ý
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ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
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¨
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
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Colorado
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90-0224471
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(State or other jurisdiction of
incorporation or organization)
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(IRS Employer
Identification No.)
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9785 S. Monroe, Ste 300
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Sandy, UT 84070
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(Address of principal executive offices, including zip code)
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Registrant’s telephone number: (801) 432-9000
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Large accelerated filer
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¨
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Accelerated filer
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ý
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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•
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Matters relating to our audit committee's independent review into sales of our products in certain international markets;
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•
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Non-compliance by our independent distributors with applicable legal requirements or our policies and procedures;
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•
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Potential adverse effects on our business and stock price due to ineffective internal controls over financial reporting;
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•
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Inability to manage financial reporting and internal control systems and processes;
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•
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Inability to properly motivate and manage our independent distributors;
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•
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Inability to manage existing markets, open new international markets or expand our operations;
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•
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Inability of new products to gain distributor or market acceptance;
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•
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Inability to execute our product launch process due to increased pressure on our supply chain, information systems and management;
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•
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Inability to appropriately manage our inventory;
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•
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Disruptions in our information technology systems;
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•
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Inability to protect against cyber security risks and to maintain the integrity of data;
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•
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Inability to comply with financial covenants imposed by our credit facility and the impact of debt service obligations and restrictive debt covenants;
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•
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International trade or foreign exchange restrictions, increased tariffs, foreign currency exchange fluctuations;
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•
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Deterioration of global economic conditions;
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•
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Inability to maintain appropriate level of internal control over financial reporting;
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•
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Inability to raise additional capital if needed;
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•
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Exposure to environmental liabilities stemming from past operations and property ownership;
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•
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Dependence upon a few products for revenue;
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•
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Inability to retain independent distributors or to attract new independent distributors on an ongoing basis;
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•
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High quality materials for our products may become difficult to obtain or expensive;
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•
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Improper actions by our independent distributors that violate laws or regulations;
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•
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Dependence on third parties to manufacture our products;
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•
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Disruptions to the transportation channels used to distribute our products;
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•
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We may be subject to a product recall;
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•
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Government regulations on direct selling activities in our various markets may prohibit or severely restrict our business model;
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•
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Unfavorable publicity on our business or products;
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•
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Our direct selling program could be found to not be in compliance with current or newly adopted laws or regulations in various markets;
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•
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Legal proceedings may be expensive and time consuming;
|
•
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Strict government regulations on our business;
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•
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Regulations governing the production or marketing of our skin care products;
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•
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Risk of investigatory and enforcement action by the Federal Trade Commission;
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•
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Government authorities may question our tax positions or transfer pricing policies or change their laws in a manner that could increase our effective tax rate or otherwise harm our business;
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•
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Failure to comply with anti-corruption laws;
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•
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Inability to build and integrate our new management team could harm our business;
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•
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Loss of, or inability to attract, key personnel;
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•
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We may be held responsible for certain taxes or assessments relating to the activity of our independent distributors;
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•
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Competition in the dietary supplement market;
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•
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Our inability to protect our intellectual property rights;
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•
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Third party claims that we infringe on their intellectual property;
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•
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Product liability claims against us;
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•
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Economic, political, foreign exchange and other risks associated with international operations;
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•
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Potential delisting of our common stock due to non-compliance with Nasdaq's continued listing requirements;
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•
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Inability to raise future capital or complete acquisitions as a result of delayed periodic reports with the SEC;
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•
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Volatility of the market price of our common stock;
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•
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Substantial sales of shares may negatively impact the market price of our common stock;
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•
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Dilution of outstanding common shares may occur if holders of our existing warrants and options exercise their securities or upon future vesting of Performance Stock Units; and
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•
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We have not paid dividends on our capital stock, and we do not currently anticipate paying dividends in the foreseeable future.
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Page
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•
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Our Compensation
: We believe our compensation plan is one of the more financially rewarding in the direct selling industry. Our percentage of sales paid to independent distributors as compensation and incentive is one of the highest percentages reported in the direct selling industry. Our compensation plan also enables independent distributors to earn compensation early and often as they sell our products. Some elements of our compensation plan are paid weekly, allowing new independent distributors to receive compensation quickly. We believe more frequent payments of compensation helps us retain new independent distributors by allowing them to experience success soon after enrolling. We also offer a variety of incentive programs to our independent distributors for achieving specified sales goals. For example, our My LifeVenture
®
is an incentive program that enables independent distributors to earn the title to a new Jeep Wrangler by achieving and maintaining specified sales goals. We believe our compensation plan and incentive programs help motivate our independent distributors to achieve success.
|
•
|
Our Products
: We have a focus in nutrigenomics, the study of how nutrition and naturally occurring compounds affect our genes. We have developed quality, scientifically-validated nutrigenomics products focused on helping individuals look, feel and perform better. Protandim
®
Nrf2 Synergizer is a patented dietary supplement clinically proven to combat oxidative stress, a natural consequence of cellular metabolism associated with many of the undesirable effects of aging. Protandim
®
NRF1 Synergizer is a dietary supplement formulated to strengthen the mitochondria for better cellular health. Our skin care line, LifeVantage TrueScience
®
, is a patented combination of scientifically based anti-aging skin care products formulated to target the visible signs of aging on the skin. Axio
®
, our line of energy drink mixes, is formulated to promote alertness and support mental performance. PhysIQ™, our Smart Weight Management System, promotes weight loss and supports optimal digestion and immune function. Our companion pet supplement, Canine Health
®
, incorporates some of the same active ingredients as Protandim
®
Nrf2 Synergizer to combat oxidative stress in dogs. We believe our significant number of preferred customers who regularly purchase our products without the intention of becoming independent distributors is a strong indicator of the benefits of our products.
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•
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Distributor Training and Resources
: We are committed to providing our independent distributors with resources and training designed to increase productivity and increase their potential for success. We provide training materials and we encourage our independent distributors to participate in company-sponsored events, including conventions, promotions and incentives. In addition, we are dedicated to using technology to facilitate a streamlined approach for independent distributors to manage their businesses and sell our products. Our suite of four new mobile applications provides the training and tools to help our independent distributors share our products and business opportunity directly from their smart phones.
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•
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Our Culture
: We are committed to creating a culture for our independent distributors, customers and employees that focuses on ethical, legal and transparent business practices. At enrollment, our independent distributors agree to abide by our policies and procedures. Our policies and procedures, when followed, ensure that our independent distributors comply with applicable laws and regulations. Our compliance department monitors the activities of our independent distributors as part of our effort to enforce our policies and procedures. Similarly, our code of business conduct and ethics sets forth guidelines and expectations for our employees. We believe our ethical, legal and transparent culture attracts highly qualified employees and independent distributors who share our commitment to these principles.
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•
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Our Employees
: We believe that our employees are an essential asset. We have a dedicated team of professionals that support our system of independent distributors, work to generate long-term value for our shareholders and contribute to the broader public through LifeVantage Legacy and other charitable programs. In turn, we offer competitive compensation, invest in our employees' careers and direct their focus on the long-term goals of our independent distributors and shareholders.
|
•
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TrueScience
®
Ultra Gentle Facial Cleanser:
a concentrated, ultra-rich cleanser used to remove impurities and light make-up without drying or stripping natural oils in the skin.
|
•
|
TrueScience
®
Perfecting Lotion:
a hybrid lotion formulated for smoother, radiant and brighter looking skin.
|
•
|
TrueScience
®
Eye Corrector Serum:
a serum that noticeably improves the visible signs of fine lines, creases and wrinkles around the entire eye area, diminishes puffiness above and below the eye, firms and tightens the upper eyelid area and evens skin tone and dark circles that are visible signs of aging.
|
•
|
TrueScience
®
Anti-Aging Cream:
a cream that deeply moisturizes and helps to combat the appearance of fine lines and wrinkles.
|
•
|
TrueScience
®
Micro-Lift Serum:
a serum that tightens and smooths skin around eyes to combat the appearance of fine lines and wrinkles.
|
•
|
PhysIQ
™
Fat Burn:
a supplement containing natural active ingredients to stimulate the breakdown of abdominal fat, increase energy and support long-term weight management.
|
•
|
PhysIQ
™
Probio:
a supplement designed to support long-term gut health by restoring healthy gut bacteria to support digestive system health.
|
•
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PhysIQ
™
Cleanse:
a supplement designed to stimulate healthy digestion and regularity and supports the cleansing of your digestive system.
|
•
|
PhysIQ
™
Protein Shake:
a combination of fast and slow release proteins designed to satisfy hunger and deliver amino acids to support quick recovery and improved muscle synthesis.
|
•
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Blueprint
: professionally-designed training materials independent distributors can utilize in their sales efforts;
|
•
|
Pro Audio Series
: our weekly audio series presented by our independent distributor leaders providing training and tips on becoming more productive independent distributors;
|
•
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Elite Academy and Global Convention
: regularly occurring company-sponsored events intended to provide training and motivation to our independent distributors; and
|
•
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Promotions and Incentive Trips
: we hold special promotions and incentive trips from time to time in order to motivate our independent distributors to accomplish specific sales goals.
|
•
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LV Pro App
: designed for independent distributors to access to their business in real-time, directly from their smart phone;
|
•
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LV Share App
: uses social media as an effective tool to connect and expand social reach on sites like Facebook, Twitter, Pinterest and Instagram;
|
•
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Brandr App
: library equipped with professionally-designed overlays with LifeVantage’s branding and other useful tools, including quotes, tips and facts independent distributors can share with their social networks; and
|
•
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LV Move App
: platform designed to engage new distributors upon enrollment and mentor existing distributors to help them launch their respective businesses.
|
|
For the years ended June 30,
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|||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
Americas
|
$
|
158,291
|
|
|
76.6
|
%
|
|
$
|
138,118
|
|
|
72.6
|
%
|
|
$
|
141,227
|
|
|
66.0
|
%
|
Asia/Pacific & Europe
|
48,249
|
|
|
23.4
|
%
|
|
52,218
|
|
|
27.4
|
%
|
|
72,741
|
|
|
34.0
|
%
|
|||
Total
|
$
|
206,540
|
|
|
100
|
%
|
|
$
|
190,336
|
|
|
100
|
%
|
|
$
|
213,968
|
|
|
100
|
%
|
•
|
require us or our distributors to register with governmental agencies;
|
•
|
impose caps on the amount of commission we can pay;
|
•
|
impose reporting requirements; and
|
•
|
require that we ensure, among other things, that our distributors maintain levels of product sales to qualify to receive commissions and that our distributors are being compensated primarily for sales of products and not primarily for recruiting additional participants.
|
•
|
gives the FDA explicit authority to inspect and copy certain records related to any food and to compel a recall if the FDA believes there is a reasonable probability of serious adverse health consequences or death;
|
•
|
places strict obligations on food and dietary supplement importers to verify that food from foreign suppliers is not adulterated or misbranded; and
|
•
|
provides whistle blower protection for employees of conventional food or dietary supplement companies who provide information to governmental authorities about violations of the FFDCA.
|
•
|
any adverse publicity regarding us, our products, our distribution channel, or our competitors;
|
•
|
non-compliance by our independent distributors with applicable legal requirements or our policies and procedures;
|
•
|
lack of interest in existing or new products or their failure to achieve desired results;
|
•
|
lack of a compelling business opportunity sufficient to generate the interest and commitment of new independent distributors;
|
•
|
any changes we might make to our independent distributor compensation plan;
|
•
|
any negative public perception of our company or our products or their ingredients;
|
•
|
any negative public perception of our independent distributors and direct selling business in general;
|
•
|
our actions to enforce our policies and procedures;
|
•
|
any efforts to sell our products through competitive channels;
|
•
|
any regulatory actions or charges against us or others in our industry; and
|
•
|
general economic and business conditions.
|
•
|
political and economic instability of foreign markets;
|
•
|
foreign governments’ restrictive trade policies;
|
•
|
lack of well-established or reliable legal systems in certain areas in which we operate;
|
•
|
inconsistent product regulation or sudden policy changes by foreign agencies or governments;
|
•
|
the imposition of, or increase in, duties, taxes, government royalties, or non-tariff trade barriers;
|
•
|
difficulty in collecting international accounts receivable and potentially longer payment cycles;
|
•
|
the possibility that a foreign government may limit our ability to repatriate cash;
|
•
|
increased costs in maintaining international marketing efforts;
|
•
|
problems entering international markets with different cultural bases and consumer preferences; and
|
•
|
fluctuations in foreign currency exchange rates.
|
|
Fiscal year
|
||||||||||||||
|
2016
|
|
2015
|
||||||||||||
|
High
|
|
Low
|
|
High
|
|
Low
|
||||||||
First Quarter
|
$
|
6.86
|
|
|
$
|
1.40
|
|
|
$
|
10.85
|
|
|
$
|
7.84
|
|
Second Quarter
|
$
|
10.50
|
|
|
$
|
4.66
|
|
|
$
|
10.01
|
|
|
$
|
7.70
|
|
Third Quarter
|
$
|
10.55
|
|
|
$
|
7.63
|
|
|
$
|
9.38
|
|
|
$
|
4.90
|
|
Fourth Quarter
|
$
|
14.71
|
|
|
$
|
8.01
|
|
|
$
|
5.60
|
|
|
$
|
3.37
|
|
Measured Period
|
LFVN
|
NASDAQ
Composite
|
Peer Group
|
||||||
June 30, 2011
|
$
|
100.00
|
|
$
|
100.00
|
|
$
|
100.00
|
|
June 30, 2012
|
$
|
188.57
|
|
$
|
106.99
|
|
$
|
78.18
|
|
June 30, 2013
|
$
|
154.67
|
|
$
|
125.83
|
|
$
|
98.01
|
|
June 30, 2014
|
$
|
96.00
|
|
$
|
165.05
|
|
$
|
101.43
|
|
June 30, 2015
|
$
|
35.33
|
|
$
|
188.87
|
|
$
|
74.54
|
|
June 30, 2016
|
$
|
129.52
|
|
$
|
185.70
|
|
$
|
68.29
|
|
|
Years Ended June 30,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue, net
|
$
|
206,540
|
|
|
$
|
190,336
|
|
|
$
|
213,968
|
|
|
$
|
208,178
|
|
|
$
|
126,183
|
|
Cost of sales
|
33,932
|
|
|
28,010
|
|
|
33,194
|
|
|
31,845
|
|
|
18,052
|
|
|||||
Product recall costs
|
—
|
|
|
—
|
|
|
—
|
|
|
4,798
|
|
|
—
|
|
|||||
Gross profit
|
172,608
|
|
|
162,326
|
|
|
180,774
|
|
|
171,535
|
|
|
108,131
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commissions and incentives
|
103,120
|
|
|
91,074
|
|
|
104,525
|
|
|
101,737
|
|
|
57,955
|
|
|||||
Selling, general and administrative
|
56,074
|
|
|
57,353
|
|
|
56,801
|
|
|
57,730
|
|
|
28,719
|
|
|||||
Total operating expenses
|
159,194
|
|
|
148,427
|
|
|
161,326
|
|
|
159,467
|
|
|
86,674
|
|
|||||
Operating income
|
13,414
|
|
|
13,899
|
|
|
19,448
|
|
|
12,068
|
|
|
21,457
|
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
(3,321
|
)
|
|
(3,087
|
)
|
|
(3,177
|
)
|
|
(3
|
)
|
|
(8
|
)
|
|||||
Other income (expense), net
|
(1,409
|
)
|
|
(159
|
)
|
|
384
|
|
|
(912
|
)
|
|
(36
|
)
|
|||||
Change in fair value of derivative liabilities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,741
|
)
|
|||||
Total other income (expense)
|
(4,730
|
)
|
|
(3,246
|
)
|
|
(2,793
|
)
|
|
(915
|
)
|
|
(6,785
|
)
|
|||||
Income before income taxes
|
8,684
|
|
|
10,653
|
|
|
16,655
|
|
|
11,153
|
|
|
14,672
|
|
|||||
Income tax expense
|
(2,665
|
)
|
|
(3,666
|
)
|
|
(5,272
|
)
|
|
(3,545
|
)
|
|
(2,203
|
)
|
|||||
Net income
|
$
|
6,019
|
|
|
$
|
6,987
|
|
|
$
|
11,383
|
|
|
$
|
7,608
|
|
|
$
|
12,469
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.44
|
|
|
$
|
0.50
|
|
|
$
|
0.75
|
|
|
$
|
0.47
|
|
|
$
|
0.85
|
|
Diluted
|
$
|
0.41
|
|
|
$
|
0.49
|
|
|
$
|
0.71
|
|
|
$
|
0.43
|
|
|
$
|
0.74
|
|
Weighed average shares outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
13,730
|
|
|
13,899
|
|
|
15,113
|
|
|
16,039
|
|
|
14,671
|
|
|||||
Diluted
|
14,531
|
|
|
14,150
|
|
|
15,943
|
|
|
17,555
|
|
|
16,904
|
|
|
As of June 30,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
7,883
|
|
|
$
|
13,905
|
|
|
$
|
20,387
|
|
|
$
|
26,299
|
|
|
$
|
24,648
|
|
Working capital
|
13,859
|
|
|
4,615
|
|
|
17,271
|
|
|
25,375
|
|
|
22,800
|
|
|||||
Total assets
|
50,259
|
|
|
39,781
|
|
|
52,646
|
|
|
55,484
|
|
|
44,528
|
|
|||||
Current liabilities
|
28,550
|
|
|
25,860
|
|
|
22,702
|
|
|
20,566
|
|
|
16,028
|
|
|||||
Long-term debt, net of unamortized discount
|
7,409
|
|
|
8,533
|
|
|
23,720
|
|
|
—
|
|
|
—
|
|
|||||
Total liabilities
|
38,128
|
|
|
36,456
|
|
|
48,656
|
|
|
21,539
|
|
|
16,245
|
|
|||||
Total stockholders' equity
|
12,131
|
|
|
3,325
|
|
|
3,990
|
|
|
33,945
|
|
|
28,283
|
|
•
|
Our scientifically-validated products, including our Protandim
®
product line, LifeVantage TrueScience
®
, Canine Health
®
, Axio
®
and PhysIQ
™
;
|
|
For the years ended June 30,
|
|||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
Protandim
®
product line
|
$
|
128,019
|
|
|
62.0
|
%
|
|
$
|
120,967
|
|
|
63.6
|
%
|
|
$
|
142,935
|
|
|
66.8
|
%
|
LifeVantage TrueScience® skin care regimen
|
32,914
|
|
|
15.9
|
%
|
|
38,287
|
|
|
20.1
|
%
|
|
46,474
|
|
|
21.7
|
%
|
|||
Other
|
45,607
|
|
|
22.1
|
%
|
|
31,082
|
|
|
16.3
|
%
|
|
24,559
|
|
|
11.5
|
%
|
|||
Total
|
$
|
206,540
|
|
|
100.0
|
%
|
|
$
|
190,336
|
|
|
100.0
|
%
|
|
$
|
213,968
|
|
|
100.0
|
%
|
|
Active Preferred Customers By Region
|
|
|
|
|
||||||||||||
|
As of June 30, 2016
|
|
As of June 30, 2015
|
|
Change from Prior Year
|
|
Percent Change
|
||||||||||
Americas
|
95,000
|
|
|
81.2
|
%
|
|
94,000
|
|
|
81.7
|
%
|
|
1,000
|
|
|
1.1
|
%
|
Asia/Pacific & Europe
|
22,000
|
|
|
18.8
|
%
|
|
21,000
|
|
|
18.3
|
%
|
|
1,000
|
|
|
4.8
|
%
|
|
117,000
|
|
|
100.0
|
%
|
|
115,000
|
|
|
100.0
|
%
|
|
2,000
|
|
|
1.7
|
%
|
|
Active Independent Distributors By Region
|
|
|
|
|
||||||||||||
|
As of June 30, 2016
|
|
As of June 30, 2015
|
|
Change from Prior Year
|
|
Percent Change
|
||||||||||
Americas
|
49,000
|
|
|
71.0
|
%
|
|
44,000
|
|
|
67.7
|
%
|
|
5,000
|
|
|
11.4
|
%
|
Asia/Pacific & Europe
|
20,000
|
|
|
29.0
|
%
|
|
21,000
|
|
|
32.3
|
%
|
|
(1,000
|
)
|
|
(4.8
|
)%
|
|
69,000
|
|
|
100.0
|
%
|
|
65,000
|
|
|
100.0
|
%
|
|
4,000
|
|
|
6.2
|
%
|
|
For the years ended June 30,
|
|||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
Americas
|
$
|
158,291
|
|
|
76.6
|
%
|
|
$
|
138,118
|
|
|
72.6
|
%
|
|
$
|
141,227
|
|
|
66.0
|
%
|
Asia/Pacific & Europe
|
48,249
|
|
|
23.4
|
%
|
|
52,218
|
|
|
27.4
|
%
|
|
72,741
|
|
|
34.0
|
%
|
|||
Total
|
$
|
206,540
|
|
|
100
|
%
|
|
$
|
190,336
|
|
|
100
|
%
|
|
$
|
213,968
|
|
|
100
|
%
|
|
For the years ended,
|
|||||||
|
June 30, 2016
|
|
June 30, 2015
|
|
June 30, 2014
|
|||
Revenue, net
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
16.4
|
|
|
14.7
|
|
|
15.5
|
|
Gross profit
|
83.6
|
|
|
85.3
|
|
|
84.5
|
|
Operating expenses:
|
|
|
|
|
|
|||
Commissions and incentives
|
49.9
|
|
|
47.8
|
|
|
48.9
|
|
Selling, general and administrative
|
27.1
|
|
|
30.1
|
|
|
26.5
|
|
Total operating expenses
|
77.0
|
|
|
77.9
|
|
|
75.4
|
|
Operating income
|
6.6
|
|
|
7.4
|
|
|
9.1
|
|
Other income (expense):
|
|
|
|
|
|
|||
Interest expense
|
(1.6
|
)
|
|
(1.6
|
)
|
|
(1.5
|
)
|
Other income (expense), net
|
(0.7
|
)
|
|
(0.1
|
)
|
|
0.2
|
|
Total other income (expense)
|
(2.3
|
)
|
|
(1.7
|
)
|
|
(1.3
|
)
|
Income before income taxes
|
4.3
|
|
|
5.7
|
|
|
7.8
|
|
Income tax expense
|
(1.3
|
)
|
|
(1.9
|
)
|
|
(2.5
|
)
|
Net income
|
3.0
|
%
|
|
3.8
|
%
|
|
5.3
|
%
|
|
For the years ended June 30,
|
|
|
|||||||
|
2016
|
|
2015
|
|
% change
|
|||||
Japan
|
$
|
36,343
|
|
|
$
|
41,428
|
|
|
(12.3
|
)%
|
Hong Kong
|
7,964
|
|
|
5,963
|
|
|
33.6
|
%
|
||
Other
|
3,942
|
|
|
4,827
|
|
|
(18.3
|
)%
|
||
Asia/Pacific & Europe Total
|
$
|
48,249
|
|
|
$
|
52,218
|
|
|
(7.6
|
)%
|
|
For the years ended June 30,
|
||||||
|
2016
|
|
2015
|
||||
Contractual interest expense:
|
|
|
|
||||
October 2013 Term Loan
|
$
|
1,216
|
|
|
$
|
2,633
|
|
March 2016 Term Loan
|
126
|
|
|
—
|
|
||
Amortization of deferred financing fees:
|
|
|
|
||||
October 2013 Term Loan
|
1,098
|
|
|
255
|
|
||
March 2016 Term Loan
|
3
|
|
|
—
|
|
||
Amortization of debt discount:
|
|
|
|
||||
October 2013 Term Loan
|
854
|
|
|
198
|
|
||
March 2016 Term Loan
|
5
|
|
|
—
|
|
||
Other
|
19
|
|
|
1
|
|
||
Total interest expense
|
$
|
3,321
|
|
|
$
|
3,087
|
|
|
For the years ended June 30,
|
|
|
|||||||
|
2015
|
|
2014
|
|
% change
|
|||||
Japan
|
$
|
41,428
|
|
|
$
|
61,872
|
|
|
(33.0
|
)%
|
Hong Kong
|
5,963
|
|
|
7,347
|
|
|
(18.8
|
)%
|
||
Other
|
4,827
|
|
|
3,522
|
|
|
37.1
|
%
|
||
Asia/Pacific & Europe Total
|
$
|
52,218
|
|
|
$
|
72,741
|
|
|
(28.2
|
)%
|
•
|
Maintain a minimum fixed charge coverage ratio (as defined in the March 2016 Loan Agreement) of at least 1.50 to 1.00 at the end of each fiscal quarter, measured on a trailing twelve month basis;
|
•
|
Maintain minimum consolidated working capital (as defined in the March 2016 Loan Agreement) at the end of each fiscal quarter of at least $5.0 million;
|
•
|
Maintain a ratio of funded debt to EBITDA (as defined in the March 2016 Loan Agreement) of not greater than 2.00 to 1.00 at the end of each quarter, measured on a trailing twelve month basis; and
|
•
|
Have a tangible net worth (as defined in the March 2016 Loan Agreement) of at least $4.0 million as of June 30, 2016 and maintain at least that minimum tangible net worth thereafter, measured annually at the end of each subsequent fiscal year.
|
|
Payments due by period
|
|
|
||||||||||||||||
Contractual Obligations
|
Total
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
Thereafter
|
||||||||||
Long-term debt obligations
|
$
|
9,500
|
|
|
$
|
2,000
|
|
|
$
|
7,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest on long-term debt obligations
|
963
|
|
|
438
|
|
|
525
|
|
|
—
|
|
|
—
|
|
|||||
Operating lease obligations
|
11,574
|
|
|
2,592
|
|
|
3,876
|
|
|
4,137
|
|
|
969
|
|
|||||
Total
|
$
|
22,037
|
|
|
$
|
5,030
|
|
|
$
|
11,901
|
|
|
$
|
4,137
|
|
|
$
|
969
|
|
|
Year ended June 30, 2016
|
|
Year ended June 30, 2015
|
||||||||||||||||||||
|
1st Quarter
|
|
2nd Quarter
|
|
3rd Quarter
|
|
4th Quarter
|
|
1st Quarter
|
|
2nd Quarter
|
|
3rd Quarter
|
|
4th Quarter
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Japan
|
122.25
|
|
|
121.44
|
|
|
115.38
|
|
|
107.97
|
|
|
103.93
|
|
|
114.47
|
|
|
119.17
|
|
|
121.35
|
|
Australia
|
1.38
|
|
|
1.39
|
|
|
1.39
|
|
|
1.34
|
|
|
1.08
|
|
|
1.17
|
|
|
1.27
|
|
|
1.29
|
|
Hong Kong
|
7.75
|
|
|
7.75
|
|
|
7.77
|
|
|
7.76
|
|
|
7.75
|
|
|
7.76
|
|
|
7.76
|
|
|
7.75
|
|
Mexico
|
16.42
|
|
|
16.77
|
|
|
18.04
|
|
|
18.11
|
|
|
13.12
|
|
|
13.87
|
|
|
14.95
|
|
|
15.32
|
|
Canada
|
1.31
|
|
|
1.34
|
|
|
1.37
|
|
|
1.29
|
|
|
1.09
|
|
|
1.14
|
|
|
1.24
|
|
|
1.23
|
|
Thailand
|
35.28
|
|
|
35.91
|
|
|
35.72
|
|
|
35.33
|
|
|
32.17
|
|
|
32.77
|
|
|
32.71
|
|
|
33.29
|
|
Europe
|
0.90
|
|
|
0.91
|
|
|
0.91
|
|
|
0.89
|
|
|
0.75
|
|
|
0.80
|
|
|
0.89
|
|
|
0.90
|
|
•
|
distributor enrollment requirements by country, including the requirement of sufficient and appropriate oversight and senior management approvals for any changes to such country-specific policies;
|
•
|
approved distributor payment and collection policies by country, including the requirement of sufficient and appropriate oversight and senior management approvals for any changes to such country-specific policies;
|
•
|
approved shipping, order fulfillment and customs import policies by country, including the requirement of sufficient and appropriate oversight and senior management approvals for any changes to such country-specific policies; and
|
•
|
approval requirements for transactions between us and independent distributors outside of our approved compensation plans.
|
Name
|
|
Age
|
|
Position with Company
|
Mr. Darren Jensen
|
|
46
|
|
President, Chief Executive Officer and Director
|
Mr. Mark Jaggi
|
|
41
|
|
Chief Financial Officer and Treasurer
|
Mr. Robert Urban
|
|
56
|
|
Chief Operating Officer
|
Mr. Ryan Goodwin
|
|
39
|
|
Chief Marketing Officer
|
Mr. Justin Rose
|
|
48
|
|
Chief Sales Officer
|
Ms. Michelle Oborn-Virchow
|
|
35
|
|
Senior Vice President of Human Resources
|
Mr. Michael A. Beindorff
|
|
64
|
|
Independent Director
|
Mr. David S. Manovich
|
|
64
|
|
Independent Director
|
Mr. Garry Mauro
|
|
68
|
|
Chairman, Independent Director
|
Mr. George E. Metzger
|
|
69
|
|
Independent Director
|
Mr. Richard Okumoto
|
|
64
|
|
Independent Director
|
Mr. David Toole
|
|
60
|
|
Independent Director
|
NEO
|
Position
|
Darren Jensen
|
President and Chief Executive Officer
|
Mark Jaggi
|
Chief Financial Officer
(1)
|
Michelle Oborn-Virchow
|
Senior Vice President of Human Resources
(2)
|
Justin Rose
|
Chief Sales Officer
(3)
|
Robert M. Urban
|
Chief Operating Officer
|
David S. Colbert
|
Former Chief Financial Officer and Treasurer
(4)
|
(1)
|
Mr. Jaggi was appointed as our Chief Financial Officer effective August 24, 2015.
|
(2)
|
Ms. Oborn-Virchow was promoted to Sr. Vice President of Human Resources effective November 30, 2015
|
(3)
|
Mr. Rose was appointed as our Chief Sales Officer effective July 22, 2015.
|
(4)
|
Mr. Colbert's employment with the Company was terminated effective July 3, 2015.
|
•
|
Part I-Compensation Principles and Processes
. In this part we describe the important principles, processes and tools that help us determine compensation for our NEOs.
|
•
|
Part II-Compensation Components
. In this part we discuss the three material components of NEO compensation - base salary, annual and long term incentive opportunities - and actual compensation paid or awarded to, or earned by, our NEOs in fiscal 2016.
|
•
|
Part III-Other Matters
. In this part we discuss other compensation practices that affect how we compensate our NEOs, including employment agreements and certain corporate policies.
|
•
|
manage the distribution of gains between our NEOs and our shareholders;
|
•
|
reward company and individual performance;
|
•
|
maintain an appropriate balance between base salary and annual and long-term incentive opportunities;
|
•
|
be externally competitive and internally equitable; and
|
•
|
give us the flexibility to attract, retain and motivate talented executives.
|
CVR Partners (UAN)
|
Nutraceutical International (NATR)
|
Depomed (DEPO)
|
Omega Protein (OME)
|
Gaiam (GAIA)
|
PetMed Express (PETS)
|
Lifeway Foods (LWAY)
|
Quidel (ODEL)
|
Mannatech (MTEX)
|
QuinStreet (QNST)
|
Medifast (MED)
|
Rentech Nitrogen (RNF)
|
Meridian Bioscience (VIVO)
|
Sagent Pharmaceuticals (SGNT)
|
MGP Ingredients (MGPI)
|
SciClone Pharmaceuticals (SCLN)
|
MusclePharm (MSLP)
|
Spectrum Pharmaceuticals (SPPI)
|
Natural Alternatives Int'l (NAII)
|
Sucampo Pharmaceuticals (SCMP)
|
•
|
Reward the NEOs for business and individual performance;
|
•
|
Encourage effective short-term performance while balancing long-term focus;
|
•
|
Provide a significant portion of total compensation opportunity that is at risk; and
|
•
|
Be externally competitive and internally equitable.
|
•
|
align NEO's incentives directly with shareholder value;
|
•
|
encourage performance that increases long-term shareholder return;
|
•
|
serve as a retention tool; and
|
•
|
give NEOs a meaningful equity stake in our business.
|
•
|
An annual incentive payment for incremental annual revenue from sales of Protandim over prior year revenue for such product in an amount equal to 3% of the positive difference between total net revenue from sales of Protandim for the most recently completed fiscal year relative to the prior fiscal year; and
|
•
|
An annual incentive payment for incremental annual revenue from sales of TrueScience Skin Care Regimen products over prior year revenue for such products in an amount equal to 2% of the positive difference between total net revenue from sales of TrueScience Skin Care Regimen for the most recently completed fiscal year relative to the prior fiscal year.
|
•
|
a one-time cash bonus of $300,000 when our annual net revenue exceeds $300 million;
|
•
|
a one-time cash bonus of $400,000 when our annual net revenue exceeds $400 million; and
|
•
|
a one-time cash bonus of $500,000 when our annual net revenue exceeds $500 million (each of $300 million, $400 million and $500 million, a “Revenue Milestone”).
|
Name and Principal Position
|
Year
|
|
Salary ($)
|
|
Bonus
($)
|
|
Stock Awards ($)
(1)
|
|
Non-equity Plan Compensation
|
|
All Other Compensation ($)
|
|
Total
($)
|
||||||
Darren J. Jensen,
President
|
2016
|
|
550,000
|
|
|
—
|
|
|
2,031,840
|
|
(3)
|
—
|
|
|
20,988
|
|
(4)
|
2,602,828
|
|
and Chief Executive Officer
(2)
|
2015
|
|
68,750
|
|
|
451,000
|
|
(5)
|
630,000
|
|
|
—
|
|
|
2,414
|
|
|
1,152,164
|
|
Mark Jaggi,
Chief Financial Officer
(6)
|
2016
|
|
294,688
|
|
(8)
|
—
|
|
|
695,961
|
|
(7)
|
—
|
|
|
|
|
990,649
|
|
|
Robert M. Urban
,
Chief
|
2016
|
|
370,000
|
|
|
—
|
|
|
610,880
|
|
(9)
|
—
|
|
|
26,514
|
|
(10)
|
1,007,394
|
|
Operating Officer
|
2015
|
|
370,000
|
|
|
—
|
|
|
308,000
|
|
|
—
|
|
|
—
|
|
|
678,000
|
|
|
2014
|
|
370,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
370,000
|
|
Justin Rose,
Chief Sales Officer
(11)
|
2016
|
|
323,436
|
|
(12)
|
|
|
676,281
|
|
(13)
|
83,338
|
|
(14)
|
10,325
|
|
(15)
|
1,010,042
|
|
|
Michelle Oborn-Virchow
, Senior Vice
|
2016
|
|
234,667
|
|
(16)
|
—
|
|
|
385,120
|
|
(17)
|
—
|
|
|
7,425
|
|
(18)
|
627,212
|
|
President of Human Resources
(16)
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
||||
David S. Colbert
, former Chief
|
2016
|
|
3,750
|
|
|
—
|
|
|
|
|
—
|
|
|
325,000
|
|
(20)
|
328,750
|
|
|
Financial Officer
(19)
|
2015
|
|
325,000
|
|
|
—
|
|
|
308,000
|
|
|
—
|
|
|
—
|
|
|
633,000
|
|
|
2014
|
|
325,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
325,000
|
|
(1)
|
The amounts in this column represent the aggregate grant date fair value of stock awards granted to the NEO in the applicable fiscal year under our 2010 LTIP and computed in accordance with FASB ASC Topic 718. See Note 8 of the notes to our consolidated financial statements.
|
(2)
|
Mr. Jensen was hired as our President and CEO in May 2015.
|
(3)
|
Consists of $1,731,960, the grant date fair value of the PRSUs granted to Mr. Jensen on January 4, 2016, and $299,880, which represents the aggregate incremental fair value calculated in accordance with FASB ASC Topic 718 in connection with the modification of Mr. Jensen’s PRSUs on March 28, 2016. Assuming the highest level of performance conditions will be achieved, the value PRSUs awarded would be $2,873,340.
|
(4)
|
Reflects relocation expenses paid by the Company in the amount of $8,012, reimbursements for travel, including airfare, in the amount of $10,528, $2,063 in 401(k) matching contributions and $385 for a holiday cash gift.
|
(5)
|
Reflects a signing bonus paid to Mr. Jensen in connection with the commencement of his employment.
|
(6)
|
Mr. Jaggi was hired as our Chief Financial Officer on August 24, 2015.
|
(7)
|
Consists of $85,081, the grant date fair value of shares of restricted stock awarded to Mr. Jaggi in connection with this commencement of employment, $520,720, the grant date fair value of the PRSUs granted to Mr. Jaggi on January 4, 2016, and $90,160, which represents the aggregate incremental fair value calculated in accordance with FASB ASC Topic 718 in connection with the modification of Mr. Jaggi’s PRSUs on March 28, 2016. Assuming the highest level of performance conditions will be achieved, the value PRSUs awarded would be $863,880.
|
(8)
|
Consists of $10,313 paid to Mr Jaggi for consulting services prior to his employment with the Company and $284,375 paid to Mr. Jaggi during the fiscal year for his salary. His annualized salary during the fiscal year was $325,000.
|
(9)
|
Consists of $520,720, the grant date fair value of the PRSUs granted to Mr. Urban on January 4, 2016, and $90,160, which represents the aggregate incremental fair value calculated in accordance with FASB ASC Topic 718 in connection with the modification of Mr. Urban’s PRSUs on March 28, 2016. Assuming the highest level of performance conditions will be achieved, the value PRSUs awarded would be $863,880.
|
(10)
|
Reflects $15,029 Mr. Urban received in reimbursements for travel, including airfare, $11,100 in 401(k) matching contributions and $385 for a holiday cash gift.
|
(11)
|
Mr. Rose was hired as our Chief Sales Officer on July 21, 2015.
|
(12)
|
Mr. Rose's annualized salary during the fiscal year was $340,000.
|
(13)
|
Consists of $65,401, the grant date fair value of shares of restricted stock awarded to Mr. Rose in connection with this commencement of employment, $520,720, the grant date fair value of the PRSUs granted to Mr. Rose on January 4, 2016, and $90,160, which represents the aggregate incremental fair value calculated in accordance with FASB ASC Topic 718 in connection with the modification of Mr. Rose’s PRSUs on March 28, 2016. Assuming the highest level of performance conditions will be achieved, the value PRSUs awarded would be $863,880.
|
(14)
|
During fiscal 2016, Mr. Rose participated in the Company’s sales incentive plan, which provides for bonuses to eligible employees in our sales function based upon revenue earned and other sales metrics measured during the applicable period. This plan pays on a quarterly basis. The amount in the table reflects the total bonus paid to Mr. Rose with respect to fiscal 2016 under our sales incentive plan and does not include $14,171 related to the fourth quarter bonus that was not paid as a result of the independent review conducted by our audit committee. Further details relating to Mr. Rose’s sales incentive plan bonus are provided in “
Compensation Discussion and Analysis - PART II: COMPENSATION COMPONENTS - Annual Incentive Plan.”
|
(15)
|
Reflects relocation expenses paid by the Company in the amount of $8,170 and reimbursements for travel, including airfare, in the amount of $1,770 and $385 for a holiday cash gift.
|
(16)
|
Ms. Oborn-Virchow was promoted to Senior Vice President, Human Resources on November 30, 2015. Her annualized salary was $225,500 through March 1, 2016, when it was increased to $253,000.
|
(17)
|
Consists of $328,280, the grant date fair value of the PRSUs granted to Ms. Oborn-Virchow on January 4, 2016, and $56,840, which represents the aggregate incremental fair value calculated in accordance with FASB ASC Topic 718 in connection with the modification of Ms. Oborn-Virchow’s PRSUs on March 28, 2016. Assuming the highest level of performance conditions will be achieved, the value PRSUs awarded would be $544,620.
|
(18)
|
Reflects 401(k) matching contributions and $385 for a holiday cash gift.
|
(19)
|
Mr. Colbert’s employment with the Company was terminated effective July 3, 2015.
|
(20)
|
Represents severance payments made pursuant to Mr. Colbert's separation agreement.
|
Name
|
Award Type (1)
|
Grant Date
|
Estimated Future Payouts Under Non-Equity Incentive Plan Awards (2)
|
Estimated Future Payouts Under Equity Incentive Plan Awards (3)
|
All Other Stock Awards: Number of Shares Or Units (#) (4)
|
Grant Date Fair Value of Stock and Option Awards ($)(5)
|
||||||||||
Threshold ($)
|
Target ($)
|
Maximum ($)
|
Target (#)
|
Maximum (#)
|
||||||||||||
Darren Jensen
|
PRSU
|
3/28/2016
|
|
—
|
|
—
|
|
153,000
|
|
306,000
|
|
|
2,031,840
|
|
||
|
AIP
|
|
90,200
|
|
453,750
|
|
825,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Mark Jaggi
|
RSA
|
8/24/2015
|
|
—
|
|
—
|
|
|
|
17,143
|
|
170,161
|
|
|||
|
PRSU
|
3/28/2016
|
|
|
|
46,000
|
|
92,000
|
|
—
|
|
610,880
|
|
|||
|
AIP
|
|
9,750
|
|
162,500
|
|
243,750
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Robert M. Urban
|
PRSU
|
3/28/2016
|
|
—
|
|
—
|
|
46,000
|
|
92,000
|
|
|
610,880
|
|
||
|
AIP
|
|
11,100
|
|
185,000
|
|
277,500
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Justin Rose
|
RSA
|
7/27/2015
|
|
|
|
|
|
17,143
|
|
130,801
|
|
|||||
|
PRSU
|
3/28/2016
|
|
—
|
|
—
|
|
46,000
|
|
92,000
|
|
—
|
|
610,880
|
|
|
|
SIP
(6)
|
|
8,492
|
|
170,000
|
|
(6)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Michelle Oborn-Virchow
|
PRSU
|
3/25/2016
|
|
|
|
29,000
|
|
29,000
|
|
—
|
|
385,120
|
|
|||
|
AIP
|
|
5,313
|
|
88,550
|
|
132,825
|
|
|
|
—
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
(1)
|
“AIP” denotes that the award was made pursuant to our fiscal 2016 annual incentive plan. “SIP" denotes that the award was made pursuant to our fiscal 2016 sales incentive plan. “RSA” denotes an award of restricted stock that was made pursuant to our 2010 LTIP. “PRSU” denotes a performance-based restricted stock unit award that was made pursuant to our 2010 LTIP.
|
(2)
|
The annual incentive plan (AIP) is an annual incentive plan that pays a cash award for performance and is generally paid after the end of the performance year. See our “
Compensation Discussion and Analysis-Part II-Compensation Components-Annual Incentive Plan
” for a detailed description of annual incentive plan awards. The amounts reported in the Threshold column reflect the potential payout if the Company’s revenue and diluted adjusted earnings per share for the fiscal year was at the minimum level required to receive a cash bonus. The amounts reported in the Target column reflect the at-target potential payout if the Company’s revenue and diluted adjusted earnings per share for the fiscal year was at the goal performance level. The amounts reported in the Maximum column reflect the maximum payout possible under the plan. Amounts for each NEO are based on a percentage of the NEO’s base salary set prior to the beginning of the fiscal year.
|
(3)
|
Each NEO was granted PRSUs under the 2010 LTIP on January 4, 2016, the vesting of which was tied to the Company's TSR during each of three consecutive annual performance periods. The PRSUs were subsequently amended on March 28, 2016, resulting in the deemed cancellation of the original PRSUs and grant of replacement PRSUs, the vesting of which is tied to the Company’s TSR during a three-year performance period commencing on January 1, 2016 and ending on December 31, 2018. We have included the sum of the grant date value of each individual’s PRSU plus the additional incremental value measured on the modification date in the above table. The fair value amounts for each of the January 4, 2016 original grant date and the March 28, 2016 modification date for each NEO are set forth below in the footnotes detailing their respective awards. Vesting of 50% of the PRSUs is based on the Company’s absolute TSR for the performance period as compared to a matrix of fixed numeric values, and the
|
(4)
|
Messrs. Jaggi and Rose were granted restricted stock under our 2010 LTIP. These awards vest over three years in equal installments based on continued employment with the Company on each such date. See our
“Compensation Discussion and Analysis -Part II-Compensation Components-Annual Incentive Plan-Long Term Incentive Plan”
above and also the Outstanding Equity Awards table below for a description of restricted stock awards under our 2010 LTIP.
|
(5)
|
We calculate the grant date fair value of each award in accordance with FASB ASC Topic 718 and as described in Footnote 1 to the “
Summary Compensation Table
,” above. In accordance with SEC rules, the grant date fair value of an award that is subject to a performance condition is based on the probable outcome of the performance condition.
|
(6)
|
Mr. Rose participated during the year in our 2016 sales incentive plan. The sales incentive plan does not provide for maximum amount that may be paid on annual basis for awards. See our “
Compensation Discussion and Analysis-Part II-2016 Sales Incentive Plan
” for a detailed description of his 2016 bonus.
|
|
Option Awards
|
|
Stock Awards
|
||||||||||||||
Name
|
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
|
Number
of Shares
or Units
of Stock
That Have
Not
Vested
(#)
|
|
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(1)
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
(#)
|
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
($)(2)
|
|||||||
Darren Jensen
|
—
|
|
—
|
|
—
|
|
|
142,858
|
|
(3)
|
1,942,868
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
153,000
|
|
(4)
|
2,080,800
|
|
|||||
Mark Jaggi
|
—
|
|
—
|
|
|
|
17,143
|
|
(5)
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
46,000
|
|
(4)
|
625,600
|
|
|||||
Robert M. Urban
|
21,429
|
|
22.33
|
|
5/29/2022
|
|
(6)
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
9,143
|
|
(7)
|
124,345
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
19,048
|
|
(8)
|
259,053
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
46,000
|
|
(4)
|
625,600
|
|
Justin Rose
|
—
|
|
—
|
|
—
|
|
|
17,143
|
|
(9)
|
233,145
|
|
|
|
|
||
|
—
|
|
|
|
|
|
|
|
46,000
|
|
(4)
|
625,600
|
|
||||
Michelle Oborn-Virchow
|
1,715
|
|
4.90
|
|
3/27/2019
|
|
(10)
|
|
|
|
|
|
|
||||
|
1,643
|
|
9.80
|
|
1/25/2022
|
|
(11)
|
|
|
|
|
|
|
||||
|
|
|
|
|
1,190
|
|
(12)
|
16,184
|
|
|
|
|
|||||
|
|
|
|
|
2,214
|
|
(13)
|
30,110
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
19,048
|
|
(8)
|
259,053
|
|
|||||
|
|
|
|
|
|
|
|
29,000
|
|
(4)
|
394,400
|
|
(1)
|
Computed in accordance with SEC rules as the number of unvested RSAs multiplied by the closing market price of our common stock at the end of the 2016 fiscal year, which was $13.60 on June 30, 2016 (the last business day of the 2016 fiscal year). The actual value (if any) to be realized by the NEO depends on whether the shares vest and the future performance of our common stock.
|
(2)
|
Computed in accordance with SEC rules as the number of unvested PRSUs multiplied by the closing market price of our common stock at the end of the 2016 fiscal year, which was $13.60 on June 30, 2016 (the last business day of the
|
(3)
|
These shares of restricted stock were granted on May 18, 2015 and vest in full on the third anniversary of Mr. Jensen’s commencement of employment with the Company, assuming continuous employment with the Company through such date.
|
(4)
|
See Footnote 3 accompanying the Summary Compensation Table above for details regarding the 2016 PRSUs.
|
(5)
|
These shares of restricted stock were granted on August 24, 2015 and vest in three equal annual installments beginning on August 24, 2016 assuming Mr. Jaggi's continuous employment with the Company through each such date.
|
(6)
|
This option was granted on May 29, 2012. One-fourth of the shares subject to this option vested on May 29, 2013, and the remaining shares vested in 36 equal monthly installments on the 29th day of each month thereafter.
|
(7)
|
These shares of restricted stock were part of a restricted stock grant that was granted on June 24, 2013 and vested in four equal annual installments beginning on June 24, 2014 assuming continuous employment with the Company through each such date. Mr. Urban has 9,143 restricted shares remaining from the original grant that will vest on June 24, 2017 from this award.
|
(8)
|
These PRSUs were granted to Mr. Urban and Ms. Oborn-Virchow on January 2, 2015 under the 2010 LTIP. Vesting for the PRSUs is subject to continued service and the Company’s TSR, with one-third of the PRSUs eligible to vest for each of calendar years 2015, 2016 and 2017. Vesting of 50% of the PRSUs is based on the Company’s absolute TSR for the performance period as compared to a matrix of fixed numeric values, and the vesting of the other 50% of the PRSUs is based on a relative comparison of the Company’s TSR to the Vanguard Russell 2000 exchange traded fund. The number of PRSUs eligible to vest in any performance period is 0% to 200% of the target for such calendar year. The number of PRSUs in the table reflects performance at the 100% target level of 9,524 PRSUs per year. Additional details regarding the vesting of the portion of these awards that related to calendar 2015 performance are provided in Footnote 2 to the Options Exercised and Stock Vested table below and in the Compensation Discussion and Analysis - PART II: COMPENSATION COMPONENTS - Long Term Incentive Plan.
|
(9)
|
These shares of restricted stock were granted on July 27, 2015 and vest in three equal annual installments beginning on July 27, 2016 assuming continuous employment with the Company through each such date.
|
(10)
|
This option was granted on March 27, 2009. All of the shares subject to this option vested on March 27, 2010.
|
(11)
|
This option was granted on January 25, 2012. One-fourth of the shares subject to this option vested on January 25, 2013, and the remaining shares vest in 36 equal monthly installments on the 25th day of each month assuming continuous employment with the Company.
|
(12)
|
These shares of restricted stock were part of a restricted stock grant that was granted on January 23, 2013 and vested in four equal annual installments beginning on January 23, 2014 assuming continuous employment with the Company through each such date. Ms. Oborn-Virchow has 1,190 restricted shares remaining from the original grant that will vest on January 23, 2017 from this award.
|
(13)
|
These shares of restricted stock were part of a restricted stock grant that was granted on June 24, 2013 and vested in four equal annual installments beginning on June 24, 2014 assuming continuous employment with the Company through each such date. Ms. Oborn-Virchow has 2,214 restricted shares remaining from the original grant that will vest on June 24, 2017 from this award.
|
|
|
Stock Awards
|
Performance Shares (PRSUs)
|
||||||
Name
|
|
Number of Shares Acquired on Vesting (#)
|
Value Realized on Vesting ($)(1)
|
Number of Shares Acquired on Vesting (#)
|
Value Realized on Vesting ($)(1)
|
||||
Darren Jensen
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Mark Jaggi
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Robert M. Urban
|
|
17,127
|
|
198,767
|
|
7,466 (2)
|
|
71,076
|
|
Justin Rose
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Michelle Oborn-Virchow
|
|
10,872
|
|
109,997
|
|
7,466 (2)
|
|
71,076
|
|
(1)
|
Value realized upon vesting of stock awards was determined by multiplying the number of shares of restricted stock that vested by the fair market value of our common stock on the vesting date.
|
(2)
|
These PRSUs were granted to Mr. Urban and Ms. Oborn-Virchow on January 2, 2015 under the 2010 LTIP. Vesting for the PRSUs is subject to continued service and the Company’s TSR, with one-third of the PRSUs eligible to vest for each of calendar years 2015, 2016 and 2017. Vesting of 50% of the PRSUs is based on the Company’s absolute TSR for the performance period as compared to a matrix of fixed numeric values, and the vesting of the other 50% of the PRSUs is based on a relative comparison of the Company’s TSR to the Vanguard Russell 2000 exchange traded fund. The number of PRSUs eligible to vest in any performance period is 0% to 200% of the target for such calendar year. The number of PRSUs in the table reflects the number of shares issued to each of Mr. Urban and Ms. Oborn-Virchow as a result of performance achievement for calendar year 2015 at the 78.39% achievement level. Details regarding calendar year 2015 performance are included in the “Compensation Discussion and Analysis - PART II: COMPENSATION COMPONENTS - Long Term Incentive Plan.”
|
•
|
Executive's rate of base salary as of June 30, 2016;
|
•
|
Cash out of all stock options (whose vesting is accelerated) at their then intrinsic value as of June 30, 2016;
|
•
|
Cash severance as provided under the NEO's employment agreement or key executive benefit package agreement, as applicable, in effect as of June 30, 2016;
|
•
|
Change in control occurring on June 30, 2016;
|
•
|
Termination of executive's employment occurring on June 30, 2016; and
|
•
|
A price per share of $13.60 which was the closing price of our common stock on June 30, 2016, the final trading day of fiscal 2016.
|
|
|
Involuntary Termination ($)(1)
|
|
Involuntary Termination within 12 months after a Change in Control ($)(2)
|
|||
Darren Jensen
|
|
|
|
|
|||
Base salary continuation
|
|
275,000
|
|
|
|
550,000
|
|
Acceleration of vesting of equity awards
|
|
—
|
|
|
|
4,023,657
|
|
Total
|
|
275,000
|
|
|
|
4,573,657
|
|
Mark Jaggi
|
|
|
|
|
|
||
Base salary continuation
|
|
162,500
|
|
|
|
162,500
|
|
Acceleration of vesting of equity awards
|
|
—
|
|
|
|
625,600
|
|
Total
|
|
162,500
|
|
|
|
162,500
|
|
Robert M. Urban
|
|
|
|
|
|
||
Base salary continuation
|
|
370,000
|
|
|
|
370,000
|
|
Acceleration of vesting of equity awards
|
|
—
|
|
|
|
1,008,998
|
|
Total
|
|
370,000
|
|
|
|
494,345
|
|
Justin Rose
|
|
|
|
|
|
||
Base salary continuation
|
|
170,000
|
|
|
|
170,000
|
|
Acceleration of vesting of equity awards
|
|
—
|
|
|
|
625,600
|
|
Total
|
|
170,000
|
|
|
|
170,000
|
|
Michelle Oborn-Virchow
|
|
|
|
|
|
||
Base salary continuation
|
|
126,500
|
|
|
|
126,500
|
|
Acceleration of vesting of equity awards
|
|
—
|
|
|
|
653,453
|
|
Total
|
|
126,500
|
|
|
|
126,500
|
|
(1)
|
For purposes of this table, an involuntary termination consists of our termination of their respective employment without cause or their resignation for good reason. See
“Compensation Discussion and Analysis-Part III-Other Matters-Employment Agreements”
and “
Compensation Discussion and Analysis-Part III-Other Matters-Severance or Change-in-Control Agreements
,” above.
|
(2)
|
For purposes of this table, an involuntary termination within 12 months after a change in control consists of, with respect to Messrs. Jensen and Urban, the termination of their respective employment without cause or their resignation for good reason. See “
Compensation Discussion and Analysis-Part III-Other Matters-Employment Agreements
” and “
Compensation Discussion and Analysis-Part III-Other Matters-Severance or Change-in-Control Agreements
,” above.
|
|
The Compensation Committee
|
|
|
|
|
|
George E. Metzger, Chair
|
|
|
Michael Beindorff
|
|
|
David S. Manovich
|
|
•
|
Annual Equity Awards - On the date of the next regular annual meeting of shareholders after the annual meeting of shareholders at which a continuing non-employee director is re-elected (the “Election Date”) (for example, for continuing non-employee directors re-elected at and having an Election Date of the fiscal 2016 annual meeting of shareholders, the fiscal 2017 annual meeting of shareholders), each such continuing non-employee director who continues to serve as a member of our board of directors immediately prior to the next regular annual meeting of
|
•
|
Initial Equity Awards - On the one year anniversary of the non-employee director joining our board of directors, each new non-employee director will receive an award for that number of shares of our common stock determined as follows: $150,000 divided by the “average stock price” and rounded down to the nearest whole share, with the “average stock price” calculated by averaging the closing prices of a share of our common stock on the last trading day of the month for each of the twelve months prior to the one year anniversary of the non-employee director joining our board.
|
Name
|
|
Fees Earned or Paid in Cash ($)
|
|
Stock Awards ($)(1)
|
|
All Other Compensation
|
|
Total ($)
|
|||
Michael A. Beindorff
|
|
60,000
|
|
|
75,000
|
|
|
—
|
|
135,000
|
|
Dave Manovich
|
|
60,000
|
|
|
75,000
|
|
|
—
|
|
135,000
|
|
Garry Mauro
|
|
69,500
|
|
|
75,000
|
|
|
—
|
|
144,500
|
|
George E. Metzger
|
|
63,500
|
|
|
75,000
|
|
|
—
|
|
138,500
|
|
Richard Okumoto
|
|
63,500
|
|
|
75,000
|
|
|
—
|
|
138,500
|
|
David Toole
|
|
30,000
|
|
|
—
|
|
|
—
|
|
30,000
|
|
|
|
Option Awards
|
|||||||
Name
|
|
Number of Securities Underlying Unexercised Options (#) Exercisable
|
|
Number of Securities Underlying Unexercised Options (#) Unexercisable
|
|
Option Exercise Price ($)
|
|||
Michael A. Beindorff
|
|
14,286
|
|
|
—
|
|
|
9.31
|
|
Dave Manovich
|
|
14,286
|
|
|
|
|
9.31
|
|
|
Garry Mauro
|
|
14,286
|
|
|
—
|
|
|
2.10
|
|
|
|
17,143
|
|
|
—
|
|
|
1.47
|
|
|
|
17,143
|
|
|
—
|
|
|
1.75
|
|
|
|
17,143
|
|
|
—
|
|
|
5.60
|
|
|
|
14,286
|
|
|
—
|
|
|
9.31
|
|
Name of Beneficial Owner(1)
|
|
Number of Shares
|
|
Percent of Class
|
|
Principal Shareholders
|
|
|
|
|
|
Dell Loy Hansen
|
|
711,839
|
|
(2)
|
5.07%
|
595 S. Riverwoods Pkwy, Suite 400
|
|
|
|
|
|
Logan, UT 84321
|
|
|
|
|
|
Directors and Named Executive Officers
|
|
|
|
|
|
Michael A. Beindorff
|
|
44,532
|
|
(3)
|
*
|
David S. Manovich
|
|
113,651
|
|
(4)
|
*
|
Garry P. Mauro
|
|
124,998
|
|
(5)
|
*
|
George Metzger
|
|
23,929
|
|
(6)
|
*
|
Richard Okumoto
|
|
25,000
|
|
(7)
|
*
|
David Toole
|
|
—
|
|
|
*
|
Darren J. Jensen
|
|
143,458
|
|
(8)
|
1.02%
|
Robert Urban
|
|
64,834
|
|
(9)
|
*
|
Mark Jaggi
|
|
15,665
|
|
(10)
|
*
|
Justin Rose
|
|
15,294
|
|
(11)
|
*
|
Michelle Oborn-Virchow
|
|
28,091
|
|
(12)
|
*
|
All executive officers and directors (12 persons)
|
|
599,452
|
|
(13)
|
|
(1)
|
The shares of our common stock beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a “beneficial owner” of a security if that person has or shares voting power, which includes the power to vote or direct the voting of such security, or investment power, which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days. Securities that can be so acquired are deemed to be outstanding for purposes of computing such person's ownership percentage, but not for purposes of computing any other person's percentage. Under these rules, more than one person may be deemed beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which such person has no economic interest. This table is based upon information supplied by officers, directors and principal shareholders and Schedules 13D and 13G filed with the SEC. Except as otherwise indicated in these footnotes and subject to community property laws where applicable, each of the beneficial owners has, to our knowledge, sole voting and investment power with respect to the indicated shares of common stock. In accordance with the beneficial ownership rules of the SEC.
|
(2)
|
Based solely upon a Schedule 13D filed on July 8, 2015, by Dell Loy Hansen and Hansen Guaranty, LLC. According to the Schedule 13D, adjusted for our October 19, 2015 reverse stock split, Dell Loy Hansen has sole voting and dispositive power with respect to 191,000 shares and shared voting and dispositive power with respect to 520,839 shares. Hansen Guaranty, LLC has shared voting and dispositive power with respect to 520,839 shares.
|
(3)
|
Includes 28,857 shares held directly by Mr. Beindorff, 1,143 shares owned by Mr. Beindorff's spouse which he is deemed to beneficially own, 246 shares owned by Mr. Beindorff's spouse in a custodial account for their minor children, which Mr. Beindorff is deemed to beneficially own. Also includes the following shares which Mr. Beindorff has the right to acquire or will have the right to acquire within 60 days of November 30, 2016 upon the exercise of options: 14,286 shares at an exercise price of $9.31 per share.
|
(4)
|
Includes 43,649 shares owned in a joint trust account by Mr. Manovich and his spouse, 15,715 shares owned directly by Mr. Manovich, 5,715 shares held in Mr. Manovich's IRA,
34,286 shares owned by Mr. Manovich's spouse, which he is deemed to beneficially own. Also includes the following shares which Mr. Manovich has the right to acquire or will have the right to acquire within 60 days of November 30, 2016 upon the exercise of options: 14,286 shares at an exercise price of $9.31 per share.
|
(5)
|
Includes 44,813 shares directly owned by Mr. Mauro, 184 shares owned by Mr. Mauro in a custodial account for his minor children, which he is deemed to beneficially own. Also includes the following shares which Mr. Mauro has the right to acquire or will have the right to acquire within 60 days of November 30, 2016 upon the exercise of options: 14,286 shares at an exercise price of $2.10 per share, 17,143 shares at an exercise price of $1.47 per share, 17,143 shares at an exercise price of $1.75 per share, 17,143 shares at an exercise price of $5.60 per share and 14,286 shares at an exercise price of $9.31 per share.
|
(6)
|
Consists of 23,929 shares directly owned by Mr. Metzger.
|
(7)
|
Consists of 25,000 shares directly owned by Mr. Okumoto.
|
(8)
|
Consists of 600 shares directly owned by Mr. Jensen and 142,858 shares pursuant to a Restricted Stock Award.
|
(9)
|
Includes 24,738 shares directly owned by Mr. Urban and 9,143 shares pursuant to a Restricted Stock Award. Also includes the following shares which Mr. Urban has the right to acquire or will have the right to acquire within 60 days of November 30, 2016; upon the exercise of 21,429 options at an exercise price of $22.33 per share and upon the vesting of 9,524 PRSUs at a vesting at target.
|
(10)
|
Consists of 4,237 shares directly owned by Mr. Jaggi and 11,428 shares pursuant to a Restricted Stock Award.
|
(11)
|
Consists of 3,866 shares directly owned by Mr. Rose and 11,428 shares pursuant to a Restricted Stock Award.
|
(12)
|
Consists of 11,805 shares directly owned by Ms. Oborn-Virchow and 3,404 shares pursuant to a Restricted Stock Award. Also includes the following shares which Ms. Oborn-Virchow has the right to acquire or will have the right to acquire within 60 days of November 30, 2016; upon the exercise of 1,715 options at an exercise price of $4.90 per share, 1,643 options at an exercise price of $9.80 per share and upon the vesting of 9,524 PRSUs at a vesting at target.
|
(13)
|
Consists of 447,044 shares directly owned by our executive officers and directors as a group and 152,408
shares which our executive officers and directors as a group have the right to acquire or will have the right to acquire within 60 days of November 30, 2016.
|
(1)
|
Includes 382,760 shares of our common stock that can be issued upon the exercise of outstanding options and 693,307 shares of our common stock that can be issued upon vesting of restricted stock awards and PRSUs.
|
(2)
|
Does not take into account outstanding restricted stock awards and PRSUs, as those awards have no exercise price.
|
EKS&H LLLP
|
|
Fiscal year ended June 30,
|
||||||
|
|
2016
|
|
2015
|
||||
Audit Fees(1)
|
|
$
|
68,261
|
|
|
$
|
243,895
|
|
Audit-Related Fees(2)
|
|
—
|
|
|
20,000
|
|
||
Tax Fees(3)
|
|
91,434
|
|
|
74,636
|
|
||
All Other Fees
|
|
—
|
|
|
—
|
|
||
|
|
$
|
159,695
|
|
|
$
|
338,531
|
|
(1)
|
Audit Fees consist of fees billed for the audit of annual financial statements and internal control over financial reporting and the review of interim financial statements.
|
(2)
|
Audit-Related Fees consist of fees billed for the audit of our employee benefit plan.
|
(3)
|
Tax Fees consisted of fees billed for professional services for tax compliance, tax advice and tax planning.
|
BDO USA, LLP
|
|
Fiscal year ended June 30, 2016
|
||
Audit Fees(1)
|
|
$
|
—
|
|
Audit-Related Fees
|
|
—
|
|
|
Tax Fees
|
|
—
|
|
|
All Other Fees
|
|
—
|
|
|
|
|
$
|
—
|
|
(1)
|
Audit Fees consist of fees billed for the review of interim financial statements.
|
WSRP, LLC
|
|
Fiscal year ended June 30, 2016
|
||
Audit Fees(1)
|
|
$
|
178,217
|
|
Audit-Related Fees(2)
|
|
—
|
|
|
Tax Fees(3)
|
|
—
|
|
|
All Other Fees
|
|
—
|
|
|
|
|
$
|
178,217
|
|
(1)
|
Audit Fees consist of fees billed for the audit of annual financial statements and internal control over financial reporting and the review of interim financial statements.
|
LifeVantage Corporation.
a Colorado corporation
|
|
|
|
By:
|
/s/ Darren Jensen
|
|
Darren Jensen
|
Its:
|
President and Chief Executive Officer
|
Date:
|
December 12, 2016
|
Signature
|
|
Date
|
|
Title
|
|
|
|
|
|
/s/ Darren Jensen
|
|
December 12, 2016
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
Darren Jensen
|
|
|
|
|
|
|
|
|
|
/s/ Mark Jaggi
|
|
December 12, 2016
|
|
Chief Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
|
Mark Jaggi
|
|
|
|
|
|
|
|
|
|
/s/ Garry Mauro
|
|
December 12, 2016
|
|
Chairman of the Board
|
Garry Mauro
|
|
|
|
|
|
|
|
|
|
/s/ Michael A. Beindorff
|
|
December 12, 2016
|
|
Director
|
Michael A. Beindorff
|
|
|
|
|
|
|
|
|
|
/s/ Dave Manovich
|
|
December 12, 2016
|
|
Director and Vice Chairman of the Board
|
Dave Manovich
|
|
|
|
|
|
|
|
|
|
/s/ George E. Metzger
|
|
December 12, 2016
|
|
Director
|
George E. Metzger
|
|
|
|
|
|
|
|
|
|
/s/ Richard Okumoto
|
|
December 12, 2016
|
|
Director
|
Richard Okumoto
|
|
|
|
|
|
|
|
|
|
/s/ Dave Toole
|
|
December 12, 2016
|
|
Director
|
Dave Toole
|
|
|
|
|
Exhibit
No.
|
|
Document Description
|
|
Filed Herewith or Incorporated by Reference From
|
|
|
|
|
|
3.1(a)
|
|
Amended and Restated Articles of Incorporation and Statement of Correction to Amended and Restated Articles of Incorporation
|
|
Exhibit to 4.1 to Registration Statement on Form S-8 (File No. 333-200363) filed on November 19, 2014.
|
|
|
|
|
|
3.1(b)
|
|
Articles of Amendment to the Amended and Restated Articles of Incorporation
|
|
Exhibit 3.1(b) to Form 10-Q for the fiscal quarter ended September 30, 2015 filed on November 4, 2015.
|
|
|
|
|
|
3.2(a)
|
|
Amended and Restated Bylaws
|
|
Exhibit 3.2 to Form 10-K for the fiscal year ended June 30, 2011 filed on September 28, 2011.
|
|
|
|
|
|
3.2(b)
|
|
First Amendment of the Amended and Restated Bylaws
|
|
Exhibit to 3.1 Form 8-K filed on May 31, 2012.
|
|
|
|
|
|
4.1
|
|
Form of Warrant issued in connection with November 2009 Financing
|
|
Exhibit 4.2 to Form 8-K filed on November 18, 2009.
|
|
|
|
|
|
4.2
|
|
Amendment to Debentures and Warrants, dated as of December 11, 2009
|
|
Exhibit 4.3 to Form 10-Q for the fiscal quarter ended December 31, 2010 filed on February 16, 2010.
|
|
|
|
|
|
4.3
|
|
Form of Restated Warrant issued pursuant to Amended and Restated Securities Purchase Agreement dated December 11, 2009
|
|
Exhibit 4.5 to Form 10-Q for the fiscal quarter ended December 31, 2009 filed on February 16, 2010.
|
|
|
|
|
|
4.4
|
|
Form of Restated Common Stock Purchase Warrant issued on each of December 31, 2009, January 20, 2010, February 4, 2010 and February 26, 2010
|
|
Exhibit 4.2 to Form 10-Q for the fiscal quarter ended March 31, 2010 filed on May 14, 2010.
|
|
|
|
|
|
4.5
|
|
Form of LifeVantage Corporation Amendment to Warrant
|
|
Exhibit (a)(1)(ii) to Schedule TO filed on November 29, 2011.
|
|
|
|
|
|
10.1
|
|
Manufacturing and Supply Agreement dated July 1, 2008 between Cornerstone Research and Development and LifeVantage Corporation
|
|
Exhibit 10.21 to Form 10-K/A for the fiscal year ended June 30, 2009 filed October 28, 2009.
|
|
|
|
|
|
10.2#
|
|
LifeVantage Distributor Compensation Plan
|
|
Exhibit 10.14 to Form 10-K for the fiscal year ended June 30, 2010 filed on September 15, 2010.
|
|
|
|
|
|
10.3
|
|
Form of Securities Purchase Agreement entered into in connection with November 2009 Financing
|
|
Exhibit 10.1 to Form 8-K filed on November 18, 2009.
|
|
|
|
|
|
10.4
|
|
Form of Amended and Restated Securities Purchase Agreement originally dated December 11, 2009
|
|
Exhibit 10.3 to Form 10-Q for the fiscal quarter ended December 31, 2009 filed on February 16, 2010.
|
|
|
|
|
|
10.5
|
|
Amended and Restated Securities Purchase Agreement dated December 31, 2009, among LifeVantage Corporation and the purchaser parties thereto
|
|
Exhibit 10.1 to Form 10-Q for the fiscal quarter ended March 31, 2010 filed on May 14, 2010.
|
|
|
|
|
|
10.6
|
|
Amended and Restated Securities Purchase Agreement dated January 20, 2010, among LifeVantage Corporation and the purchaser parties thereto
|
|
Exhibit 10.2 to Form 10-Q for the fiscal quarter ended March 31, 2010 filed on May 14, 2010.
|
|
|
|
|
|
10.7
|
|
Amended and Restated Securities Purchase Agreement dated February 4, 2010, among LifeVantage Corporation and the purchaser parties thereto
|
|
Exhibit 10.3 to Form 10-Q for the fiscal quarter ended March 31, 2010 filed on May 14, 2010.
|
|
|
|
|
|
Exhibit
No.
|
|
Document Description
|
|
Filed Herewith or Incorporated by Reference From
|
10.8
|
|
Amended and Restated Securities Purchase Agreement dated February 26, 2010, among LifeVantage Corporation and the purchaser parties thereto
|
|
Exhibit 10.4 to Form 10-Q for the fiscal quarter ended March 31, 2010 filed on May 14, 2010.
|
|
|
|
|
|
10.9#
|
|
LifeVantage Corporation 2007 Long-Term Incentive Plan
|
|
Appendix B to Proxy Statement on Schedule 14A filed on October 20, 2006.
|
|
|
|
|
|
10.10(a)#
|
|
LifeVantage Corporation 2010 Long-Term Incentive Plan effective as of September 27, 2010 and as amended as of August 21, 2014
|
|
Annex A to Proxy Statement on Schedule A filed on November 19, 2014.
|
|
|
|
|
|
10.10(b)#
|
|
Form of Nonstatutory Stock Option Agreement for the LifeVantage Corporation 2010 Long-Term Incentive Plan
|
|
Exhibit 4.4 to Registration Statement on Form S-8 (File No. 333-175104) filed on June 23, 2011.
|
|
|
|
|
|
10.10(c)#
|
|
Form of Incentive Stock Option Agreement for the LifeVantage Corporation 2010 Long-Term Incentive Plan
|
|
Exhibit 4.5 to Registration Statement on Form S-8 (File No. 333-175104) filed on June 23, 2011.
|
|
|
|
|
|
10.10(d)#
|
|
Form of Amended and Restated Stock Unit Agreement for the LifeVantage Corporation 2010 Long-Term Incentive Plan
|
|
Exhibit 10.3 to Form 10-Q for the fiscal quarter ended March 31, 2016 filed on May 4, 2016.
|
|
|
|
|
|
10.11#
|
|
LifeVantage Corporation FY2015 Annual Incentive Plan
|
|
Exhibit 10.13 to Form 10-K for the fiscal year ended June 30, 2014 filed on September 10, 2014.
|
|
|
|
|
|
10.12#
|
|
LifeVantage Corporation FY2015 Sales Incentive Plan
|
|
Exhibit 10.14 to Form 10-K for the fiscal year ended June 30, 2014 filed on September 10, 2014.
|
|
|
|
|
|
10.13#
|
|
LifeVantage Corporation Performance Incentive Plan
|
|
Exhibit 10.15 to Form 10-K for the fiscal year ended June 30, 2015 filed on September 1, 2015.
|
|
|
|
|
|
10.14#
|
|
LifeVantage Corporation FY2016 Annual Incentive Plan
|
|
Exhibit 10.16 to Form 10-K for the fiscal year ended June 30, 2015 filed on September 1, 2015.
|
|
|
|
|
|
10.15#
|
|
LifeVantage Corporation FY2016 Sales Incentive Plan
|
|
Exhibit 10.17 to Form 10-K for the fiscal year ended June 30, 2015 filed on September 1, 2015.
|
|
|
|
|
|
10.16#
|
|
LifeVantage Corporation FY2017 Annual Incentive Plan
|
|
Filed herewith.
|
|
|
|
|
|
10.17#
|
|
LifeVantage Corporation FY2017 Sales Incentive Plan
|
|
Filed herewith.
|
|
|
|
|
|
10.18#
|
|
LifeVantage Corporation Cash Settled Performance-Based Long Term Incentive Plan
|
|
Exhibit 10.14 to Form 10-K for the fiscal year ended June 30, 2013 filed on September 12, 2013.
|
|
|
|
|
|
10.19#
|
|
Form of Performance Unit Agreement
|
|
Exhibit 10.15 to Form 10-K for the fiscal year ended June 30, 2013 filed on September 12, 2013.
|
|
|
|
|
|
10.20#
|
|
Form of Performance Unit Agreement - FY2016 through FY2018
|
|
Exhibit 10.20 to Form 10-K for the fiscal year ended June 30, 2015 filed on September 1, 2015.
|
|
|
|
|
|
10.21#
|
|
Form of Performance Unit Agreement - FY2017 through FY2019
|
|
Filed herewith.
|
|
|
|
|
|
Exhibit
No.
|
|
Document Description
|
|
Filed Herewith or Incorporated by Reference From
|
10.22#
|
|
Separation Agreement and General Release between LifeVantage Corporation and Douglas C. Robinson effective February 13, 2015
|
|
Exhibit 10.1 to Form 8-K filed on February 20, 2015.
|
|
|
|
|
|
10.23#
|
|
Employment Agreement by and between Darren Jensen and LifeVantage Corporation dated April 26, 2015
|
|
Exhibit 10.1 to Form 8-K filed on April 29, 2015.
|
|
|
|
|
|
10.24#
|
|
Separation Agreement and General Release between LifeVantage Corporation and David Colbert effective July 3, 2015
|
|
Exhibit 10.25 to Form 10-K for the fiscal year ended June 30, 2015 filed on September 1, 2015.
|
|
|
|
|
|
10.25#
|
|
Separation Agreement and General Release between LifeVantage Corporation and Rob Cutler effective May 8, 2015
|
|
Exhibit 10.28 to Form 10-K for the fiscal year ended June 30, 2015 filed on September 1, 2015.
|
|
|
|
|
|
10.26
|
|
Lease dated September 22, 2011 between Sandy Park I L.L.C. and LifeVantage Corporation
|
|
Exhibit 10.3 to Form 10-Q for the fiscal quarter ended September 30, 2011 filed on November 14, 2011.
|
|
|
|
|
|
10.27
|
|
Lease dated September 20, 2012 between Sandy Park II L.L.C. and LifeVantage Corporation
|
|
Exhibit 10.1 to Form 10-Q for the fiscal quarter ended September 30, 2012 filed on November 8, 2012.
|
|
|
|
|
|
10.28
|
|
First Amendment to Lease entered into as of March 24, 2014 between Sandy Park II L.L.C. and LifeVantage Corporation
|
|
Exhibit 10.3 to Form 10-Q for the fiscal quarter ended March 31, 2014 filed on May 6, 2014.
|
|
|
|
|
|
10.29*
|
|
Commercial Supply Agreement dated January 31, 2014 between LifeVantage Corporation and Deseret Laboratories, Inc.
|
|
Exhibit 10.1 to Form 10-Q for the fiscal quarter ended March 31, 2014 filed on May 6, 2014.
|
|
|
|
|
|
10.30*
|
|
Software Service Agreement with JIA, Inc. dated September 28, 2012
|
|
Exhibit 1.01 to Form 10-Q/A for the fiscal quarter ended March 31, 2013 filed on May 24, 2013.
|
|
|
|
|
|
10.31*
|
|
Software License Agreement with JIA, Inc. dated September 28, 2012
|
|
Exhibit 10.2 to Form 10-Q/A for the fiscal quarter ended March 31, 2013 filed on May 24, 2013.
|
|
|
|
|
|
10.32*
|
|
Service Agreement entered into as of June 1, 2014 between IntegraCore, LLC and LifeVantage
|
|
Exhibit 10.29 to Form 10-K for the fiscal year ended June 30, 2014 filed on September 10, 2014.
|
|
|
|
|
|
10.33*
|
|
Commercial Supply Agreement entered into as of May 30, 2014 between LifeVantage Corporation and Wasatch Product Development
|
|
Exhibit 10.30 to Form 10-K for the fiscal year ended June 30, 2014 filed on September 10, 2014.
|
|
|
|
|
|
10.34#
|
|
Financing Agreement, dated October 18, 2013, by and among LifeVantage Corporation, the Guarantors and Lenders party thereto and TCW Special Situations, LLC as Collateral Agent and Administrative Agent
|
|
Exhibit (b) to the Schedule TO-I/A filed on October 18, 2013.
|
|
|
|
|
|
10.35#
|
|
Amendment No. 1 to Financing Agreement, dated May 1, 2015, by and between LifeVantage Corporation, the Guarantors and lenders party thereto and TCW Special Situations, LLC as Collateral Agent and Administrative Agent
|
|
Exhibit 10.1 to Form 10-Q for the quarter ended March 31, 2015 filed on May 6, 2015.
|
|
|
|
|
|
10.36#
|
|
Amendment No. 2 to Financing Agreement, dated August 27, 2015 by and between LifeVantage Corporation, the Guarantors and lenders party thereto and TCW Special Situations, LLC as Collateral Agent and Administrative Agent
|
|
Exhibit 10.39 to Form 10-K for the fiscal year ended June 30, 2015 filed on September 1, 2015.
|
Exhibit
No.
|
|
Document Description
|
|
Filed Herewith or Incorporated by Reference From
|
|
|
|
|
|
10.37
|
|
Form of Director and Officer Indemnification Agreement
|
|
Exhibit 10.1 to Form 8-K filed on January 8, 2016.
|
|
|
|
|
|
10.38
|
|
Loan Agreement, dated March 30, 2016, by and between Z.B., N.A., LifeVantage Corporation and Lifeline Nutraceuticals Corporation
|
|
Exhibit 10.1 to Form 8-K filed on April 4, 2016.
|
|
|
|
|
|
10.39
|
|
Security Agreement, dated March 30, 2016, by and between Z.B., N.A., LifeVantage Corporation and Lifeline Nutraceuticals Corporation
|
|
Exhibit 10.2 to Form 8-K filed on April 4, 2016.
|
|
|
|
|
|
21.1
|
|
List of Subsidiaries.
|
|
Exhibit A to Form 10-K for the fiscal year ended June 30, 2014 filed on September 10, 2014.
|
|
|
|
|
|
23.1
|
|
Consent of EKS&H LLLP
|
|
Filed herewith.
|
|
|
|
|
|
23.2
|
|
Consent of WSRP, LLC
|
|
Filed herewith.
|
|
|
|
|
|
24.1
|
|
Power of Attorney
|
|
Signature page to this report.
|
|
|
|
|
|
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 pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
Furnished herewith.
|
|
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
Furnished herewith.
|
|
|
|
|
|
101
|
|
The following financial information from the registrant’s Annual Report on Form 10-K for the year ended June 30, 2016 formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations and Other Comprehensive Income; (iii) Consolidated Statement of Stockholders’ Deficit; (iv) Consolidated Statements of Cash Flows; and (v) Notes to Consolidated Financial Statements, tagged as blocks of text.
|
|
Filed herewith.
|
#
|
|
Management contract or compensatory plan.
|
*
|
|
The Company has been granted confidential treatment for portions of this agreement. Accordingly, certain portions of this agreement have been omitted in the version filed with this report and such confidential portions have been filed with the SEC.
|
|
||
|
|
|
|
||
|
||
|
||
F - 8
,
|
||
|
|
June 30,
|
||||||
|
2016
|
|
2015
|
||||
(In thousands, except per share data)
|
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
7,883
|
|
|
$
|
13,905
|
|
Accounts receivable
|
1,552
|
|
|
1,031
|
|
||
Income tax receivable
|
—
|
|
|
2,179
|
|
||
Inventory, net
|
25,116
|
|
|
9,248
|
|
||
Current deferred income tax asset
|
2,776
|
|
|
1,117
|
|
||
Prepaid expenses and deposits
|
5,082
|
|
|
2,995
|
|
||
Total current assets
|
42,409
|
|
|
30,475
|
|
||
|
|
|
|
||||
Property and equipment, net
|
3,456
|
|
|
5,759
|
|
||
Intangible assets, net
|
1,744
|
|
|
1,879
|
|
||
Long-term deferred income tax asset
|
1,130
|
|
|
235
|
|
||
Other long-term assets
|
1,520
|
|
|
1,433
|
|
||
TOTAL ASSETS
|
$
|
50,259
|
|
|
$
|
39,781
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Accounts payable
|
$
|
8,891
|
|
|
$
|
2,614
|
|
Commissions payable
|
7,719
|
|
|
6,505
|
|
||
Income tax payable
|
1,206
|
|
|
—
|
|
||
Other accrued expenses
|
8,734
|
|
|
5,600
|
|
||
Current portion of long-term debt
|
2,000
|
|
|
11,141
|
|
||
Total current liabilities
|
28,550
|
|
|
25,860
|
|
||
|
|
|
|
||||
Long-term debt
|
|
|
|
||||
Principal amount
|
7,500
|
|
|
10,484
|
|
||
Less: unamortized discount and deferred offering costs
|
(91
|
)
|
|
(1,951
|
)
|
||
Long-term debt, net of unamortized discount and deferred offering costs
|
7,409
|
|
|
8,533
|
|
||
Other long-term liabilities
|
2,169
|
|
|
2,063
|
|
||
Total liabilities
|
38,128
|
|
|
36,456
|
|
||
Commitments and contingencies- Note 11
|
|
|
|
||||
Stockholders’ equity
|
|
|
|
||||
Preferred stock — par value $0.001, 50,000 shares authorized, no shares issued or outstanding
|
—
|
|
|
—
|
|
||
Common stock — par value $0.001, 250,000 shares authorized and 14,028 and 13,958 issued and outstanding as of June 30, 2016 and 2015, respectively
|
14
|
|
|
14
|
|
||
Additional paid-in capital
|
120,150
|
|
|
117,657
|
|
||
Accumulated deficit
|
(108,076
|
)
|
|
(114,095
|
)
|
||
Accumulated other comprehensive income (loss)
|
43
|
|
|
(251
|
)
|
||
Total stockholders’ equity
|
12,131
|
|
|
3,325
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
50,259
|
|
|
$
|
39,781
|
|
|
For the years ended June 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
(In thousands, except per share data)
|
|
|
|
|
|
||||||
Revenue, net
|
$
|
206,540
|
|
|
$
|
190,336
|
|
|
$
|
213,968
|
|
Cost of sales
|
33,932
|
|
|
28,010
|
|
|
33,194
|
|
|||
Gross profit
|
172,608
|
|
|
162,326
|
|
|
180,774
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Commissions and incentives
|
103,120
|
|
|
91,074
|
|
|
104,525
|
|
|||
Selling, general and administrative
|
56,074
|
|
|
57,353
|
|
|
56,801
|
|
|||
Total operating expenses
|
159,194
|
|
|
148,427
|
|
|
161,326
|
|
|||
Operating income
|
13,414
|
|
|
13,899
|
|
|
19,448
|
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest expense
|
(3,321
|
)
|
|
(3,087
|
)
|
|
(3,177
|
)
|
|||
Other income (expense), net
|
(1,409
|
)
|
|
(159
|
)
|
|
384
|
|
|||
Total other income (expense)
|
(4,730
|
)
|
|
(3,246
|
)
|
|
(2,793
|
)
|
|||
Income before income taxes
|
8,684
|
|
|
10,653
|
|
|
16,655
|
|
|||
Income tax expense
|
(2,665
|
)
|
|
(3,666
|
)
|
|
(5,272
|
)
|
|||
Net income
|
$
|
6,019
|
|
|
$
|
6,987
|
|
|
$
|
11,383
|
|
Net income per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.44
|
|
|
$
|
0.50
|
|
|
$
|
0.75
|
|
Diluted
|
$
|
0.41
|
|
|
$
|
0.49
|
|
|
$
|
0.71
|
|
Weighted-average shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
13,730
|
|
|
13,899
|
|
|
15,113
|
|
|||
Diluted
|
14,531
|
|
|
14,150
|
|
|
15,943
|
|
|||
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
294
|
|
|
(135
|
)
|
|
(3
|
)
|
|||
Other comprehensive income (loss), net of tax:
|
294
|
|
|
(135
|
)
|
|
(3
|
)
|
|||
Comprehensive income
|
$
|
6,313
|
|
|
$
|
6,852
|
|
|
$
|
11,380
|
|
|
Common Stock
|
|
Additional
Paid-In Capital
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
|
|||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balances, June 30, 2013
|
16,732
|
|
|
$
|
17
|
|
|
$
|
110,517
|
|
|
$
|
(76,476
|
)
|
|
$
|
(113
|
)
|
|
$
|
33,945
|
|
Stock-based compensation
|
—
|
|
|
—
|
|
|
2,606
|
|
|
—
|
|
|
—
|
|
|
2,606
|
|
|||||
Exercise of options and warrants
|
741
|
|
|
1
|
|
|
2,208
|
|
|
—
|
|
|
—
|
|
|
2,209
|
|
|||||
Issuance of shares related to restricted stock
|
32
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Shares canceled or surrendered as payment of tax withholding
|
(98
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
||||||
Repurchase of company stock
|
(2,806
|
)
|
|
(3
|
)
|
|
—
|
|
|
(46,147
|
)
|
|
—
|
|
|
(46,150
|
)
|
|||||
Currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
11,383
|
|
|
—
|
|
|
11,383
|
|
|||||
Balances, June 30, 2014
|
14,601
|
|
|
$
|
15
|
|
|
$
|
115,331
|
|
|
$
|
(111,240
|
)
|
|
$
|
(116
|
)
|
|
$
|
3,990
|
|
Stock-based compensation
|
—
|
|
|
—
|
|
|
1,737
|
|
|
—
|
|
|
—
|
|
|
1,737
|
|
|||||
Exercise of options and warrants
|
376
|
|
|
—
|
|
|
589
|
|
|
—
|
|
|
—
|
|
|
589
|
|
|||||
Issuance of shares related to restricted stock
|
189
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Shares canceled or surrendered as payment of tax withholding
|
(129
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Repurchase of company stock
|
(1,079
|
)
|
|
(1
|
)
|
|
—
|
|
|
(9,842
|
)
|
|
—
|
|
|
(9,843
|
)
|
|||||
Currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(135
|
)
|
|
(135
|
)
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
6,987
|
|
|
—
|
|
|
6,987
|
|
|||||
Balances, June 30, 2015
|
13,958
|
|
|
$
|
14
|
|
|
$
|
117,657
|
|
|
$
|
(114,095
|
)
|
|
$
|
(251
|
)
|
|
$
|
3,325
|
|
Stock-based compensation
|
—
|
|
|
—
|
|
|
1,966
|
|
|
—
|
|
|
—
|
|
|
1,966
|
|
|||||
Exercise of options and warrants
|
52
|
|
|
—
|
|
|
527
|
|
|
—
|
|
|
—
|
|
|
527
|
|
|||||
Issuance of shares related to restricted stock
|
76
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Shares canceled or surrendered as payment of tax withholding
|
(58
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
294
|
|
|
294
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
6,019
|
|
|
—
|
|
|
6,019
|
|
|||||
Balances, June 30, 2016
|
14,028
|
|
|
$
|
14
|
|
|
$
|
120,150
|
|
|
$
|
(108,076
|
)
|
|
$
|
43
|
|
|
$
|
12,131
|
|
|
For the years ended June 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
(In thousands)
|
|
|
|
|
|
||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
6,019
|
|
|
$
|
6,987
|
|
|
$
|
11,383
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
1,895
|
|
|
2,285
|
|
|
2,118
|
|
|||
Loss on disposal of fixed assets
|
1,186
|
|
|
—
|
|
|
—
|
|
|||
Stock-based compensation
|
2,621
|
|
|
1,806
|
|
|
2,953
|
|
|||
Amortization of deferred financing fees
|
232
|
|
|
255
|
|
|
159
|
|
|||
Amortization of debt discount
|
183
|
|
|
198
|
|
|
122
|
|
|||
Write-off of capitalized debt transaction costs pursuant to debt refinance
|
1,544
|
|
|
—
|
|
|
—
|
|
|||
Deferred income tax
|
(2,554
|
)
|
|
91
|
|
|
2,172
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Decrease/(increase) in receivables
|
1,770
|
|
|
2,651
|
|
|
(2,044
|
)
|
|||
Decrease/(increase) in inventory
|
(15,650
|
)
|
|
(936
|
)
|
|
1,646
|
|
|||
Decrease/(increase) in prepaid expenses and deposits
|
392
|
|
|
1,486
|
|
|
(2,318
|
)
|
|||
Decrease/(increase) in long-term assets
|
258
|
|
|
826
|
|
|
(1,045
|
)
|
|||
Increase/(decrease) in accounts payable
|
3,673
|
|
|
(171
|
)
|
|
(2,384
|
)
|
|||
Increase/(decrease) in accrued expenses
|
3,449
|
|
|
(2,170
|
)
|
|
(537
|
)
|
|||
Increase/(decrease) in other long-term liabilities
|
968
|
|
|
(87
|
)
|
|
(120
|
)
|
|||
Net Cash Provided by Operating Activities
|
5,986
|
|
|
13,221
|
|
|
12,105
|
|
|||
Cash Flows from Investing Activities:
|
|
|
|
|
|
||||||
Purchase of equipment
|
(562
|
)
|
|
(1,159
|
)
|
|
(1,898
|
)
|
|||
Purchase of intangible assets
|
—
|
|
|
—
|
|
|
(350
|
)
|
|||
Net Cash Used in Investing Activities
|
(562
|
)
|
|
(1,159
|
)
|
|
(2,248
|
)
|
|||
Cash Flows from Financing Activities:
|
|
|
|
|
|
||||||
Proceeds from term loan
|
10,000
|
|
|
—
|
|
|
45,825
|
|
|||
Payment of deferred financing fees
|
(99
|
)
|
|
—
|
|
|
(1,511
|
)
|
|||
Excess tax benefits from stock-based compensation
|
266
|
|
|
128
|
|
|
655
|
|
|||
Repurchase of company stock
|
—
|
|
|
(9,850
|
)
|
|
(46,171
|
)
|
|||
Payment on term loan
|
(22,125
|
)
|
|
(9,200
|
)
|
|
(16,175
|
)
|
|||
Exercise of options and warrants
|
261
|
|
|
468
|
|
|
1,573
|
|
|||
Net Cash Used in Financing Activities
|
(11,697
|
)
|
|
(18,454
|
)
|
|
(15,804
|
)
|
|||
Foreign Currency Effect on cash
|
251
|
|
|
(90
|
)
|
|
35
|
|
|||
Decrease in cash and cash equivalents
|
(6,022
|
)
|
|
(6,482
|
)
|
|
(5,912
|
)
|
|||
Cash and Cash Equivalents — beginning of period
|
13,905
|
|
|
20,387
|
|
|
26,299
|
|
|||
Cash and Cash Equivalents — end of period
|
7,883
|
|
|
13,905
|
|
|
20,387
|
|
|
For the years ended June 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Non Cash Investing and Financing Activities:
|
|
|
|
|
|
||||||
Increase in property and equipment/other long-term liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,386
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
1,342
|
|
|
$
|
2,633
|
|
|
$
|
2,758
|
|
Cash paid for income taxes
|
$
|
1,368
|
|
|
$
|
1,658
|
|
|
$
|
4,879
|
|
Common stock shares issued upon cashless warrant exercises
|
6
|
|
|
252
|
|
|
385
|
|
|||
Total cashless exercise price of warrants
|
$
|
9
|
|
|
$
|
1,462
|
|
|
$
|
1,615
|
|
Gross warrants underlying cashless exercises
|
6
|
|
|
418
|
|
|
487
|
|
|
Years
|
Equipment (includes computer hardware and software)
|
3
|
Furniture and fixtures
|
5
|
Leasehold improvements
|
*
|
Vehicles
|
5
|
|
Years ended June 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Numerator:
|
|
|
|
|
|
||||||
Net income
|
$
|
6,019
|
|
|
$
|
6,987
|
|
|
$
|
11,383
|
|
Denominator:
|
|
|
|
|
|
||||||
Basic weighted-average common shares outstanding
|
13,730
|
|
|
13,899
|
|
|
15,113
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Stock awards and options
|
735
|
|
|
180
|
|
|
379
|
|
|||
Warrants
|
66
|
|
|
71
|
|
|
451
|
|
|||
Diluted weighted-average common shares outstanding
|
14,531
|
|
|
14,150
|
|
|
15,943
|
|
|||
Net income per share, basic
|
$
|
0.44
|
|
|
$
|
0.50
|
|
|
$
|
0.75
|
|
Net income per share, diluted
|
$
|
0.41
|
|
|
$
|
0.49
|
|
|
$
|
0.71
|
|
|
Years ended June 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Americas
|
$
|
158,291
|
|
|
$
|
138,118
|
|
|
$
|
141,227
|
|
Asia/Pacific & Europe
|
48,249
|
|
|
52,218
|
|
|
72,741
|
|
|||
Total revenues
|
$
|
206,540
|
|
|
$
|
190,336
|
|
|
$
|
213,968
|
|
|
For the years ended June 30,
|
|||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
Protandim
®
product line
|
$
|
128,019
|
|
|
62.0
|
%
|
|
$
|
120,967
|
|
|
63.6
|
%
|
|
$
|
142,935
|
|
|
66.8
|
%
|
LifeVantage TrueScience® skin care regimen
|
32,914
|
|
|
15.9
|
%
|
|
38,287
|
|
|
20.1
|
%
|
|
46,474
|
|
|
21.7
|
%
|
|||
Other
|
45,607
|
|
|
22.1
|
%
|
|
31,082
|
|
|
16.3
|
%
|
|
24,559
|
|
|
11.5
|
%
|
|||
Total
|
$
|
206,540
|
|
|
100.0
|
%
|
|
$
|
190,336
|
|
|
100.0
|
%
|
|
$
|
213,968
|
|
|
100.0
|
%
|
|
June 30,
|
||||||
|
2016
|
|
2015
|
||||
Equipment (includes computer hardware and software)
|
$
|
6,402
|
|
|
$
|
6,895
|
|
Furniture and fixtures
|
1,485
|
|
|
1,481
|
|
||
Leasehold improvements
|
3,497
|
|
|
3,324
|
|
||
Vehicles
|
51
|
|
|
51
|
|
||
Accumulated depreciation
|
(7,979
|
)
|
|
(5,992
|
)
|
||
Total property and equipment, net
|
$
|
3,456
|
|
|
$
|
5,759
|
|
|
June 30,
|
||||||
|
2016
|
|
2015
|
||||
Patent costs
|
$
|
2,330
|
|
|
$
|
2,330
|
|
Accumulated amortization
|
(1,181
|
)
|
|
(1,046
|
)
|
||
Total definite-lived intangible assets, net
|
1,149
|
|
|
1,284
|
|
||
|
|
|
|
||||
Trademarks and other indefinite-lived intangible assets
|
595
|
|
|
595
|
|
||
Total intangible assets, net
|
$
|
1,744
|
|
|
$
|
1,879
|
|
|
June 30,
|
||||||
|
2016
|
|
2015
|
||||
Accrued severance
|
$
|
100
|
|
|
$
|
638
|
|
Accrued incentives and promotions to distributors
|
408
|
|
|
380
|
|
||
Accrued payroll and other employee expenses
|
774
|
|
|
578
|
|
||
Deferred revenue
|
2,406
|
|
|
990
|
|
||
Accrued payable to vendors
|
838
|
|
|
1,019
|
|
||
Other taxes payable
|
1,410
|
|
|
809
|
|
||
Accrued incentive compensation
|
1,320
|
|
|
55
|
|
||
Accrued other expenses
|
1,478
|
|
|
1,131
|
|
||
Total other accrued expenses
|
$
|
8,734
|
|
|
$
|
5,600
|
|
|
Options (in thousands)
|
|
Weighted
Average
Exercise Price
|
|
Weighted
Average Remaining
Contractual Term (in years)
|
|
Aggregate Intrinsic Value
(in thousands)
|
|||||
Outstanding at June 30, 2013
|
1,002
|
|
|
$
|
7.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Granted
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Exercised
|
(200
|
)
|
|
4.83
|
|
|
|
|
$
|
2,282
|
|
|
Forfeited
|
(67
|
)
|
|
12.88
|
|
|
|
|
|
|||
Expired or Canceled
|
—
|
|
|
—
|
|
|
|
|
|
|||
Outstanding at June 30, 2014
|
735
|
|
|
8.23
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|||||
Granted
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Exercised
|
(22
|
)
|
|
5.04
|
|
|
|
|
$
|
60
|
|
|
Forfeited
|
(251
|
)
|
|
9.18
|
|
|
|
|
|
|||
Expired or Canceled
|
—
|
|
|
—
|
|
|
|
|
|
|||
Outstanding at June 30, 2015
|
462
|
|
|
7.87
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|||||
Granted
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Exercised
|
(46
|
)
|
|
5.66
|
|
|
|
|
$
|
209
|
|
|
Forfeited
|
(33
|
)
|
|
17.85
|
|
|
|
|
|
|||
Expired or Canceled
|
—
|
|
|
—
|
|
|
|
|
|
|||
Outstanding at June 30, 2016
|
383
|
|
|
7.28
|
|
|
3.87
|
|
$
|
2,765
|
|
|
Exercisable at June 30, 2016
|
383
|
|
|
$
|
7.28
|
|
|
3.87
|
|
$
|
2,765
|
|
Nonvested Shares
|
|
Shares (in thousands)
|
|
Weighted Average Grant Date Fair Value
|
|||
Nonvested at June 30, 2013
|
|
391
|
|
|
18.10
|
|
|
|
|
|
|
|
|||
Granted
|
|
32
|
|
|
$
|
12.51
|
|
Vested
|
|
(109
|
)
|
|
18.56
|
|
|
Forfeited
|
|
(68
|
)
|
|
17.82
|
|
|
Nonvested at June 30, 2014
|
|
246
|
|
|
17.25
|
|
|
Vested at June 30, 2014
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|||
Granted
|
|
189
|
|
|
$
|
5.57
|
|
Vested
|
|
(75
|
)
|
|
16.57
|
|
|
Forfeited
|
|
(110
|
)
|
|
15.54
|
|
|
Nonvested at June 30, 2015
|
|
250
|
|
|
9.36
|
|
|
Vested at June 30, 2015
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|||
Granted
|
|
60
|
|
|
$
|
5.94
|
|
Vested
|
|
(40
|
)
|
|
15.64
|
|
|
Forfeited
|
|
(39
|
)
|
|
16.21
|
|
|
Nonvested at June 30, 2016
|
|
231
|
|
|
6.24
|
|
|
Vested at June 30, 2016
|
|
—
|
|
|
—
|
|
|
June 30, 2016
|
|
June 30, 2015
|
||
Risk-free interest rate
|
1.31
|
%
|
|
1.07
|
%
|
Dividend yield
|
—
|
%
|
|
—
|
%
|
Expected volatility - Company
|
55.5
|
%
|
|
54.1
|
%
|
Expected volatility - peer company
|
15.7
|
%
|
|
15.7
|
%
|
Total measurement period (years)
|
3.0
|
|
|
3.0
|
|
|
Number of Units (in thousands)
|
|
Weighted Average Grant Date Fair Value
|
|||
Nonvested at June 30, 2014
|
—
|
|
|
—
|
|
|
|
|
|
|
|||
Granted
|
229
|
|
|
$
|
10.76
|
|
Vested
|
—
|
|
|
—
|
|
|
Forfeited
|
(114
|
)
|
|
10.76
|
|
|
Nonvested at June 30, 2015
|
115
|
|
|
10.76
|
|
|
|
|
|
|
|||
Granted
|
848
|
|
|
$
|
12.30
|
|
Vested
|
(15
|
)
|
|
10.76
|
|
|
Forfeited
|
(485
|
)
|
|
11.25
|
|
|
Nonvested at June 30, 2016
|
463
|
|
|
13.07
|
|
|
Vested at June 30, 2016
|
—
|
|
|
—
|
|
|
Number of Units (in thousands)
|
|
Weighted Average Grant Date Fair Value
|
|||
Outstanding at June 30, 2013, nonvested
|
—
|
|
|
|
||
|
|
|
|
|||
Granted
|
35
|
|
|
$
|
10.36
|
|
Vested
|
(31
|
)
|
|
—
|
|
|
Forfeited
|
(4
|
)
|
|
$
|
10.57
|
|
Outstanding at June 30, 2014, nonvested
|
—
|
|
|
|
||
|
|
|
|
|||
Granted
|
69
|
|
|
$
|
8.05
|
|
Vested
|
(51
|
)
|
|
—
|
|
|
Forfeited
|
(18
|
)
|
|
$
|
8.12
|
|
Outstanding at June 30, 2015, nonvested
|
—
|
|
|
|
||
|
|
|
|
|||
Granted
|
77
|
|
|
$
|
8.47
|
|
Vested
|
(13
|
)
|
|
—
|
|
|
Forfeited
|
(13
|
)
|
|
$
|
8.30
|
|
Outstanding at June 30, 2016, nonvested
|
51
|
|
|
|
|
Common
Stock
Warrants
|
|
Outstanding and exercisable, June 30, 2013
|
1,177
|
|
|
|
|
Issued
|
—
|
|
Canceled
|
—
|
|
Exercised
|
(571
|
)
|
Expired
|
—
|
|
Outstanding and exercisable, June 30, 2014
|
606
|
|
|
|
|
Issued
|
—
|
|
Canceled
|
—
|
|
Exercised
|
(519
|
)
|
Expired
|
—
|
|
Outstanding and exercisable, June 30, 2015
|
87
|
|
|
|
|
Issued
|
—
|
|
Canceled
|
—
|
|
Exercised
|
(7
|
)
|
Expired
|
—
|
|
Outstanding and exercisable, June 30, 2016
|
80
|
|
|
Year ended June 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Business development incentive, net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
666
|
|
Foreign currency transaction gain (loss), net
|
(11
|
)
|
|
(498
|
)
|
|
(194
|
)
|
|||
Gain (loss) on settlement of forward contract
|
(212
|
)
|
|
203
|
|
|
8
|
|
|||
Loss on disposal of fixed assets
|
(1,186
|
)
|
|
—
|
|
|
—
|
|
|||
Other income (expense), net
|
—
|
|
|
136
|
|
|
(96
|
)
|
|||
Total other income (expense), net
|
$
|
(1,409
|
)
|
|
$
|
(159
|
)
|
|
$
|
384
|
|
|
Year ended June 30,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Income / (Loss) Before Income Taxes:
|
|
|
|
|
|
||||||
Domestic
|
$
|
7,518
|
|
|
$
|
8,249
|
|
|
$
|
13,894
|
|
International
|
1,166
|
|
|
2,404
|
|
|
2,761
|
|
|||
|
$
|
8,684
|
|
|
$
|
10,653
|
|
|
$
|
16,655
|
|
Current Taxes:
|
|
|
|
|
|
||||||
Federal
|
$
|
4,180
|
|
|
$
|
2,600
|
|
|
$
|
2,010
|
|
State
|
561
|
|
|
446
|
|
|
72
|
|
|||
Foreign
|
478
|
|
|
856
|
|
|
1,018
|
|
|||
Total Current Income Tax Provision
|
$
|
5,219
|
|
|
$
|
3,902
|
|
|
$
|
3,100
|
|
Deferred Taxes:
|
|
|
|
|
|
||||||
Federal
|
(2,326
|
)
|
|
97
|
|
|
2,299
|
|
|||
State
|
(105
|
)
|
|
4
|
|
|
83
|
|
|||
Foreign
|
(123
|
)
|
|
(337
|
)
|
|
(210
|
)
|
|||
Total Deferred Income Tax Provision
|
$
|
(2,554
|
)
|
|
$
|
(236
|
)
|
|
$
|
2,172
|
|
Net Income Tax Provision
|
$
|
2,665
|
|
|
$
|
3,666
|
|
|
$
|
5,272
|
|
|
Year ended June 30,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
Federal statutory income tax rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State income taxes, net of federal benefit
|
2.8
|
%
|
|
2.0
|
%
|
|
1.9
|
%
|
Foreign tax rate difference
|
(1.3
|
)%
|
|
0.0
|
%
|
|
0.0
|
%
|
Tax return to provision true-up
|
0.7
|
%
|
|
1.2
|
%
|
|
(3.0
|
)%
|
Permanent differences:
|
|
|
|
|
|
|||
— stock based compensation
|
0.9
|
%
|
|
1.2
|
%
|
|
1.3
|
%
|
— domestic production activities deduction
|
(4.4
|
)%
|
|
(1.6
|
)%
|
|
(1.8
|
)%
|
— credit for increasing research activities
|
(0.7
|
)%
|
|
(3.8
|
)%
|
|
(1.5
|
)%
|
— other
|
(2.9
|
)%
|
|
0.4
|
%
|
|
(0.5
|
)%
|
Change in valuation allowance
|
0.6
|
%
|
|
0.0
|
%
|
|
0.1
|
%
|
Net income tax provision
|
30.7
|
%
|
|
34.4
|
%
|
|
31.5
|
%
|
|
June 30,
|
||||||
|
2016
|
|
2015
|
||||
Deferred tax assets:
|
|
|
|
||||
Federal, state, and foreign net operating loss carryovers
|
$
|
651
|
|
|
$
|
656
|
|
Stock option compensation
|
1,696
|
|
|
1,353
|
|
||
Accrued vacation, allowance for returns, bonuses & other
|
2,965
|
|
|
1,395
|
|
||
Gross deferred tax asset
|
$
|
5,312
|
|
|
$
|
3,404
|
|
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
||||
Patents and trademarks
|
(417
|
)
|
|
(468
|
)
|
||
Change in tax accounting methods
|
—
|
|
|
(98
|
)
|
||
Property & equipment
|
(722
|
)
|
|
(1,268
|
)
|
||
Gross deferred tax liabilities
|
(1,139
|
)
|
|
(1,834
|
)
|
||
Less: valuation allowance
|
(267
|
)
|
|
(218
|
)
|
||
Deferred tax assets, net
|
$
|
3,906
|
|
|
$
|
1,352
|
|
Year ending June 30,
|
Amount
|
||
2017
|
$
|
2,592
|
|
2018
|
1,340
|
|
|
2019
|
1,246
|
|
|
2020
|
1,290
|
|
|
2021
|
1,334
|
|
|
Thereafter
|
3,772
|
|
|
Total future minimum lease payments
|
$
|
11,574
|
|
|
Fiscal Quarter
|
|
Year ended June 30, 2016
|
||||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
|||||||||||
Revenue, net
|
$
|
45,352
|
|
|
$
|
51,995
|
|
|
$
|
56,160
|
|
|
$
|
53,033
|
|
|
$
|
206,540
|
|
Gross profit
|
38,377
|
|
|
44,153
|
|
|
46,446
|
|
|
43,632
|
|
|
172,608
|
|
|||||
Net income
|
$
|
1,066
|
|
|
$
|
1,600
|
|
|
$
|
1,003
|
|
|
$
|
2,350
|
|
|
$
|
6,019
|
|
Per common share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income per share, basic
|
$
|
0.08
|
|
|
$
|
0.12
|
|
|
$
|
0.07
|
|
|
$
|
0.17
|
|
|
$
|
0.44
|
|
Income per share, diluted
|
$
|
0.08
|
|
|
$
|
0.11
|
|
|
$
|
0.07
|
|
|
$
|
0.16
|
|
|
$
|
0.41
|
|
|
Fiscal Quarter
|
|
Year ended June 30, 2015
|
||||||||||||||||
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
|||||||||||
Revenue, net
|
$
|
51,633
|
|
|
$
|
48,247
|
|
|
$
|
45,155
|
|
|
$
|
45,301
|
|
|
$
|
190,336
|
|
Gross profit
|
45,954
|
|
|
40,761
|
|
|
37,603
|
|
|
38,008
|
|
|
162,326
|
|
|||||
Net income
|
$
|
4,716
|
|
|
$
|
1,472
|
|
|
$
|
573
|
|
|
$
|
226
|
|
|
$
|
6,987
|
|
Per common share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income per share, basic
|
$
|
0.33
|
|
|
$
|
0.11
|
|
|
$
|
0.04
|
|
|
$
|
0.02
|
|
|
$
|
0.50
|
|
Income per share, diluted
|
$
|
0.32
|
|
|
$
|
0.10
|
|
|
$
|
0.04
|
|
|
$
|
0.02
|
|
|
$
|
0.49
|
|
(i)
|
is not on a leave of absence for any reason for ninety calendar days or more in the Fiscal Year;
|
(ii)
|
is not on any type of corrective action plan; and
|
(iii)
|
is not a participant in the Company’s FY2017 Sales Incentive Plan.
|
|
LIFEVANTAGE CORPORATION
___________________________________
By: Darren Jensen
Title: President and CEO |
•
|
Ensure alignment of expectations between the sales organization and individual Participants;
|
•
|
Focus on growth in enrollment and Company revenues;
|
•
|
Support reductions in distributor attrition; and
|
•
|
Ensure a pay for performance philosophy where a Participant is recognized and rewarded for achieving results.
|
(i)
|
is responsible for sales targets within the sales organization (must be an account manager or sales manager or above);
|
(ii)
|
is not on a leave of absence for any reason for thirty calendar days or more in a Quarter;
|
(iii)
|
is not on any type of corrective action plan; and
|
(iv)
|
is not a participant in the Company’s FY2016 Annual Incentive Plan.
|
Participant Job Level
|
Annual Target Amount in Dollars
|
Senior Vice President or above
|
50% multiplied by Relative Weight multiplied by Base Salary
|
Vice President
|
40% multiplied by Relative Weight multiplied by Base Salary
|
Director
|
30% multiplied by Relative Weight multiplied by Base Salary
|
Manager
|
25% multiplied by Relative Weight multiplied by Base Salary
|
Account Manager
|
20% multiplied by Relative Weight multiplied by Base Salary
|
Supervisor
|
15% multiplied by Relative Weight multiplied by Base Salary
|
Full Time
|
10% multiplied by Relative Weight multiplied by Base Salary
|
|
|
The Plan and Other Agreements
|
The text of the Plan is incorporated in this Agreement by reference. You and the Company agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Agreement. Unless otherwise defined in this Agreement, certain capitalized terms used in this Agreement are defined in the Plan.
This Agreement and the Plan constitute the entire understanding between you and the Company regarding this Award of Performance Units. Any prior agreements, commitments or negotiations are superseded.
For purposes of this Agreement, the following terms have the below defined meanings:
“
Performance Period
” means the time period from July 1,2016 through June 30, 2018 provided however that the Performance Period shall end earlier upon the date of any Change in Control.
“
Qualifying Termination
” means that Participant’s Service was terminated after July 1, 2016 due to either Participant’s death or Disability.
“
Settlement Amount
” means a cash amount that is equal to the sum (rounded to the nearest whole dollar) of: (i) Settlement Price FY17 multiplied by Vested Performance Units Fiscal Year 2017 plus (ii) Settlement Price FY18 multiplied by Vested Performance Units Fiscal Year 2018 plus (iii) Settlement Price FY19 multiplied by Vested Performance Units Fiscal Year 2019.
“
Settlement Price FY17
” means the average of the Fair Market Values of a Share for the first ten trading days following the end of Fiscal Year 2017; provided however that if a Change in Control occurs on or before the tenth such trading day then “Settlement Price FY17” shall instead be the Fair Market Value of a Share as of the last trading day before the Change in Control.
“
Settlement Price FY18
” means the average of the Fair Market Values of a Share for the first ten trading days following the end of Fiscal Year 2018; provided however that if a Change in Control occurs (i) on or before the tenth such trading day and (ii) after Fiscal Year 2018, then “Settlement Price FY18” shall instead be the Fair Market Value of a Share as of the last trading day before the Change in Control.
“
Settlement Price FY19
” means the average of the Fair Market Values of a Share for the first ten trading days following the end of Fiscal Year 2019; provided however that if a Change in Control occurs (i) on or before the tenth such trading day and (ii) after Fiscal Year 2019, then “Settlement Price FY19” shall instead be the Fair Market Value of a Share as of the last trading day before the Change in Control.
“
Settlement Time
” means the time when a Vested Performance Unit is exchanged for cash and such event (if any) shall occur upon any date in the fourth calendar month after the end of the Performance Period or upon an earlier Change in Control. Participant must remain employed by the company through Settlement Time in order for the award to be earned.
“
Vested Performance Unit
” means, with respect to a Performance Unit subject to this Agreement, that such Performance Unit has become both Service-Based Vested and Performance-Based Vested as described below. Participant must also remain employed by the company through Settlement Time in order for the award to be earned.
|
|
|
Award of Performance Units
|
The Company awards Participant the number of Performance Units shown on the cover sheet of this Agreement. The Award is subject to the terms and conditions of this Agreement and the Plan.
|
|
|
Vesting
|
As of the Date of Award, none of the Performance Units subject to this Agreement are Vested Performance Units. Only Vested Performance Units are eligible to be exchanged for cash consideration. For any Performance Unit to become a Vested Performance Unit, two separate vesting requirements must each be satisfied as specified below.
Service-Based Vested Requirement: Subject to the next sentence, the Service-Based Vested requirements will be satisfied upon the end of the Performance Period only if Participant has continuously remained in Service from the Date of Award through the end of the Performance Period. If there is a Qualifying Termination before the end of the Performance Period then the following number of Performance Units (rounded to the nearest whole number) shall become Service-Based Vested at the end of the Performance Period (and those Performance Units that do not become Service-Based Vested shall be forfeited without consideration): the sum of (i) the quotient of the number of days elapsed in the Fiscal Year of the Qualifying Termination (determined as of the Termination Date) divided by the total number of days in that Fiscal Year (provided that if the Performance Period ends before the end of that Fiscal Year then only the total number of days in that Fiscal Year that occurred before the end of the Performance Period shall be used in the denominator), multiplied by (ii) the total number of Performance Units subject to the Fiscal Year of the Termination Date, plus (iii) the total number of Performance Units subject to all prior completed Fiscal Years in the Performance Period. No unvested Performance Units can become Service-Based Vested after Participant’s Service has terminated for any reason and any Performance Units that are not Service-Based Vested shall be forfeited without consideration on the Participant’s Termination Date. No unvested Performance Units for a future Fiscal Year can become Service-Based Vested after a Change in Control and any Performance Units that are not Service-Based Vested shall be forfeited without consideration upon such Change in Control.
Performance-Based Vested Requirement: The Performance-Based Vested requirements are described in this section. The Performance Units shall be subject to achievement of Performance Goals that will annually be prescribed by the Committee for one or more of each of the then remaining Fiscal Years that are contained within the Performance Period. The Performance Goals for Fiscal Year 2017 are set forth below and it is expected that the Performance Goals for Fiscal Years 2018 and 2019, respectively, will be provided by the Company to you in writing within the first 90 days of each such Fiscal Year (and you must timely execute such writing as a condition of this Award and such writing will then become a part of this Agreement). Each respective set of annual Performance Goals will apply to the number of Performance Units designated above for the corresponding Fiscal Year in the Performance Period. After the end of each Fiscal Year in the Performance Period, the Committee will determine the degree of satisfaction for that Fiscal Year’s Performance Goals and will determine what number of the Performance Units subject to that Fiscal Year’s Performance Goals will no longer be eligible to become Performance-Based Vested and which are therefore forfeited without consideration upon such Committee determination. Additionally, after the end of the Performance Period, the Committee will make a cumulative determination as to what number (if any) of then outstanding Performance Units from any or all of the Fiscal Years in the Performance Period will be forfeited without consideration based on overall considerations and factors that the Committee elects to apply in its discretion notwithstanding the degree of attainment of the various Performance Goals over the Performance Period. Notwithstanding the foregoing, the Committee will make all such performance vesting determinations no later than immediately before the occurrence of any Change in Control. The number of remaining Performance Units (if any) that have not been forfeited after the Committee’s final determinations under this section shall then become Performance-Based Vested.
Fiscal Year 2017 Performance Goals: See Exhibit A
|
|
|
Settlement
|
To the extent any Performance Units become Vested Performance Units and subject to satisfaction of any tax withholding obligations as discussed below, such Vested Performance Units will entitle you to receive payment in cash of the Settlement Amount at the Settlement Time. Payment of the Settlement Amount shall be in complete satisfaction of such Vested Performance Units. Such settled Vested Performance Units shall be immediately cancelled and no longer outstanding and you shall have no further rights or entitlements related to those settled Performance Units. Participant must be employed by the company at the Settlement Time in order for the award to be earned.
|
|
|
Leaves of Absence
|
For purposes of this Award, your Service does not terminate when you go on a
bona fide
leave of absence that was approved by the Company in writing, if the terms of the leave provide for Service crediting, or when Service crediting is required by applicable law. Your Service terminates in any event when the approved leave ends unless you immediately return to active work.
The Company determines which leaves count for this purpose (along with determining the effect of a leave of absence on vesting of the Award), and when your Service terminates for all purposes under the Plan.
|
|
|
Withholding Taxes
|
You will be solely responsible for payment of any and all applicable taxes, including without limitation any penalties or interest based upon such tax obligations, associated with this Award.
Any payments to be provided to you under this Agreement shall be subject to applicable tax withholding as determined by the Company and the Company shall have the right to effect withholding from such payments in amounts that it determines in accordance with applicable laws.
|
|
|
Code Section 409A
|
This Award will be administered and interpreted to comply with Code Section 409A. Section 4(d) of the Plan will apply to this Award to the extent needed.
|
|
|
Transfer of Award
|
You cannot gift, transfer, assign, alienate, pledge, hypothecate, attach, sell, or encumber this Award. If you attempt to do any of these things, this Award will immediately become invalid. You may, however, dispose of this Award in your will or it may be transferred by the laws of descent and distribution. Regardless of any marital property settlement agreement, the Company is not obligated to recognize your spouse’s interest in your Award in any other way.
|
|
|
Retention Rights
|
Your Award or this Agreement does not give you the right to be retained by the Company (or any Parent or any Subsidiaries or Affiliates) in any capacity. The Company (or any Parent and any Subsidiaries or Affiliates) reserves the right to terminate your Service at any time and for any reason.
This Award is not intended to replace any compensation and is not to be considered compensation of a continuing or recurring nature, or part of your normal or expected compensation, and in no way represents any portion of your salary, compensation or other remuneration for any purpose.
|
|
|
Shareholder Rights
|
As a holder of Performance Units, you shall have no rights other than those of a general creditor of the Company. A holder of outstanding Performance Units has none of the rights and privileges of a shareholder of the Company, including no right to vote or to receive dividends (if any). Performance Units create no fiduciary duty of the Company to you and only represent an unfunded and unsecured contractual obligation of the Company. The Performance Units shall not be treated as property or as a trust fund of any kind.
|
|
|
Adjustments
|
In the event of a stock split, a stock dividend or a similar change in the Company stock, the number of outstanding Performance Units covered by this Award may be adjusted (and rounded down to the nearest whole number) pursuant to the Plan. Your Performance Units shall be subject to the terms of the agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity.
|
|
|
Clawback Policy
|
The Company may (i) cause the cancellation of this Award, (ii) require reimbursement of this Award and (iii) effect any other right of recoupment of equity or other compensation provided under the Plan or otherwise in accordance with the Company's Clawback Policy and/or applicable law. In addition, you may be required to repay to the Company certain previously paid compensation, whether provided under the Plan or this Agreement or otherwise, in accordance with the Clawback Policy. By accepting this Award, you are also agreeing to be bound by the Company’s Clawback Policy which may be amended from time to time by the Company in its discretion (including without limitation to comply with applicable laws or stock exchange requirements) and are further agreeing that this Award may be unilaterally amended by the Company to the extent needed to comply with the Clawback Policy.
|
|
|
Applicable Law
|
This Agreement will be interpreted and enforced under the laws of the State of Utah without reference to the conflicts of law provisions thereof and any action relating to this Agreement must be brought in state or federal courts located in Salt Lake County, Utah.
|
|
|
Data Privacy
|
You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this document by the Company for the exclusive purpose of implementing, administering and managing your participation in the Plan. You understand that the Company holds certain personal information about you, including, but not limited to, name, home address and telephone number, date of birth, social security or insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all Awards for the purpose of implementing, managing and administering the Plan (“Data”). You understand that the Data may be transferred to any third parties assisting in the implementation, administration and management of the Plan, that these recipients may be located in your country or elsewhere and that the recipient country may have different data privacy laws and protections than your country. You authorize the recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Data.
|
|
Other Information
|
You agree to receive shareholder information, including copies of any annual report, proxy statement and periodic report, from the Company’s website at www.LifeVantage.com, if the Company wishes to provide such information through its website.
|
|
Nondisclosure of Confidential Information
|
You acknowledge that the businesses of the Company is highly competitive and that the Company’s strategies, methods, books, records, and documents, technical information concerning their products, equipment, services, and processes, procurement procedures and pricing techniques, the names of and other information (such as credit and financial data) concerning former, present or prospective customers and business affiliates, all comprise confidential business information and trade secrets which are valuable, special, and unique assets which the Company uses in their business to obtain a competitive advantage over competitors. You further acknowledge that protection of such confidential business information and trade secrets against unauthorized disclosure and use is of critical importance to the Company in maintaining its competitive position. You acknowledge that by reason of your duties to and association with the Company, you have had and will have access to and have and will become informed of confidential business information which is a competitive asset of the Company. You hereby agree that you will not, at any time during or after employment, make any unauthorized disclosure of any confidential business information or trade secrets of the Company, or make any use thereof, except in the carrying out of services responsibilities. You shall take all necessary and appropriate steps to safeguard confidential business information and protect it against disclosure, misappropriation, misuse, loss and theft. Confidential business information shall not include information in the public domain (but only if the same becomes part of the public domain through a means other than a disclosure prohibited hereunder). The above notwithstanding, a disclosure shall not be unauthorized if (i) it is required by law or by a court of competent jurisdiction or (ii) it is in connection with any judicial, arbitration, dispute resolution or other legal proceeding in which your legal rights and obligations as a service provider or under this Agreement are at issue; provided, however, that you shall, to the extent practicable and lawful in any such events, give prior notice to the Company of your intent to disclose any such confidential business information in such context so as to allow the Company an opportunity (which you will not oppose) to obtain such protective orders or similar relief with respect thereto as may be deemed appropriate. Any information not specifically related to the Company would not be considered confidential to the Company.
The Company will be entitled to enforce its rights under this Agreement specifically, to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights to which it may be entitled. You agree and acknowledge that money damages may not be an adequate remedy for breach of the provisions of this Agreement and that the Company may in its sole discretion apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive relief in order to enforce or prevent any violations of the provisions of this Agreement.
|
|
Further Assistance
|
You agree to provide assistance reasonably requested by the Company in connection with actions taken by you while providing services to the Company, including but not limited to assistance in connection with any lawsuits or other claims against the Company arising from events during the period in which you rendered service to the Company.
|
|
|
Notice
|
All notices, requests, demands, claims, and other communications under this Agreement shall be in writing. Any notice, request, demand, claim, or other communication under this Agreement shall be deemed duly given if (and then two business days after) it is sent by registered or certified mail, return receipt requested, postage prepaid, and addressed to the intended recipient at the address set forth below the recipient’s signature to this Agreement. Either party to this Agreement may send any notice, request, demand, claim, or other communication under this Agreement to the intended recipient at such address using any other means (including personal delivery, expedited courier, messenger service, telecopy, ordinary mail, or electronic mail), but no such notice, request, demand, claim, or other communication shall be deemed to have been duly given unless and until it actually is received by the intended recipient. Either party to this Agreement may change the address to which notices, requests, demands, claims, and other communications hereunder are to be delivered by giving the other party notice in the manner set forth in this section.
|
1.
|
I have reviewed this Annual Report on Form 10-K of LifeVantage Corporation;
|
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(s) 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(s) and I have disclosed, based on our 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.
|
December 12, 2016
|
/s/ Darren Jensen
|
|
Darren Jensen
|
|
President & Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this Annual Report on Form 10-K of LifeVantage Corporation;
|
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(s) 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(s) and I have disclosed, based on our 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.
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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.
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December 12, 2016
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/s/ Mark Jaggi
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Mark Jaggi
Chief Financial Officer
(Principal Financial Officer)
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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December 12, 2016
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/s/ Darren Jensen
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Darren Jensen
President & Chief Executive Officer
(Principal Executive Officer)
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1.
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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December 12, 2016
|
/s/ Mark Jaggi
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Mark Jaggi
Chief Financial Officer
(Principal Financial Officer)
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