these tests. We employ a qualified staff of professionals to develop, implement, and maintain a quality system designed to ensure that our products are manufactured to our internal and applicable regulatory agency specifications.

Our Salt Lake City, Utah, manufacturing facilities are registered, as required, with the FDA, Health Canada Natural Health Products Directorate, the Australian Therapeutic Goods Administration (“TGA”), and other governmental agencies. These and other various organizations and government agencies regularly audit this facility to assess, among other things, compliance with current Good Manufacturing Practices (“GMPs”) and with labeling claims. Additionally, our Salt Lake City, Utah manufacturing facilities are certified, through inspection and audits, with the Islamic Foods and Nutrition Counsel of America in compliance with Halal, The Organized Kashrus Laboratories in compliance with Kosher, NSF International in compliance with product testing and GMPs, and the TGA in compliance with the current Therapeutic Goods Act in Australia.

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The manufacture of nutritional or dietary supplements and related products in the United States requires compliance with dietary supplement GMPs, which are based on the food-model GMPs and pharmaceutical GMPs, with additional requirements that are specific to dietary supplements. We are audited by the FDA, specifically for dietary supplements, and have historically been found to be in compliance with GMPs for dietary supplements. Although the FDA has not promulgated GMPs for personal care items, it has issued guidelines for manufacturing personal care products. We voluntarily maintain compliance with the guidance established by the FDA and the Personal Care Products Council.

Our Beijing, China manufacturing facility is registered with State Administration of Market Regulation (“SAMR”), which includes the China Food and Drug Administration. Our facility in Beijing is audited regularly by various organizations and government agencies to assess, among other things, compliance with applicable GMPs, and with labeling claims.

Third-Party Suppliers and Manufacturers

We contract with third-party suppliers and manufacturers for the production of certain of our products, which accounted for approximately 44% of our product sales in 2025, an increase from prior years as a result of the Hiya acquisition in December 2024. These third-party suppliers and manufacturers produce and, in most cases, package these products according to formulations that have been developed by or in conjunction with our in-house product development team. These products include most of our gelatin-capsulated supplements, Rev3 Energy® Drink, Probiotics, certain powdered drink mixes, protein drinks, most of Hiya's products and certain of Rise's products. In 2026, we plan to continue transitioning the production of our powdered drink mixes as well as various Hiya products to our USANA facilities.

Products manufactured by third-party suppliers at their locations must also pass through quality control and assurance procedures to ensure they are manufactured in conformance with our specifications. As noted above, with the expansion of our manufacturing facility in Salt Lake City, Utah, we are able to manufacture our foods product line. Additionally, we plan to increase the proportion of the personal care and skincare products that we manufacture. This will reduce our reliance on third-party suppliers and manufacturers and add to our operating strengths, which are described below in this Annual Report.

Quality Control and Assurance

We have in-house microbiology and analytical chemistry labs in which we conduct quality control processes. In our microbiology laboratory, scientists test for biological contamination of raw materials and finished goods. In our analytical chemistry laboratory, scientists test for chemical contamination and accurate levels of active ingredients in both raw materials and finished products. Scientists also identify and confirm all raw materials used in the manufacturing process through scientifically valid means. Both laboratories conduct stability tests on finished products to determine the shelf life of our products. Our Salt Lake City, Utah laboratory staff also performs chemical assays on vitamin and mineral constituents, using USP methods and other internally validated methods. In addition to our quality control and clinical laboratories, both our headquarters and China facilities also house a laboratory designated for R&D.

Raw Materials

Most of the raw ingredients used in the manufacture of our products are available from a number of suppliers. Our raw material suppliers must demonstrate stringent process and quality control before we use their products in our manufacturing process. When supplies of certain raw materials have tightened, we have been able to find alternative sources of raw materials, and believe we will be able to do so in the future, if the need arises.

Distribution and Marketing

General

We distribute products from our core nutritional business internationally primarily through direct selling, which entails person-to-person marketing and selling of products. Direct selling is based on the strength of personal relationships and recommendations that frequently come from friends, neighbors, relatives, and close acquaintances. We believe that direct selling is an effective way to distribute our products because it allows person-to-person product education, as well as higher levels of customer service, all of which are not as readily available through other distribution channels. As noted elsewhere in this report, through Hiya and Rise, we have expanded our distribution channel to an omni-channel platform and believe this platform provides a new and diversified opportunity for sales and customer growth.

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Structure of Core Nutritional Program

Overview. Although our core nutritional business philosophy and strategy are generally consistent in our markets around the world, certain aspects of our business may differ from market to market as a result of different legal and regulatory regimes, operational requirements or other factors. These differences may include how individuals join USANA, the compensation they are paid, the products they sell, and other components of their relationship with USANA. For example, China has enacted and maintains unique business laws and regulations governing direct selling that differ materially from our other markets around the world. Consequently, we have adjusted our direct selling program in China to comply with these laws and regulations. To do this, we operate our business in China through BabyCare. BabyCare utilizes a business model in China that is consistent with the philosophy of our worldwide business model, but differs in structure from our other markets. These differences are explained below under “China Business.”

Brand Partners. Outside of China, a person who wishes to sell products from our core nutritional business must join our independent sales force as a Brand Partner. A person becomes a USANA Brand Partner by completing an application under the sponsorship of an existing Brand Partner. The new Brand Partner then becomes part of the sponsoring Brand Partner’s sales organization. New Brand Partners must agree to adhere to the USANA policies and procedures. Under our policies and procedures, Brand Partners may not, among other things: (i) use deceptive or unlawful practices to sell products; (ii) make deceptive or unlawful claims or representations concerning our products or Compensation Plan; or (iii) sell competitive products to other Brand Partners or solicit Brand Partners to participate in other direct selling opportunities. Brand Partners who violate our policies are subject to discipline, which may include the termination of their purchase and distribution rights. New Brand Partners are required to purchase a starter kit that includes a detailed manual describing our business and products, as well as our policies and procedures. We sell these kits at a nominal price averaging approximately $16 in each of our markets and these kits are fully refundable under our return policy, which is described elsewhere in this report. No other direct investment is required to become a Brand Partner.

A Brand Partner may purchase products directly from us at wholesale prices for their personal use and for resale to customers. Our Brand Partners are also entitled to build sales organizations by attracting, enrolling and selling product to new customers. Brand Partners are not required to recruit or sponsor new Brand Partners and we do not compensate Brand Partners for sponsoring or recruiting Brand Partners. The sponsoring of new Brand Partners results in the creation of multiple levels within our direct sales structure. Sponsored Brand Partners are referred to as part of the sales organization of the sponsoring Brand Partner. New Brand Partners in turn may sponsor new Brand Partners and Preferred Customers, creating additional levels in their sales network, but also forming a part of the same sales organization as the original sponsoring Brand Partner. As outlined below, Brand Partners who are interested in earning income with USANA must successfully sell products and establish a network of product consumers in order to qualify for commissions, including bonuses. Subject to payment of a minimal annual account renewal fee, Brand Partners may continue to distribute or consume our products as long as they adhere to our policies and procedures.

Brand Partner Compensation. This section describes our Brand Partner Compensation Plan generally, except for our China operations, which are discussed separately below under the caption “China Business.”Our Compensation Plan provides several opportunities for Brand Partners to earn compensation, provided they are willing to work consistently at (i) sharing, marketing and selling our products to consumers and (ii) building, training, and retaining their sales organizations. The purpose behind each form of compensation under our Compensation Plan is to reward committed Brand Partners for generating product sales either directly or indirectly through their sales organization and network of product consumers.

Brand Partners can earn compensation under the Compensation Plan in four ways:

•Commissions. The primary way a Brand Partner is compensated is through earning commissions. Brand Partners earn commissions by generating sales volume points, which are based on product sales of their sales organization. We have assigned each of our products a sales volume point value comprised of a certain percentage of the product price in U.S. dollars. To be eligible to earn commissions, a Brand Partner must sell a certain amount of product each month. Brand Partners do not earn commissions for simply recruiting and enrolling others in their organization. Commissions are paid only on the sale of products. In most markets, we pay Brand Partners their commissions on a weekly basis.

•Bonuses. We offer Brand Partners several bonus opportunities, including our new sales bonus, our new milestone bonus, leadership bonus, elite bonus, and lifetime matching bonus. These bonus opportunities are based on a pay-for-performance philosophy and, therefore, are paid out when the Brand Partner achieves certain performance measures.

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•Retail Mark-Ups. As discussed previously, in markets where retail mark-ups are permitted, our Brand Partners purchase products from us at the Preferred Price and may resell them to consumers at higher retail prices. This allows the Brand Partner to retain the retail mark-up as another form of compensation.

•Contests and Promotions. We regularly sponsor contests and promotions designed to incentivize Brand Partners to generate sales, grow their active Customer base and ultimately increase the number of product users. These promotions are also based on a pay-for-performance philosophy and, therefore, are only paid upon the achievement of certain objectives.

With the exception of our China market (discussed below), we endeavor to integrate our Compensation Plan across markets where legally permissible, allowing Brand Partners to receive commissions for global product sales. This sales organization structure is designed to allow Brand Partners to build a global network by establishing or expanding their sales organization in the markets where we operate. We believe our Compensation Plan significantly enhances our ability to expand internationally, and we intend to continue to integrate new markets, where permitted, into our Compensation Plan.

Preferred Customers and Retail Customers. We also sell products directly to Preferred Customers and retail customers who purchase the products only for their personal use. Preferred Customers enroll with USANA, generally through an introduction by a Brand Partner, and purchase product directly from the Company. Retail customers, however, purchase directly from Brand Partners or directly from the Company without enrolling as a Preferred Customer. Neither Preferred Customers nor retail customers may resell or distribute our products, regardless of where they purchased them. To sell our products, a Preferred Customer or retail customer must become a Brand Partner.

These various customer programs give us access to a customer market that would otherwise be missed, by targeting consumers who enjoy our products, but who prefer not to maintain a distribution relationship with us. Although our policies prohibit Preferred Customers and retail customers from engaging in retail sales of products, they may enroll as Brand Partners at any time in the future, if they desire.

Affiliate program. We offer an Affiliate Program in certain markets. Affiliates receive unique links to share advertising and products with their prospective customers. Affiliates earn a commission on all orders placed through their links, with commission percentages ranging from 15-20% of the product sale amount based on the product category.

China Business. As explained above, the Chinese government maintains direct selling laws and regulations that differ materially from our other markets around the world. Although these laws and regulations permit direct selling, they impose a number of financial and operational restrictions, including a prohibition of pyramid selling and multi-level compensation systems. The Chinese government has also implemented a number of administrative and regulatory measures around direct selling to control these prohibited activities. To reduce the risk that the Chinese government might view BabyCare’s business model as conflicting with these laws and regulations, BabyCare utilizes a business model that is different from the model we use elsewhere in the world. BabyCare’s business model has been developed specifically for the China market and is based on, among other things: (i) BabyCare’s communications with the Chinese government, (ii) BabyCare’s interpretation of China's direct selling laws and regulations, as well as its understanding of how the government interprets and enforces these laws and regulations, and (iii) BabyCare’s understanding of how other multinational direct selling companies operate in China. Consequently, individuals who join BabyCare in China are compensated under BabyCare’s compensation plan, which has been established for China. Notwithstanding the foregoing, BabyCare has not received approval from the Chinese government that its business model, compensation plan or operations comply with applicable laws and regulations, including those pertaining to direct selling.

BabyCare sells products in China through a variety of methods, including: (a) online through its website; (b) at physical branch retail locations; (c) through direct sellers in provinces and municipalities where BabyCare has received a direct selling license granted by the local provincial government; and (d) through independent distributors who are considered independent business owners under Chinese law. Individuals who reside in China and who are interested in being part of our business in China may do so by enrolling with BabyCare. While the process for enrolling with BabyCare is similar to the process for joining our business in other markets, individuals must initially enroll with BabyCare as either a traditional Preferred Customer (as described previously in this report) or China Preferred Customer ("CPC"). CPCs are similar to traditional Preferred Customers, but CPCs may also refer other CPCs and Preferred Customers in China and receive product vouchers from us to redeem on future product purchases based on the volume of product purchased by customers they have referred.

A Preferred Customer or CPC may become a direct seller or independent distributor (which we report collectively as Brand Partners) in China by electing to do so and agreeing to adhere to BabyCare’s policies and procedures in China.

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Our direct sellers in China are permitted by our policies and the terms of our direct selling licenses to sell product away from fixed retail locations in the provinces and municipalities where BabyCare has been granted a local direct selling license. Direct sellers are compensated for their sales under BabyCare’s compensation plan and do not receive compensation for promotional, marketing, or sales services that independent distributors are eligible to receive (as described below). Independent distributors are independent business owners who sell BabyCare’s products in China and also provide promotional, marketing, and sales services for BabyCare in China. Under BabyCare’s compensation plan, independent distributors are compensated not only for their own product sales, but also for their productivity in providing promotional, marketing and sales services. BabyCare’s compensation to its independent distributors for these services is intended and designed to be business-to-business compensation under Chinese law. To calculate independent distributor compensation for these services, we (i) use our worldwide Compensation Plan to track sales volume, and other metrics for the group of Preferred Customers, CPCs, distributors and others in China to whom the independent distributor provides promotional, marketing and sales services on behalf of BabyCare; (ii) calculate the fee-based compensation for the various services performed by the distributor; and (iii) pay the corresponding service fee to the independent distributor in China. While we have historically paid compensation to our distributors and direct sellers in China on a monthly basis, we are moving toward paying compensation in China on a weekly basis to eligible Brand Partners, similar to our other markets. The fee-based compensation we pay our China independent distributors is comparable to the compensation available to our Brand Partners in other markets and competitive with other direct selling companies in China.

BabyCare’s business model, compensation plan, and operations in China involve certain risks and uncertainties, as discussed further in Item 1A. Risk Factors. We endeavor to mitigate these risks and uncertainties through various measures, including by seeking to understand and obey laws and regulations, training our employees and sales force, engaging in dialogue with government officials to better understand their goals and explain our plans, and cooperating in inquiries and other matters of interest to regulators. However, these efforts do not completely eliminate the significant risks associated with BabyCare’s operations in China.

Brand Partner Training and Motivation. Initial training of Brand Partners about USANA, our products and Compensation Plan, and global direct selling in general, is provided primarily by a Brand Partner’s sponsor and others in the Brand Partner’s sales organization. We develop and provide training materials and sales tools to assist Brand Partners in building their businesses, and we provide reprints from commercial publications that feature USANA that may be used as sales tools. We also sponsor and conduct regional, national, and international Brand Partner events, as well as intensive leadership training seminars. Attendance at these sessions is voluntary, and we undertake no generalized effort to provide individualized training to Brand Partners, although experience shows that the most effective and successful Brand Partners tend to be those who participate in such training activities. Although we provide leadership training and sales tools, we ultimately rely on our Brand Partners to sell our products, attract new customers to purchase our products, and to educate and train new Brand Partners regarding our products and Compensation Plan.

Structure of Hiya and Rise Businesses

Hiya operates largely through a subscription-based direct-to-consumer business model. A customer's initial order from Hiya comes with a sustainable, refillable glass bottle that kids can personalize and additional orders come with educational material and games. Hiya also utilizes social media to promote sales across various platforms through brand-focused content and influencer partnerships. Hiya's diversified marketing also utilizes internet and social media keyword searches, influencers and paid advertisements, podcasts, advertorial publishing and direct mail campaigns. In 2025, Hiya began expanding its distribution channel to include third-party marketplace sales, and will further expand its channel in 2026 to include select retail locations. Rise's distribution channel for its products includes direct-to-consumer sales, third-party marketplace sales, and sales through certain key retailers. Notwithstanding its omni-channel platform, Rise relies on orders from key retailers to generate the majority of its sales and we cannot assure you that orders from these retailers will continue, increase in volume, or meet Rise's current or future forecasts.

Operating Strengths

Our vision is to improve the overall health and nutrition of individuals and families around the world. We do this through developing and manufacturing high-quality, science-based nutritional, and personal care and skincare products that promote long-term health, and providing a global direct selling opportunity for our Brand Partners who desire to distribute our products and earn supplemental income. Our strategy is to capitalize on our operating strengths, which include (i) a strong R&D program; (ii) significant in-house manufacturing capability; (iii) high quality science-based products; (iv) a rewarding Brand Partner Compensation Plan; (v) a scalable business model; (vi) an experienced management team; and (vii) an increasing omni-channel sales and distribution platform.

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Emphasis on Research and Development. We have a technical team of experienced scientists, including several holding doctoral degrees, quality engineers, and regulatory specialists who contribute to our R&D activities. In our R&D laboratories, our scientists and researchers:

•Investigate activities of natural extracts and formulated products in laboratory and clinical settings;

•Identify and research combinations of nutrients that may be candidates for new products;

•Study the metabolic activities of existing and newly identified nutritional ingredients;

•Enhance existing USANA brand products, as new discoveries in nutrition, personal care and skincare are made;

•Formulate products to meet diverse regulatory requirements across all of our markets; and

•Investigate processes for improving the production of our formulated products.

Our in-house research team also conducts double-blind, placebo-controlled, clinical studies, which are intended to further evaluate the efficacy of our products. In addition, we collaborate with outside research organizations to further support various aspects of our R&D efforts. Our in-house research team has funded clinical research programs and works closely with scientists at a number of universities and research institutes, including those listed under the caption “Research and Development” above, to maintain our leadership in clinical research in nutrition, oxidative stress, glycemic stress, chronic inflammation and health implications of the microbiome. It is through our internal R&D efforts, as well as our relationships with outside research organizations and health care providers, that we can provide what we believe to be among the highest quality health products in the industry.

In-house Manufacturing. We manufacture products that account for approximately 56% of our product sales. We believe that our ability to manufacture our own products in-house is a significant competitive advantage for the following reasons:

•We can better control the quality of raw materials and finished products;

•We can more reliably monitor the manufacturing process to better guarantee potency and bioavailability and to reduce the risk of product contamination;

•We can better control production schedules to increase the likelihood of maintaining an uninterrupted supply of products for our customers;

•We are able to produce most of our own prototypes in the research phase of product development; and

•We are better able to manage the underlying costs associated with manufacturing our products.

Science-based Quality Products. As a result of our emphasis on R&D and our in-house manufacturing capabilities, we have developed a line of high quality products that we believe provide health benefits to our customers. Our products have been developed based on a combination of published research, in-house laboratory and third-party clinical studies, and sponsored research.

Rewarding Brand Partner Compensation Plan and Support. We are committed to increasing product sales for our direct sales business by providing a competitive compensation plan that attracts and retains Brand Partners who constitute our sales force. We motivate our Brand Partners by paying incentives on a weekly basis where permissible. Our Compensation Plan is also implemented as a global-seamless plan where permissible, meaning that Brand Partners can be compensated for their business success in any market in which they have product consumers and/or a sales organization where we conduct business. As noted elsewhere in this report, our China operations maintain their own compensation plan, which is structured differently than our plan in other markets. In 2025, we modified our Brand Partner Compensation Plan to enhance the earning opportunity for Brand Partners and to prioritize sales and customer growth under the plan.

To support our Brand Partners, we sponsor virtual and in-person meetings and events throughout the year, where we offer information about our products and our global direct selling system. These meetings are designed to assist Brand Partners in business development and to provide a forum for interaction with some of our Brand Partner leaders and with members of our management team. Our strategy in 2026, and going forward, is to offer in-person meetings and events with our Brand Partners to the extent health and safety practices make it possible. Our plan is to continue to leverage a virtual

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meeting element as a component of our in-person meetings. We also provide low-cost sales tools and resources, which we believe are an integral part of building and maintaining a successful home-based business for our Brand Partners.

In addition to company-sponsored meetings, sales tools and resources, we maintain a website exclusively for our Brand Partners, where they can access the latest USANA news, obtain training materials, manage their personal information, enroll new customers, shop for products, and register for company-sponsored events. Additionally, through this website, Brand Partners can access other online services to which they may subscribe. For example, we offer an online business management service, which includes a tool that helps Brand Partners track and manage their business activity, a personal webpage to which prospects or retail customers can be directed, and e-cards for advertising.

We also believe that recognition is an important factor in supporting and retaining our Brand Partners. We understand that being a successful USANA Brand Partner requires hard work and dedication, and we celebrate key achievements and rank advancements of our Brand Partners. We believe that our recognition programs greatly contribute to our ability to retain our Brand Partners.

Direct Selling Business Model. We believe that our direct selling business model provides, among others, the following advantages:

•No requirement for a company-employed sales force to sell our products, with a relatively low incremental cost to add a new active Customer;

•Commissions paid to our Brand Partners are tied to sales performance;

•Accounts receivable are minimal because payment is required at the time a customer purchases product;

•A stream of recurring revenue generated from our monthly product subscription program known as “Auto Order,” which we utilize in all of our markets (this program offers a 10% price discount and represented 62% of our direct sales product sales volume for the year ended January 3, 2026); and

•The ability to expand into new international markets with moderate investment because we generally maintain only warehouse facilities, customer support, and minimal administrative facilities in those international markets. Larger markets, including China, however, require more significant local investment.

Omni-Channel Platform. We believe that our omni-channel platform through USANA, Hiya, and Rise provides, among others, the following advantages:

•Access to a new, diverse and growing sales and customer base through direct-to-consumer, third-party marketplace, and retail distribution channels;

•Direct-to-consumer subscriptions through Hiya that provide:

◦a steady, predictable income stream, making it easier to manage cash flow and plan for growth;

◦stronger relationships with customers making it easier for them to receive products regularly, which leads to higher retention rates and loyalty;

◦a platform to retain existing subscribers in an effort to lower expenses on acquiring new customers;

◦data on customer preferences and behaviors, which enables personalized offerings, efficient marketing and data-driven innovation insights; and

◦minimal accounts receivable because payment is required at the time of online purchase.

•Third-party marketplace sales that provide:

◦the ability to tap into built-in customer traffic and high purchase intent without generating all of the demand through traditional advertising;

◦an opportunity to lower customer acquisition costs by leveraging marketplace searches and algorithms in lieu of fully paid digital advertising; and

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◦potentially higher sales conversion rates due to trust in the marketplace's advertising, payment options, and fulfillment capabilities.

•Retail (brick-and-mortar) sales that provide:

◦in-person shelf presence to promote visibility and discovery of Hiya and Rise products in high-traffic environments;

◦increased trust, credibility, and purchase opportunity for Hiya and Rise products generated from the reputation of our key retail partners; and

◦potential accelerated scale and increased geographic reach for Hiya and Rise products through the diverse and expansive locations of our key retail partners.

Experienced Management Team. Our management team includes individuals with expertise in various scientific and managerial disciplines, including global direct selling, nutrition, product research and development, international development, marketing, sales, information technology, manufacturing, accounting and finance, legal, regulatory, and operations. This team is responsible for supporting growth, R&D, international expansion, strengthening our financial condition, and improving our internal controls. Our team also includes individuals with significant expertise in the sales and distribution models for Hiya and Rise.

Competition

Our business through USANA, Hiya, and Rise is very competitive and the barriers to entry are not significant. We compete with manufacturers, distributors, and retailers of nutritional products in many channels, including global direct selling, direct-to-consumer, specialty retail stores, wholesale stores, e-commerce businesses such as Amazon, and the internet generally. We also compete with other public and privately owned direct sellers for distributor talent, including for example Amway, Herbalife, and Nu Skin. On both fronts, compared to USANA, Hiya, and Rise, many of our competitors are significantly larger, have a longer operating history, higher visibility and name recognition, and greater financial resources. We compete with these entities by emphasizing the strengths of our business, as described in the "Operating Strengths" section above.

Product Returns

Product returns have not been a material factor in our business, totaling approximately 0.8%, 0.6%, and 0.6% of net sales in 2025, 2024, and 2023, respectively. Customer satisfaction has always been and will continue to be a hallmark of our business. We believe that we have always offered a generous product return policy. Our standard return policy for our core nutritional business allows customers to receive a 100% refund on the purchase price on all product orders that are unused and returned within the first 30 days following purchase. Additionally, we offer a 100% refund of the sales price on all product orders by Brand Partners that are unused and resalable up to one year from the date of purchase. To avoid manipulation of our Compensation Plan, return of product when the purchase amount exceeds $100 and the product was not damaged at the time of receipt by the Brand Partner may result in cancellation of a Brand Partner’s distributorship. This standard policy differs slightly in a few of our international markets due to applicable regulations in those markets. It also differs from our Hiya direct-to-consumer segment for which returns are allowed only in specific situations. For Hiya's business, a return must be unopened in its original packaging postmarked within 10 days of the original delivery date.

Major Customers

We sell product to independent Brand Partners, Preferred Customers, active Monthly Subscribers, and retail customers. No single Brand Partner, Preferred Customer, active Monthly Subscriber, or retail customer accounted for 10% or more of net sales in any of the last three fiscal years. Notwithstanding the foregoing, the nature of our business model results in a significant amount of sales to several different Brand Partner leaders and their sales organizations. Although no single Brand Partner accounted for 10% or more of our annual net sales, the loss of a key Brand Partner leader or that Brand Partner’s sales organization could adversely affect our net sales and our overall operating results. As noted elsewhere in this report, notwithstanding its omni-channel platform, Rise relies on orders from certain key retailers to generate the majority of its sales. We cannot assure you that orders from these retailers will continue, increase in volume, or meet Rise's current or future forecasts. See “Item 1A. Risk Factors.”

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Brand Partner Compliance

Our reputation depends upon the quality of our products and the integrity of our Brand Partners for our core nutritional business. We continually monitor and review our Brand Partners’ compliance with our policies and procedures as well as the laws and regulations applicable to our business around the world. Part of this review entails an assessment of our Brand Partners’ sales activities to ensure that they are actually selling products to consumers. Our policies and procedures require Brand Partners to present our products and the USANA opportunity ethically and honestly. Brand Partners are not permitted to make claims about our products or Compensation Plan that are not consistent with our policies and procedures and applicable laws and regulations. The majority of our Brand Partners use marketing and promotional materials provided by USANA. Brand Partners are permitted to produce their own marketing and promotional materials. However, prior to doing so, Brand Partners are required to complete an Advertising Certification to help educate them and prevent them from making unapproved product and business claims (with the exception of Mainland China where Brand Partners are only allowed to use advertising material created by the Company).

In the ordinary course of our business, we encounter Brand Partners who fail to adhere to our policies and procedures. We systematically review reports of alleged Brand Partner misbehavior. Infractions of the policies and procedures are reported to our Ethics and Education group, who determine what, if any, disciplinary action is warranted in each case. More serious infractions are also reported to our Ethics Committee, which includes USANA executives. If we determine that a Brand Partner has violated any of our policies and procedures, we may take a number of disciplinary actions, including warnings, fines or probation. Among other measures, we may also withdraw or deny awards, suspend privileges, withhold commissions until specific conditions are satisfied, or take other appropriate actions in our discretion, including termination of the Brand Partner’s purchase and distribution rights.

Because we believe that Brand Partner compliance is critical to the integrity of our business, we are aggressive in ensuring that our Brand Partners comply with our policies and procedures. When a Brand Partner fails to comply with our policies and procedures, we may terminate the Brand Partner’s purchase and distribution rights. From time to time, we become involved in litigation with Brand Partners whose purchase and distribution rights have been terminated. We consider such litigation to be routine and incidental to our business and we will continue to be aggressive in ensuring that our Brand Partners comply with our policies and procedures.

Information Technology

We believe that the ability to efficiently manage sales, active Customer data, distribution, compensation, manufacturing, inventory, accounting and finance, and communication functions through the use of secure, sophisticated, and dependable information processing systems is critical to our success. We continually evaluate changes in the information technology environment in connection with our efforts to capitalize on new technologies, keep pace with regulatory standards, and secure our systems and data. Over the last several years, we have meaningfully invested in technology systems and infrastructure to create a better overall customer experience for our customers and we will continue to invest in this area going forward, including in 2026.

Our information technology resources are maintained primarily by our in-house staff to optimally support our customer base and core business processes. Our IT staff manages an array of systems and processes that support our global operations 24 hours a day and 365 days a year. Below is a list of our most critical applications:

•A web-based application and native mobile applications that provide online services to Brand Partners, such as training sessions, presentations, communication tools, online shopping, enrollment, a real-time reporting engine, product information, web hosting, email, and other tools to help Brand Partners effectively manage their business and sales organizations;

•A web-based order-entry system that handles order entry, customer information, compensation, Brand Partner business structure, returns, invoices, and other transactional-based processes; and

•Fully integrated worldwide Enterprise Resource Planning (“ERP”) systems that handle accounting, human resources, inventory management, production processes, quality assurance, and reporting requirements in a multinational environment.

Our web applications are supported by a clustered environment providing high availability. All systems vital to the functioning of our organization are fully backed up and stored off-site to mitigate the risk of significant interruption of our business in the event of a disaster at the locations of our primary servers.

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We are investing in strengthening our data foundation to improve internal reporting functions and better enable our internal artificial intelligence / machine learning projects to increase effectiveness.We are also engaged in a large modernization effort to improve the infrastructure and technologies that our core systems are based upon.In addition, we will increase artificial intelligence adoption to speed up internal work and efficiency.

For information regarding technology-related risks, see the information in “Item 1A: Risk Factors.”

Regulatory Matters

General. In every jurisdiction in which we operate, our business is subject to extensive governmental regulation. These regulations exist at various national and local levels and pertain to our products, direct selling, and other aspects of our business. In this section, we describe the material regulations that are applicable to our business.

Product Regulation. Numerous governmental agencies regulate the formulation, manufacturing, holding, packaging, labeling, advertising, promoting, importing, distributing, shipping, and selling of health supplements, cosmetics, and foods. In the United States, these agencies include the Federal Trade Commission (“FTC”) under the FTC Act, as amended, the FDA, under the Food, Drug, and Cosmetic Act, as amended (“FDCA”) and related regulations, the Consumer Product Safety Commission, the U.S. Department of Agriculture, the Environmental Protection Agency, the United States Customs and Border Patrol, and the United States Postal Service.

Our largest selling product group includes products that are regulated as dietary supplements under the FDCA. Dietary supplements are also regulated in the United States under the Dietary Supplement Health and Education Act of 1994, as amended (“DSHEA”), which we believe is generally favorable to the dietary supplement industry. Some of our powdered drink, food bar, and other nutrition products are regulated as foods under the Nutrition Labeling and Education Act of 1990, as amended (“NLEA”). The NLEA establishes requirements for ingredient and nutritional labeling including product labeling claims. The manufacture of nutritional or dietary supplements and related products in the United States requires compliance with dietary supplement GMPs, which are based on the food-model GMPs and pharmaceutical GMPs, with additional requirements that are specific to dietary supplements. We are audited annually by the FDA, specifically for dietary supplements, and have been found in compliance with GMPs for dietary supplements. The Dietary Supplement & Nonprescription Drug Consumer Protection Act requires manufacturers of dietary supplements and over-the-counter (“OTC”) products to notify the FDA when they receive reports of serious adverse events occurring within the United States. We have an internal adverse event reporting system that has been in place for several years, and we believe that we comply with this law.

In general, our personal care and skincare products, which are regulated as cosmetic products by the FDA, are not subject to pre-market approval by that agency. Cosmetics, however, are subject to regulation by the FDA under the adulteration and misbranding provisions of the FDCA. Cosmetics also are subject to specific labeling regulations, including warning statements, if the safety of a cosmetic is not adequately substantiated or if the product may be hazardous, as well as ingredient statements and other packaging requirements under The Fair Packaging and Labeling Act. Cosmetics that meet the definition of a drug, such as sunscreens, are regulated as drugs. OTC drug products, including cosmetics, may be marketed if they conform to the requirements of the OTC monograph that is applicable to that drug. Drug products not conforming to monograph requirements require an approved New Drug Application (“NDA”) before marketing may begin. Under these provisions, if the agency were to find that a product or ingredient of one of our OTC drug products is not generally recognized as safe and effective or is not included in a final monograph that is applicable to one of our OTC drug products, we would be required to reformulate or cease marketing that product until it is the subject of an approved NDA or until the time, if ever, that the monograph is amended to include such product.

Advertising of our products in the United States is subject to regulation by the FTC under the FTC Act. Claims by us or our Brand Partners about our products that cannot be adequately substantiated may be considered unfair or deceptive acts or practices and may expose us to liability under the FTC Act. In recent years, the FTC has initiated numerous investigations of and actions against companies that sell dietary supplement, weight-management, and cosmetic products. We believe that we have adequate substantiation for all material advertising claims that we make for our products in the United States, and we believe that we have organized the documentation to support our advertising and promotional practices. However, no assurance can be given that the FTC would reach the same conclusion if it were to review or question our substantiation for our advertising claims in the United States.

The FTC may enforce compliance with the law in a variety of ways both administratively and judicially, using compulsory process, cease and desist orders, and injunctions. FTC enforcement can result in orders requiring, among other things, limits on advertising, corrective advertising, consumer redress, divestiture of assets, rescission of contracts, and

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such other relief as the agency deems necessary to protect the public. During 2020, for example, the FTC sent warning letters to several nutrition companies and direct selling companies in connection with advertising claims that the companies and/or their distributor sales people were making about the respective company's product's ability to prevent or treat COVID-19. In 2023, the FTC sent letters to nearly 700 companies, including USANA, warning them that the FTC, pursuant to its Penalty Offense Authority, could seek penalties for a company's failure to adequately substantiate product claims. The letter did not accuse any recipient company, including USANA, of engaging in unlawful conduct. But if the FTC later alleges that we have not adequately substantiated our product claims, we could be at risk of penalties and other potential liability. Failure to adhere to FTC warning letters or other orders can result in substantial financial or other penalties. Although, to our knowledge, we have not been the subject of any action by the FTC, no assurance can be given that the FTC will not question our advertising or other operations in the United States in the future. Any action in the future by the FTC could materially and adversely affect our ability to market our products successfully in the United States.

The manufacturing, labeling, and advertising of our products are also regulated by various governmental agencies outside the United States in each country where they are distributed. In China, our nutritional products are typically classified as “health functional foods” and our personal care and skincare products are classified typically as “non-special use cosmetics.” The registration process for health functional foods in China is complex and can be unpredictable. It generally requires extensive analysis and approval by the SAMR. As a result, it can take several years to register a product as a health functional food in China. While all products currently sold by BabyCare in China have been registered with the SAMR, we continue to work through the registration process for other health functional food products, which we also hope to begin selling through BabyCare in the future. SAMR and other governmental agencies also enforce advertising and other regulations that restrict the ability of health product companies to advertise the benefits of their products in China.

In Australia, the TGA regulates product registration, labeling, and manufacturing. In Japan, the Ministry of Health, Labor, and Welfare regulates these activities. Upon entering a new market, prior to commencing operations or marketing products, we may be required to obtain approvals, licenses, or certifications from that country’s Food Administration, Ministry of Health, or comparable agency. Approvals or licensing may be conditioned on reformulation of USANA products for the particular market or approval or licensing otherwise may be unavailable with respect to certain products or product ingredients in a given market.

We cannot predict the nature of any future laws, regulations, interpretations, or applications, nor can we determine what effect additional governmental regulations or administrative orders, when and if promulgated, would have on our business. Future changes could include requirements for the reformulation of certain products to meet new standards, the recall or discontinuation of certain products that cannot be reformulated, additional record keeping, expanded documentation of the properties of certain products, expanded or different labeling, and additional scientific substantiation. Any or all of these requirements could have a material adverse effect on our business, financial condition, and operating results.

Direct Selling Regulation. Various laws and regulations in all of our markets regulate direct selling. These laws and regulations exist at many levels of government in many different forms, including statutes, rules, regulations, judicial decisions, and administrative orders. Direct selling regulations are inherently fact-based and often do not include “bright line” rules. In most of our markets, these regulations are subject to discretionary interpretation by regulators and respective legal authorities. Consequently, the regulations, or a regulator’s interpretation and enforcement of the regulations, could change at any time. If that were to occur, we may be required to change our business model in the respective market in an effort to comply.

In the United States, the FTC has jurisdiction to regulate direct selling companies under the FTC Act. The FTC’s interpretation of the applicable direct selling laws and regulations has evolved over the last several years as represented in various consent orders between the FTC and certain direct selling companies, guidance issued by the FTC to the direct selling industry, and informal communications from the FTC to the industry. The FTC, through these consent orders, guidance, and communications, has addressed a variety of consumer protection issues, including misleading earnings representations by a company or its independent distributors, as well as the fairness and legal compliance of a company’s business model and distributor compensation plan.

For example, in 2020, the FTC sent warning letters to several direct selling companies in connection with income claims allegedly made by the companies and/or their distributor sales forces in the context of the respective company's business opportunity during the COVID-19 pandemic. The consent orders, guidance and communication from the FTC have also created a degree of ambiguity and uncertainty regarding how the FTC and other regulators will interpret the laws, regulations, and judicial precedent applicable to direct selling in the United States.

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In 2021, the FTC sent letters to over 1,100 companies, including USANA, warning them that the FTC could, pursuant to its Penalty Offense Authority, seek penalties for conduct determined to be unfair, deceptive, or otherwise unlawful in certain prior FTC actions. The letter did not accuse any recipient company, including USANA, of engaging in unlawful conduct. But if the FTC later alleges that we have engaged in acts or practices found to be unfair, deceptive, or unlawful in the actions referenced in the letters, we could be at risk of penalties and other potential liability.

In 2025, the FTC issued a Notice of Proposed Rulemaking ("NPR") and an Advanced Notice of Proposed Rulemaking ("ANPR") regarding potential rules for earnings claims for direct selling companies. The NPR would, among other things, prohibit direct selling companies from making deceptive earnings claims, and require them to maintain written substantiation to support any earnings claims and make that substantiation available to consumers upon request. Additionally, the FTC is considering, under the ANPR, additional restrictions on earnings claims and recruiting by direct selling companies that, if adopted, could harm our business. For more information about these risks and the other risks with the regulation of our overall business, direct selling business model, and compensation plan in this Annual Report, please see “Item 1A. “Risk Factors.”

As noted above, the Chinese government has adopted direct selling laws and regulations that contain a number of financial and operational restrictions on direct selling companies, as well as prohibitions on pyramid selling and multi-level compensation. These regulations are subject to discretionary interpretation and enforcement by various municipal, provincial, and state officials in China. Departments within the Chinese government that regulate direct selling include the Ministry of Commerce (“MOFCOM”), the Ministry of Public Security (“MPS”), and their regional and local counterparts. BabyCare’s business model has been developed specifically for China based on, among other things: (i) BabyCare’s communications with the Chinese government, (ii) BabyCare’s interpretation of the direct selling laws and regulations, as well as its understanding of how the government interprets and enforces the regulations, and (iii) BabyCare’s understanding of how other multinational direct selling companies operate in China.

Notwithstanding the foregoing, the direct selling industry in China, as well as the regulatory environment for the industry, continues to evolve and receive significant attention and scrutiny from the Chinese government and the Chinese media. In 2019, following unfavorable media coverage of certain health product companies and direct selling companies, several departments of the Chinese government, including SAMR, MPS, and MOFCOM, initiated a review of health product and direct selling companies. This review required direct selling companies in China such as BabyCare to conduct a self-assessment of the regulatory compliance of their business (including product regulatory compliance and direct selling regulatory compliance) and to provide information to the Chinese government regarding that assessment. The review also entailed a review of direct sellers' regulatory compliance by various departments of the Chinese government. During this review, the Chinese government, among other things, instructed direct selling companies not to hold large distributor meetings, and suspended its application review process for direct selling licenses and authorizations. The Chinese government has yet to re-open the application review process for direct selling licenses and authorizations or indicate if or when it plans to do so. The Chinese government's scrutiny of the direct selling industry has been higher following the 2019 review.

The Chinese government has taken action historically against direct selling companies that it believes have violated the government’s direct selling regulations and anti-pyramiding laws. The government’s action in this regard has entailed investigating direct selling companies and their distributors, imposing significant fines and, in some cases, shutting down companies it believed to be in violation. Historically, there have been instances when inquiries or complaints about BabyCare’s business resulted in warnings from the Chinese government, as well as the payment of fines by BabyCare or its distributors.

BabyCare has obtained direct selling licenses in certain provinces and municipalities in China, but must obtain others from additional provinces and municipalities if it is to continue to expand its business model in China. As of the date of this Annual Report, BabyCare has been granted licenses to engage in direct selling in the provinces and municipalities of Beijing, Jiangsu, Shaanxi, and Tianjin.

Direct selling companies, and the industry in general, continue to experience significant media and public scrutiny. Several companies similar to USANA recently have been scrutinized and penalized in several markets where we operate, including the United States, Canada, China, Japan, and South Korea. This scrutiny, along with the uncertainty of the laws and regulations pertaining to direct selling in many countries, can affect how a regulator or member of the public, including investors, perceives us. For instance, there has been significant media and short-seller attention given to the viability and legality of direct selling in the United States and China over the past few years. This attention has led to intense public scrutiny of our industry, as well as volatility in our stock price and the stock prices of other direct selling

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companies who operate in the same markets. We cannot predict the impact that this scrutiny may have on our business or industry in the future.

We detail more of the various risks associated with the regulation of our overall business, direct selling business model, and Compensation Plan in this Annual Report in “Item 1A. “Risk Factors.”

Transfer Pricing Regulation. In the United States and many other countries, we are subject to transfer pricing and other tax regulations designed to ensure that appropriate levels of income are reported by our United States or international entities and taxed accordingly. We have adopted transfer prices, which are supported by formal transfer pricing studies, for the sale of products to our subsidiaries in accordance with applicable transfer pricing laws. In addition, we have entered into agreements with our subsidiaries for services and other contractual obligations, such as the payment of Brand Partner incentives that are also supported by the same formal transfer pricing studies. We have experienced instances in the past where international taxing authorities have successfully challenged our transfer pricing calculations and agreements and assessed us additional tax. Going forward, if the U.S. Internal Revenue Service (“IRS”) or the taxing authorities of any other jurisdiction successfully challenge these agreements or require changes in our standard transfer pricing practices for products, we could become subject to higher taxes and our earnings could be adversely affected. The tax treaties between the United States and most countries provide competent authority for relief to avoid any double taxation. We believe that we operate in compliance with all applicable transfer pricing regulations. There can be no assurance, however, that we will continue to be found to be operating in compliance with transfer pricing regulations or that those laws will not be modified, which may require that we change our operating procedures.

In addition, the organization for Economic Co-operation and Development, or OECD, has released guidance covering various international tax standards as part of its “base erosion and profit shifting,” or BEPS, initiative. On December 20, 2021, the OECD published model rules around two groups of proposals for global tax reform labeled “Pillar One” and "Pillar Two”. Pillar One provides a framework for taxing rights more closely aligned with the location of consumer engagement. Pillar Two establishes a global minimum tax rate of 15% and would apply on income that is taxed less than 15% in any taxing jurisdiction. In December 2022, the EU member states agreed to implement the OECD framework in their domestic tax laws with a target effective date for the 15% global minimum tax rate in 2024. The OECD has issued additional guidance in 2023, 2024, 2025 and more guidance is expected in 2026. We continue to evaluate the potential impact of the OECD model rules and guidance on the Company. There can be no assurance that future legislative, regulatory, or judicial developments will not result in an increase in the amount of taxes payable by the Company.

Intellectual Property

Trademarks. We have developed and use registered trademarks in our business, particularly relating to our product names. We own 34 trademarks that are registered with the U.S. Patent and Trademark Office. Federal registration of a trademark enables the registered owner of the mark to bar the unauthorized use of the registered mark by a third-party in connection with a similar product in similar channels of trade anywhere in the United States, regardless of whether the registered owner has ever used the trademark in the area where the unauthorized use occurs. We have filed applications and own trademark registrations, and we intend to register additional trademarks in countries outside the United States where USANA products are or may be sold in the future. Protection of registered trademarks in some jurisdictions may not be as extensive as the protection in the United States.

We also claim ownership and protection of certain product names, unregistered trademarks, and service marks under common law. Common law trademark rights do not provide the same level of protection that is afforded by the registration of a trademark. In addition, common law trademark rights are limited to the geographic area in which the trademark is actually used. We believe these trademarks, whether registered or claimed under common law, constitute valuable assets, adding to recognition of USANA and the effective marketing of USANA products. Trademark registration once obtained is essentially perpetual, subject to the payment of a renewal fee and continued usage of the trademark. We therefore believe that these proprietary rights have been and will continue to be important in enabling us to compete.

Patent. We own U.S. Patent 10,632,101 for our InCelligence complex formula. This patent was issued in 2020.

Trade Secrets. We own certain intellectual property, including trade secrets that we seek to protect, in part, through operational protections and confidentiality agreements with employees, consultants, vendors and other parties. Even where these agreements exist, there can be no assurance that these agreements will not be breached, that we would have adequate remedies for any breach, or that our trade secrets will not otherwise become known to or independently developed by competitors. Our proprietary product formulations are generally considered trade secrets, but are not otherwise protected under intellectual property laws.

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We intend to protect our legal rights concerning intellectual property by taking all appropriate legal action. Consequently, we may become involved from time to time in litigation to determine the enforceability, scope, and validity of any of the foregoing proprietary rights. Any intellectual property litigation could result in substantial cost and divert the efforts of management and technical personnel.

Seasonality

We experience variations in the activity of our core nutritional customers in many of our markets in the first and fourth quarters around major cultural events such as Lunar New Year and Christmas. Hiya's first quarter typically reflects normal seasonality of higher marketing spend for New Years, as well as third quarter for back to school.

Backlog

Our products are typically shipped within 72 hours after receipt of an order. As of March 13, 2026, we had no significant backlog of orders.

Working Capital Practices

Due to our dual role as manufacturer and distributor, we require substantial inventories, as such, we strive to maintain sufficient amounts of inventory in order to provide a high level of service to our customers. At times we may strategically choose to carry a greater amount of inventory for various reasons, such as promotional activity, product launches, and uncertainty in supply and distribution channels. We also watch seasonal commodity markets and may buy ahead of normal demand to hedge against cost increases and supply risks. The entry and expansion into large retailers by Rise has required meaningful investments in working capital to meet aggressive sales targets. Additionally, Hiya has required additional working capital as it begins to expand internationally in the first quarter of 2026 and into retail in the second quarter of 2026.

Environment Laws

We are not aware of any instance in which we have contravened federal, state, or local laws relating to protection of the environment or in which we otherwise may be subject to liability for environmental conditions that could materially affect operations.

Our Values and Culture

Our business is driven by our four Core Values:

•Excellence: We never settle for status quo. We push boundaries through innovation and a commitment to continuous improvement.

•Community: We uplift, empower, and grow stronger together.

•Integrity:We hold ourselves to the highest ethical standards in everything we do.

•Health: We champion true health through informed choices and intentional living.

Corporate Sustainability

The Sustainability Committee of the Board of Directors oversees and advises on all matters related to corporate sustainability. The Sustainability Committee is composed of directors Peggie Pelosi, Chair; John Fleming; Frederic Winssinger; Tim Wood; and J. Scott Nixon. The corporate sustainability effort focuses on issues that address enterprise risk and the overall strength and resilience of our business by addressing potential impacts on customer acquisition and retention, employee engagement, continuity of operations, and support of the communities and environment in which we operate. In the United States and abroad there are an increasing number of sustainability-related rules and regulations that have been adopted or proposed. Such regulations may subject us to new disclosure requirements, which could result in risks to our reputation or consumer demand for our products if we do not meet increasingly demanding stakeholder expectations and standards. We will continue to incorporate and advance sustainability-related principles and practices across all of our markets as part of our commitment to improving the health and wellness of individuals, families and communities around the world.

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Our sustainability strategy centers on three main pillars - products, people, and planet - that encompass where we are focusing our sustainability efforts now and in the future. To achieve our objectives, we plan to continue fortifying each pillar, to deliver meaningful progress while evolving our efforts to ensure our business becomes more sustainable day by day.

Strategic Pillars Tier One Topics Tier Two Topics

We encourage you to review our most recent Sustainability Report available on our investor relations website https://ir.usana.com/ for more detailed information regarding our sustainability programs and initiatives. Nothing on our website, including our Sustainability Report or sections thereof, is deemed incorporated by reference into this Report.

Human Capital

We believe that "creating the healthiest family on earth" starts with our employees. Key to our ambition is giving our employees the skills and development they need to build a meaningful career and tools to support their total health and wellness and enhancing our diverse and inclusive workplace culture to help employees thrive. We also believe that the manner in which we address issues related to workforce demographics, inclusion and belonging, community involvement, talent management, compensation and benefits, and employee health and safety directly correlates to our success as a business.

As of January 3, 2026, we had approximately 1,570 employees working in 22 countries worldwide, as measured by full-time equivalency. The majority of our employee population resides in the United States (41%) and China (28%). Approximately 56% of our worldwide employee population is female. We are actively working through initiatives such as our Women in Leadership Program, along with formal and informal mentorship programs, to continue promoting and hiring talented and capable women into management roles. We have also increased the number of women in leadership roles over the past several years with 48% of total leadership positions currently being held by females. This is important to enhance our understanding of the needs and expectations of USANA's largest group of customers and Brand Partners, females.

Our employees are not currently represented by a collective bargaining agreement, and we have not experienced work stoppages as a result of labor disputes. We believe that we have a good relationship with our employees.

We are committed to fostering a diverse, inclusive and equitable workplace. Our inclusion and belonging program is designed to promote representation and engagement at all levels of the organization. Through our mentorship program and Women in Leadership initiative, we are working to increase representation of underrepresented groups in leadership positions. Our inclusion and belonging council focuses on education and awareness, access to developmental programs, and community engagement.

One of the key elements of our inclusion and belonging program is our commitment to volunteerism and charitable action. In 2025, we spent more than 1,300 hours volunteering, working with local organizations to help promote inclusion and belonging in the communities where we operate. Additionally, we continued our support of programs that foster career development and help to ensure that all employees have the opportunity to reach their full potential.

In addition to these internal initiatives, we also partner with other organizations to help achieve our inclusion and belonging goals. By working together with other companies, community groups, and non-profits, we are able to amplify our impact and create a more inclusive and equitable society for all.

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Our inclusion and belonging program is a key component of our company culture and enables us to create a more vibrant and innovative workplace that benefits all of our employees, customers, and stakeholders. We will continue to invest in this program, and strive to make our company an inclusive, equitable and welcoming place for all.

We understand the value of developing employees at every level. Our leaders actively participate in leadership development programs that include mentorship and coaching, online learning, and regular company and industry specific training programs. Additionally, our global employee population is engaged in online learning platforms, and 487 participants have completed our mentorship and coaching program. All employees are encouraged to attend training specific to their role as well as utilize our tuition reimbursement program, which has provided additional monetary support to employees at all levels as they pursue bachelor and advanced college degrees.

The health and safety of employees is also a key element in providing return to all stakeholders. In addition to following mandatory government requirements for health and safety, we have established a wellness program that includes free nutritional products to employees.

Employees in our corporate headquarters have access to an on-site gym, exercise classes, free access to massages, and chiropractic care. A health clinic located on the campus of our corporate headquarters provides medical and mental health care, and is actively engaged in the health of about 57% of our eligible employees.

We recognize that a strong commitment to community is essential to all stakeholders. We utilize the USANA Foundation, which operates independently of the Company, to provide philanthropic nutrition to underserved children and families worldwide. In 2025, the USANA Foundation:

•Provided over 6.9 million meals with most of them coming from our sustainable Garden Tower program that provides continuous meals each year;

•Provided more than $400,000 in aid and grants to partner charities around the world; and

•Distributed 55,000 backpacks of food for at risk children in local schools to take home on the weekend and during long holiday breaks.

A discussion of the risks relating to our ability to attract and retain active Brand Partners and Preferred Customers, and the loss of key management, is included in Item 1A. Risk Factors.

Information About Our Executive Officers and Directors

Executive Officers

The following table sets forth certain information regarding our Executive Officers as of the date of this Annual Report:

Name Age Position

Kevin G. Guest 63 Chief Executive Officer and Chairman of the Board

G. Douglas Hekking 56 Chief Financial Officer

Paul A. Jones 63 Chief People Officer

P. Joshua Foukas 50 Chief Legal Officer, General Counsel and Corporate Secretary

Kathryn Armstrong 45 Chief Scientific Officer

Walter Noot 60 Chief Operating Officer

Brent Neidig 42 Chief Commercial Officer

Kevin G. Guest reassumed the role of Chief Executive Officer in January 2026. Mr. Guest also currently serves as Chairman of the Board, a position he has held since May 2020. Mr. Guest earned a B.A. in Communications from Brigham Young University.

G. Douglas Hekking became our Chief Financial Officer in May 2017. Mr. Hekking received a B.S. in accounting from the University of Utah and an M.B.A. from Brigham Young University.

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Paul A. Jones has been our Chief People Officer since 2021. From 2015 to 2021, Mr. Jones was Chief Leadership Development Officer. Mr. Jones received a B.S. in finance from Utah State University and M.A. in organizational management from the University of Phoenix.

P. Joshua Foukas has served as our Chief Legal Officer and Corporate Secretary since 2018. Mr. Foukas received a B.A. from the University of Utah and a J.D. from the University of Idaho.

Kathryn Armstrong, Ph.D. has served as USANA's executive vice president of research and development since July of 2024, andbecame our Chief Scientific Officer in January 2025. Dr. Armstrong holds a B.S. in Chemistry from Loyola University Chicago and a Ph.D. in Biochemistry from the University of Notre Dame.

Walter Noot joinedUSANA as Chief Information Officer in December 2016 and served in that role until he was promoted to Chief Operating Officer in October 2019. He holds a B.S. in mechanical engineering from Brigham Young University.

Brent L. Neidig was appointed Chief Commercial Officer in July 2023. Mr. Neidig was appointed Executive Vice President of China in February 2017, and in April 2019 was named Chief Officer and Managing Director of China. Mr. Neidig received a B.S. in accounting and M.B.A. from the University of Utah.

Board of Directors

The following table sets forth certain information regarding our Directors as of the date of this Annual Report:

Name Age Position

Kevin G. Guest 63 Chief Executive Officer and Chairman of the Board

Gilbert A. Fuller 85 Director

Xia Ding 55 Director

Peggie J. Pelosi 70 Director

Frederic J. Winssinger 57 Director

Timothy Wood 77 Director

John T. Fleming 82 Director

J. Scott Nixon 66 Director

Additional Available Information

We maintain our corporate headquarters, executive offices, and principal facilities at 3838 West Parkway Boulevard, Salt Lake City, Utah 84120. Our telephone number is (801) 954-7100. Our website address is www.usana.com. The information on our website should not be considered part of and is not incorporated into this Annual Report by reference.

We make available, free of charge at our corporate website, copies of our reports filed with the SEC under the Exchange Act, including our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements, and all amendments to such reports, as soon as reasonably practicable after such reports or other material have been electronically filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act. This information may also be obtained from the SEC via its on-line database, which is located at www.sec.gov.

You may also obtain, free of charge on our website, a copy of our Corporate Governance Guidelines, our Code of Ethics for Directors and Employees, and the charters of the Audit Committee, Governance, Risk and Nominating Committee, Compensation Committee, and Sustainability Committee of our Board of Directors.

Item 1A. Risk Factors

We have listed below the most material risk factors applicable to us. These risk factors are not necessarily in the order of importance or probability of occurrence: You should consider the following risk factors, in addition to the information presented elsewhere in this Annual Report, particularly under the heading “Cautionary Note Regarding Forward-Looking Statements,” on page 1, and the disclosures contained in Part I, “Item 1. Business,” and Part II, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this report, as well as in the other filings we make from time to time with the SEC, in evaluating us, our business and an investment in our securities.

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Below is a summary of the principal factors that make an investment in the common stock of the Company risky or speculative. This summary does not address all of the risks we face. Unless otherwise indicated or otherwise required by the context, the terms “we,” “our,” “it,” “its,” “Company,” and “USANA” refer to USANA Health Sciences, Inc. and its wholly owned subsidiaries.

Risks Associated with Direct Selling

•Direct selling is subject to intense government scrutiny, and regulation and changes in the law, or the interpretation and enforcement of the law, might adversely affect our business.

•The violation of marketing or advertising laws by Brand Partners in connection with the sale of our products or the improper promotion of our Compensation Plan could adversely affect our business.

•We may have or could incur obligations relating to the activities of our Brand Partners.

•Our Brand Partner Compensation Plan, or changes we make to it, may be viewed negatively by some Brand Partners, could fail to achieve our desired objectives, and could have a negative impact on our business.

•Changes we are required to make to our Brand Partner Compensation Plan in certain markets, including limits on the amount of Brand Partner compensation we can pay, may hurt our ability to attract and retain Brand Partners, result in regulatory risk and affect our operating results.

Risks Related to Our China Business

•Our Greater China region accounts for a significant part of our business and expected growth. A decline in sales or customers in this region would harm our business, financial condition and results of operations.

•Our operations in China are subject to significant government regulation, as well as a variety of legal, political, and economic risks. If the Chinese government modifies its direct selling laws and regulations, or interprets and enforces these laws and regulations in a manner that is adverse to our business in China, our consolidated business and results of operations may be materially harmed.

•Although BabyCare Holdings, Ltd. (“BabyCare”) utilizes a business model that has been developed specifically for China’s laws and regulations, the Chinese government has not approved BabyCare’s model, compensation plan, and operations.

•BabyCare’s operations in China, and direct selling companies in general, are subject to significant government oversight, scrutiny and monitoring.

•BabyCare must apply for and receive government approval to expand its business in China and the failure to obtain such approvals could negatively impact its ability to expand and grow its business.

Risk Associated with Our International Operations

•Risks associated with operating in international markets could restrict our ability to expand globally and harm our business and prospects.

•Trade policies, disputes, tariffs or other international disputes could harm our business and operating results.

•Because some of our customers and suppliers are based in China, our business, financial condition, and results of operations could be adversely affected by the political and economic tensions between the United States and China.

•We are subject to various governmental export control and trade sanctions laws and regulations that could impair our ability to compete in international markets or subject us to liability if we violate these controls.

•Fluctuation in the value of currency exchange rates with the U.S. dollar affects our operations and our net sales and earnings.

•Inflationary pressures and persistently high prices and uncertain availability of commodities, raw materials or other inputs used by us and our suppliers, or instability in logistics and related costs, could negatively impact our profitability.

Risks Related to Our Products, Manufacturing and Operations

•Our products and manufacturing activities are subject to extensive government regulation, which could limit or prevent the sale of our products in some markets.

•Our in-house manufacturing activity is subject to certain risks.

•Our reliance on third parties to manufacture and supply certain of our products may harm our business, financial condition and operating results.

•The inability to obtain adequate supplies of raw materials for products at favorable prices, or at all, could have a material adverse effect on our business, financial condition, or operating results.

•Delays and disruptions to transporting and distributing our products may adversely affect our results.

•We may incur liability with respect to our products.

•Nutritional supplement products may be supported by only limited availability of conclusive clinical studies.

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Legal, Regulatory, Compliance and Tax Risks

•Legal action by former Brand Partners or third parties against us could harm our business.

•We may incur liability under our “Athlete Guarantee” program.

•Failure to comply with anti-corruption laws could adversely affect our business.

•We could be subject to adverse changes in tax laws, regulations and interpretations or challenges to our tax positions.

•If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud.

•Environmental, Social, and Governance ("ESG") issues may have an adverse effect on our reputation, business, financial condition or results of operations.

Risk Associated with Information Technology, Data Security and Data Privacy

•A failure or interruption of our information technology systems would harm our business.

•We rely on information technology to support our operations and reporting environments. A data breach involving that technology or the data stored in it, could disrupt our ability to operate our businesses effectively, adversely affect our reported financial results and our reputation, and expose us to significant potential liability, government investigations, fines or litigation.

•We are subject to data privacy and security laws and regulations, and our actual or perceived failure to comply with them could adversely affect our business and operating results.

Human Capital Risks Associated with our Business

•If we are unable to attract and retain active Brand Partners and Preferred Customers, our business may be harmed.

•The loss of key management personnel could adversely affect our business.

Risks Associated with Business Development Activities and Acquisitions

•Growth through acquisitions is part of our strategy, and we may not successfully integrate, operate or realize the anticipated benefits of our acquisitions.

•The Hiya Acquisition may not be accretive, and may be dilutive, to our earnings per share, which may negatively affect the market price of our common stock.

•Although we expect that the Hiya acquisition will result in synergies and other benefits to us, we may not realize those benefits because of challenges inherently associated with integration, performance and the achievement of synergies.

•The Hiya Acquisition and integration may result in additional costs and expenses.

•The Hiya Acquisition may be viewed negatively by our Brand Partners.

General Economic, Publicity, Competitive, and Intellectual Property Risks Associated with our Business

•Difficult economic conditions may adversely affect our business.

•Our business is subject to the effects of adverse publicity and negative public perception.

•Our business is subject to the risks associated with intense competition from larger, wealthier, and more established competitors.

•Our business is subject to particular intellectual property risks.

Risks Related to Public Health Crises

•Pandemics, epidemics, disease outbreaks and other public health crises, such as the COVID-19 pandemic, have disrupted our business and operations, and future public health crises could materially adversely impact our business, financial condition, liquidity and results of operations.

Risks Related to Our Common Stock

•The beneficial ownership of a significant percentage of our common stock gives our founder and parties related to or affiliated with him effective control, and limits the influence of other shareholders on important policy and management issues.

•Sales by our shareholders of a substantial number of shares of our common stock in the public market could adversely affect the market price of our common stock.

•The market price of our common stock may be influenced by many factors, some of which are beyond our control.

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Risk Associated with Direct Selling

Direct selling is subject to intense government scrutiny, and regulation and changes in the law, or the interpretation and enforcement of the law, might adversely affect our business.

Various laws and regulations in the United States and other countries regulate direct selling. These laws and regulations exist at many levels of government in many different forms, are inherently fact-based, and often do not include “bright line” rules. We are also subject to the risk that the laws and regulations, or a regulator’s interpretation and enforcement of the laws and regulations, could change.

In the United States, the FTC is one of many regulators who regulate direct selling. The FTC has actively warned various direct selling companies and the industry as a whole about certain business practices associated with direct selling and entered into settlements with several direct selling companies that required those companies to modify their compensation plans and business models. Those settlements resulted from enforcement actions brought by the FTC involving a variety of alleged violations of consumer protection laws, including misleading product claims, misleading earnings representations and legal compliance of those companies’ business models and distributor compensation plans. For example, in 2016, the FTC entered into a settlement with another direct selling company following an enforcement action in which the FTC alleged that the company’s distributors were making misleading earnings representations and that the company was utilizing an illegal business model. Also in 2016, the FTC entered into a settlement with another direct selling company following an enforcement action in which the FTC alleged that the company’s distributors had made misleading income representations and that the company was utilizing an unfair and deceptive compensation plan.

In 2019, the FTC entered into a settlement with a direct selling company following an FTC enforcement action, which included the alleged violations noted above. Pursuant to this settlement, the company is permanently prohibited from using a multilevel compensation plan in the United States. Following this settlement, the FTC initiated litigation with another direct selling company for similar alleged violations and pursued similar claims and remedies, including a prohibition of multilevel compensation in the United States. Although the court ruled in favor of the defendant company in this case, settlements such as those described in the other cases above may require a direct selling company to pay a significant fine, revise its U.S. business model and compensation plan to comply with various restrictions on how it can compensate distributors and change its marketing practices to avoid misleading product or income representations, among other things. Although a settlement between the FTC and a specific company does not generally have force of law or binding effect on other companies, FTC officials have indicated that the direct selling industry should look to these settlements, and the principles contained therein, for guidance.

In 2020, the FTC sent warning letters to several direct selling companies regarding product and/or income claims that the companies and/or their distributors were making related to the COVID-19 pandemic. In 2021, the FTC sent letters to over 1,100 companies, including USANA, warning them that the FTC, pursuant to its Penalty Offense Authority, could seek penalties for conduct determined to be unfair, deceptive, or otherwise unlawful in certain prior FTC actions. In 2023, the FTC sent letters to nearly 700 companies, including USANA, warning them that the FTC, pursuant to its Penalty Offense Authority, could seek penalties for a company's failure to adequately substantiate its product claims. The 2021 and 2023 letters did not accuse any recipient company, including USANA, of engaging in unlawful conduct. But if the FTC later alleges that we have engaged in the actions referenced in the 2021 or 2023 letters, we could be at risk of penalties and other potential liability.

In 2025, the FTC issued a Notice of Proposed Rulemaking ("NPR") and an Advanced Notice of Proposed Rulemaking ("ANPR") regarding potential rules for earnings claims for direct selling companies. The NPR would, among other things, prohibit direct selling companies from making misleading earnings claims, and require them to maintain written substantiation to support any earnings claims and make that substantiation available upon request. Under the ANPR, the FTC is considering additional restrictions on earnings claims and recruiting by direct selling companies that, if adopted, could have a material adverse effects on our business. Additionally, the FTC’s increased scrutiny of earnings claims, as reflected in the NPR and ANPR, could lead to new industry standards, other new rules, or more FTC actions regarding misleading claims, all of which could limit our ability to advertise and negatively impact our business.

We regularly analyze our business model in response to settlements between the FTC and other direct selling companies, as well as guidance and other communications issued by the FTC, and from time to time we refine aspects of our business model where appropriate. While we maintain a robust Brand Partner compliance program and strive to educate our Brand Partners on compliant claims, if a regulator determines we are making misleading claims, this could lead to an FTC investigation, which could harm our business operations. Additionally, while we strive to ensure that our compensation plan is compliant with applicable laws and regulatory guidance in each of our markets, we cannot assure you

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that a regulator, if it were to review our business, would agree with our assessment and would not require us to change one or more aspects of our operations. Any action against us in the future by the FTC or another regulator could materially and adversely affect our operations.

We are also subject to various direct selling laws and regulations in our other markets, including China (as explained below). We cannot predict the nature of any future law, regulation, or guidance, nor can we predict what effect additional governmental regulations, judicial decisions, or administrative orders would have on our business. Failure by us, or our Brand Partners, to comply with these laws, regulations, or guidance, could have a material adverse effect on our business in a particular market or in general. Finally, the continuation of regulatory challenges, investigations and litigation against other direct selling companies could harm our business and industry if the laws and regulations are interpreted in a way that results in additional restrictions on direct selling companies in general.

The violation of marketing or advertising laws by Brand Partners in connection with the sale of our products or the improper promotion of our Compensation Plan could adversely affect our business.

All Brand Partners contractually agree to adhere to our policies. Although these policies prohibit Brand Partners from making false, misleading and other improper claims regarding products or income potential from the sale of the products, from time to time Brand Partners, without our knowledge and in violation of our policies, create promotional materials or otherwise provide information that does not accurately describe USANA, our products or the Compensation Plan. They also may make statements regarding potential earnings, product claims, or other matters in violation of our policies or applicable laws and regulations concerning these matters. These violations may result in legal action against us in our various markets by regulatory agencies, state attorneys general, or private parties. Legal actions against us or our Brand Partners or others who are associated with us could lead to increased regulatory scrutiny of our business, including our business model. While we take what we believe to be commercially reasonable steps to regularly train our Brand Partners, and monitor their activities to promote compliance with our policies and guard against illegal or unethical conduct by Brand Partners, there can be no assurance that our efforts will be sufficient to accomplish this objective. In the past, we have experienced adverse publicity both within and outside of our sales force for enforcing our Brand Partner policies and procedures. This type of adverse publicity has made, and will continue to make, it difficult for us to attract and retain Brand Partners and Preferred Customers and may have an adverse effect on our business, financial condition, and results of operations.

We may have or could incur obligations relating to the activities of our Brand Partners.

Our Brand Partners are subject to taxation, and, in some instances, legislation or governmental agencies may impose an obligation on us to collect taxes, such as sales taxes or value added taxes, and to maintain appropriate records of such transactions. In addition, we are subject to the risk in some jurisdictions of being responsible for social security and similar taxes as well as employee benefits with respect to our Brand Partners. In particular, the laws regarding independent contractor status in certain jurisdictions, including the United States, continue to evolve and, in some cases, authorities have sought to apply these laws unfavorably against gig economy, platform and direct selling companies, including USANA. In 2020, we were named as a defendant in a private lawsuit in California by a plaintiff’s firm that is seeking to reclassify our California Brand Partners from independent contractors to employees under California state law. Although we prevailed in this litigation and continue to believe we have legally and appropriately classified our Brand Partners as independent contractors, it is possible that future lawsuits or potential future laws, could negatively impact the independent contractor status of our Brand Partners or distributors in direct selling companies in general.

In March 2024, a new Department of Labor (DOL) rule regarding the classification of workers as employees vs. independent contractors under the Fair Labor Standards Act went into effect but became subject to litigation. If the 2024 DOL final rule or other federal, state or local laws and regulations or the interpretation of such laws and regulations require us to treat our Brand Partners as employees, or if our Brand Partners are deemed by local regulatory authorities in one or more of the jurisdictions in which we operate to be our employees rather than independent contractors, under existing laws and interpretations, we may be deemed to be responsible for a variety of obligations that are imposed upon employers relating to their employees, including social security and related taxes in those jurisdictions, wages, employee benefits, plus any related assessments and penalties, which could harm our financial condition and operating results.

Our Brand Partner Compensation Plan, or changes we make to it, may be viewed negatively by some Brand Partners, could fail to achieve our desired objectives, and could have a negative impact on our business.

From time to time, we modify our Compensation Plan to (i) keep it competitive and attractive, (ii) cause or address a change in Brand Partner behavior, (iii) conform to legal and regulatory requirements, or (iv) address other business needs. It is difficult to predict how any changes to the plan will be viewed by Brand Partners and whether such

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changes will achieve their desired results. For example, in 2023 we launched our Affiliate program in certain markets and this program creates a new and different element of our Compensation Plan. In 2025, we also made certain modifications to our Compensation Plan to enhance the earning opportunity for Brand Partners and prioritize sales and customer growth. There can be no assurance that changes to our Brand Partner Compensation Plan will allow us to successfully attract new Brand Partners or retain existing Brand Partners, nor can we assure that any changes we make to our Compensation Plan will achieve our desired results. We may also face legal challenges and disputes from our Brand Partners in one or more markets regarding changes to the Compensation Plan. Additionally, the payment of Brand Partner incentives under our Compensation Plan is our most significant expense. Modifying our Compensation Plan directly affects the incentives we pay as a percentage of net sales. There can be no assurance that changes to the Compensation Plan will be successful in achieving target levels of Brand Partner incentives as a percentage of net sales. Furthermore, such changes may make it difficult to attract and retain qualified and motivated Brand Partners.

Changes we are required to make to our Brand Partner Compensation Plan in certain markets, including limits on the amount of Brand Partner compensation we can pay, may hurt our ability to attract and retain Brand Partners, result in regulatory risk and affect our operating results.

We have been required to modify our Brand Partner Compensation Plan in certain markets to comply with the laws and regulations in these markets or the interpretation of the same by authorities in these markets. For example, we have been required to use a different compensation plan for our BabyCare operations in China (as noted elsewhere in this report) and have been required to modify our Compensation Plan in India, South Korea, Malaysia, and Indonesia to comply with applicable laws and regulations. We obtain regulatory approval of our Compensation Plan when required or, when not required, we may seek a legal opinion regarding compliance. We may also be prohibited from distributing products through direct selling or paying multilevel compensation in some countries.Several markets, including China, South Korea, and Indonesia also impose limits on the amount of compensation we can pay to our Brand Partner sales force.

If we fail to comply with the legal requirements for our Compensation Plan in our various markets, including the limits on compensation we are legally permitted to pay, we may incur fines or other sanctions, including the loss of applicable licenses to conduct our business. These required changes to our Compensation Plan, including compensation limits, may also be viewed as limiting the incentive for people to join our Brand Partner sales force and may reduce the competitive advantage of our Brand Partner Compensation Plan.

Risks Related to Our China Business

Our Greater China region accounts for a significant part of our business and expected growth. A decline in sales or customers in this region would harm our business, financial condition and results of operations.

Our Greater China region consists of China, Hong Kong, and Taiwan and has been our largest region for sales over the last several years and China has been our largest market. Our international growth strategy has focused largely on growing our China business. For the last several years, officials in Greater China have responded to the COVID-19 pandemic and, more recently, overall economic conditions in China, all of which have created a challenging operating environment for our business in China and negatively impacted our sales and customer results. Prior to that, in 2019, our sales and active Customer counts in both the Greater China region and our China market declined, largely because of a challenging operating environment in China, following the China’s governments inquiry into and review of the health foods industry in China. If we are not successful in growing BabyCare’s sales and customer base in China, our consolidated growth as a company will be negatively affected and our business, financial condition, results of operations and cash flows may be harmed.

BabyCare must comply with significant operational, financial, and other regulatory requirements to engage in direct selling in China. Although we believe that we will be successful in growing BabyCare’s business in China, it is difficult to assess the extent to which BabyCare’s business model and compensation plan will be successful or deemed to be compliant with applicable Chinese laws and regulations. In light of the factors listed above, and the other risks to our business, there can be no assurance that we will be successful in increasing sales and customers in China through BabyCare.

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Our operations in China are subject to significant government regulation, as well as a variety of legal, political, and economic risks. If the Chinese government modifies its direct selling laws and regulations, or interprets and enforces these laws and regulations in a manner that is adverse to our business in China, our consolidated business and results of operations may be materially harmed.

Our operations in China are conducted by BabyCare, our China subsidiary. BabyCare operates in China pursuant to direct selling laws and regulations that are uncertain and evolving. These regulations contain a number of financial and operational restrictions for direct selling companies, including prohibitions on pyramid selling and multi-level compensation. The laws and regulations are also subject to discretionary interpretation and enforcement by various state, provincial and municipal level officials in China. Regulators in China may modify current direct selling laws and regulations or change how they interpret and enforce them. As a result, there can be no assurance that the Chinese government’s current or future interpretation and application of existing and new regulations will not negatively impact our business in China, result in regulatory investigations or lead to fines or penalties against us or our Brand Partners.

The Chinese government also exercises significant control over the Chinese economy, including through controlling capital, foreign currency exchange, foreign exchange rates, and tax regulations, providing preferential treatment to certain industry segments or companies and issuing required licenses to conduct business. We also face additional risks resulting from new and expanded China data privacy and security laws and regulations. Accordingly, any adverse change in the Chinese governmental, economic or other policies could have a material adverse effect on BabyCare’s business in China and our consolidated results of operations.

In addition to BabyCare's business in China, we periodically offer and sell certain U.S. products in China through a cross-border e-commerce sales channel by utilizing one of our separate China subsidiaries that is registered to engage in cross-border e-commerce. This cross-border e-commerce channel is legally required to be separate from BabyCare's business in China. The products that we offer and sell through this channel are neither registered for retail sale in China nor registered as direct selling products under BabyCare's direct selling license. Consequently, products sold via our cross-border e-commerce channel can only be sold to China customers for their personal consumption and cannot be sold through BabyCare's direct selling channel. BabyCare's business in China could be negatively impacted if China regulatory authorities (i) attribute our cross-border e-commerce sales and related product claims to BabyCare's business, and (ii) make a determination that the same are in violation of direct selling or other applicable laws and regulations.

Although BabyCare utilizes a business model that has been developed specifically for China’s laws and regulations, the Chinese government has not approved BabyCare’s model, compensation plan, and operations.

BabyCare’s business model has been designed specifically for China’s laws and regulations based on, among other things, BabyCare’s (i) communications with the Chinese government, (ii) interpretation of the direct selling laws and regulations, as well as its understanding of how the government interprets and enforces the regulations, and (iii) understanding of how other multinational direct selling companies operate in China. Many of the components of BabyCare’s business model are unique to China and are not part of our business model in our markets outside of China. For example, BabyCare sells products in China through a variety of methods, including: (a) online through its website; (b) at physical branch retail locations in China; (c) through direct sellers in provinces and municipalities where BabyCare has received a direct selling license; and (d) through independent distributors who are considered independent business owners under Chinese law. BabyCare has not received confirmation from the Chinese government that its business model and operations in China comply with applicable laws and regulations, including those pertaining to direct selling. We cannot assure that Chinese regulatory authorities would deem BabyCare's business model, compensation plan or the activities of its employees, direct sellers or independent distributors to be compliant with current or future laws and regulations. If BabyCare’s model were deemed to be in violation of applicable regulations, as they are now or may in the future be interpreted or enforced, BabyCare could be subject to fines, penalties or suspension of its business in China or, ultimately, have its direct selling license revoked by the Chinese government, all of which could have a material adverse impact on our business in China.

BabyCare’s operations in China, and direct selling companies in general, are subject to significant government oversight, scrutiny and monitoring.

Chinese regulators regularly monitor and make inquiries about the business activities of direct sellers in China and have done so with BabyCare. For example, following adverse media coverage of certain health product companies and direct selling companies in 2019, several departments of the Chinese government, including SAMR, MPS, and MOFCOM, initiated a review of health product and direct selling companies in China. The review required applicable companies such as BabyCare to conduct a self-assessment of the regulatory compliance of their business and to provide information to the

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government regarding the same. The review also entailed a review of a company’s regulatory compliance by various departments of the Chinese government. During this review, the Chinese government, among other things, (i) instructed direct selling companies not to hold large distributor meetings, and (ii) suspended its application review process for direct selling licenses and authorizations. The Chinese government has yet to re-open the application review process for direct selling licenses and authorizations or indicate if or when it plans to do so.

Direct selling regulations in China prevent persons who are not Chinese nationals from engaging in direct selling in China. We have implemented internal policies that are designed to promote our Brand Partners’ compliance with these regulations, however, we cannot guarantee that any of our Brand Partners residing outside of China or any of BabyCare’s Brand Partners in China have not engaged or will not engage in activities that violate our policies in this market or that violate Chinese law or other applicable laws and regulations, which might result in regulatory action and adverse publicity and potential harm to our business in China.