LifeVantage Corporation Annual Report 2022

FY2022 Annual Report · LifeVantage Corporation

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________________________________________________________
FORM 10-K

(Mark One)

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ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the fiscal year ended June 30, 2022

TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from __________ to __________

Commission file number: 001-35647
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LIFEVANTAGE CORPORATION

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)

90-0224471
(IRS Employer
Identification No.)

3300 N. Triumph Blvd, Suite 700
Lehi, Utah 84043
(Address of principal executive offices, including zip code)

(801) 432-9000
Registrant's telephone number

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

Common Stock, par value $0.0001
Title of each class

LFVN
Trading Symbol(s)

The Nasdaq Stock Market LLC
Name of each exchange on which registered

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 ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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. Yes ☒ No ☐

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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.

Large accelerated filer
Non-accelerated filer
Emerging growth company

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Accelerated filer
Smaller reporting company

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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. ☐

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. ☒

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

The aggregate market value of the registrant's common stock held by non-affiliates as of December 31, 2021, the end of the registrant's second fiscal
quarter, was approximately $81.2 million, based on a closing market price of $6.32 per share.

The number of shares of common stock (par value $0.0001) outstanding as of August 22, 2022 was 12,552,781 shares.

________________________________________________________________________________

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement to be filed subsequent to the date hereof with the Securities and Exchange Commission pursuant to
Regulation 14A in connection with the registrant’s fiscal year 2022 annual meeting of stockholders are incorporated by reference into Part III of this
report. Such definitive proxy statement will be filed with the Commission not later than 120 days after the end of the registrant’s fiscal year ended June
30, 2022.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this report and the information incorporated by reference herein may contain “forward-looking statements” (as such

term is defined in 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")). These statements, which involve risks and uncertainties, reflect our current expectations, intentions, or strategies regarding our
possible future results of operations, performance, and achievements. Forward-looking statements include, without limitation: statements regarding future
products or product development; statements regarding future selling, general and administrative costs and research and development spending;
statements regarding the future performance of our network marketing efforts; statements regarding our expectations regarding ongoing litigation;
statements regarding international growth; and statements regarding future financial performance, results of operations, capital expenditures and
sufficiency of capital resources to fund our operating requirements. These forward-looking statements are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995 and applicable rules of the Securities and Exchange Commission and common law.

These forward-looking statements may be identified in this report and the information incorporated by reference by words such as “anticipate,”

“believe,” “could,” “estimate,” “expect,” “intend,” “plan,” “predict,” “project,” “should” and similar terms and expressions, including references to
assumptions and strategies. These statements reflect our current beliefs and are based on information currently available to us. Accordingly, these
statements are subject to certain risks, uncertainties, and contingencies, which could cause our actual results, performance, or achievements to differ
materially from those expressed in, or implied by, such statements.

The following factors are among those that may cause actual results to differ materially from our forward-looking statements:

•

Inability to properly manage, motivate and retain our independent distributors or to attract new customers and independent distributors on an
ongoing basis;

The COVID-19 pandemic or the widespread outbreak of any other illness or communicable disease or any other public health crisis, could
adversely affect our business, results of operations and financial condition;

Inability to protect against cyber security risks and to maintain the integrity of data;

Inability to manage existing markets, open new international markets or expand our operations;

Non-compliance by our independent distributors with applicable legal requirements or our policies and procedures, including making improper
and/or illegal claims about our products or earnings opportunity;

Inability of new products and technological innovations to gain customer or independent distributor or market acceptance;

• Our business and stock price may be adversely affected if our internal controls over financial reporting is not effective;

•

Inability to execute our product launch process due to increased pressure on our supply chain, information systems and management;

Inability to appropriately manage our inventory;

Disruptions in our information technology systems;

International trade or foreign exchange restrictions, increased tariffs, foreign currency exchange fluctuations;

Inability to raise additional capital or complete desired acquisitions;

Inability to comply with financial covenants imposed by our credit facility and the impact of debt service obligations and restrictive debt
covenants;

Dependence upon a few products for revenue;

• We may be unable to retain our existing distributor force or customer base or attract additional customers and/or independent distributors;

•

High quality materials for our products may become difficult to obtain or expensive;

Improper actions by our independent distributors that violate laws or regulations could harm our business;

•

Dependence on third parties to manufacture our products;

Disruptions to the transportation channels used to distribute our products;

• We may be subject to a product recall;

•

Unfavorable publicity on our business or products;

• We are subject to risks related to Global Not For Resale programs;

• Our direct selling program could be found to not be in compliance with current or newly adopted laws or regulations in various markets;

•

Legal proceedings may be expensive and time consuming;

Strict government regulations on our business;

• Our Cannabidiol (“CBD”) products are subject to varying and changing federal, state or local laws which could adversely affect our results of

operations and financial condition;

•

Regulations governing the production or marketing of our products;

Risk of investigatory and enforcement action;

• Government authorities may question our tax positions or transfer pricing policies or change their laws in a manner that could increase our

effective tax rate or otherwise harm our business;

•

Failure to comply with anti-corruption laws;

Loss of, or inability to attract, key personnel;

• We may be held responsible for certain taxes or assessments and other obligations relating to the activity of our independent distributors;

•

Competition in the dietary supplement and personal care markets;

• Our inability to protect our intellectual property rights;

•

Third party claims that we infringe on their intellectual property;

Product liability claims against us;

Consumer discretionary spending habits factor into our economic success;

Economic, political, foreign exchange and other risks associated with international operations;

Potential delisting of our common stock due to non-compliance with Nasdaq's continued listing requirements;

Volatility of the market price of our common stock; and

Substantial sales of shares may negatively impact the market price of our common stock.

When considering these forward-looking statements, you should keep in mind the cautionary statements in this report and the documents

incorporated by reference. Except as required by law, we have no obligation and do not undertake to update or revise any such forward-looking
statements to reflect events or circumstances after the date of this report.

Item 1. Business
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Mine Safety Disclosures

TABLE OF CONTENTS

PART I

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Item 6. Selected Financial Data
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8. Financial Statements and Supplementary Data
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information

Item 10. Directors, Executive Officers and Corporate Governance
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14. Principal Accountant Fees and Services

PART III

Item 15. Exhibits, Financial Statement Schedules
Signatures

PART IV

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ITEM 1 — BUSINESS

Overview

PART I

LifeVantage Corporation is a company focused on nutrigenomics, the study of how nutrition and naturally occurring compounds affect human genes

to support good health. LifeVantage is dedicated to helping people achieve their health, wellness and financial goals. We provide quality, scientifically-
validated products to customers and independent distributors as well as a financially rewarding commission-based direct sales opportunity to our
independent distributors. We sell our products in the United States, Mexico, Japan, Australia, Hong Kong, Canada, Thailand, the United Kingdom, the
Netherlands, Germany, Taiwan, Austria, Spain, Ireland, Belgium, New Zealand, Singapore, and the Philippines. We also sell our products in a number of
countries to customers for personal consumption only. In addition, we sell our products in China through a China approved cross-border e-commerce
business model.

We engage in the identification, research, development, formulation and sale of advanced nutrigenomic activators, dietary supplements, nootropics,

pre- and pro-biotics, weight management, skin and hair care, bath & body, and targeted relief products. Our line of scientifically-validated dietary
supplements includes our flagship Protandim family of products, LifeVantage Omega+, ProBio, IC Bright
TrueScience is our line of skin, hair, bath & body, and targeted relief products. We also market and sell Petandim , our companion pet supplement
formulated to combat oxidative stress in dogs, Axio our nootropic energy drink mixes, and PhysIQ, our smart weight management system.

, and Daily Wellness dietary supplements.

We were incorporated in Colorado in June 1988 under the name Andraplex Corporation. We changed our corporate name to Yaak River Resources,
Inc. in January 1992, and subsequently changed it again in October 2004 to Lifeline Therapeutics, Inc. In October 2004 and March 2005, we acquired all
of the outstanding common stock of Lifeline Nutraceuticals Corporation. In November 2006, we changed our name to LifeVantage Corporation. From our
fiscal year 2005 until our fiscal year 2009, we marketed and sold a single product, Protandim , through traditional retail stores. In October 2008, we
announced that we were transitioning our business model from a traditional retail model to a direct sales model in which Protandim would be sold
primarily through a network of independent distributors. Since entering direct sales, we have increased our geographic reach by entering new
international markets and increased our product offering by introducing additional scientifically-validated products.

In March 2018, following approval by our stockholders at our fiscal year 2018 Annual Meeting of Stockholders, we changed our state of incorporation
from the State of Colorado to the State of Delaware pursuant to a plan of conversion. All outstanding shares of common stock, options and share units of
the Colorado corporation were converted into an equivalent share, option or share unit of the Delaware corporation and the par value of our common
stock was adjusted to $0.0001. All directors and officers of the Colorado corporation held the same position within the Delaware corporation on the date
of reincorporation.

Fiscal Year 2022 Highlights

COVID-19 Response

Beginning in fiscal year 2020 and continuing throughout fiscal year 2022, we pivoted our business operations to overcome a variety of challenges
related to the COVID-19 pandemic. Coronavirus disease (COVID-19) is an infectious disease caused by the SARS-CoV-2 virus. During fiscal year 2022,
we continued to provide successful virtual events and trainings, including twice-weekly online training events, and have seen a high level of engagement
and attendance from our independent distributors, with hundreds of attendees on average and over 2,000 attendees at some meetings. We invested in
incentives and promotions designed to build and maintain engagement with our independent distributors in lieu of in-person events. Last year, we shifted
all our employees to work from home and accelerated our adoption of technology. In fiscal year 2022, we began a hybrid model with our employees
working from home a few days a week, and in the office a few days a week. We remain focused on being digital first and committed to increasing our
investments into digital technologies and tools for independent distributors and employees to function effectively in the current hybrid working
environment. Further, we completed a full evaluation of our supply chain and identified and mitigated risks resulting from the pandemic and, to date, our
customers and independent distributors have experienced only minimal impact across our supply chain.

New Product Offerings

In fiscal year 2022, we launched several new products. In October 2021, we launched IC Bright . IC Bright

combines macular carotenoids with

vitamins and key ingredients that effectively support eye and brain health. It also helps reduce eye fatigue and strain from use of digital devices, helps
promote healthy levels of essential proteins for the brain, and may help support normal sleep patterns, which can be disrupted by blue light exposure. In
June 2022, we launched TrueScience® Liquid Collagen, the first consumable supplement in the TrueScience category. It has been formulated
specifically to activate,

replenish, and maintain the body’s production of collagen on the cellular level, supporting skin firmness and elasticity for healthy, glowing skin from
within. We also launched several limited time seasonal flavors of Axio during the fiscal year 2022.

Several products also were introduced into new markets in fiscal year 2022:

•

Australia introduced IC Bright

, Body Wash, Body Lotion;

Canada—IC Bright , Daily Wellness, Refining Mask;

Europe and Hong Kong—IC Bright

, Daily Wellness;

®
Japan—IC Bright ;

• Mexico—Daily Wellness, IC Bright

, Refining Mask, and a new delivery system of Nrf2 Synergizer in 7-day blister packs for direct retailing to

customers;

•

New Zealand—IC Bright

, Daily Wellness, Body Lotion;

Singapore—ProBio, IC Bright

, Daily Wellness; and

Taiwan—ProBio.

Global Expansion

To further support our global expansion initiative, we expanded our business operations to Philippines in fiscal year 2022.

Technology Innovation

We continued to develop, enhance and improve the LifeVantage app, which is available for download on the Apple app Store and Google Play store.

This custom-developed platform is pioneering new ways for us to interact with our independent distributors and gives us and our distributor leadership
valuable insight into the activities of our independent distributor base. The app provides independent distributors with tools and communications that help
simplify business activities, provide new distributors with step-by-step instruction for starting their business and improve the prospecting of potential
distributors and customers.

Nutrigenomic Culture & Activating Wellness

We have continued to simplify our nutrigenomic story, emphasizing that it activates and empowers the body to work better by using nutrients to
turn natural internal processes on or off and help support vibrant health at any age. Nutrigenomics and cellular activation are cutting-edge trends in our
industry that support our unique position in the market and leverage our core competencies and existing products. Activation is the guiding principle of our
culture and is the key underlying message for our independent distributors and customers. We are capitalizing on this message by highlighting how
LifeVantage has used the concept of activation and expanded it to every aspect of our business, with a new brand message of “activating wellness.” By
focusing on wellness, we are able to apply activation not only to our products, which support physical, mental, and emotional health, but also our business
opportunity, which supports financial, social, and spiritual health. The “activating wellness” message was introduced in fiscal year 2022 and continues to
be featured across our communications with our independent distributors and in our brand and marketing materials. Additional marketing and media
assets are currently in development to further promote this culture.

Red Carpet Program

We continued to grow through our red carpet program, which is designed to attract and incentivize experienced direct selling sales leaders who are in

transition to join LifeVantage. We remain optimistic that this program will help drive long term revenue growth for our business. We have increased red
carpet leadership enrollments and hope to see improved retention and active independent distributor and customer counts as a result of this program.

Our Competitive Advantages

We believe we have a competitive advantage in several key areas:

• Our Sales Compensation: We believe our sales compensation plan engineered for our independent distributors is one of the more financially

rewarding plans in the direct selling industry. Our percentage of sales paid to independent distributors as compensation and incentives is one of
the highest percentages reported in the direct selling industry. Our sales compensation plan also enables independent distributors to earn
compensation early and often as they sell our products. Some elements of our sales compensation plan are calculated and paid daily to eligible
independent

distributors and others are calculated and paid weekly or monthly, allowing new independent distributors to receive their sales commissions
quicker. We believe the ease of more frequent payments of sales commissions helps us attract and then retain new distributors by allowing them
to receive their commission payments as soon as possible after making qualified product sales. We also offer a variety of incentives to our
independent distributors for achieving specified product sales goals. We believe our sales compensation plan provides motivation for our
independent distributors to sell our products to customers and share the business opportunity with those entrepreneurs’ seeking to begin their
own sales business.

• Our Products: Our focus is on nutrigenomics, the study of how properly formulated and applied nutrition and naturally occurring compounds

™

affect human genes to support good health. We have developed proprietary and exclusive scientifically-validated nutrigenomics products focused
on helping individuals look, feel and perform better. Our products are the Protandim line of scientifically-validated dietary supplements,
LifeVantage Omega+, ProBio and Daily Wellness dietary supplements, TrueScience , our line of skin, bath & body, target relief, and hair care
products, Petandim , our companion pet supplement formulated to combat oxidative stress in dogs, Axio , our nootropic energy drink mixes, and
PhysIQ , our smart weight management system. The Protandim product line includes Protandim NRF1 Synergizer , Protandim Nrf2
Synergizer , and Protandim NAD Synergizer The Protandim NRF1 Synergizer is formulated to increase cellular energy and performance by
boosting mitochondria production to improve cellular repair and slow cellular aging. The Protandim Nrf2 Synergizer contains a proprietary
blend of ingredients and has been shown to combat oxidative stress and enhance energy production by increasing the body’s natural antioxidant
protection at the genetic level, inducing the production of naturally-occurring protective antioxidant enzymes, including superoxide dismutase,
®
catalase, and glutathione synthase. The Protandim NAD Synergizer was specifically formulated to target cell signaling pathways involved in
the synthesis and recycling of a specific molecule called NAD (nicotinamide adenine dinucleotide), and has been shown to double sirtuin activity,
supporting increased health, focus, energy, mental clarity and mood. Use of the three Protandim products together has been shown to produce
synergistic benefits greater than using the individual products on their own. LifeVantage Omega+ is a dietary supplement that combines DHA
and EPA Omega-3 fatty acids, Omega-7 fatty acids, and Vitamin D3 to support cognitive health, cardiovascular health, skin health, and the
immune system. LifeVantage ProBio is a dietary supplement designed to support optimal digestion and immune system function. LifeVantage
Daily Wellness is a dietary supplement designed to support and strengthen the immune health. Our TrueScience line of Nrf2 and CBD
enhanced anti-aging skin care, hair care, bath & body, and targeted relief products includes TrueScience Facial Cleanser, TrueScience
Perfecting Lotion, TrueScience Eye Serum, TrueScience Anti-Aging Cream, TrueScience Beauty Serum, TrueScience Hand Cream,
TrueScience Invigorating Shampoo, TrueScience Nourishing Conditioner, TrueScience Scalp Serum, TrueScience Body Lotion,
TrueScience Body Wash, TrueScience Body Butter, TrueScience Deodorant, TrueScience Soothing Balm, TrueScience Body Rub, and
TrueScience Liquid Collagen. Petandim is a supplement specially formulated to combat oxidative stress in dogs through Nrf2 activation. Axio
is our line of our nootropic energy drink mixes formulated to promote alertness and support mental performance. PhysIQ is our smart weight
management system, which includes PhysIQ Fat Burn, PhysIQ Prebiotic and PhysIQ Whey Protein, all formulated to aid in weight management.
IC Bright
support normal sleep patterns. We believe our significant number of customers who regularly and repeatedly purchase our products is a strong
indicator of the health benefits of our products.

is a supplement to help support eye and brain health, reduce eye fatigue and strain, supports cognitive functions, and may help

•

Technology-Enabled Distributor Training and Resources : We are committed to providing our independent distributors with resources and training
designed to promote productivity and their opportunity for successful sales and resulting commissions. We are dedicated to using technology to
facilitate a streamlined approach for independent distributors to manage their businesses and sell our products. The LifeVantage app, which is
available for download on the Apple app Store and Google Play store, is a custom-developed platform that provides new ways for us to interact
with our independent distributors and gives us and our distributor leadership valuable insight into the sales activities of our distributor base. The
LifeVantage app was designed to allow independent distributors to conduct any aspect of their business on a single platform from anywhere in
the world. Ultimately, through artificial intelligence and machine learning, we expect that the app will be able to guide independent distributors on
what to share, when to share it, and with whom to sell LifeVantage products. In addition, we provide other business and product training materials
and we encourage our independent distributors to participate in company-sponsored events, including conventions and sales promotions and
incentives.

• Our Culture: We are committed to creating a culture for our independent distributors, their customers and our employees that focuses on ethical,
legal and transparent business practices. At enrollment, our independent distributors agree to abide by their contract which includes our policies
and procedures. These policies and procedures, when followed, are designed to ensure that our independent distributors comply with applicable
laws and regulations. Our distributor compliance department monitors the activities of our independent distributors as part of our effort to

enforce our policies and procedures. Similarly, our code of business conduct and ethics sets forth guidelines and expectations for our employees.
We believe our ethical, legal and transparent culture attracts highly qualified employees and independent distributors who share our commitment
to these principles.

• Global Customer Acquisition: We introduced our global customer acquisition program in April 2018 to expand the number of countries where
customers can purchase and use our products for personal consumption only. This program allows us to enter additional markets at low
incremental cost and enables independent distributors to leverage customer sales through their international relationships outside of their home
countries. The program initially launched in eight markets, many of which subsequently became fully open for business on-the-ground through a
growing network of resident independent distributors. We expanded our global customer base in fiscal year 2021 by entering into key strategic
agreements with third parties based in the United States that will help customers ship LifeVantage products purchased in the U.S. throughout
the world via their customer personal purchase and importation programs. We also previously expanded our Auto-Assigned Customer Program,
which allows new customers to order directly through www.lifevantage.com without being required to go through an independent distributor on
their initial order. After the initial order, these new customers are then assigned to independent distributors, who benefit from the initial sale
commission and are then incentivized to provide future product support and sales to the assigned customer. This program provides consumers
easier access to our innovative products while providing referrals to our distributor force.

• Our Employees: We believe that our employees are an essential asset. We have a dedicated team of professionals that support our independent
distributors, work to generate long-term value for our stockholders and contribute to the broader society through charitable programs, including
the 501(c)(3) LifeVantage Legacy, LLC. In turn, we offer competitive compensation and direct employee focus on the short and long-term goals
of our stockholders and independent distributors. LifeVantage has been named one of the Best Places to Work by the Direct Selling News for six
years in a row, which reflects our commitment to create a great work environment for our employees.

Scientific Background

The Normal Aging Process

Aging in humans is a complex process driven by diverse changes in genetic, molecular, biochemical, and cellular events. This multifactorial process

is ultimately characterized by a gradual decline in physiological functions and in the effectiveness of the intricate network of internal cellular
communication referred to as cellular signaling. Theories as to why humans' age include the oxidative stress theory, the mitochondrial theory, and the
sirtuin theory.

Oxidative Stress Theory of Aging and the Nrf2 Pathway

The oxidative stress theory of aging states that as humans age, we accumulate free radicals and other oxidants. If left unchecked, this oxidative
stress can lead to serious consequences to the cell. Oxidative stress can ultimately lead to oxidative damage from attacks and damage to essential
biological structures of the cell which results in compromised cellular function.

Antioxidants are the cell’s primary defense against free radicals and other oxidants. There are two major classes of antioxidants: 1) dietary

antioxidants obtained through food and nutritional supplements and 2) endogenous antioxidants produced by the body. A 2013 review of the scientific
literature led by the United States National Institutes of Health’s National Center for Complementary and Integrative Health concluded that “rigorous trials
of antioxidant supplements in large numbers of people have not found that high doses of antioxidant supplements prevent disease.” Thus, much attention
has shifted to the body’s endogenous antioxidant and detoxification systems. Endogenous antioxidants are antioxidants made by the body and are the
primary line of defense against oxidative stress. In general, endogenous antioxidants either prevent oxidants from being formed, or remove them from the
body. Endogenous antioxidants form a complex network of antioxidant metabolites and enzymes. These networks work together, throughout the cell, to
neutralize oxidants and protect important biological structures from oxidative damage.

Endogenous antioxidants can also be upregulated in times of increasing oxidative stress. The Nrf2 cellular signaling pathway is the primary pathway
for upregulating endogenous antioxidant and other detoxification pathways. With age, the activity of this Nrf2 cellular signaling pathway has been shown
to decrease – both in its ability to sense oxidative threats and ultimately upregulate its target genes.

Mitochondrial Theory of Aging and the NRF1 Pathway

Mitochondria are membrane-bound cellular organelles that generate most of the chemical energy needed to power the cell's biochemical reactions.

The mitochondria produce energy by breaking down food that has been ingested and capturing high-energy electrons in the process. When mitochondria
are functioning properly, they harness the energy of these electrons to

produce energy for the cell. At the end of this process, the mitochondria attach these electrons to molecular oxygen that ultimately get detoxified to water.
However, this process is not perfectly efficient and, even in young, healthy mitochondria, electrons can escape, potentially forming free radicals and other
oxidants.

The mitochondrial theory of aging states that as humans age, mitochondria function less efficiently, producing less energy and more free radicals and

other oxidants. The reduction in energy production compromises cellular function. The increase in free radicals and other oxidants in turn damage
structures of the cell, including the mitochondria. This mitochondrial damage goes on to further compromise mitochondrial function leading to a
downward spiral of decreased mitochondrial efficiency and increased production of free radicals and other oxidants. This process ultimately contributes to
an increase in the overall cellular burden of oxidative stress and otherwise compromises cellular function through decreased energy production.

A major cellular signaling pathway believed to be involved in mitochondrial health is NRF1 (nuclear factor erythroid 2-related factor 1). The NRF1
cellular signaling pathway, directly or indirectly, regulates a number of genes involved in mitochondrial health, turnover, and biogenesis. Nrf1 (Nuclear
Respiratory Factor-1) is a protein believed to activate the expression of key genes involved in metabolism, cellular growth, energy production, and
mitochondrial DNA transcription and replication. Together with Nrf2, Nrf1 also provides the essential function of coordinating gene expression between
nuclear and mitochondrial genomes. An additional protein shown to support mitochondrial health is PGC1-alpha (peroxisome proliferator activated
receptor gamma coactivator-1-alpha). PGC1-alpha has been shown to regulate energy metabolism and is the master regulator of mitochondrial
biogenesis and turnover.

Sirtuin Theory of Aging and the NAD Pathway

The sirtuin theory of aging developed from studies examining the health benefits of caloric restriction. Caloric restriction is the process whereby
caloric intake is restricted by as much as 40 to 60 percent. In numerous experimental models, animals put on calorically restricted diets experienced
significant increases in maximum lifespan. Numerous studies have concluded that a family of proteins called the “sirtuins” are required for the increase in
lifespan brought on by caloric restriction.

When the physiology of humans undergoing caloric restriction was examined, a number of health benefits were discovered. As researchers began to

understand the molecular biology of these sirtuins, they found that the enzymatic activity for most of them required the molecule NAD (nicotinamide
adenine dinucleotide). NAD is an essential molecule for many biochemical reactions, most notably metabolism of food for energy in the mitochondria.

Taken together, these findings are intriguing because now there is a direct link between metabolism and healthy longevity. When energy intake is
normal, the primary role of NAD is for energy production. However, when NAD levels increase, either due to restricting calories or increasing the cellular
production of NAD , it becomes a signaling molecule to activate sirtuins and other health promoting mechanisms within the cell.

Research and Development

Historically, we have focused our research and development efforts on creating and supporting scientifically validated products under the

LifeVantage , Protandim , TrueScience , Petandim , Axio , and PhysIQ federation of brands. We anticipate that our future research and development
efforts will be focused on creating, developing and evaluating new products that are consistent with our commitment to provide quality, scientifically-
validated products that activate and empower the body’s ability to work better. We intend to build on our foundation of nutrigenomics with products that
activate gene or cell pathways targeting specific benefit areas, provide real results, and are an essential and enjoyable part of everyday life. We are also
exploring ways to expand our product delivery systems beyond primarily tablets and capsules, starting with the new TrueScience Liquid Collagen shots
introduced this year. LifeVantage remains committed to helping people look and feel healthy and vibrant at any age by combating sources of premature
aging or declining health.

Product Overview

Protandim Nrf2 Synergizer

Protandim Nrf2 Synergizer is a patented dietary supplement that has been shown in clinical trials to reduce the age-dependent increase in
markers of oxidative stress and has also been shown to provide substantial benefits to combat the variety of negative health effects linked to oxidative
stress.

Protandim Nrf2 Synergizer combats oxidative stress by increasing the body’s natural antioxidant protection at the gene level. The unique blend of

phytonutrients in Protandim Nrf2 Synergizer signals the activation of Nrf2 to increase production of antioxidant enzymes, specifically superoxide
dismutase and catalase, and other cell-protective gene products. The body's internally produced antioxidant enzymes provide a better defense against
oxidative stress than externally derived sources of antioxidants such as Vitamin C and Vitamin E. Unlike externally derived sources of antioxidants, these
enzymes are “catalytic,” which means these enzymes are not used up upon neutralizing free radicals.

®
We hold multiple U.S. patents related to Protandim Nrf2 Synergizer . We believe these patents set Protandim apart from other dietary

supplements and protect the original formula as well as certain formula modifications we could create to extend our Protandim product line. We sell
Protandim Nrf2 Synergizer in three formulas around the world.

Protandim Nrf2 Synergizer has been, and is expected to continue to be, the subject of numerous independent scientific studies at various
universities and research facilities including Ohio State University, Louisiana State University, University of Colorado Denver, Virginia Commonwealth
University, Colorado State University, Texas Tech University and the National Institute on Aging. The results of these studies have been published in a
variety of peer-reviewed scientific journals, including Free Radical Biology & Medicine, Enzyme Research, Circulation-the scientific journal of the
American Heart Association, American Journal of Physiology-Lung Cellular and Molecular Physiology, PLoS One, Journal of Dietary Supplements,
Molecular Aspects of Medicine, Oxidative Medicine and Cell Longevity, Exercise & Sports Science Reviews, Clinical Pharmacology, the FASEB Journal,
and the Journal of Applied Physiology.

Protandim NRF1 Synergizer

Protandim NRF1 Synergizer is a dietary supplement which was formulated to strengthen the mitochondria, the powerhouse of all cells, for better
®
cellular health. It is designed to work in tandem with our flagship Protandim Nrf2 Synergizer and further enhance the body's internal ability to naturally
produce antioxidants and reduce the effects of cellular stress. Protandim NRF1 Synergizer activates NRF1, a protein that regulates the expression of
genes involved in mitochondrial DNA transcription, translation and repair. The unique blend of ingredients in Protandim NRF1 Synergizer supports the
mitochondria to slow cellular aging and increase cellular energy.

®
Protandim NAD Synergizer

Sirtuin activity naturally declines by as much as 60 percent as humans age. Research has long shown that sirtuin activity can be increased by as
much as 94 percent through drastic caloric restriction. Protandim NAD Synergizer is a dietary supplement which was specifically formulated to target
the biochemical pathways involved in the synthesis and recycling of a specific molecule called NAD (nicotinamide adenine dinucleotide) and has been
shown to double sirtuin activity in just 24 hours. Sirtuin activity has been linked to multiple health benefits. In addition to being responsible for cellular
autophagy (cellular cleanup and renewal process), sirtuins help improve mental focus and concentration, support positive mood and motivation, boost
mental and physical energy, aid in maintaining cholesterol levels already in a healthy range, support a healthy vascular system, and promote healthy
longevity.

The Protandim Family of Products and Nutrigenomics

Nutrigenomics is the study of how foods and individual nutrients can affect gene expression and how genes can also affect how humans metabolize

food. Specific combinations of nutrients that engage cellular signaling and biochemical pathways are believed to unlock specific health mechanisms in
human cells, tissues, and organs. Specifically, by looking at the cellular signaling and biochemical pathways known to be implicated in the aging process,
we have formulated products to address various effects of aging utilizing nutrigenomics. This is the rationale behind the Protandim family of products,
which were formulated from specific combinations of nutrients with US Patents Pending to support natural cellular functions by targeting specific cellular
signaling and biochemical pathways related to oxidative stress, optimal mitochondrial function, and activation of the sirtuin family of proteins.

LifeVantage Omega+

LifeVantage Omega+ is a dietary supplement that combines DHA and EPA Omega-3 fatty acids, Omega-7 fatty acids, and Vitamin D3 to support

cognitive health, cardiovascular health, skin health, and the immune system.

LifeVantage ProBio

LifeVantage ProBio is a dietary supplement designed to support long-term gut health by restoring healthy gut bacteria to support digestive system

health.

LifeVantage IC Bright

IC Bright

combines macular carotenoids with vitamins and key ingredients that effectively support your eye and brain health. It helps reduce eye

fatigue and strain from use of digital devices, helps promote healthy levels of essential proteins for the brain, and may help support normal sleep
patterns, which can be disrupted by blue light exposure.

LifeVantage Daily Wellness

LifeVantage Daily Wellness is a dietary supplement designed to strengthen immune health by supporting and balancing the three essential roles of

the immune system: barrier, innate and adaptive.

PhysIQ

We sell a full line of weight management products under our PhysIQ brand, which consists of:

•

PhysIQ Fat Burn: a supplement containing naturally derived active ingredients to stimulate the breakdown of abdominal fat, increase energy
and support long-term weight management.

PhysIQ Prebiotic: a supplement designed to support the “good” bacteria in the gut and a healthy microbiome, resulting in a healthier digestive
tract and a healthier metabolism.

PhysIQ Whey Protein: a protein powder designed to satisfy hunger and deliver amino acids to support quick recovery and improved muscle
synthesis.

TrueScience Skin Care

We sell a full line of anti-aging skin care products under our LifeVantage TrueScience brand, which consists of:

•

TrueScience® Liquid Collagen: our first digestible liquid supplement in fully recyclable glass bottles that activates, replenishes, and maintains
the body’s production of collagen on the cellular level to support skin firmness and elasticity for healthy, glowing skin.

TrueScience Facial Cleanser: a concentrated, ultra-rich cleanser used to remove impurities and light make-up without drying or stripping
natural oils in the skin.

TrueScience Perfecting Lotion: a hybrid lotion formulated for smoother, radiant and brighter looking skin.

TrueScience Eye Serum: a serum that noticeably improves the visible signs of fine lines, creases and wrinkles around the entire eye area,
diminishes puffiness above and below the eye, firms and tightens the upper eyelid area and evens skin tone and dark circles that are visible
signs of aging.

TrueScience Anti-Aging Cream: a cream that deeply moisturizes and helps to combat the appearance of fine lines and wrinkles.

TrueScience Hand Cream: a cream formulated with Nrf2 ingredients to moisturize skin and decrease the visible signs of premature aging on
the hands.

TrueScience Beauty Serum: a CBD-enhanced facial serum designed to renew radiance and bring balance to the skin.

Our TrueScience Beauty System includes the following products in a TSA-compliant set: TrueScience Facial Cleanser, TrueScience Perfecting

Lotion, TrueScience Eye Serum, and TrueScience Anti-Aging Cream.

We received two composition patents related to our LifeVantage TrueScience skin care products, which were tested in an independent third-party

clinical study and shown to reduce the visible signs of aging by utilizing Nrf2 technology to mitigate the visible effects of skin damage caused by oxidative
stress. Our LifeVantage TrueScience skin care products leverage our research on Nrf2 activation and oxidative stress.

TrueScience Hair Care

We sell a full line of hair care products under our TrueScience brand, which consists of:

•

TrueScience Invigorating Shampoo: Mild surfactant and added amino acid blend that cleans hair without drying out the scalp.

TrueScience Nourishing Conditioner: Deeply nourishing weightless conditioner that helps hair feel soft and smooth and look fuller and
thicker.

TrueScience Scalp Serum: A serum that nourishes the scalp to support normal hair growth while soothing all scalp types.

®
TrueScience Personal Care

We sell a full line of bath & body and targeted relief products under our TrueScience brand, which consists of:

•

TrueScience Body Lotion: A lightweight formula that delivers nourishing hydration from rich emollients like mango seed butter and chia seed,
prevents visible signs of aging with a postbiotic blend, and shields the skin from environmental assaults with Dragon’s Blood resin.

TrueScience Body Wash: A body wash that hydrates and protects the skin with luxurious manuka honey, cleanses with a fruit acid exfoliant,
and supports the skin’s natural resilience with a unique adaptogen complex that includes Siberian ginseng, chaga mushroom and spikemoss.

TrueScience Body Butter: A body butter loaded with rich, deep penetrating emollients like mistletoe and cloudberry that provide immediate
and lasting relief for dry, distressed skin, it also combines nourishing oils from oat, olive, chia and amaranth seeds that leave the skin looking and
feeling healthy and soft. Enhanced with broad-spectrum CBD-enhanced Nrf2 ingredients to protect the skin against the visible effects of free
radical damage.

TrueScience Deodorant: A deodorant with live fermented enzymes that break down sweat molecules and effectively fight both odor and
wetness to address the issue at the source. Hyaluronic acid aids in lowering the skin’s pH under the arm, which helps create an environment
where odor-causing bacteria are less prone to flourish. Enriched with passionflower fruit extract, aloe, and CBD-enhanced Nrf2 ingredients, the
gentle formula soothes and nourishes underarm skin.

TrueScience Soothing Balm: A balm with lipid-rich emollients from a blend of four nourishing seed oils, beeswax, and shea and mango
butters create a do-it-all, ultra-intensive balm that leaves skin soft, soothes away stress, and cools with invigorating camphor, eucalyptus, and
spearmint.

TrueScience Body Rub: A body rub that offers a soothing cool-down for post workout—and post workday—muscles. CBD-enhanced Nrf2
ingredients give the body a boost of tranquility with a cooling sensation.

®
Petandim

Petandim is a supplement specially formulated to combat oxidative stress in dogs through Nrf2 activation. Petandim builds upon the active

ingredients in Protandim Nrf2 Synergizer to reduce oxidative stress and support joint function, mobility and flexibility in dogs. Petandim received the
Quality Seal from the National Animal Supplement Council.

®
Axio

Axio is our line of energy drink mixes, formulated as a nootropic to promote alertness and support mental performance. These energy drink powders

deliver sustained energy, as well as improved mental focus and promote a positive mood. Axio is derived from a unique combination of scientifically
validated ingredients.

Product Stacking

A stack consists of multiple products bundled together that are designed to achieve a specific result. By studying the effects of nutrients and natural

compounds, we have developed scientifically-backed nutrigenomics products that promote healthy aging on the cellular level. By stacking these products
together, we have created a foundation for synergy from nutrigenomic products to promote a healthier life.

The Vitality Stack includes four of our nutrigenomics products — Protandim NRF1 Synergizer , Protandim Nrf2 Synergizer , LifeVantage

Omega+ and LifeVantage ProBio. This product stack was designed to provide a foundation for wellness, supporting healthy organs, including the brain,
®
heart, eyes, and other vitals. With the Ultimate Stack, we added Protandim NAD Synergizer and PhysIQ Prebiotic to our Vitality Stack to support gut
consists of our
health and increase sirtuin activity, supporting increased health, focus, energy, mental clarity and mood. The Protandim Tri-Synergizer
Protandim NRF1 Synergizer , Protandim Nrf2 Synergizer and Protandim NAD Synergizer , and was designed to effectively and synergistically
reduce oxidative stress, support mitochondria function, increase sirtuin activity, and target cell signaling pathways to fight the effects of aging. We also
offer stacks that directly support the following consumer needs: immune support, heart health, energy, well-being, eye health, cognition and memory,
metabolism, gut health, skin care, and hair care.

™

Distribution of Products

We believe our products are well suited for distributor to customer sales through our direct selling model. This model allows our independent

distributors to educate our customers regarding the benefits of our unique products more thoroughly than other business models. Our direct selling model
also allows our independent distributors to offer personalized customer service to our customers and encourage regular use of our products.

Product Return Policy

All products purchased directly from us include a product guarantee. Subject to some exceptions based on local regulations, we will accept returns of

opened and unopened product within 30 days of purchase for a full refund of the purchase price. In addition, our product return program allows
independent distributors to return certain unopened, unexpired product for a refund of the purchase price less a 10% restocking fee and any paid
commissions. The amount of inventory we will repurchase from an independent distributor is subject to specified policies and procedures.

Accounts

We generally categorize accounts as either independent distributors or customers, both of which may be consumers of our products.

Independent Distributors

An independent distributor in our company is an independent contractor who participates in our direct sales opportunity by enrolling through the
independent distributor contract process and selling our products. Independent distributors may purchase our products and sell them to others either
directly or through our company. We believe our independent distributors are typically entrepreneurs, who believe in our products and desire to earn
income through sales commissions and by building their own distributorship business. Many of our independent distributors are attracted by the
opportunity to sell unique, scientifically-validated products without incurring significant start-up costs. Independent distributors sign a contract with us that
includes a requirement that they adhere to strict policies and procedures. Independent distributors may purchase product from us for individual and family
consumption and for demonstrations, samples and retailing opportunities.

While we provide support, product samples, brochures, magazines, the LifeVantage app and other sales and marketing materials, independent
distributors are primarily responsible for their sales to customers and for attracting, enrolling and educating new independent distributors about the
benefits of our products and sales compensation plan. An independent distributor creates multiple levels of compensation by selling our products and
enrolling new independent distributors who sell our products. These newly enrolled independent distributors form a “downline” for the independent
distributor who enrolled them. If downline independent distributors enroll new independent distributors or customers who purchase our products, they
create additional levels of compensation and their downline independent distributors remain in the same downline network as the original enrolling
independent distributor. We pay commissions only upon the sale of our products. We do not pay commissions for enrolling independent distributors.

We define “active independent distributors” as those independent distributors who have purchased product from us for retail sales or personal
consumption during the prior three months. We had approximately 63,000 active independent distributors as of each of the fiscal years ended June 30,
2022 and 2021.

Independent Distributor Compensation

We believe our sales compensation plan is one of the more financially rewarding in the direct selling industry. Our percentage of sales paid to

independent distributors as sales compensation and incentives is one of the highest percentages reported in the direct selling industry. Some elements of
our sales compensation plan are paid daily, to eligible distributors, and others are paid weekly or monthly. We believe this gives us a competitive
advantage and helps retain new distributors by allowing them to receive some sales commissions in a more timely manner from their sales efforts. Our
sales compensation plan is intended to appeal to a broad cross-section of people, including those seeking to supplement family income, start a home-
based business or pursue entrepreneurial opportunities full- or part-time. Our independent distributors earn sales commissions on product sales to their
personally enrolled customers and independent distributors and the product sales to customers and independent distributors within their sales
organization, or "downline." Our independent distributors can also earn money by purchasing product from us and selling that product to others at their
chosen retail price. We pay sales commissions in the local currency of the independent distributor’s home country.

Independent Distributor Motivation and Training

Our revenue depends in part on the sales success and productivity of our independent distributors. We provide tools, training and technology
designed to increase our independent distributors' sales productivity and increase their potential for sales success. We offer training and business
development opportunities to our independent distributors, including the following:

•

Playbook: Professionally-designed training materials independent distributors can utilize in their sales efforts;

Digital Training: Our digital audio series presented by our independent distributor leaders provides training and tips on becoming more sales
productive distributors;

•

Elite Academy, Global Convention, and Other Company-Sponsored Training : We hold regularly occurring live and virtual company-sponsored
events intended to provide sales training and motivation to our independent distributors, in addition to twice-weekly virtual distributor trainings;

Promotions and Incentive Trips : We hold special sales promotions and incentive trips from time to time in order to motivate our independent
distributors to accomplish specific sales goals; and

• Mobile Application: The LifeVantage app was designed to allow users to conduct any aspect of their business on a single platform from

anywhere in the world. Ultimately, through artificial intelligence and machine learning, we expect that the app will be able to guide users on what
to share, when to share it, and with whom to maximize their sales potential.

We are continuing to evaluate new ways in which to incorporate new technology and sales training opportunities to improve distributor sales success

and commissions.

Distributor Compliance Activities

Given that our independent distributors are independent contractors, we do not control or direct their promotional efforts. We do, however, require
that our independent distributors abide by policies and procedures that require them to act in an ethical manner and in compliance with applicable laws
and regulations. As a member of the United States Direct Selling Association and similar organizations in many of the markets where we do business, we
are also subject to the ethical business practices and consumer service standards required by the industry's code of ethics.

Independent distributors represent to us that their receipt of sales commissions is based on their product sales and by product sales of other

LifeVantage distributors in their personal marketing organization. We must produce or pre-approve all sales aids used by distributors, such as brochures
and online materials. Products may be promoted only through sales materials produced or approved by us. Independent distributors may not use our
trademarks or other intellectual property without our written consent.

We monitor and systematically review alleged distributor misbehavior through our internal distributor compliance department. If we determine one of
our independent distributors has violated any of our policies and procedures, we first attempt to educate, but may discipline or terminate the distributor’s
rights to sell or distribute our products when appropriate. When necessary, we have brought legal action against distributors, or former distributors, to
enforce our policies and procedures. Short of termination or legal action, and in addition to educating, we may impose sanctions against distributors
whose actions are in violation of our policies and procedures. Such sanctions may include warnings, probation, withdrawal or denial of an award,
suspension of privileges of a distributorship, fines and/or withholding of commissions until specified conditions are satisfied, or other appropriate injunctive
relief.

Customers

Customers purchase products directly from us at either our non-subscription (list) pricing for one-time purchases or our subscription price on a

monthly subscription basis for personal consumption, without the ability to resell or earn commissions from the purchase or sale of such products. A
customer may decide to enroll as an independent distributor at any time if they become interested in selling the product. We believe our customers are a
great source of word-of-mouth advertising for our products. We also believe our large base of customers validates the health benefits of our products.

We define an “active customer” as a customer who has purchased product from us within the prior three months. As of June 30, 2022 and 2021, we

had approximately 93,000 and 107,000 active customers, respectively.

Sales of Our Products

We accept orders for our products through our own website at www.lifevantage.com and through personalized websites we provide to our

independent distributors, which we refer to as “Virtual Offices”. Orders placed through Virtual Offices and through our website are processed daily at our
fulfillment centers, where orders are shipped directly to the consumer.

We offer toll-free numbers for our independent distributors and our customers to order product or ask questions. Our customer service

representatives assist customers in placing orders through our web order processing system, answering questions, tracking packages, and initiating
refunds. The customer service representatives receive extensive training about our products and our direct selling business model. LifeVantage
customers and independent distributors generally pay for products by credit card, prior to shipment, and as a result, we carry minimal accounts
receivable.

Seasonality

In addition to general economic factors, we are impacted by seasonal factors and trends such as major cultural events and vacation patterns. We

believe that direct selling in the United States and Japan is also generally negatively impacted during our first fiscal quarter, from July 1 through
September 30, when many individuals, including our independent distributors, traditionally take vacations. The timing and size of our training events and
incentive trips can also cause revenue and expense to fluctuate in the periods that they are held.

Although our product launch process may vary by market, we may introduce new products to our customers and independent distributors through
limited-time offers and promotions. The limited-time offers and promotions typically generate significant activity and a high level of sales and purchasing,
which may result in a higher than normal increase in revenue during the quarter of the limited-time offer and skew year-over-year and sequential
comparisons. Similarly, company events for independent distributors typically generate a higher than normal increase in revenue. The timing of these
events can also skew year-over-year and sequential comparisons.

Geographic Information

Americas
Asia/Pacific & Europe

Total

2022

138,323
68,037
206,360

For the fiscal years ended June 30,
2021

2020

67.0 % $
33.0 %
100.0 % $

154,655
65,526
220,181

70.2 % $
29.8 %
100.0 % $

166,336
66,579
232,915

71.4 %
28.6 %
100.0 %

Additional comparative revenue and related financial information is presented in the section captioned " Segment Information" in Note 2 to our

consolidated financial statements.

Marketing

We utilize our network of independent distributors located throughout the United States, Mexico, Japan, Australia, Hong Kong, Canada, Thailand, the

United Kingdom, the Netherlands, Germany, Taiwan, Austria, Spain, Ireland, Belgium, New Zealand, Singapore, and the Philippines to market and sell
our products. In addition, we utilize our network of in-country social marketers to market and sell our US products in China through our cross-border e-
commerce business model. In addition, we have in-house sales, marketing, IT, and customer service groups dedicated to supporting our independent
distributors. Support includes training and education, personalized assistance, in-person and digital events, recognition, incentives and promotions, digital
and social media content, press coverage, regular communications, as well as a full suite of marketing assets, including content for their websites.

Raw Materials and Manufacturing

We outsource the primary manufacturing, fulfillment, and shipping components of our business to third-party companies we believe possess a high

degree of expertise. We believe outsourcing provides us access to advanced manufacturing process capabilities and expertise without incurring fixed
costs associated with manufacturing our own products in house.

We currently outsource the manufacture of our products to multiple third-party contract manufacturers. Our contract manufacturers have a legal
obligation to comply with the current Good Manufacturing Practices regulations that are applicable to those who manufacture, package, label and hold
dietary supplements and personal care products. Additionally, we are subject to regulations that, among other things, obligate us to know what and how
manufacturing activities are performed so that we can make decisions related to whether the packaged and labeled product conforms to our established
specifications and whether to approve and release product for distribution to consumers. We maintain and qualify alternative manufacturing options in
order to keep our costs low, maintain the quality of our products, and prepare for unanticipated spikes in demand or manufacturing failure. Our contract
manufacturers deliver products to our fulfillment centers based on our purchase orders.

We acquire raw materials for our products from third-party suppliers. Although we generally have good relationships with our suppliers, we believe we
could replace any of our current suppliers without great difficulty or significant increase to our cost of goods sold. We also have ongoing relationships with
secondary and tertiary suppliers. Please refer to "Risk Factors - High quality material for our products may be difficult to obtain or expensive " for a
discussion of the risks and uncertainties associated with our sourcing of raw materials.

Product Liability and Other Insurance

We have product liability insurance coverage for our products that we believe is adequate for our needs. We also maintain commercial property and
liability coverage, directors’ and officers’ liability insurance, workers compensation coverage and cyber information security risk insurance policies as well
as foreign and other miscellaneous coverage.

Intellectual Property

We use commercially reasonable efforts to protect our intellectual property through patent protection, trademarks and trade secrets, licensed rights

and contractual protections, and intend to continue to develop a strong brand identity for our company and our products.

Protandim Nrf2 Synergizer is a proprietary, patented dietary supplement formulation for enhancing antioxidant enzymes including superoxide

dismutase and catalase. The patents and patent applications protecting its formulations are held by LifeVantage Corporation or our wholly-owned
subsidiary, Lifeline Nutraceuticals Corporation. Our intellectual property is covered, in part, by many issued U.S. patents. Our patents and patent
applications claim the benefit of priority of multiple U.S. provisional patent applications, the earliest of which was filed on March 23, 2004, and relate to
compositions, methods of use, and methods of manufacture of various compositions, including those embodied by the Protandim Nrf2 Synergizer
formulation. The expected duration of our patent protection via some granted patents for Protandim Nrf2 Synergizer is at least through approximately
March 2025 and we continue to research and file new composition and method patents in the U.S. for enhanced and improved product formulations that
will extend our patent protection for a variety of product formulations and methods. During fiscal year 2018, we received other patents for personal care
or skin care products. These patents expire approximately February 2036. In fiscal year 2021, we filed additional U.S. patents that, if granted, will protect
the combined effects and synergistic benefits of the Protandim Nrf1 Synergizer ; Protandim Nrf2 Synergizer and Protandim NAD Synergizer
products when these three products (also called the Tri-Synergizer

pack) are used together.

™

We continue to protect our products and brands using trademarks. We have filed and successfully procured registered trademarks for our key brands

consisting of Protandim , LifeVantage , and TrueScience in many countries around the world, and we have pending trademark applications for these
and other marks in many other countries. We anticipate seeking protection in other countries, as we deem appropriate.

In order to protect the confidentiality of our intellectual property, including trade secrets, know-how and other proprietary technical and business
information, it is our policy to limit access to such information to those who require access in order to perform their functions and to enter into agreements
with employees, consultants and vendors to contractually protect such information.

Competition

Direct Selling Companies

We compete with other direct selling companies, many of which have longer operating histories and greater visibility, name recognition and financial

resources than we do. We also compete with newer direct selling companies that may attempt to solicit our distributors by offering the possibility of a
more financially rewarding opportunity or by being among the company's early distributor base. We compete for new distributors with these companies on
the basis of our business opportunity, product offerings, sales compensation plan, management and our operations. In order to successfully compete in
the direct selling industry and attract and retain quality distributors, we must maintain the attractiveness of our business opportunity, product offerings and
sales compensation plan.

Dietary Supplement Market

We compete with other companies that sell dietary supplements. We believe the dietary supplement market is highly fragmented and competitive.
We believe competition in the dietary supplement market is based primarily on quality, price, efficacy of products, brand name and recognition of product
benefits. In the dietary supplement industry, our competition includes numerous nutritional supplement companies, pharmaceutical companies and
packaged food and beverage companies. Many of these companies have broader product lines, larger sales volumes and greater financial resources
than we do. Additionally, some of these companies are able to compete more effectively due to greater vertical integration. Increased

competition in the dietary supplement market could have a material adverse effect on our results of operations and financial condition.

Nrf2 Activators

In the last few years we have seen the number of products marketed as Nrf2 activators increase. We anticipate the number of products that claim to

activate Nrf2 will continue to increase as the technology becomes more popular and more broadly accepted.

Direct Antioxidants

Vitamin C, Vitamin E, other vitamin/mineral antioxidants, and other sources of externally derived antioxidants may be considered competitors of

Protandim Nrf2 Synergizer but they are mechanistically distinct from Protandim Nrf2 Synergizer . These other sources of antioxidants do not
increase the body’s elimination of oxidants using internal antioxidant enzymes. Our research indicates that Protandim Nrf2 Synergizer increases
production of anti-fibrotic gene products including antioxidant enzymes, such as superoxide dismutase and catalase, within the cells of the body. We
believe that the body’s internally produced antioxidant enzymes provide a better defense against oxidative stress than externally derived sources of
antioxidants.

Oral Superoxide Dismutase and Catalase

There are many companies performing research into antioxidants. Several companies sell oral forms of superoxide dismutase and catalase.

Although we believe Protandim Nrf2 Synergizer is a superior alternative to oral forms of superoxide dismutase and catalase, these products do
compete with Protandim Nrf2 Synergizer in the marketplace. We anticipate additional companies will likely develop, purchase or in-license products
®
that are competitive with Protandim Nrf2 Synergizer .

Omega Fatty Acid Products

There are many companies that market Omega supplements, including Omega-3. Although LifeVantage Omega+ contains a unique combination of

DHA and EPA Omega-3 fatty acids, Omega-7 fatty acids, and Vitamin D3, we anticipate additional companies will likely develop products that are
competitive with LifeVantage Omega+.

Probiotic Products

There are many companies that market probiotic supplements and we anticipate additional companies will likely continue to develop products that are

competitive with our LifeVantage ProBio supplement.

Eye Health Products

There are many companies that market eye health supplements and we anticipate additional companies will likely continue to develop products that

®
are competitive with our IC Bright .

Personal Skin Care Market

In the personal skin care market, we compete principally with large, well-known cosmetics companies that manufacture and sell broad product lines

through retail establishments. Many of these competitors have greater financial resources and brand recognition than we do. We believe, however, we
can compete with these larger companies by leveraging our direct selling model and emphasizing our unique, science-based, Nrf2 and CBD enhanced
skin and personal care products. We also now compete in the growing global liquid collagen market and believe we can compete with our triple action
formula that has been shown to deliver visible results in only 30 days as it activates, replenishes and maintains collagen levels. Our product is a unique
blend featuring sustainably sourced, hydrolyzed fish collagen that delivers 10 different types of peptides – significantly more than most competitive
products – plus a unique red quinoa extract that has been shown to up regulate genes associated with collagen production and down regulate those that
produce enzymes that break down collagen.

Personal Hair Care Market

In the personal hair care market, we compete principally with large, well-known hair care companies that manufacture and sell broad product lines
through retail establishments. Many of these competitors have greater financial resources and brand recognition than we do. We believe, however, we
can compete with these larger companies by leveraging our direct selling model and emphasizing our unique, science-based hair care products.

Animal Supplement Market

We compete principally with large, well-known companies in the animal supplement market. Most of the companies we compete with in the animal
supplement market have broad distribution channels that include retail establishments. Many of these competitors have greater financial resources and
brand recognition than we do. We believe, however, we can compete with these larger companies by leveraging our direct selling model and emphasizing
our unique, science-based animal supplement product.

Energy Drink Market

We compete with large, well-known companies in the energy drink market. Most of the companies we compete with in the energy drink market have
broad distribution channels that include big box retail establishments. Many of these competitors have greater financial resources and brand recognition
than we do. We intend to compete with these larger companies by leveraging our direct selling model and emphasizing our unique, science-based energy
drink product. Axio is a no sugar, low-carbohydrate and low-calorie energy drink that is also non-GMO, gluten-free and vegan.

Weight Management Market

We compete with large, well-known companies in the weight management market. Most of the companies we compete with in the weight
management market have broad distribution channels that include big box retail establishments. Many of these competitors have greater financial
resources and brand recognition than we do. We intend to compete with these larger companies by leveraging our direct selling model and emphasizing
our unique, science-based weight management products.

Regulatory Environment

The formulation, manufacturing, packaging, labeling, and advertising of our products in the United States are subject to regulation by the Food and

Drug Administration, or FDA, and the Federal Trade Commission, or FTC, as well as comparable state laws.

FDA Regulations and DSHEA

We market our Protandim products as “dietary supplements” as defined in the Dietary Supplement Health and Education Act of 1994, or DSHEA.

DSHEA is intended to promote access to safe, quality dietary supplements, and information about dietary supplements. DSHEA established a new
framework governing the composition and labeling of dietary supplements. DSHEA does not apply to animal supplements like Petandim . We are not
required to obtain FDA pre-market approval to sell our products in the United States under current laws.

DSHEA permits statements of nutritional support, called “structure-function” statements, to be included in labeling for dietary supplements without

FDA marketing approval. Such statements may claim a benefit related to a classical nutrient deficiency disease and disclose the prevalence of such
disease in the United States, describe the role of a nutrient or dietary ingredient intended to affect the structure or function in humans, characterize the
documented mechanism by which a nutrient or dietary ingredient acts to maintain such structure or function, or describe general well-being from
consumption of a nutrient or dietary ingredient. Such statements may not expressly or impliedly claim that a dietary supplement is intended to diagnose,
cure, mitigate, treat, or prevent a disease. A company that uses a structure-function statement in labeling must possess evidence substantiating that the
statement is truthful and not misleading and is supported by competent and reliable scientific evidence.

The FDA may assert that a particular structure-function statement that a company is using is an illegal claim; that assertion, normally, is in the form of

a warning letter to that company. We have a duty to send to the FDA a notice that lists each new structure-function statement made by us; we are
obligated to send that notice within 30 days after the first marketing of a supplement with such a statement.

DSHEA also permits certain scientific literature, for example a reprint of a peer-reviewed scientific publication, to be used in connection with the sale

of a dietary supplement to consumers without the literature being subject to regulation as labeling. However, such literature must not be false or
misleading, the literature may not promote a particular manufacturer or brand of dietary supplement and it must include a balanced view of the available
scientific information on the subject matter, among other requirements.

The FDA's Center for Veterinary Medicine, or CVM, is responsible for enforcing the portion of the Federal Food, Drug, and Cosmetic Act, or the Act,

that relates to animal supplements, like our Petandim product. CVM's primary responsibility in enforcing the Act is to ensure that animal supplements
are safe, effective, and can be manufactured to a consistent standard. CVM has taken the position that DSHEA does not apply to products intended for
animals, but it is clear that products like Petandim are under FDA jurisdiction.

Our Petandim product follows the labeling rules of the National Animal Supplement Council (NASC) of which LifeVantage is a member. Under the

NASC rules, Petandim is classified as a dosage form animal health product.

While we exercise care in our formulation, manufacturing, packaging, labeling, and advertising of our products, we cannot guarantee the FDA will

never inform us that the FDA believes some violation of law has occurred either by us or by our independent distributors. Any allegations of our non-
compliance may result in time-consuming and expensive defense of our activities. The FDA’s normal course of action is to issue a warning letter if it
believes that a product is misbranded or adulterated. The responsive action requested by the FDA differs depending upon the nature of the product and
claims in question. Typically, the FDA expects a written response within 15 working days of the receipt of a warning letter. The warning letter is public
information posted on the FDA’s web site. That information could affect our relationships with our customers/consumers, investors, independent
distributors, vendors, and employees. Warning letters also often spark private class action litigation under state consumer protection statutes. The FDA
could also order compliance activities, such as an inspection of our facilities and products, and could file a civil lawsuit in which an arrest warrant (seizure)
could be issued as to some or all of our products. In extraordinary cases, we could be named a defendant and sued for declaratory and injunctive relief.

FTC Regulations

Advertising and marketing of our products in the United States are also subject to regulation by the FTC under the Federal Trade Commission Act, or

FTC Act. Among other things, the FTC Act prohibits unfair methods of competition and unfair false or deceptive acts or practices in or affecting
commerce. The FTC Act also makes it illegal to disseminate or cause to be disseminated any false advertisement for “food, drugs, devices, services, or
cosmetics." The FTC Act provides that disseminating any false advertisement pertaining to foods, which would include dietary supplements, is an unfair
or deceptive act or practice. An advertiser is required to have competent and reliable scientific evidence for all express and implied health-related product
claims at the time the claims are first made. We are required to have adequate scientific substantiation for all material advertising claims made for our
products in the United States. The FTC routinely reviews websites to identify questionable advertising claims and practices. Competitors sometimes
inform the FTC when they believe other competitors are violating the FTC Act and consumers may also notify the FTC of what they believe may be
wrongful advertising. The FTC may initiate a non-public investigation that focuses on our advertising claims, which usually involves non-public pre-lawsuit
extensive formal discovery. Such an investigation may be very expensive to defend, be lengthy, and result in a publicly disclosed Consent Decree, which
is a settlement agreement. If no settlement can be reached, the FTC may start an administrative proceeding or a federal court lawsuit against us and/or
our principal officers. The FTC often seeks to recover from the defendants, whether in a Consent Decree or a proceeding, any or all of the following: (i)
consumer redress in the form of monetary relief or disgorgement of profits; (ii) significant reporting requirements for several years; and (iii) injunctive
relief. In addition, most, if not all, states have statutes prohibiting deceptive and unfair acts and practices. The requirements under these state statutes are
similar to those of the FTC Act.

The National Advertising Division, or NAD, of the national Better Business Bureau, a non-governmental not-for-profit organization through its
Advertising Self-Regulatory Council, or ASRC, is also actively engaged in conducting investigations, called inquiries, which are focused on determining
whether the requisite claim substantiation standard exists for advertising claims, including specific structure-function claims. Although the results of each
inquiry or proceeding are not binding on the recipient, they are posted on NAD’s website, and the NAD often refers cases to the FTC, if the advertisers do
not agree to modify their advertising in conformance with the NAD decision. We have been the subject of a NAD proceeding in 2008 and 2009, which
was concluded in 2009.

In January 2019, the Direct Selling Self-Regulatory Council (DSSRC) was introduced. T his program monitors the entire direct selling channel —

including Direct Selling Association member companies and non-members. The DSSRC provides impartial monitoring, enforcement, and dispute
resolution regarding product claims or income representations (including lifestyle claims) disseminated by direct selling companies and their sales force
members (distributors). The failure of a company to resolve DSSRC complaints will ultimately result in the DSSRC reporting the matter to the FTC, which
may or may not pursue enforcement action in any given case.

Regulation of Direct Selling Activities

Direct selling activities are regulated by the FTC, as well as various federal, state and local governmental agencies in the United States and foreign

countries. These laws and regulations are generally intended to prevent fraudulent or deceptive schemes, often referred to as “pyramid” schemes, which
compensate participants primarily for recruiting additional participants without sufficient emphasis on product sales. The laws and regulations may often:

•

require us or our independent distributors to register with governmental agencies;

impose caps on the amount or type of sales commission we can pay;

•

impose reporting requirements; and

require that we ensure, among other things, that our independent distributors maintain levels of product sales to qualify to receive sales
commissions and that our independent distributors are being compensated primarily for sales of products and not primarily for recruiting
additional participants.

The laws and regulations governing direct selling are modified from time to time, and, like other direct selling companies, we may be subject from
time to time to government investigations related to our direct selling activities. This may require us to make changes to our business model and our sales
compensation plan.

State Regulations

In addition to United States federal regulation, each state has enacted its own food and drug laws. We may receive requests to supply information
regarding our sales or advertising to state regulatory agencies. We remain subject to the risk that, in one or more of our present or future markets, our
products, sales, and advertising could be found non-compliant with state laws and regulations. If we fail to comply with these laws and regulations, it
could have a material adverse effect on our business in a particular market or in general. In addition, these laws and regulations could affect our ability to
enter new markets.

The FDA Food Safety Modernization Act

The FDA Food Safety Modernization Act, or FSMA, was enacted in 2011 and is now part of the Federal Food, Drug and Cosmetic Act, or FFDCA.
The FSMA is a comprehensive set of laws that gives the FDA considerable authority with respect to the prevention of food contamination and the serious
problems associated with such contamination. Among other things, it does the following:

•

gives the FDA explicit authority to compel a recall if the FDA believes there is a reasonable probability of serious adverse health consequences
or death;

places strict obligations on food and dietary supplement importers to verify that food from foreign suppliers is not adulterated or misbranded; and

provides whistle blower protection for employees of conventional food or dietary supplement companies who provide information to governmental
authorities about violations of the FFDCA.

International Regulations

In addition to the regulations applicable to our activities in the United States, all other markets in which we operate our business regulate our
products under a variety of statutory and regulatory schemes. We typically market our Protandim line of products in international markets as foods,
health foods or dietary supplements under applicable regulatory regimes. However, because of varied regulations, some products or ingredients that are
recognized as a “food” in certain markets may be treated as a “pharmaceutical” or equivalent in other markets. In the event a product, or an ingredient in
a product, is classified as a drug or pharmaceutical product in any market, we will generally not be able to distribute that product through our independent
distributors channel because of pre-marketing approval requirements and strict regulations applicable to drug and pharmaceutical products. In Japan, for
example, ashwagandha was determined to be inappropriate for inclusion in food products. Ashwagandha is one of the ingredients in Protandim Nrf2
Synergizer . While we disagree with the assessment of ashwagandha by Japanese regulatory authorities, we are restricted from selling a formulation of
Protandim Nrf2 Synergizer that contains ashwagandha in Japan. As such, we reformulated Protandim Nrf2 Synergizer for the Japan market to
exclude ashwagandha and include black pepper extract . This reformulated Protandim Nrf2 Synergizer was introduced in Japan in fiscal year 2013.

Similarly, our other markets outside the United States regulate advertising and product claims regarding the efficacy of our products and require
adequate substantiation of claims. As such, we are unable to claim that any of our products will diagnose, cure, mitigate, treat or prevent diseases. For
example, in Japan, Protandim Nrf2 Synergizer is considered a food product, which significantly limits our ability to make claims regarding the product.
If marketing materials make claims that exceed the scope of allowed claims for dietary supplements, regulatory authorities could deem our products to be
unapproved drugs and we could experience substantial harm.

Our business model is also subject to regulatory frameworks that may limit or significantly alter the way business is done in foreign markets vis-à-vis

the United States. For example, our marketing of products or business opportunity as a distributor in the United Kingdom differs significantly from
marketing to United States customers and distributors. Consequently, we may experience additional costs and delays in entering or continuing to do
business in foreign markets in order to comply with local regulations.

Potential FDA and Other Regulation

We could become subject to additional laws or regulations administered by the FDA, FTC, or other federal, state, local or international regulatory

authorities, to the repeal of laws or regulations that we consider favorable, such as DSHEA, or to more stringent interpretations of current laws or
regulations. Because of negative publicity associated with some adulterated or misbranded supplements, including pharmaceutical drugs marketed as
dietary supplements, there has been an increased movement in the United States and other markets to expand the regulation of dietary supplements,
which could impose additional restrictions or requirements in the future. In recent years, there also has been increased pressure in the United States to
further regulate cosmetics. In general, the regulatory environment is becoming more complex with increasingly strict regulations. In March of 2022, the
FTC gave notice of a new potential rulemaking concerning false, misleading and unsubstantiated earnings claims. The Direct Selling Association, which
represents many direct selling companies publicized its filed comments and cited “already robust ethics and self-regulation in direct selling.” The Direct
Selling Association asserted that the DSSRC “has a strong track record of monitoring the market for potentially problematic claims and engaging in quick
and effective follow-up to address the relatively rare instances where it finds that distributors are making questionable claims, usually in social media.”

The Dietary Supplement and Nonprescription Drug Consumer Protection Act requires us to report to the FDA all serious adverse events and to
maintain for six years, records of all adverse events, whether or not serious. An adverse event is defined as any health-related event associated with the
use of a dietary supplement that is adverse. In addition, this law requires the label of each dietary supplement, including our Protandim products, to
include a domestic address or telephone number by which the company selling the product may receive a report of a serious adverse event associated
®
with such product. The labels of our Protandim products comply with that statutory provision.

Employees

As of June 30, 2022 and 2021, we had 259 and 263 full-time employees, respectively. As of June 30, 2022, 187 of our full-time employees were

based in the United States, 31 were based in Japan and a total of 10 were based in the Philippines, 9 in Thailand, 9 in Taiwan, 4 in Mexico, 4 in
Australia, 3 in Singapore, 1 in Hong Kong, and 1 in Canada. We do not include our independent distributors in our number of employees because our
independent distributors are independent contractors and not employees. We outsource our manufacturing, warehousing and shipping operations.

Corporate Responsibility and Sustainability

We understand that long-term value creation for stockholders is our core responsibility. We are investing in a number of sustainability initiatives,
including reducing the environmental impact of our business activities and products, improving the global human condition, providing a positive working
environment and engaging with our stakeholders regarding these initiatives.

Employees: We believe that our employees are an essential asset. We have a dedicated team of professionals that support our customers and

independent distributors, work to generate long-term value for our stockholders and contribute to the broader public through charitable programs,
including LifeVantage Legacy LLC. In turn, we offer competitive compensation and direct their focus on the long-term goals of our stockholders and
independent distributors. We have been named one of the Best Places to Work by the Direct Selling News for six years in a row, which reflects our
commitment to create a great work environment for our employees.

Environment: We are committed to reducing our impact on the environment and creating awareness about sustainability. We will strive to improve

our environmental performance over time and to initiate additional projects and activities that will further reduce our impacts on the environment. Our
commitment to the environment extends to our customers, our independent distributors, our employees, and the global communities in which we operate.
We comply with applicable environmental regulations and strive to prevent pollution whenever possible. We are increasing our efforts to train our
employees and independent distributors on our environmental program and empower them to contribute and participate. We are committed to continually
improve over time by striving to measure our environmental impacts and by setting goals to reduce these impacts each year. Some examples of our
efforts include:

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Created a digital starter kit to replace the prior hard copy version in an effort to reduce the use of materials like paper and plastic;

Utilized furniture in our new office made from 80+% recycled content;

Designed our corporate office with furniture sourced from U.S. Green Building Council and LEED Platinum certified vendor;

•

Included sustainability as one of our corporate core values, and committed to continually look for ways to minimize our impact on the environment
including using more easily recycled packaging for the launch of our new products in our TrueScience line and ensuring the new products score
low on the Think Dirty scale;

Engaged our stakeholders by establishing a sustainability committee comprised of independent distributors to meet periodically during the year
to receive feedback on initiatives important to them. This committee met three times during the year and discussed potential sustainability
partners, finding more easily recyclable packaging and other packaging concerns;

Continued a more flexible work from home structure for corporate employees, including positions that are now permanently work from home,
reducing our impact on the environment with fewer vehicles on the road commuting to and from the office;

Implemented an environmental policy using the feedback from our stakeholders to help formalize our focus on sustainability and began using
environmental auditing in our selection process for new partners;

Switched to more easily recyclable bottles and cartons for product packaging, including replacing plastic bags with paper cartons for our energy
drink products and using a fully recyclable glass bottle and cap for the recently launched TrueScience Liquid Collagen product line;

Began sourcing shipping boxes made from Sustainable Forestry Initiative (SFI) certified corrugate material;

Created sharable videos that our independent distributors can use with our sustainability efforts; and

Focused on working with fish oil suppliers and fisheries who are Marine Stewardship Council (MSC) certified.

Social/Community: We believe that our legacy isn’t the past, it’s the future we create. This belief informed our effort to sponsor the formation of
LifeVantage Legacy – an independent charitable organization focused on bettering the lives of children throughout the world. LifeVantage Legacy helps
the leaders of tomorrow by touching a million lives across the world today. From simply helping a child in need to supporting initiatives that uplift entire
communities, our goal is simple - give future generations the support and resources they need to live happier, healthier lives one child at a time. One of
the best parts of LifeVantage is our commitment to leaving places better than we find them.

•

For the past 8 years, other than in 2020 due to the COVID-19 pandemic, during the holidays, employees, independent distributors and their
families have traveled to Puerto Penasco, Mexico, and built over 25 homes for families in need.

In fiscal year 2022, we provided monetary donations through our 501(c)(3) non-profit organization, to those affected by the war in Ukraine,
typhoon Odette in the Philippines, relief efforts in Louisiana, USA after hurricane Ida and women's shelters in Orlando, FL and Cabo San Lucas,
Mexico.

• We have partnered with local refugee foundations to provide needed items for kids and cleaning supplies for their homes.

•

At our company-sponsored incentive trips, we make sure to take time and give back to the local communities. At our global convention, those
who attended in person tied fleece blankets for local children’s hospitals. At our Elite training event, we spent a day working with a local after
school center organizing the building, cleaning and providing new kitchen equipment so that the school could better serve the community, as well
as participated in a local cleanup effort at a historic local pond that was impacted by flooding the day before.

• We engaged our stakeholders by establishing a social committee comprised of independent distributors to meet periodically during fiscal 2022 to
receive feedback on initiatives important to them. This committee met three times during the year and discussed diversity, inclusive marketing
materials and community service opportunities.

• We have a human rights policy to formalize our auditing and commitment to align internationally with human rights philosophies in how we

conduct business. LifeVantage began auditing its key partners in fiscal 2022.

• We measured our employee's engagement level and requested anonymous feedback during the fiscal year and implemented changes to

address the feedback. We are pleased with being named a Best Place to Work by Direct Selling News (as nominated by our employees) for the
sixth year in a row. We have set up monthly lunches between our employees and our executives to continue the culture of asking questions and
providing transparency.

Governance: We endeavor to continue to strengthen and improve our corporate governance and executive compensation practices. We adopted an

equity ownership policy to reinforce our belief that executives and directors who believe in the future

of our company should have meaningful equity holdings in LifeVantage. In addition, we adopted a majority standard for the election of directors on our
board.

Available Information

Our principal offices are located at 3300 N. Triumph Blvd, Suite 700, Lehi, UT 84043. Our telephone number is (801) 432-9000 and our fax number is

(801) 880-0699. Our website address is www.lifevantage.com; however, information found on our website is not incorporated by reference into this
report. Our website address is included in this annual report as an inactive textual reference only.

The reports filed with the Securities and Exchange Commission, or SEC, by us and by our officers, directors, and significant stockholders are
available for review on the SEC’s website at www.sec.gov. Such reports are also available free of charge through the investor relations section of our
website at www.lifevantage.com and are accessible as soon as reasonably practicable after being electronically filed with or furnished to the SEC.

ITEM 1A — RISK FACTORS

Because of the following risks, as well as other risks affecting our financial condition and operating results, past financial performance should not be
considered to be a reliable indicator of future performance, and investors should not use historical trends to anticipate results or trends in future periods.
The risks described below are those we currently believe could materially affect us. The following risks are not necessarily all of the important factors that
could cause our actual results of operations to differ materially from those expressed in the forward-looking statements in this report.

Risks Relating to Our Company

An inability to properly motivate and incentivize sales from our independent distributors could harm our business.

Motivating our independent distributors and providing them with appropriate sales resources, including technology, tools and training, are important to

the growth and success of our business. From time to time, we face challenges in motivating and incentivizing sales from our independent distributors.
For example, as we previously disclosed in Item 9A of our Annual Report on Form 10-K for the year ended June 30, 2016, the audit committee of our
board of directors conducted an independent review related to the distribution of our products into countries outside the U.S. in which those products were
not registered or that otherwise imposed stringent restrictions on our direct selling model, and the associated revenue and tax and other accruals
associated with such sales. This independent review was initiated following internal reviews conducted by Company personnel and was further informed
by the content of employee complaints. Actions we take from time to time to enforce our policies and procedures, may cause discord among some of our
independent distributors. The loss of key independent distributors due to various factors including, but not limited to, voluntary termination or involuntary
termination or suspension resulting from non-compliance with our policies and procedures, could distract our independent distributors and disrupt our
business. For example, in the past, we have experienced discord among our leading independent distributors in Japan, which is a significant part of our
business. If we fail to properly respond to any discord among our leading independent distributors in Japan and other markets, we could lose additional
leaders, including to competing direct selling companies, which could have a significant negative impact on our revenue. Further, from time to time, we
are involved in legal proceedings with former independent distributors. Such legal proceedings can be a distraction to our active independent distributors
and can be expensive, time-consuming and cause a disruption to our business. Our inability to properly respond to these and other distractions may have
a negative impact on our business.

The COVID-19 pandemic or the widespread outbreak of any other illness or communicable disease, or any other public health crisis, could
adversely affect our business, results of operations and financial condition.

We could be negatively impacted by the widespread outbreak of an illness or any other communicable disease, or any other public health crisis that
results in economic and trade disruptions, including the disruption of global supply chains. In December 2019, an outbreak of COVID-19 began in China
and in March 2020, the World Health Organization declared COVID-19 a pandemic. The COVID-19 pandemic has negatively impacted the global
economy, disrupted global supply chains and created significant volatility and disruption of financial markets. This pandemic has resulted, and is likely to
continue to result, in significant national and global economic disruption and may adversely affect our business. Uncertainty exists concerning the
magnitude of the impact and duration of the COVID-19 pandemic.

During fiscal year 2022, we have continued to be mindful of COVID-19 and the disruptions it can have on an office environment. From July 2021
through the date of this filing, we have experienced fewer disruptions at the corporate level as we transitioned our corporate workforce from a remote
working environment to a hybrid work from home / work from the office environment. Our independent distributors continue to experience disruptions
related to the COVID-19 pandemic. In Japan, independent distributors are still required to provide a hard-copy introductory packet (gaiyoshomen) in
person to each person they approach to possibly enroll as an independent distributor before presenting our products and business opportunity. This
requirement has inhibited independent distributors from connecting with potential new independent distributors virtually or through social media from time
to time during the fiscal year whenever temporary lockdown responses to COVID-19 were issued. Accordingly, quarantines, avoidance of public places
and general concerns about physical distancing related to COVID-19 or otherwise continue to significantly reduce the ability for our independent
distributors to meet people in person and commence the enrollment process in some areas of the world. Our independent distributors have begun to
adapt their approach for customer outreach and sales, including transitioning to a stronger social media presence, in an effort to sustain their sales
volume. Our business may, in the future, experience additional disruptions and be negatively impacted by the COVID-19 pandemic, including as a result
of limitations on the ability of our suppliers to manufacture, or procure from manufacturers, the products we sell or any of the raw materials or
components required in the production process, or to meet delivery requirements and commitments; limitations on the ability of our employees to perform
their work due to illness caused by the pandemic or local, state, or federal orders requiring employees to remain at home; limitations on the ability of
carriers to deliver our products to customers; limitations on the ability of our independent distributors to conduct their businesses and purchase our
products; and limitations on the ability of our customers or independent distributors to continue to purchase our products due to decreased disposable
income.

The extent of the impact of the COVID-19 pandemic on our operational and financial performance, including our ability to execute our business
strategies and initiatives in the expected time frame, will depend on future developments, including the duration of the pandemic and related restrictions
on travel and transports, all of which are uncertain and cannot be predicted. An extended period of global supply chain and economic disruption could
have a material adverse effect on our business, results of operations, access to sources of liquidity and financial condition.

Cyber security risks and the failure to maintain the integrity of data belonging to our company, employees, customers, and independent
distributors could expose us to data loss, litigation and liability, and our reputation could be significantly harmed.

We collect and retain large volumes of data relating to our business and from our customers, independent distributors and employees for business
purposes, including for transactional and promotional purposes, and our various information technology systems enter, process, summarize and report
such data. The integrity and protection of this data is critical to our business. We are subject to significant security and privacy regulations, as well as
requirements imposed by the payment card industry. Maintaining compliance with these evolving regulations and requirements could be difficult and may
increase our expenses. In addition, a penetrated or compromised data system or the intentional, inadvertent or negligent release or disclosure of data
could result in theft, loss or fraudulent or unlawful use of data relating to our company or our customers, independent distributors and/or employees, which
could harm our brand and reputation, disrupt our operations, or result in remedial and other costs, fines or lawsuits, all of which would substantially harm
our business and operating results.

Further, we are subject to changes in the regulatory environment regarding privacy and data protection. Our growth and expansion into a variety of

new markets may potentially involve new regulatory issues and requirements. For example, many countries, such as European Union member countries
as a result of the General Data Protection Regulation (GDPR) have introduced into local law some form of traffic and user data retention requirements.
Compliance with these retention requirements can be difficult and costly from a legal, operational and technical perspective and could harm our business
and operational results.

We may not be successful in expanding our operations.

We may not be successful in expanding our operations. Although we have been selling our products through our direct selling network since fiscal
year 2009, we still may have limited insight into trends, disruptions and other factors that may emerge and affect our business. For example, primarily as
a result of the impact of our business of the COVID-19 pandemic, our total revenue has declined each year for the past two fiscal years. In addition, from
time to time, we are compelled to terminate one or more of our independent distributors for actions contrary to their contractual obligations with us. In the
past, some of these terminations have caused disruption among our independent distributors, and such terminations or resulting disruption in the future
may negatively impact our revenue. Additionally, we may not be successful in keeping our leading independent distributors focused and motivated or in
aligning their goals with our company goals. We also have limited experience expanding into new geographic markets. This limited experience was a
contributing factor to the conduct that led to the independent review conducted by our audit committee in 2016. Although we are seeking to grow our
business, if we fail to effectively manage operations in our existing markets and/or expand our operations into additional markets, we may be unable to
generate consistent operating profit growth in future periods.

We may not succeed in growing existing markets or opening new markets.

We sell our products in the United States, Mexico, Japan, Australia, Hong Kong, Canada, Thailand, the United Kingdom, the Netherlands, Germany,
Taiwan, Austria, Spain, Ireland, Belgium, New Zealand, Singapore, and the Philippines. We also sell our products in a number of countries to customers
for personal consumption only. In addition, we sell our products in China through our China approved cross-border e-commerce business model. In fiscal
year 2022, we generated approximately 37% of our revenue from our international operations, a majority of which was generated in Japan. We believe
that our ability to achieve future growth is dependent in part on our ability to effectively expand into new international markets and grow our existing
markets. In some of our international markets, we have experienced unexpected difficulties which have resulted in adverse consequences to our
business and financial results, including declining revenue, limitations on in person meetings as a result of the COVID-19 pandemic, and disruption to our
business as we implemented changes to our systems and independent distributor enrollment requirements as a result of the independent review
conducted by our audit committee in 2016. In addition, the COVID-19 pandemic delayed our plans to also expand into other markets and may adversely
impact our plans to expand into new markets in the near future. Our business and financial results may also be negatively impacted if a particular market
or new business model, such as our China cross border e-commerce business model, is not widely accepted and adopted. We must overcome
significant regulatory and legal barriers before we can begin marketing in any international market. Also, before marketing commences in a new country
or market, it is difficult to assess the extent to which our products and sales techniques will be accepted or successful. In addition to significant regulatory
barriers, we may also encounter problems conducting operations in new markets with different cultures and legal systems from those encountered
elsewhere. We may be required to reformulate one or more of our products before commencing sales of that product in a given country. Once we have
entered a market, we must adhere to the regulatory and legal requirements of that market. We may not be able to obtain and retain necessary permits
and approvals in new markets, or we may have insufficient capital to finance our expansion efforts in a timely manner.

Our independent distributors could fail to comply with applicable legal requirements or our policies and procedures, which could result in
claims against us that could harm our business.

Our independent distributors are independent contractors and, accordingly, we are not in a position to directly provide the same oversight, direction

and motivation as we would if they were our employees. As a result, there can be no assurance that our independent distributors will comply with
applicable laws or regulations or our independent distributor policies and procedures, participate in our marketing strategies or plans, or accept our
introduction of new products.

Extensive federal, state, local and international laws regulate our business, products and direct selling activities. Because we have expanded into

foreign countries, our policies and procedures for our independent distributors differ slightly in some countries due to the different legal requirements of
each country in which we do business. In addition, as we have expanded internationally, some of our independent distributors have carried or shipped our
products into countries in which such products are not registered or that otherwise impose stringent restrictions on our direct selling model. While we have
taken steps to stop or restrict these sales from occurring, including through our independent distributor policies and procedures, it can be difficult to
enforce these policies and procedures because of the large number of independent distributors and their independent status. If relevant regulatory
authorities determined that any such independent distributor activities are not compliant with all regulatory requirements, we could be subject to related
fines, penalties and other assessments. Activities by our independent distributors that violate applicable laws or regulations could result in government or
third-party actions against us, which could harm our business. In addition, violations by our independent distributors of our policies and procedures could
reflect negatively on our products and operations and harm our business reputation. Further, it is possible that a court could hold us civilly or criminally
accountable based on vicarious liability because of the actions of our independent distributors. In the past, some of our independent distributors have
been investigated by government agencies for conduct alleged to have violated the law and our

policies. This type of investigation can have an adverse effect on us even if we are not involved in the independent distributor's activities.

Inability of new products and technological innovations to gain market acceptance by customers and/or independent distributors could harm
our business.

We believe our ability to introduce new products that gain acceptance among our customers and independent distributors is an important part of our

ability to grow our revenue in future periods. However, any new products we introduce may not gain market acceptance by customers and/or independent
distributors to the extent we anticipate or project. Factors that could affect our ability to introduce new products include, among others, government
regulations, the inability to attract and retain qualified research and development staff, the termination of third-party research and collaborative
arrangements, proprietary protections of competitors that may limit our ability to offer comparable products and the difficulties in anticipating changes in
consumer tastes and buying preferences. In addition, new products we introduce may not be successful or generate substantial sales revenue. The
introduction of a new product could also negatively impact other product lines to the extent our independent distributor leaders focus their sales efforts on
the new product instead of an existing product. If any of our products fails to gain customer and/or independent distributor acceptance, we could see an
increase in product returns.

In addition, we believe our ability to introduce new technologies that gain acceptance among our customers and independent distributors is an
important part of our ability to grow our sales revenue in future periods. However, these or other new technologies that we introduce may not gain
customer and/or independent distributor acceptance to the extent we anticipate or project.

Our business and stock price may be adversely affected if our internal control over financial reporting is not effective.

As a public company, we are required to maintain internal controls over financial reporting and to report any material weaknesses in such internal

controls. Section 404 of the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act) requires that we evaluate and determine the effectiveness of our
internal controls over financial reporting and provide a management report on the internal controls over financial reporting, which must be attested to by
our independent registered public accounting firm.

In September 2016, our audit committee, with the assistance of outside legal counsel, commenced an independent review related to the distribution

of our products into countries outside the U.S. in which such products are not registered or that otherwise impose stringent restrictions on our direct
selling model, and the associated revenue and tax and other accruals associated with such sales. Based on its review, the audit committee determined
that we had sold our products to independent distributors who carried or shipped such products primarily into four countries outside the U.S. in which
those products are not registered or that otherwise impose stringent restrictions on our direct selling model and that we had allowed individuals who were
resident in countries that impose stringent restrictions on our direct selling model to enroll as our independent distributors. Accordingly, we concluded that
we had a material weakness in our internal control over financial reporting related to our business policies, practices, monitoring and training governing
our international business operations, including the sale and distribution of our products in international markets. A “material weakness” is a deficiency, or
a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our
annual or interim financial statements will not be prevented or detected on a timely basis. We also evaluated the effectiveness of the design and
operation of our disclosure controls and procedures as of June 30, 2016 and concluded that our disclosure controls and procedures were not effective as
of that date, because of the material weakness in our internal control over financial reporting.

We adopted various measures that were designed to remediate the material weakness in our internal control over financial reporting, including the

development and implementation of new control policies and procedures regarding the international business policies, practices, monitoring and training
for each country outside the U.S. in which we do business. However, we cannot be assured that significant deficiencies or material weaknesses in our
internal control over financial reporting will not exist in the future. Any failure to maintain or implement required new or improved controls, or any
difficulties we encounter in their implementation, could result in significant deficiencies or material weaknesses, cause us to fail to timely meet our periodic
reporting obligations, or result in material misstatements in our financial statements. Any such failure could also adversely affect the results of periodic
management evaluations and annual auditor attestation reports regarding disclosure controls and the effectiveness of our internal control over financial
reporting required under Section 404 of the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder. The existence of a material weakness
could result in errors in our financial statements that could result in a restatement of financial statements, cause us to fail to timely meet our reporting
obligations and cause investors to lose confidence in our reported financial information, leading to a decline in our stock price.

Our business could be negatively impacted if we fail to execute our product launch process due to increased pressure on our supply chain,
information systems and management.

Although our product launch process may vary by market, we generally introduce new products to our customers and independent distributors
through live events or cyber launches, limited-time offers and promotions. The limited-time offers typically generate significant activity and a high level of
purchasing, which may result in a higher than normal increase in sales revenue during the quarter of the limited-time offer and skew year-over-year and
sequential comparisons. We may experience difficulty effectively managing growth associated with these limited-time offers. In addition, the size and
condensed schedule of these product launches increases pressure on our supply chain. If we are unable to accurately forecast sales levels in each
market, obtain sufficient ingredients or produce a sufficient supply to meet demand, we may incur higher expedited shipping costs and we may
temporarily run out of stock of certain products, which could negatively impact the enthusiasm of our independent distributors and their customers.
Conversely, if demand does not meet our expectations for a product launch, we could incur increased inventory write-offs. Any inventory write-off would
negatively impact our gross margins. In addition, our order processing systems could have difficulties handling the high volume of orders generated by
limited-time offers. Although our previous limited-time offers have not materially affected our product return rate, these events may increase our product
return rate in the future.

Our business may be harmed if we are unable to appropriately manage our inventory.

In the past, we have experienced difficulties in appropriately managing our inventory. For example, when we launched our PhysIQ product line in

December 2015, we experienced higher than expected demand and did not have sufficient inventory to meet demand. Subsequently, our inventory
balances increased significantly, causing us to engage in a deliberate effort to manage our inventory balances down to levels we viewed as appropriate.
We review all inventory items quarterly for obsolescence, and when items become obsolete or are expired we write down our inventory accordingly. If we
are unable to sell our inventory in a timely manner, we may experience additional inventory obsolescence charges, including for finished products in
inventory that have expired. If we are unable to appropriately manage our inventory balances, our business may be harmed.

We rely on our information technology systems to manage numerous aspects of our business, and a disruption in these systems could
adversely affect our business.

We depend on our information technology, or IT, systems to manage numerous aspects of our business, including our finance and accounting
transactions, to manage our independent distributor sales compensation plan and to provide analytical information to management. Our IT systems are
an essential component of our business and growth strategies, and a serious disruption to our IT systems could significantly limit our ability to manage
and operate our business efficiently. These systems are vulnerable to, among other things, damage and interruption from power loss or natural disasters,
computer system and network failures, loss of telecommunications services, physical and electronic loss of data, security breaches and computer viruses.
Any disruption could cause our business and competitive position to suffer and adversely affect our business and operating results. In addition, if we
experience future growth, we will need to scale or change some of our systems to accommodate the increasing number of independent distributors and
their customers.

A substantial portion of our business is conducted in foreign markets, exposing us to the risks of trade or foreign exchange restrictions,
increased tariffs, foreign currency fluctuations, disruptions or conflicts with our third-party importers and similar risks associated with
foreign operations.

Global economic conditions continue to be challenging and unpredictable. A substantial portion of our sales are generated outside the United States.

If we are successful in entering additional foreign markets, we anticipate that the percentage of our sales generated outside the United States will
increase. There are substantial risks associated with foreign operations. For example, a foreign government may impose trade or foreign exchange
restrictions, increased tariffs or other legal, tax, customs or other financial burdens on us or our independent distributors, due, for example, to the
structure of our operations in various markets. Any such actions could negatively impact our operations and financial results. We are also exposed to risks
associated with foreign currency fluctuations. For instance, in preparing our financial statements, we translate revenue and expenses in our markets
outside the United States from their local currencies into U.S. Dollars using weighted average exchange rates. If the U.S. Dollar strengthens relative to
local currencies, our reported revenue, gross profit and net income will likely be reduced. Foreign currency fluctuations can also result in losses and gains
resulting from translation of foreign currency denominated balances on our balance sheet. Additionally, purchases from suppliers are generally made in
U.S. Dollars while sales to customers and independent distributors are generally made in local currencies. Accordingly, strengthening of the U.S. Dollar
versus a foreign currency could have a negative impact on us. Specifically, because a significant percentage of our revenue is generated in Japan,
strengthening of the U.S. Dollar versus the Japanese yen has had and, in the future, could have an adverse impact on our financial results. Although we
may engage in transactions intended to reduce our exposure to foreign currency fluctuations, there can be no assurance that these transactions will be
effective. Given the complex global political and

economic dynamics that affect exchange rate fluctuations, it is difficult to predict future fluctuations and the effect these fluctuations may have upon future
reported results or our overall financial condition.

Additionally, we may be negatively impacted by conflicts with or disruptions caused or faced by third party importers, as well as conflicts between
such importers and local governments or regulatory agencies. Our operations in some markets also may be adversely affected by political, economic and
social instability in foreign countries.

If we are to expand our product offerings, we may need to raise additional capital.

We intend to continue our efforts to expand our product portfolio and may seek to do so by acquiring products by license or through product or
company acquisitions. If cash generated from operations is insufficient to satisfy our requirements in this regard, we may need to raise additional capital,
which may be dilutive to our existing stockholders. If we are unable to raise additional required capital in a timely manner, we could be forced to reduce
our growth plans.

Inability to comply with financial covenants imposed by our credit facility and the impact of debt service obligations and restrictive

covenants could impede our operations and flexibility.

We entered into a Financing Agreement in March 2016, which was subsequently amended in May 2018 and February 2019, that provides for a credit

facility consisting of a term loan in an aggregate principal amount of $10 million and a revolving loan facility in an aggregate principal amount not to
exceed $5 million. During the fiscal year ended June 30, 2020, we repaid, in full, the remaining balance of the 2016 Term Loan. The revolving loan facility
was again amended in April 2021 to extend the maturity date to March 2024. As of June 30, 2022 and 2021, there is no outstanding balance on the
revolving loan facility. The principal amount of any borrowings under the credit facility is repayable in consecutive quarterly installments. We expect to
generate the cash necessary to pay any future principal and interest on the credit facility from our cash flows provided by operating activities. However,
our ability to meet our debt service obligations will depend on our future performance, which may be affected by financial, business, economic,
demographic and other factors. If we do not have enough money to pay our debt service obligations, we may be required to refinance all or part of our
debt, sell assets, borrow more money or raise cash through the sale of equity. In such an event, we may not be able to refinance our debt, sell assets,
borrow more money or raise cash through the sale of equity on terms acceptable to us or at all. Also, our ability to carry out any of these activities on
favorable terms, if at all, may be further impacted by any financial or credit crisis which may limit access to the credit markets and increase the cost of
capital.

The credit facility is secured by a lien on substantially all of our assets, and the assets of our subsidiaries, and contains customary covenants,

including affirmative and negative covenants, that restrict our ability to incur or guarantee additional indebtedness, declare or pay dividends on or redeem
capital stock, make other payments to holders of our equity interests, make certain investments, purchase or otherwise acquire all or substantially all the
assets or equity interests of other companies, sell our assets and enter into consolidations, mergers or transfers of all or substantially all of our assets.
The credit facility requires that we maintain specified financial ratios and satisfy certain financial condition tests and meet certain informational
requirements in order to draw on the revolving loan facility, if needed. Our ability to meet these financial ratios and tests and informational requirements
can be affected by events beyond our control and we may be unable to meet these ratios and tests and informational requirements. A breach of any of
the covenants, ratios, tests or restrictions imposed by the credit facility would result in an event of default and the lender could declare any and all
amounts outstanding under the credit facility to be immediately due and payable or limit our ability to draw on the revolving loan facility. Our assets may
not be sufficient to repay the indebtedness if the lenders accelerate our repayment of the indebtedness under the credit facility.

Risks Relating to Our Business and Industry

We primarily depend on a few products for our revenue.

Although we generate revenue through the sale of other products, we primarily rely on our Protandim and TrueScience product lines for our
revenue, which collectively represent approximately 76.8% of our total revenue. We do not currently have a diversified portfolio of other products that we
could rely on to support our operations if we were to experience any difficulty with the manufacture, marketing, sale or distribution of these product lines.
If we are unable to sustain or increase the price or sales levels for the Protandim and TrueScience product lines, our business could be harmed.

If we are unable to retain our existing customers and independent distributors or attract additional customers and independent distributors,
our revenue will not increase and may decline further.

Our customers may cease purchasing product at any time and for any reason. Our independent distributors may terminate their services at any time,

and we can and have in the past terminated distributors for conduct violative of our policies and procedures. As such, like most direct selling companies,
we have experienced and are likely to continue to experience turnover among both customers and independent distributors. Over the past two years, we
have seen a decrease in the number of

domestic independent distributors. The departure for any reason of one of our leading independent distributors can be a major disruption to other
independent distributors and can have a significant negative impact on our sales and operating results. Independent distributors who join our Company to
purchase our products for personal consumption or for short-term income goals may only stay with us for a short time. While we take steps to help train,
motivate, and retain independent distributors, we cannot accurately predict the number or sales productivity of our independent distributors.

Our operating results will be harmed if we and our independent distributor leaders do not generate sufficient interest in our business to retain existing

customers and independent distributors and attract new customers and independent distributors. The number and sales productivity of our independent
distributors could be harmed by several factors, including:

•

any adverse publicity regarding us, our products, our distribution channel, or our competitors;

non-compliance by our independent distributors with applicable legal requirements or our policies and procedures;

lack of interest in existing or new products or their failure to achieve desired sales results;

lack of a compelling business opportunity sufficient to generate the interest and commitment of new independent distributors;

any changes we might make to our independent distributor sales compensation plan;

any negative public perception of our Company or our products or their ingredients;

any negative public perception of our independent distributors and direct selling business in general;

our actions to enforce our policies and procedures;

any efforts to sell our products through competitive channels;

any regulatory actions or charges against us or others in our industry;

challenges resulting from the COVID-19 pandemic, including illness among our distributor base and their families; and

general economic and business conditions.

High quality materials for our products may be difficult to obtain or expensive.

Raw materials account for a significant portion of our manufacturing costs and we rely on third-party suppliers to provide raw materials. Suppliers
may be unable or unwilling to provide the raw materials our manufacturers need in the quantities requested, at a price we are willing to pay, or that meet
our quality standards. We are also subject to potential delays in the delivery of raw materials caused by events beyond our control, including the COVID-
19 pandemic, labor disputes, transportation interruptions and changes in government regulations. Our business could be adversely affected if we are
unable to obtain a reliable source of any of the raw materials used in the manufacturing of our products that meets our quality standards. Additionally, if
demand for our products exceeds our forecasts, we may have difficulties in obtaining additional raw materials in time to meet the excess demand. Any
significant delay in or disruption of the supply of raw materials could, among other things, substantially increase the cost of such materials, require
reformulation or repackaging of products, require the qualification of new suppliers, or result in our inability to meet customer demands.

Although our independent distributors are independent contractors, improper actions by independent distributors that violate laws or
regulations could harm our business.

Our independent distributors are not employees and act independent of us. However, activities by our independent distributors that allegedly violate
applicable laws or regulations could result in government or third-party actions against us, which could harm our business. Our independent distributors
agree to abide by our policies and procedures which are designed to ensure our independent distributors will comply with legal requirements. We have a
distributor compliance department that addresses violations of our independent distributors when they become known to us. However, given the size of
our independent distributor network, we experience problems with independent distributors violating our policies and procedures from time to time and
are not always able to discover or remedy such violations.

One of our most significant areas of risk with respect to independent distributor activities relates to improper product claims and claims regarding the
distributor business opportunity of being an independent distributor. Any determination by the Food and Drug Administration, Federal Trade Commission,
any state agency or other similar governmental agency outside the United States that we or our independent distributors are not in compliance with
applicable laws could materially harm our business. Even if governmental actions do not result in rulings or orders against us, they could create negative
publicity that

could detrimentally affect our efforts to recruit or motivate independent distributors and attract customers or lead to consumer lawsuits against us. When
we experience growth in the number of our independent distributors, we have seen an increase in sales aids and promotional material being produced by
independent distributors and distributor groups in some markets. This places an increased burden on us to monitor compliance of such materials and
increases the risk that such materials could contain problematic product, marketing, or business opportunity claims in violation of our policies and
applicable regulations. As we expand internationally, our independent distributors sometimes attempt to anticipate additional new markets that we may
enter in the future and begin marketing and sponsoring activities in markets where we are not qualified to conduct business. For example, some of our
independent distributors have carried or shipped our products into countries in which such products are not registered or that otherwise impose stringent
restrictions on our direct selling model. These or other activities by our independent distributors that violate applicable laws or regulations could subject us
to legal or regulatory claims or actions, which could result in fines, penalties or negative publicity, any of which could have an adverse impact on our
business.

We are dependent upon third parties to manufacture our products.

We currently rely on third parties to manufacture the products we sell. We are dependent on the uninterrupted and efficient operation of third-party
manufacturers’ facilities. We currently use multiple third-party manufacturers for our products. If any of our current manufacturers are unable or unwilling,
including as a result of the COVID-19 pandemic, to fulfill our manufacturing requirements or seek to impose unfavorable terms, we will likely have to seek
out other manufacturers, which could disrupt our operations and we may not be successful in finding alternative manufacturing resources. In addition,
competitors who perform their own manufacturing may have an advantage over us with respect to pricing, availability of product, and in other areas
through their control of the manufacturing process.

Disruptions to or significantly increased costs associated with transportation and other distribution channels for our products may adversely
affect our margins and profitability.

We generally rely on the uninterrupted and efficient operation of third-party logistics companies to transport and deliver our products. These third-
party logistics companies may experience disruptions to the transportation channels used to distribute our products, including disruptions caused by the
COVID-19 pandemic, increased airport and shipping port congestion, a lack of transportation capacity, increased fuel expenses, and a shortage of
manpower. Disruptions to the transportation channels experienced by our third-party logistics companies may result in increased costs, including the
additional use of airfreight to meet demand. In addition, for our China cross-border e-commerce business model, we rely on a third party to process
transactions, fulfill orders, and manage logistic and money flows. Disruptions to this business model or our relationship with the third party if, for example,
performance fails to meet our expectations, could harm our business.

We are subject to risks related to product recalls.

We have implemented measures in our manufacturing process that are designed to prevent and detect defects in our products, including

contaminants. However, such measures may not prevent or reveal defects or detect contaminants in our products and such defects and contaminants
may not become apparent until after our products have been sold into the market. Accordingly, there is a risk that product defects will occur, or that our
products will contain foreign contaminants, and that such defects and contaminants will require a product recall. We do not maintain product recall
insurance. In the past, we commenced a voluntary recall of certain lots of Protandim Nrf2 Synergizer to alleviate safety concerns related to certain
®
batches of turmeric extract, an ingredient in Protandim Nrf2 Synergizer we purchase from third-party suppliers. Product recalls and subsequent
remedial actions can be expensive to implement and could have a material adverse effect on our business, results of operations and financial condition.
In addition, product recalls could result in negative publicity and public concerns regarding the safety of our products, either of which could harm the
reputation of our products and our business and could cause the market value of our common stock to decline.

The events that lead to and followed our voluntary product recall in December 2012 strained our relationships with some of our third-party
manufacturers. Additionally, following the voluntary recall we implemented more stringent measures, including several redundant measures, in our
manufacturing process to detect contaminants. Third-party manufacturers may be reluctant to implement these redundant measures, may refuse to
manufacture our products, and additional safety measures such as these may increase our cost of goods sold and strain our relationships with
manufacturers.

Laws and regulations may prohibit or severely restrict direct selling and cause our revenue and profitability to decline, and regulators could
adopt new regulations that negatively impact our business.

Various government agencies throughout the world regulate direct selling practices. The laws and regulations applicable to us and our independent

distributors in Japan are particularly stringent. These laws and regulations are generally intended to prevent fraudulent or deceptive schemes, often
referred to as “pyramid” schemes, which compensate participants primarily for recruiting additional participants without significant emphasis on the sale of
product to end consumers. The laws and regulations in some of our markets impose cancellations, product returns, inventory buy-backs and cooling-off
rights for our

independent distributors and/or customers. Excessive refunds and/or product returns pursuant to local laws and regulations could have a negative impact
on our operating results. Complying with these rules and regulations can be difficult and requires the devotion of significant resources on our part. We
may not be able to continue business in existing markets or commence operations in new markets if we are unable to comply with these laws or adjust to
changes in these laws.

Unfavorable publicity could materially harm our business.

We are highly dependent upon consumers' perceptions of the safety, quality, and efficacy of our products, as well as competitive products distributed

by other companies. In the past, we have experienced negative publicity that has harmed our business. Critics of our industry and other individuals
whose interests are not aligned with our interests, have in the past and may in the future utilize the Internet, the press and other means to publish
criticism of the industry, our company, our products and our competitors, or make allegations regarding our business and operations, or the business and
operations of our competitors. For instance, several prominent companies in our industry have been targeted by short sellers who profit if a company's
stock price decreases. One such company was targeted by a short seller who, after taking a significant short position, publicly made allegations regarding
the legality of the company's direct selling model. Short sellers have an incentive to publicly criticize our industry and business model and any such
criticism may adversely affect our stock price.

Future scientific research or publicity may not be favorable to our industry or any particular product. Because of our dependence upon consumer

perceptions, adverse publicity associated with illness or other adverse effects resulting or claimed to have resulted from the consumption or use of our
products or any similar products distributed by other companies could have a material adverse impact on us. Such adverse publicity could arise even if
the claims are unsubstantiated or if the adverse effects associated with such products resulted from failure to consume or use such products as directed.
Adverse publicity could also increase our product liability exposure, result in increased regulatory scrutiny and lead to the initiation of private lawsuits.

We are subject to risks related to a Global Not For Resale Program

We have opened a Global Not For Resale program, which allows customers from around the world to purchase limited amounts of our products for

their individual consumption. Under this program, customers from other countries are able to set up a U.S. customer account and associated U.S.
address and payment method to drop-ship their order to a third-party vendor in the US, who will then ship the products to the customer’s global location
with any customs and/or duties being the sole responsibility of the ordering customer.

This program may raise questions from tax regulators about the appropriate sales tax jurisdiction due to the varied and complex tax regulations in the
U.S. and around the world. Further, any regulatory review of our facilitation to ship U.S. product to existing LifeVantage markets, where such product has
not been registered, may raise issues against the local subsidiary from the foreign jurisdiction equivalents of the FDA or FTC or the relevant trade
associations, should any agency or association perceive that we or our independent distributors are advertising and/or facilitating the sale of unregistered
product in their country.

Our direct selling program could be found to be not in compliance with current or newly adopted laws or regulations in one or more markets,
which could prevent us from conducting our business in these markets and harm our financial condition and operating results.

Some of the legal and regulatory requirements concerning the direct selling business model are ambiguous and subject to interpretation. As a result,

regulators and courts have discretion in their application of these laws and regulations, and the enforcement or interpretation of these laws and
regulations by governmental agencies or courts can change. Recent allegations by short sellers regarding the legality of multi-level marketing companies
generally have also created intense public scrutiny of our industry and could cause governmental agencies to change their enforcement and interpretation
of applicable laws and regulations. The failure of our business to comply with current or newly adopted regulations or interpretations could negatively
impact our business in a particular market or in general and may adversely affect our stock price.

We may become involved in legal proceedings that are expensive, time consuming and, if adversely adjudicated or settled, could adversely
affect our financial results.

Litigation claims can be expensive and time consuming to bring or defend against and could result in settlements or damages that could significantly

affect our financial results. It is not possible to predict the final resolution of litigation to which we may become a party, and the impact of litigation
proceedings on our business, results of operations and financial condition could be material.

From time to time, we are involved in various legal matters, both as a plaintiff and as defendant. While we believe the suits against us are without
merit, they are costly to defend and we cannot be assured that we will ultimately prevail. If we do not prevail and are required to pay damages, it could
harm our business.

Our business is subject to strict government regulations.

The manufacturing, packaging, labeling, advertising, sale and distribution of our products are subject to federal laws and regulations by one or more

federal agencies, including, in the United States, the Food and Drug Administration, or FDA, the Federal Trade Commission, or FTC, the Consumer
Product Safety Commission, and the United States Department of Agriculture. These activities are also regulated by various state, local, and international
laws and agencies of the states, localities and countries in which our products are sold. For instance, the FDA regulates, among other things, the
composition, safety, labeling, and marketing of dietary supplements (including vitamins, minerals, herbs and other dietary ingredients for human use).
Government regulations may prevent or delay the introduction of our products, or require us to reformulate our products or change the claims we make
about them, which could result in lost revenue, increased costs and delay our expansion into new international markets.

The FDA may determine that a particular dietary supplement or ingredient is adulterated or misbranded or both and may determine that a particular

claim or statement of nutritional support that we make to support the marketing of a dietary supplement is an impermissible drug claim, or is an
unauthorized version of a “health claim.” The FDA, the FTC, or state attorneys general may also determine that a particular claim we make for our
products is not substantiated. Determining whether a claim is improper frequently involves a degree of subjectivity by the regulatory agency or individual
regulator. Any of these determinations by the FDA or other regulators could prevent us from marketing that particular dietary supplement product, or
making certain claims for that product. The FDA could also require us to remove a particular product from the market. Any future recall or removal would
result in additional costs to us, including lost revenue from any product that we are required to remove from the market, which could be material. Any
product recalls or removals could also lead to liability, substantial costs, and reduced growth prospects.

In April 2017, we received a warning letter from the FDA alleging that information on our website contained impermissible drug claims relating to our

Protandim Nrf2 Synergizer product. We believe the letter from the FDA contained factual inaccuracies and we responded promptly to the FDA. The
FDA subsequently concluded that the issues set forth in the warning letter have been fully resolved. We believe we do not claim that any of our products
prevent, diagnose, treat or cure any disease in any of our marketing materials or labeling and we proactively and consistently engage distinguished
experts in FDA law and regulation to ensure our promotional materials and websites adhere to applicable requirements and restrictions. Nevertheless, in
the future, we may receive similar warning letters from the FDA if it believes some violation of law has occurred either by us or by our independent
distributors. Any allegations of our non-compliance may result in time-consuming and expensive defense of our activities. FDA warning letters are
available to the public on the FDA’s website. That information could negatively affect our relationships with our customers, investors, independent
distributors, vendors, employees and consumers. Warning letters may also spark private class action litigation under state consumer protection statutes.
The FDA could also order compliance activities, such as an inspection of our facilities and products, and could file a civil lawsuit in which an arrest
warrant (seizure) could be issued as to some or all of our products. In extraordinary cases, we could be named a defendant and sued for declaratory and
injunctive relief.

Additional or more stringent regulations of dietary supplements and other products have been considered from time to time. In recent years, there has
been increased pressure in the United States and other markets to increase regulation of dietary supplements. New regulations, or new interpretations of
those regulations, could impose additional restrictions, including requiring reformulation of some products to meet new standards, recalls or
discontinuance of some products not able to be reformulated, additional record-keeping requirements, increased documentation of the properties of some
products, additional or different labeling, additional scientific substantiation, additional adverse event reporting, or other new requirements. Any of these
developments could increase our costs significantly.

In the United States, for example, some legislators and industry critics continue to push for increased regulatory authority by the FDA over dietary
supplements and the FTC over the direct selling industry. The FDA may strengthen the regulation of dietary supplements by modernizing its oversight of
dietary supplements and the FTC may strengthen the regulation of business opportunity claims, among other things. Our business could be harmed if
more restrictive legislation or regulation is successfully introduced and adopted in the future. In the United States, the FTC’s Guides Concerning the Use
of Endorsements and Testimonials in Advertising, or Guides, require disclosure of material connections between an endorser and the company they are
endorsing and generally do not allow marketing using atypical results. Our independent distributors have historically used testimonials to market and sell
our products. Producing marketing materials that conform to the requirements and restrictions of the Guides may diminish the impact of our marketing
efforts and negatively impact our sales results. If we or our independent distributors fail to comply with these Guides, the FTC could bring an enforcement
action against us and we could be forced to alter our marketing materials and/or refund or disgorge funds. Our operations also could be harmed if new
laws or regulations are enacted that restrict our ability to market or distribute dietary supplements or impose additional burdens or requirements on dietary
supplement companies or require us to reformulate our products.

In addition, the Dietary Supplement and Nonprescription Drug Consumer Protection Act imposes significant regulatory requirements on dietary
supplement manufacturers, packers and distributors including the reporting of “serious adverse events” to the FDA and record keeping requirements.
Complying with this legislation could raise our costs and negatively impact our business. We and our suppliers are also required to comply with FDA
regulations with respect to current Good Manufacturing Practices in manufacturing, packaging, or holding dietary ingredients and dietary supplements.
These regulations require dietary supplements to be prepared, packaged, and held in compliance with procedures that we and our third-party
subcontractors must develop and make available for inspection by the FDA. These regulations could raise our costs and negatively impact our business.
Additionally, our third-party suppliers or vendors may not be able to comply with these rules without incurring substantial expenses. If our third-party
suppliers or vendors are not able to comply with these rules, we may experience increased cost or delays in obtaining certain raw materials and third-
party products.

In 2016, the FDA published an updated draft guidance which is intended, among other things, to help manufacturers and distributors of dietary

supplement products determine when they are required to file with the FDA a New Dietary Ingredient, or NDI, notification with respect to a dietary
supplement product. In this draft guidance, the FDA highlighted the necessity for marketers of dietary supplements to submit NDI notifications as an
important preventive control to ensure that consumers are not exposed to potential unnecessary public health risks in the form of new ingredients with
unknown safety profiles. Although we do not believe that any of our products contain an NDI, if the FDA were to conclude that we should have filed an
NDI notification for any of our products, then we could be subject to enforcement actions by the FDA. Such enforcement actions could include product
seizures and injunctive relief being granted against us, any of which would harm our business.

In May 2016, the FDA released a final rule updating the Nutrition Facts label for packaged foods and the Supplement Facts label for dietary

supplements, with the objective to help consumers make better informed decisions. While the original compliance deadline for manufacturers of food and
dietary supplements to use the new label was July 26, 2018, FDA subsequently extended the compliance deadline to January 1, 2020, and later
announced it would exercise enforcement discretion (i.e., not enforce the new label requirements) until January 1, 2021. Further, in December 2018, the
U.S. Department of Agriculture promulgated regulations requiring that, by January 1, 2022, the labels of certain bioengineered foods, including dietary
supplements, must include a disclosure that the food is bioengineered. Implementation of the new label requirements may result in additional costs to our
business.

Our Cannabidiol (“CBD”) products are subject to varying, rapidly changing federal, state and local laws, regulations, and rules, which could
adversely affect our results of operations and financial condition.

We launched new hemp-derived CBD personal care products during fiscal year 2021. The CBD industry is evolving and subject to varying, and
rapidly changing, laws, regulations and administrative practices. For example, the Agricultural Improvement Act of 2018 (the “2018 Farm Bill”) formally
defined “hemp” as the Cannabis sativa plant and its derivatives, extracts and cannabinoids with a delta-9 tetrahydrocannabinol (“THC”) concentration of
not more than 0.3%, and removed hemp from the federal definition of marijuana, making it no longer a Schedule I illegal drug under the Controlled
Substances Act. The 2018 Farm Bill thus opened a pathway for the production and marketing of hemp and hemp derivatives, subject to compliance with
certain federal requirements and state and local law. Our CBD products are derived from hemp as defined in the 2018 Farm Bill. Continued development
of CBD-related industries is dependent upon continued legalization of CBD-related products at the federal and state levels, and a number of factors could
slow or halt progress in this area.

In addition, the manufacture, labeling, and distribution of our CBD products are regulated by various federal, state and local agencies. These
governmental authorities or litigators, such as class action lawyers or attorneys general, may commence regulatory or legal proceedings, which could
restrict the permissible scope of our product claims or our ability to sell products in the future. Violations of applicable laws, or allegations of such
violations, could disrupt our business and result in material adverse effects on our operations and financial condition. We cannot predict the nature of any
future laws, regulations, interpretations or applications, and it is possible that regulations may be enacted in the future that will have a material adverse
effect on our business, including our ability to develop, sell, and expand our CBD-infused products. Further, in the event of either repeal of federal, state
or local laws and regulations, or amendments thereto that are adverse to our intended products, we may be restricted or limited with respect to those
products that we may sell or distribute, which could adversely impact our intended business plan with respect to such products.

Regulations governing the production and marketing of our products could harm our business.

We are subject to various domestic and foreign laws and regulations that regulate the production and marketing of our products. If, for example, a

determination that our dietary supplement products are used to diagnose, treat, cure, or prevent any disease or illness, including due to improper
marketing claims by our independent distributors, it may lead to a determination that the LifeVantage supplements require pre-market approval as a
drug. Such regulations in any given market can limit our ability to import products and can delay product launches as we go through the registration and
approval process for those products. Furthermore, if we fail to comply with these regulations, we could face enforcement action against us and we could

be fined, forced to alter or stop selling our products and/or be required to adjust our operations. Our operations also could be harmed if new laws or
regulations are enacted that restrict our ability to market or distribute our products or impose additional burdens or requirements on the contents of our
products or require us to reformulate our products.

We are subject to the risk of investigatory and enforcement action.

We are subject to the risk of investigatory and enforcement action by various government agencies, both domestic and international. For instance,
the FTC and state attorneys general may open an investigation or bring an enforcement action against us based on our advertising claims and marketing
practices. The FTC routinely reviews product advertising, including websites, to identify significant questionable advertising claims and practices. The
FTC has brought many actions against dietary supplement companies, including some actions that were brought jointly with state attorneys general,
based upon allegations that applicable advertising claims or practices were deceptive or not substantiated. If the FTC initiates an investigation, the FTC
can initiate pre-complaint discovery that may be nonpublic in nature. In addition, we are subject to the risk of investigatory and enforcement action by
other agencies including, but not limited to, the FDA, including warning letters and other sanctions, enforcement actions by the SEC and by other
international regulatory agencies. Any investigation may be very expensive to defend and may result in an adverse ruling or in a consent decree.

Government authorities may question our tax positions or transfer pricing policies or change their laws in a manner that could increase our
effective tax rate or otherwise harm our business.

As a U.S. company doing business in international markets through subsidiaries, we are subject to various tax and intercompany pricing laws,

including those relating to the flow of funds between our Company and our subsidiaries. From time to time, we are audited by tax regulators in the United
States and in our foreign markets. If regulators challenge our tax positions, corporate structure, transfer pricing mechanisms or intercompany transfers,
we may be subject to fines and payment of back taxes, our effective tax rate may increase and our operations may be harmed. Tax rates vary from
country to country, and, if tax authorities determine that our profits in one jurisdiction may need to be increased, we may not be able to fully utilize all
foreign tax credits that are generated, which will increase our effective tax rate. The various customs, exchange control and transfer pricing laws are
continually changing and are subject to the interpretation of government agencies. We may experience increased efforts by customs authorities in foreign
countries to reclassify our products or otherwise increase the level of duties we pay on our products. Despite our efforts to be aware of and comply with
such laws, and changes to and interpretations thereof, there is a risk that we may not continue to operate in compliance with such laws. We may need to
adjust our operating procedures in response to such changes and, as a result, our business may suffer. In addition, due to the international nature of our
business, from time to time, we are subject to reviews and audits by taxing authorities of other jurisdictions in which we conduct business throughout the
world.

Non-compliance with anti-corruption laws could harm our business.

Our international operations are subject to anti-corruption laws, including the Foreign Corrupt Practices Act, also known as the FCPA. Any
allegations that we are not in compliance with anti-corruption laws may require us to dedicate time and resources to an internal investigation of the
allegations or may result in a government investigation. Any determination that our operations or activities are not in compliance with existing anti-
corruption laws or regulations could result in the imposition of substantial fines, and other penalties. Although we have implemented anti-corruption
policies and controls to protect against violation of these laws, we cannot be certain that these efforts will be effective.

The loss of or inability to attract key personnel could negatively impact our business.

Our future performance will depend, in part, upon our ability to attract, retain, and motivate our executive and senior management team and scientific
staff. Our success depends to a significant extent both upon the continued services of our current executive and senior management team and scientific
staff, as well as our ability to attract, hire, motivate, and retain additional qualified management and scientific staff in the future. Specifically, competition
for executive and senior staff in the direct selling and dietary supplement markets is intense, and our operations could be adversely affected if we cannot
attract and retain qualified personnel. Additionally, former members of our executive and senior management team have in the past, and could in the
future join or form companies that compete against us in the direct selling industry.

All of our employees are “at will” employees, which means any employee may quit at any time and we may terminate any employee at any time. We

do not carry “key person” insurance covering members of senior management or our employees.

We may be held responsible for certain taxes or assessments and other obligations relating to the activities of our independent distributors,
which could harm our financial condition and operating results.

Our independent distributors are subject to taxation, and in some instances, legislation or governmental agencies impose an obligation on us to

collect or withhold taxes, such as value added taxes or income taxes, and to maintain appropriate records. In

the event that local laws and regulations or the interpretation of local laws and regulations change to require us to treat our independent distributors as
employees, or that our independent distributors 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, or our independent distributors are deemed to be conducting
business in countries outside of the country in which they are authorized to do business, we may be held responsible for social security, income, and
other related taxes in those jurisdictions, plus any related assessments and penalties, which could harm our financial condition and operating results. If
our independent distributors were deemed to be employees rather than independent contractors, we may be obligated to pay certain employee benefits,
such as workers compensation and unemployment insurance. Further, if our independent distributors are misclassified as employees, we would also face
the threat of increased vicarious liability for their actions.

The dietary supplement market is highly competitive.

Our flagship product line, Protandim , competes in the dietary supplements market, which is large, highly competitive and fragmented. Participants
include specialty retailers, supermarkets, drugstores, mass merchants, multi-level marketing organizations, on-line merchants, mail-order companies, and
a variety of other smaller participants. Many of our competitors have greater financial and other resources available to them and possess better
manufacturing, independent distribution and marketing capabilities than we do. We believe some of these competitors with greater resources are
currently working on developing and releasing products that will compete directly with the Protandim product line and be marketed as NRF1 and Nrf2
activators. One or more of these products could significantly reduce the demand for the Protandim product line and have a material adverse effect on
our revenue. We believe that the market is also highly sensitive to the introduction of new products, including various prescription drugs, which may
rapidly capture a significant share of the market. Moreover, because of regulatory restrictions concerning claims about the efficacy of dietary
supplements, we may have difficulty differentiating our products from our competitors’ products and competing products entering the dietary supplements
market could harm our revenue. In the United States and Japan, we also compete for sales with heavily advertised national brands manufactured by
large pharmaceutical and food companies, as well as other retailers. In addition, as some products become more mainstream, we experience increased
competition for those products as more participants enter the market. Our international competitors include large international pharmacy chains, major
international supermarket chains, and other large U.S.-based companies with international operations. We may not be able to compete effectively and our
attempt to do so may result in increased pricing pressure, which may result in lower margins and have a material adverse effect on our results of
operations and financial condition.

Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our products and brand.

The loss of our intellectual property rights in our products could permit our competitors to manufacture their own version of our products. We have

attempted to protect our intellectual property rights in our products through a combination of patents, patent applications, trademarks, trade secrets,
confidentiality agreements, non-compete agreements and other contractual protection mechanisms, and we will continue to do so. While we intend to
defend against any threats to our intellectual property, our patents or various contractual protections may not adequately protect our intellectual property.
In addition, we could be required to expend significant resources to defend our rights to proprietary information and may not be successful in such
defense.

Moreover, our intellectual property rights are more limited outside of the United States than they are in the United States. As such, we may not be

successful in preventing third parties from copying or misappropriating our intellectual property. There can also be no assurance that pending patent
applications owned by us will result in patents being issued to us, that patents issued to or licensed by us in the past or in the future will not be challenged
or circumvented by competitors or that such patents will be found to be valid or sufficiently broad to protect our products or to provide us with any
competitive advantage. Third-parties could also obtain patents that may require us to negotiate to obtain licenses to conduct our business, and any
required licenses may not be available on reasonable terms or at all. We also rely on confidentiality and non-compete agreements with certain
employees, independent distributors, consultants and other parties to protect, in part, trade secrets and other proprietary rights. There can be no
assurance that these agreements will not be breached, that we will have adequate remedies for any breach, that others will not independently develop
substantially equivalent proprietary information or that third-parties will not otherwise gain access to our trade secrets or proprietary knowledge.

Third parties might claim that we infringe on their intellectual property rights.

Although the dietary supplement industry has historically been characterized by products with naturally occurring ingredients, recently it is becoming
more common for suppliers and competitors to apply for patents or develop proprietary technologies and processes. Third-parties may assert intellectual
property infringement claims against us despite our efforts to avoid such infringement. Such claims could prevent us from offering competitive products or
result in litigation or threatened litigation.

Our business is susceptible to product liability claims.

The manufacture and sale of any product for human consumption raises the risk of product liability claims. These claims may derive from the product
itself or a contaminant found in the product from the manufacturing, packaging, sales process or even due to tampering by unauthorized third parties. Our
products consist of vitamins, minerals, herbs, and other ingredients that are classified as foods or dietary supplements and are not subject to pre-market
regulatory approval in the United States. Our products could contain contaminated substances, and some of our products contain ingredients that do not
have long histories of human consumption. Previously unknown adverse reactions resulting from human consumption of these ingredients could occur. In
addition, third-party manufacturers produce all of the products we sell. As a distributor of products manufactured by third parties, we may also be liable
for various product liability claims for these products despite not manufacturing them. We may be subject to various product liability claims, including,
among others, that our products include inadequate instructions for use or inadequate warnings concerning possible side effects and interactions with
other substances. Any product liability claim against us could result in increased costs and could adversely affect our reputation with our customers,
which in turn could adversely affect our revenue and operating income. Although we maintain insurance coverage, there is a risk that our insurance will
not cover our potential exposure completely or would fail to cover a particular claim, in which case we may not have the financial resources to satisfy
such claim. In addition, certain types of damages, such as punitive damages, are not covered by our insurance policy.

We rely on consumer discretionary spending and may be adversely affected by economic downturns and other macroeconomic conditions or
trends.

Macroeconomic conditions may adversely affect our business. If general economic conditions deteriorate globally or in specific markets where we
operate, consumer discretionary spending may decline and demand for our products may be reduced. A decrease in consumer discretionary spending
would cause sales in our products to decline and adversely impact our business. If our costs were to become subject to significant inflationary pressures,
we may not be able to fully offset such higher costs through increases in revenue as increases in core inflation rates may also affect consumers’
willingness to make discretionary purchases on our products. Our inability or failure to do so could harm our business, financial condition, and results of
operations. As the world moves into new phases of the pandemic, with new variants emerging, and inflation on the rise, macroeconomic conditions may
continue to trend downward for a more prolonged period than expected.

Economic, political, and other risks associated with our international operations could adversely affect our revenue and international growth
prospects.

As part of our business strategy, we intend to continue to expand and grow our international presence. Our international operations are subject to a
number of risks inherent to operating in foreign countries, and any expansion or growth of our international operations will increase the effects of these
risks. These risks include, among others:

•

political and economic instability of foreign markets;

foreign governments’ restrictive trade policies;

lack of well-established or reliable legal systems in certain areas in which we operate;

inconsistent product regulation or sudden policy changes by foreign agencies or governments;

the imposition of, or increase in, duties, taxes, government royalties, or non-tariff trade barriers;

difficulty in collecting international accounts receivable and potentially longer payment cycles;

the possibility that a foreign government may limit our ability to repatriate cash;

increased costs in maintaining international marketing efforts;

problems entering international markets with different cultural bases and consumer preferences; and

fluctuations in foreign currency exchange rates.

Any of these risks could have a material adverse effect on our international operations and our growth strategy.

Risks Related to Ownership of Our Common Stock

If we are unable to maintain compliance with Nasdaq requirements for continued listing, our common stock could be delisted from trading.

As previously disclosed, in fiscal year 2016, we were delinquent in the filing of our periodic reports with the SEC and, as a result, were not in

compliance with the continued listing requirements of the Nasdaq Stock Market. Accordingly, we were subject to having our stock delisted from trading on
Nasdaq though we later were successful in regaining compliance with the Nasdaq continued listing requirements. However, there can be no assurance
that our common stock will not be subject to delisting by Nasdaq in the future. If our common stock were to be delisted, there can be no assurance
whether or when it would again be listed for trading on Nasdaq or any other exchange. In addition, if our common stock were to be delisted, the market
price of our shares will likely decline and become more volatile, and our stockholders may find that their ability to trade in our stock will be adversely
affected. Furthermore, institutions whose charters do not allow them to hold securities in unlisted companies might sell our shares, which could have a
further adverse effect on the price of our stock.

Our stock price may experience future volatility.

The trading price of our common stock has historically been subject to wide fluctuations. The price of our common stock may fluctuate in the future in
response to quarter-to-quarter variations in operating results, material announcements by us or competitors, governmental regulatory action, conditions in
the dietary supplement industry, or other events or factors, many of which are beyond our control, and some of which do not have a strong correlation to
our operating performance.

Substantial sales of shares may impact the market price of our common stock.

If our stockholders sell substantial amounts of our common stock, the market price of our common stock may decline. These sales also might

make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we consider appropriate.

ITEM 1B — UNRESOLVED STAFF COMMENTS

None.

ITEM 2 — PROPERTIES

Corporate Offices

On November 14, 2019, we entered into a lease agreement with Traverse Ridge Center III LLC, a Utah limited liability company, for our new

corporate headquarters located at 3300 N. Triumph Blvd., Suite 700, Lehi, Utah 84043. The lease is for approximately 51,674 square feet with a right of
first refusal to lease certain additional space in the building when such space becomes available. The term of the lease began on January 1, 2021 and
will continue for a period of eleven years.

Our subsidiary, LifeVantage Japan K.K., leases approximately 10,400 square feet of office space in Tokyo, Japan. The lease for the Tokyo, Japan

property expires in July 2023.

We believe that the facilities under our leases are sufficient to meet our needs for the foreseeable future.

Warehouse Facilities

Since fiscal year 2010, Maersk E-Commerce Logistics (formerly Visible Supply Chain Management and IntegraCore, LLC) has provided fulfillment
services to us, including services relating to procurement, warehousing, ordering, processing and shipping. We have also entered into arrangements to
receive similar services in each of our international markets.

ITEM 3 — LEGAL PROCEEDINGS

See Note 14 of the Notes to the Consolidated Financial Statements contained within this Annual Report on Form 10-K for a discussion of the

Company's legal proceedings.

ITEM 4 — MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5 — MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES

Market Information and Holders

Our common stock began trading on the Nasdaq Capital Market under the symbol "LFVN" in September 2012. Our common stock was previously

quoted on the OTC Bulletin Board under the symbol “LFVN". On October 19, 2015, the Company effected a one-for-seven reverse stock split.

PART II

Our common stock is issued in registered form and the following information is taken from the records of our current transfer agent, Computershare
Trust Company, Inc. As of June 30, 2022, we had 92 stockholders of record and 12.5 million shares of common stock outstanding. This does not include
an unknown number of persons who hold shares in street name through brokers and dealers and who are not listed on our stockholder records.

Stock Performance Graph

The following line graph and table compares the cumulative total stockholder return on our common stock with the cumulative total return of (i) the

Nasdaq Composite Index and (ii) a market-weighted index of publicly-traded peer companies (the "Peer Group") for the period from June 30, 2017
through June 30, 2022. The data shown assumes an investment on June 30, 2017 of $100 and reinvestment of all dividends into additional shares of the
same class of equity, if applicable, to the stock or index. There is no expectation that the rate of return achieved in the prior 5 years will be achievable in
the upcoming years.

The Peer Group consists of the following companies, which compete in our industry and product categories: Nature's Sunshine Products, Inc.; Nu

Skin Enterprises, Inc.; Mannatech, Incorporated; Herbalife LTD.; Reliv International, Inc.; Avon Products, Inc.; USANA Health Sciences, Inc. and
Tupperware Brands Corporation.

Measured Period
June 30, 2017
June 30, 2018
June 30, 2019
June 30, 2020
June 30, 2021
June 30, 2022

LFVN

Nasdaq
Composite

Peer Group

$
$
$
$
$
$

100.00 $
147.11 $
299.77 $
312.24 $
169.75 $
101.22 $

100.00 $
123.60 $
133.22 $
169.11 $
245.60 $
188.07 $

100.00
118.48
92.53
90.69
123.75
65.93

Dividends

On May 3, 2022, we announced a quarterly cash dividend of $0.03 per common share in an aggregate amount of $0.4 million that was paid on May

31, 2022, to stockholders of record on May 17, 2022. Additionally, the 2016 Credit Facility, as amended, contains customary covenants that, among other
things, restrict our ability to pay dividends absent consent from our lender. In May 2022, we received consent from our lender to pay out the quarterly
cash dividend of $0.03 per common share to our stockholders. We currently expect that a comparable cash dividend will be paid each quarter for the
foreseeable future.

The declaration of dividends is subject to the discretion of our board of directors and will depend upon various factors, including our earnings, financial

condition, restrictions imposed by any indebtedness that may be outstanding, cash requirements, future prospects and other factors deemed relevant by
our board of directors.

Purchases of Equity Securities

On November 27, 2017, our board of directors approved a stock repurchase plan, which was subsequently amended on February 1, 2019. Under the

plan, we are authorized to repurchase up to $15.0 million of the outstanding shares through November 27, 2020. On August 27, 2020, our board of
directors approved an amendment to the share repurchase program to increase the authorized share repurchase amount from $15 million to $35 million
and to extend the duration of the program through November 30, 2023 and, on February 17, 2022, the Board of Directors approved an amendment to
the share repurchase program to increase the authorized share repurchase amount from $35 million to $60 million. The repurchase program permits us
to purchase shares from time to time through a variety of methods, including in the open market, through privately negotiated transactions or other
means as determined by our management, in accordance with applicable securities laws. As part of the repurchase program, we may enter into a pre-
arranged stock repurchase plan which operates in accordance with guidelines specified under Rule 10b5-1 of the Securities Exchange Act of 1934, as
amended. Accordingly, any transactions under such stock repurchase plan would be completed in accordance with the terms of the plan, including
specified price, volume and timing conditions. The authorization may be suspended or discontinued at any time. During the three months ended June 30,
2022, we repurchase 0.1 million shares of our common stock under this repurchase plan.

The following table provides information with respect to all purchases made by the Company during the three months ended June 30, 2022. All

purchases listed below were made at prevailing market prices.

Period

April 1 - April 30
May 1 - May 31
June 1 - June 30
Total

Total Number of

Shares Purchased

Average Price Paid

Per Share

—
18,748
84,643
103,391

$
$
$

—
4.16
4.50

Total Number of
Shares Purchased as
Part of the Announced
Plans or Programs

Maximum Dollar Value
of Shares that May Yet Be
Purchased Under the Plans
or Programs

—
18,748
84,643
103,391

$
$
$

28,133,664
28,055,645
27,674,586

Recent Sale of Unregistered Securities

None.

Equity Compensation Plan Information

This information is incorporated by reference to Part III, Item 12 of this report.

ITEM 6 — SELECTED FINANCIAL DATA

The following table summarizes certain historical financial information at the dates and for the periods indicated prepared in accordance with GAAP.

The consolidated statement of operations data for each of the fiscal years ended June 30, 2022, 2021 and 2020, and the consolidated balance sheet

data as of June 30, 2022 and 2021, have been derived from our consolidated financial statements audited by WSRP, LLC, an independent registered
public accounting firm, included elsewhere in this annual report on Form 10-K. The consolidated statement of operations data for each of the fiscal years
ended June 30, 2019 and 2018, and the consolidated balance sheet data as of June 30, 2021, 2020, 2019 and 2018, have been derived from our
financial statements not included herein. The selected consolidated financial data should be read in conjunction with “Management's Discussion and
Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and notes thereto, which

are included elsewhere in this annual report on Form 10-K. Our historical results are not necessarily indicative of operating results to be expected in the
future.

(In thousands, except per share data)
Statement of Operations Data:
Revenue, net
Cost of sales
Gross profit
Operating expenses:
Commissions and incentives
Selling, general and administrative
Total operating expenses
Operating income
Other expense:

Interest expense
Other income (expense), net
Impairment of investment

Total other expense
Income before income taxes
Income tax expense
Net income
Net income per share:

Basic
Diluted

Weighted-average shares outstanding:

Basic
Diluted

(In thousands)
Balance Sheet Data:
Cash and cash equivalents
Working capital
Total assets
Current liabilities
Long-term debt, net of unamortized discount
Total liabilities
Total stockholders' equity

2022

2021

Years Ended June 30,
2020

2019

2018

206,360 $
38,097
168,263

220,181 $
38,187
181,994

232,915 $
37,964
194,951

225,958 $
37,973
187,985

203,204
34,848
168,356

97,263
63,425
160,688
7,575

103,541
60,838
164,379
17,615

111,571
67,914
179,485
15,466

108,620
69,551
178,171
9,814

(10)
(669)
(2,205)
(2,884)
4,691
(1,571)
3,120 $

(17)
(366)
—
(383)
17,232
(4,338)
12,894 $

(120)
(685)
—
(805)
14,661
(3,112)
11,549 $

(323)
(261)
—
(584)
9,230
(1,801)
7,429 $

98,193
59,840
158,033
10,323

(456)
(319)
—
(775)
9,548
(3,787)
5,761

0.24 $
0.24 $

0.92 $
0.90 $

0.82 $
0.79 $

0.53 $
0.50 $

0.41
0.41

12,886
13,069

14,070
14,268

14,105
14,599

14,005
14,980

13,992
14,136

2022

2021

As of June 30,
2020

2019

2018

20,190 $
21,229
70,706
25,728
—
39,190
31,516

23,174 $
22,855
78,732
25,199
—
41,925
36,807

22,138 $
18,849
58,877
25,019
—
25,623
33,254

18,824 $
16,993
55,273
26,195
—
28,074
27,199

16,652
15,133
51,142
23,805
3,412
29,195
21,947

$
$

ITEM 7 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial
statements and related notes, which are included in this Annual Report on Form 10-K.

Overview

We are a company focused on nutrigenomics, the study of how nutrition and naturally occurring compounds affect human genes to support good

health. We are dedicated to helping people achieve their health, wellness and financial goals. We provide quality, scientifically-validated products to
customers and independent distributors as well as a financially rewarding commission-based direct sales opportunity to our independent distributors. We
engage in the identification, research, development, formulation and sale of advanced nutrigenomic activators, dietary supplements, nootropics, pre- and
pro-biotics, weight management, skin and hair care, bath & body, and targeted relief products. We currently sell our products to customers and
independent distributors in two geographic regions that we have classified as the Americas region and the Asia/Pacific &

Europe region.

The success and growth of our business is primarily based on the effectiveness of our independent distributors to attract and retain customers in
order to sell our products and our ability to attract and retain independent distributors. When we are successful in attracting and retaining independent
distributors and customers, it is largely because of:

• Our products, including our flagship Protandim family of scientifically-validated dietary supplements, LifeVantage Omega+, ProBio, IC Bright

and Daily Wellness dietary supplements, our line of Nrf2 enhanced TrueScience® skin, hair, bath & body, and targeted relief products,
Petandim , our companion pet supplement formulated to combat oxidative stress in dogs, Axio , our nootropic energy drink mixes, and PhysIQ,
our smart weight management system;

• Our sales compensation plan and other sales initiatives and incentives; and

• Our delivery of superior customer service.

As a result, it is vital to our success that we leverage our product development resources to develop and introduce compelling and innovative

products and provide opportunities for our independent distributors to sell these products in a variety of markets. We sell our products in the United
States, Mexico, Japan, Australia, Hong Kong, Canada, Thailand, the United Kingdom, the Netherlands, Germany, Taiwan, Austria, Spain, Ireland,
Belgium, New Zealand, Singapore, and the Philippines. In addition, we sell our products in a number of countries to customers for personal consumption
only and in China through a China approved cross-border e-commerce business model. Entering a new market requires a considerable amount of time,
resources and continued support. If we are unable to properly support an existing or new market, our revenue growth may be negatively impacted.

Impact of COVID-19 on Our Business

The pandemic caused by COVID-19 has continued to disrupt and adversely affect our business in fiscal year 2022. As of the date of this filing, we

have experienced multiple disruptions at times at the corporate level as we have transitioned our corporate workforce from a remote working
environment, to a hybrid work from home/work in the office schedule. We have continued to experience temporary closures of some of our overseas
showrooms and will call locations in international markets and have experienced cancelled multiple planned large group events in order to comply with
group meeting restrictions in certain markets. Our independent distributors have also experienced disruptions. Specifically, in Japan, independent
distributors are required to provide a hard-copy introductory packet (gaiyoshomen) in person to each person they approach to sponsor as an independent
distributor before presenting our products and business opportunity. This requirement inhibits independent distributors from connecting with potential new
independent distributors virtually or through social media. Accordingly, quarantines, avoidance of public places and general concerns about physical
distancing related to COVID-19 or otherwise negatively affected the ability for independent distributors to meet people in person and commence the
enrollment process. To mitigate these effects and in an effort to sustain their sales volume, our independent distributors have adapted their approach for
customer outreach and enrollment, including transitioning to a stronger social media presence. Our business may, in the future, experience additional
disruptions and be negatively impacted by the COVID-19 pandemic, including as a result of limitations on the ability of our suppliers to manufacture, or
procure from manufacturers, the products we sell or any of the raw materials or components required in the production process, or to meet delivery
requirements and commitments; limitations on the ability of our employees to perform their work due to illness caused by the pandemic or local, state, or
federal orders requiring employees to remain at home; limitations on the ability of carriers to deliver our products to customers; limitations on the ability of
our independent distributors to conduct their businesses and purchase our products; and limitations on the ability of our independent distributors or
customers to continue to purchase our products due to decreased disposable income.

We have made modifications and are evaluating additional potential modifications that may be needed, to protect our supply chain and preserve
adequate liquidity to ensure that our business can continue to operate during uncertain times. Near the end of fiscal year 2020 we transitioned all of our
corporate employees to a work from home model and during July 2021 we began to implement a hybrid schedule with opportunities for employees to
return back to the office. That hybrid schedule continues to be in effect today. To date, our employees are performing and adapting well with the evolving
environment. With respect to liquidity, we are evaluating and taking actions to ensure that we continue to responsibly manage expenses across our
organization.

While we are unable to determine or predict the nature, duration or scope of the overall impact that the COVID-19 pandemic will have on our

business, results of operations, liquidity or capital resources, we will continue to actively monitor the situation and may take further actions that alter our
business operations as may be required by federal, state or local authorities or that we determine are in the best interests of our employees, independent
distributors, customers, and stockholders.

Our Products

Our products are the Protandim line of scientifically-validated dietary supplements, LifeVantage Omega+ , ProBio and Daily Wellness dietary
supplements, TrueScience , our line of skin, bath & body, target relief, and hair care products, Petandim , our companion pet supplement formulated to
combat oxidative stress in dogs, Axio , our nootropic energy drink mixes, and PhysIQ, our smart weight management system. The Protandim product
®
line includes Protandim NRF1 Synergizer , Protandim Nrf2 Synergizer , and Protandim NAD Synergizer . The Protandim NRF1 Synergizer is
formulated to increase cellular energy and performance by boosting mitochondria production to improve cellular repair and slow cellular aging. The
Protandim Nrf2 Synergizer contains a proprietary blend of ingredients and has been shown to combat oxidative stress and enhance energy production
by increasing the body’s natural antioxidant protection at the genetic level, inducing the production of naturally-occurring protective antioxidant enzymes,
including superoxide dismutase, catalase, and glutathione synthase. The Protandim NAD Synergizer was specifically formulated to target cell signaling
pathways involved in the synthesis and recycling of a specific molecule called NAD (nicotinamide adenine dinucleotide), and has been shown to double
sirtuin activity, supporting increased health, focus, energy, mental clarity and mood. Use of the three Protandim products together has been shown to
produce synergistic benefits greater than using the single products on their own. LifeVantage Omega+ is a dietary supplement that combines DHA and
EPA Omega-3 fatty acids, Omega-7 fatty acids, and Vitamin D3 to support cognitive health, cardiovascular health, skin health, and the immune system.
LifeVantage ProBio is a dietary supplement designed to support optimal digestion and immune system function. LifeVantage Daily Wellness is a
dietary supplement designed to support and strengthen immune health. Our TrueScience line of anti-aging skin and hair care, and CBD Nrf2 enhanced,
®
bath & body, targeted relief products includes TrueScience Facial Cleanser, TrueScience Perfecting Lotion, TrueScience Eye Serum, TrueScience
Anti-Aging Cream, TrueScience Beauty Serum, TrueScience Hand Cream, TrueScience Invigorating Shampoo, TrueScience Nourishing
Conditioner, TrueScience Scalp Serum, TrueScience Body Lotion, TrueScience Body Wash, TrueScience Body Butter, TrueScience Deodorant,
®
TrueScience Soothing Balm, TrueScience Body Rub, and TrueScience Liquid Collagen. Petandim is a supplement specially formulated to combat
oxidative stress in dogs through Nrf2 activation. Axio is our line of our nootropic energy drink mixes formulated to promote alertness and support mental
performance. PhysIQ is our smart weight management system, which includes PhysIQ Fat Burn, PhysIQ Prebiotic and PhysIQ Whey Protein, all
formulated to aid in weight management. IC Bright
helps support eye and brain health, reduce eye fatigue and strain, supports cognitive functions, and
may help support normal sleep patterns. We believe our significant number of customers who regularly and repeatedly purchase our products is a strong
indicator of the health benefits of our products. The following table shows revenues by major product line for the fiscal years ended June 30, 2022, 2021
and 2020:

®
Protandim product line
®
TrueScience product line
Other

Total

2022

135,616
22,877
47,867
206,360

Years ended June 30,
2021

2020

65.7 % $
11.1 %
23.2 %
100.0 % $

150,272
22,617
47,292
220,181

68.2 % $
10.3 %
21.5 %
100.0 % $

156,335
23,739
52,841
232,915

67.1 %
10.2 %
22.7 %
100.0 %

Our revenue is largely attributed to two product lines, Protandim and TrueScience , which each accounted for more than 10% of total revenue for

each of the fiscal years ended June 30, 2022, 2021 and 2020. On a combined basis, these product lines represent approximately 76.8%, 78.5% and
77.3% of our total net revenue for the fiscal years ended June 30, 2022, 2021 and 2020, respectively.

We currently have additional products in development. Any delays or difficulties in introducing compelling products or attractive initiatives or tools into

our markets may have a negative impact on our revenue and our ability to attract new independent distributors and customers.

Accounts

Because we primarily utilize a direct selling model for the distribution of a majority of our products, the success and growth of our business depends
in large part on the effectiveness of our independent distributors to attract and retain customers to sell our products to, and our ability to attract new and
retain existing independent distributors. Changes in our product sales are typically the result of variations in product sales volume relating to fluctuations
in the number of active independent distributors and customers purchasing our products. The number of active independent distributors and customers
is, therefore, used by management as a key non-financial measure.

The following tables summarize the changes in our active accounts by geographic region. These numbers have been rounded to the nearest

thousand as of the dates indicated. For purposes of this report, we define "Active Accounts" as only those

independent distributors and customers who have purchased from us at any time during the most recent three-month period, either for personal use or
for resale.

Active Independent Distributors
Americas
Asia/Pacific & Europe

Total Active Independent Distributors

Active Customers
Americas
Asia/Pacific & Europe
Total Active Customers

Active Accounts
Americas
Asia/Pacific & Europe
Total Active Accounts

Income Statement Presentation

As of June 30,

2022

2021

Change from
Prior Year

Percent Change

37,000
26,000
63,000

69,000
24,000
93,000

106,000
50,000
156,000

58.7 %
41.3 %
100.0 %

74.2 %
25.8 %
100.0 %

67.9 %
32.1 %
100.0 %

41,000
22,000
63,000

78,000
29,000
107,000

119,000
51,000
170,000

65.1 %
34.9 %
100.0 %

72.9 %
27.1 %
100.0 %

70.0 %
30.0 %
100.0 %

(4,000)
4,000
—

(9,000)
(5,000)
(14,000)

(13,000)
(1,000)
(14,000)

(9.8)%
18.2 %

— %

(11.5)%
(17.2)%
(13.1)%

(10.9)%
(2.0)%
(8.2)%

We report revenue in two geographic regions and we translate revenue from each market's local currency into U.S. Dollars using weighted-average

exchange rates. Revenue consists primarily of product sales, fee revenue, and shipping and handling fees, net of applicable sales discounts. Revenue is
recognized at the time of shipment, which is when the passage of title and risk of loss to customers occurs. Also reflected in revenue is a provision for
product returns and allowances, which is estimated based on our historical experience. The following table sets forth net revenue information by region
for the years indicated. The following table should be reviewed in connection with the tables presented under "Results of Operations" (in thousands):

Americas
Asia/Pacific & Europe

Total

2022

138,323
68,037
206,360

For the fiscal years ended June 30,
2021

2020

67.0 % $
33.0 %
100.0 % $

154,655
65,526
220,181

70.2 % $
29.8 %
100.0 % $

166,336
66,579
232,915

71.4 %
28.6 %
100.0 %

Cost of sales primarily consists of costs of products purchased from and manufactured by third-party vendors, shipping and order fulfillment costs,

costs of adjustments to inventory carrying value, and costs of marketing materials which we sell to our independent distributor sales force, as well as
freight, duties and taxes associated with the import and export of our products. As our international revenue increases as a percentage of total revenue,
cost of sales as a percentage of revenue likely will increase as a result of additional duties, freight, and other factors, such as changes in currency
exchange rates.

Commissions and incentives expenses are our most significant expenses and are classified as operating expenses. Commissions and incentives

expenses include sales commissions paid to our independent distributors, special incentives and costs for incentive trips and other rewards.
Commissions and incentives expenses do not include any amounts we pay to our independent distributors related to their personal purchases.
Commissions paid to independent distributors on personal purchases are considered a sales discount and are reported as a reduction to net revenue.
Our global sales compensation plan is an important factor in our ability to attract and retain our independent distributors. Under our global sales
compensation plan, independent distributors can earn commissions for product sales to their customers as well as the product sales made through the
sales networks they have developed and trained. We do not pay commissions on marketing materials that are sold to our independent distributors.
Commissions and incentives expenses, as a percentage of net revenue, may be impacted by the timing and magnitude of non-commissionable revenue
derived from the sales of marketing materials, event tickets, and promotional items, investment in our red carpet program, limited-time offers and the
timing, magnitude and number of incentive trips and

other promotional activities. From time to time, we make modifications and enhancements to our global sales compensation plan in an effort to help
motivate our sales force and develop leadership characteristics, which can have an impact on commissions and incentives expenses.

Selling, general and administrative expenses include wages and benefits, stock compensation expenses, marketing and event costs, professional
fees, rents and utilities, depreciation and amortization, research and development, travel costs and other operating expenses. Wages and benefits and
stock compensation expenses represent the largest component of selling, general and administrative expenses. Marketing and event costs include costs
of distributor conventions and events held in various markets worldwide, which we expense in the period in which they are incurred. Marketing and event
costs also include expenses associated with our sponsorship of the Major League Soccer team, Real Salt Lake.

Sales to customers outside the United States are transacted in the respective local currencies and are translated to U.S. Dollars at weighted-average

currency exchange rates for each monthly accounting period to which they relate. Consequently, our net sales and earnings are affected by changes in
currency exchange rates. In general, sales and gross profit are affected positively by a weakening U.S. Dollar and negatively by a strengthening U.S.
Dollar. Currency fluctuations, however, have the opposite effect on our commissions paid to independent distributors and selling, and general and
administrative expenses. In our revenue discussions that follow, we approximate the impact of currency fluctuations on revenue by translating current
year revenue at the average exchange rates in effect during the comparable prior year periods.

Results of Operations

For the fiscal years ended June 30, 2022, 2021 and 2020, we generated net revenue of $206.4 million, $220.2 million and $232.9 million,

respectively, recognized operating income of $7.6 million, $17.6 million and $15.5 million, respectively, and recognized net income of $3.1 million, $12.9
million and $11.5 million, respectively.

The following table presents certain consolidated earnings data as a percentage of net revenue for the years indicated

(1)

Revenue, net
Cost of sales

Gross profit
Operating expenses:

Commissions and incentives
Selling, general and administrative
Total operating expenses

Operating income

Other expense:

Interest expense
Other expense, net
Impairment of investment
Total other expense
Income before income taxes
Income tax expense

Net income
(1) Certain percentages may not add due to rounding.

Comparison of Fiscal Years Ended June 30, 2022 and 2021

2022

For the fiscal years ended June 30,
2021

2020

100.0 %
18.5
81.5

47.1
30.7
77.8
3.7

—
(0.3)
(1.1)
(1.4)
2.3
(0.8)
1.5 %

100.0 %
17.3
82.7

47.0
27.6
74.6
8.1

—
(0.2)
—
(0.2)
7.9
(2.0)
5.9 %

100.0 %
16.3
83.7

47.9
29.2
77.1
6.6

(0.1)
(0.3)
—
(0.3)
6.3
(1.3)
5.0 %

Revenue, net. We generated net revenue of $206.4 million and $220.2 million during the fiscal years ended June 30, 2022 and 2021, respectively.
The overall decrease in revenue is attributed mainly to a reduction of 8.2% in total active accounts during fiscal year 2022. Revenue in the United States,
Japan, Canada and Europe declined on a year over year basis, partially offset by increases of 10.7% in our Australia and New Zealand market, 18.5% in
our Greater China market, and the addition of the Philippines in fiscal year 2022. During the prior year, we launched several limited time and permanent
®
flavors of Axio , our energy drink mixes, launched our new LifeVantage Daily Wellness product, and rolled out six new products in our TrueScience
Body & Bath and Targeted Relief product lines and a line extension to our TrueScience
launched our new IC Bright

skin care line. During our October 2021 global convention, we

product, and rolled out our TrueScience Liquid

Collagen product during our Activate 2022 event held in June 2022. Foreign currency fluctuations negatively impacted our net revenue $4.5 million or
2.0%.

Americas. The following table sets forth revenue for the fiscal years ended June 30, 2022 and 2021 for the Americas region (in thousands):

United States
Other
Americas Total

For the fiscal years ended June 30,

2022

2021

% change

130,932 $
7,391
138,323 $

144,897
9,758
154,655

(9.6)%
(24.3)%
(10.6)%

Revenue in the Americas region for the fiscal year ended June 30, 2022 decreased $16.3 million, or 10.6%, compared to the prior year. Total active

accounts decreased 10.9% in the region compared to the prior fiscal year which drove the decrease in revenue. We believe that our total active accounts
number was negatively impacted by the COVID-19 global pandemic as we were unable to hold some of our in-person training events and our
independent distributors were not able to conduct in person opportunity and training meetings as frequently as they had before COVID-19. We launched
several new products during fiscal year 2022, both during our October 2021 global convention and our Activate 2022 convention held in June 2022. As a
result of these launches and continued efforts from our distributors and employees, we hope to see revenue growth in the Americas region in the
upcoming fiscal year.

Asia/Pacific & Europe. The following table sets forth revenue for the fiscal years ended June 30, 2022 and 2021 for the Asia/Pacific & Europe region

and its principal markets (in thousands):

Japan
Australia & New Zealand
Greater China
Other
Asia/Pacific & Europe Total

For the fiscal years ended June 30,

2022

2021

% change

36,810 $
12,280
5,655
13,292
68,037 $

41,173
11,095
4,771
8,487
65,526

(10.6)%
10.7 %
18.5 %
56.6 %
3.8 %

Revenue in the Asia/Pacific and Europe region for the fiscal year ended June 30, 2022 increased $2.5 million, or 3.8%, compared to the prior year.

Revenue in the region was negatively impacted approximately $4.6 million, or 7.1%, by foreign currency exchange rate fluctuations.

Revenue in our Japan market decreased 10.6% year over year on a U.S. Dollar basis and 0.7% on a constant currency basis. During the fiscal year
ended June 30, 2022, the Japanese yen, on average, weakened against the U.S. Dollar, negatively impacting our revenue in this market by $3.7 million
or 8.9%. The decline in revenue related to foreign currency was offset by increase in revenues in our other markets during the fiscal year ended June 30,
2022.

Revenue in our Australia and New Zealand market s increased $1.2 million, or 10.7%, during fiscal year 2022. We continue to see synergies between

our Australian and New Zealand independent distributor organizations and customer bases, increasing our ability to attract experienced direct selling
leaders and further driving the growth within the region.

Revenue in our Greater China region increased by 18.5% year over year as we experienced revenue growth in our Taiwan market, due, in part, to a
slight recovery from the global pandemic. We have refined our mainland China cross-border e-commerce business model and have recognized revenue
growth through this channel during the fiscal year ended June 30, 2022.

Revenue in our Philippines market was $4.1 million during fiscal year 2022. This market launched in November 2021 and has seen increase

revenues during each month since inception. Revenue in Thailand has grown year over year due to increases in active independent distributors. Europe
remained stable during the fiscal year 2022 relative to the prior year.

Overall, we are encouraged with our increase in total active distributor accounts in our Asia/Pacific and Europe region, which grew by 18.2% on a

year over year basis, primarily from the Philippines, Thailand and Taiwan.

Globally, our sales and marketing efforts continue to be directed toward strengthening our core business through our fiscal year initiatives and

building our worldwide sales. During fiscal year 2022,we successfully launched two new products, completed a full on the ground launch of the
Philippines. In October 2021, we held our global convention, our first major event with in person attendance since the start of the COVID-19 global
pandemic and held several others throughout fiscal year 2022. We continued the refinement and expansion of our product offerings internationally during
fiscal year 2022 and have plans for continued product expansion in fiscal year 2023 and beyond. We expect this expansion will continue to drive revenue
growth globally through increased average order size and increased ability to attract and retain new independent distributors and customers with a
compelling product lineup.

During fiscal year 2023, our main focus will be to increase our average account base through concentrating our efforts on the enrollment of new
independent distributors, who will in turn help grow the business through incremental product sales, and on increasing the number of accounts that place
an order in the month following their initial enrollment. We will continue investing in our red carpet program, which we believe has increased our ability to
attract and retain strong distributor leadership and is a significant opportunity to drive revenue growth throughout our markets. We remain committed to
further expanding the functionality and availability of our mobile application, which we believe will aid independent distributors in initiating and expanding
their businesses.

Gross Margin. Cost of sales were $38.1 million for the fiscal year ended June 30, 2022, and $38.2 million for the fiscal year ended June 30, 2021,

resulting in a gross margin of $168.3 million, or 81.5%, and $182.0 million, or 82.7%, respectively. The decrease in gross margin as a percentage of
revenue is primarily due to increased raw material and manufacturing related costs, inventory obsolescence costs and shipping to customer expenses
during the current fiscal year.

Commissions and Incentives. Commissions and incentives expenses for the fiscal year ended June 30, 2022 were $97.3 million or 47.1% o f revenue

compared to $103.5 million or 47.0% of revenue for the fiscal year ended June 30, 2021. The decrease of $6.2 million in fiscal year 2022 was due to the
decrease in revenue. Commissions and incentives expenses as a percentage of revenue increased slightly during the comparable periods due the
continued refinement and the timing and magnitude of our various promotional and incentive programs during the year.

Commissions and incentives expenses, as a percentage of revenue, may fluctu ate in future periods based on ability to hold incentive trips and events

and the timing and magnitude of compensation, incentive and promotional programs.

Selling, General and Administrative. Selling, general and administrative expenses for the fiscal year ended June 30, 2022 were $63.4 million or

30.7% of revenue compared to $60.8 million or 27.6% of revenue for the fiscal year ended June 30, 2021. The increase in selling, general, and
administrative expenses as a percentage of revenue during the current fiscal year primarily was due to the decrease in revenue and increased events
and travel expenses as a result of changes to our event schedule and the easing of COVID-19 related travel and associated group meeting restrictions.
These increases were partially offset from a decrease in incentive compensation during the year and de creased executive severance and transition
expenses.

Primary factors that may cause our selling, general and administrative expenses to fluctuate in the future include changes in the number of
employees, the timing and number of events we hold, marketing and branding initiatives and costs related to legal matters, if and as they arise. A
fluctuation in our stock price may also impact our share-based compensation expense recorded for equity awards made in future years.

Interest Expense. Interest expense for the fiscal year ended June 30, 2022 was $10,000 as compared to $17,000 for the fiscal year ended June 30,

2021.

Other Expense, Net. We recognized other expense, net, for the fiscal year ended June 30, 2022 of $0.7 million as compared to $0.4 million for the

fiscal year ended June 30, 2021. The increase of $0.3 million was primarily due to the impact of foreign currency fluctuations recognized during fiscal
year 2022.

Impairment of Investment. We recognized an impairment of $2.2 million on our investment in Gig Economy Group ("GEG") during fiscal year 2022 as

we determined our investment in GEG had declined significantly as a result of the business failing to achieve profitability due to weak market conditions
for its products.

Income Tax Expense . Our income tax expense for the fiscal year ended June 30, 2022 was $1.6 million as compared to income tax expense of $4.3

million for the fiscal year ended June 30, 2021.

The effective tax rate was 33.5% of pre-tax income for the fiscal year ended June 30, 2022, compared to 25.2% for the fiscal year ended June 30,

2021. The increase in the effective tax rate for fiscal year 2022 compared to the prior year is mainly due to the change in valuation allowance on the
impairment of GEG investment.

Our provision for income taxes for the fiscal year ended June 30, 2022 consisted prim arily of federal, state, and foreign tax on anticipated fiscal year
2022 income which was partially offset by tax benefits. We expect our effective rate to fluctuate in future periods based on the impact of permanent items
in relation to pre-tax income.

Net Income. As a result of the foregoing factors, net income for the fiscal year ended June 30, 2022 decreased to $3.1 million compared to $12.9

million for the fiscal year ended June 30, 2021.

Comparison of Fiscal Years Ended June 30, 2021 and 2020

For a discussion of our results of operations for the fiscal year 2021 compared with fiscal year 2020, refer to “Part II. Item 7. Management's

Discussion and Analysis of Financial Condition and Results of Operations" in our annual report on Form 10-K for the fiscal year ended June 30, 2021, as
filed with the SEC on August 19, 2021.

Liquidity and Capital Resources

Liquidity

Our primary liquidity and capital resource requirements are to service our debt, which includes any outstanding balances under the 2016 Credit

Facility, and finance the cost of our planned operating expenses and working capital (principally inventory purchases), as well as capital expenditures. We
have generally relied on cash flow from operations to fund operating activities and we have, at times, incurred long-term debt in order to fund stock
repurchases and strategic transactions.

At June 30, 2022, our cash and cash equivalents were $20.2 million. This represented an decrease of $3.0 million from the $23.2 million in cash and

cash equivalents as of June 30, 2021.

During the fiscal year ended June 30, 2022, our net cash provided by operating activities was $8.0 million as compared to net cash provided by
operating activities of $16.3 million during the fiscal year ended June 30, 2021. The decrease in cash provided by operating activities during the fiscal
year ended June 30, 2022 primarily was due to decreases in net income and increases in prepaid expenses, offset by the impairment of our investment in
GEG and increases in accounts payable.

During the fiscal year ended June 30, 2022, our net cash used in investing activities was $1.5 million, as a result of the purchase of fixed assets.

During the fiscal year ended June 30, 2021, our net cash used in investing activities was $3.7 million, as a result of the purchase of fixed assets.

Cash used in financing activities during the fiscal year ended June 30, 2022 was $9.0 million, as a result of the repurchase of company stock, the
payment of a cash dividend and shares purchased as payment of tax withholding upon vesting of employee equity awards, partially offset by proceeds
from stock option exercises and proceeds from purchases of company stock under our employee stock purchase plan. Cash used in financing activities
during the fiscal year ended June 30, 2021 was $11.5 million, as a result of the repurchase of company stock and shares purchased as payment of tax
withholding upon vesting of employee equity awards, partially offset by proceeds from stock option exercises and proceeds from purchases of company
stock under our employee stock purchase plan.

At June 30, 2022 and 2021, the total amount of our foreign subsidiary cash was $7.0 million and $9.2 million, respectively. Under current U.S. tax

law, in the future, if needed, we expect to be able to repatriate cash from foreign subsidiaries without paying additional U.S. taxes.

At June 30, 2022, we had working capital (current assets minus current liabilities) of $21.2 million compared to working capital of $22.9 million at

June 30, 2021. The decrease in working capital primarily was due to decreases in cash offset slightly by increases in accounts receivable and prepaid
expenses. We believe that our cash and cash equivalents balances and our ongoing cash flow from operations will be sufficient to satisfy our cash
requirements for at least the next 12 months. The majority of our historical expenses have been variable in nature and as such, a potential reduction in
the level of revenue would reduce our cash flow. In the event that our current cash balances and future cash flow from operations are not sufficient to
meet our obligations or strategic needs, we would consider raising additional funds, which may not be available on terms that are acceptable to us, or at
all. Our credit facility, however, contains covenants that restrict our ability to raise additional funds in the debt markets and repurchase our equity
securities without prior approval from the lender. Additionally, our credit facility provides for a revolving loan facility in an aggregate principal amount up
to $5.0 million. We would also consider realigning our strategic plans including a reduction in capital spending and expenses.

Capital Resources

Shelf Registration Statement

On March 24, 2020, we filed a shelf registration statement (the "Shelf Registration") on Form S-3 with the SEC that was declared effective April 3,

2020, which permits us to offer up to $75 million of common stock, preferred stock, debt securities

and warrants in one or more offerings and in any combination, including in units from time to time. Our Shelf Registration is intended to provide us with
additional flexibility to access capital markets for general corporate purposes, which may include, among other purposes, working capital, capital
expenditures, other corporate expenses and acquisitions of assets, licenses, products, technologies or businesses.

2016 Credit Facility

On March 30, 2016, we entered into a loan agreement (the "2016 Loan Agreement") to refinance our outstanding debt. In connection with the 2016

Loan Agreement and on the same date, we entered into a security agreement (the "Security Agreement"). The 2016 Loan Agreement provides for a term
loan in an aggregate principal amount of $10.0 million (the "2016 Term Loan") and a revolving loan facility in an aggregate principal amount not to exceed
$2.0 million (the "2016 Revolving Loan," and collectively with the 2016 Term Loan, the 2016 Loan Agreement and the Security Agreement, the "2016
Credit Facility").

The principal amount of the 2016 Term Loan was payable in consecutive quarterly installments in the amount of $0.5 million plus accrued interest
beginning with the fiscal quarter ended June 30, 2016. If we borrow under the 2016 Revolving Loan, interest will be payable quarterly in arrears on the
last day of each fiscal quarter.

On May 4, 2018, we entered into a loan modification agreement, which amended the 2016 Credit Facility (“Amendment No. 1”). Amendment No. 1

revised the maturity date from March 30, 2019 to March 31, 2021 and increased the fixed interest rate for the term loan from 4.93% to 5.68%.
Amendment No. 1 also revised certain financial covenants. The minimum fixed charge coverage ratio (as defined in Amendment No. 1) was revised from
a minimum of 1.50 to 1.00 to 1.25 to 1.00, measured on a trailing twelve-month basis, at the end of each fiscal quarter. The minimum working capital was
increased from $5.0 million to $8.0 million. The funded debt to EBITDA ratio was replaced with the total liabilities to tangible net worth ratio (as defined in
Amendment No. 1) of not greater than 3.00 to 1.00 at the end of each quarter. The minimum tangible net worth measure was removed from the financial
covenants.

Loans outstanding under the 2016 Credit Facility, as amended, may be prepaid in whole or in part at any time without premium or penalty. In

addition, if, at any time, the aggregate principal amount outstanding under the 2016 Revolving Loan, as amended, exceeds $2.0 million, we must prepay
an amount equal to such excess. Any principal amount of the 2016 Term Loan, as amended, which is prepaid or repaid may not be re-borrowed.

On February 1, 2019, we entered into a loan modification agreement, which amended the 2016 Credit Facility, as amended ("Amendment No. 2").

Under Amendment No. 2, we made a principal payment of $2.0 million and increased the revolving loan facility from $2.0 million to $5.0 million.
Amendment No. 2 also revised certain financial covenants. The minimum fixed charge coverage ratio (as defined in Amendment No. 2) was revised from
a minimum of 1.25 to 1.00 to 1.10 to 1.00, measured on a trailing twelve-month basis, at the end of each fiscal quarter. The minimum working capital was
decreased from $8.0 million to $6.0 million.

On April 1, 2021, we entered into a loan modification agreement ("Amendment No. 3"), which amended the 2016 Credit Facility, as previously

amended. Amendment No. 3 revised the maturity date from March 31, 2021 to March 31, 2024 and modified the variable interest rate based on the one-
month United States Treasury Rate, plus a margin of 3.00%, with an interest rate floor of 4.00%. As of June 30, 2021, the effective interest rate is 4.00%.
Amendment No. 3 also revised the debt (total liabilities) to tangible net worth ratio (as defined in Amendment No. 3) covenant to require that we maintain
this ratio not in excess of 2.00 to 1.00, measured as of the end of each fiscal quarter, and revised the definition and calculation of the minimum fixed
charge coverage ratio (as defined in Amendment No. 3). There were no other changes to the covenants or revolving loan facility as set forth in
Amendment No. 2.

The 2016 Credit Facility, as amended, contains customary covenants, including affirmative and negative covenants that, among other things, restrict

our ability to create certain types of liens, incur additional indebtedness, declare or pay dividends on or redeem capital stock, make other payments to
holders of our equity interests, make certain investments, purchase or otherwise acquire all or substantially all the assets or equity interests of other
companies, sell assets or enter into consolidations, mergers or transfers of all or any substantial part of our assets. In May 2022, we received consent
from our lender to pay out the quarterly cash dividend of $0.03 per common share to our stockholders.

The 2016 Credit Facility, as amended, also contains various financial covenants that require us to maintain certain consolidated working capital

amounts, total liabilities to tangible net worth ratios and fixed charge coverage ratios. Specifically, we must:

• Maintain a minimum fixed charge coverage ratio (as defined in the 2016 Loan Agreement, as amended) of at least 1.10 to 1.00 at the end of

each fiscal quarter, measured on a trailing twelve month basis;

• Maintain minimum consolidated working capital (as defined in the 2016 Loan Agreement, as amended) at the end of each fiscal quarter of at

least $6.0 million; and

• Maintain a ratio of debt (total liabilities) to tangible net worth (as defined in the 2016 Loan Agreement, as amended) of not greater

than 2.00 to 1.00 at the end of each quarter, measured on a trailing twelve month basis.

As of June 30, 2022, we were not in compliance with the financial covenant related to the minimum fixed charge coverage ratio under the 2016 Credit

Facility, as amended. As of June 30, 2022, there was no balance outstanding on this credit facility, We have requested, and were granted, a waiver
related to this covenant violation as of June 30, 2022. We are in the process of renegotiating the terms of the amended 2016 Credit Facility and expect
that a revised loan agreement will be in place in the first quarter of fiscal 2023.

During the fiscal year ended June 30, 2020, we repaid, in full, the remaining balance of the 2016 Term Loan in accordance with the terms of the 2016

Credit Facility, as amended.

Commitments and Obligations

The following table summarizes our contractual payment obligations and commitments as of June 30, 2022 (in thousands):

Contractual Obligations
Operating lease obligations
Other operating obligations
Total

(1)

(2)

Payments due by period

Total

18,460 $
15,920
34,380 $

Less than
1 year

1-3 years

3-5 years

Thereafter

3,369 $

15,920
19,289 $

3,635 $
—
3,635 $

3,333 $
—
3,333 $

8,123
—
8,123

(1)

(2)

Operating lease obligations include current and future obligations associated with corporate office leases.

Other operating obligations represent contractual obligations primarily related to marketing and sponsorship commitments and purchases of inventory.

Off-Balance Sheet Arrangements

At June 30, 2022 and 2021, we had no off-balance sheet arrangements.

Critical Accounting Policies

We prepare our financial statements in conformity with accounting principles generally accepted in the United States of America. As such, we are
required to make certain estimates, judgments, and assumptions that we believe are reasonable based upon the information available. These estimates
and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and
expenses during the periods presented. Actual results could differ from these estimates. Our significant accounting policies are described in Note 2 to our
consolidated financial statements. Certain of these significant accounting policies require us to make difficult, subjective, or complex judgments or
estimates. We consider an accounting estimate to be critical if (1) the accounting estimate requires us to make assumptions about matters that were
highly uncertain at the time the accounting estimate was made and (2) changes in the estimate that are reasonably likely to occur from period to period,
or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results
of operations.

There are other items within our financial statements that require estimation, but are not deemed critical as defined above. Changes in estimates

used in these and other items could have a material impact on our financial statements. Management has discussed the development and selection of
these critical accounting estimates with our board of directors, and the audit committee has reviewed the disclosures noted below.

Allowances for Product Returns

We record allowances for product returns at the time we ship the product based on estimated return rates. Subject to some exceptions based on
local regulations, our return policy is to provide a full refund for product returned within 30 days. After 30 days of purchase, only unopened product that is
in a resalable and restockable condition may be returned within twelve months of purchase and shall receive a 100% refund, less a 10% handling and
restocking fee and any shipping and handling costs. As of June 30, 2022, our shipments of products sold totaling approximately $18.5 million were
subject to our return policy.

We monitor our product returns estimate on an ongoing basis and revise the allowances to reflect our experience. Our allowance for product returns

was $0.1 million at June 30, 2022, compared with $0.2 million at June 30, 2021. To date, product

expiration dates have not played any role in product returns, and we do not expect they will in the future as it is unlikely that we will ship product with an
expiration date earlier than the latest allowable product return date.

Inventory Valuation

We value our inventory at the lower of cost or net realizable value on a first-in, first-out basis. Accordingly, we reduce our inventories for the

diminution of value resulting from product obsolescence, damage or other issues affecting marketability equal to the difference between the cost of the
inventory and its estimated net realizable value. Factors utilized in the determination of estimated net realizable value include (i) current sales data and
historical return rates, (ii) estimates of future demand, (iii) competitive pricing pressures, (iv) new production introductions, (v) product expiration dates,
and (vi) component and packaging obsolescence.

During the fiscal years ended June 30, 2022 and 2021, we recognized expenses of $1.5 million and $0.4 million, respectively, related to obsolete and

slow-moving inventory.

Revenue Recognition

Revenue is recognized when control of the promised goods or services are transferred to the customer, in an amount that reflects the consideration
we expect to be entitled to in exchange for those goods or services. Sales, value add, and other taxes that we collect concurrent with revenue-producing
activities are excluded from revenue.

Stock-Based Compensation

We use the fair value approach to account for stock-based compensation in accordance with current accounting guidance. We recognize
compensation costs for awards with performance conditions when we conclude it is probable that the performance conditions will be achieved. We
reassess the probability of vesting at each balance sheet date and adjust compensation costs based on our probability assessment. For awards with
market-based performance conditions, the cost of the awards is recognized as the requisite service is rendered by the employees, regardless of when, if
ever, the market-based performance conditions are satisfied.

Research and Development Costs

We expense all of our costs related to research and development activities as incurred.

Legal Accruals

We are occasionally involved in lawsuits and disputes arising in the normal course of business. Management regularly reviews all pending litigation

matters in which we are involved and establishes accruals as we deem appropriate for these litigation matters when a probable loss estimate can be
made. Estimated accruals require management judgment about future events. The results of lawsuits are inherently unpredictable and unfavorable
resolutions could occur. As such, the amount of loss may differ from management estimates.

Recently Issued Accounting Standards

Refer to “Item 8. Financial Statements and Supplementary Data” and Note 2 to our consolidated financial statements included in Part IV, Item 15 of

this report for discussion regarding the impact of accounting standards that were recently issued but not yet effective, on our consolidated financial
statements.

ITEM 7A — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We conduct business in several countries and intend to continue to grow our international operations. Net revenue, operating income, and net income

are affected by fluctuations in currency exchange rates and other uncertainties in doing business and selling products in more than one currency. In
addition, our operations are exposed to risks associated with changes in social, political and economic conditions inherent in international operations,
including changes in the laws and policies that govern international investment in countries where we have operations, as well as, to a lesser extent,
changes in U.S. laws and regulations relating to international trade and investment.

Foreign Currency Risk

During the fiscal year ended June 30, 2022, approximately 37% of our net revenue was realized outside of the United States. The local currency of
each international subsidiary is generally the functional currency. All revenue and expenses are translated at weighted average exchange rates for the
periods reported. Therefore, our reported revenue and earnings will be positively impacted by a weakening of the U.S. Dollar and will be negatively
impacted by a strengthening of the U.S. Dollar. Currency fluctuations, however, have the opposite effect on our expenses incurred outside the United
States. Given the large

portion of our business derived from Japan, any weakening of the Japanese Yen will negatively impact our reported revenue and profits, whereas a
strengthening of the Japanese Yen will positively impact our reported revenue and profits. Because of the uncertainty of exchange rate fluctuations, it is
difficult to predict the effect of these fluctuations on our future business, product pricing and results of operations or financial condition. Changes in
various currency exchange rates affect the relative prices at which we sell our products. We regularly monitor our foreign currency risks and periodically
take measures to reduce the risk of foreign exchange rate fluctuations on our operating results. Additionally, we may seek to reduce our exposure to
fluctuations in foreign currency exchange rates through the use of foreign currency exchange contracts. We do not use derivative financial instruments
for trading or speculative purposes. As of June 30, 2022, we did not have any derivative instruments. A 10% strengthening of the U.S. Dollar compared to
all of the foreign currencies in which we transact business would have resulted in a 3.3% decrease of our 2022 fiscal year revenue, in the amount of $6.8
million.

Following are the average currency exchange rates of U.S. $1 into local currency for each of our international or foreign markets:

Japan
Australia
Hong Kong
Mexico
Canada
Thailand
Europe
Taiwan
Singapore
Philippines
China

Inflation Risk

Year ended June 30, 2022

Year ended June 30, 2021

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

1st Quarter

2nd Quarter

110.10
1.36
7.78
20.02
1.26
32.98
0.85
27.87
1.35
50.20
6.47

113.64
1.37
7.79
20.76
1.26
33.43
0.87
27.84
1.36
50.49
6.40

116.22
1.38
7.81
20.52
1.27
33.09
0.89
28.00
1.35
51.60
6.35

129.68
1.40
7.85
20.03
1.28
34.43
0.94
29.44
1.38
52.73
6.61

106.14
1.40
7.75
22.08
1.33
31.38
0.86
29.36
1.37
48.94
6.92

104.45
1.37
7.75
20.55
1.3
30.64
0.84
28.49
1.35
48.32
6.63

3rd Quarter
106
1.29
7.76
20.36
1.27
30.33
0.83
28.09
1.33
48.33
6.49

4th Quarter

109.48
1.3
7.77
20.04
1.23
31.40
0.83
27.98
1.33
48.22
6.46

As of the date of filing of this Annual Report, we do not believe that inflation has had a material effect on our business, financial condition, or results of

operations. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through
increases in revenue as increases in core inflation rates may also affect consumers’ willingness to make discretionary purchases on our products. Our
inability or failure to do so could harm our business, financial condition, and results of operations.

ITEM 8 — FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this Item 8 is set forth in the consolidated financial statements included in Part IV, Item 15 of this report and is

incorporated into this Item 8 by reference.

ITEM 9 — CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A — CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) that are designed to ensure that

the information required to be disclosed in the reports we file or submit under the Exchange Act is (a) recorded, processed, summarized and reported
within the time periods specified in the rules and forms of the SEC and (b) accumulated and communicated to management, including our Chief
Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. As of June 30, 2022, we carried out
an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of
the effectiveness and design and operation of such disclosure controls and procedures, as defined in Rules 13a-15(e)

and 15d-15(e) under the Exchange. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures were designed and operating effectively as of June 30, 2022.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rules

13a-15(f) and 15d-15(f). Our system of internal control over financial reporting is designed to provide reasonable assurance to our management and
board of directors regarding the preparation and fair presentation of our consolidated and combined financial statements for external purposes in
accordance with GAAP.

Our management, under the supervision of our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control

over financial reporting as of June 30, 2022. In making this assessment, we used the framework included in Internal Control - Integrated Framework
published by the Committee of Sponsoring Organizations of the Treadway Commission 2013 (COSO). Based on that evaluation, our management has
concluded that internal control over financing reporting was effective as of June 30, 2022.

Auditor’s Attestation Report on Internal Control Over Financial Reporting

WSRP, LLC, our independent registered public accounting firm, has audited our consolidated financial statements included in this annual report on
Form 10-K and has issued an attestation report, included herein, on the effectiveness of our internal control over financial reporting as of June 30, 2022.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended June 30, 2022 that have materially affected or are

reasonably likely to materially affect our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, cannot provide absolute assurance that our disclosure controls
or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated,
can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact
that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in
all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control
issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty
and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by
collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions
about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future
conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate
because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

ITEM 9B — OTHER INFORMATION

None.

PART III

Certain information required by Part III of this report is omitted from this report pursuant to General Instruction G(3) of Form 10-K because we will file

a definitive proxy statement pursuant to Regulation 14A for our fiscal year 2023 annual meeting of stockholders (the “Proxy Statement”) not later than
120 days after the end of the fiscal year covered by this report, and the information included in the Proxy Statement that is required by Part III of this
report is incorporated herein by reference.

ITEM 10 — DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Incorporated herein by reference to the information to be set forth in the Proxy Statement.

ITEM 11 — EXECUTIVE COMPENSATION

Incorporated herein by reference to the information to be set forth in the Proxy Statement.

ITEM 12 — SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

Incorporated herein by reference to the information to be set forth in the Proxy Statement.

ITEM 13 — CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS, AND DIRECTORS INDEPENDENCE

Incorporated herein by reference to the information to be set forth in the Proxy Statement.

ITEM 14 — PRINCIPAL ACCOUNTING FEES AND SERVICES

Incorporated herein by reference to the information to be set forth in the Proxy Statement.

PART IV

ITEM 15 — EXHIBITS, FINANCIAL STATEMENT SCHEDULES

The following documents are being filed as part of this report:

Financial Statements

(a)(1) Financial Statements. The following consolidated financial statements of LifeVantage Corporation and Report of Independent Registered

Public Accounting Firm are included in a separate section of this Annual Report on Form 10-K.

(a)(2) All schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related instructions

or are inapplicable and therefore have been omitted.

Exhibits

(a)(3) The following exhibits are filed as part of, or incorporated by reference into, the Annual Report on Form 10-K.

Exhibit
No.

3.1

3.2

4.1

4.2

10.1#
10.3(a)#

10.3(b)#

10.3(c)#

10.3(d)#

10.4*

Document Description

Filed Herewith or Incorporated by Reference From

Certificate of Incorporation

Exhibit to 3.1 to Form 8-K filed on March 13, 2018.

Amended and Restated Bylaws

Exhibit 3.1 to the Current Report on Form 8-K filed on August 15,
2019

Form of Common Stock Certificate

Exhibit to 4.1 to Form 8-K filed on March 13, 2018.

Description of Capital Stock

Filed herewith.

LifeVantage Sales Compensation Plan
LifeVantage Corporation 2010 Long-Term Incentive Plan effective
as of September 27, 2010 and as amended as of August 21, 2014

Filed herewith.
Annex A to Proxy Statement on Schedule A filed on October 6,
2014.

Form of Nonstatutory Stock Option Agreement for the LifeVantage
Corporation 2010 Long-Term Incentive Plan

Exhibit 4.4 to Registration Statement on Form S-8 (File No. 333-
175104) filed on June 23, 2011.

Form of Incentive Stock Option Agreement for the LifeVantage
Corporation 2010 Long-Term Incentive Plan

Exhibit 4.5 to Registration Statement on Form S-8 (File No. 333-
175104) filed on June 23, 2011.

Form of Amended and Restated Stock Unit Agreement for the
LifeVantage Corporation 2010 Long-Term Incentive Plan

Exhibit 10.3 to Form 10-Q for the fiscal quarter ended March 31,
2016 filed on May 4, 2016.

Commercial Supply Agreement dated January 31, 2014 between
LifeVantage Corporation and Deseret Laboratories, Inc.

Exhibit 10.1 to Form 10-Q for the fiscal quarter ended March 31,
2014 filed on May 6, 2014.

Exhibit
No.

Document Description

Filed Herewith or Incorporated by Reference From

10.5*

10.6*

10.7

10.8

10.9

10.10#

10.11#

10.12#

10.13#

10.14#

10.15#

10.16

10.17

10.18

10.19#

10.20

14.1

21.1

Service Agreement entered into as of June 1, 2014 between
IntegraCore, LLC and LifeVantage

Exhibit 10.29 to Form 10-K for the fiscal year ended June 30,
2014 filed on September 10, 2014.

Commercial Supply Agreement entered into as of May 30, 2014
between LifeVantage Corporation and Wasatch Product
Development

Exhibit 10.30 to Form 10-K for the fiscal year ended June 30,
2014 filed on September 10, 2014.

Form of Director and Officer Indemnification Agreement

Exhibit to 99.1 to Form 8-K filed on March 13, 2018.

Loan Agreement, dated March 30, 2016, by and between Z.B.,
N.A., LifeVantage Corporation and Lifeline Nutraceuticals
Corporation

Security Agreement, dated March 30, 2016, by and between Z.B.,
N.A., LifeVantage Corporation and Lifeline Nutraceuticals
Corporation

Exhibit 10.1 to Form 8-K filed on April 4, 2016.

Exhibit 10.2 to Form 8-K filed on April 4, 2016.

CEO Offer Letter between the Company and Steven R. Fife dated
January 31, 2021

Exhibit 10.1# to Form 10-Q filed for the fiscal quarter ended
March 31, 2021 filed on April 29, 2021.

Amended and Restated Key Executive Benefit Package between
the Company and Steven R. Fife dated January 31, 2021

Exhibit 10.2# to Form 10-Q filed for the fiscal quarter ended
March 31, 2021 filed on April 29, 2021.

Forms of Key Executive Benefits Package

Amended and Restated LifeVantage Corporation 2017 Long-Term
Incentive Plan

Filed herewith.

Form of Restricted Stock Grant Agreement for the 2017 Long-Term
Incentive Plan

Exhibit 99.2 to the Registration Statement on Form S-8 filed on
March 27, 2017

Form of Stock Unit Agreement for the 2017 Long-Term Incentive
Plan

Exhibit 99.3 to the Registration Statement on Form S-8 filed on
March 27, 2017

Amended No.1 to Loan Agreement, dated May 4, 2018, by and
between Z.B., N.A., LifeVantage Corporation and Lifeline
Nutraceuticals Corporation

Exhibit 10.1 to Form 10-Q filed for the fiscal quarter ended March
31, 2018 filed on May 9, 2018.

Change in Terms Agreement dated April 1, 2021 by and between
Zions Bank and the Company

Exhibit 10.3 to Form 10-Q filed for the fiscal quarter ended March
31, 2021 filed on April 29, 2021.

Second Loan Modification Agreement dated February 1, 2019 by
and between Zions Bank and the Company

Exhibit 10.1 to the Form 8-K filed on February 4, 2019

LifeVantage Corporation 2019 Employee Stock Purchase Plan

Exhibit 10.2 to the Form 8-K filed on November 19, 2018

Lease Agreement between Traverse Ridge Center III and
LifeVantage Corporation dated November 14, 2019

Exhibit 10.1 to Form 10-Q on January 28, 2020

Code of Business Conduct and Ethics

List of Subsidiaries

Filed herewith.

Exhibit
No.

Document Description

Filed Herewith or Incorporated by Reference From

23.1

24.1

31.1

31.2

32.1

32.2

101

104

#
*

Consent of WSRP, LLC

Power of Attorney

Filed herewith.

Signature page to this report.

Certification of Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.

Filed herewith.

Certification of Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.

Filed herewith.

Certification of Chief Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.

Furnished herewith.

Certification of Chief Financial Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.

Furnished herewith.

The following financial information from the registrant’s Annual
Report on Form 10-K for the year ended June 30, 2022 formatted in
Inline XBRL (eXtensible Business Reporting Language):
(i) Consolidated Balance Sheets; (ii) Consolidated Statements of
Operations and Other Comprehensive Income; (iii) Consolidated
Statement of Stockholders’ Deficit; (iv) Consolidated Statements of
Cash Flows; and (v) Notes to Consolidated Financial Statements,
tagged as blocks of text.

Filed herewith.

Cover Page Interactive Data File (formatted as Inline XBRL and
contained in Exhibit 101)

Filed herewith.

Management contract or compensatory plan.
The Company has been granted confidential treatment for portions of this agreement. Accordingly, certain portions of this agreement
have been omitted in the version filed with this report and such confidential portions have been filed with the SEC.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant duly caused this report to be signed on its

behalf by the undersigned, thereunto duly authorized.

SIGNATURES

LIFEVANTAGE CORPORATION

/s/ Steven R. Fife
Steven R. Fife
President and Chief Executive Officer
August 23, 2022

/s/ Carl A. Aure
Carl A. Aure
Chief Financial Officer
August 23, 2022

By:

Date:

By:

Date:

Each person whose individual signature appears below hereby constitutes and appoints Steven R. Fife with full power of substitution and re-

substitution and full power to act without the other, as his or her true and lawful attorney-in-fact and agent to act in his or her name, place and stead and
to execute in the name and on behalf of each person, individually and in each capacity stated below, and to file any and all amendments to this report,
and to file the same, with all exhibits thereto, and other

documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full
power and authority to do and perform each and every act and thing, ratifying and confirming all that said attorneys-in-fact and agents or any of them or
their or his substitute or substitutes may lawfully do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the

registrant and in the capacities and on the dates indicated.

Signature

Date

Title

/s/ Steven R. Fife
Steven R. Fife

/s/ Garry Mauro
Garry Mauro

/s/ Michael A. Beindorff
Michael A. Beindorff

/s/ Erin Brockovich
Erin Brockovich

/s/ Raymond B. Greer
Raymond B. Greer

/s/ Cynthia Latham
Cynthia Latham

/s/ Darwin K. Lewis
Darwin K. Lewis

August 23, 2022

President and Chief Executive Officer
(Principal Executive Officer)

August 23, 2022

Chairman of the Board

Director

August 23, 2022

LIFEVANTAGE CORPORATION

Index to Consolidated Financial Statements

Reports of Independent Registered Public Accounting Firm (WSRP, LLC, Salt Lake City, UT, Auditor Firm ID: 374)
Consolidated Financial Statements:
Consolidated Balance Sheets
Consolidated Statements of Operations and Comprehensive Income
Consolidated Statements of Stockholders’ Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements

61
62
63
64
66

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
of LifeVantage Corporation
Lehi, Utah

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of LifeVantage Corporation and subsidiaries (the Company) as of June 30, 2022, and
2021, and the related consolidated statements of operations and comprehensive income, stockholders’ equity, and cash flows for each of the years in the
three-year period ended June 30, 2022, and the related notes (collectively referred to as the financial statements). In our opinion, the consolidated
financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2022, and 2021, and the results of its
operations and its cash flows for each of the years in the three-year period ended June 30, 2022, in conformity with accounting principles generally
accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s
internal control over financial reporting as of June 30, 2022, based on criteria established in Internal Control—Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated August 23, 2022, expressed an unqualified opinion.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the
Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities
and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and
performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our
opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were
communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the
consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit
matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical
audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Income Tax Provision

As discussed in Note 12 to the consolidated financial statements, The Company’s income tax expense includes U.S., state, local and international income
taxes. Deferred tax assets and liabilities are recognized for the consequences of temporary diﬀerences between the ﬁnancial reporting basis and the tax
basis of existing assets and liabilities. The tax rate used to determine the deferred tax assets and liabilities is based on the enacted tax rate for the year
and the manner in which the diﬀerences are expected to reverse. Valuation allowances are recorded to reduce deferred tax assets to the amount that will
more likely than not be realized.
We identiﬁed management’s calculation of income tax expense and deferred tax assets and liabilities (net of valuation allowance) as a critical audit
matter because of the signiﬁcant judgments and estimates management makes to determine these amounts as well as the complex nature of having
multiple foreign jurisdiction’s roll into the consolidated global tax provision. Performing audit procedures to evaluate the reasonableness of management’s
interpretation of tax law in various foreign

jurisdictions, and its estimate of the associated provisions and tax charges required a high degree of auditor judgment and increased effort.

The primary procedures we performed to address this critical audit matter include:

1. Obtained an understanding, evaluated the design and tested the operating effectiveness of internal controls over the income tax provision for

income taxes and deferred tax assets and liabilities (including valuation allowances).

2. Assessed the Company’s income tax expense and deferred tax liabilities by evaluating the income tax provision calculation, including testing the
appropriateness of the income tax rates applied and of income allocations among the various taxing jurisdictions, and reperforming the
mathematical accuracy of the calculations; evaluating the Company’s analyses supporting its conclusions as to the recognition and
measurement of deferred tax assets and liabilities, including the calculation of the deferred tax asset resulting from the carryover of net operating
losses; evaluating management’s assessment of the Company’s ability to utilize the deferred tax assets in future years; and evaluating the
Company’s disclosures related to the provision for income taxes and deferred tax assets and liabilities (including valuation allowances).

Cost Method Investment Impairment Analysis

Description of the Matter

As discussed in Note 6 to the consolidated financial statements, the Company has an equity investment without a readily determinable fair value. The
Company has elected the measurement alternative for this investment and valued the investment at cost, less any impairment, plus or minus changes
resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. The Company performs an
impairment indicator analysis each year. The impairment test is performed using a qualitative evaluation. During the fourth quarter of fiscal year ended
June 30, 2022, the Company determined its equity investment had significantly declined as a result of the business failing to achieve profitability due to a
weak market environment for its products. The Company determined the book value of its equity investment exceeded the fair value and concluded the
decline was other than temporary, resulting in the Company recording an impairment charge of $2.2 million.

The primary procedures we performed to address this critical audit matter include:

1. Obtained an understanding of the impairment analysis prepared by management and evaluated the conclusions reached around the impairment

of the equity investment.

2. Tested management assumptions and analysis.

3. Assessed management’s key indicators regarding impairment considerations compared to tests of underlying data.

Interviewed the audit committee chairman, and management of the Company related to the conclusions reached that the equity investments was
impaired.

/s/ WSRP, LLC

We have served as the Company's auditor since 2016.
Salt Lake City, Utah
August 23, 2022

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders
of LifeVantage Corporation
Lehi, Utah

Opinion on Internal Control over Financial Reporting

We have audited LifeVantage Corporation and subsidiaries’ (the Company’s) internal control over financial reporting as of June 30, 2022, based on
criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2022, based on
criteria established in Internal Control-Integrated Framework (2013) issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated
balance sheets and the related consolidated statements of operations and comprehensive income, stockholders’ equity, and cash flows of the Company,
and our report dated August 23, 2022, expressed an unqualified opinion.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness
of internal control over financial reporting, included in the accompanying Item 9A. Our responsibility is to express an opinion on the Company’s internal
control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal
control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also
included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for
our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal
control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures
of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material
effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.

/s/ WSRP, LLC

Salt Lake City, Utah
August 23, 2022

LIFEVANTAGE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

June 30,

2022

2021

(In thousands, except per share data)
ASSETS
Current assets

Cash and cash equivalents
Accounts receivable
Income tax receivable
Inventory, net
Prepaid expenses and other
Total current assets

Property and equipment, net
Right-of-use assets
Intangible assets, net
Deferred income tax asset
Equity securities
Other long-term assets

TOTAL ASSETS

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities

Accounts payable
Commissions payable
Income tax payable
Lease liabilities
Other accrued expenses

Total current liabilities

Long-term lease liabilities
Other long-term liabilities

Total liabilities

Commitments and contingencies — Note 14
Stockholders’ equity

Preferred stock — par value $ 0.0001 per share, 5,000 shares authorized, no shares issued or

outstanding

Common stock — par value $ 0.0001 per share, 40,000 shares authorized and 12,493 and

13,609 issued and outstanding as of June 30, 2022 and 2021, respectively

Additional paid-in capital
Accumulated deficit
Accumulated other comprehensive (loss) income

Total stockholders’ equity

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

20,190 $
3,338
1,752
16,472
5,205
46,957

9,500
11,040
587
1,289
—
1,333
70,706 $

7,462 $
7,285
453
2,601
7,927
25,728

13,154
308
39,190

—

1
131,075
(98,437)
(1,123)
31,516
70,706 $

23,174
2,925
1,038
16,145
4,772
48,054

11,123
13,700
719
1,208
2,205
1,723
78,732

6,744
8,138
830
2,151
7,336
25,199

16,032
694
41,925

—

1
129,048
(92,346)
104
36,807
78,732

The accompanying notes are an integral part of these consolidated financial statements.

LIFEVANTAGE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(In thousands, except per share data)
Revenue, net
Cost of sales

Gross profit
Operating expenses:

Commissions and incentives
Selling, general and administrative
Total operating expenses

Operating income
Other expense:

Interest expense
Other expense, net
Impairment of investment

Total other expense
Income before income taxes
Income tax expense

Net income
Net income per share:

Basic
Diluted

Weighted-average shares outstanding:

Basic
Diluted

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustment

Other comprehensive (loss) income, net of tax:
Comprehensive income

2022

For the years ended June 30,
2021

2020

$
$

206,360 $
38,097
168,263

220,181 $
38,187
181,994

97,263
63,425
160,688
7,575

103,541
60,838
164,379
17,615

(10)
(669)
(2,205)
(2,884)
4,691
(1,571)
3,120 $

0.24 $
0.24 $

12,886
13,069

(1,227)
(1,227)
1,893 $

(17)
(366)
—
(383)
17,232
(4,338)
12,894 $

0.92 $
0.90 $

14,070
14,268

(40)
(40)
12,854 $

232,915
37,964
194,951

111,571
67,914
179,485
15,466

(120)
(685)
—
(805)
14,661
(3,112)
11,549

0.82
0.79

14,105
14,599

82
82
11,631

The accompanying notes are an integral part of these consolidated financial statements.

LIFEVANTAGE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
For the years ended June 30, 2022, 2021 and 2020

Common Stock

Amount

Additional
Paid-In Capital

Accumulated
Deficit

Accumulated
Other
Comprehensive
Income (Loss)

Total

(In thousands)
Balances, June 30, 2019
Cumulative effect of adoption of accounting principle
Balances, July 1, 2019
Stock-based compensation
Exercise of options
Common stock issued under employee stock
purchase plan
Common stock issued under equity award plans
Shares canceled or surrendered as payment of tax
withholding and other
Repurchase of company stock
Currency translation adjustment
Net income
Balances, June 30, 2020
Stock-based compensation
Exercise of options
Common stock issued under employee stock
purchase plan
Common stock issued under equity award plans
Shares canceled or surrendered as payment of tax
withholding and other
Repurchase of company stock
Currency translation adjustment
Net income
Balances, June 30, 2021
Stock-based compensation
Exercise of options
Common stock issued under employee stock
purchase plan
Common stock issued under equity award plans
Shares canceled or surrendered as payment of tax
withholding and other
Repurchase of company stock
Cash dividends
Currency translation adjustment
Net income
Balances, June 30, 2022

14,114 $
—
14,114 $
—
25

64
910

(413)
(387)
—
—
14,313 $
—
289

59
230

(86)
(1,196)
—
—
13,609 $
—
30

68
169

(39)
(1,344)
—
—
—
12,493 $

1
—
1
—
—

—
—

—
—
—
—
1
—
—

—
—

—
—
—
—
1
—
—

—
—

—
—
—
—
—
1

127,096 $

—

127,096 $
4,837
76

653
—

(6,246)
—
—
—

126,416 $
2,152
1,379

517
—

(1,416)
—
—
—

129,048 $
1,768
133

372
—

(246)
—
—
—
—

131,075 $

(99,960) $
508
(99,452) $
—
—

—
—

—
(5,404)
—
11,549
(93,307) $
—
—

—
—

—
(11,933)
—
12,894
(92,346) $
—
—

—
—

—
(8,833)
(378)
—
3,120
(98,437) $

62 $
—
62 $
—
—

—
—

—
—
82
—
144 $
—
—

—
—

—
—
(40)
—
104 $
—
—

—
—

—
—
—
(1,227)
—
(1,123) $

27,199
508
27,707
4,837
76

653
—

(6,246)
(5,404)
82
11,549
33,254
2,152
1,379

517
—

(1,416)
(11,933)
(40)
12,894
36,807
1,768
133

372
—

(246)
(8,833)
(378)
(1,227)
3,120
31,516

The accompanying notes are an integral part of these consolidated financial statements.

LIFEVANTAGE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)
Cash Flows from Operating Activities:

Net income
Adjustments to reconcile net income to net cash provided by operating activities:

3,120 $

12,894 $

11,549

2022

For the years ended June 30,
2021

2020

Depreciation and amortization
Stock-based compensation
Amortization of right-of-use assets
Impairment of investment
Gain on sale of fixed assets
Amortization of deferred financing fees
Amortization of debt discount
Deferred income tax

Changes in operating assets and liabilities:

Accounts receivable
Income tax receivable
Inventory, net
Prepaid expenses and other
Other long-term assets
Accounts payable
Income tax payable
Other accrued expenses
Lease liabilities
Other long-term liabilities

Net Cash Provided by Operating Activities
Cash Flows from Investing Activities:

Purchase of equipment
Proceeds from sale of fixed assets
Net Cash Used in Investing Activities
Cash Flows from Financing Activities:
Repurchase of company stock
Payment of cash dividends
Payment on term loan
Shares purchased as payment of tax withholding and other
Proceeds from common stock issued under employee stock purchase plan
Exercise of options and warrants
Net Cash Used in Financing Activities
Foreign Currency Effect on Cash
(Decrease) Increase in Cash and Cash Equivalents
Cash and Cash Equivalents — beginning of period
Cash and Cash Equivalents — end of period

3,261
1,768
1,786
2,205
—
—
—
(81)

(614)
(713)
(1,186)
(551)
139
824
(377)
357
(1,644)
(335)
7,959

(1,530)
—
(1,530)

3,460
2,036
2,365
—
(7)
—
—
955

(265)
(1,036)
(2,069)
486
59
3,214
46
(3,659)
(1,913)
(293)
16,273

(3,741)
7
(3,734)

(8,833)
(378)
—
(246)
372
133
(8,952)
(461)
(2,984)
23,174
20,190 $

(11,933)
—
—
(1,416)
517
1,379
(11,453)
(50)
1,036
22,138
23,174 $

2,777
4,919
2,323
—
—
7
39
364

(539)
1,237
(152)
(29)
(483)
(1,648)
193
432
(2,698)
35
18,326

(2,681)
—
(2,681)

(5,405)
—
(1,500)
(6,246)
653
76
(12,422)
91
3,314
18,824
22,138

The accompanying notes are an integral part of these consolidated financial statements.

LIFEVANTAGE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(In thousands)
Non Cash Investing and Financing Activities:

Increase in property and equipment and lease liabilities from lease incentives
Conversion of convertible notes receivable to equity securities
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash paid for interest
Cash paid for income taxes

2022

For the years ended June 30,
2021

2020

$
$

— $
— $

10 $
2,601 $

3,543 $
— $

17 $
4,017 $

—
2,205

44
1,623

The accompanying notes are an integral part of these consolidated financial statements.

LIFEVANTAGE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — The Company

LifeVantage Corporation (the "Company" or "we" or "our" or "us") is a company focused on nutrigenomics, the study of how nutrition and naturally

occurring compounds affect human genes to support good health. The Company is dedicated to helping people achieve their health, wellness and
financial goals. The Company provides quality, scientifically-validated products to customers and independent distributors as well as a financially
rewarding commission-based direct sales opportunity to its independent distributors. LifeVantage sells its products in the United States, Mexico, Japan,
Australia, Hong Kong, Canada, Thailand, the United Kingdom, the Netherlands, Germany, Taiwan, Austria, Spain, Ireland, Belgium, New Zealand,
Singapore, and the Philippines. The Company also sells its products in a number of countries to customers for personal consumption only. In addition,
the Company sells its products in China through a China approved cross-border e-commerce business model.

The Company engages in the identification, research, development, formulation and sale of advanced nutrigenomic activators, dietary supplements,

nootropics, pre- and pro-biotics, weight management, skin and hair care, bath & body, and targeted relief products. The Company’s line of scientifically
®
validated dietary supplements includes its flagship Protandim family of products, LifeVantage Omega+, ProBio, IC Bright
supplements. TrueScience is the Company's line of skin, hair, bath & body, and targeted relief products. The Company also markets and sells
™
Petandim , its companion pet supplement formulated to combat oxidative stress in dogs, Axio its nootropic energy drink mixes, and PhysIQ , its smart
weight management system.

, and Daily Wellness dietary

The Company was incorporated in Colorado in June 1988 under the name Andraplex Corporation. The Company changed its corporate name to

Yaak River Resources, Inc. in January 1992, and subsequently changed it again in October 2004 to Lifeline Therapeutics, Inc. In October 2004 and
March 2005, the Company acquired all of the outstanding common stock of Lifeline Nutraceuticals Corporation. In November 2006, the Company
changed its name to LifeVantage Corporation.

In March 2018, following approval by the Company's stockholders at its fiscal year 2018 Annual Meeting of Stockholders, the Company changed its
state of incorporation from Colorado to Delaware pursuant to a plan of conversion. All outstanding shares of common stock, options and share units of the
Colorado corporation were converted into an equivalent share, option or share unit of the Delaware corporation and the par value of the Company's
common stock was adjusted to $0.0001. All directors and officers of the Colorado corporation held the same position within the Delaware corporation on
the date of reincorporation.

Note 2 — Summary of Significant Accounting Policies

Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts

and transactions are eliminated in consolidation. Certain other prior period balances have also been reclassified to conform to the current period
presentation.

Use of Estimates

The Company prepares the consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in
the United States of America (GAAP). In preparing these statements, the Company is required to use estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual results could differ materially from those estimates and assumptions. On an ongoing basis, the
Company reviews its estimates, including, but not limited to, those related to inventory valuation and obsolescence, sales returns, income taxes and tax
valuation reserves, transfer pricing methodology and positions, impairment of assets, share-based compensation, and loss contingencies.

Foreign Currency Translation

A portion of the Company’s business operations occurs outside the United States. The local currency of each of the Company’s subsidiaries
generally is its functional currency. All assets and liabilities are translated into U.S. Dollars at exchange rates existing at the balance sheet dates,
revenue and expenses are translated at weighted-average exchange rates and stockholders’ equity is recorded at historical exchange rates. The
resulting foreign currency translation adjustments are recorded as a separate component of stockholders’ equity in the consolidated balance sheets and
as a component of comprehensive

income. Transaction gains and losses are included in other expense, net in the consolidated statements of operations and comprehensive income.

Fair Value of Financial Instruments

The Company accounts for assets and liabilities using a hierarchy of valuation techniques based on whether the inputs to those valuation techniques

are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the
Company's market assumptions. These two types of inputs have created the fair-value hierarchy below. This hierarchy requires the Company to
minimize the use of unobservable inputs and to use observable market data, if available, when determining fair value.

•

Level 1—Quoted prices for identical instruments in active markets;

Level 2—Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active,
and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and

Level 3—Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Equity securities held by the Company are measured at fair value on a nonrecurring basis; that is, the assets are not measured at fair value on an

ongoing basis but are instead subject to fair value adjustments using fair value measurements with unobservable inputs (level 3), in certain
circumstances (e.g., when there is evidence of impairment).

Cash and Cash Equivalents

The Company considers only its monetary liquid assets with original maturities of three months or less to be cash and cash equivalents.

Accounts Receivable

The Company’s accounts receivable for the fiscal years ended June 30, 2022 and 2021 consist primarily of credit card receivables. Based on the
Company’s verification process for customer credit cards and historical information available, management has determined that an allowance for doubtful
accounts on credit card sales related to its customer sales as of June 30, 2022 or 2021 is not necessary. No bad debt expense was recorded for the
fiscal years ended June 30, 2022, 2021 and 2020.

Inventory

As of June 30, 2022 and 2021, inventory consisted of (in thousands):

Finished goods
Raw materials

Total inventory

2022

12,674
3,798
16,472

As of June 30,

76.9 % $
23.1 %
100.0 % $

2021

12,225
3,920
16,145

75.7 %
24.3 %
100.0 %

Inventories are carried at the lower of cost or net realizable value, using the first-in, first-out method , which includes a reduction in inventory values of

$1.3 million and $0.5 million at June 30, 2022 and 2021, respectively, related to obsolete and slow-moving inventory.

Property and Equipment

Property and equipment are recorded at cost and depreciated using the straight-line method over the following useful lives:

Equipment (includes computer hardware and software)
Furniture and fixtures
Vehicles

Leasehold improvements are depreciated over the shorter of estimated useful life of the related asset or the lease term.

Years
3 - 5
5
5

The cost of normal maintenance and repairs is charged to expense as incurred. When an asset is sold or otherwise disposed of, the cost and

associated accumulated depreciation are removed from the accounts and the resulting gain or loss is recognized in the consolidated statements of
operations and comprehensive income in other expense, net. Significant expenditures that increase the useful life of an asset are capitalized and
depreciated over the estimated useful life of the asset. Property and equipment are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of such assets may not be recoverable.

Intangible Assets

Intangible assets are stated at cost less accumulated amortization. Definite-lived intangible assets are amortized over their related useful lives, using

a straight-line method, consistent with the underlying expected future cash flows related to the specific intangible asset. Definite-lived intangible assets
are reviewed for impairment whenever events or changes in circumstances exist that indicate the carrying amount of an asset may not be recoverable.
When indicators of impairment exist, an estimate of undiscounted net cash flows is used in measuring whether the carrying amount of the asset or
related asset group is recoverable. Measurement of the amount of impairment, if any, is based upon the difference between the asset’s carrying value
and estimated fair value.

Indefinite-lived intangible assets are not amortized; however, they are tested at least annually for impairment or more frequently if events or changes

in circumstances exist that may indicate impairment. An impairment loss is recognized if the carrying amount of the asset exceeds its fair value. Annual
impairment tests on intangible assets were completed for the fiscal years ended June 30, 2022 and 2021, resulting in no impairment charges.

Impairment of Long-Lived Assets

Pursuant to guidance established for impairment or disposal of assets, the Company assesses impairment whenever events or changes in

circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. When an assessment for impairment of long-lived assets,
long-lived assets to be disposed of, and certain identifiable intangibles related to those assets is performed, the Company is required to compare the net
carrying value of long-lived assets on the lowest level at which cash flows can be determined on a consistent basis to the related estimates of future
undiscounted net cash flows for such assets. If the net carrying value exceeds the net cash flows, then an impairment is recognized to reduce the
carrying value to the estimated fair value, generally equal to the future discounted net cash flow. For the fiscal years ended June 30, 2022 and 2021,
management has concluded that there are no indications of impairment.

Concentration of Credit Risk

Accounting guidance for financial instruments requires disclosure of significant concentrations of credit risk regardless of the degree of such risk.
Financial instruments with significant credit risk include cash and cash equivalents. At June 30, 2022, the Company had $15.4 million in cash accounts at
one financial institution and $4.8 million in other financial institutions. As of June 30, 2022 and 2021, and during the years then ended, the Company’s
cash balances exceeded federally insured limits.

Commissions and Incentives

Commissions and incentives expenses are the Company’s most significant expenses and are classified as operating expenses. Commissions and
incentives expenses include sales commissions paid to the Company's independent distributors, special incentives, costs for incentive trips and other
rewards. Commissions and incentives expenses do not include any amounts the Company pays to its independent distributors for personal purchases.
Commissions paid to independent distributors on personal purchases are considered a sales discount and are reported as a reduction to net revenue.

Shipping and Handling

Shipping and handling costs associated with inbound freight and freight out to customers, including independent distributors, are included in cost of

sales. Shipping and handling fees charged to all customers are included in sales.

Research and Development Costs

The Company expenses all costs related to research and development activities as incurred. Research and development expenses for the fiscal

years ended June 30, 2022, 2021 and 2020 were $0.7 million, $0.7 million and $ 0.9 million, respectively.

Leases

The Company accounts for leases in accordance with Accounting Standards Codification ("ASC") 842. The Company reviews all contracts and
determines if the arrangement is or contains a lease, at inception. Operating leases are included in right-of-use (“ROU”) assets, current lease liabilities
and long-term lease liabilities on the condensed consolidated balance sheets. The Company does not have any finance leases.

Operating lease ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the

Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date
based on the estimated present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate based on the
information available at the commencement date in determining the present value of future payments. The operating lease ROU asset also includes any
upfront lease payments made and excludes lease incentives and initial direct costs incurred. The Company’s lease terms may include options to extend
or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is
recognized on a straight-line basis over the lease term. Leases with a term of 12 months or less are not recorded on the balance sheet. The Company’s
lease agreements do not contain any residual value guarantees.

Stock-Based Compensation

The Company recognizes stock-based compensation by measuring the cost of services to be rendered based on the grant date fair value of the
equity award. The Company recognizes stock-based compensation, net of any estimated forfeitures, over the period an employee is required to provide
service in exchange for the award, generally referred to as the requisite service period. The Company estimates forfeitures based on historical
information and other management assumptions. For awards with market-based performance conditions, the cost of the awards is recognized as the
requisite service is rendered by employees, regardless of when, if ever, the market-based performance conditions are satisfied.

The Black-Scholes option pricing model is used to estimate the fair value of stock options and options under the Company's 2019 Employee Stock

Purchase Plan. The determination of the fair value of options is affected by the Company's stock price and a number of assumptions, including expected
volatility, expected life, risk-free interest rate and expected dividends. The Company uses historical data for estimating the expected volatility and
expected life of stock options required in the Black-Scholes model. The risk-free interest rate assumption is based on observed interest rates appropriate
for the expected terms of the stock options.

The fair value of restricted stock grants, including performance restricted stock units that include non-market based performance conditions, is based

on the closing market price of the Company's stock on the date of grant less the Company's expected dividend yield. The fair value of cash-settled
performance-based awards, accounted for as liabilities, is remeasured at the end of each reporting period and is based on the closing market price of the
Company’s stock on the last day of the reporting period. The Company recognizes compensation costs for awards with performance conditions when it
concludes it is probable that the performance conditions will be achieved. The Company reassesses the probability of vesting at each balance sheet date
and adjusts compensation costs accordingly.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax

consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases
and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using statutory tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be recovered or settled, updated as needed for changes in corporate tax rates.
The effect on deferred tax assets and liabilities from a change in tax rates is recognized in income in the period that includes the effective date of the
change. The Company recognizes tax liabilities or benefits from an uncertain position only if it is more likely than not that the position will be sustained
upon examination by taxing authorities based on the technical merits of the issue. The amount recognized would be the largest liability or benefit that the
Company believes has greater than a 50% likelihood of being realized upon settlement.

Income Per Share

Basic income per common share is computed by dividing net income by the weighted-average number of common shares outstanding during the
period, less unvested restricted stock awards. Diluted income per common share is computed by dividing net income by the weighted-average common
shares and potentially dilutive common share equivalents using the treasury stock method.

For the fiscal years ended June 30, 2022, 2021 and 2020, the effects of approximately 0.2 million, 0.1 million and 0.1 million common shares,
respectively, issuable upon exercise of options and non-vested shares of restricted stock, are not included in the computations as their effect was anti-
dilutive.

The following is a reconciliation of net income per share and the weighted-average common shares outstanding for purposes of computing basic and

diluted net income per share (in thousands, except per share amounts):

Numerator:

Net income

Denominator:

Basic weighted-average common shares outstanding

Effect of dilutive securities:

Stock awards and options

Diluted weighted-average common shares outstanding

Net income per share, basic

Net income per share, diluted

Segment Information

2022

Years ended June 30,
2021

2020

3,120 $

12,894 $

12,886

183
13,069

0.24 $

14,070

198
14,268

0.92 $

0.90 $

11,549

14,105

494
14,599

0.82

0.79

The Company operates in a single operating segment by selling products directly to customers through an international network of independent

distributors that operates in an integrated manner from market to market. Commissions and incentives expenses are the Company’s largest expense
comprised of the commissions paid to its independent distributors. The Company manages its business primarily by managing its international network of
independent distributors. The Company disaggregates revenue in two geographic regions: the Americas region and the Asia/Pacific & Europe region.
See disaggregated revenue in Note 3.

The following table presents the Company's long-lived assets for its most significant geographic markets (in thousands):

United States
Japan

New Accounting Pronouncements

June 30,

2022

2021

$
$

19,790 $
1,869 $

22,696
3,363

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842),

which requires all lessees to recognize both a right-of-use asset and lease liability on its balance sheet, representing the obligation to make payments
and the right to use or control the use of a specified asset for the lease term. The Company adopted Topic 842 on July 1, 2019, using the modified
retrospective transition method. The Company elected the practical expedients available under the provisions of the new standard, including: not
reassessing whether expired or existing contracts are or contain leases; not reassessing the classification of expired or existing leases; not reassessing
the initial direct cost for any existing leases; and using hindsight in determining the lease term. Upon adoption, the Company recognized cumulative
operating lease liabilities of $3.9 million and operating right-of-use assets of $ 3.3 million. Additionally, a one-time beginning balance adjustment of
$0.5 million was recognized in the condensed consolidated statement of stockholders’ equity due to an update to the expected term of an operating
lease.

Note 3 — Revenue

Revenue is recognized when control of the promised goods or services are transferred to the customer, in an amount that reflects the consideration
the Company expects to be entitled to in exchange for those goods or services. Sales, value add, and other taxes the Company collects concurrent with
revenue-producing activities are excluded from revenue.

The Company generates the majority of its revenue through product sales to customers. These products include the Protandim line of dietary
supplements, LifeVantage Omega+, ProBio, and Daily Wellness dietary supplements, TrueScience skin, hair, bath & body and targeted relief, IC
Bright , Petandim , Axio nootropic energy drink mixes, and the PhysIQ smart weight management system. The Company ships most of its product
directly to the consumer and receives substantially all payment for product sales in the form of credit card receipts. Revenue from direct product sales to
customers is recognized upon shipment, which is when passage of title and risk of loss occurs. For items sold in packs and bundles, the Company
determines the standalone selling price at contract inception for each distinct good, and then allocates the transaction price on a

relative standalone selling price basis. Any discounts are accounted for as a direct reduction to the transaction price. Shipping and handling revenue is
recognized upon shipment when the performance obligation is completed.

The Company also charges amounts to independent distributors to attend events that it holds. Tickets to events are sold as standalone items or
included within packs. For event tickets sold in packs, the Company allocates a portion of the transaction price to the ticket on a relative standalone
selling price basis, adjusted for the probability of the tickets being redeemed for attendance at a future event. Any discounts are accounted for as a direct
reduction to the transaction price. Fee revenue associated with ticket sales is recorded in the month that the event is held, which is when the Company
has performed its obligations under the contract.

Deferred Revenue

The Company records deferred revenue when cash payments are received or due in advance of performance, including amounts which are
refundable. Deferred revenue is included in accrued expenses in the condensed consolidated balance sheets. The Company pre-sells tickets to its
events. When cash payments are received in advance of events, the cash received is recorded to deferred revenue until the event is held, at which time
the Company has performed its obligations under the contract and the revenue is recognized.

Sales Returns and Allowances

Estimated returns are recorded when product is shipped. Subject to some exceptions based on local regulations, the Company’s return policy is to

provide a full refund for product returned within 30 days. After 30 days of purchase, only unopened product that is in a resalable and restockable
condition may be returned within twelve months of purchase and shall receive a 100% refund, less a 10% handling and restocking fee and any shipping
and handling costs. The Company establishes a refund liability reserve, and an asset reserve for its right to recover products, based on historical
experience. The returns asset reserve and returns liability reserve are evaluated on a quarterly basis. As of June 30, 2022 and 2021, the Company’s
return liability reserve, net was $0.1 million and $0.2 million, respectively.

Geographic Information

The Company reports revenue in two geographic regions: the Americas region and the Asia/Pacific & Europe region. The following table presents

the Company's revenue disaggregated by these two geographic regions (in thousands):

Americas
Asia/Pacific & Europe
Total revenue

2022

Years ended June 30,
2021

138,323 $
68,037
206,360 $

154,655 $
65,526
220,181 $

2020

166,336
66,579
232,915

Additional information as to the Company’s revenue from operations in the most significant geographical areas is set forth below (in thousands):

United States
Japan

Major Products

$
$

2022

130,932 $
36,810 $

Years ended June 30,
2021

144,897 $
41,173 $

2020

155,480
42,343

The Company's revenue is largely attributed to two product lines, Protandim and TrueScience , which each accounted for more than 10% of total

revenue for each of the fiscal years ended June 30, 2022, 2021, and 2020. On a combined basis, the Protandim and TrueScience product lines
represent approximately 76.8%, 78.5% and 77.3% of the Company's total revenue for the fiscal years ended June 30, 2022, 2021 and 2020,
respectively. The following table shows revenue by major product line for the fiscal years ended June 30, 2022, 2021 and 2020:

®
Protandim product line
®
TrueScience product line
Other

Total

2022

135,616
22,877
47,867
206,360

Years ended June 30,
2021

2020

65.7 % $
11.1 %
23.2 %
100.0 % $

150,272
22,617
47,292
220,181

68.2 % $
10.3 %
21.5 %
100.0 % $

156,335
23,739
52,841
232,915

67.1 %
10.2 %
22.7 %
100.0 %

Note 4 — Property and Equipment, Net

Property and equipment, net consist of (in thousands):

Equipment (includes computer hardware and software)
Furniture and fixtures
Leasehold improvements
Vehicles
Accumulated depreciation

Total property and equipment, net

June 30,

2022

2021

17,781 $
1,320
6,034
51
(15,686)

9,500 $

16,850
1,211
6,037
51
(13,026)
11,123

Depreciation expense totaled $3.1 million, $3.3 million and $ 2.6 million for the fiscal years ended June 30, 2022, 2021 and 2020, respectively.

Note 5 — Intangible Assets, Net

Intangible assets, net consist of (in thousands):

Patent costs
Accumulated amortization

Total definite-lived intangible assets, net

Trademarks and other indefinite-lived intangible assets

Total intangible assets, net

June 30,

2022

2021

2,330 $
(1,988)
342

245
587 $

2,330
(1,856)
474

245
719

Amortization expense totaled $0.1 million, $0.1 million and $ 0.1 million for the fiscal years ended June 30, 2022, 2021 and 2020, respectively. As of

June 30, 2022, the remaining weighted-average amortization period for definite-lived intangible assets was 2.75 years. Annual estimated amortization
expense is expected to approximate $0.1 million for each of the three succeeding fiscal years.

Note 6 — Gig Economy Group Investment

Convertible Note Receivable

The Company entered into a convertible promissory note agreement with Gig Economy Group, Inc. ("GEG") pursuant to which the Company agreed

to loan to GEG up to an aggregate of $2.0 million in a series of loan installments, evidenced by a convertible promissory note having a maturity date of
May 31, 2019 ("Convertible Note"). The Convertible Note accrued interest at a rate of 8% per annum, compounded annually. On May 17, 2019, the
Company and GEG entered into an amendment agreement to extend the maturity date of the Convertible Note to December 31, 2019. In all other
aspects, the Convertible Note remained unchanged from the original agreement. Pursuant to a Common Stock Purchase Agreement between the
Company and GEG dated December 16, 2019, GEG issued to the Company 1,000,000 shares of GEG’s common stock, par value $ 0.0001 per share, in
consideration for conversion and cancellation of all principal, interest and other amounts due under the Convertible Note (representing $2.2 million in
aggregate consideration).

Equity Securities under ASC 321

At December 31, 2019, the Company held a minority interest (less than 20%) in GEG, accounted for under ASC 321, Investments - Equity Securities

("ASC 321"), which is included in equity securities in the condensed consolidated balance sheets. Dividends received are reported in earnings if and
when received. The Company reviews securities individually for impairment by evaluating if events or circumstances have occurred that may indicate the
fair value of the investment is less than its carrying value. If such events or circumstances have occurred, the Company estimates the fair value of the
investment and recognizes an impairment loss in other expense, net on the condensed consolidated statements of operations and comprehensive
income equal to the difference between the fair value of the investment and its carrying value. The estimated fair value of the investment is determined
using unobservable inputs including assumptions by GEG's management and quantitative information such as lower valuations in recently completed or
proposed financings. These inputs are classified as Level 3.

Equity securities held by the Company lack readily determinable fair values and therefore the securities are measured at cost minus impairment, if

any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar equity securities of the same
issuer. The carrying amount of equity securities held by the Company without readily determinable fair values was $2.2 million at June 30, 2021. During
the fiscal year ended June 30, 2021, there were no price changes or impairments recognized. During the fourth quarter of fiscal year ended June 30,
2022, the Company determined its investment in GEG had declined significantly as a result of the business failing to achieve profitability due to weak
market conditions for its products. The Company determined the book value of its investment exceeded its fair value and concluded this decline in value
was other than temporary. The Company recorded non-cash impairment charges of $2.2 million related to these equity securities.

Note 7 — Other Accrued Expenses

Other accrued expenses consist of (in thousands):

Accrued incentive compensation
Accrued severance
Other taxes payable
Accrued other expenses
Accrued payable to vendors
Deferred revenue
Accrued incentives and promotions to distributors

Total other accrued expenses

Note 8 — Long-Term Debt

June 30,

2022

2021

708 $
263
1,753
1,901
461
78
2,763
7,927 $

1,497
—
1,959
1,657
847
319
1,057
7,336

On March 30, 2016, the Company entered into a loan agreement (the "2016 Loan Agreement") to refinance its outstanding debt. In connection with
the 2016 Loan Agreement and on the same date, the Company entered into a security agreement (the "Security Agreement"). The 2016 Loan Agreement
provides for a term loan in an aggregate principal amount of $10.0 million (the "2016 Term Loan") and a revolving loan facility in an aggregate principal
amount not to exceed $2.0 million (the "2016 Revolving Loan," and collectively with the 2016 Term Loan, the 2016 Loan Agreement and the Security
Agreement, the "2016 Credit Facility").

The principal amount of the 2016 Term Loan is payable in consecutive quarterly installments in the amount of $ 0.5 million plus accrued interest
beginning with the fiscal quarter ended June 30, 2016. If the Company borrows under the 2016 Revolving Loan, interest will be payable quarterly in
arrears on the last day of each fiscal quarter.

On May 4, 2018, the Company entered into a loan modification agreement, which amended the 2016 Credit Facility (“Amendment No. 1”).

Amendment No. 1 revised the maturity date from March 30, 2019 to March 31, 2021 and increased the fixed interest rate for the term loan
from 4.93% to 5.68%. Amendment No. 1 also revised certain financial covenants. The minimum fixed charge coverage ratio (as defined in Amendment
No. 1) was revised from a minimum of 1.50 to 1.00 to 1.25 to 1.00, measured on a trailing twelve-month basis, at the end of each fiscal quarter. The
minimum working capital was increased from $5.0 million to $8.0 million. The funded debt to EBITDA ratio was replaced with the total liabilities to tangible
net worth ratio (as defined in Amendment No. 1) of not greater than 3.00 to 1.00 at the end of each quarter. The minimum tangible net worth measure
was removed from the financial covenants.

The Company’s obligations under the 2016 Credit Facility, as amended, are secured by a security interest in substantially all of the Company’s

assets. Loans outstanding under the 2016 Credit Facility, as amended, may be prepaid in whole or in part at any time without premium or penalty. In
addition, if, at any time, the aggregate principal amount outstanding under the 2016 Revolving Loan, as amended, exceeds $2.0 million, the Company
must prepay an amount equal to such excess. Any principal amount of the 2016 Term Loan, as amended, which is prepaid or repaid may not be re-
borrowed.

On February 1, 2019, the Company entered into a loan modification agreement, which amended the 2016 Credit Facility, as amended ("Amendment

No. 2"). Under Amendment No. 2, the Company made a principal payment of $2.0 million and increased the revolving loan facility from $ 2.0
million to $5.0 million. Amendment No. 2 also revised certain financial covenants. The minimum fixed charge coverage ratio (as defined in Amendment
No. 2) was revised from a minimum of 1.25 to 1.00 to 1.10 to 1.00, measured on a trailing twelve-month basis, at the end of each fiscal quarter. The
minimum working capital was decreased from $8.0 million to $ 6.0 million.

On April 1, 2021, the Company entered into a loan modification agreement ("Amendment No. 3"), which amended the 2016 Credit Facility, as
previously amended. Amendment No. 3 revised the maturity date from March 31, 2021 to March 31, 2024 and modified the variable interest rate based
on the one-month United States Treasury Rate, plus a margin of 3.00%, with an interest rate floor of 4.00%. As of June 30, 2021, the effective interest
rate is 4.00%. Amendment No. 3 also revised the debt (total liabilities) to tangible net worth ratio (as defined in Amendment No. 3) covenant to require
that the Company maintain this ratio not in excess of 2.00 to 1.00, measured as of the end of each fiscal quarter, and revised the definition and
calculation of the minimum fixed charge coverage ratio (as defined in Amendment No. 3). There were no other changes to the covenants or revolving
loan facility as set forth in Amendment No. 2.

The 2016 Credit Facility, as amended, contains customary covenants, including affirmative and negative covenants that, among other things, restrict

the Company's ability to create certain types of liens, incur additional indebtedness, declare or pay dividends on or redeem capital stock without prior
approval, make other payments to holders of equity interests in the Company, make certain investments, purchase or otherwise acquire all or
substantially all the assets or equity interests of other companies, sell assets or enter into consolidations, mergers or transfers of all or any substantial
part of the Company's assets. The 2016 Credit Facility, as amended, also contains various financial covenants that require the Company to maintain a
certain consolidated working capital amounts, total liabilities to tangible net worth ratios and fixed charge coverage ratios. Additionally, the 2016 Credit
Facility, as amended, contains cross-default provisions, whereby a default under the terms of certain indebtedness or an uncured default of a payment or
other material obligation of the Company under a material contract of the Company will cause a default on the remaining indebtedness under the 2016
Credit Facility, as amended. In May 2022, the Company received consent to pay out the quarterly cash dividend of $0.03 per common share to
stockholders.

As of June 30, 2022, the Company was in not in compliance with its financial covenant related to the minimum fixed charge coverage ratio under the

2016 Credit Facility, as amended. As of June 30, 2022, there was no balance outstanding on this credit facility. The Company requested, and was
granted, a waiver related to this covenant violation as of June 30, 2022. The Company is in the process of renegotiating the terms of the amended 2016
Credit Facility and expects that a revised loan agreement will be in place in the first quarter of fiscal 2023.

The Company’s book value for the 2016 Credit Facility, as amended, approximates the fair value. During the fiscal year ended June 30, 2020, the

Company repaid, in full, the remaining balance of the 2016 Term Loan in accordance with the terms of the 2016 Credit Facility, as amended.

Note 9 — Stockholders’ Equity

During the fiscal years ended June 30, 2022, 2021 and 2020, the Company issued 30,000, 0.3 million and 25,000 shares, respectively, of common
stock as a result of the exercise of options. During the fiscal years ended June 30, 2022, 2021 and 2020, the Company issued 0.2 million, 0.2 million and
0.9 million shares, respectively, under the Company's equity incentive plans. During the fiscal years ended June 30, 2022, 2021 and 2020, 39,000, 0.1
million and 0.4 million shares, respectively, of restricted stock were canceled or surrendered as payment of tax withholding upon vesting.
years ended June 30, 2022, 2021 and 2020 , the Company sold 0.1 million, 0.1 million and 0.1 million shares under its 2019 Employee Stock Purchase
Plan, respectively.

During the fiscal

On November 27, 2017, the Company's board of directors approved a stock repurchase plan, which was subsequently amended on February 1,

2019. Under the plan, the Company was authorized to repurchase up to $15.0 million of its outstanding shares through November 27, 2020. On
August 27, 2020, the Board of Directors approved an amendment to the share repurchase program to increase the authorized share repurchase amount
from $15 million to $35 million and to extend the duration of the program through November 30, 2023 and, on February 17, 2022, the Board of Directors
approved an amendment to the share repurchase program to increase the authorized share repurchase amount from $ 35 million to $60 million. The
repurchase program permits the Company to purchase shares from time to time through a variety of methods,

including in the open market, through privately negotiated transactions or other means as determined by the Company's management, in accordance
with applicable securities laws. As part of the repurchase program, the Company may enter into a pre-arranged stock repurchase plan which operates in
accordance with guidelines specified under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. Accordingly, any transactions under such
stock repurchase plan would be completed in accordance with the terms of the plan, including specified price, volume and timing conditions. The
authorization may be suspended or discontinued at any time. During year ended June 30, 2022, the Company purchased 1.3 million shares of its
common stock at an aggregate purchase price of $8.8 million under this repurchase program. During the fiscal year ending June 30, 2021, the Company
purchased 1.2 million shares of its common stock at an aggregate purchase price of $ 11.9 million under this repurchase program. At June 30, 2022,
there is $27.7 million remaining under this repurchase program.

The Company’s Certificate of Incorporation authorizes the designation and issuance shares of preferred stock. However, as of June 30, 2022, none

have been issued nor have any rights or preferences been assigned to the preferred stock by the Company’s board of directors.

Dividends

On May 3, 2022, the board of directors declared a quarterly cash dividend of $ 0.03 per share of common stock to stockholders of record as of May

17, 2022 and was paid on May 31, 2022. Quarterly cash dividend for the year ended June 30, 2022 totaled 0.4 million, or $0.03 per share. In August
2022, the board of directors declared a quarterly cash dividend of $0.03 per share of common stock to be paid on September 15, 2022, to stockholders of
record on September 2, 2022.

The declaration of dividends is subject to the discretion of our board of directors and will depend upon various factors, including our earnings, financial

condition, restrictions imposed by any indebtedness that may be outstanding, cash requirements, future prospects and other factors deemed relevant by
our board of directors.

Note 10 — Share-Based Compensation

Long-Term Incentive Plans

Equity-Settled Plans

The Company adopted, and the stockholders approved, the 2007 Long-Term Incentive Plan (the “2007 Plan”), effective November 21, 2006, to

provide incentives to certain eligible employees, directors and consultants. A maximum of 1.4 million shares of the Company’s common stock can be
issued under the 2007 Plan in connection with the grant of awards. Effective November 21, 2016, no new awards can be granted under the 2007 Plan.
As of June 30, 2022 there were no stock option awards outstanding under the 2007 Plan.

The Company adopted, and the stockholders approved, the 2010 Long-Term Incentive Plan (the “2010 Plan”), effective September 27, 2010, as
amended on August 21, 2014, to provide incentives to certain eligible employees, directors and consultants. A maximum of 1.0 million shares of the
Company’s common stock can be issued under the 2010 Plan in connection with the grant of awards. Awards to purchase common stock have been
granted pursuant to the 2010 Plan and are outstanding to various employees, officers and directors. Outstanding stock options awarded under the 2010
Plan have exercise prices between $9.31 and $19.74 per share, and vest over one to four year vesting periods. Awards expire in accordance with the
terms of each award. The contractual term of stock options granted is generally ten years. No new awards will be granted under the 2010 Plan and
forfeited or terminated shares may be added to the 2017 Plan pool as described below. As of June 30, 2022, under the 2010 Plan, there were stock
option awards outstanding, net of awards expired, for an aggregate of 20,000 shares of the Company’s common stock.

The Company adopted, and the stockholders approved, the 2017 Long-Term Incentive Plan (the “2017 Plan”), effective February 16, 2017, to

provide incentives to eligible employees, directors and consultants. On February 2, 2018, November 15, 2018, and November 12, 2020, the stockholders
approved amendments to the 2017 Plan to increase by 425,000 shares, 715,000 shares, and 650,000 shares respectively, the number of shares of the
Company's common stock that are available for issuance under the 2017 Plan. As of June 30, 2022, a maximum of 2.9 million shares of the Company's
common stock can be issued under the 2017 Plan in connection with the grant of awards which is calculated as the sum of (i) 2,440,000 shares and (ii)
up to 475,000 shares previously reserved for issuance under the 2010 Plan, including shares returned upon cancellation, termination or forfeiture of
awards that were previously granted under that plan. Outstanding stock options awarded under the 2017 Plan have exercise prices of $4.44 per share,
and vest over a three year vesting period. Awards expire in accordance with the terms of each award and, upon expiration of the award, the shares
subject to the award are added back to the 2017 Plan. The contractual term of stock options granted are substantially the same as described above for
the 2007 Plan and 2010 Plan. As of June 30, 2022, under the 2017 Plan, there were stock option awards outstanding, net of awards expired, for an
aggregate of 0.1 million shares of the Company’s common stock.

Cash-Settled Plans

Performance Units

The Company adopted a performance incentive plan effective July 1, 2017 (the "Fiscal Year 2018 Performance Plan"). The Fiscal Year 2018
Performance Plan is intended to provide selected employees an opportunity to earn performance-based cash bonuses whose value is based upon the
Company’s stock value and to encourage such employees to provide services to the Company and to attract new individuals with outstanding
qualifications. The Fiscal Year 2018 Performance Plan seeks to achieve this purpose by providing for awards in the form of performance share units (the
“Units”). No shares will be issued under the Fiscal Year 2018 Performance Plan. Awards may be settled only with cash and will be paid subsequent to
award vesting. The fair value of share-based compensation awards, that include performance shares, are accounted for as liabilities. Vesting for the Units
is subject to achievement of both service-based and performance-based vesting requirements. Performance-based vesting occurs in three installments if
the Company meets certain performance criteria generally set for each year of a three-year performance period. The service-based vesting criteria
occurs in a single installment at the end of the third fiscal year after the awards are granted if the participant has continuously remained in service from
the date of award through the end of the third fiscal year. The fair value of these awards is based on the trading price of the Company's common stock
and is remeasured at each reporting period date until settlement.

Phantom Units

During the fiscal year ended June 30, 2018, the Company awarded phantom units to its executive officers and senior management. The vesting date

for the phantom units was December 31, 2018, at which time the units would be settled in cash equal to (i) the number of vested units multiplied by (ii)
the positive difference (if any) between the value at December 31, 2018 and $4.76, the closing price of the Company's common stock on the start date.
The start date is December 29, 2017, the last business day of calendar year 2017. The fair value of these awards is based on the Black-Scholes
valuation model and is remeasured at each reporting period date until settlement.

Upon vesting of the phantom units, the awards were partially settled in cash and partially settled with the issuance of restricted stock units. The

restricted stock units were issued on January 8, 2019 and vest in a single installment after a one-year vesting period, subject to continued service
through the vesting date. On January 8, 2020, the restricted stock units were fully vested. As of June 30, 2022 and 2021, there were no restricted stock
units outstanding related to the phantom units.

Employee Stock Purchase Plan

General. The Company’s 2019 Employee Stock Purchase Plan ("ESPP") was adopted by its board of directors in September 2018 and its

stockholders approved it in November 2018. The ESPP is intended to qualify under Section 423 of the Internal Revenue Code.

Share Reserve. The Company has reserved 0.4 million shares of its common stock for issuance under the ESPP. As of June 30, 2022, 0.2 million

shares were available for issuance. The number of shares reserved under the ESPP will automatically be adjusted in the event of a stock split, stock
dividend or a reverse stock split (including an adjustment to the per-purchase period share limit).

Purchase Price. Employees may purchase each share of common stock under the ESPP at a price equal to 85% of the lower of the fair market
values of the stock as of the beginning or the end of the six-month offering periods. An employee’s contributions to the ESPP are limited to 15% of the
compensation, and up to a maximum of 3,000 shares may be purchased by an employee during any offering period. A participant shall not be granted an
option under the ESPP if such option would permit the participant’s rights to purchase stock to accrue at a rate exceeding $25,000 fair market value of
stock for each calendar year in which such option is outstanding at any time.

Offering Periods. Unless otherwise determined by the compensation committee, the ESPP will be operated through a series of successive six-

month offering periods, which will begin each year on March 1 and September 1.

During the fiscal years ended June 30, 2022, 2021, and 2020, 0.1 million, 0.1 million, and 0.1 million shares of common stock were purchased under

the ESPP, respectively.

Stock-Based Compensation

In accordance with accounting guidance for stock-based compensation, payments in equity instruments for goods or services are accounted for by

the fair value method. For the fiscal year ended June 30, 2022, stock-based compensation of $1.8 million was reflected as an increase to additional paid
in capital. For the fiscal years ended June 30, 2021 and 2020, stock-based compensation of $2.2 million and $ 4.8 million, respectively, was reflected as
an increase to additional paid in capital and a

reduction of $0.1 million and increase of $ 0.1 million, respectively, was reflected in other accrued expenses, all of which was employee related.

At June 30, 2022, there was $ 2.0 million of unrecognized compensation cost related to non-vested share-based compensation arrangements under
the 2010 and 2017 Plans, based on management's estimate of the shares that will ultimately vest. The Company expects to recognize such costs over a
weighted-average period of 1.83 years.

Stock Options

During the fiscal year ended June 30, 2018, the Company awarded stock options ("FY 2018 Stock Options") to its executive officers and senior
management. The vesting period for the FY 2018 Stock Options is three years and occurs as follows, subject to continued service through the applicable
vesting dates: one-third of the total number of shares awarded vests on January 1, 2019; and one-twelfth of the total number of shares awarded vests on
the last day of each fiscal quarter following January 1, 2019. The fair value of the stock options will be recognized on a straight-line basis over the
requisite service period of the awards.

There were no stock option grants during the fiscal years ended June 30, 2022, 2021 and 2020.

The following is a summary of stock option activity for the fiscal years ended June 30, 2022, 2021 and 2020:

Options (in thousands)

Weighted
Average
Exercise Price

Weighted
Average Remaining
Contractual Term (in years)

Aggregate Intrinsic
Value (in thousands)

Outstanding at June 30, 2019

Granted
Exercised
Forfeited
Expired or Canceled
Outstanding at June 30, 2020

Granted
Exercised
Forfeited
Expired or Canceled
Outstanding at June 30, 2021

Granted
Exercised
Forfeited
Expired or Canceled
Outstanding at June 30, 2022
Exercisable at June 30, 2022

527 $

— $
(25)
(1)
(5)
496

— $

(289)
(20)
(9)
178

— $
(30)
(2)
(54)
92
92 $

5.12

—
3.00
20.09
4.11
5.12

—
4.77
4.82
6.19
5.96

—
4.44
16.12
5.93
6.23
6.23

4.39 $
4.39 $

283

1,590

108

—
—

Restricted Stock Awards

The following is a summary of restricted stock award activity during the fiscal years ended June 30, 2022, 2021 and 2020:

Nonvested at June 30, 2019

Granted
Vested
Forfeited
Nonvested at June 30, 2020

Granted
Vested
Forfeited
Nonvested at June 30, 2021

Granted
Vested
Forfeited
Nonvested at June 30, 2022

Shares
(in thousands)

Weighted Average Grant
Date Fair Value

30
(80)
—
40

41
(40)
—
41

66
(41)
—
66

7.87

15.20
8.19
—
12.74

11.14
12.74
—
11.14

6.85
11.14
—
6.85

The total vesting date fair value of restricted shares that vested during the fiscal years ended June 30, 2022, 2021 and 2020 w as $0.3 million, $0.5

million and $1.0 million, respectively.

Restricted Stock Units

The following is a summary of restricted stock units activity during the fiscal years ended June 30, 2022, 2021 and 2020:

Number of Units (in thousands)

Weighted Average Grant
Date Fair Value

Nonvested at June 30, 2019

Granted
Vested
Forfeited
Nonvested at June 30, 2020

Granted
Vested
Forfeited
Nonvested at June 30, 2021

Granted
Vested
Forfeited
Nonvested at June 30, 2022

340 $

122 $
(221)
(2)
239

202 $
(135)
(121)
185

321 $
(92)
(80)
334

13.81

13.64
13.87
12.92
13.68

12.77
13.07
14.60
12.54

6.60
13.17
9.18
7.36

The total vesting date fair value of restricted stock units that vested during the fiscal years ended June 30, 2022, 2021, and 2020 was $ 0.6 million,

$1.6 million, and $3.3 million, respectively.

Performance Restricted Stock Units

During the fiscal year ended June 30, 2019, the Company awarded performance restricted stock units ("FY 2019 Performance Restricted Stock
Units") to certain employees (the "FY 2019 Recipients"). Each FY 2019 Performance Restricted Stock Unit represents a contingent right for the FY 2019
Recipients to receive a distribution of shares of common stock of the

Company equal to 0% to 200% of the target number of performance restricted stock units subject to the award. The actual number of shares distributed
will be based on the Company's achievement of specified financial performance metrics. The performance period for the FY 2019 Performance
Restricted Stock Units ended June 30, 2019. The FY 2019 Performance Restricted Stock Units will vest only to the extent the specified financial
performance criteria are achieved and subject to the FY 2019 Recipient’s continued service with the Company, as follows: (i) a portion of the earned
award will vest on the first anniversary of the grant date and (ii) an additional portion of the earned award will vest thereafter in a series of quarterly
installments. The fair values of the FY 2019 Performance Restricted Stock Units were based on the grant date fair value which is the closing price of the
Company's common stock on the date of grant. During the fiscal years ended June 30, 2021 and 2020, the Company awarded performance restricted
stock units ("FY 2021 Performance Restricted Stock Units" and "FY 2020 Performance Restricted Stock Units") to certain employees. The FY 2021
Performance Restricted Stock Units and FY 2020 Performance Restricted Stock Units include terms that are substantially the same as described above
for the FY 2019 Performance Restricted Stock Units.

The following is a summary of performance restricted stock units activity during the fiscal years ended June 30, 2022, 2021 and 2020:

Number of Units (in thousands)

Weighted Average Grant
Date Fair Value

Nonvested at June 30, 2019

Granted
Vested
Forfeited
Nonvested at June 30, 2020

(1)

Granted
(1)
Vested
Forfeited
Nonvested at June 30, 2021

Granted
(1)
Vested
Forfeited
Nonvested at June 30, 2022

450 $

357 $
(658)
(40)
109

49 $
(55)
(91)
12

176 $
(10)
(177)
1

7.71

6.96
5.88
15.02
13.61

14.50
13.08
14.39
13.85

7.23
13.63
7.26
15.2

(1)

Includes shares added based on achievement of performance goals in excess of target.

The total vesting date fair value of performance restricted stock units that vested during the fiscal years ended June 30, 2022, 2021, and 2020 was

$0.1 million, $0.6 million, and $10.1 million, respectively.

Cash-Settled Performance Units

The following is a summary of cash-settled performance units activity during the fiscal year ended June 30, 2020:

Outstanding at June 30, 2019, nonvested

Granted
Vested
Forfeited
Outstanding at June 30, 2020, nonvested

Number of Units (in thousands)
50

Weighted Average Grant Date
Fair Value

—
(42)
(8)
—

—
—
7.68

The fair value of vested awards under the cash-settled performance plan for the fiscal years ended June 30, 2020 was $ 0.4 million, respectively. All

vested awards under the cash-settle performance plan were cash-settled as of June 30, 2021. Payments of $0.4 million and $ 0.3 million were made to
settle vested cash-settled performance units during the fiscal years ended June 30, 2021 and 2020, respectively.

Note 11 — Other Expense, Net

Other expense, net consists of the following (in thousands):

Foreign currency transaction gain (loss), net
Loss on settlement of forward contract
Gain on disposal of fixed assets
Other income (expense), net
Total other expense, net

Note 12 — Income Taxes

2022

Year ended June 30,
2021

2020

(646) $
(64)
—
41
(669) $

201 $
(571)
7
(3)
(366) $

The income tax expense for the fiscal years ended June 30, 2022, 2021 and 2020 consists of the following (in thousands):

Income Before Income Taxes:

Domestic
International

Current Taxes:
Federal
State
Foreign

Total Current Income Tax Provision

Deferred Taxes:
Federal
State
Foreign

Total Deferred Income Tax Provision

Net Income Tax Provision

2022

Year ended June 30,
2021

2020

$
$

1,613 $
3,078
4,691 $

255 $
237
1,195
1,687 $

(391) $
(43)
318
(116) $
1,571 $

15,233 $
1,999
17,232 $

2,146 $
510
730
3,386 $

897 $
197
(142)
952 $
4,338 $

(434)
(368)
3
114
(685)

12,817
1,844
14,661

1,297
332
1,113
2,742

316
71
(17)
370
3,112

The effective income tax rate for the fiscal years ended June 30, 2022, 2021 and 2020 differs from the U.S. Federal statutory income tax rate due to

the following:

2022

Year ended June 30,
2021

2020

Federal statutory income tax rate
State income taxes, net of federal benefit
Foreign tax rate difference
Tax return to provision true-up
Limit on future stock compensation due to 162(m)
Foreign withholding tax
Other differences
Revalue of deferred for change in federal tax rate
Permanent differences:

— stock based compensation
— current year section 162(m) limitation
— foreign derived intangible income deduction
— tax credits
— meals and entertainment
— removal of permanent reinvestment assertion in Japan
— other permanent differences

Change in valuation allowance
Net income tax provision

21.0 %
0.1 %
12.9 %
(4.3)%
0.1 %
1.3 %
1.0 %
0.1 %

3.9 %
0.0 %
(6.5)%
(16.0)%
0.1 %
4.6 %
2.2 %
13.1 %
33.5 %

21.0 %
3.6 %
2.1 %
(0.7)%
1.7 %
0.4 %
1.5 %
0.1 %

(2.3)%
0.0 %
(0.6)%
(1.4)%
0.1 %
0.0 %
0.9 %
(1.2)%
25.2 %

The components of the deferred tax assets and liabilities as of June 30, 2022 and 2021 are as follows (in thousands):

Deferred tax assets:

Federal, state, and foreign net operating loss carryovers
Stock option compensation
Accrued vacation, allowance for returns, bonuses & other

Gross deferred tax asset

Deferred tax liabilities:

Patents and trademarks
Property & equipment
Other

Gross deferred tax liabilities

Less: valuation allowance
Deferred tax assets, net

June 30,

2022

2021

292 $
232
3,923
4,447 $

(78) $

(1,996)
(409)
(2,483)
(675)
1,289 $

21.0 %
3.8 %
1.4 %
0.0 %
2.3 %
3.3 %
1.9 %
(0.1)%

(13.6)%
1.6 %
(0.5)%
(2.3)%
0.4 %
0.0 %
1.8 %
0.2 %
21.2 %

271
444
2,104
2,819

(99)
(1,250)
(189)
(1,538)
(73)
1,208

During fiscal 2022, the Company impaired its investment in GEG Corporation for book purposes. The Company performed an analysis and

determined that for tax purposes the loss would be capital in nature, but that the tax event had not yet occurred. The Company recorded a deferred tax
asset for the loss in the current year, but recorded a full valuation allowance against the deferred tax asset because the Company believes that when the
tax event does occur, it will not be able to utilize the capital loss within the carryback or carryforward period. This valuation allowance is the main driving
factor behind the Company's increased tax rate in fiscal 2022.

During fiscal 2022, the Company removed its permanent reinvestment assertion in Japan. As a result, the Company recorded provisions for
withholding tax that it will pay to Japan and income taxes it will pay to various states when the cash is repatriated from Japan to Singapore. During the
year, the Company made a check the box election for LifeVantage Asia to be

taxed as a DRE of the parent company, so dividends from Japan to Singapore are treated as received by the United States for USA income tax purposes.
The Company also recorded an unborn foreign tax credit related to the 965(a) PTEP in Japan that will be given a partial FTC when the cash is
repatriated. Japan also has E&P in the 965(b) PTEP basket, but is not allowed to take a foreign tax credit against that income. It also has E&P in the
951A basket. The Company has historically had little or no excess FTC limitation in the 951A basket and has therefore chosen not to record the unborn
foreign tax credit related to that basket.

The Company has adopted accounting guidance for uncertain tax positions which provides that in order to recognize an uncertain tax benefit, the
taxpayer must be more likely than not of sustaining the position. The measurement of the benefit is calculated as the largest amount that is more than
50% likely to be realized upon recognition of the benefit. Currently, the Company has no material uncertain tax positions and does not expect significant
changes within the next twelve months. Accordingly, the Company has not reserved for any corresponding interest or penalties.

In fiscal 2020, LifeVantage recorded an uncertain tax position related to withholding taxes in Taiwan. During fiscal 2021, the Company determined

that this liability was owed, and moved it out of the UTP into taxes payable. In fiscal 2022, the Company made the payment. The Company applied for a
reduced withholding rate with the Taiwan government and was advised by its tax service providers who assisted with the application to hold payment until
after a decision was made on the application. Near the end of fiscal 2021, the Taiwan government approved the application, and accordingly,
LifeVantage made the required payments in the beginning of fiscal 2022.

The beginning balance, ending balance, and changes to the liability for uncertain tax positions for the fiscal years ending June 30, 2021 and 2020

are as follows (in thousands):

Unrecognized tax benefits, beginning of period

Gross increases - tax positions in prior period
Gross decreases - tax positions in prior period
Gross increases - tax positions in current period
Settlement
Lapse of statute of limitations
Currency adjustment

Unrecognized tax benefits, end of period

June 30,

2022

2021

— $
—
—
—
—
—
—
— $

480
—
(480)
—
—
—
—
—

The tax years open for examination by the Internal Revenue Service (“IRS”) include returns for fiscal years June 30, 2019 through present and the
open tax years by state tax authorities include returns for fiscal years June 30, 2018 through present. In addition, the IRS and state tax authorities may
examine net operating losses ("NOLs") for any previous years if utilized by the Company.

As of June 30, 2022, the Company had utilized all of its Federal NOL carry-forwards. The net operating losses were to expire by June 30, 2024 and

are subject to review by the Internal Revenue Service, and are subject to U.S. Internal Revenue Code Section 382 limitations. As of June 30, 2022, state
NOLs were $6.5 million and foreign NOLs were $ 0.3 million.

The total recognized tax benefit from settlement of stock based awards for the fiscal years ending June 30, 2022 and 2021, was $ 0.2 million and

$8,000, respectively.

The Company conducts its business globally. As a result, the Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and

various state and foreign jurisdictions, and are subject to examination for the open tax years of June 30, 2018 through June 30, 2022.

Note 13 — Leases

The Company has operating leases for current corporate offices and certain equipment. These leases have remaining terms of approximately one to
ten years. As of June 30, 2022, the weighted average remaining lease term and weighted average discount rate for operating leases was 8.51 years and
3.27%, respectively.

For the fiscal years ended June 30, 2022, 2021, and 2020, operating lease expense was $3.2 million, $3.6 million, and $2.7 million, respectively.

Supplemental cash flow information related to operating leases was as follows (in thousands):

June 30, 2022

June 30, 2021

Operating cash outflows from operating leases
Right-of-use assets obtained in exchange for lease obligations

$
$

2,709 $
— $

Maturity of lease liabilities at June 30, 2022 are as follows (in thousands):

Year ended June 30,
2023
2024
2025
2026
2027
Thereafter
Total
Less: imputed interest
Present value of lease liabilities

Note 14 — Commitments and Contingencies

Contingencies

Amount

2,536
15,725

3,070
1,985
1,606
1,646
1,687
8,123
18,117
(2,362)
15,755

The Company accounts for contingent liabilities in accordance with ASC 450, Contingencies. This guidance requires management to assess
potential contingent liabilities that may exist as of the date of the financial statements to determine the probability and amount of loss that may have
occurred, which inherently involves an exercise of judgment. If the assessment of a contingency indicates that it is probable that a material loss has been
incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the
assessment indicates that a potential material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then
the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. For loss
contingencies considered remote, no accrual or disclosures are generally made. Management has assessed potential contingent liabilities as of June 30,
2022, and based on the assessment there are no probable loss contingencies requiring accrual or disclosures within its financial statements.

Legal Accruals

In addition to commitments and obligations in the ordinary course of business, from time to time, the Company is subject to various claims, pending

and potential legal actions, investigations relating to governmental laws and regulations and other matters arising out of the normal conduct of its
business. Management assesses contingencies to determine the degree of probability and range of possible loss for potential accrual in the consolidated
financial statements. An estimated loss contingency is accrued in the consolidated financial statements if it is probable that a liability has been incurred
and the amount of the loss can be reasonably estimated. Because evaluating legal claims and litigation results are inherently unpredictable and
unfavorable results could occur, assessing contingencies is highly subjective and requires judgments about future events. When evaluating
contingencies, management may be unable to provide a meaningful estimate due to a number of factors, including the procedural status of the matter in
question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of information important to the matters. In
addition, damage amounts claimed or asserted against the Company may be unsupported, exaggerated or unrelated to possible outcomes, and as such
are not meaningful indicators of a potential liability. Management regularly reviews contingencies to determine the adequacy of financial statement
accruals and related disclosures. The amount of ultimate loss may differ from these estimates. It is possible that cash flows or results of operations could
be materially affected in any particular period by the unfavorable publicity or resolution of one or more of these contingencies. Whether any losses finally
determined in any claim, action, investigation or proceeding or publicity related to such could reasonably have a material effect on the Company's
business, financial condition, results of operations or cash flows will depend on a number of variables, including: the timing and amount of such losses;
the structure and type of any remedies; the significance of the impact of any such losses, damages or remedies may have on the consolidated financial
statements; and the unique facts and circumstances of the particular matter that may give rise to additional factors.

Class Action Lawsuit (Smith v. LifeVantage Corp.): On January 24, 2018, a purported class action was filed in the United States District Court for
the District of Connecticut, entitled Smith v. LifeVantage Corp., Case No. 3:18-cv-a35 (D. Connecticut filed Jan. 24, 2018). In this action, Plaintiffs alleged
that the Company, its Chief Executive Officer, Chief Sales Officer and Chief Marketing Officer operated a pyramid scheme in violation of a variety of
federal and state statutes, including RICO and the Connecticut Unfair Trade Practices Act. On April 16, 2018, the Company filed motions with the court to
dismiss the complaint against LifeVantage, dismiss the complaint against the Company's executives, transfer the venue of the case from the State of
Connecticut to the State of Utah, and contest class certification. On July 23, 2018, the parties filed a stipulation with the Court agreeing to transfer the
case to the Federal District Court for Utah. On September 20, 2018, Plaintiffs filed an amended complaint in Utah. As per the parties stipulated
agreement, Plaintiffs' amended complaint dropped the RICO and Connecticut state law claims and removed the Company's Chief Sales Officer and Chief
Marketing Officer as individual defendants (the former Chief Executive Officer remains a defendant in the case). The Plaintiffs' amended complaint added
an antitrust claim, alleging that the Company fraudulently obtained patents for its products and is attempting to use those patents in an anti-competitive
manner. The Company filed a Motion to Dismiss the amended complaint on November 5, 2018, Plaintiffs filed a response to the Company’s Motion to
Dismiss on December 17, 2018, and the Company filed a reply brief on January 10, 2019. The Court ruled on the motion on December 5, 2019,
dismissing three of the Plaintiff's four claims, including the antitrust claim, unjust enrichment claim, and the securities claim for the sale of unregistered
securities. On December 19, 2019, Plaintiffs filed a second amended complaint which included three causes of action, including a 10(b)(5) securities
fraud claim, and renewed claims relating to the sale of unregistered securities and unjust enrichment. LifeVantage filed a Motion to Dismiss the Second
Amended Complaint on January 28, 2020, and with the Motion fully briefed by the parties as of March 17, 2020, the Court decided the matter on the
parties’ briefs only on November 25, 2020. In its decision, the Court dismissed with prejudice the Plaintiffs’ Section 12(1) claim (sale of an unregistered
security), because the Court concluded the claim is time barred. The Court also dismissed the Plaintiffs’ claim for unjust enrichment against LifeVantage
without prejudice, and the Plaintiffs did not amend their complaint following the Court’s order to re-plead unjust enrichment. The court found that the
Plaintiffs had sufficiently pled their claim under Section 12(2) (offer to sell a security that misstates or omits a material fact by means of a prospectus or
oral communication). LifeVantage filed its Answer to the Second Amended Complaint on December 23, 2020, responding to the Plaintiffs’ remaining
securities claims. On February 2, 2021, the Court issued an amended scheduling order that reflects the parties’ agreement on a schedule for discovery
and other litigation matters. On June 15, 2021, the plaintiffs filed their motion for class certification, and on July 13, 2021, the defendants, including
LifeVantage Corporation, filed their opposition brief that opposed class certification. On July 27, 2021, the Plaintiffs filed their reply to the Company's
opposition brief. The court held a hearing for the motion for class certification on March 28, 2022. On April 19, 2022, the court issued an order denying
the Plaintiff’s motion for class certification. The case has been stayed by the Court as of June 24, 2022 and is currently stayed until September 23, 2022.
The Company has not established a loss contingency accrual for this lawsuit as it believes liability is not probable or estimable, and the Company plans
to vigorously defend against this lawsuit. Nonetheless, an unfavorable resolution of this matter could have a material adverse effect on the Company's
business, results of operations or financial condition.

Other Matters. In addition to the matters described above, the Company also may become involved in other litigation and regulatory matters
incidental to its business and the matters disclosed in this annual report on Form 10-K, including, but not limited to, product liability claims, regulatory
actions, employment matters and commercial disputes. The Company intends to defend itself in any such matters and does not currently believe that the
outcome of any such matters will have a material adverse effect on the Company's business, financial condition, results of operations and cash flows.

Note 15 — Related Party Transactions

The Company has entered into a series of agreements with GEG for outsourced software application development services. The Company and GEG

have also entered into a common stock purchase agreement. For discussion related to the common stock purchase agreement, see Note 6. Two
members of the Company's board of directors serve on the GEG board of directors. During the fiscal year ended June 30, 2020, the Company paid
$1.2 million to GEG for software application development services. No payments were made to GEG for software and application development services
during the fiscal years ended June 30, 2022 and 2021.

Note 16 — Interim Financial Results (Unaudited)

The following summarizes selected quarterly financial information for quarterly periods during the fiscal years ended June 30, 2022 and 2021:

LIFEVANTAGE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED QUARTERLY RESULTS

(in thousands except per share data)

Revenue, net
Gross profit
Net income (loss)
Per common share:

Income (loss) per share, basic
Income (loss) per share, diluted

Revenue, net
Gross profit
Net income
Per common share:

Income per share, basic
Income per share, diluted

$
$

First

Second

Third

Fourth

Fiscal Quarter

Year ended June
30, 2022

53,224 $
43,793

3,316 $

0.25 $
0.25 $

52,189 $
42,512

79 $

0.01 $
0.01 $

Fiscal Quarter

50,004 $
40,347

1,141 $

0.09 $
0.09 $

50,943 $
41,611
(1,416) $

(0.11) $
(0.11) $

206,360
168,263
3,120

0.24
0.24

First

Second

Third

Fourth

Year ended June
30, 2021

59,007 $
48,818

3,812 $

0.27 $
0.26 $

51,570 $
42,752

1,724 $

0.12 $
0.12 $

54,777 $
44,995

4,907 $

0.36 $
0.35 $

220,181
181,994
12,894

0.92
0.90

54,827 $
45,429

2,451 $

0.17 $
0.17 $