<p align= justify >The complaint alleges violations of the federal securities laws, including Section 10(b) of the Securities Exchange Act of 1934. USANA is a health sciences company engaged in the manufacture and sale of nutritional and personal care products headquartered in Salt Lake City, Utah.</p> <p align= justify > </p>
<p align= justify >Specifically, the Complaint alleges that, throughout the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and financial results and failed to disclose, among other things, that: (1) the Company’s multi-level marketing system was operating as a pyramid scheme; (2) the majority of the Company’s Associates did not sell to consumers, but sold to other Associates; (3) the Company was experiencing an exceedingly high Associate attrition rate, resulting in an unsustainable sales force; (4) 74% of the Company’s new Associates were failing within the first year; and (5) 87% of the Company’s Associates were losing money. The Complaint further alleges that, as a result of these false statements and omissions, USANA common stock traded at artificially inflated or distorted prices. On March 15, 2007, the Fraud Discovery Institute issued a press release and The Wall Street Journal published an article concerning a three-year investigation by the Fraud Discovery Institute that had revealed that USANA’s multi-level marketing system was an unsustainable pyramid scheme. In reaction to this news, the price of the Company’s stock declined $8.92 per share, or 15%, to close on March 15, 2007 at $49.85 per share, on unusually heavy trading volume.</p>