Press Releases

Medifast, Inc. announced today that it has been notified by the New York Stock Exchange (the “NYSE”) that it is not in compliance with the NYSE’s continued listing standards. Medifast, Inc. is considered below criteria by the NYSE because over a consecutive 30-day trading period its total market capitalization was less than $75 million and the Company’s most recently reported shareholders’ equity was below $75 million. Under applicable NYSE procedures, the Company has 45 days from the receipt of the notice to submit a plan to the NYSE to demonstrate its ability to achieve compliance with the continued listing standards within 18 months. The Company plans to submit a plan that will demonstrate compliance with the listing standards within the required time frame.

About Medifast: (www.choosemedifast.com)

Medifast has been helping people lose weight and achieve better health for 25 years. Its meal replacement foods have been proven effective in multiple clinical studies, recommended by over 15,000 physicians and used by more than 1 million customers. Medifast offers its customers world-class customer service and nutrition support.

Please Note: This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by use of phrases or terminology such as “intend” or other similar words or the negative of such terminology. Similarly, descriptions of Medifast’s objectives, strategies, plans, goals or targets contained herein are also considered forward-looking statements. Medifast believes this release should be read in conjunction with all of its filings with the United States Securities and Exchange Commission and cautions its readers that these forward-looking statements are subject to certain events, risks, uncertainties, and other factors. Some of these factors include, among others, Medifast’s inability to attract and retain independent Associates and Members, stability in the pricing of print, TV and Direct Mail marketing initiatives affecting the cost to acquire customers, increases in competition, litigation, regulatory changes, and its planned growth into new domestic and international markets and new channels of distribution. Although Medifast’s believes that the expectations, statements, and assumptions reflected in these forward- looking statements are reasonable, it cautions readers to always consider all of the risk factors and any other cautionary statements carefully in evaluating each forward-looking statement in this release, as well as those set forth in its latest Annual Report on Form 10-K and Quarterly Report on Form 10-Q, and other filings filed with the United States Securities and Exchange Commission, including its current reports on Form 8-K. All of the forward-looking statements contained herein speak only as of the date of this release.

                       MEDIFAST, INC. AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED BALANCE SHEETS

                                           (Unaudited)        (Audited)
                                                              (Restated)
                                       September 30, 2007  December 31, 2006

  ASSETS
  Current assets:
  Cash and cash equivalents                   $2,102,000        $1,085,000
  Accounts receivable-net of allowance
   for doubtful accounts of $100,000             425,000           448,000
  Inventory                                    8,471,000         8,255,000
  Investment securities                        1,477,000         1,540,000
  Deferred compensation                          830,000           673,000
  Prepaid expenses and other current assets    3,208,000         2,599,000
  Note receivable - current                      174,000           174,000
  Current portion of deferred tax asset           91,000            90,000
    Total current assets                      16,778,000        14,864,000

  Property, plant and equipment - net         16,005,000        14,020,000
  Trademarks and intangibles - net             5,749,000         5,874,000
  Deferred tax asset, net of current portion     807,000           517,000
  Note receivable, net of current assets       1,250,000         1,355,000
  Other assets                                    84,000            47,000

      TOTAL ASSETS                           $40,673,000       $36,677,000

  LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities:
  Accounts payable and accrued expenses       $2,805,000        $2,913,000
  Income taxes payable                           101,000           535,000
  Line of credit                                       -         1,256,000
  Current maturities of long-term debt         1,460,000           548,000
    Total current liabilities                  4,366,000         5,252,000

  Other liabilities and deferred credits
  Long-term debt, net of current portion       4,615,000         3,509,000
    Total liabilities                          8,981,000         8,761,000

  Stockholders' Equity:
  Preferred stock, $.001 par value
   (1,500,000 authorized, no shares
   issued and outstanding)                             -                 -
  Common stock; par value $.001 per
   share; 20,000,000 shares authorized;
   13,709,098 and 13,631,898 shares issued
   and outstanding                                14,000            14,000
  Additional paid-in capital                  26,930,000        26,629,000
  Accumulated other comprehensive income         367,000           334,000
  Retained earnings                            9,216,000         5,981,000
                                              36,527,000        32,958,000
  Less: cost of 270,534 and 249,184
   shares of common stock in treasury         (1,971,000)       (1,686,000)
  Less:  Unearned compensation                (2,864,000)       (3,356,000)
  Total stockholders' equity                  31,692,000        27,916,000

  TOTAL LIABILITIES AND STOCKHOLDERS'
   EQUITY                                    $40,673,000       $36,677,000




                       MEDIFAST, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                 (Unaudited)

                            Three Months Ended        Nine Months Ended
                               September 30,             September 30,
                             2007         2006         2007         2006
                                       (Restated)                (Restated)

  Revenue                $21,846,000  $19,642,000  $63,975,000  $58,779,000
  Cost of sales            5,523,000    4,705,000   15,944,000   14,334,000
  Gross Profit            16,323,000   14,937,000   48,031,000   44,445,000

  Selling, general, and
   administration         14,766,000   13,166,000   43,116,000   37,362,000

  Income from operations   1,557,000    1,771,000    4,915,000    7,083,000

  Other income/(expense)
    Interest expense, net   (159,000)     (42,000)    (284,000)    (134,000)
    Other income               2,000       24,000       90,000      184,000
                            (157,000)     (18,000)    (194,000)      50,000

  Income before provision
   for income taxes        1,400,000    1,753,000    4,721,000    7,133,000
  Provision for income
   tax (expense)            (446,000)    (298,000)  (1,486,000)  (2,219,000)

  Net income                $954,000   $1,455,000   $3,235,000   $4,914,000

  Basic earnings per share     $0.07        $0.11        $0.25        $0.39
  Diluted earnings per
   share                       $0.07        $0.11        $0.24        $0.36

  Weighted average shares
   outstanding -
       Basic              12,982,730   12,767,629   12,939,562   12,657,842
       Diluted            13,683,809   13,603,208   13,640,641   13,493,421

First Call Analyst:
FCMN Contact: bgleason@choosemedifast.com

SOURCE: Medifast, Inc.