Significant Accounting Policies (Policies)

6 Months Ended

Dec. 31, 2018

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation of Interim Financial Statements

The accompanying condensed consolidated financial statements for the interim periods are unaudited and include the accounts of Integrated BioPharma, Inc., a Delaware corporation (together with its subsidiaries, the “Company”). The interim condensed consolidated financial statements have been prepared in conformity with Rule

of Regulation S-

of the Securities and Exchange Commission (“SEC”) and therefore do

not

include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America. However, all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the periods presented have been included. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained in the Company’s Annual Report on Form

-K for the fiscal year ended

June 30, 2018 (

“Form

-K”), as filed with the SEC. The

June 30, 2018

balance sheet was derived from audited financial statements, but does

not

include all disclosures required by accounting principles generally accepted in the United States of America. The results of operations for the

six

months ended

December 31, 2018

are

not

necessarily indicative of the results for the full fiscal year ending

June 30, 2019

or for any other period.

Nature of Operations

The Company is engaged primarily in manufacturing, distributing, marketing and sales of vitamins, nutritional supplements and herbal products. The Company’s customers are located primarily in the United States, Luxembourg and Canada. The Company was previously known as Integrated Health Technologies, Inc. and, prior to that, as Chem International, Inc. The Company was reincorporated in its current form in Delaware in

1995.

The Company continues to do business as Chem International, Inc. with certain of its customers and certain vendors.

The Company’s business segments include: (a) Contract Manufacturing operated by InB:Manhattan Drug Company, Inc. (“MDC”), which manufactures vitamins and nutritional supplements for sale to distributors, multilevel marketers and specialized health-care providers; (b) Branded Proprietary Products operated by AgroLabs, Inc. (“AgroLabs”), which distributes healthful nutritional products for sale through major mass market, grocery and drug and vitamin retailers, under the following brands: Naturally Noni, Peaceful Sleep, Green Envy, FiberCal, Wheatgrass and other products which are being introduced into the market (these are referred to as our branded proprietary nutraceutical business and/or products); and (c) Other Nutraceutical Businesses which includes the operations of (i) The Vitamin Factory (the “Vitamin Factory”), which sells private label MDC products, as well as our AgroLabs products, through the Internet, (ii) IHT Health Products, Inc. (“IHT”) a distributor of fine natural botanicals, including multi minerals produced under a license agreement, (iii) MDC Warehousing and Distribution, Inc., a service provider for warehousing and fulfilment services and (iv) Chem International, Inc. (“Chem”), a distributor of certain raw materials for DSM Nutritional Products LLC.

New Accounting Pronouncements, Policy [Policy Text Block]

Accounting Pronouncements Recently Adopted

May 2014,

the FASB issued ASU

2014

09,

“Revenue from Contracts with Customers”, Topic

606.

This update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards. The guidance in this update supersedes the revenue recognition requirements in Topic

605,

Revenue Recognition and most industry-specific guidance. The core principle of the guidance is that an entity should recognize revenue to illustrate the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to

be entitled in exchange for those goods or services. The new guidance also includes a cohesive set of disclosure requirements that will provide users of financial statements with comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a reporting organization’s contracts with customers. During

2016,

the FASB issued several accounting updates (ASU

No.

2016

08,

2016

and

2016

) to clarify implementation guidance and correct unintended application of the guidance. The standard allows for either “full retrospective” adoption, meaning the standard is applied to all of the periods presented, or “modified retrospective” adoption, meaning the standard is applied only to the most current period presented in the financial statements. This new guidance was effective for the Company beginning on

July 1, 2018,

and Note

provides the related disaggregated revenue disclosures. The adoption of this standard using the modified retrospective approach did

not

have a material impact on the Company’s revenue recognition accounting policy or its Condensed Consolidated Financial Statements.

January 2016,

the FASB issued ASU

No.

2016

01,

Financial Instruments – Overall, (Subtopic

825

) “Recognition and Measurement of Financial Assets and Financial Liabilities”, which addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. Under this guidance, companies have to measure equity investments, except those accounted for under the equity method, at fair value and recognize changes in fair value in net income. The adoption of this standard on

July 1, 2018,

by Company did

not

have a material effect on its Condensed Consolidated Financial Statements.

February 2016,

the FASB issued ASU

No.

2016

02,

Leases (Topic

842

), a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of right-of-use (“ROU”) assets and lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases under current U.S. GAAP. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We will be required to recognize and measure leases existing at, or entered into after, the beginning of the earliest comparative period presented using a modified retrospective approach, with certain practical expedients available.

The standard will be effective for us beginning

July 1, 2019,

with early adoption permitted. We elected to early adopt the standard effective

July 1, 2018.

We elected the available practical expedients on adoption. In preparation for adoption of the standard, we have implemented internal controls and key system functionality to enable the preparation of financial information. The standard had a material impact on our consolidated balance sheets, but did

not

have a material impact on our consolidated income statements. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while our accounting for capital leases remained substantially unchanged.

Adoption of this standard resulted in the recognition of additional ROU assets and lease liabilities for operating leases and had the following impact to the reported results as of

June 30, 2018

on our condensed consolidated financial statements:

Consolidated Statement of Financial Condition	As Reported		New Lease Standard Adjustment		As Adjusted

Operating lease right-of-use assets	$	-	$	69	$	69
Operating lease right-of-use assets - Vitamin Realty, LLC		-		3,668		3,668
Operating lease liabilities		-		69		69
Operating lease liabilities - Vitamin Realty, LLC		-		3,677		3,677
Current portion of long term debt, net		773		-		773
Long term debt, net		3,624		-		3,624
Current portion - Subordinated convertible note, net - CD Financial, LLC		5,269		-		5,269

August, 2016,

the FASB issued ASU

No.

2016

15,

“Statement of Cash Flows (Topic

230

): Classification of Certain Cash Receipts and Cash Payments,” which clarifies how certain cash receipts and payments are to be presented in the statement of cash flows. The guidance was effective for the Company on

July 1, 2018

and did

not

have a material impact on the Company’s Condensed Consolidated Financial Statements.

Aside from the adoption of ASUs, as described above and the Leases policy described below, there have been

material changes during fiscal year

2019

in the Company’s significant accounting policies to those previously disclosed in the Company’s Annual Report on Form

-K for the fiscal year ended

June 30, 2018.

Revenue from Contract with Customer [Policy Text Block]

Sales

The Company recognizes sales revenue, net of estimated sales returns and allowances, at the time it sells its products to the customer. The timing of a sale is determined when the product’s title and risk of loss transfers to the customer. The Company’s sales policy requires the customer to provide the Company with purchase orders with agreed upon selling prices and shipping terms.

Other Income [Policy Text Block]

Other

Income

The Company recognizes revenue from service transactions at the time the service is performed and collection from the counter party is expected. Generally, revenue from services is classified as a component of other income (expense), net in the Company's Condensed Consolidated Statements of Operations when it relates to professional services and in sales, net when it relates to warehousing and distribution services.

Lessee, Leases [Policy Text Block]

Leases.

We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities on our consolidated balance sheets. Finance leases are included in property and equipment, current portion of long term debt, and long-term debt obligation on our consolidated statement of financial condition.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do

not

provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Our lease terms

may

include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

We have lease agreements with lease and non-lease components, which are generally accounted for separately. For certain equipment leases, such as vehicles, we account for the lease and non-lease components as a single lease component.

Earnings Per Share, Policy [Policy Text Block]

Earnings Per Share.

Basic earnings per common share amounts are based on weighted average number of common shares outstanding. Diluted earnings per share amounts are based on the weighted average number of common shares outstanding, plus the incremental shares that would have been outstanding upon the assumed exercise of all potentially dilutive stock options, warrants and convertible debt, subject to anti-dilution limitations using the treasury stock method and if converted method.

The following options and potentially dilutive shares for convertible notes payable (See Note

Senior Credit Facility, Subordinated Convertible Note, net - CD Financial, LLC and other Long Term Debt) were

not

included in the computation of weighted average diluted common shares outstanding as the effect of doing so would be anti-dilutive for the

three

and

six

months ended

December 31, 2018

and

2017:

	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2018		2017		2018		2017

Anti-dilutive stock options		150,000		2,496,750		1 50,000		2,496,750
Anti-dilutive shares for convertible note payable		-		8,230,769		-		8,230,769
Anti-dilutive shares		150 ,000		10,727,519		1 50,000		10,727,519

Additionally, in the

six

months ended

December 31, 2018,

the

8,230,769

common shares underlying the convertible note were potentially dilutive and therefore included in the diluted earnings per share calculation on a proportionate basis prior to the conversion into common shares of the Company as of

July 24, 2018

and the results were antidilutive. (See Note

Senior Credit Facility, Subordinated Convertible Note, net - CD Financial, LLC and other Long Term Debt).