Lifevantage (LFVN) risk factors, FY2025 10-K

Risks Relating to Our Business and Industry

1. 01An inability to properly motivate and incentivize sales from our independent consultants could harm our business
2. 02If we are unable to retain our existing customers and independent consultants or attract additional customers and independent consultants, our revenue will not increase and may decline
3. 03Our independent consultants could fail to comply with applicable legal requirements or our policies and procedures, which could result in claims against us that could harm our business
4. 04We may be adversely affected by changes to our independent consultant compensation plans
5. 05We primarily depend on a few products for a majority of our revenue
6. 06We are dependent upon third parties to manufacture our products
7. 07High quality materials for our products may be difficult to obtain or expensive
8. 08Disruptions to or significantly increased costs associated with transportation and other distribution channels for our products may adversely affect our margins and profitability
9. 09We are subject to risks related to product recalls
10. 10Our business is susceptible to product liability claims
11. 11Many of the markets in which we compete for business, including the dietary supplement and personal care markets, are highly competitive. We may not be able to compete effectively, which may have a material adverse effect on our results of operations and financial condition
12. 12Unfavorable publicity could materially harm our business
13. 13Actions of activist stockholders have, and could continue to, impact the pursuit of our business strategies, cause us to incur substantial costs, divert our management’s attention and resources, and adversely affect our business, results of operations, financial condition, and the trading price of our common stock
14. 14The loss of or inability to attract key personnel could negatively impact our business
15. 15We may be held responsible for certain taxes or assessments and other obligations relating to the activities of our independent consultants, which could harm our financial condition and operating results
16. 16We are subject to risks related to a Global Not For Resale Program

Risks Relating to Our Company

1. 17We may not be successful in expanding our operations
2. 18If we are able to expand our operations, including through acquisition of assets or businesses, we may experience difficulties in managing our future growth, which could adversely affect our business
3. 19We may not succeed in growing our business in existing markets or opening new markets
4. 20Inability of new products and technological innovations to gain market acceptance by customers and/or independent consultants could harm our business
5. 21Our business could be negatively impacted if we fail to execute any product launch process due to increased pressure on our supply chain, information systems and management
6. 22Our business may be harmed if we are unable to appropriately manage our inventory
7. 23We rely on our IT systems to manage numerous aspects of our business, and a disruption in these systems, including as a result of cybersecurity incidents, could adversely affect our business
8. 24In April 2024, we entered into a loan agreement, which provides for a revolving line of credit in an aggregate principal amount not to exceed $5.0 million (the “2024 Credit Facility”). As of June 30, 2025, there is no outstanding balance on the 2024 Credit Facility
9. 25A substantial portion of our business is conducted in foreign markets, exposing us to the risks of trade or foreign exchange restrictions, increased tariffs, foreign currency fluctuations, disruptions or conflicts with our third-party importers and similar risks associated with foreign operations
10. 26economic dynamics that affect exchange rate fluctuations, it is difficult to predict future fluctuations and the effect these fluctuations may have upon future reported results or our overall financial condition
11. 27We may require substantial additional funding, which may not be available to us on acceptable terms, or at all, and, if not available, may require us to delay, scale back, or cease our product development or growth plans

Risks Related to Regulatory, Compliance, and Legal Matters

1. 28Our business is subject to strict government regulations
2. 29enacted that restrict our ability to market or distribute dietary supplements or impose additional burdens or requirements on dietary supplement companies or require us to reformulate our products
3. 30Regulations governing the production and marketing of our products could harm our business
4. 31We are subject to the risk of investigatory and enforcement action
5. 32Our direct selling program could be found to be not in compliance with current or newly adopted laws or regulations in one or more markets, which could prevent us from conducting our business in these markets and harm our financial condition and operating results
6. 33Laws and regulations may prohibit or severely restrict direct selling and cause our revenue and profitability to decline, and regulators could adopt new regulations that negatively impact our business
7. 34Our financial condition and results of operations may be adversely affected by international regulatory and business risks
8. 35Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our products and brand
9. 36Third parties might claim that we infringe on their intellectual property rights

Risks Related to Ownership of Our Common Stock

1. 37Our stock price may experience future volatility
2. 38Substantial sales of shares of our common stock in the public market may impact the market price of our common stock
3. 39We cannot guarantee that our share repurchase program will be utilized to the full value approved or that it will enhance long-term stockholder value. Repurchases we consummate could increase the volatility of the price of our common stock and could have a negative impact on our available cash balance
4. 40Additional shares that may be issued upon the exercise of currently outstanding options or upon future vesting of restricted stock units, would dilute the voting power of our currently outstanding common stock and could cause our stock price to decline
5. 41If we are unable to maintain compliance with Nasdaq requirements for continued listing, our common stock could be delisted from trading
6. 42We are a “smaller reporting company” and may take advantage of certain scaled disclosures available to us. We cannot be certain if the reduced reporting requirements applicable to smaller reporting companies will make our common stock less attractive to investors
7. 43Delaware law and provisions in our certificate of incorporation and amended and restated bylaws could make a merger, tender offer or proxy contest difficult, thereby depressing the trading price of our common stock
8. 44We may become involved in legal proceedings that are expensive, time-consuming and, if adversely adjudicated or settled, could adversely affect our financial results
9. 45If we fail to maintain proper and effective internal controls, our ability to produce accurate and timely financial statements could be impaired, which could result in sanctions or other penalties that would harm our business
10. 46Government authorities may question our tax positions or transfer pricing policies or change their laws in a manner that could increase our effective tax rate or otherwise harm our business
11. 47Economic, political, and other risks associated with our international operations could adversely affect our revenue and international growth prospects
12. 48Unfavorable global economic conditions, including high inflation, tariffs, and other macroeconomic conditions or trends may have an adverse impact on our business, financial results, and prospects
13. 49In addition, such macroeconomic conditions could impact our ability to access the public markets as and when appropriate or necessary to carry out our operations or our strategic goals. We cannot predict the ongoing extent, duration, or severity of these conditions, nor the extent to which we may be impacted
14. 50We could be subject to securities class action litigation
15. 51If securities or industry analysts cease publishing research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline