USANA HEALTH SCIENCES INC

NOTE A – ORGANIZATION, CONSOLIDATION, AND BASIS OF PRESENTATION

USANA Health Sciences, Inc. and subsidiaries ("the Company") is a global nutritional, personal health and wellness company that develops and manufactures high quality, science-based nutritional and personal care products. For financial reporting purposes, the Company categorizes its operations into three reportable segments: Core Nutritional, Hiya, and Rise. Effective January 4, 2026, the Company reorganized its reportable segments to reflect changes in how its chief operating decision maker (CODM) evaluates the Company's business performance and allocates resources. All prior period segment information has been recast to conform to the current period presentation.

Core Nutritional is the Company's primary business with approximately 84% of consolidated net sales year to date 2026. It is grouped and presented intwo geographic regions:

Asia Pacific

(1)Asia Pacific is organized into three sub-regions: Greater China, Southeast Asia Pacific, and North Asia. Markets included in each of these sub-regions are as follows:

(i)Greater China – Hong Kong, Taiwan, and China. The Company's business in China is conducted by BabyCare, the Company’s wholly owned subsidiary.

(ii)Southeast Asia Pacific – Australia, New Zealand, Singapore, Malaysia, the Philippines, Thailand, Indonesia and India.

(iii)North Asia – Japan and South Korea.

Americas and Europe

(2)Americas and Europe – United States, Canada, Mexico, Colombia, and Europe (the United Kingdom, France, Germany, Spain, Italy, Romania, Belgium, and the Netherlands).

In 2024, the Company entered into a merger agreement with Hiya Health Products, LLC ("Hiya"), a leading direct-to-consumer provider of high-quality children's health and wellness products, by which the Company acquired a 78.85% controlling ownership interest. Hiya operates and sells products in the United States, and during the first quarter of 2026 expanded into Canada and the United Kingdom. In 2022, the Company acquired Rise Wellness, Inc. ("Rise") and has expanded Rise's product offering, distribution channel, and customer base over the last three years. Rise operates and sells products in the United States and Canada. Consequently, through the Company's Core Nutritional business, Hiya and Rise, we now operate and sell products through an omni-channel platform, which includes direct selling, direct-to-consumer, third-party marketplace (i.e. Amazon), and retail channels.

The condensed consolidated balance sheet as of January 3, 2026, derived from audited consolidated financial statements, and the unaudited interim condensed consolidated financial information of the Company have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X promulgated by the SEC. Accordingly, certain information and disclosures that are normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. In the opinion of the Company’s management, the accompanying unaudited interim condensed consolidated financial information contains all adjustments, consisting only of normal recurring adjustments, that are necessary to state fairly the Company’s financial position as of July 4, 2026, and results of operations and cash flows for the three and six months ended July 4, 2026 and June 28, 2025.

The interim financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto that are included in the Company’s Annual Report on Form 10-K for the year ended January 3, 2026. The results of operations for the three and six months ended July 4, 2026, are not necessarily indicative of the results that may be expected for the fiscal year ending January 2, 2027.

Certain reclassifications have been made to prior period amounts to conform to current period presentation. These reclassifications had no effect on the reported results of operations. These reclassifications relate to disaggregation of Trade accounts receivable, net, that were previously included within “Prepaid expenses and other current assets” and "Prepaid expenses and other assets” line items of the condensed consolidated balance sheets and the condensed consolidated statements of cash flows, respectively.

Fiscal Year

The Core Nutritional and Rise segments operate on a 52/53-week year, ending on the Saturday closest to December 31. The Hiya segment currently operates on a calendar year end basis ending on December 31.

Recent Accounting Pronouncements

Issued Accounting Pronouncements Not Yet Adopted

In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-04): Expense Disaggregation Disclosures. The standard is intended to provide investors with more decision-useful information about a public business entity's expenses by improving disclosures on income statement expenses through disclosure of disaggregated information about specific natural expense categories underlying certain relevant income statement expense line items that include one or more of five natural expense categories. ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. The Company is currently evaluating the impact that adoption of the standard will have on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The standard is intended to modernize old internal-use software guidance written in 1998 to adapt to the agile (i.e. iterative and flexible) basis predominantly used to develop software today. ASU 2025-06 is effective for annual and interim reporting periods beginning after December 15, 2027. Early adoption is permitted as of the beginning of an annual reporting period. The guidance requires adoption on either a prospective, retrospective, or modified prospective basis. The Company is currently evaluating the impact that adoption of the standard will have on its consolidated financial statements.

No other recent accounting pronouncements had, or are expected to have, a material impact on the Company's consolidated financial statements.

NOTE B – FAIR VALUE MEASURES

The Company measures, at fair value, certain of its financial and non-financial assets and liabilities by using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, essentially an exit price, based on the highest and best use of the asset or liability. The levels of the fair value hierarchy are:

•Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date.

•Level 2 inputs are from other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

•Level 3 inputs are unobservable and are used to measure fair value in situations where there is little, if any, market activity for the asset or liability at the measurement date.

As of July 4, 2026 and January 3, 2026, the following financial assets and liabilities were measured at fair value on a recurring basis using the type of inputs shown:

There were no transfers of financial assets or liabilities between levels of the fair value hierarchy for the periods indicated.

The majority of the Company’s non-financial assets, which include long-lived assets, are not required to be carried at fair value on a recurring basis. However, if an impairment charge is required, a non-financial asset would be written down to fair value. As of July 4, 2026, the fair value of the Hiya reporting unit was estimated using an income approach and a market approach (level 3 measurement), which resulted in an impairment of goodwill in the reporting unit. As of January 3, 2026, the fair value of the Buy-Sell reporting unit was estimated using an income approach and a market approach (level 3 measurement), which resulted in an impairment of goodwill in the reporting unit. Refer to Note C – Goodwill.

As of July 4, 2026 and January 3, 2026, the Company’s financial instruments include cash equivalents, restricted cash, accounts receivable, and line of credit. The recorded values of cash equivalents, restricted cash, accounts receivable, and line of credit approximate their fair values based on their short-term nature.

NOTE C – GOODWILL

During the three months ended July 4, 2026, the Company identified a potential impairment indicator within its Hiya reporting unit related to current lower-than-expected financial performance and changes in the near-term forecast. As such, the Company performed a quantitative impairment analysis. Based on the results of this analysis, the Company concluded that the estimated fair value of its Hiya reporting unit was less than its carrying value. The fair value of the Hiya reporting unit was determined using a combination of an income approach, which estimates fair value based upon projected financial information discounted to present values, and a market approach based on guideline public companies.

These methods involve the use of significant estimates, assumptions, and judgments by management. The principal assumptions used in this analysis consisted of management’s best estimates of future financial results including revenue growth rates and profitability margins, an appropriate discount rate to apply to projected cash flows, and selection and weighting of market multiples. The impairment resulted primarily from changes to projected financial information, as well as adjustments to market multiples and discount rates to reflect current facts and circumstances.

As a result, the Company recorded a non-cash goodwill impairment charge of $29,137 for the Hiya reporting unit during the second quarter of 2026, included in the “Goodwill impairment” line item of the condensed consolidated statements of comprehensive income. For all other reporting units, the Company identified no indicators that it was more likely than not that their fair values were less than their carrying values.

The changes in the carrying amount of goodwill, including by reportable segment are as follows:

(1)January 3, 2026 reflects the recast of previously reported goodwill by reportable segment to conform to the Company's reorganized reportable segments, effective January 4, 2026, See Note A and Note K.

NOTE D – INVENTORIES

Inventories consist of the following:

As of July 4, 2026, noncurrent inventories consisted of $7,163 of raw materials and $1,350 of finished goods inventory. As of January 3, 2026, noncurrent inventories consisted of $3,928 of raw materials and $871 of finished goods inventory. Noncurrent inventories are included in the “Other assets” line item on the Company’s condensed consolidated balance sheets. Noncurrent inventory is anticipated to be consumed beyond the Company's normal operating cycle, but prior to obsolescence.

NOTE E – INVESTMENT IN EQUITY SECURITIES

As of July 4, 2026 and January 3, 2026, the carrying amount of equity securities without readily determinable fair values was $20,000 and is included in the “Other assets” line item on the Company’s condensed consolidated balance sheets. The investment was made with the objective of generating long-term total return through capital appreciation, and, where applicable, dividend income.

During the three and six months ended July 4, 2026 and June 28, 2025, no observable price changes occurred and no adjustment to the carrying value of the securities was recorded. Additionally, no impairment of securities was recorded for the three and six months ended July 4, 2026, and June 28, 2025.

NOTE F – REVENUE AND CONTRACT LIABILITIES

Revenue is recognized when, or as, control of a promised product or service transfers to a customer, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring those products or services. A majority of the Company’s Core Nutritional sales are for products sold at a point in time and shipped to customers, for which control is transferred as goods are delivered to the third-party carrier for shipment. The Company receives payment, primarily via credit card, for the sale of products at the time customers place orders and payment is required prior to shipment.

Other revenue includes fees, which are paid by the customer at the beginning of the service period, for access to online customer service applications and annual account renewal fees for Brand Partners, for which control is transferred over time as services are delivered and are recognized as revenue on a straight-line basis over the term of the respective contracts.

The following table presents other revenue, included in Net sales in the condensed consolidated statements of comprehensive income, for the periods indicated:

Hiya's revenue is generated primarily from e-commerce/direct-to-consumer sales, with expansion into retail in the first quarter of 2026. Revenue from online product sales is recognized at the point in time when control of the promised good is transferred to the third-party shipping carrier. The Company receives payments, primarily via credit card and PayPal, for the sale of products at the time customers place orders and subsequent subscription orders, and payment is required prior to shipment. There are no extended payment terms offered to consumers. To encourage customers to purchase its products, the Company provides incentive offers on initial e-commerce orders. These offers, when accepted by customers, are treated as a reduction to the transaction price.

Rise's revenue is generated primarily from sales to large national retailers and club retailers, with revenue recognized at the point in time when control of the promised good is transferred to the third-party shipping carrier. The transaction price may include variable consideration arising from trade promotional programs, discounts, spoilage, and other retailer deductions. The Company estimates variable consideration using the expected value method based on historical experience, contractual terms, and current market conditions. Variable consideration is recognized as a reduction of net revenue in the period the related sales are recorded.

As of July 4, 2026, one of the Company's customers accounted for more than 10% of trade accounts receivable, representing approximately 47% of total trade accounts receivable. As of January 3, 2026, two customers accounted for 10% or more of trade accounts receivable, representing approximately 50% and 16% of total trade accounts receivable.

Contract liabilities, which are recorded within the “Other current liabilities” line item in the Company's condensed consolidated balance sheets, primarily relate to deferred revenue for product sales for customer payments received in advance of shipment, for outstanding material rights under the initial order program, and for services where control is transferred over time as services are delivered. The Company does not recognize assets associated with costs to obtain or fulfill a contract with a customer.

Disaggregation of revenue by geographic region and major product line is included in Note K – Segment Information.

The following table provides information about contract liabilities from contracts with customers, including significant changes in the contract liabilities balances during the period:

NOTE G – LINE OF CREDIT

On June 27, 2025, the Company as borrower, and certain of its material subsidiaries as guarantors, entered into a Third Amended and Restated Credit Agreement (the “Credit Agreement”) with Bank of America, N.A. (“Bank of America”), as Administrative Agent, Swingline Lender and Letter of Credit Issuer, and the other lenders party thereto.

The Credit Agreement provides for a revolving credit limit for loans to the Company of up to $75,000 (the “Credit Facility”). In addition, at the option of the Company, and subject to certain conditions, the Company may request to increase the aggregate commitment under the Credit Facility by up to $200,000.

There was $0 and $14,000 of outstanding debt balance on the Credit Facility as of July 4, 2026 and January 3, 2026, respectively. The obligations of the Company under the Credit Agreement are secured by the pledge of capital stock of subsidiaries of the Company, pursuant to a Security and Pledge Agreement.

Interest on revolving borrowings under the Credit Facility is computed using the Secured Overnight Financing Rate ("SOFR") or the base rate, which is based on the Federal Funds Rate, the Bank of America Prime Rate, or SOFR, adjusted by features specified in the Credit Agreement. The covenants require the Company's rolling four-quarter consolidated earnings before interest, taxes, depreciation and amortization ("EBITDA") (as defined in the Credit Agreement) to be equal to or greater than $80,000 for the period of four prior fiscal quarters ending on each of June 28, 2025, September 27, 2025, January 3, 2026, April 4, 2026, and July 4, 2026, and $100,000 for each fiscal quarter ending thereafter. The covenants also require the Company's ratio of consolidated funded debt to consolidated EBITDA to be equal to or less than 2.0 to 1.0 at the end of each quarter. The Credit Agreement does not include any restrictions on the payment of cash dividends or share repurchases by the Company. Consolidated EBITDA and consolidated funded debt are non-GAAP terms. The Company will be required to pay any balance on this Credit Facility in full at the time of maturity in June 2030.

The Company maintains local lines of credit across different markets to secure sufficient working capital. As of July 4, 2026 and January 3, 2026, there wasno balance on the local lines of credit.

NOTE H – CONTINGENCIES

The Company is involved in various lawsuits, claims, and other legal matters from time to time that arise in the ordinary course of conducting business, including matters involving its products, intellectual property, supplier relationships, distributors, competitor relationships, employees and other matters. The Company records a liability when a particular contingency is probable and estimable. The Company faces contingencies that are reasonably possible to occur; however, they cannot currently be estimated. While complete assurance cannot be given as to the outcome of these proceedings, management does not currently believe that any of these matters, individually or in the aggregate, will have a material adverse effect on the Company’s financial condition, liquidity or results of operations. It is reasonably possible that a change in the contingencies could result in a change in the amount recorded by the Company in the future.

NOTE I – DERIVATIVE FINANCIAL INSTRUMENTS

The Company’s risk management strategy includes the select use of derivative instruments to reduce the effects of volatility in foreign currency exchange exposure on operating results and cash flows. In accordance with the Company’s risk management policies, the Company does not hold or issue derivative instruments for trading or speculative purposes. The Company recognizes all derivative instruments as either assets or liabilities in the condensed consolidated balance sheets at their respective fair values. When the Company becomes a party to a derivative instrument and intends to apply hedge accounting, the Company formally documents the hedge relationship and the risk management objective for undertaking the hedge, the nature of risk being hedged, and the hedged transaction, which includes designating the instrument for financial reporting purposes as a fair value hedge, a cash flow hedge, or a net investment hedge. The Company also documents how the hedging instrument’s effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively, and a description of the method used to measure ineffectiveness.

The Company periodically uses derivative instruments to hedge the foreign currency exposure of its net investment in foreign subsidiaries into U.S. dollars. Initially, the Company records derivative assets on a gross basis in its condensed consolidated balance sheets. Subsequently the fair value of derivatives is measured for each reporting period. The effective portion of gains and losses attributable to these net investment hedges is recorded to foreign currency translation adjustment (“FCTA”) within accumulated other comprehensive income (loss) (“AOCI”) to offset the change in the carrying value of the net investment being hedged and will subsequently be reclassified to net earnings in the period in which the investment in the subsidiary is either sold or substantially liquidated.

During the six months ended July 4, 2026, the Company entered into and settled a forward foreign currency contract designated as a net investment hedge with a notional amount of $61,766. During the six months ended June 28, 2025, the Company entered into and settled a European option designated as a net investment hedge with a notional amount of $70,062.

For the three and six months ended July 4, 2026 and June 28, 2025, the Company realized losses of $917 and $1,072, respectively, related to its net investment hedges. These amounts were recorded in FCTA within AOCI. The Company assessed hedge effectiveness using the forward rate method and determined that the hedging instruments were highly effective.

As of July 4, 2026, there were no derivatives outstanding for which the Company has applied hedge accounting.

NOTE J – COMMON STOCK AND EARNINGS PER SHARE

Basic earnings per share (“EPS”) is based on the weighted-average number of shares outstanding for each period. Shares that have been repurchased and retired during the periods specified below have been included in the calculation of the number of weighted-average shares that are outstanding for the calculation of basic EPS based on the time they were outstanding in any period. Diluted EPS is based on shares that are outstanding (computed under basic EPS) and on potentially dilutive shares. Shares that are included in the diluted EPS calculations under the treasury stock method include equity awards that are in-the-money but have not yet been exercised.

The following is a reconciliation of the numerator and denominator used to calculate basic EPS and diluted EPS for the periods indicated:

Under the Company's share repurchase plan, there wereno share repurchases during the three and six months ended July 4, 2026. During the three and six months ended June 28, 2025, the Company repurchased and retired 528 and 927 shares for $15,358 and $27,738, inclusive of accrued excise tax of $151 and $231, respectively.

The excess of the repurchase price over par value is allocated between additional paid-in capital and retained earnings on a pro-rata basis. The purchase of shares under this plan reduces the number of shares outstanding in the above calculations.

Because the Company reported a net loss for the three and six months ended July 4, 2026, all potentially dilutive shares have been excluded from the calculation of diluted net loss per share as their effect would have been antidilutive. Accordingly, basic and diluted net loss per share are the same for these two periods. The number of shares excluded for the three and six months ended July 4, 2026 was 6 and 10, respectively.

As of July 4, 2026, the remaining authorized repurchase amount under the stock repurchase plan was $33,965, inclusive of accrued excise tax. There is no expiration date on the remaining approved repurchase amount and no requirement for future share repurchases.

NOTE K – SEGMENT INFORMATION

The Company primarily operates as a global nutrition, personal health and wellness company that develops and manufactures high quality, science-based nutritional, and personal care products. As of the Company's 2025 fiscal year ended January 3, 2026, the Company hadtwo reportable segments: Core Nutritional and Hiya. Additionally, the Company had operating segments that were not material and included as a component of an other category. Effective January 4, 2026, the Company reorganized its reportable segments tothree - Core Nutritional, Hiya, and Rise, reflecting the changes in how its chief operating decision maker ("CODM") evaluates the Company's business performance and allocates resources. Additionally, operations of Oola Global, LLC, which was previously included in the other category, were merged into the Core Nutritional segment. All prior period segment information has been recast to conform to the current period presentation.

Management identifies segments based upon the Company's organizational and management reporting structure. The Core Nutritional reportable segment develops and manufactures high quality, science-based nutritional, personal care and skincare products with a primary focus on promoting long-term health and wellness in various geographic markets worldwide that are distributed through the Core Nutritional channel. The Hiya reportable segment is a leading provider of high-quality children’s health and wellness products in the U.S. that are distributed primarily through the direct-to-consumer channel, with recent expansion into retail sales. The Rise reportable segment manufactures and sells high-quality protein bars, powdered protein drinks, and ready-to-drink ("RTD") liquid protein drinks that are formulated to help customers achieve their health goals through clean and simple ingredients. Their products are distributed primarily through sales to large national retailers and club retailers, as well as through the direct-to-consumer channel.

The operating segments primarily reflect the Company's sales channels and represent the way the CODM evaluates the Company's business performance and allocates resources. The CODM is the Company's Chief Executive Officer. The CODM evaluates the performance of each segment based on segment earnings from operations in order to determine how to allocate the Company's resources across its operating segments, including allocating capital and personnel. Transactions between reportable segments are accounted for at cost plus a negotiated mark-up. Intersegment revenues and expenses are eliminated in consolidation and are not included in the Company's consolidated results. The negotiated mark-up is intended to approximate the return that would be expected in an arm's-length transaction and is reviewed periodically by management to ensure it remains commercially reasonable. The CODM does not evaluate operating segments using asset information, accordingly, the Company does not report asset information by segment.

In accordance with FASB Accounting Standards Codification ("ASC") 280, Segment Reporting, the Company has recast prior‑period segment information to conform to the current‑year presentation. The recast affects the presentation of segment financial information for the periods shown below, but there was no impact on the Company’s condensed consolidated financial statements.

Summarized financial information for the Company’s reportable segments is shown in the following tables, including significant segment expenses that are regularly reviewed by the CODM.

(1)The Core Nutritional segment excludes $124 and $1,251 of intersegment net sales to Hiya and Rise, respectively.

(2)Includes amortization of acquired intangible assets of $4,456 and $210 for the Hiya and Rise segments, respectively.

(1)The Core Nutritional segment excludes $1,183 of intersegment net sales to Rise.

(2)Includes amortization of acquired intangible assets of $99, $4,456, and $210, for the Core Nutritional, Hiya, and Rise segments, respectively.

(1)The Core Nutritional segment excludes $1,052 and $14,277 of intersegment net sales to Hiya and Rise, respectively.

(2)Includes amortization of acquired intangible assets of $8,911 and $421 for the Hiya and Rise segments, respectively.

(1)The Core Nutritional segment excludes $1,946 of intersegment net sales to Rise.

(2)Includes amortization of acquired intangible assets of $194, $8,911, and $421 for the Core Nutritional, Hiya, and Rise segments, respectively.

No single Brand Partner or customer accounted for 10% or more of net sales for the periods presented. The table below summarizes the approximate percentage of total product revenue for the Company's Core Nutritional, Hiya, and Rise reportable segments, that has been contributed by the Company’s Core Nutritional, foods, and personal care and skincare products for the periods indicated.

(1)Includes the Company’s Active Nutrition line.

Selected Financial Information

Financial information, presented by geographic region is listed below:

(1)Includes results of the Hiya and Rise segments.

The following table provides further information on markets representing ten percent or more of consolidated net sales and long-lived assets (excluding intangible assets), respectively:

(1)Includes results of the Hiya and Rise segments.

(1)Includes balances of the Hiya and Rise segments.

NOTE L – INCOME TAXES

For the three and six months ended July 4, 2026, the Company recorded income tax expense of $9,051 and $17,557, respectively, on loss before income taxes of $18,900 and $3,435, respectively. This compares to the Company’s effective tax rate of 44.5% for both the three and six months ended June 28, 2025, which reflects the Company’s customary relationship between earnings before income taxes and income taxes after considering the impact of foreign, state, and other taxes in excess of the U.S. federal statutory rate of 21%.

The variation from the Company’s customary effective tax rate relationship for the three and six months ended July 4, 2026 is primarily attributable to (i) the estimated annual effective tax rate on ordinary earnings before income taxes that is significantly higher than in the prior year due primarily to an unfavorable shift in the jurisdictional mix of the Company’s projected earnings, such that losses generated in certain markets are not producing a corresponding income tax benefit while income earned in other, generally higher-taxed, jurisdictions continues to generate income tax expense, and (ii) a $6,346 discrete tax benefit recognized during the three months ended July 4, 2026 related to the non-cash goodwill impairment charge recorded in the Hiya reporting unit (see Note C), which partially offset the increase in income tax expense described above.

NOTE M – REDEEMABLE NONCONTROLLING INTEREST

On December 23, 2024, the Company acquired a controlling financial interest in Hiya. Simultaneously, USANA and the remaining noncontrolling interest holders entered into an Amended and Restated Limited Liability Company Agreement ("LLC Agreement"). The agreement granted USANA the right to buy ("Call Right") and the noncontrolling interest holders the right to cause USANA to purchase ("Put Right") half of the remaining noncontrolling interest units beginning on April 30, 2028, and the remaining unpurchased noncontrolling interest units beginning on April 30, 2030 or, if the Put Right and Call Right have not, collectively, been exercised with respect to all noncontrolling interest units prior to the end of 2030, the period beginning on April 30th of each year after 2030. The purchase price for the noncontrolling interest units pursuant to the Call Right and Put Right is based on Hiya’s Adjusted EBITDA (as defined in the LLC Agreement) for the calendar year immediately prior to the year in which such right is exercised, multiplied by the Company Value Reference Amount (as defined in the LLC Agreement). The Call Right and Put Right are not mandatorily redeemable. The redemption of the noncontrolling interest is contingent upon the passage of time and within the control of the interest holders, therefore, the Company has classified the noncontrolling interest as redeemable within the mezzanine section on the condensed consolidated balance sheets.

The noncontrolling interest was recognized and measured at fair value on the acquisition date. The Company records the redeemable noncontrolling interest at the greater of: (i) the carrying value, which is adjusted each period for the noncontrolling interests' share of net earnings or loss and distributions or (ii) the redemption value. The following is a reconciliation of the changes in the redeemable noncontrolling interest for the periods indicated: