type public traded as nyse usna industry multi level marketing of nutritional products founded west valley city utah 1992 1992 founder myron wentz ph.d. headquarters west valley city utah united states key people myron wentz ph.d. founder & chairman david wentz co ceo kevin guest co ceo products nutritional supplements weight management energy personal care website www.usana.com coordinates 40 42 42 n 111 58 49 w 40.711563 n 111.980288 w 40.711563 ; 111.980288 headquarters in west valley city utah usana health sciences inc. or usana is a utah based multi level marketing company that produces various nutritional products and nutraceuticals . usana products most of which are manufactured at the company s west valley city facility are sold in 20 countries 1 via a network of independent distributors referred to as associates . usana is the 24th largest multi level marketing company in the world . 2 the company has sponsored and provided products to several athletic organizations . 3 in 2007 several of usana s executives were discovered to have made false statements in their resumes . 3 contents 1 background 2 products 3 business model 4 sponsorships 4.1 athletics 4.2 women s tennis 4.3 usana amphitheatre 5 lawsuit 6 see also 7 references 8 external links background edit usana was founded by immunologist and microbiologist myron wentz . usana based in west valley city utah sells its products through multilevel marketing distributors recruit and profit from other distributors . 4 the products are not available through retail channels but instead can only be obtained through one of its independent distributors referred to as associates or by direct order through the company . 4 at the end of 2014 the company had 349 000 active associates and 81 000 active preferred customers in its worldwide distribution network . 5 in 2012 91 % of product sales was purchased by associates 6 as of 2013 its products are marketed in the united states canada australia new zealand united kingdom netherlands japan hong kong taiwan south korea singapore mexico malaysia philippines france colombia and thailand . beginning in 1993 dallin a. larsen served as usana s vice president of sales and later as consultant to usana s president and special advisor to the board of directors prior to founding the mlm beverage company monavie in 2005 . 7 8 9 from 2004 to 2006 usana was named on forbes 200 best small companies list . 10 in 2007 usana was not included on forbes 200 best small companies list and an article in the magazine quoted industry and government experts who had raised questions about usana s business practices and products . 11 12 usana responded by issuing a press release denying that the company had breached a 40 million loan agreement with bank of america . 13 in 2007 usana faced repeated controversy after several of its executives were discovered to have made false statements regarding their qualifications . 3 the executives included denis waitley a member of the board of directors who had falsely claimed to hold a master s degree from the naval postgraduate school ; 3 14 sales associate ladd mcnamara who quit the company s medical advisory board after it was discovered that his license to practice medicine had been revoked ; 15 16 17 vice president of research and development timothy wood who was found to have a doctorate in forestry as opposed to biology as he had claimed ; 18 and the executive vice president and chief financial officer gilbert fuller who had continued to use the title of cpa 19 though his cpa license had expired 10 years before he joined usana in 1996 . 3 18 20 in august 2007 usana announced that it had been notified by the securities and exchange commission sec that its shares were subject to delisting from the nasdaq because the company had failed to have the financial information in its quarterly form 10 q reviewed by an independent auditor . usana reported this was due to their public accountant resigning and not yet being replaced . 21 in october 2007 usana announced that nasdaq had determined they were in compliance and their stock would continue to be listed . 22 on 3 january 2011 usana completed the transfer of its common stock from the nasdaq to the new york stock exchange . 23 on 10 may 2011 it was announced that 4 of usana s executives president and coo fred w. cooper cfo jeffrey a. yates evp of sales mark h. wilson and vp of finance riley timmer had unexpectedly resigned their positions at the company to pursue an unspecified business opportunity . 24 25 in fiscal years 2012 2013 and 2014 usana expended 4.7 million 5.1 million and 5.1 million 26 respectively on product research and development activities while earning 648 million 718 million and 790 million in total revenue 27 during those same years respectively . thus representing less than 1 % of the company s annual revenues . products edit usana produces three product lines usana nutritionals essentials optimizers and digestion detox nutritional supplements usana diet & energy reset meal replacement shakes protein bars and rev3 energy drinks and sens personal care skin care skin treatment and hair & body care products . usana manufactures 90 % of its products in house including all of its tableted nutritional supplements . 28 some products from the usana nutritionals range are listed on the australian register of therapeutic goods artg . 29 non primary source needed several of usana s products are certified for product label accuracy by nsf international in the dietary supplements category . 30 non primary source needed usana essentials were tested in 2011 by consumerlab.com in their multivitamin and multimineral supplements review of 38 of the leading multivitamin multimineral products sold in the u.s. and canada . the essentials passed consumerlab s test 31 which included testing of selected index elements their ability to disintegrate in solution per united states pharmacopeia guidelines lead contamination threshold set in california proposition 65 and meeting u.s. food and drug administration fda labeling requirements . 32 commenting on the relatively high cost of usana s supplements anthony almada chief scientist of the nutritional supplement industry consulting firm imaginutrition told forbes the economic reality of usana and other multilevel marketing entities mandates that their products invariably lack robust distinctiveness and convincing evidence of consumer relevance and superiority achievable through rigorous clinical trials only to their retail counterparts . 11 these comments were supported by natural health product specialist prof. jean louis brazier of the university of montreal s faculty of pharmacy who examined usana s products for radio canada s consumer report show la facture . brazier found that they cost two to three times the price of equivalent store bought items and no evidence that usana s products were of better quality than their competitors . 4 john cloud senior writer for time magazine conducted an evaluation of nutritional supplements in which he took a regimen of usana pills protein bars powder drinks and psyllium fiber as recommended by the company s online evaluation . cloud took a blood test prior to taking the products to determine the levels of calcium protein sodium cholesterol glucose and other substances and then was tested again five months after taking the supplement regimen which included 3 000 pills at a cost of 1 200 . the follow up test revealed a change in only two values ; a 75 % increase in vitamin d levels attributed to the vitamin d3 supplement cloud had been taking and a 28 mg dl increase in high density lipoprotein which could not be accounted for . cloud also experienced a placebo response where that act of taking the supplements made him feel more vigorous despite no physiological reasons being present . this response also led to a 10 lb increase in weight as the belief he was more vigorous led to his making poorer dietary decisions a phenomenon referred to as the licensing effect . 33 business model edit usana a multilevel marketing company sells its products primarily via non employee distributors known as sales associates as well as via the internet . associates may be eligible to receive commissions based on their own product sales as well as through sales made by any new distributors they recruit referred to in multilevel marketing parlance as a downline . 4 usana s compensation plan awards commissionable points for sales volume . when the points reach a pre determined number the associate is paid . if the points do not reach the payment threshold they accumulate towards the next week . the firm requires that associates purchase a minimum of 100 volume of products equivalent to approximately 110 130 every four weeks in order to remain eligible to receive compensation . if this minimum is not maintained the distributor loses the points that have accumulated but not yet been paid . 34 according to documentation from usana corporate 87 % of associates fail to make enough from commissions to recover the cost of their qualifying purchases with 67 % of all associates making no commission ; 72.2 % of the company s commissions are earned by the top 2.31 % of associates . 35 according to a 2011 article published by the salt lake city tribune the firm s fy09 income disclosure statement indicated that the average yearly income of the company s 165 710 associates which includes those just starting out was 617 while the top of the pyramid distributors earn an average of 857 865 annually . 36 the firm s 2010 income disclosure statement defines associates as those who are actively building a business acting as wholesale buyers or are new distributors . 37 the firm s 2009 sec 10 k filing draws a distinction between associates and preferred customers . 38 associates are independent distributors of usana products who also purchase their products for personal use . preferred customers may purchase products at wholesale prices strictly for personal use and are not permitted to resell or to distribute . as of july 2011 the firm had 222 000 active associates and 68 000 preferred customers . 5 usana s associates are bound by distributor agreements which forbid distributors from making misleading income claims to potential associates and from making health claims for the products . 4 however an investigative report aired by radio canada in february 2009 which included hidden camera filming of recruitment and other sessions found that one group of associates appeared to violate the company s policies . the program contrasted the information about potential revenues presented at meetings and in written materials with the canadian legal requirements for multi level marketing schemes to provide clear frequent and complete information about the revenue of the typical participant . 4 39 in addition the same group of associates were filmed making recommendations for using usana products to treat illnesses including leukemia . 4 in 2008 two canadian usana distributors were awarded 7 million in compensation for damages related to their wrongful dismissal from the company . the firm had terminated their positions in 2003 because it believed the distributor had violated the companies policies and procedures . 40 41 new zealand government statistician for the commerce commission dr. murray h. smith who served as an expert witness in every pyramid scheme case brought by the commission preceding 10 years opined in 2008 that very few usana distributors are likely to become wealthy and stating you can make a very strong argument that this could be a pyramid scheme . when asked by the national business review to review the firm s business structure and compensation plan it was smith s opinion from a statistical not legal standpoint that the firm demonstrated a number of characteristics commonly occurring in pyramid schemes including that most members recoup less than what they pay to participate ; that those at the top