Medifast Inc

Medifast, Inc. and Subsidiaries Index Part 1 - Financial Information

Condensed Consolidated Statements of Operations (unaudited) for the Three and Nine Months Ended September 30, 2026 and 2025 2

Condensed Consolidated Statements of Comprehensive Loss (unaudited) for the Three and Nine Months Ended September 30, 2026 and 2025 3

Condensed Consolidated Balance Sheets (unaudited) as of September 30, 2026 and December 31, 2025 4

Condensed Consolidated Statements of Cash Flows (unaudited) for the Nine Months Ended September 30, 2026 and 2025 5

Condensed Consolidated Statements of Changes in Stockholders' Equity (unaudited) for the Three and Nine Months Ended September 30, 2026 and 2025 6

Notes to Condensed Consolidated Financial Statements (unaudited) 8

Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 18

Item 3 - Quantitative and Qualitative Disclosures about Market Risk 31

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds 32

The accompanying notes are an integral part of these condensed consolidated financial statements. 2

MEDIFAST, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) (U.S. dollars in thousands) Three months ended September 30, Nine months ended September 30, 2026 2025 2026 2025 Net loss $ ( 17,511 ) $ ( 2,261 ) $ ( 22,733 ) $ ( 553 ) Other comprehensive income (loss), net of tax: Unrealized net gains (losses) on investment securities ( 428 ) 41 ( 651 ) 40 Comprehensive loss $ ( 17,939 ) $ ( 2,220 ) $ ( 23,384 ) $ ( 513 )

The accompanying notes are an integral part of these condensed consolidated financial statements. 3

MEDIFAST, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (U.S. dollars in thousands, except par value) September 30, 2026 December 31, 2025 ASSETS Current Assets Cash and cash equivalents $ 58,372 $ 89,303 Inventories, net 21,202 20,228 Investments 114,162 77,970 Income taxes, prepaid 4,171 5,116 Prepaid expenses and other current assets 4,028 9,066 Total current assets 201,935 201,683 Property, plant and equipment, net of accumulated depreciation 13,245 31,230 Right-of-use assets 19,498 7,232 Other assets 5,085 7,828

TOTAL ASSETS $ 239,763 $ 247,973 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable and accrued expenses $ 38,801 $ 38,359 Current lease obligations 3,075 4,603 Total current liabilities 41,876 42,962 Lease obligations, net of current lease obligations 17,610 6,091

Total liabilities 59,486 49,053 Stockholders' Equity Common stock, par value $ 0.001 per share: 20,000 shares authorized; 11,183 and 10,991 issued and outstanding at September 30, 2026 and December 31, 2025, respectively 11 11 Additional paid-in capital 45,145 40,406 Accumulated other comprehensive income (loss) ( 417 ) 234 Retained earnings 135,538 158,269 Total stockholders' equity 180,277 198,920 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 239,763 $ 247,973

The accompanying notes are an integral part of these condensed consolidated financial statements. 4

MEDIFAST, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (U.S. dollars in thousands) Nine months ended September 30, 2026 2025 Operating Activities Net loss $ ( 22,733 ) $ ( 553 ) Adjustments to reconcile net income to cash provided by operating activities Depreciation and amortization 9,292 10,777 Non-cash lease expense 3,496 3,459 Share-based compensation 5,564 5,467 Gain on sale of assets held for sale ( 2,184 ) - Loss on disposal of property, plant and equipment 425 1,001 Realized gain on sale of investment securities ( 27 ) ( 3,303 ) Amortization of discount on investment securities ( 464 ) ( 515 ) Deferred income taxes - ( 648 ) Unrealized gain on equity investment securities - ( 14 ) Non-cash restructuring charges, excluding share-based compensation 10,832 - Change in operating assets and liabilities: Inventories ( 974 ) 19,216 Prepaid expenses and other current assets 3,585 2,818 Other assets 356 ( 169 ) Accounts payable and accrued expenses ( 2,941 ) ( 19,610 ) Income taxes 1,025 ( 5,785 ) Net cash flow provided by operating activities 5,252 12,141 Investing Activities Purchase of investment securities ( 151,050 ) ( 51,495 ) Proceeds from sale and maturities of investment securities 114,717 52,780 Proceeds from sale of assets held for sale, net of costs to sell 3,637 - Purchase of property and equipment ( 2,492 ) ( 4,263 ) Net cash flow used in investing activities ( 35,188 ) ( 2,978 ) Financing Activities

Net shares repurchased for employee taxes ( 825 ) ( 370 ) Cash dividends paid to stockholders ( 170 ) ( 195 ) Net cash flow used in financing activities ( 995 ) ( 565 ) Increase (decrease) in cash and cash equivalents ( 30,931 ) 8,598 Cash and cash equivalents - beginning of the period 89,303 90,928 Cash and cash equivalents - end of period $ 58,372 $ 99,526 Supplemental disclosure of cash flow information: Income taxes paid $ 223 $ 10,016 Dividends included in accounts payable and accrued expenses $ 74 $ 441

The accompanying notes are an integral part of these condensed consolidated financial statements. 5

MEDIFAST, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) (U.S. dollars in thousands) Nine months ended September 30, 2026 Number of Shares Issued Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income Retained Earnings Total Balance, December 31, 2025 10,991 $ 11 $ 40,406 $ 234 $ 158,269 $ 198,920 Net loss - - - - ( 2,122 ) ( 2,122 ) Share-based compensation 212 - 1,896 - - 1,896 Net shares repurchased for employee taxes ( 84 ) - ( 814 ) - - ( 814 ) Other comprehensive loss - - - ( 201 ) - ( 201 ) Forfeiture of dividends on unvested awards - - - - 2 2

Nine months ended September 30, 2025 Number of Shares Issued Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income Retained Earnings Total Balance, December 31, 2024 10,938 $ 11 $ 33,136 $ 180 $ 176,782 $ 210,109 Net loss - - - - ( 772 ) ( 772 ) Share-based compensation 80 - 1,930 - - 1,930 Net shares repurchased for employee taxes ( 27 ) - ( 369 ) - - ( 369 ) Other comprehensive income - - - 59 - 59 Forfeiture of dividends on unvested awards - - - - 2 2 Balance, March 31, 2025 10,991 $ 11 $ 34,697 $ 239 $ 176,012 $ 210,959 Net income - - - - 2,480 2,480 Share-based compensation - - 2,627 - - 2,627 Net shares repurchased for employee taxes - - ( 1 ) - - ( 1 ) Other comprehensive loss - - - ( 60 ) - ( 60 ) Balance, June 30, 2025 10,991 $ 11 $ 37,323 $ 179 $ 178,492 $ 216,005 Net loss - - - - ( 2,261 ) ( 2,261 ) Share-based compensation - - 910 - - 910 Other comprehensive income - - - 41 - 41 Forfeiture of dividends on unvested awards - - - - 11 11 Balance, September 30, 2025 10,991 $ 11 $ 38,233 $ 220 $ 176,242 $ 214,706

The accompanying notes are an integral part of these condensed consolidated financial statements. 7

Provision for Income Taxes - The Company computes its income tax provision for interim periods in accordance with Accounting Standards Codification 740. For interim periods during the year ended December 31, 2025, the Company calculated an annual effective tax rate and applied that rate to year-to-date ordinary income or loss to calculate its quarterly income tax provision ("AETR Approach"). Due to the existence of a full valuation allowance against its deferred tax assets recorded as of December 31, 2025, the Company did not apply the AETR Approach for the period ending September 30, 2026 or for the quarters within that period. Instead, the Company calculated income tax expense for the interim period based on actual results for the quarter. As a result, the Company's income tax provision for the three months ending September 30, 2026, reflects 8

discrete items, primarily a $ 0.4 million change in unrecognized tax benefits due to finalization of a state tax examination, partially offset by $ 0.1 million of state income taxes. The Company calculates income tax expense for interim periods based on actual results for the quarter. Income tax benefit for the three months ended September 30, 2026 was $ 0.3 million, an effective tax rate of 1.8 %, as compared to $ 0.4 million for the three months ended September 30, 2025, an effective tax rate of 14.9 %. The decrease in the effective tax rate was primarily driven by the increased loss incurred during the three months ended September 30, 2026 and the valuation allowance on the net deferred tax assets. Income tax benefit for the nine months ended September 30, 2026 was less than $ 0.1 million, an effective tax rate of 0.2 %, as compared to income tax expense of $ 1.3 million for the nine months ended September 30, 2025, an effective tax rate of 174.4 %. The decrease in the effective tax rate was primarily driven by the increased loss incurred during the nine months ended September 30, 2026 and the valuation allowance on the net deferred tax assets, as well as various items in 2025 that were magnified by the near break-even pre-tax position. The Company will continue to assess the realizability of its deferred tax assets and the need for a valuation allowance on a quarterly basis. Should the valuation allowance be released in whole or in part, the Company expects to return to applying an estimated annual effective tax rate in future interim periods. Accounting Pronouncements - Adopted in 2026 The Company has not adopted any new accounting standards during the nine months ended September 30, 2026. Recently Issued Accounting Pronouncements - Pending Adoption In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2024-03 - Disaggregation of Income Statement Expenses ("ASU 2024-03") to improve the disclosures about a public business entity's expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2024-03 on its consolidated financial statements. In September 2025, the FASB issued Accounting Standards Update 2025-06 - Internal-Use Software (Subtopic 250-40): Targeted Improvements to the Accounting for Internal-Use Software ("ASU 2025-06") to increase the operability of the recognition guidance considering different methods of software development. ASU 2025-06 is effective for public business entities for annual periods beginning after December 15, 2027. The amendments can be adopted on a prospective, modified, or retrospective basis. Entities are permitted to early adopt the standard. The Company did not early adopt prior to or during the current reporting period. The Company is currently evaluating the impact of adopting the ASU 2025-06 on its consolidated financial statements. 2. INVENTORIES, NET Inventories consist principally of raw materials, packaging, non-food finished goods and packaged meal replacements, protein powder, and supplements 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 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): September 30, 2026 December 31, 2025 Raw materials $ 5,783 $ 4,915 Packaging 1,564 1,654 Non-food finished goods 406 1,216 Finished goods 16,278 16,785 Allowance for obsolete inventory ( 2,829 ) ( 4,342 ) Total $ 21,202 $ 20,228

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 September 30, Nine months ended September 30, 2026 2025 2026 2025 Numerator: Net loss $ ( 17,511 ) $ ( 2,261 ) $ ( 22,733 ) $ ( 553 ) Denominator: Weighted average shares of common stock outstanding 11,181 10,991 11,108 10,977 Effect of dilutive common stock equivalents - - - - Weighted average shares of common stock outstanding 11,181 10,991 11,108 10,977 Loss per share - basic $ ( 1.57 ) $ ( 0.21 ) $ ( 2.05 ) $ ( 0.05 ) Loss per share - diluted $ ( 1.57 ) $ ( 0.21 ) $ ( 2.05 ) $ ( 0.05 )

The Company was in a loss position for the three and nine months ended September 30, 2026, and as such, all equity awards were antidilutive for those periods. If the Company were not in a loss position, the calculation of diluted EPS would have included the effect of dilutive common stock equivalents of 380 thousand and 282 thousand, and would have excluded 70 thousand and 105 thousand antidilutive restricted stock awards for three and nine months ended September 30, 2026, respectively. For the three and nine months ended September 30, 2025, if the Company were not in a loss position, the calculation of diluted EPS would have included the effect of dilutive common stock equivalents of 176 thousand and 102 thousand, and would have excluded 308 thousand and 329 thousand antidilutive restricted stock awards, respectively. EPS is computed independently for each of the periods presented above, and accordingly, the sum of the quarterly earnings per share may not equal the year-to-date total computed. 4. SHARE-BASED COMPENSATION Stock Options The Company has granted non-qualified and incentive stock options to employees under the Amended and Restated 2012 Share Incentive Plan (the "2012 Plan"). The fair values of these options were estimated on the grant dates using the Black-Scholes option pricing model, which required 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 September 30, 2026, generally vested over a period of 3 years and expire 10 years from the date of grant. The exercise price of these options is $ 66.68 . Due to the Company's lack of option exercise history on the date of grant, the expected term was 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 was based on the U.S. Treasury yield curve in effect on the date of grant that most closely corresponded to the expected term of the option. The expected volatility was based on the historical volatility of the Company's common stock over the period of time equivalent to the expected term for each award. The dividend yield was computed as the annualized dividend 10

rate at the grant date divided by the strike price of the stock option. For the nine months ended September 30, 2026 and 2025, the Company did no t grant stock options. The following table is a summary of our stock option activity (in thousands, except per share data): Nine months ended September 30, 2026 2025 Awards Weighted-Average Exercise Price Awards Weighted-Average Exercise Price Outstanding at beginning of period 22 $ 66.68 22 $ 66.68 Exercised - - - - Forfeited - - - - Outstanding at end of the period 22 $ 66.68 22 $ 66.68 Exercisable at end of the period 22 $ 66.68 22 $ 66.68

As of September 30, 2026, the weighted-average remaining contractual life for both the outstanding stock options and exercisable stock options was 1.4 years with an aggregate intrinsic value of $ 0 . There was no unrecognized compensation on the awards for the periods ended September 30, 2026 and 2025. There were no stock options exercised for the nine months ended September 30, 2026 and 2025. For the nine months ended September 30, 2026 and 2025, the Company received no cash proceeds from the exercise of stock options. Restricted Stock The Company has granted restricted stock under the 2012 Plan to employees and non-employee directors generally with vesting terms up to 3 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): Nine months ended September 30, 2026 2025 Shares Weighted-Average Grant Date Fair Value Shares Weighted-Average Grant Date Fair Value Outstanding at beginning of period 677 $ 24.76 279 $ 57.21 Granted 490 10.19 533 13.75 Vested ( 260 ) 29.52 ( 80 ) 67.32 Forfeited ( 129 ) 13.43 ( 18 ) 19.93 Outstanding at end of the period 778 $ 15.88 714 $ 24.55

The Company withheld approximately 77 thousand sha re s and 27 thousand shares of the Company's common stock to cover minimum tax liability withholding obligations upon the vesting of shares of restricted stock for the nine months ended September 30, 2026 and 2025, respectively. The total fair value of restricted stock awards vested during the nine months ended September 30, 2026 and 2025 was $ 2.6 million and $ 1.1 million, respectively. Market and Performance-based Share Awards The Company has granted market and performance-based share awards in 2023, and 2025, and performance-based share awards in 2024 and 2026 under the 2012 Plan to certain key executives who were granted deferred shares and may earn between 0 % and 210 % of the target number depending upon both the Company's total stockholder return ("TSR"), for those with market conditions, 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 TSR are valued using the Monte Carlo method and are recognized ratably as expense over the award's performance period. The fair 11

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 the expected level of achievement over the performance period. Expense for performance-based share awards is amortized ratably over the performance period. In the event that management determines that the Company will not reach the lower threshold of the predetermined performance goals established in the grant agreement, any previously recognized expense is reversed in the period in which such a determination is made.

The total fair value of market and performance-based share awards issued during the nine months ended September 30, 2026 was $ 0.2 million. The Company withheld approximately 8 thousand shares for the nine months ended September 30, 2026 to cover minimum tax liability withholding obligations upon the issuance of shares of market and performance-based share awards. No market and performance-based share awards were issued during the nine months ended September 30, 2025, as a result of the market and performance-based share awards granted in March of 2022 not reaching the lower threshold of the predetermined performance goals. Share-based compensation expense is recorded in selling, general, and administrative expense in the accompanying Condensed Consolidated Statements of Operations (Unaudited). The total expense during the three months ended September 30, 2026 and 2025 was as follows (in thousands): Three months ended September 30, 2026 2025 Shares Share-Based Compensation Expense Shares Share-Based Compensation Expense Options and restricted stock 800 $ 1,222 736 $ 1,565 Performance-based share awards granted in 2026 173 150 - - Market and performance-based share awards granted in 2025 275 371 319 407 Performance-based share awards granted in 2024 35 107 117 ( 1,181 ) Market and performance-based share awards granted in 2023 - - 47 119 Total share-based compensation 1,283 $ 1,850 1,219 $ 910

The total expense during the nine months ended September 30, 2026 and 2025 was as follows (in thousands): Nine months ended September 30, 2026 2025 Shares Share-Based Compensation Expense Shares Share-Based Compensation Expense Options and restricted stock 800 $ 3,955 736 $ 4,563 Performance-based share awards granted in 2026 173 312 - $ - Market and performance-based share awards granted in 2025 275 1,032 319 875 Performance-based share awards granted in 2024 35 265 117 ( 444 ) Market and performance-based share awards granted in 2023 - - 47 473 Total share-based compensation 1,283 $ 5,564 1,219 $ 5,467

The total income tax benefit recognized in the accompanying Condensed Consolidated Statements of Operations (Unaudited) for restricted stock awards was $ 0.6 million and $ 0.2 million for the three months ended September 30, 2026 and 2025, respectively, and income tax expense of $ 0.1 million and of $ 0.1 million for the nine months ended September 30, 2026 and 2025, respectively.

There was $ 6.3 million of total unrecognized compensation expense related to restricted stock awards as of September 30, 2026, which is expected to be recognized over a weighted-average period of 1.7 years. There was $ 3.3 million of unrecognized compensation expense related to the 275 thousand market and performance-based shares and 208 thousand performance-based shares presented in the table above as of September 30, 2026, which is expected to be recognized over a weighted-average period of 1.6 years. 12

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 for the nine months ended September 30, 2026 and 2025. Our leases relating to office and warehouse space have lease terms of 87 months to 125 months . Our leases relating to equipment have lease terms of 36 months, with certain of them having automatic renewal clauses. The Company's lease agreements also contain non-lease components, 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 $ 1.3 million and $ 1.2 million for the three months ended September 30, 2026 and 2025, and $ 4.1 million and $ 3.7 million for the nine months ended September 30, 2026 and 2025.

Supplemental cash flow information related to the Company's operating leases was as follows (in thousands): Nine months ended September 30, 2026 2025 Cash paid for amounts included in the measurements of lease liabilities Operating cash flow used in operating leases $ 4,300 $ 4,831 Right-of-use assets obtained in exchange for lease obligations Operating leases $ 19,370 $ - Right-of-use assets derecognized upon early termination Operating leases $ 3,608 $ - Lease liabilities derecognized upon early termination Operating leases $ ( 5,824 ) $ -

As of September 30, 2026, the weighted average remaining lease term was 5 years, 11 months and the weighted average discount rate was 5.30 %. The following table presents the maturity of the Company's operating lease liabilities as of September 30, 2026 (in thousands): 2026 (excluding the nine months ended September 30, 2026) $ 1,081 2027 4,029 2028 4,164 2029 4,306 2030 4,208 Thereafter 6,357 Total lease payments $ 24,145 Less: Imputed interest ( 3,460 ) Total $ 20,685

During the first quarter of 2026, the Company's lease commenced for a new headquarters office space in 1501 South Clinton Street, Baltimore, Maryland 21224, with a lease term of 8 years and 7 months. The Company recorded an initial right-of-use 13

asset and corresponding lease liability of $ 6.8 million during the period ended March 31, 2026. The future minimum lease commitments related to this lease are included in the table above. The Company did not renew its office space lease in 100 International Drive, Baltimore, Maryland 21202 which expired in February 2026. During the second quarter of 2026 , the Company executed an amendment to extend the lease and reduce the square footage for our distribution facility located at 2000 Rock Glenn Boulevard, Havre de Grace, Maryland 21078 with a term of 5 years (the "HdG Lease"). The amendment to the HdG Lease commenced in June 2026, at which time the Company remeasured its right-of-use asset and corresponding lease liability by $ 12.5 million and $ 12.7 million, respectively. The future minimum lease commitments related to the HdG Lease are included in the table above. During the third quarter of 2026, the Company terminated the leases for properties located at 4251 Northern Cross Boulevard, Haltom City, Texas 76117 (the "FTW Lease") and 11515 Cronridge Drive, Owings Mills, Maryland 21117 (the "OMIC Lease") before their contractual expiration dates. In connection with these terminations, the Company derecognized right-of-use assets totaling $ 3.6 million and corresponding lease liabilities totaling $ 5.8 million during the three months ended September 30, 2026. No future minimum lease commitments related to the FTW Lease or the OMIC Lease are included in the table above. See Footnote 9 "Restructuring and related activities" for further information.