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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2022

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

For the transition period from to .

Commission File Number: 001-31573

Medifast, Inc.

(Exact name of registrant as specified in its charter)

Delaware	13-3714405
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

100 International Drive

Baltimore, Maryland 21202

Telephone Number: (410) 581-8042

(Address of Principal Executive Offices, Zip Code and Telephone Number, Including Area Code)

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

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.001 per share	MED	New York Stock Exchange

Indicate by checkmark 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 x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

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

Indicate by checkmark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

The number of shares of the registrant’s common stock outstanding at April 25, 2022 was 11,513,656.

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Medifast, Inc. and Subsidiaries

Index

Part 1 – Financial Information
Item 1 – Financial Statements
Condensed Consolidated Statements of Income (unaudited) for theThree Months Ended March 31, 2022and2021	2
Condensed Consolidated Statements of Comprehensive Income (unaudited) for the Three Months Ended March 31, 2022 and 2021	3
Condensed Consolidated Balance Sheets (unaudited) as of March 31, 2022 and December 31, 2021	4
Condensed Consolidated Statements of Cash Flows (unaudited) for the Three Months Ended March 31, 2022 and 2021	5
Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the Three Months Ended March 31, 2022 and 2021	6
Notes to Condensed Consolidated Financial Statements (unaudited)	7
Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3 – Quantitative and Qualitative Disclosures about Market Risk	18
Item 4 – Controls and Procedures	18
Part II – Other Information
Item 1 – Legal Proceedings	19
Item 1A – Risk Factors	19
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds	19
Item 6 – Exhibits	20

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MEDIFAST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(U.S. dollars in thousands, except per share amounts & dividend data)

	Three months ended March 31,
	2022		2021
Revenue	$	417,600	$	340,669
Cost of sales	115,314		92,122
Gross profit	302,286		248,547
Selling, general, and administrative	247,199		195,748
Income from operations	55,087		52,799
Other (expense) income
Interest (expense) income	(95)		23
Other (expense) income	(16)		19
	(111)		42
Income from operations before income taxes	54,976		52,841
Provision for income taxes	13,195		11,778
Net income	$	41,781	$	41,063
Earnings per share - basic	$	3.62	$	3.49
Earnings per share - diluted	$	3.59	$	3.46
Weighted average shares outstanding
Basic	11,557		11,772
Diluted	11,638		11,881
Cash dividends declared per share	$	1.64	$	1.42

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

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MEDIFAST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(U.S. dollars in thousands)

	Three months ended March 31,
	2022		2021
Net income	$	41,781	$	41,063
Other comprehensive income, net of tax:
Foreign currency translation	30		78
Unrealized losses on investment securities	(14)		(16)
	16		62
Comprehensive income	$	41,797	$	41,125

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

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MEDIFAST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(U.S. dollars in thousands, except par value)

		December 31,<br>2021
ASSETS
Current Assets
Cash and cash equivalents	118,003	$	104,183
Inventories		180,043
Investment securities		5,361
Income taxes, prepaid		945
Prepaid expenses and other current assets		16,334
Total current assets		306,866
Property, plant and equipment - net of accumulated depreciation		56,131
Right-of-use assets		24,457
Other assets		6,468
Deferred tax assets		4,404
TOTAL ASSETS	421,435	$	398,326
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses	174,369	$	163,309
Current lease obligations		6,523
Total current liabilities		169,832
Lease obligations, net of current lease obligations		26,020
Total liabilities		195,852
Stockholders' Equity
Common stock, par value 0.001 per share: 20,000 shares authorized;
11,553 and 11,594 issued and 11,552 and 11,593 outstanding
at March 31, 2022 and December 31, 2021, respectively		12
Additional paid-in capital		12,018
Accumulated other comprehensive income		111
Retained earnings		190,333
Total stockholders' equity		202,474
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	421,435	$	398,326

All values are in US Dollars.

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

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MEDIFAST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(U.S. dollar in thousands)

	Three months ended March 31,
	2022		2021
Operating Activities
Net income	$	41,781	$	41,063
Adjustments to reconcile net income to cash provided by operating activities
Depreciation and amortization	2,444		1,124
Non-cash lease expense	1,619		889
Share-based compensation	2,275		2,198
Amortization of premium on investment securities	11		28
Change in operating assets and liabilities:
Inventories	(8,929)		(8,842)
Income taxes, prepaid	945		—
Prepaid expenses and other current assets	3,107		(266)
Other assets	(6,632)		(70)
Accounts payable and accrued expenses	7,052		29,202
Net cash flow provided by operating activities	43,673		65,326
Investing Activities
Sale and maturities of investment securities	1,245		3,720
Purchase of property and equipment	(3,009)		(4,598)
Net cash flow used in investing activities	(1,764)		(878)
Financing Activities
Options exercised by executives and directors	—		481
Net shares repurchased for taxes	(1,459)		(1,807)
Cash dividends paid to stockholders	(16,660)		(13,392)
Stock repurchases	(10,000)		(7,500)
Net cash flow used in financing activities	(28,119)		(22,218)
Foreign currency impact	30		78
Increase in cash and cash equivalents	13,820		42,308
Cash and cash equivalents - beginning of the period	104,183		163,723
Cash and cash equivalents - end of period	$	118,003	$	206,031
Supplemental disclosure of cash flow information:
Income taxes paid	$	62	$	56
Dividends declared included in accounts payable	$	19,663	$	17,292

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

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MEDIFAST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

(U.S. dollars in thousands)

	Three months ended March 31, 2022
	Number of<br>Shares Issued	Common Stock		Additional Paid-In <br>Capital		Accumulated Other <br>Comprehensive Income		Retained <br>Earnings		Treasury Stock		Total
Balance, December 31, 2021	11,594	$	12	$	12,018	$	111	$	190,333	$	—	$	202,474
Net income	—	—		—		—		41,781		—		41,781
Share-based compensation	18	—		2,275		—		—		—		2,275
Net shares repurchased for taxes	(8)	—		(1,459)		—		—		—		(1,459)
Treasury stock from stock repurchases	—	—		—		—		—		(10,000)		(10,000)
Treasury stock retired from stock repurchases	(51)	—		—		—		(10,000)		10,000		—
Other comprehensive income	—	—		—		16		—		—		16
Cash dividends declared to stockholders	—	—		—		—		(19,063)		—		(19,063)
Balance, March 31, 2022	11,553	$	12	$	12,834	$	127	$	203,051	$	—	$	216,024	Three months ended March 31, 2021
---	---	---	---	---	---	---	---	---	---	---	---	---	---
	Number of <br>Shares Issued	Common Stock		Additional Paid-In <br>Capital		Accumulated Other<br>Comprehensive Income		Retained <br>Earnings		Treasury Stock		Total
Balance, December 31, 2020	11,822	$	12	$	7,842	$	41	$	154,351	$	(5,000)	$	157,246
Net income	—	—		—		—		41,063		—		41,063
Share-based compensation	13	—		2,198		—		—		—		2,198
Options exercised by executives and directors	11	—		481		—		—		—		481
Net shares repurchased for taxes	(7)	—		(1,807)		—		—		—		(1,807)
Treasury stock from stock repurchases	—	—		—		—		—		(7,500)		(7,500)
Other comprehensive income	—	—		—		62		—		—		62
Cash dividends declared to stockholders	—	—		—		—		(16,852)		—		(16,852)
Balance, March 31, 2021	11,839	$	12	$	8,714	$	103	$	178,562	$	(12,500)	$	174,891

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

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MEDIFAST, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation - The accompanying unaudited condensed consolidated financial statements of Medifast, Inc. and its wholly-owned subsidiaries (“Medifast,” the “Company,” “we,” “us,” or “our”) included herein have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim reporting and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain information and notes that are normally required by GAAP have been condensed or omitted. However, in the opinion of management, all adjustments consisting of normal, recurring adjustments considered necessary for a fair presentation of the financial position and results of operations have been included and management believes the disclosures that are made are adequate to make the information presented not misleading. The condensed consolidated balance sheet at December 31, 2021 has been derived from the audited consolidated financial statements at that date included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (“2021 Form 10-K”).

The results of operations for the three months ended March 31, 2022 are not necessarily indicative of results that may be expected for the fiscal year ending December 31, 2022. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the 2021 audited consolidated financial statements and notes thereto, which are included in the 2021 Form 10-K.

Presentation of Financial Statements - The unaudited condensed consolidated financial statements included herein include the accounts of the Company. All significant intercompany accounts and transactions have been eliminated.

Reclassification - Certain amounts reported for prior periods have been reclassified to be consistent with the current period presentation. No reclassification in the condensed consolidated financial statements had a material impact on the presentation.

Use of Estimates - The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting period. Actual results could differ materially from those estimates.

Accounting Pronouncements Adopted in 2022

In March 2020, the FASB issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for a limited time to ease the potential burden in accounting for reference rate reform. The new guidance provides optional expedients and exceptions for applying accounting principles under GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met and to other derivative instruments if there is a change to the interest rates used for discounting, margining or contract price alignment. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. We adopted Topic 848 beginning in the first quarter of fiscal 2022 without any material impact on the Company's financial position and results of operations.

2. INVENTORIES

Inventories consist principally of raw materials, non-food finished goods and packaged meal replacements held in the Company’s warehouses and outsourced distribution centers. Inventories are stated at the lower of cost or net realizable value, utilizing the first-in, first-out method. The cost of finished goods includes the cost of raw materials, packaging supplies, direct

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and indirect labor and other indirect manufacturing costs. On a quarterly basis, management reviews inventories for unsalable or obsolete inventories.

Inventories consisted of the following (in thousands):

	March 31, 2022		December 31, 2021
Raw materials	$	15,340	$	15,196
Packaging	3,640		3,641
Non-food finished goods	13,316		15,991
Finished goods	161,698		152,687
Reserve for obsolete inventory	(5,022)		(7,472)
Total	$	188,972	$	180,043

3. EARNINGS PER SHARE

Basic earnings per share (“EPS”) computations are calculated utilizing the weighted average number of shares of the Company’s common stock outstanding during the periods presented. Diluted EPS is calculated utilizing the weighted average number of shares of the Company’s common stock outstanding adjusted for the effect of dilutive common stock equivalents.

The following table sets forth the computation of basic and diluted EPS (in thousands, except per share data):

	Three months ended March 31,
	2022		2021
Numerator:
Net income	$	41,781	$	41,063
Denominator:
Weighted average shares of common stock outstanding	11,557		11,772
Effect of dilutive common stock equivalents	81		109
Weighted average shares of common stock outstanding	11,638		11,881
Earnings per share - basic	$	3.62	$	3.49
Earnings per share - diluted	$	3.59	$	3.46

The calculation of diluted EPS excluded 44 and 267 antidilutive restricted stock awards for the three months ended March 31, 2022 and 2021, respectively.

4. SHARE-BASED COMPENSATION

Stock Options

The Company has issued non-qualified and incentive stock options to employees and non-employee directors. The fair value of these options are estimated on the date of grant using the Black-Scholes option pricing model, which requires estimates of the expected term of the option, the risk-free interest rate, the expected volatility of the price of the Company’s common stock, and dividend yield. Options outstanding as of March 31, 2022 generally vest over a period of three years and expire ten years from the date of grant. The exercise price of these options ranges from $26.52 to $66.68. Due to the Company’s lack of option exercise history on the date of grant, the expected term is calculated using the simplified method defined as the midpoint between the vesting period and the contractual term of each option. The risk free interest rate is based on the U.S. Treasury yield curve in effect on the date of grant that most closely corresponds to the expected term of the option. The expected volatility is based on the historical volatility of the Company’s common stock over the period of time equivalent to the expected

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term for each award. The dividend yield is computed as the annualized dividend rate at the grant date divided by the strike price of the stock option. For the three months ended March 31, 2022 and 2021, the Company did not grant stock options.

The following table is a summary of our stock option activity (in thousands, except per share data):

	Three months ended March 31,
	2022			2021
	Awards	Weighted-Average Exercise Price		Awards	Weighted-Average Exercise Price
Outstanding at beginning of period	32	$	54.98	61	$	48.19
Exercised	—	—		(11)	42.62
Outstanding at end of the period	32	$	54.98	50	$	49.43
Exercisable at end of the period	28	$	52.76	41	$	44.93

As of March 31, 2022, the weighted-average remaining contractual life for outstanding stock options was 5.1 years with an aggregate intrinsic value of $3.8 million and the weighted-average remaining contractual life for exercisable stock options was 4.9 years with an aggregate intrinsic value of $3.3 million. The unrecognized compensation expense calculated under the fair value method for stock options expected to vest as of March 31, 2022 was $0.1 million and is expected to be recognized over a weighted-average period of 0.9 year. For the three months ended March 31, 2022, there was no exercise activity of stock options. For the three months ended March 31, 2021, the Company received $0.5 million in cash proceeds from the exercise of stock options. The total intrinsic value for stock options exercised during the three months ended March 31, 2021 was $2.3 million.

Restricted Stock

The Company has issued restricted stock to employees and non-employee directors generally with vesting terms up to five years after the date of grant. The fair value of the restricted stock is equal to the market price of the Company’s common stock on the date of grant. Expense for restricted stock is amortized ratably over the vesting period.

The following table summarizes our restricted stock activity (in thousands, except per share data):

	Three months ended March 31,
	2022			2021
	Shares	Weighted-Average Grant Date Fair Value		Shares	Weighted-Average Grant Date Fair Value
Outstanding at beginning of period	43	$	183.51	50	$	116.06
Granted	29	175.66		17	253.03
Vested	(18)	149.95		(14)	109.14
Outstanding at end of the period	54	$	190.20	53	$	157.80

The Company withheld approximately 8,000 and 7,000 shares of the Company’s common stock to cover minimum tax liability withholding obligations upon the vesting of shares of restricted stock for the three months ended March 31, 2022 and 2021, respectively. The total fair value of restricted stock awards vested during the three months ended March 31, 2022 and 2021 was $3.2 million and $3.9 million, respectively.

Market and Performance-based Share Awards

The Company has issued market and performance-based share awards to certain key executives who were granted deferred shares and may earn between 0% and 250% of the target number depending upon both the Company's total stockholder return and the Company's performance against predetermined performance goals over a three-year performance period after the date of grant. Market and performance-based share awards that are tied to the Company’s total stockholder return are valued using the Monte Carlo method and are recognized ratably as expense over the award’s performance period. The fair value of the performance-based share awards is equal to the market price of the Company’s common stock on the date of grant adjusted by

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expected level of achievement over the performance period. Expense for performance-based share awards is amortized ratably over the performance period.

Share-based compensation expense is recorded in selling, general, and administrative expense in the accompanying Condensed Consolidated Statements of Income. The total expenses during the three months ended March 31, 2022 and 2021 are as follows (in thousands):

	Three months ended March 31,
	2022			2021
	Shares	Share-Based Compensation Expense		Shares	Share-Based Compensation Expense
Options and restricted stock	86	$	1,087	103	$	938
Performance-based share awards granted in 2022	25	79		—	—
Performance-based share awards granted in 2021	15	640		14	54
Performance-based share awards granted in 2020	26	469		28	495
Performance-based share awards granted in 2019	—	—		17	711
Total share-based compensation	152	$	2,275	162	$	2,198

The total income tax benefit recognized in the accompanying Condensed Consolidated Statements of Income for restricted stock awards was $0.5 million and $1.2 million for the three months ended March 31, 2022 and 2021, respectively.

There was $8.8 million of total unrecognized compensation cost related to restricted stock awards as of March 31, 2022, which is expected to be recognized over a weighted-average period of 2.4 years. There was $11.0 million of unrecognized compensation costs related to the 66,000 performance-based shares discussed above as of March 31, 2022, which is expected to be recognized over a weighted-average period of 2.1 years.

5. LEASES

Operating Leases

The Company has operating leases for office and warehouse space and certain equipment. In certain of the Company’s lease agreements, the rental payments are adjusted periodically based on defined terms within the lease. The Company did not have any finance leases as of March 31, 2022 and 2021, respectively, or for the three-month periods then ended, respectively.

Our leases relating to office and warehouse space have lease terms of 18 months to 126 months. Our leases relating to equipment have lease terms of 24 months to 203 months, with certain of them having automatic renewal clauses.

The Company’s warehouse agreements also contain non-lease components, in the form of payments towards variable logistics services and labor charges, which the Company is obligated to pay based on the services consumed by it. Such amounts are not included in the measurement of the lease liability but are recognized as expenses when they are incurred.

The operating lease expense was $1.8 million and $1.0 million for the three months ended March 31, 2022 and 2021, respectively.

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Supplemental cash flow information related to the Company’s operating leases was as follows (in thousands):

	Three months ended March 31,
	2022		2021
Cash paid for amounts included in the measurements of lease liabilities
Operating cash flow used in operating leases	$	1,756	$	1,002
Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	103	$	11

As of March 31, 2022, the weighted average remaining lease term was 5.3 years and the weighted average discount rate was 2.1%.

The following table presents the maturity of the Company’s operating lease liabilities as of March 31, 2022 (in thousands):

2022 (excluding the three months ended March 31, 2022)	$	5,443
2023	6,242
2024	5,693
2025	5,825
2026	4,160
Thereafter	5,412
Total lease payments	$	32,775
Less: imputed interest	(1,733)
Total	$	31,042

6. ACCUMULATED OTHER COMPREHENSIVE INCOME

The following table sets forth the components of accumulated other comprehensive income, net of tax where applicable (in thousands):

	March 31,<br>2022		December 31,<br>2021
Foreign currency translation	$	120	$	90
Unrealized gains on investment securities	7		21
Accumulated other comprehensive income	$	127	$	111

7. FINANCIAL INSTRUMENTS

Certain financial assets and liabilities are accounted for at fair value, which is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy prioritizes the inputs used to measure fair value:

Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 – Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies.

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Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value from the perspective of a market participant.

The following tables present the Company’s cash and financial assets that are measured at fair value on a recurring basis for each of the hierarchy levels (in thousands):

	March 31, 2022
	Cost		Unrealized Gains		Accrued Interest		Estimated Fair<br>Value		Cash & Cash<br>Equivalents		Investment<br>Securities
Cash	$	107,342	$	—	$	—	$	107,342	$	107,342	$	—
Level 1:
Money market accounts	10,661		—		—		10,661		10,661		—
Government & agency securities	1,401		5		8		1,414		—		1,414
	12,062		5		8		12,075		10,661		1,414
Level 2:
Municipal bonds	2,625		2		16		2,643		—		2,643
Total	$	122,029	$	7	$	24	$	122,060	$	118,003	$	4,057	December 31, 2021
---	---	---	---	---	---	---	---	---	---	---	---	---
	Cost		Unrealized Gains		Accrued Interest		Estimated Fair<br>Value		Cash & Cash<br>Equivalents		Investment<br>Securities
Cash	$	94,824	$	—	$	—	$	94,824	$	94,824	$	—
Level 1:
Money market accounts	9,359		—		—		9,359		9,359		—
Government & agency securities	1,401		12		—		1,413		—		1,413
	10,760		12		—		10,772		9,359		1,413
Level 2:
Municipal bonds	3,880		9		59		3,948		—		3,948
Total	$	109,464	$	21	$	59	$	109,544	$	104,183	$	5,361

The Company had no realized losses or gains for the three months ended March 31, 2022 and 2021, respectively. As of March 31, 2022, the maturities of the Company’s investment securities were less than one year for all the municipal bonds, and government and agency securities.

8. DEBT

Credit Agreement

On April 13, 2021, the Company and certain of its subsidiaries (collectively, the “Guarantors”) entered into a credit agreement (the “Credit Agreement”) among the Company, the Guarantors, the lenders party thereto and Citibank, N.A., in its capacity as

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administrative agent. The Credit Agreement provides for a $125.0 million senior secured revolving credit facility with a $20.0 million letter of credit sub-limit. The Credit Agreement also provides for an uncommitted incremental facility that permits the Company, subject to certain conditions, to increase the senior secured revolving credit facility by up to $100.0 million. The Credit Agreement matures on April 13, 2026.

The Company’s obligations under the Credit Agreement are guaranteed by the Guarantors. The obligations of the Company and the Guarantors are secured by first-priority liens on substantially all of the assets of the Company and the Guarantors, subject to certain exceptions.

Under the Credit Agreement, the Company will pay to the administrative agent for the account of each revolving lender a commitment fee on a quarterly basis based on amounts committed but unused under the revolving facility from 0.20% to 0.40% per annum depending on the Company’s Total Net Leverage Ratio (as defined in the Credit Agreement). The Company is also obligated to pay the administrative agent customary fees for credit facilities of this size and type.

Revolving borrowings under the Credit Agreement bear interest at a rate per annum equal to (i) the Adjusted LIBOR Rate for the interest period plus the Applicable Rate (as defined in the Credit Agreement) based on the Company’s Total Net Leverage Ratio (with customary provisions under the Credit Agreement providing for the replacement of LIBOR with a successor rate) or (ii) the Alternate Base Rate (as defined in the Credit Agreement) as in effect from time to time plus the Applicable Rate based on the Company’s Total Net Leverage Ratio. As of March 31, 2022, the Applicable Rate for Eurodollar Loans is 1.25% per annum and the Applicable Rate for ABR Loans is 0.25% per annum.

The Credit Agreement contains affirmative and negative covenants customarily applicable to senior secured credit facilities, including covenants that, among other things, limit or restrict the ability of the Company and its subsidiaries, subject to negotiated exceptions, to incur additional indebtedness and additional liens on their assets, engage in mergers or acquisitions or dispose of assets, pay dividends or make other distributions, voluntarily prepay other indebtedness, enter into transactions with affiliated persons, make investments and change the nature of their businesses. The Credit Agreement also contains customary events of default, subject to thresholds and grace periods, including, among others, payment default, covenant default, cross default to other material indebtedness and judgment default. In addition, the Credit Agreement requires the Company to maintain a Total Net Leverage Ratio of no more than 3.00 to 1.00 and an Interest Coverage Ratio of at least 3.50 to 1.00.

The Company has no borrowings under the Credit Agreement as of March 31, 2022.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Note Regarding Forward-Looking Statements

Certain information in this report contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally can be identified by use of phrases or terminology such as "intend," “anticipate,” “expects” or other similar words or the negative of such terminology. Similarly, descriptions of Medifast's objectives, strategies, plans, goals or targets contained herein are also considered forward-looking statements. These statements are based on the current expectations of our management and are subject to certain events, risks, uncertainties and other factors. These risks and uncertainties include, but are not limited to, those described in our 2021 Form 10-K and those described from time to time in our future reports filed with the SEC. Although Medifast believes that the expectations, statements and assumptions reflected in these forward-looking statements are reasonable, it cautions readers to always consider all of the risk factors and any other cautionary statements carefully in evaluating each forward-looking statement in this report. All of the forward-looking statements contained herein speak only as of the date of this report.

The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and related notes appearing elsewhere herein.

Overview

Medifast is the global company behind one of the fastest-growing health and wellness communities, OPTAVIA®, which offers Lifelong Transformation, One Healthy Habit at a Time®. Reflecting the success of our holistic approach to health and wellness, we have consistently grown revenue over the past five years. Of equal importance, we expect our differentiated model to continue to deliver growth in the foreseeable future.

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Our OPTAVIA brand offers a highly competitive and effective lifestyle solution centered on developing new healthy habits through smaller, foundational changes called micro-habits. The program is built around four key components:

•Independent OPTAVIA Coaches: Provide individualized support and guidance to customers on the path to optimal health and wellbeing.

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

•The Habits of Health® Transformational System: A proprietary system which offers easy steps to a sustainably healthy lifestyle.

•Products & Plans: Clinically proven plans and scientifically developed products, called “Fuelings,” backed by dietitians, scientists and physicians.

We help customers achieve their health goals through a network of approximately 63,900 independent OPTAVIA Coaches, about 90% of whom were customers first, and have impacted more than 2 million lives to date. OPTAVIA Coaches introduce customers to a set of healthy habits, in most cases starting with the habit of healthy eating, and offer exclusive Fuelings, which are nutrient-dense, portion-controlled, nutritionally interchangeable and simple to use. They are formulated with high-quality ingredients and are fortified with probiotic cultures, vitamins and minerals, as well as other nutrients essential for good health. Our products support the process of integrating healthy habits into our customer’s day-to-day lives.

The OPTAVIA coaching model is customer-centric and boasts an energized health and wellness community. It promotes holistic health and wellness and positions healthy weight as a catalyst to greater lifestyle changes. OPTAVIA Coaches provide personalized support to customers and motivate them by sharing their passion for healthy living and lifestyle transformation. We believe this personal coaching is an essential factor in customer success based on findings from a clinical study published in Obesity Science and Practice in 2018, which validated the effectiveness of combining the OPTAVIA meal plan with education and support consistent with that was provided by OPTAVIA Coaches.

The entrepreneurial spirit of our OPTAVIA Coaches is another key to our success, as they create a continuous cycle of growth, activating new customers, many of whom go on to become OPTAVIA Coaches. We offer economic incentives designed to support each OPTAVIA Coach’s long-term success, which we believe plays an important role in their financial wellness, providing the opportunity to improve their finances while changing the health trajectory of families, communities and generations.1

OPTAVIA Coaches are independent contractors, not employees, who support customers and market our products and services primarily through word of mouth, email and social media channels such as Facebook, Instagram, Twitter and video conferencing platforms. As entrepreneurs, OPTAVIA Coaches market our products to friends, family and other acquaintances. OPTAVIA products are shipped directly to OPTAVIA customers who are working with an OPTAVIA Coach. OPTAVIA Coaches do not handle or deliver merchandise to customers. This arrangement frees our OPTAVIA Coaches from having to manage inventory and allows them to maintain an arms-length transactional relationship while focusing their attention on support and encouragement.

We are one of the fastest growing health and wellness companies in the United States ("U.S."), with a large and growing market opportunity. We believe our coach-based model is scalable and drives both customer success and growth. We expect our continued investment in fostering a robust community around our OPTAVIA brand and our OPTAVIA Coaching model will continue to drive a sustainable, repeatable business rhythm focused on our mission of offering the world Lifelong Transformation, One Healthy Habit at a Time.

Our operations are conducted through our wholly owned subsidiaries, Jason Pharmaceuticals, Inc., OPTAVIA, LLC, Jason Enterprises, Inc., Jason Properties, LLC, Medifast Franchise Systems, Inc., Seven Crondall Associates, LLC, Corporate Events, Inc., OPTAVIA (Hong Kong) Limited, OPTAVIA (Singapore) PTE. LTD and OPTAVIA Health Consultation (Shanghai) Co., Ltd.

As we previously disclosed, global expansion is an important component of our long-term growth strategy. In July 2019, we commenced our international operations, entering into the Asia Pacific markets of Hong Kong and Singapore. Our decision to enter these markets was based on industry market research that reflects a dynamic shift in how health care is being prioritized

1 OPTAVIA makes no guarantee of financial success. Success with OPTAVIA results from successful sales efforts, which require hard work, diligence, skill, persistence, competence, and leadership. Please see the OPTAVIA Income Disclosure Statement (http://bit.ly/idsOPTAVIA) for statistics on actual earnings of Coaches.

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and consumed in those countries. We outsource a distribution center in Hong Kong to provide adequate product distribution capacity for the foreseeable future in these markets.

COVID-19 Update

A novel strain of coronavirus (“COVID-19”) surfaced in late 2019 and has spread around the world, including to the U.S. In March 2020, the World Health Organization declared COVID-19 a worldwide pandemic.

In response to the pandemic, many governments implemented policies intended to stop or slow the further spread of the disease, such as social distancing guidelines, shelter-in-place orders and other measures. Nutritional supplements and health foods have been designated critical/essential infrastructure in the U.S. As a manufacturer and distributor of these products our manufacturing and distribution facilities remain fully operational to date and we have not experienced any meaningful disruption to our worldwide supply chain. The Company’s priorities during the COVID-19 pandemic continue to be protecting the health and safety of our employees and OPTAVIA Coaches, and their families, and we have undertaken numerous steps and instituted additional precautions to protect their safety and well-being, including:

•enhanced safety protocols, limiting visitation to our plant and distribution center and rolling out additional sick leave (crisis pay) for our onsite essential employees;

•through the majority of 2021, our non-essential employees continued to work from home. Effective October 2021, the Company implemented a hybrid work approach which enables our non-essential employees the flexibility to work partially from home and partially from the office;

•established additional health and safety precautions in our headquarters and manufacturing and distribution centers, including use of personal protective equipment and frequent hand sanitization;

•created process controls in relation to social distancing, visitors, travel and quarantine; and

•organized 16 vaccination clinics in partnership with the health department across all our operations.

Although vaccines are available in various countries where we operate, it is possible the COVID-19 pandemic could further impact our operations and the operations of our suppliers and vendors, particularly in light of the potential of variant strains of the virus to cause a resumption of high levels of infection and hospitalization. Should that occur, the extent to which the pandemic ultimately impacts the Company’s business, financial condition, results of operations, cash flows, and liquidity may differ from management’s current expectations. Factors that could cause actual results to differ from management’s expectations include inherent uncertainties regarding the duration and further spread of the outbreak, its severity, government actions taken to contain the virus or treat its impact, changes in consumer behavior resulting from the pandemic and how quickly and to what extent normal economic and operating conditions can resume. The senior management team meets regularly to review and assess the status of the Company’s operations and the health and safety of its various constituencies, and will continue to proactively respond to the situation and communicate with our supply chain partners to identify and mitigate risk and to manage inventory levels. The Company may take further actions that alter its business operations as may be required by governmental authorities, or that are determined to be in the best interests of employees, OPTAVIA Coaches and customers.

These uncertainties make it challenging for our management to estimate our future business performance. However, we intend to continue to actively monitor the impact of COVID-19 and related developments on our business and will update our practices accordingly, as we have done throughout the pandemic.

Critical Accounting Policies and Estimates

Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. Our significant accounting policies are described in Note 2 to the audited consolidated financial statements included in the 2021 Form 10-K. We consider all of our significant accounting policies and estimates to be critical. There were no significant changes in our critical accounting policies during the first quarter of 2022.

The preparation of our financial statements requires management to make 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. Management develops, and changes periodically, these estimates and assumptions based on historical experience and on various other factors that are believed to be reasonable under

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the circumstances. Actual results may differ from these estimates under different assumptions or conditions. There were no significant changes in our critical estimates during the first quarter of 2022.

Overview of Results of Operations

Our product sales accounted for approximately 98.0% of our revenues for each of the three months ended March 31, 2022 and 2021, respectively.

The following tables reflect our income statements (in thousands, except percentages):

	Three months ended March 31,
	2022			2021			Change	% Change
Revenue	$	417,600		$	340,669			22.6	%
Cost of sales	115,314			92,122			(23,192)	(25.2)%
Gross profit	302,286			248,547			53,739	21.6	%
Selling, general, and administrative	247,199			195,748			(51,451)	(26.3%)
Income from operations	55,087			52,799			2,288	4.3	%
Other (expense) income
Interest (expense) income	(95)			23			(118)	(513.0%)
Other (expense) income	(16)			19			(35)	(184.2%)
	(111)			42			(153)	(364.3%)
Income from operations before income taxes	54,976			52,841			2,135	4.0	%
Provision for income taxes	13,195			11,778			(1,417)	(12.0%)
Net income	$	41,781		$	41,063			1.7	%
% of revenue
Gross profit	72.4		%	73.0		%
Selling, general, and administrative costs	59.2		%	57.5		%
Income from operations	13.2		%	15.5		%

All values are in US Dollars.

Revenue: Revenue increased $76.9 million, or 22.6%, to $417.6 million for the three months ended March 31, 2022 from $340.7 million for the three months ended March 31, 2021. The average revenue per active earning OPTAVIA Coach was $6,536 for the three months ended March 31, 2022 compared to $6,454 for the three months ended March 31, 2021. Increase in the productivity per active earning OPTAVIA Coach for the quarter was driven by an increase in both the number of customers supported by each Coach as well as an increase in average customer spend. The year-over-year growth in revenue was primarily driven by the increase in the number of active earning OPTAVIA Coaches and in the productivity per active earning OPTAVIA Coach.

Cost of sales: Cost of sales increased $23.2 million, or 25.2%, to $115.3 million for the three months ended March 31, 2022 from $92.1 million for the three months ended March 31, 2021. The increase in cost of sales was primarily driven by an increase in OPTAVIA product sales and higher product costs and shipping costs resulting from inflation in raw ingredient costs, and freight and labor costs. In addition, acceleration of demand for OPTAVIA-branded products led to the increase in the Company’s use of co-manufacturers, which further increased cost of sales.

Gross profit: For the three months ended March 31, 2022, gross profit increased $53.8 million, or 21.6%, to $302.3 million from $248.5 million for the three months ended March 31, 2021. The increase in gross profit was primarily attributable to

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higher revenue partially offset by increased cost of sales. As a percentage of revenue, gross profit decreased 60 basis points to 72.4% for 2022 from 73.0% for 2021. The decrease in gross margin percentage for the quarter was primarily due to a customer acquisition program and higher product and shipping costs resulting from inflation in raw ingredient costs, and freight and labor costs.

Selling, general, and administrative: Selling, general, and administrative (“SG&A”) expenses were $247.2 million for the three months ended March 31, 2022, an increase of $51.5 million, or 26.3%, as compared to $195.7 million from the corresponding period in 2021. As a percentage of revenue, SG&A expenses were 59.2% for the three months ended March 31, 2022 as compared to 57.5% for the corresponding period in 2021. The increase in SG&A expenses for the three months ended March 31, 2022 was primarily due to higher OPTAVIA Coach compensation expense, increased salaries and benefits-related expenses for employees, incremental costs related to continued investment in information technology and distribution infrastructure, as well as the increased credit card fees resulting from higher sales. SG&A expenses included research and development costs of $0.9 million and $1.0 million for the three months ended March 31, 2022 and 2021, respectively, in connection with the development of new products and programs and clinical research activities.

OPTAVIA Coach compensation expense, which is a variable expense, increased $36.8 million, or 25.2%, to $183.0 million for the three months ended March 31, 2022 from $146.2 million for the corresponding period in 2021. The increase was primarily the result of increased OPTAVIA product sales. The total number of active earning OPTAVIA Coaches for the three months ended March 31, 2022 increased to 63,900 from 52,500 for the corresponding period in 2021, an increase of 21.7%.

Income from operations: For the three months ended March 31, 2022, income from operations increased $2.3 million to $55.1 million from $52.8 million for the corresponding period in 2021 primarily as a result of increased gross profit partially offset by increased SG&A expenses. Income from operations as a percentage of revenue decreased to 13.2% for the three months ended March 31, 2022 from 15.5% for the corresponding period in 2021 due to the factors described above impacting gross profit and SG&A expenses.

Provision for income taxes: For the three months ended March 31, 2022, the Company recorded $13.2 million in income tax expense, an effective tax rate of 24.0%, as compared to $11.8 million in income tax expense, an effective tax rate of 22.3%, for the three months ended March 31, 2021. The increase in the effective tax rate for the three months ended March 31, 2022 was primarily driven by a decrease in the tax benefit of stock compensation and other items as well as an increase in the state income tax rate.

Net income: Net income was $41.8 million, or $3.59 per diluted share, for the three months ended March 31, 2022 as compared to $41.1 million, or $3.46 per diluted share, for the three months ended March 31, 2021. The period-over-period changes were driven by the factors described above impacting gross profit and SG&A expenses.

Liquidity and Capital Resources

The Company had stockholders’ equity of $216.0 million and working capital of $143.2 million at March 31, 2022 as compared with $202.5 million and $137.0 million at December 31, 2021, respectively. The $13.5 million net increase in stockholders’ equity reflects $41.8 million in net income for the three months ended March 31, 2022 offset by $10.0 million spent on repurchases of the Company’s common stock and $19.1 million for declared dividends paid to holders of the Company’s common stock as well as the other equity transactions described in the “Condensed Consolidated Statements of Changes in Stockholders’ Equity” included in this report. The Company declared a quarterly dividend of $1.64 per share on March 17, 2022, to stockholders of record as of March 29, 2022 that will be paid in the second quarter of 2022. While we intend to continue the dividend program and believe we will have sufficient liquidity to do so, we can provide no assurance that we will be able to continue to declare and pay dividends. The Company’s cash, cash equivalents and investment securities increased from $109.5 million at December 31, 2021 to $122.1 million at March 31, 2022.

Net cash provided by operating activities decreased by $21.6 million to $43.7 million for the three months ended March 31, 2022 from $65.3 million for the three months ended March 31, 2021 primarily driven by a $22.2 million decrease in accounts payable and accrued expenses and a $6.6 million decrease in other assets partially offset by a $3.4 million increase in prepaid expenses and other current assets, a $1.3 million increase in depreciation and amortization, a $0.9 million increase in prepaid income taxes and a $0.7 million increase in net income. We continued to expand our cloud computing technology capabilities to support our planned growth during the three months ended March 31, 2022.

Net cash used in investing activities was $1.8 million for the three months ended March 31, 2022 as compared to $0.9 million for the three months ended March 31, 2021.

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Net cash used in financing activities increased by $5.9 million to $28.1 million for the three months ended March 31, 2022 from $22.2 million for the three months ended March 31, 2021. This increase was primarily due to a $2.5 million increase in stock repurchases and a $3.3 million increase in cash dividends paid to stockholders.

In pursuing its business strategy, the Company may require additional cash for operating and investing activities. The Company expects future cash requirements, if any, to be funded from operating cash flow and financing activities.

From time to time the Company evaluates potential acquisitions that complement our business. If consummated, any such transactions may use a portion of our working capital or require the issuance of equity or debt. We have no present understandings, commitments or agreements with respect to any material acquisitions.

On April 13, 2021, the Company entered into a credit agreement, which provides for a $125.0 million senior secured revolving credit facility with a $20.0 million letter of credit sublimit and also provides for an uncommitted incremental facility that permits the Company, subject to certain conditions, to increase the senior secured revolving credit facility by up to $100.0 million. The credit facility contains affirmative and negative covenants customarily applicable to credit facilities. As of March 31, 2022, the Company was in compliance with all of its debt covenants and there were no borrowings outstanding under the credit facility.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest rates and a decline in the stock market. The Company does not enter into derivatives, foreign exchange transactions or other financial instruments for trading or speculative purposes.

The Company is exposed to market risk related to changes in interest rates and market pricing impacting our investment portfolio. Its current investment policy is to maintain an investment portfolio consisting of municipal bonds and U.S. money market securities directly or through managed funds. Its cash is deposited in and invested through highly rated financial institutions in North America. Its marketable securities are subject to interest rate risk and market pricing risk and will fall in value if market interest rates increase or if market pricing decreases. If market interest rates were to increase and market pricing were to decrease immediately and uniformly by 10% from levels at March 31, 2022, the Company estimates that the fair value of its investment portfolio would decline by an immaterial amount and therefore it would not expect its operating results or cash flows to be affected to any significant degree by the effect of a change in market conditions on our investments.

There have been no material changes to our market risk exposure since December 31, 2021.

Item 4. Controls and Procedures

Management, including our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, as of March 31, 2022. Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported accurately and on a timely basis. Based on this evaluation performed in accordance with the criteria established in the 2013 Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, our management concluded that the Company’s disclosure controls and procedures are effective at the reasonable assurance level as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

There have been no material changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Act) during the fiscal quarter ended March 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II Other Information

Item 1. Legal Proceedings

The Company is, from time to time, subject to a variety of litigation and similar proceedings that arise out of the ordinary course of its business. Based upon the Company’s experience, current information and applicable law, it does not believe that these proceedings and claims will have a material adverse effect on its results of operations, financial position or liquidity. However, the results of legal actions cannot be predicted with certainty. Therefore, it is possible that the Company’s results of operations, financial condition or cash flows could be materially adversely affected in any particular period by the unfavorable resolution of one or more legal actions.

Item 1A. Risk Factors

There have been no material changes to the risk factors set forth in Part I, Item 1A of the 2021 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

2022	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased<br>as Part of a Publicly Announced<br>Plan or Program	Maximum Number of Shares that May<br><br>Yet Be Purchased Under the Plans or Programs (2)
January 1 - January 31	41,864	$	199.48	41,864	2,042,616
February 1 - February 28	14,647	186.10		8,600	2,034,016
March 1 - March 31	2,166	180.52		—	2,034,016

(1)Also included are shares of common stock surrendered by employees and directors to the Company to cover minimum tax liability withholding obligations upon the exercise of stock options or the vesting of shares of restricted stock previously granted to such employees and directors.

(2)At the outset of the quarter ended March 31, 2022, there were 2,084,480 shares of the Company's common stock eligible for repurchase under the stock repurchase authorization dated September 16, 2014 (the "Stock Repurchase Plan").

As of March 31, 2022, there were 2,034,016 shares of the Company’s common stock eligible for repurchase under the Stock Repurchase Plan. There can be no assurances as to the amount, timing or prices of repurchases, which may vary based on market conditions and other factors. The Stock Repurchase Plan does not have an expiration date and can be modified or terminated by the Board of Directors at any time.

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Item 6. Exhibits

Exhibit Number	Description of Exhibit
3.1	Restated and Amended Certificate of Incorporation of Medifast, Inc. (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K (File No. 001-31573) filed February 27, 2015).
3.2	Amended and Restated Bylaws of Medifast, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Amendment No. 1 Current Report on Form 8-K (File No. 001-31573) filed on December 4, 2019).
10.1	Medifast, Inc. Amended and Restated 2012 Share Incentive Plan Grant Notice Perfo rmance Share Units (filed herewith).ex-101medifastformpsuagree.htm
10.2	Medifast, Inc. Amended and Restated 2012 Share Incentive Plan Grant Notice Nonemployee Director Deferred Shares (filed herewith).
10.3	Medifast, Inc. Amended and Restated 2012 Share Incentive Plan Grant Notice Employee Deferred Share s (filed herewith).
10.4	Medifast, Inc. Amended and Restated 2012 Share Incentive Plan Grant Notice Nonemployee Director Deferred Share Cash Equivalent (filed herewith).
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following financial statements from Medifast, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022 filed May 2, 2022, formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Income, (ii) Condensed Consolidated Statements of Comprehensive Income, (iii) Condensed Consolidated Balance Sheets, (iv) Condensed Consolidated Statements of Cash Flows, (v) Condensed Consolidated Statements of Changes in Stockholders’ Equity, and (vi) Notes to the Condensed Consolidated Financial Statements (filed herewith).
104	Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

In accordance with SEC Release No. 33-8238, Exhibit 32.1 is being furnished and not filed.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Medifast, Inc.

By:	/s/ DANIEL R. CHARD
	Daniel R. Chard
	Chief Executive Officer
	(Principal Executive Officer)
Dated:	May 2, 2022
	/s/ JAMES P. MALONEY
	James P. Maloney
	Chief Financial Officer
	(Principal Financial Officer)
Dated:	May 2, 2022

Document

MEDIFAST, INC. AMENDED AND RESTATED 2012 SHARE INCENTIVE PLAN

GRANT NOTICE PERFORMANCE SHARE UNITS

Medifast, Inc. (the “Company”) hereby grants to the Participant named below performance-based Deferred Shares (“Performance Share Units” or “PSUs”) pursuant to the Medifast, Inc. Amended and Restated 2012 Share Incentive Plan (the “Plan”) in the number specified below (the “Target Award Opportunity”) covering the three-year Performance Period specified below and subject to the achievement of Performance Goals, which relate to the Performance Measures specified below. Each PSU relates to and corresponds in value to a single share of Company common stock (“Share”) and represents the right to receive one Share for each vested PSU.

The PSUs are subject to all of the terms and conditions as set forth in this Grant Notice, the Performance Share Units Award Agreement (the “Award Agreement”) and the Plan, all of which are attached hereto and incorporated herein in their entirety. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Plan or the Award Agreement.

Participant Name:
Grant Date:
Target Award Opportunity:
Performance Period:
Vesting Schedule (other than in connection with a Change in Control as provided in Section 8 of the Plan)

Additional Terms/Acknowledgements: The undersigned Participant acknowledges receipt of, and understands and agrees to the terms set forth in this Grant Notice, the Award Agreement and the Plan (by accepting this Grant Notice and attached Award Agreement electronically, you agree to the terms and conditions in the Grant Notice, Award Agreement and Plan).

Participant further acknowledges that as of the Grant Date, this Grant Notice, the Award Agreement, the Plan, and any employment or change in control agreement between you and the Company set forth the entire understanding between Participant and the Company regarding the acquisition of Shares in accordance with this Grant Notice, the Award Agreement and the Plan and supersede all prior oral and written Award Agreements on that subject.

MEDIFAST, INC. AMENDED AND RESTATED 2012 SHARE INCENTIVE PLAN

PERFORMANCE SHARE UNITS AWARD AGREEMENT

Pursuant to your Performance Share Units Grant Notice (“Grant Notice”) and this Award Agreement, Medifast, Inc. (the “Company”) has granted to you performance-based Deferred Shares (“Performance Share Units”, “PSUs” or “Award”) under the Plan covering the number of PSUs indicated in your Grant Notice, which vest in accordance with the Vesting Schedule indicated in your Grant Notice and this Award Agreement.

Capitalized terms not otherwise defined herein shall have the meanings set forth in the Plan or your Grant Notice.

The details of your Performance Share Units are as follows:

1.Eligibility for Payment or Distribution of Vested PSUs. You must be continuously employed by the Company or any of its subsidiaries from the Grant Date through and up to the last day of the Performance Period specified in your Grant Notice to be eligible for a payment or distribution of your PSUs that vest and become nonforfeitable in accordance with Section 2 of this Award Agreement. If you incur a Termination of Service for any reason other than Retirement prior the last day of the Performance Period, you will forfeit any nonvested PSUs that you then hold and you shall not be entitled to any distribution or payout with respect to such forfeited PSUs, except as otherwise provided in Section 3 of this Award Agreement.

2.Retirement. If your employment with the Company is terminated by virtue of a Retirement, the PSUs shall continue to vest and be settled as they would have absent an employment termination and shall be eligible to vest at the conclusion of the Performance Period on a pro-rata basis, as set forth in Section 2 below.

“Retirement” means your termination of employment from the Company and its subsidiaries other than for cause, provided that you (i) have attained age 55, (ii) the numerical sum of your age and years of service with the Company or its subsidiaries is equal to at least 70, (iii) you are performing your job duties to the Company’s satisfaction at the time of notice and until your termination of employment, and (iv) you have given notice to the Company, in form satisfactory to the Company, of your intent to retire specifying the exact intended date of retirement to the Company that is at least 12 months following such notice date (provided that prior to such notice the Company had not already given you notice that you would be terminated), and remained employed by the Company until the earlier of (a) the one year anniversary of the date of such notice or (b) the date on which you are terminated by the Company without Cause. The Chief Executive Officer of the Company (or the Compensation Committee of the Board of Directors of the Company, in the event that you are at the time of notice either of the Chief Executive Officer (“CEO”), or the CEO’s direct report at the Executive Vice President-level or above, or one of the Company’s “Named Executive Officers” in the Company’s most recent Proxy filing pursuant to Item 402 of Regulation S-K) may, in his or her discretion, waive the requirement that you remain employed until the one year anniversary of the date of such notice.

3.Determination of Number of Vested PSUs. Subject to the requirements of Section 1 of this Agreement, at the conclusion of the Performance Period the Committee shall determine whether and to what extent you have become vested in your Award in accordance with Appendix A to this Agreement. In the event of your Retirement prior to the conclusion of the Performance Period, you shall be eligible to vest in a number of PSUs equal to the number of PSUs that would have vested if you had remained employed until the end of the Performance Period times a fraction, the numerator of which is the number of full months during the Performance Period that you were employed prior to your Retirement and the denominator of which is the number of months during the Performance Period.

4.Effect of a Change in Control Prior to a Vesting Date. The treatment of any nonvested PSUs that you hold upon or after a Change in Control will be determined under Section 8 of the Plan.

5.Form and Timing of Settlement of PSUs. As provided for under Section 6(e)(ii) of the Plan, within two and one-half months after the close of the calendar year in which your shares vest, the Company will issue and deliver to you (at the Company’s sole discretion) the number of shares of Stock equal to the number of your PSUs that vested on such Vesting Date, subject to satisfaction of applicable tax and/or other obligations as described in Section 9 of this Award Agreement.

6.Dividend Equivalents. In the event that the Company declares and pays a dividend in respect of its outstanding Shares and, on the record date for such dividend, you hold PSUs granted pursuant to this Award Agreement that have not been settled, the Company shall credit to an account maintained by the Company for your benefit an amount equal to the cash dividends you would have received if you were the holder of record, as of such record date, of the number of Shares related to the portion of the PSUs that have not been settled or forfeited as of such record date (the “Dividend Equivalent” or “DER”). Such account is intended to constitute an “unfunded” account, and neither this Section 5 nor any action taken pursuant to or in accordance with this Section 5 shall be construed to create a trust of any kind. Amounts credited to such account with respect to PSUs that vest in accordance with Sections 2 or 3 of this Award Agreement will become vested DERs and will be paid to you in cash, Shares, or a combination thereof, as determined by the Committee in its sole discretion, at the same time as your vested PSUs are settled. You shall not be entitled to receive any interest with respect to the timing of payment of DERs. In the event all or any portion of the PSUs granted to you pursuant to this Award Agreement fail to become vested under Sections 2 or 3 of this Award Agreement, the unvested DERs accumulated in your account with respect to such PSUs shall be forfeited.

7.Delivery of Shares. The Company shall deliver Shares in settlement of your vested PSUs to you in accordance with this Section 6; provided, however, the Company shall not be obligated to deliver Shares to you if (i) you have not satisfied all applicable tax withholding obligations, (ii) Shares are not properly registered or subject to an applicable exemption therefrom, (iii) Shares are not listed on the stock exchanges on which Company Shares are otherwise listed, or (iv) the Company determines that the delivery of Shares would violate any federal or state securities or other applicable laws. At the discretion of the Company, Shares may be delivered to you by book-entry credit to an account in your name established by the Company with the Company’s transfer agent, or upon written request from you (or your personal representative, beneficiary or estate, as the case may be) in certificates in your name (or your personal representative, beneficiary or estate).You shall not acquire or have any rights as a shareholder of the Company until Shares issuable hereunder are actually issued and delivered to you in accordance with the Award Agreement.

8.Restrictive Covenants. Without limiting any other non-competition, non-solicitation, non-disparagement or non-disclosure or other similar agreement to which you may be a party, you shall be subject to the confidentiality and restrictive covenants set forth on Exhibit A attached hereto, which Exhibit A is incorporated herein and forms part of this Award Agreement. In the event that you violate any of the restrictive covenants referred to in this Section 8, in addition to any other remedy that may be available at law or in equity, the PSUs shall be automatically forfeited effective as of the date on which such violation first occurs and any payment or delivery with respect to the PSUs during the [6 months] prior to such violation shall be rescinded. The Company shall notify you in writing of any such rescission within two years after such payment or delivery. Within ten days after receiving such a notice from the Company, you shall return the Shares to the Company or pay to the Company any profit or gain your realized in connection with sale of such Shares. The foregoing rights and remedies are in addition to any other rights and remedies that may be available to the Company and shall not prevent (and you shall not assert that they shall prevent) the Company from bringing one or more actions in any applicable jurisdiction to recover damages as a result of your breach of such restrictive covenants.

9.Forfeiture and Recoupment. Notwithstanding any provision of this Award Agreement or the Plan to the contrary, you agree that your right to retain your Award, to retain any amount received pursuant to your Award and to retain any profit or gain your realized in connection with sale of such Shares, shall be subject to any recoupment or “clawback” policy or forfeiture policy adopted by the Company.

10.Restrictions on Resales of Shares. The Company may impose such restrictions, conditions, and limitations as it determines appropriate as to the timing and manner of any resales by you or other subsequent transfers by you of any Shares issued as a result of the settlement of your PSUs, including (i) restrictions under an insider trading policy, (ii) restrictions designed to delay and/or coordinate the timing and manner of sales by you and other PSU holders, and (iii) restrictions as to the use of a specified brokerage firm for such resales or other transfers.

11.Tax Withholding Obligations.

a.At the time your PSUs are settled, you hereby authorize withholding from payroll and any other amounts payable to you by the Company, and otherwise agree to make adequate provision for, any sums required to satisfy the federal, state, local and foreign tax withholding obligations

(“Withholding Obligations”) of the Company, if any, which arise in connection with the settlement of your PSUs.

b.Upon your request and subject to approval by the Company, in its sole discretion, and compliance with any applicable legal conditions or restrictions, the Company may withhold from fully vested Shares otherwise issuable to you upon the settlement of your PSUs a number of whole Shares having a Fair Market Value, determined by the Company as of the date of settlement, at least equal to the minimum statutory amount of tax required to be withheld by law but in no event in excess of the maximum statutory amount of tax that is permitted to be withheld by law.

12.Tax Consequences. You hereby agree that the Company does not have a duty to design or administer the Plan or its other compensation programs in a manner that minimizes your tax liabilities. You shall not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates related to tax liabilities arising from your PSUs or your other compensation.

13.Applicability of Section 409A of the Internal Revenue Code.

a.Your PSUs granted hereunder are not intended to provide for a “deferral of compensation” within the meaning of Section 409A of the U.S. Internal Revenue Code (“Section 409A”) and shall be interpreted and construed in a manner consistent with that intent. If any provision of this Award Agreement, your Grant Notice or the Plan causes your PSUs to be subject to the requirements of Section 409A, or could otherwise cause you to recognize income or be subject to the interest and penalties under Section 409A, then the provision shall have no effect or, to the extent practicable, the Committee may, in its sole discretion and without the Participant’s consent, modify the provision to (i) comply with, or avoid being subject to Section 409A, or to avoid the incurrence of any taxes, interest and penalties under Section 409A, and/or (ii) maintain, to the maximum extent practicable, the original intent and economic benefit to you of the applicable provision without materially increasing the cost to the Company or contravening the provisions of Section 409A. This Section 12 does not create an obligation of the Company to modify this Award Agreement, your Grant Notice or the Plan and does not guarantee that your PSUs will not be subject to taxes, interest and penalties under Section 409A.

b.If you are a “specified employee” as defined under Code Section 409A and your PSUs are to be settled on account of your separation from service (for reasons other than death) and such PSUs constitutes “deferred compensation” as defined under Code Section 409A, then any portion of your PSUs that would otherwise be settled during the six-month period commencing on your separation from service shall be settled as soon as practicable following the conclusion of the six-month period (or following your death if it occurs during such six-month period).

c.Your Termination of Service shall not be deemed to have occurred for purposes of any provision of the Award Agreement providing for the payment of any amounts or benefits that are considered nonqualified deferred compensation under Section 409A upon or following a Termination of Service, unless such termination is also a “separation from service” within the meaning of Section 409A and the payment thereof prior to a “separation from service” could otherwise cause you to recognize income or be subject to the interest and penalties under Section 409A.

14.Restrictions on Transferability. Your PSUs may not be sold, transferred, pledged, assigned, exchanged, encumbered, or otherwise alienated or hypothecated, except (i) by will or by the laws of descent and distribution; (ii) to the extent permitted by the Plan and allowed under applicable law and approved by the Committee in its sole discretion; or (iii) pursuant to a domestic relations order.

15.Beneficiary Designation. You may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under this Award Agreement is to be paid in case of your death before you receive any or all of such benefit. Each such designation shall revoke all prior designations by you, shall be in a form prescribed by the Company, and will be effective only when filed by you in writing with the Secretary of the Company during your lifetime. In the absence of any such designation, benefits remaining unpaid at the time of your death shall be paid to your estate.

securities law in exercising your rights under this Award Agreement. The Committee may impose such restrictions on any Shares acquired by you under the Award Agreement as it may deem necessary or advisable, under applicable federal securities laws, the requirements of any stock exchange or market upon which such Shares are then listed or traded or any blue sky or state securities laws applicable to such Shares. In addition, the Shares shall be subject to any trading restrictions, stock holding requirements or other policies in effect from time to time as determined by the Committee.

17.Data Privacy. To administer the Plan, the Company may process personal data about you. Such data includes the information provided in this Award Agreement, other appropriate personal and financial data about you such as home address and business addresses and other contact information, payroll information and any other information deemed appropriate by the Company to facilitate the administration of the Plan. By accepting this award, you consent to the Company’s processing of such personal data and the transfer of such data outside the country in which you work or are employed, including, with respect to non-U.S. residents, to the United States, to transferees who shall include the Company and other persons designated by the Company to administer the Plan.

18.No Right to Continued Employment or Further Awards.

a.Neither the Plan nor this Award Agreement shall (i) alter your status as an “at-will” employee of the Company; (ii) be construed as giving you any right to continue in the employ of the Company; or (iii) be construed as giving you any right to be reemployed by the Company following any Termination of Service. The Termination of Service provisions in this Award Agreement shall solely apply to the treatment of your PSUs as specified herein and shall not otherwise affect your employment relationship with the Company.

b.The Company has granted your PSUs in its sole discretion. Your Grant Notice, this Award Agreement and the Plan do not confer to you any right or entitlement to receive another grant of PSUs, or any other similar award at any time in the future or in respect of any future period. Your PSU grant does not confer on you any right or entitlement to receive compensation in any specific amount for any future fiscal year, and does not diminish in any way the Company’s discretion to determine the amount, if any, of your compensation.

19.Notices. Any notice required or permitted to be given under this Award Agreement, or Grant Notice or the Plan shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered United States mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

If to the Company:

Medifast, Inc. 100 International Drive

18th Floor

Baltimore, Maryland 21202 Attn.: General Counsel

If to the Employee:

To the last address delivered to the Company by the Employee in the manner set forth herein.

20.General Provisions.

a.Headings. The headings preceding the text of the sections in this Award Agreement are inserted solely for convenience of reference, and shall not constitute a part of this Award Agreement, nor shall they affect its meaning, construction, or effect.

b.Severability. If any provision of this Award Agreement is declared to be illegal, invalid, or otherwise unenforceable by a court of competent jurisdiction, such provision shall be reformed, if possible, to the extent necessary to render it legal, valid, and enforceable, or otherwise deleted, and the remainder of the provisions of this Award Agreement shall not be affected except to the extent necessary to reform or delete such illegal, invalid, or unenforceable provision.

c.Governing Documents. This Award Agreement is subject to all of the terms and conditions as set forth in your Grant Notice and the Plan, all of which are incorporated herein in their entirety.

Your Grant Notice, this Award Agreement, the Plan, and any employment or change in control agreement between you and the Company constitute the entire understanding between you and the Company regarding the PSUs. Any prior Award Agreements, commitments or negotiations concerning the PSUs are superseded. In the event of any conflict between the provisions of your Grant Notice and this Award Agreement and those of the Plan, the provisions of the Plan shall control.

d.Binding on Parties. The provisions of this Award Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective permitted heirs, beneficiaries, successors and assigns.

e.Applicable Law. Your Grant Notice and this Award Agreement shall be governed, construed, interpreted, and administered solely in accordance with the laws of the state of Delaware, without regard to principles of conflicts of law, with consent of jurisdiction by you in the State of Maryland.

f.Rescission of Award Agreement and PSU Grant. Your PSUs granted under this Award Agreement may be rescinded if necessary to ensure compliance with federal, state or other applicable laws.

g.Administration of PSUs. All questions arising under your Grant Notice, this Award Agreement and the Plan shall be decided by the Committee in its total and absolute discretion. It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of your Grant Notice, this Award Agreement and the Plan; all such determinations shall be binding upon you and your successors.

h.No Shareholder Rights. The PSUs granted to you under pursuant this Award Agreement do not and shall not entitle you to any rights of a holder of a Share of Company common stock prior to the date Shares are issued to you in settlement of the PSUs, if at all (or an appropriate book entry has been made). Except as described in the Plan, no adjustments are made for dividends or other rights if the applicable record date occurs prior to the date Shares are issued to you in settlement of the PSUs (or an appropriate book entry has been made).

i.Unfunded Arrangement. The PSUs create a contractual obligation on the part of the Company to distribute to you Shares in connection with the vesting of the PSUs at the time provided for in this Award Agreement. Neither you nor any other party claiming an interest under this Agreement shall have any interest whatsoever in any specific assets of the Company. Your right to receive Shares under this Agreement is that of an unsecured general creditor of Company.

j.Consent to Electronic Delivery. Certain statutory materials relating to the Plan may be delivered to you in electronic form. By accepting this grant, you consent to electronic delivery and acknowledge receipt of these materials, including the Plan.

This Award Agreement is not a stock certificate or a negotiable instrument.

Appendix A

Unless otherwise provided in the Award Agreement or Plan, set forth below are the Performance Goals applicable to your Award and the method for calculating the number of your PSUs that vest at the conclusion of the Performance Period ending on ________________, 20__.

Document

MEDIFAST, INC. AMENDED AND RESTATED 2012 SHARE INCENTIVE PLAN

GRANT NOTICE NONEMPLOYEE DIRECTOR DEFERRED SHARES

Medifast, Inc. (the “Company”) hereby grants to the Participant named below Deferred Shares ( “RSUs”) pursuant to the Medifast, Inc. Amended and Restated 2012 Share Incentive Plan (the “Plan”) in the number specified below, which shall vest in accordance with the Vesting Schedule. Each RSU relates and corresponds in value to a single share of Company common stock (“Share”) and represents the right to receive one Share for each vested RSU.

The RSUs are subject to all of the terms and conditions as set forth in this Grant Notice, the Deferred Share Award Agreement (the “Award Agreement”) and the Plan, all of which are attached hereto and incorporated herein in their entirety. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Plan or the Award Agreement.

Participant Name:	________________________________
Grant Date:	________________________________
Number of RSUs Granted:	________________________________
Vesting Schedule:	________________________________

Participant further acknowledges that as of the Grant Date, this Grant Notice, the Award Agreement, and the Plan, set forth the entire understanding between Participant and the Company regarding the acquisition of Shares in accordance with this Grant Notice, the Award Agreement and the Plan and supersede all prior oral and written Award Agreements on that subject.

MEDIFAST, INC. AMENDED AND RESTATED 2012 SHARE INCENTIVE PLAN

DEFERRED SHARE NONEMPLOYEE DIRECTOR AWARD AGREEMENT

Pursuant to your Deferred Share Grant Notice (“Grant Notice”) and this Award Agreement, Medifast, Inc. (the “Company”) has granted to you Deferred Shares (“RSUs” or “Award”) under the Plan covering the number of RSUs indicated in your Grant Notice, which vest in accordance with the Vesting Schedule indicated in your Grant Notice and this Award Agreement.

Capitalized terms not otherwise defined herein shall have the meanings set forth in the Plan or your Grant Notice.

The details of your RSUs are as follows:

1.Determination of Number of Vested RSUs. Your RSUs are subject to the Vesting Schedule set forth in your Grant Notice. On each vesting date (“Vesting Date”) set forth in the Vesting Schedule, you will vest in the specified percentage of your RSUs, and your vested RSUs shall be settled in accordance with the terms of this Award Agreement; provided that you satisfy the requirements of Section 2 of this Agreement or vest in your RSUs in accordance with Section 3 of this Award Agreement.

2.Eligibility for Payment or Distribution. You must be continuously participating on the Board of Directors of the Company or any of its subsidiaries from the Grant Date through and up to a Vesting Date specified in your Grant Notice to be eligible for a payment or distribution of your RSUs that vest and become nonforfeitable on such Vesting Date. If you incur a Termination of Service prior to a Vesting Date, you will forfeit any non-vested RSUs that you then hold on the date of such Termination of Service and you shall not be entitled to any distribution or payout with respect to such forfeited RSUs, except as otherwise expressly provided in Section 5 of this Award Agreement.

3.Effect of a Change in Control Prior to a Vesting Date. The treatment of any nonvested RSUs that you hold upon or after a Change in Control will be determined under Section 8 of the Plan.

5.Dividend Equivalents. In the event that the Company declares and pays a dividend in respect of its outstanding Shares and, on the record date for such dividend, you hold RSUs granted pursuant to this Award Agreement that have not been settled, the Company shall credit to an account maintained by the Company for your benefit an amount equal to the cash dividends you would have received if you were the holder of record, as of such record date, of the number of Shares related to the portion of the RSUs that have not been settled or forfeited as of such record date (the “Dividend Equivalent” or “DER”). Such account is intended to constitute an “unfunded” account, and neither this Section 5 nor any action taken pursuant to or in accordance with this Section 5 shall be construed to create a trust of any kind. Amounts credited to such account with respect to RSUs that vest in accordance with Sections 2 or 3 of this Award Agreement will become vested DERs and will be paid to you in cash, Shares, or a combination thereof, as determined by the Committee in its sole discretion, at the same time as your vested RSUs are settled. You shall not be entitled to receive any interest with respect to the timing of payment of DERs. In the event all or any portion of the RSUs granted to you pursuant to this Award Agreement fail to become vested under Sections 2 or 3 of this Award Agreement, the unvested DERs accumulated in your account with respect to such RSUs shall be forfeited.

6.Delivery of Shares. The Company shall deliver such Shares in settlement of your vested RSUs to you in accordance with this Section 6; provided, however, the Company shall not be obligated to deliver Shares to you if (i) you have not satisfied all applicable tax withholding obligations, (ii) Shares are not properly registered or subject to an applicable exemption therefrom, (iii) Shares are not listed on the stock exchanges on which Company Shares are otherwise listed, or (iv) the Company determines that the delivery of Shares would violate any federal or state securities or other applicable laws. At the discretion of the Company, Shares may be delivered to you by book-entry credit to an account in your name established by the Company with the Company’s transfer agent, or upon written request from you (or your personal representative, beneficiary or estate, as the case may be) in certificates in your name (or your personal representative, beneficiary or estate).You shall not

acquire or have any rights as a shareholder of the Company until Shares issuable hereunder are actually issued and delivered to you in accordance with the Award Agreement.

7.Forfeiture and Recoupment. Notwithstanding any provision of this Award Agreement or the Plan to the contrary, you agree that your right to retain your Award, to retain any amount received pursuant to your Award and to retain any profit or gain you realized in connection with sale of such Shares, shall be subject to any recoupment or “clawback” policy or forfeiture policy adopted by the Company.

8.Restrictions on Resales of Shares. The Company may impose such restrictions, conditions, and limitations as it determines appropriate as to the timing and manner of any resales by you or other subsequent transfers by you of any Shares issued as a result of the settlement of your RSUs, including (i) restrictions under an insider trading policy, (ii) restrictions designed to delay and/or coordinate the timing and manner of sales by you and other RSU holders, and (iii) restrictions as to the use of a specified brokerage firm for such resales or other transfers.

9.Tax Consequences. You hereby agree that the Company does not have a duty to design or administer the Plan or its other compensation programs in a manner that minimizes your tax liabilities. You shall not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates related to tax liabilities arising from your RSUs or your other compensation.

10.Restrictions on Transferability. Your RSUs may not be sold, transferred, pledged, assigned, exchanged, encumbered, or otherwise alienated or hypothecated, except (i) by will or by the laws of descent and distribution; (ii) to the extent permitted by the Plan and allowed under applicable law and approved by the Committee in its sole discretion; or (iii) pursuant to a domestic relations order.

11.Beneficiary Designation. You may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under this Award Agreement is to be paid in case of your death before you receive any or all of such benefit. Each such designation shall revoke all prior designations by you, shall be in a form prescribed by the Company, and will be effective only when filed by you in writing with the Secretary of the Company during your lifetime. In the absence of any such designation, benefits remaining unpaid at the time of your death shall be paid to your estate.

12.Securities Laws. This Award Agreement shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required, or the Committee determines are advisable. You agree to take all steps that the Company determines are necessary to comply with all applicable provisions of federal and state securities law in exercising your rights under this Award Agreement. The Committee may impose such restrictions on any Shares acquired by you under the Award Agreement as it may deem necessary or advisable, under applicable federal securities laws, the requirements of any stock exchange or market upon which such Shares are then listed or traded or any blue sky or state securities laws applicable to such Shares. In addition, the Shares shall be subject to any trading restrictions, stock holding requirements or other policies in effect from time to time as determined by the Committee.

13.Data Privacy. To administer the Plan, the Company may process personal data about you. Such data includes the information provided in this Award Agreement, other appropriate personal and financial data about you such as home address and business addresses and other contact information, payroll information and any other information deemed appropriate by the Company to facilitate the administration of the Plan. By accepting this award, you consent to the Company’s processing of such personal data and the transfer of such data outside the country in which you work or are employed, including, with respect to non-U.S. residents, to the United States, to transferees who shall include the Company and other persons designated by the Company to administer the Plan.

14.No Right to Further Awards. The Company has granted your RSUs in its sole discretion. Your Grant Notice, this Award Agreement and the Plan do not confer to you any right or entitlement to receive another grant of RSUs, or any other similar award at any time in the future or in respect of any future period. Your RSU grant does not confer on you any right or entitlement to receive compensation in any specific amount for any future fiscal year, and does not diminish in any way the Company’s discretion to determine the amount, if any, of your compensation.

15.Notices. Any notice required or permitted to be given under this Award Agreement, or Grant Notice or the Plan shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered United States mail, postage prepaid, return receipt

requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

If to the Company:

Medifast, Inc. 100 International Drive

18th Floor

Baltimore, Maryland 21202 Attn.: General Counsel

If to the Participant:

To the last address delivered to the Company by the Participant in the manner set forth herein.

16.General Provisions.

c.Governing Documents. This Award Agreement is subject to all of the terms and conditions as set forth in your Grant Notice and the Plan, all of which are incorporated herein in their entirety. Your Grant Notice, this Award Agreement and the Plan constitute the entire understanding between you and the Company regarding the RSU’s. Any prior Award Agreements, commitments or negotiations concerning the RSUs are superseded. In the event of any conflict between the provisions of your Grant Notice and this Award Agreement and those of the Plan, the provisions of the Plan shall control.

f.Rescission of Award Agreement and RSU Grant. Your RSUs granted under this Award Agreement may be rescinded if necessary to ensure compliance with federal, state or other applicable laws.

g.Administration of RSUs. All questions arising under your Grant Notice, this Award Agreement and the Plan shall be decided by the Committee in its total and absolute discretion. It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of your Grant Notice, this Award Agreement and the Plan; all such determinations shall be binding upon you and your successors.

h.No Shareholder Rights. The RSUs granted to you under pursuant this Award Agreement do not and shall not entitle you to any rights of a holder of a Share of Company common stock prior to the date Shares are issued to you in settlement of the RSUs, if at all (or an appropriate book entry has been made). Except as described in the Plan, no adjustments are made for dividends or other rights if the applicable record date occurs prior to the date Shares are issued to you in settlement of the RSUs (or an appropriate book entry has been made).

i.Unfunded Arrangement. The RSUs create a contractual obligation on the part of the Company to distribute to you Shares in connection with the vesting of the RSUs at the time provided for in this Award Agreement. Neither you nor any other party claiming an interest under this Agreement shall have any interest whatsoever in any specific assets of the Company. Your right to receive Shares under this Agreement is that of an unsecured general creditor of Company.

This Award Agreement is not a stock certificate or a negotiable instrument.

Document

MEDIFAST, INC. AMENDED AND RESTATED 2012 SHARE INCENTIVE PLAN

GRANT NOTICE EMPLOYEE DEFERRED SHARES

Participant Name:	________________________________
Grant Date:	________________________________
Number of RSUs Granted:	________________________________
Vesting Schedule:	________________________________

MEDIFAST, INC. AMENDED AND RESTATED 2012 SHARE INCENTIVE PLAN

DEFERRED SHARE EMPLOYEE AWARD AGREEMENT

Capitalized terms not otherwise defined herein shall have the meanings set forth in the Plan or your Grant Notice.

The details of your RSUs are as follows:

1.Determination of Number of Vested RSUs. Your RSUs are subject to the Vesting Schedule set forth in your Grant Notice. On each vesting date (“Vesting Date”) set forth in the Vesting Schedule, you will vest in the specified percentage of your RSUs, and your vested RSUs shall be settled in accordance with the terms of this Award Agreement; provided that you satisfy the requirements of Section 2 or 3 of this Agreement or vest in your RSUs in accordance with Section 4 of this Award Agreement.

2.Eligibility for Payment or Distribution. You must be continuously employed by the Company or any of its subsidiaries from the Grant Date through and up to a Vesting Date specified in your Grant Notice to be eligible for a payment or distribution of your RSUs that vest and become nonforfeitable on such Vesting Date. If you incur a Termination of Service for any reason other than Retirement prior to a Vesting Date, you will forfeit any non-vested RSUs that you then hold on the date of such Termination of Service and you shall not be entitled to any distribution or payout with respect to such forfeited RSUs, except as otherwise expressly provided in Section 4 of this Award Agreement.

3.Retirement. If your employment with the Company is terminated by virtue of a Retirement, a number of the RSUs shall vest and be settled on the date of your Retirement equal to the total number of RSUs granted pursuant to this Award that remain unvested on the date of your Retirement times a fraction, the numerator of which is the number of full months between the prior Vesting Date (or the Grant Date, if there has been no Vesting Date) and the date of your Retirement and the denominator of which is the number of months between the prior Vesting Date (or the Grant Date, if there has been no Vesting Date) and the final Vesting Date.

“Retirement” means your termination of employment from the Company and its subsidiaries other than for cause, provided that you (i) have attained age 55, (ii) the numerical sum of your age and years of service with the Company or its subsidiaries is equal to at least 70, (iii) you are performing your job duties to the Company’s satisfaction at the time of notice and until your termination of employment, and (iv) you have given notice to the Company, in form satisfactory to the Company, of your intent to retire specifying the exact intended date of retirement to the Company that is at least 12 months following such notice date (provided that prior to such notice the Company had not already given you notice that you would be terminated), and remained employed by the Company until the earlier of (a) the one year anniversary of the date of such notice or (b) the date on which you are terminated by the Company without Cause. The Chief Executive Officer of the Company (or the Compensation Committee of the Board of Directors of the Company, in the event that you are at the time of notice either of the Chief Executive Officer “(CEO”) of the CEO’s direct reports at the Executive Vice President-level or above, or one of the Company’s “Named Executive Officers” in the Company’s most recent Proxy filing pursuant to Item 402 of Regulation S-K) may, in his or her discretion, waive the requirement that you remain employed until the one year anniversary of the date of such notice.

4.Effect of a Change in Control Prior to a Vesting Date. The treatment of any nonvested RSUs that you hold upon or after a Change in Control will be determined under Section 8 of the Plan.

5.Form and Timing of Settlement of RSUs. Within thirty (30) days of a Vesting Date (or, if applicable, the date of your Retirement), the Company will issue and deliver to you the number of shares of Stock equal to the number of your RSUs that vested on such Vesting Date, subject to satisfaction of applicable tax and/or other obligations as described in Section 9 of this Award Agreement.

6.Dividend Equivalents. In the event that the Company declares and pays a dividend in respect of its outstanding Shares and, on the record date for such dividend, you hold RSUs granted pursuant to this Award Agreement that have not been settled, the Company shall credit to an account maintained

by the Company for your benefit an amount equal to the cash dividends you would have received if you were the holder of record, as of such record date, of the number of Shares related to the portion of the RSUs that have not been settled or forfeited as of such record date (the “Dividend Equivalent” or “DER”). Such account is intended to constitute an “unfunded” account, and neither this Section 6 nor any action taken pursuant to or in accordance with this Section 5 shall be construed to create a trust of any kind. Amounts credited to such account with respect to RSUs that vest in accordance with Sections 2, 3, or 4 of this Award Agreement will become vested DERs and will be paid to you in cash, Shares, or a combination thereof, as determined by the Committee in its sole discretion, at the same time as your vested RSUs are settled. You shall not be entitled to receive any interest with respect to the timing of payment of DERs. In the event all or any portion of the RSUs granted to you pursuant to this Award Agreement fail to become vested under Sections 2, 3, or 4 of this Award Agreement, the unvested DERs accumulated in your account with respect to such RSUs shall be forfeited.

7.Delivery of Shares. The Company shall deliver such Shares in settlement of your vested RSUs to you in accordance with this Section 6; provided, however, the Company shall not be obligated to deliver Shares to you if (i) you have not satisfied all applicable tax withholding obligations, (ii) Shares are not properly registered or subject to an applicable exemption therefrom, (iii) Shares are not listed on the stock exchanges on which Company Shares are otherwise listed, or (iv) the Company determines that the delivery of Shares would violate any federal or state securities or other applicable laws. At the discretion of the Company, Shares may be delivered to you by book-entry credit to an account in your name established by the Company with the Company’s transfer agent, or upon written request from you (or your personal representative, beneficiary or estate, as the case may be) in certificates in your name (or your personal representative, beneficiary or estate).You shall not acquire or have any rights as a shareholder of the Company until Shares issuable hereunder are actually issued and delivered to you in accordance with the Award Agreement.

8.Restrictive Covenants. Without limiting any other non-competition, non-solicitation, non-disparagement or non-disclosure or other similar agreement to which you may be a party, you shall be subject to the confidentiality and restrictive covenants set forth on Exhibit A attached hereto, which Exhibit A is incorporated herein and forms part of this Award Agreement. In the event that you violate any of the restrictive covenants referred to in this Section 8, in addition to any other remedy that may be available at law or in equity, the RSUs shall be automatically forfeited effective as of the date on which such violation first occurs and any payment or delivery with respect to the RSUs during the [6 months] prior to such violation shall be rescinded. The Company shall notify you in writing of any such rescission within two years after such payment or delivery. Within ten days after receiving such a notice from the Company, you shall return the Shares to the Company or pay to the Company any profit or gain your realized in connection with sale of such Shares. The foregoing rights and remedies are in addition to any other rights and remedies that may be available to the Company and shall not prevent (and you shall not assert that they shall prevent) the Company from bringing one or more actions in any applicable jurisdiction to recover damages as a result of your breach of such restrictive covenants.

10.Restrictions on Resales of Shares. The Company may impose such restrictions, conditions, and limitations as it determines appropriate as to the timing and manner of any resales by you or other subsequent transfers by you of any Shares issued as a result of the settlement of your RSUs, including (i) restrictions under an insider trading policy, (ii) restrictions designed to delay and/or coordinate the timing and manner of sales by you and other RSU holders, and (iii) restrictions as to the use of a specified brokerage firm for such resales or other transfers.

11.Tax Withholding Obligations.

a.At the time your RSUs are settled, you hereby authorize withholding from payroll and any other amounts payable to you by the Company, and otherwise agree to make adequate provision for, any sums required to satisfy the federal, state, local and foreign tax withholding obligations (“Withholding Obligations”) of the Company, if any, which arise in connection with the settlement of your RSUs.

b.Upon your request and subject to approval by the Company, in its sole discretion, and compliance with any applicable legal conditions or restrictions, the Company may withhold from fully vested

Shares otherwise issuable to you upon the settlement of your RSUs a number of whole Shares having a Fair Market Value, determined by the Company as of the date of settlement, at least equal to the minimum statutory amount of tax required to be withheld by law but in no event in excess of the maximum statutory amount of tax that is permitted to be withheld by law.

13.Applicability of Section 409A of the Internal Revenue Code.

a.Your RSUs granted hereunder are not intended to provide for a “deferral of compensation” within the meaning of Section 409A of the U.S. Internal Revenue Code (“Section 409A”) and shall be interpreted and construed in a manner consistent with that intent. If any provision of this Award Agreement, your Grant Notice or the Plan causes your RSUs to be subject to the requirements of Section 409A, or could otherwise cause you to recognize income or be subject to the interest and penalties under Section 409A, then the provision shall have no effect or, to the extent practicable, the Committee may, in its sole discretion and without the Participant’s consent, modify the provision to (i) comply with, or avoid being subject to Section 409A, or to avoid the incurrence of any taxes, interest and penalties under Section 409A, and/or (ii) maintain, to the maximum extent practicable, the original intent and economic benefit to you of the applicable provision without materially increasing the cost to the Company or contravening the provisions of Section 409A. This Section 12 does not create an obligation of the Company to modify this Award Agreement, your Grant Notice or the Plan and does not guarantee that your RSUs will not be subject to taxes, interest and penalties under Section 409A.

b.If you are a “specified employee” as defined under Code Section 409A and your RSUs are to be settled on account of your separation from service (for reasons other than death) and such RSUs constitutes “deferred compensation” as defined under Code Section 409A, then any portion of your RSUs that would otherwise be settled during the six-month period commencing on your separation from service shall be settled as soon as practicable following the conclusion of the six-month period (or following your death if it occurs during such six-month period).

14.Restrictions on Transferability. Your RSUs may not be sold, transferred, pledged, assigned, exchanged, encumbered, or otherwise alienated or hypothecated, except (i) by will or by the laws of descent and distribution; (ii) to the extent permitted by the Plan and allowed under applicable law and approved by the Committee in its sole discretion; or (iii) pursuant to a domestic relations order.

16.Securities Laws. This Award Agreement shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required, or the Committee determines are advisable. You agree to take all steps that the Company determines are necessary to comply with all applicable provisions of federal and state securities law in exercising your rights under this Award Agreement. The Committee may impose such restrictions on any Shares acquired by you under the Award Agreement as it may deem necessary or advisable, under applicable federal securities laws, the requirements of any stock exchange or market upon which such Shares are then listed or traded or any blue sky or state securities laws applicable to such Shares. In addition, the Shares shall be subject to any trading

restrictions, stock holding requirements or other policies in effect from time to time as determined by the Committee.

18.No Right to Continued Employment or Further Awards.

a.Neither the Plan nor this Award Agreement shall (i) alter your status as an “at-will” employee of the Company; (ii) be construed as giving you any right to continue in the employ of the Company; or (iii) be construed as giving you any right to be reemployed by the Company following any Termination of Service. The Termination of Service provisions in this Award Agreement shall solely apply to the treatment of your RSUs as specified herein and shall not otherwise affect your employment relationship with the Company.

b.The Company has granted your RSUs in its sole discretion. Your Grant Notice, this Award Agreement and the Plan do not confer to you any right or entitlement to receive another grant of RSUs, or any other similar award at any time in the future or in respect of any future period. Your RSU grant does not confer on you any right or entitlement to receive compensation in any specific amount for any future fiscal year, and does not diminish in any way the Company’s discretion to determine the amount, if any, of your compensation.

If to the Company:

Medifast, Inc. 100 International Drive

18th Floor

Baltimore, Maryland 21202 Attn.: General Counsel

If to the Employee:

To the last address delivered to the Company by the Employee in the manner set forth herein.

20.General Provisions.

c.Governing Documents. This Award Agreement is subject to all of the terms and conditions as set forth in your Grant Notice and the Plan, all of which are incorporated herein in their entirety. Your Grant Notice, this Award Agreement, the Plan, and any employment or change in control agreement between you and the Company constitute the entire understanding between you and the Company regarding the RSUs. Any prior Award Agreements, commitments or negotiations concerning the RSUs are superseded. In the event of any conflict between the provisions of your

Grant Notice and this Award Agreement and those of the Plan, the provisions of the Plan shall control.

f.Rescission of Award Agreement and RSU Grant. Your RSUs granted under this Award Agreement may be rescinded if necessary to ensure compliance with federal, state or other applicable laws.

This Award Agreement is not a stock certificate or a negotiable instrument.

Document

MEDIFAST, INC. AMENDED AND RESTATED 2012 SHARE INCENTIVE PLAN

GRANT NOTICE NONEMPLOYEE DIRECTOR DEFERRED SHARE CASH EQUIVALENT

Medifast, Inc. (the “Company”) hereby grants to the Participant named below Deferred Shares ( “RSUs”) pursuant to the Medifast, Inc. Amended and Restated 2012 Share Incentive Plan (the “Plan”) in the number specified below, which shall vest in accordance with the Vesting Schedule. Each RSU corresponds in value to a single share of Company common stock (“Share”) and represents the right to receive the cash equivalent of a Share for each vested RSU.

Participant Name:	________________________________
Grant Date:	________________________________
Number of RSUs Granted:	________________________________
Vesting Schedule:	________________________________

Participant further acknowledges that as of the Grant Date, this Grant Notice, the Award Agreement and the Plan set forth the entire understanding between Participant and the Company regarding the acquisition of Shares in accordance with this Grant Notice, the Award Agreement and the Plan and supersede all prior oral and written Award Agreements on that subject.

Participant:	Medifast, Inc.
_________________________________________	By: _________________________________________
Signature	Signature
Date:_____________________________________	Title:_____________________________________
Residence Address: _________________________________________	Date:_____________________________________

Attachments: Nonemployee Director Restricted Share Cash Equivalent Award Agreement and Medifast, Inc. Amended and Restated 2012 Share Incentive Plan

MEDIFAST, INC. AMENDED AND RESTATED 2012 SHARE INCENTIVE PLAN

NONEMPLOYEE DIRECTOR DEFERRED SHARE CASH EQUIVALENT AWARD AGREEMENT

Pursuant to your Restricted Share Units Grant Notice (“Grant Notice”) and this Award Agreement, Medifast, Inc. (the “Company”) has granted to you Deferred Shares (“RSUs” or “Award”) under the Plan covering the number of RSUs indicated in your Grant Notice, which vest in accordance with the Vesting Schedule indicated in your Grant Notice and this Award Agreement.

Capitalized terms not otherwise defined herein shall have the meanings set forth in the Plan or your Grant Notice.

The details of your RSUs are as follows:

2.Eligibility for Payment. You must continuously serve as a nonemployee director on the Company’s Board from the Grant Date through and up to a Vesting Date specified in your Grant Notice to be eligible for a payment of your RSUs that vest and become nonforfeitable on such Vesting Date. If you incur a Termination of Service prior to a Vesting Date, you will forfeit any nonvested RSUs that you then hold on the date of such Termination of Service and you shall not be entitled to any payout with respect to such forfeited RSUs, except as otherwise expressly provided in Section 3 of this Award Agreement.

3.Effect of a Change in Control Prior to a Vesting Date. The treatment of any nonvested RSUs that you hold upon or after a Change in Control will be determined under Section 8 of the Plan.

4.Form and Timing of Settlement of RSUs. Except to the extent that an election to defer the RSUs has been made pursuant to the Company’s Director Deferred Compensation Plan, within thirty (30) days of a Vesting Date, the Company will pay to you the cash equivalent of the number of RSUs that vested on such Vesting Date. For this purpose, the cash equivalent of each RSU shall be equal to the New York Stock Exchange closing price of a Share on the Vesting Date (or if the Vesting Date is a date on which the Stock is not traded, based on the closing price on the last date immediately preceding the Vesting Date on which the Stock was traded), subject to satisfaction of applicable tax and/or other obligations as described in Section 7 of this Award Agreement.

5.Dividend Equivalents. In the event that the Company declares and pays a dividend in respect of its outstanding Shares and, on the record date for such dividend, you hold RSUs granted pursuant to this Award Agreement that have not been settled, the Company shall credit to an account maintained by the Company for your benefit an amount equal to the cash dividends you would have received if you were the holder of record, as of such record date, of the number of Shares related to the portion of the RSUs that have not been settled or forfeited as of such record date (the “Dividend Equivalent” or “DER”). Such account is intended to constitute an “unfunded” account, and neither this Section 5 nor any action taken pursuant to or in accordance with this Section 5 shall be construed to create a trust of any kind. Amounts credited to such account with respect to RSUs that vest in accordance with Sections 2 or 3 of this Award Agreement will become vested DERs and will be paid to you in cash at the same time as your vested RSUs are settled. You shall not be entitled to receive any interest with respect to the timing of payment of DERs. In the event all or any portion of the RSUs granted to you pursuant to this Award Agreement fail to become vested under Sections 2 or 3 of this Award Agreement, the unvested DERs accumulated in your account with respect to such RSUs shall be forfeited.

6.Forfeiture and Recoupment. Notwithstanding any provision of this Award Agreement or the Plan to the contrary, you agree that your right to retain your Award or to retain any amount received pursuant to your Award shall be subject to any recoupment or “clawback” policy or forfeiture policy adopted by the Company.

7.Tax Withholding Obligations. At the time your RSUs are settled, you hereby agree to make adequate provision for any sums required to satisfy any applicable foreign tax withholding obligations of the Company, if any, which arise in connection with the settlement of your RSUs.

8.Tax Consequences. You hereby agree that the Company does not have a duty to design or administer the Plan or its other compensation programs in a manner that minimizes your tax liabilities. You shall not make any claim against the Company, or any of its officers, directors, employees or subsidiaries related to tax liabilities arising from your RSUs or your other compensation.

9.Applicability of Section 409A of the Internal Revenue Code.

a.Your RSUs granted hereunder are not intended to provide for a “deferral of compensation” within the meaning of Section 409A of the U.S. Internal Revenue Code (“Section 409A”) and shall be interpreted and construed in a manner consistent with that intent. If any provision of this Award Agreement, your Grant Notice or the Plan causes your RSUs to be subject to the requirements of Section 409A, or could otherwise cause you to recognize income or be subject to the interest and penalties under Section 409A, then the provision shall have no effect or, to the extent practicable, the Committee may, in its sole discretion and without the Participant’s consent, modify the provision to (i) comply with, or avoid being subject to Section 409A, or to avoid the incurrence of any taxes, interest and penalties under Section 409A, and/or (ii) maintain, to the maximum extent practicable, the original intent and economic benefit to you of the applicable provision without materially increasing the cost to the Company or contravening the provisions of Section 409A. This Section 9 does not create an obligation of the Company to modify this Award Agreement, your Grant Notice or the Plan and does not guarantee that your RSUs will not be subject to taxes, interest and penalties under Section 409A.

b.Your Termination of Service shall not be deemed to have occurred for purposes of any provision of the Award Agreement providing for the payment of any amounts or benefits that are considered nonqualified deferred compensation under Section 409A upon or following a Termination of Service, unless such termination is also a “separation from service” within the meaning of Section 409A and the payment thereof prior to a “separation from service” could otherwise cause you to recognize income or be subject to the interest and penalties under Section 409A.

14.No Right to Further Awards. The Board has granted your RSUs in its sole discretion. Your Grant Notice, this Award Agreement and the Plan do not confer to you any right or entitlement to receive another grant of RSUs, or any other similar award at any time in the future or in respect of any future

period. Your RSU grant does not confer on you any right or entitlement to receive compensation in any specific amount for any future fiscal year, and does not diminish in any way the Board’s discretion to determine the amount, if any, of your compensation.

15.Notices. Any notice required or permitted to be given under this Award Agreement, Grant Notice or Plan shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered United States mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:

If to the Company:

Medifast, Inc. 100 International Drive

18th Floor

Baltimore, Maryland 21202 Attn.: General Counsel

If to the Participant:

To the last address delivered to the Company by the Participant in the manner set forth herein.

16.General Provisions.

c.Governing Documents. This Award Agreement is subject to all of the terms and conditions as set forth in your Grant Notice and the Plan, all of which are incorporated herein in their entirety. Your Grant Notice, this Award Agreement and the Plan constitute the entire understanding between you and the Company regarding the RSUs. Any prior Award Agreements, commitments or negotiations concerning the RSUs are superseded. In the event of any conflict between the provisions of your Grant Notice and this Award Agreement and those of the Plan, the provisions of the Plan shall control.

f.Rescission of Award Agreement and RSU Grant. Your RSUs granted under this Award Agreement may be rescinded if necessary to ensure compliance with federal, state or other applicable laws.

h.No Shareholder Rights. The RSUs granted to you under pursuant this Award Agreement do not and shall not entitle you to any rights of a holder of a Share of Company common stock.

i.Unfunded Arrangement. The RSUs create a contractual obligation on the part of the Company to pay to you cash in connection with the vesting of the RSUs at the time provided for in this

Award Agreement. Neither you nor any other party claiming an interest under this Agreement shall have any interest whatsoever in any specific assets of the Company. Your right to be paid cash under this Agreement is that of an unsecured general creditor of Company.

This Award Agreement is not a stock certificate or a negotiable instrument.

Document

Exhibit 31.1

RULE 13a-14(a) CERTIFICATION

I, Daniel R. Chard, certify that:

1.I have reviewed this report on Form 10-Q of Medifast, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 2, 2022	/s/ Daniel R. Chard
		Daniel R. Chard
		Chief Executive Officer

Document

Exhibit 31.2

RULE 13a-14(a) CERTIFICATION

I, James P. Maloney, certify that:

1.I have reviewed this report on Form 10-Q of Medifast, Inc.;

4.I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

5.I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 2, 2022	/s/ James P. Maloney
		James P. Maloney
		Chief Financial Officer

Document

Exhibit 32.1

MEDIFAST, INC.

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q (the “Report”) for the quarter ended March 31, 2022 of Medifast, Inc. (the “Company”), as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Daniel R. Chard, Chief Executive Officer and I, James P. Maloney, Chief Financial Officer, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of the operations of the Company.

By:	/s/ DANIEL R. CHARD
	Daniel R. Chard
	Chief Executive Officer
	May 2, 2022
	/s/ JAMES P. MALONEY
	James P. Maloney
	Chief Financial Officer
	May 2, 2022

10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2022

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

For the transition period from________ to ________.

Commission File Number: 001-31573

Medifast, Inc.

100 International Drive

Baltimore, Maryland 21202

Telephone Number: (410) 581-8042

Yes x No o

Yes x No o

Yes o No x

Medifast, Inc. and Subsidiaries

Index

MEDIFAST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

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

MEDIFAST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

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

MEDIFAST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

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

MEDIFAST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

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

MEDIFAST, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

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

MEDIFAST, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. INVENTORIES

3. EARNINGS PER SHARE

4. SHARE-BASED COMPENSATION

5. LEASES

6. ACCUMULATED OTHER COMPREHENSIVE INCOME

7. FINANCIAL INSTRUMENTS

8. DEBT

Credit Agreement

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Item 4. Controls and Procedures

Part II Other Information

Item 1. Legal Proceedings

Item 1A. Risk Factors

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Item 6. Exhibits

SIGNATURES

For the transition period from to .