10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2020

OR

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                    to

 Commission File Number 001-31668

INTEGRATED BIOPHARMA, INC.

(Exact name of registrant, as specified in its charter)

Delaware 22-2407475

(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

225 Long Ave., Hillside, New Jersey	07205
(Address of principal executive offices)	(Zip Code)

(888) 319-6962

(Registrant’s telephone number, including Area Code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	None	None

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes __X__ No ____

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes __X__ No ____

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  Accelerated filer  Non-accelerated filer  ☑ Emerging growth company  Smaller reporting company ☑

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes         No __X__

As of November 12, 2020, there were 29,645,943 shares of common stock, $0.002 par value per share, of the registrant outstanding.

INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES

FORM 10-Q QUARTERLY REPORT

For the Three Months Ended September 30, 2020

INDEX

		Page
	Part I. Financial Information
Item 1.	Condensed Consolidated Statements of Income for the Three Months Ended September 30, 2020 and 2019 (unaudited)	2
	Condensed Consolidated Balance Sheets as of September 30, 2020 and June 30, 2020 (unaudited)	3
	Condensed Consolidated Statement of Stockholders’ Equity for the Three Months Ended September 30, 2020 and 2019 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended September 30, 2020 and 2019 (unaudited)	5
	Notes to the Condensed Consolidated Financial Statements (unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	22
Item 4.	Controls and Procedures	22
	Part II. Other Information
Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults Upon Senior Securities	23
Item 4.	Mine Safety Disclosure	23
Item 5.	Other Information	23
Item 6.	Exhibits	23
	Other
Signatures		24

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q may constitute “forward-looking” statements as defined in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Private Securities Litigation Reform Act of 1995 (the “PSLRA”) or in releases made by the Securities and Exchange Commission (“SEC”), all as may be amended from time to time. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of Integrated BioPharma, Inc. and its subsidiaries (collectively, the “Company”) or industry results, to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, changes in general economic and business conditions; the outbreak and continued spread of COVID-19; loss of market share through competition; introduction of competing products by other companies; the timing of regulatory approval and the introduction of new products by the Company; changes in industry capacity; pressure on prices from competition or from purchasers of the Company's products; regulatory changes in the pharmaceutical manufacturing industry and nutraceutical industry; regulatory obstacles to the introduction of new technologies or products that are important to the Company; availability of qualified personnel; the loss of any significant customers or suppliers; and other factors both referenced and not referenced in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2020 (“Form 10-K”), as filed with the SEC. Statements that are not historical fact are forward-looking statements. Forward-looking statements can be identified by, among other things, the use of forward-looking language, such as the words, “plan”, “believe”, “expect”, “anticipate”, “intend”, “estimate”, “project”, “may”, “will”, “would”, “could”, “should”, “seeks”, or “scheduled to”, or other similar words, or the negative of these terms or other variations of these terms or comparable language, or by discussion of strategy or intentions. These cautionary statements are being made pursuant to the Securities Act, the Exchange Act and the PSLRA with the intention of obtaining the benefits of the “safe harbor” provisions of such laws. The Company cautions investors that any forward-looking statements made by the Company are not guarantees or indicative of future performance. Important assumptions and other important factors that could cause actual results to differ materially from those forward-looking statements with respect to the Company, include, but are not limited to, the risks and uncertainties affecting its businesses described in Item 1A of the Company’s Form 10-K and in other securities filings by the Company. Although the Company believes that its plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, actual results could differ materially from a projection or assumption in any of the forward-looking statements. The Company’s future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The forward-looking statements contained in this Quarterly Report on Form 10-Q are made only as of the date hereof and the Company does not have or undertake any obligation to update or revise any forward-looking statements whether as a result of new information, subsequent events or otherwise, unless otherwise required by law.

-1-

ITEM 1. FINANCIAL STATEMENTS

INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except for share and per share amounts)
(Unaudited)
	Three months ended
	September 30,
	2020			2019
Sales, net	$	15,172		$	11,406
Cost of sales		12,799			10,007
Gross profit		2,373			1,399
Selling and administrative expenses		864			923
Operating income		1,509			476
Other income (expense), net:
Interest expense		(76	)		(124	)
Realized gain on sale of investment in iBio Stock		56			-
Unrealized loss on investment in iBio Stock		(29	)		(20	)
Other income, net		8			17
Total other expense, net		(41	)		(127	)
Income before income taxes		1,468			349
Income tax expense, net		427			37
Net income	$	1,041		$	312
Basic net income per common share	$	0.04		$	0.01
Diluted net income per common share	$	0.03		$	0.01
Weighted average common shares outstanding - basic		29,645,943			29,565,943
Add: Equivalent shares outstanding - Stock Options		2,147,133			1,158,690
Weighted average common shares outstanding - diluted		31,793,076			30,724,633

See accompanying notes to condensed consolidated financial statements.

-2-

INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except for share and per share amounts)
(Unaudited)
	September 30,			June 30,
	2020			2020
Assets
Current Assets:
Cash	$	369		$	402
Accounts receivable, net		4,855			5,507
Inventories		12,756			10,101
Other current assets		594			451
Total current assets		18,574			16,461
Property and equipment, net		1,670			1,696
Operating lease right-of-use assets (includes $2,673 and $2,788 with a related party)		2,704			2,824
Deferred tax assets, net		1,606			1,883
Security deposits and other assets		76			80
Total Assets	$	24,630		$	22,944
Liabilities and Stockholders' Equity:
Current Liabilities:
Advances under revolving credit facility	$	2,823		$	4,046
Accounts payable (includes $72 and $62 due to related party)		7,058			4,358
Accrued expenses and other current liabilities		1,433			1,384
Current portion of long term debt, net		2,836			2,823
Current portion of operating lease liabilities (includes $472 and $467 with a related party)		494			488
Total current liabilities		14,644			13,099
Long term debt, net		654			1,436
Operating lease liabilities (includes $2,207 and $2,327 with a related party)		2,216			2,342
Total liabilities		17,514			16,877
Commitments and Contingencies
Stockholders' Equity :
Common Stock, $0.002 par value; 50,000,000 shares authorized;
29,680,843 shares issued and 29,645,943 shares outstanding, respectively		59			59
Additional paid-in capital		50,271			50,263
Accumulated deficit		(43,115	)		(44,156	)
Less: Treasury stock, at cost, 34,900 shares		(99	)		(99	)
Total Stockholders' Equity		7,116			6,067
Total Liabilities and Stockholders' Equity	$	24,630		$	22,944

See accompanying notes to condensed consolidated financial statements.

-3-

INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020 AND 2019
(in thousands, except shares)
(Unaudited)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020:
															Total
	Common Stock				Additional		Accumulated			Treasury Stock					Stockholders'
	Shares		Par Value		Paid-in-Capital		Deficit			Shares		Cost			Equity
Balance, July 1, 2020		29,680,843	$	59	$	50,263	$	(44,156	)		34,900	$	(99	)	$	6,067
Stock compensation expense employee stock options		-		-		8		-			-		-			8
Net income		-		-		-		1,041			-		-			1,041
Balance, September 30, 2020		29,680,843	$	59	$	50,271	$	(43,115	)		34,900	$	(99	)	$	7,116

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2019:
	Common Stock				Additional		Accumulated			Treasury Stock					Total Stockholders'
	Shares		Par Value		Paid-in-Capital		Deficit			Shares		Cost			Equity
Balance, July 1, 2019		29,600,843	$	59	$	50,197	$	(48,264	)		34,900	$	(99	)	$	1,893
Stock compensation expense for employee stock options		-		-		15		-			-		-			15
Net income		-		-		-		312			-		-			312
Balance, September 30, 2019		29,600,843	$	59	$	50,212	$	(47,952	)		34,900	$	(99	)	$	2,220

See accompanying notes to condensed consolidated financial statements.

-4-

INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, except share and per share amounts)
(Unaudited)
	Three months ended
	September 30,
	2020			2019
Cash flows provided by operating activities:
Net income	$	1,041		$	312
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization		83			91
Amortization of operating lease right-of-use assets		120			116
Stock based compensation		8			15
Change in deferred tax assets		277			(5	)
Realized gain on sale of investment in iBio Stock		(56	)		-
Unrealized loss on investment in iBio Stock		29			20
Other, Net		5			9
Changes in operating assets and liabilities:
Decrease (increase) in:
Accounts receivable		652			1,084
Inventories		(2,655	)		(1,073	)
Other current assets		(185	)		-
Security deposits and other assets		(26	)		18
(Decrease) increase in:
Accounts payable		2,696			1,251
Accrued expenses and other liabilities		49			(37	)
Operating lease obligations		(120	)		(116	)
Net cash provided by operating activities		1,918			1,685
Cash flows from investing activities:
Purchase of property and equipment		(53	)		(58	)
Proceeds from sale of iBio Stock		96			-
Net cash provided by (used in) investing activities		43			(58	)
Cash flows from financing activities:
Advances under revolving credit facility		13,921			11,040
Repayments of advances under revolving credit facility		(15,144	)		(12,075	)
Repayments under term note payables		(734	)		(482	)
Repayments under finance lease obligations		(37	)		(60	)
Net cash used in financing activities		(1,994	)		(1,577	)
Net (decrease) increase in cash		(33	)		50
Cash at beginning of period		402			475
Cash at end of period	$	369		$	525
Supplemental disclosures of cash flow information:
Interest paid	$	57		$	123
Income taxes paid	$	-		$	-
Supplemental disclosures of non-cash flow transactions:
Amount owed on purchase of property and equipment	$	20		$	-

See accompanying notes to condensed consolidated financial statements.

-5-

INTEGRATED BIOPHARMA, INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 (in thousands, except share and per share amounts)

(Unaudited)

Note 1. Principles of Consolidation and Basis of Presentation

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 8-03 of Regulation S-X 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 10-K for the fiscal year ended June 30, 2020 (“Form 10-K”), as filed with the SEC. The June 30, 2020 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 preparation of the unaudited condensed financial statements in conformity with these accounting principles requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the period. Ultimate results could differ from the estimates of management. The results of operations for the three months ended September 30, 2020 are not necessarily indicative of the results for the full fiscal year ending June 30, 2021 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 Manhattan Drug Company, Inc. (“MDC”), which manufactures vitamins and nutritional supplements for sale to distributors, multilevel marketers and specialized health-care providers and (b) Other Nutraceutical Businesses which includes the operations of (i) AgroLabs, Inc. (“AgroLabs”), which distributes healthful nutritional products for sale through major mass market, grocery and drug and vitamin retailers, under the following brands: Peaceful Sleep, Wheatgrass and other products which are being introduced into the market (these are referred to as our branded products), (ii) The Vitamin Factory (the “Vitamin Factory”), which sells private label MDC products, as well as our AgroLabs products, through the Internet, (iii) IHT Health Products, Inc. (“IHT”) a distributor of fine natural botanicals, including multi minerals produced under a license agreement, (iv) MDC Warehousing and Distribution, Inc., a service provider for warehousing and fulfillment services and (v) Chem International, Inc. (“Chem”), a distributor of certain raw materials for DSM Nutritional Products LLC.

Accounting Policies

Reclassifications. Certain prior year amounts have been reclassified to conform to the current year presentation.

-6-

INTEGRATED BIOPHARMA, INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 (in thousands, except share and per share amounts)

(Unaudited)

Accounting Pronouncements Recently Adopted

On August 28, 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-13, Fair Value Measurement: Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (Topic 820), which changes the fair value measurement disclosure requirements of ASC 820. This ASU removes certain disclosure requirements regarding the amounts and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy and the policy for timing of transfers between the levels. This ASU also adds disclosure requirements regarding unrealized gains and losses included in Other Comprehensive Income for recurring Level 3 fair value measurements and the range and weighted average of unobservable inputs used in Level 3 fair value measurements. ASU 2018-13 is effective for the fiscal year beginning July 1, 2020, including interim periods therein. Early adoption is permitted for any eliminated or modified disclosures upon issuance of ASU 2018-13. This new guidance did not have a material impact on the Company’s Condensed Consolidated Financial Statements.

Aside from the adoption of ASUs, as described above, there have been no material changes during fiscal year 2020 in the Company’s significant accounting policies to those previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2020.

Significant Accounting Policies

Revenue Recognition. The Company recognizes product sales revenue, the prices of which are fixed and determinable, when title and risk of loss have transferred to the customer, when estimated provisions for product returns, rebates, charge-backs and other sales allowances are reasonably determinable, and when collectability is reasonably assured. Accruals for these items are presented in the consolidated financial statements as reductions to sales. The Company’s net sales represent gross sales invoiced to customers, less certain related charges for discounts, returns, rebates, charge-backs and other allowances. Cost of sales includes the cost of raw materials and all labor and overhead associated with the manufacturing and packaging of the products. Gross margins are affected by, among other things, changes in the relative sales mix among our products and valuation and/or charge off of slow moving, expired or obsolete inventories. To perform revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps:

● identification of the promised goods or services in the contract;

● determination of whether the promised goods or serves are performance obligations including whether they are distinct in the context of the contract;

● measurement of the transaction price, including the constraint on variable consideration;

● allocation of the transaction price to the performance obligations based on estimated selling prices; and

● recognition of revenue when (or as) the Company satisfies each performance obligation. A performance obligation is a promise to transfer a distinct good or service to the customer and is the unit of account in ASC 606.

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.

-7-

INTEGRATED BIOPHARMA, INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 (in thousands, except share and per share amounts)

(Unaudited)

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 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 months ended September 30, 2020 and 2019:

	Three Months Ended
	September 30,
	2020		2019
Anti-dilutive stock options		-		50,000
Total anti-dilutive shares		-		50,000

Note 2. Inventories

Inventories are stated at the lower of cost or net realizable value using the first-in, first-out method and consist of the following:

	September 30,		June 30,
	2020		2020
Raw materials	$	9,957	$	6,610
Work-in-process		1,972		2,612
Finished goods		827		879
Total	$	12,756	$	10,101

-8-

INTEGRATED BIOPHARMA, INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 (in thousands, except share and per share amounts)

(Unaudited)

Note 3. Property and Equipment, net

Property and equipment, net consists of the following:

	September 30,			June 30,
	2020			2020
Land and building	$	1,250		$	1,250
Leasehold improvements		1,327			1,287
Machinery and equipment		6,470			6,465
Transportation equipment		6			6
		9,053			9,008
Less: Accumulated depreciation and amortization		(7,383	)		(7,312	)
Total	$	1,670		$	1,696

Depreciation and amortization expense recorded on property and equipment for the three months ended September 30, 2020 and 2019 was $83 and $91, respectively. In the three months ended September 30, 2020, the Company disposed of fully depreciated property of $12.

Note 4. Senior Credit Facility and other Long Term Debt

As of September 30, 2020 and June 30, 2020, the Company had the following debt outstanding:

	Principal Amount						Interest Rate			Maturity Date
	As of September 30, 2020			As of June 30, 2020
Revolving advances under Senior Credit
Facility with PNC Bank, National Association	$	2,823		$	4,046			3.25	%	5/15/2024
Installment Note with PNC Bank		1,850			2,584			3.50	%	5/15/2024
Payroll Protection Program Loan with PNC Bank		1,639			1,639			1.00	%	4/30/2022
Capitalized lease obligations		38			75			4.01% -9.38	%	12/1/2020
Total outstanding debt		6,350			8,344
Less: Revolving Advances		(2,823	)		(4,046	)
Prepaid financing costs		(37	)		(39	)
Current portion of long term debt, net		(2,836	)		(2,823	)
Long term debt, net	$	654		$	1,436

SENIOR CREDIT FACILITY

On May 15, 2019, the Company, MDC, AgroLabs, IHT, IHT Properties Corp. (“IHT Properties”) and Vitamin Factory (collectively, the “Borrowers”) amended the Revolving Credit, Term Loan and Security Agreement (the “Amended Loan Agreement”) with PNC Bank, National Association as agent and lender (“PNC”) and the other lenders party thereto entered into on June 27, 2012, as amended on February 19, 2016, and May 15, 2019.

-9-

INTEGRATED BIOPHARMA, INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 (in thousands, except share and per share amounts)

(Unaudited)

The Amended Loan Agreement provides for a total of $11,585 in senior secured financing (the “Senior Credit Facility”) as follows: (i) discretionary advances (“Revolving Advances”) based on eligible accounts receivable and eligible inventory in the maximum amount of $8,000 (the “Revolving Credit Facility”), and (ii) a term loan in the amount of $3,585 (the “Term Loan”). The Senior Credit Facility is secured by all assets of the Borrowers, including, without limitation, machinery and equipment, real estate owned by IHT Properties, and common stock of iBio, Inc. ("iBio Stock") owned by the Company. Revolving Advances bear interest at PNC’s Base Rate (3.25% as of September 30, 2020 and June 30, 2020) or the Eurodollar Rate, at Borrowers’ option, plus 2.50%. The Term Loan bears interest at PNC’s Base Rate (3.50% as of September 30, 2020 and June 30, 2020) or the Eurodollar Rate at Borrowers’ option, plus 3.00%.

Upon and after the occurrence of any event of default under the Amended Loan Agreement, and during the continuation thereof, interest shall be payable at the interest rate then applicable plus 2%. The Senior Credit Facility matures on May 15, 2024 (the “Senior Maturity Date”).

The principal balance of the Revolving Advances is payable on the Senior Maturity Date, subject to acceleration, based upon a material adverse event clause, as defined, subjective accelerations for borrowing base reserves, as defined or upon the occurrence of any event of default under the Amended Loan Agreement or earlier termination of the Amended Loan Agreement pursuant to the terms thereof. The Term Loan shall be repaid in eighty-four (84) consecutive monthly installments of principal, the first eighty-three (83) of which shall be in the amount of $43, commencing on the first business day of June, 2019, and continuing on the first business day of each month thereafter, with a final payment of any unpaid balance of principal and interest payable on the Senior Maturity Date. The foregoing is subject to customary mandatory prepayment provisions and acceleration upon the occurrence of any event of default under the Amended Loan Agreement or earlier termination of the Amended Loan Agreement pursuant to the terms thereof.

The Revolving Advances are subject to the terms and conditions set forth in the Amended Loan Agreement and are made in aggregate amounts at any time equal to the lesser of (x) $8,000 or (y) an amount equal to the sum of: (i) up to 85%, subject to the provisions in the Amended Loan Agreement, of eligible accounts receivables (“Receivables Advance Rate”), plus (ii) up to the lesser of (A) 75%, subject to the provisions in the Amended Loan Agreement, of the value of the eligible inventory (“Inventory Advance Rate” and together with the Receivables Advance Rate, collectively, the “Advance Rates”), (B) 85% of the appraised net orderly liquidation value of eligible inventory (as evidenced by the most recent inventory appraisal reasonably satisfactory to PNC in its sole discretion exercised in good faith) and (C) the inventory sublimit in the aggregate at any one time (“Inventory Advance Rate” and together with the Receivables Advance Rate, collectively, the “Advance Rates”), minus (iii) the aggregate Maximum Undrawn Amount of all outstanding Letters of Credit, minus (iv) such reserves as PNC may reasonably deem proper and necessary from time to time.

The Amended Loan Agreement contains customary mandatory prepayment provisions, including, without limitation the requirement to use any sales proceeds from the sale of iBio Stock to repay the Term Loan and to prepay the outstanding amount of the Term Note in an amount equal to twenty-five percent (25%) of Excess Cash Flow (as defined in the Amended Loan Agreement) for each fiscal year commencing with the fiscal year ended June 30, 2016, payable upon delivery of the financial statements to PNC referred to in and required by the Amended Loan Agreement for such fiscal year but in any event not later than one hundred twenty (120) days after the end of each such fiscal year, which amount shall be applied ratably to the outstanding principal installments of the Term Loan in the inverse order of the maturities thereof. The Amended Loan Agreement also contains customary representations and warranties, covenants and events of default, including, without limitation, (i) a fixed charge coverage ratio maintenance requirement and (ii) an event of default tied to any change of control as defined in the Amended Loan Agreement. As of September 30, 2020, the Company was in compliance with the fixed charge coverage ratio maintenance requirement and with the required annual payments of 25% of the Excess Cash Flow for each fiscal year commencing with the fiscal year ended June 30, 2016 and used the proceeds of $96 from the sale of iBio Stock in the three months ended September 30, 2020 to repay the Term Loan.

-10-

INTEGRATED BIOPHARMA, INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 (in thousands, except share and per share amounts)

(Unaudited)

In connection with the Senior Credit Facility, the following loan documents were executed: (i) a Stock Pledge Agreement with PNC, pursuant to which the Company pledged to PNC the iBio Stock; (ii) a Mortgage and Security Agreement with PNC with IHT Properties; and (iii) an Environmental Indemnity Agreement with PNC.

OTHER LONG TERM DEBT

Paycheck Protection Program Term Note. On April 29, 2020, the Company entered into a Paycheck Protection Program Term Note (the “PPP Note”) with PNC Bank in the amount of $1,639. The PPP Note has an interest rate of 1% and a maturity date of April 30, 2022. The PPP Note was issued by PNC Bank to the Company pursuant to the Coronavirus, Aid, Relief, and Economic Security Act’s (the “CARES Act”) (P.L. 116-136) Paycheck Protection Program (the “Program”). Under the Program, all or a portion of the PPP Note may be forgiven in accordance with the Program requirements. On August 20, 2020, the PPP Note was amended to conform to the provisions under the Paycheck Protection Program Flexibility Act of 2020 (the “Flexibility Act”), which was signed into law on June 5, 2020. The Flexibility Act significantly modified the loan forgiveness process and provided other benefits to the PPP loan recipient. The amount of the forgiveness shall be calculated (and may be reduced) in accordance with the requirements of the Program, including the provisions of Section 1106 of the Cares Act and the Flexibility Act. No more than 40% of the amount forgiven can be attributable to non-payroll costs, as defined in the Program.

There are no payments of interest or principal amortization due under the PPP Note while the PPP Note is in the Deferral Period, which is the period beginning on the date of the PPP Note, April 29, 2020, and ending on the Deferral Expiration Date. The Deferral Expiration Date is the date any forgiven amount is remitted to PNC Bank or the date that a final determination is made that no portion of the PPP Note will be forgiven. If the Company fails to apply for loan forgiveness, the Deferral Expiration Date will be August 15, 2021. Any amounts not forgiven under the Program will be payable in equal installments of principal plus any interest owed on the payment date from the Deferral Expiration Date through the Maturity Date. Additionally, any accrued interest that is not forgiven under the Program will be due on the First Payment Date, which is the 15th of the month following the month in which the Deferral Expiration Date occurs.

If the Company fails to make timely payments under the PPP Note, the Company, PNC Bank will charge a late payment fee equal to the lesser of 5% of the amount of such payment or $100. In the event of Default, as defined in the PPP Note, the default rate of interest will 5% in excess of the interest rate in effect from time to time under the PPP Note.

Note 5. Significant Risks and Uncertainties

(a) Major Customers. For the three months ended September 30, 2020 and 2019, approximately 92% and 91% of consolidated net sales, respectively, were derived from two customers. These two customers are in the Company’s Contract Manufacturing Segment and represented approximately 69% and 25% and 66% and 29% in the three months ended September 30, 2020 and 2019, respectively. Accounts receivable from these two major customers represented approximately 89% and 92% of total net accounts receivable as of September 30 and June 30, 2020, respectively. The loss of any of these customers could have an adverse effect on the Company’s operations. Major customers are those customers who account for more than 10% of net sales.

(b) Other Business Risks. Approximately 69% of the Company’s employees are covered by a union contract and are employed in its New Jersey facilities. The contract was renewed on September 1, 2018 and will expire on August 31, 2021.

The COVID-19, or coronavirus, outbreak has the potential to cause a disruption in the Company’s supply chain.  Currently, some of our suppliers of certain materials used in the production of our supplements are located in China and other impacted countries or other states within the United States.  Most of these materials may

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INTEGRATED BIOPHARMA, INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 (in thousands, except share and per share amounts)

(Unaudited)

be obtained from more than one supplier.  However, due to port closures and other restrictions resulting from the coronavirus outbreak throughout the world, these suppliers, located both inside and outside of the United States, may have limited supply of the materials, which has caused prices of some materials to increase. These and other disruptions would likely impact the Company’s sales and operating results.  If the Company is unable to obtain the necessary materials to produce a supplement within the Company’s standard lead times, it may delay the production and shipment of those supplements, thereby shifting the timing of recognizing the resulting sale to the Company’s customers.  In addition, the significant outbreak of this contagious disease in the human population has resulted in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could affect demand for the Company’s products and impact the Company’s operating results.

The Company does not currently anticipate any negative impact to its margins resulting from the coronavirus outbreak, however; if the Company is unable to obtain the necessary materials to produce a supplement within its standard lead times or the necessary safety and cleaning supplies it may delay the production and shipment of those supplements to its customers, thereby shifting the timing of recognizing the resulting sale to its customers. 

Note 6. Leases and other Commitments and Contingencies

(a) Leases. The Company has operating and finance leases for its corporate and sales offices, warehousing and packaging facilities and certain machinery and equipment, including office equipment. The Company’s leases have remaining terms of less than 1 year to less than 8 years.

The components of lease expense for the three months ended September 30, 2020 and 2019, were as follows:

	2020						2019
	Related Party - Vitamin Realty		Other Leases		Totals		Related Party - Vitamin Realty		Other Leases		Totals
Operating lease costs	$	141	$	24	$	165	$	135	$	39	$	174
Finance Operating Lease Costs:
Amortization of right-of use assets	$	-	$	12	$	12	$	-	$	27	$	27
Interest on operating lease liabilities		-		1		1		-		5		5
Total finance lease cost	$	-	$	13	$	13	$	-	$	32	$	32

 Operating Lease Liabilities

Related Party Operating Lease Liabilities. Warehouse and office facilities are leased from Vitamin Realty Associates, LLC (“Vitamin Realty”), which is 100% owned by the Company’s chairman, and a major stockholder and certain of his family members, who are the Co-Chief Executive Officers and directors of the Company. On January 5, 2012, MDC entered into a second amendment of lease (the “Second Lease Amendment”) with Vitamin Realty for its office and warehouse space in New Jersey increasing its rentable square footage from an aggregate of 74,898 square feet to 76,161 square feet and extending the expiration date to January 31, 2026. This Second Lease Amendment provides for minimum annual rental payments of $533, plus increases in real estate taxes and building operating expenses. On May 19, 2014, AgroLabs entered into an amendment to the lease agreement entered into on January 5, 2012, with Vitamin Realty for an additional 2,700 square feet of warehouse space in New Jersey, the term of which was to expire on January 31, 2019 to extend the expiration date to June 1, 2024. This additional lease provides for minimum lease payments of $27 with annual increases plus the proportionate share of operating expenses.

-12-

INTEGRATED BIOPHARMA, INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 (in thousands, except share and per share amounts)

(Unaudited)

Rent expense, lease amortization costs and interest expense for the three months ended September 30, 2020 and 2019 on these leases were $222 and $213 respectively, and are included in cost of sales, selling and administrative expenses and interest expense in the accompanying Condensed Consolidated Statements of Income. As of September 30, 2020 and June 30, 2020, the Company had outstanding current obligations to Vitamin Realty of $72 and $62, respectively, included in accounts payable in the accompanying Condensed Consolidated Balance Sheet. Additionally, the Company has operating lease obligations of $2,679 and $2,794 with Vitamin Realty as noted in the accompany Condensed Consolidated Balance Sheet as of September 30, 2020 and June 30, 2020, respectively.

Other Operating Lease Liabilities. The Company has entered into certain non-cancelable operating lease agreements expiring up through May, 2023, related to machinery and equipment and office equipment.

As of September 30, 2020, the Company’s right-of-use assets, lease obligations and remaining cash commitment on these leases were as follows:

	Right-of-use Assets		Current Portion of Operating Lease Obligations		Operating Lease Obligations		Remaining Cash Commitment
Vitamin Realty Leases	$	2,673	$	472	$	2,207	$	2,962
Machinery and equipment leases		13		11		2		13
Office equipment leases		18		11		7		19
	$	2,704	$	494	$	2,216	$	2,994

As of June 30, 2020, the Company’s ROU assets, lease obligations and remaining cash commitment on these leases were as follows:

	Right-of-use Assets		Current Portion Operating Lease Obligations		Operating Lease Obligations		Remaining Cash Commitment
Vitamin Realty Leases	$	2,788	$	467	$	2,327	$	3,103
Machinery and equipment leases		28		20		8		29
Office equipment leases		8		1		7		9
	$	2,824	$	488	$	2,342	$	3,141

As of September 30, 2020 and June 30, 2020, the Company’s weighted average discount rate and remaining term on lease liabilities were approximately 3.75% and 3.75% and 5.1 years and 5.4 years, respectively.

-13-

INTEGRATED BIOPHARMA, INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 (in thousands, except share and per share amounts)

(Unaudited)

Supplemental cash flows information related to leases for the three months ended September 30, 2020, is as follows:

	Related Party - Vitamin Realty		Other Leases		Totals
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	141	$	24	$	165
Operating cash flows from finance leases		-		1		1
Financing cash flows from finance lease obligations		-		37		37

Supplemental cash flows information related to leases for the three months ended September 30, 2019, is as follows:

	Related Party - Vitamin Realty		Other Leases		Totals
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	141	$	24	$	165
Operating cash flows from finance leases		-		5		5
Financing cash flows from finance lease obligations		-		60		60

The Company did not enter into any lease commitments in the three months ended September 30, 2020.

Maturities of operating lease liabilities as of September 30, 2020 were as follows:

				Related Party
	Operating Lease			Operating Lease			Financed Lease
Year ending June 30,	Commitment			Commitment			Obligations			Total
2021, remaining	$	16		$	424		$	39		$	479
2022		11			565			-			576
2023		2			565			-			567
2024		2			565			-			567
2025		1			563			-			564
2026		-			280			-			280
Total minimum lease payments		32			2,962			39			3,033
Imputed interest		(1	)		(283	)		(1	)		(285	)
Total	$	31		$	2,679		$	38		$	2,748

Total rent expense, lease amortization costs and interest expense, including real estate taxes and maintenance charges, was approximately $265 and $263 for the three months ended September 30, 2020 and 2019, respectively. Rent and lease amortization and interest expense is included in cost of sales, selling and administrative expenses and interest expense in the accompanying Condensed Consolidated Statements of Income.

-14-

(b) Legal Proceedings.

The Company is subject, from time to time, to claims by third parties under various legal theories. The defense of such claims, or any adverse outcome relating to any such claims, could have a material adverse effect on the Company’s liquidity, financial condition and cash flows.

Note 7. Related Party Transactions

See Note 6(a). Leases for related party lease transactions.

Note 8. Segment Information and Disaggregated Revenue

The basis for presenting segment results generally is consistent with overall Company reporting. The Company reports information about its operating segments in accordance with GAAP which establishes standards for reporting information about a company’s operating segments.

The Company has divided its operations into two reportable segments as follows: Contract Manufacturing, and Other Nutraceutical Businesses. The international sales, concentrated primarily in Europe and Canada, for the three months ended September 30, 2020 and 2019 were $1,467 and $2,026, respectively.

Financial information relating to the three months ended September 30, 2020 and 2019 operations by business segment and disaggregated revenues was as follows:

		Sales, Net						Segment
		U.S.		International				Gross				Capital
		Customers		Customers		Total		Profit (Loss)		Depreciation		Expenditures
Contract Manufacturing	2020	$	13,324	$	1,462	$	14,786	$	2,255	$	82	$	50
	2019		9,001		1,983		10,984		1,250		90		58
Other Nutraceutical Businesses	2020		381		5		386		118		1		3
	2019		379		43		422		149		1		-
Total Company	2020		13,705		1,467		15,172		2,373		83		53
	2019		9,380		2,026		11,406		1,399		91		58

	Total Assets as of
	September 30,		June 30,
	2020		2020
Contract Manufacturing	$	21,429	$	19,581
Other Nutraceutical Businesses		3,201		3,363
Total Company	$	24,630	$	22,944

-15-

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANICAL CONDITION AND RESULTS OF OPERATION (dollars in thousands)

Certain statements set forth under this caption constitute “forward-looking statements.” See “Disclosure Regarding Forward-Looking Statements” on page 1 of this Quarterly Report on Form 10-Q for additional factors relating to such statements. The following discussion should also be read in conjunction with the condensed consolidated financial statements of the Company and Notes thereto included herein and the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2020.

The Company is engaged primarily in the 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.

Business Outlook

Our future results of operations and the other forward-looking statements contained in this Quarterly Report on Form 10-Q, including this “Management’s Discussion and Analysis of Financial Condition and Results of Operation”, involve a number of risks and uncertainties—in particular, the statements regarding our goals and strategies, new product introductions, plans to cultivate new businesses, future economic conditions, revenue, pricing, gross margin and costs, competition, the tax rate, and potential legal proceedings. We are focusing our efforts to improve operational efficiency and reduce spending that may have an impact on expense levels and gross margin. In addition to the various important factors discussed above, a number of other important factors could cause actual results to differ significantly from our expectations. See the risks described in “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2020.

For the three months ended September 30, 2020, our net sales from operations increased by $3,766 to approximately $15,172 from approximately $11,406 in the three months ended September 30, 2019. Our net sales in the Contract Manufacturing Segment increased by $3,802, offset by a decrease in our Other Nutraceuticals Segment of $36. Net sales increased in our Contract Manufacturing Segment primarily due to increased sales volumes to Life Extension and Herbalife in the amount of $2,994 and $529, respectively. For the three months ended September 30, 2020, we had operating income of approximately $1,509, an increase of approximately $1,033 from operating income of approximately $476 for the three months ended September 30, 2019. Our profit margins increased from approximately 12.3% of net sales in the three months ended September 30, 2019 to approximately 15.5% of net sales in the three months ended September 30, 2020, primarily as a result of the increased sales in our Contract Manufacturing Segment of approximately $3,802. Our consolidated selling and administrative expenses decreased by approximately $59 or approximately 6.4 % in the three months ended September 30, 2020 compared to the three months ended September 30, 2019. Professional fees decreased by $71 primarily from decreased legal fees of approximately $61, along with a decrease in travel and entertainment of $15, offset in part, by an increase in expected losses on customer receivables of $30, each as a result of the COVID-19, or coronavirus outbreak.

Our revenue from our two significant customers in our Contract Manufacturing Segment is dependent on their demand within their respective distribution channels for the products we manufacture for them. As in any competitive market, our ability to match or beat other contract manufacturers pricing for the same items may also alter our outlook and the ability to maintain or increase revenues. We will continue to focus on our core businesses and push forward in maintaining our cost structure in line with our sales and expanding our customer base.

The COVID-19, or coronavirus outbreak, has the potential to cause a disruption in our supply chain. Currently, some of our suppliers of certain materials used in the production of our supplements are located in China and other impacted countries or other states within the United States. Most materials may be obtained from more than one supplier. However, due to port closures and other restrictions resulting from the coronavirus outbreak throughout the world, these suppliers, located both inside and outside of the United States, may have limited supply of such materials,  which has caused prices of some materials to increase.

-16-

As of November 12, 2020, we have had delays, however; have not experienced a significant disruption in the supply chain for our raw materials. We have taken measures to secure some surplus stock and have informed our customers who may be affected of the potential price increase. In addition, the significant outbreak of this contagious disease in the human population has resulted in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could affect demand for our products and impact our operating results.

While, as of November 12, 2020, we haven’t experienced a major disruption in the supply chain for our manufactured products, we have, however, seen a disruption in the supply chain for personal protection equipment (“PPE”) and cleaning supplies used in our manufacturing facilities in accordance with our standard operating procedures and the updated guidelines issued by the Centers for Disease Control and Prevention (the “CDC”) for personal safety. The U.S. Department of Labor Occupational Safety and Health Administration has adopted the CDC guidelines and as such we are required to provide the PPE for our employees to wear while working. When we have obtained the out of stock items, such as face masks, gloves and other protective personal items, the cost of such items were substantially higher than the historical costs. This may impact our future gross margins. Additionally, if we are unable to obtain cleaning supplies, we may have to temporarily close areas of production until the needed supplies are obtained.

We do not currently anticipate any negative impact to our margins resulting from the coronavirus outbreak, however; if we are unable to obtain the necessary materials to produce a supplement within our standard lead times or the necessary PPE and cleaning supplies, it may delay the production and shipment of those supplements, thereby shifting the timing of recognizing the resulting sale to our customers.

While our facilities remained open during the State of New Jersey lockdown as an essential business, there can be no assurances that we will continue to operate if the Governor of New Jersey should modify or issue new executive orders prohibiting our facilities to remain open.

Critical Accounting Policies and Estimates

There have been no changes to our critical accounting policies in the three months ended September 30, 2020, except as disclosed in Note 1. Principles of Consolidation and Basis of Presentation of the Condensed Financial Statements of the Company contained in this Quarterly Report on Form 10-Q. Critical accounting policies and the significant estimates made in accordance with them are regularly discussed by management with our Audit Committee. Those policies are discussed under “Critical Accounting Policies” in our “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Item 7 of our Annual Report on Form 10-K for the year ended June 30, 2020 and in Note 1. Principles of Consolidation and Basis of Presentation of the Condensed Financial Statements of the Company contained in this Quarterly Report on Form 10-Q.

-17-

Results of Operations (in thousands, except share and per share amounts)

Our results from operations in the following table, sets forth the income statement data of our results as a percentage of net sales for the periods indicated:

	For the three months
	ended September 30,
	2020			2019
Sales, net		100.0	%		100.0	%
Costs and expenses:
Cost of sales		84.4	%		87.7	%
Selling and administrative		5.7	%		8.1	%
		90.1	%		95.8	%
Operating income		9.9	%		4.2	%
Other expense, net
Interest expense		(0.5	%)		(1.1	%)
Realized gain on sale of investment in iBio Stock		0.4	%		-
Unrealized loss in investment in iBio, Stock		(0.2	%)		(0.2	%)
Other income, net		0.1	%		0.2	%
Other expense, net		(0.2	%)		(1.1	%)
Income before income taxes		9.7	%		3.1	%
Income tax expense, net		2.8	%		0.3	%
Net income		6.9	%		2.8	%

For the Three Months Ended September 30, 2020 compared to the Three Months Ended September 30, 2019

Sales, net. Sales, net, for the three months ended September 30, 2020 and 2019 were $15,172 and $11,406, respectively, an increase of 33.0%, and are comprised of the following:

	Three months ended				Dollar			Percentage
	September 30,				Change			Change
	2020		2019		2020 vs 2019			2020 vs 2019
	(amounts in thousands)
Contract Manufacturing:
US Customers	$	13,324	$	9,001	$	4,323			48.0	%
International Customers		1,462		1,983		(521	)		(26.3	%)
Net sales, Contract Manufacturing		14,786		10,984		3,802			34.6	%
Other Nutraceuticals:
US Customers		381		379		2			0.5	%
International Customers		5		43		(38	)		(88.4	%)
Net sales, Other Nutraceuticals		386		422		(36	)		(8.5	%)
Total net sales	$	15,172	$	11,406	$	3,766			33.0	%

For the three months ended September 30, 2020 and 2019, a significant portion of our consolidated net sales, approximately 92% and 91%, respectively, were concentrated among two customers, Life Extension and Herbalife, in our Contract Manufacturing Segment.  Life Extension and Herbalife represented approximately 69% and 25% and 66% and 29%, respectively, of our Contract Manufacturing Segment’s net sales in the three months ended September 30, 2020 and 2019, respectively.  Innophos, while not significant customer of our consolidated net sales, represented approximately 0% and 26%, of the Other Nutraceutical Businesses net sales in the three months ended September 30, 2020 and 2019, respectively. The loss of any of these customers could have a significant adverse impact on our financial condition and results of operations.

-18-

The increase in net sales of approximately $3,766 was primarily the result of increased net sales in our Contract Manufacturing Segment by $3,802 primarily due to increased sales volumes to Life Extension and Herbalife in the amounts of $2,994 and $529, respectively.

Cost of sales. Cost of sales increased by approximately $2,792 to $12,799 for the three months ended September 30, 2020, as compared to $10,007 for the three months ended September 30, 2019 or approximately 28%. Cost of sales decreased as a percentage of sales to 84.4% for the three months ended September 30, 2020 as compared to 87.7% for the three months ended September 30, 2019. The 28% increase in the cost of goods sold amount is consistent with the increased net sales of approximately 33%. The decrease in the cost of goods sold as a percentage of net sales, was primarily the result of the increased net sales used to offset the fixed manufacturing overhead. There were no significant changes in the cost of goods sold in our other two segments other than the variances in sales.

Selling and Administrative Expenses. There was a decrease in selling and administrative expenses of $59, approximately 6% in the three months ended September 30, 2020 as compared to the three months ended September 30, 2019. As a percentage of sales, net, selling and administrative expenses were approximately 6% and 8% in the three months ended September 30, 2020 and 2019, respectively. The decrease was primarily from decreases in (i) professional fees of approximately $71, as the result of decreased legal fees; and (ii) travel and entertainment of approximately $15. These decreases were partially offset by offset by an increase of approximately $30 in expected losses on collections of customer receivables resulting from the financial impact of COVID-19.

Other income (expense), net. Other income (expense), net was approximately $41 for the three months ended September 30, 2020 compared to $127 for the three months ended September 30, 2019, and is composed of:

	Three months ended
	September 30,
	2020			2019
	(dollars in thousands)
Interest expense	$	(76	)	$	(124	)
Realized gain on sale of investment in iBio Stock		56			-
Unrealized loss on investment in iBio Stock		(29	)		(20	)
Other income, net		8			17
Other expense, net	$	(41	)	$	(127	)

Our interest expense for the three months ended September 30, 2020 decreased by $48 from the three month period ended September 30, 2019, primarily as the result of lower average daily balances outstanding under the Senior Credit Facility with PNC Bank and a decrease in the interest rates of approximately 1.5% in the three month period ended September 30, 2020 from the three month period ended September 30, 2019 (See Note 4 to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q).

In the three months ended September 30, 2020, we sold 16,000 shares of iBio Stock for a gain of $56 with no such sales in the three months ended September 30, 2019.  Also, in the three months ended September 30, 2020, and 2019, we had an unrealized loss on the remaining iBio Stock of approximately $29 and $20, respectively.

Federal and state income tax expense, net. For the three months ended September 30, 2020, we had a federal deferred income tax expense of $273 compared to a $6 federal income tax benefit in the three months ended September 30, 2019 and state income tax expense, net of approximately $154 and $43, in the three months ended September 30, 2020 and 2019, respectively. We continue to maintain a reserve on a portion of our deferred tax assets as it has been determined that based upon past losses, the Company’s past liquidity concerns and the current economic environment, it is “more likely than not” that the Company’s deferred tax assets may not be fully realized.

-19-

Net income. Our net income for the three months ended September 30, 2020 and 2019 was approximately $1,041 and $312, respectively. The increase of approximately $729 was primarily the result of increased operating income of $1,033 offset by increased income taxes of $390.

Seasonality

The nutraceutical business can be seasonal. Due to our current customer base in our contract manufacturing segment, our fiscal quarter ending December 31st each year tends to be more than our average quarterly volume for the other three fiscal quarters in the fiscal year.  This increase is based on their forecast of their customer base.

The Company believes that there are non-seasonal factors that may influence the variability of quarterly results including, but not limited to, general economic and industry conditions that affect consumer spending, changing consumer demands and current news on nutritional supplements. Accordingly, a comparison of the Company’s results of operations from consecutive periods is not necessarily meaningful, and the Company’s results of operations for any period are not necessarily indicative of future periods.

Liquidity and Capital Resources

The following table sets forth, for the periods indicated, the Company’s net cash flows used in operating, investing and financing activities, its period end cash and cash equivalents and other operating measures

	For the three months ended
	September 30,
	2020			2019
	(dollars in thousands)
Net cash provided by operating activities	$	1,918		$	1,685
Net cash provided by (used in) investing activities	$	43		$	(58	)
Net cash used in financing activities	$	(1,994	)	$	(1,577	)
Cash at end of period	$	369		$	525

At September 30, 2020, our working capital was approximately $3,930, an increase of $568 from our working capital of $3,362 at June 30, 2020. Our current assets increased by $2,113 offset by an increase in our current liabilities of $1,545. The increase in the current assets is primarily from increases in inventories in the amount of $2,655 offset by a decrease in accounts receivable, net of $652.

Operating Activities

Net cash provided by operating activities of $1,918 in the three months ended September 30, 2020 includes net income of approximately $1,041. After excluding the effects of non-cash expenses, including depreciation and amortization, and changes in deferred tax assets, the adjusted cash provided from operations before the effect of the changes in working capital components was $1,507. Net cash provided by our operations in the three months ended September 30, 2020 from our working capital assets and liabilities in the amount of approximately $411 was primarily the result of cash provided from a decrease in our accounts receivable of $652 and an aggregate increase in accounts payable, accrued expenses and other liabilities of $2,745, offset in part, by increases in inventories of approximately $2,655 and prepaid and other assets of $211.

-20-

Net cash provided by operating activities of $1,685 in the three months ended September 30, 2019 includes net income of approximately $312. After excluding the effects of non-cash expenses, including depreciation and amortization, and changes in the fair value of derivative liabilities and deferred tax assets, the adjusted cash provided from operations before the effect of the changes in working capital components was $558. Net cash provided in our operations in the three months ended September 30, 2019 from our working capital assets and liabilities in the amount of approximately $1,126 was primarily the result of cash provided from a decrease in our accounts receivable of $1,084 and an aggregate increase accounts payable, accrued expenses and other liabilities of $1,214, offset in part, by an increase in inventories of approximately $1,073.

Investing Activities

Cash provided by investing activities in the three months ended September 30, 2020 of approximately $43 was from proceeds of $96 from the sale of iBio Stock offset by the purchase of machinery and equipment of $53. Cash used in investing activities in the three months ended September 30, 2019 of approximately $58 was used primarily for the purchase of machinery and equipment.

Financing Activities

Cash used in financing activities was approximately $1,994 for the three months ended September 30, 2020, and was primarily from repayments of advances under our revolving credit facility of $15,144 and principal payments under our term notes in the amount of $734, offset by advances under our revolving credit facility of approximately $13,921.

Cash used in financing activities was approximately $1,577 for the three months ended September 30, 2019, and was primarily from repayments of advances under our revolving credit facility of $12,075 and principal payments under our term notes in the amount of $482, offset by advances under our revolving credit facility of approximately $11,040.

As of September 30, 2020, we had cash of $369, funds available under our revolving credit facility of approximately $3,495 and working capital of approximately $3,930. Our working capital includes $2,823 outstanding under our revolving line of credit which is not due until May 2024 but classified as current due to a subjective acceleration clause that could cause the advances to become currently due. (See Note 4 to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q). Additionally, we had income from operations of approximately $1,509 in the three months ended September 30, 2020. After taking into consideration our interim results and current projections, management believes that operations, together with the revolving credit facility will support our working capital requirements at least through the period ending November 12, 2021.

Our total annual commitments at September 30, 2020 for long term non-cancelable leases of approximately $565 consists of obligations under operating leases for facilities and operating lease agreements for the rental of warehouse equipment, office equipment and automobiles.

Capital Expenditures

The Company's capital expenditures for the three months ended September 30, 2020 and 2019 were approximately $53 and $58, respectively. The Company has budgeted approximately $475 for capital expenditures for fiscal year 2021. The total amount is expected to be funded from lease financing and cash provided from the Company’s operations.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

Recent Accounting Pronouncements

None.

Impact of Inflation

The Company does not believe that inflation has significantly affected its results of operations.

-21-

Recent Accounting Pronouncements

None.

Impact of Inflation

The Company does not believe that inflation has significantly affected its results of operations.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

Item 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized, and reported within the time periods specified by the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to management, including the Co-Chief Executive Officers and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of management, including the Co-Chief Executive Officers and Chief Financial Officer, the Company has evaluated the effectiveness of its disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2020, and, based upon this evaluation, the Co-Chief Executive Officers and Chief Financial Officer have concluded that these controls and procedures are effective in providing reasonable assurance of compliance.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting occurred during the three months ended September 30, 2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits and legal proceedings that arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

Item 1A. Risk Factors

Not Applicable

-22-

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Recent Sales of Unregistered Securities

None

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 4. MINE SAFETY DISCLOSURE

Not Applicable.

Item 5. OTHER INFORMATION

None.

Item 6. EXHIBITS

(a)     Exhibits

Exhibit

Number

31.1	Certification of pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Co-Chief Executive Officers.
31.2	Certification of pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer.
32.1	Certification of periodic financial report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Co-Chief Executive Officers.
32.2	Certification of periodic financial report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer.
101	The following financial information from Integrated BioPharma, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Income for the three months ended September 30, 2020 and 2019, (ii) Condensed Consolidated Balance Sheets as of September 30, 2020 and June 30, 2020, (iii) Condensed Consolidated Statement of Changes in Stockholders’ Equity for the three months ended September 30, 2020 and 2019, (iv) Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2020 and 2019, and (iv) the Notes to Condensed Consolidated Financial Statements.

-23-

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

INTEGRATED BIOPHARMA, INC.

Date:     November 12, 2020	By: /s/ Christina Kay
	Christina Kay,
	Co-Chief Executive Officer
Date:     November 12, 2020	By: /s/ Riva Sheppard
	Riva Sheppard,
	Co-Chief Executive Officer
Date:     November 12, 2020	By: /s/ Dina L. Masi
	Dina L. Masi,
	Chief Financial Officer & Senior Vice President

-24-

-25-

EX-31.1

Exhibit 31.1

Certification of Co-Chief Executive Officers

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

We, Christina Kay and Riva Sheppard each certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Integrated BioPharma, Inc.;

2. Based on our knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

2. Based on our knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and we are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth quarter, in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 12, 2020	By: /s/ Christina Kay
	Name: Christina Kay,
	Title: Co-Chief Executive Officer
	(Co-Principal Executive Officer)
	By: /s/ Riva Sheppard
	Name: Riva Sheppard,
	Title: Co-Chief Executive Officer
	(Co-Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Dina L. Masi, certify that:

 1.          I have reviewed this quarterly report on Form 10-Q of Integrated BioPharma, Inc.;

2.         Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.          Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth quarter, in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 12, 2020	By: /s/ Dina L. Masi
	Name: Dina L. Masi
	Title: Chief Financial Officer & Senior Vice President
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF PERIODIC REPORT

As adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2020 of Integrated BioPharma, Inc. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Christina Kay and Riva Sheppard, Co-Chief Executive Officers of Integrated BioPharma, Inc. certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that to their knowledge:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

This certification accompanies the Report pursuant to Section 906 of Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

Dated:  November 12, 2020	By: /s/ Christina Kay
	Name: Christina Kay,
	Title:   Co-Chief Executive Officer
	(Co-Principal Executive Officer)
	By: /s/ Riva Sheppard
	Name: Riva Sheppard,
	Title:   Co-Chief Executive Officer
	(Co-Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION OF PERIODIC REPORT

As adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2020 of Integrated BioPharma, Inc. (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Dina L. Masi, the Senior Vice President and Chief Financial Officer of Integrated BioPharma, Inc. certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that to her knowledge:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

This certification accompanies the Report pursuant to Section 906 of Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

November 12, 2020	By: /s/ Dina L. Masi
	Name: Dina L. Masi
	Title:   Chief Financial Officer & Senior Vice President
	(Principal Financial Officer)

XML

Document And Entity Information - shares	3 Months Ended
	Sep. 30, 2020	Nov. 12, 2020
Document Information [Line Items]
Entity Registrant Name	INTEGRATED BIOPHARMA INC
Entity Central Index Key	0001016504
Trading Symbol	inbp
Current Fiscal Year End Date	--06-30
Entity Filer Category	Non-accelerated Filer
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Interactive Data Current	Yes
Entity Common Stock, Shares Outstanding (in shares)		29,645,943
Entity Shell Company	false
Document Type	10-Q
Document Period End Date	Sep. 30, 2020
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Amendment Flag	false
Title of 12(g) Security	Common Stock, $.002 par value per share

XML

Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Sales, net	$ 15,172	$ 11,406
Cost of sales	12,799	10,007
Gross profit	2,373	1,399
Selling and administrative expenses	864	923
Operating income	1,509	476
Other income (expense), net:
Interest expense	(76)	(124)
Realized gain on sale of investment in iBio Stock	56
Unrealized loss on investment in iBio Stock	(29)	(20)
Other income, net	8	17
Total other expense, net	(41)	(127)
Income before income taxes	1,468	349
Income tax expense, net	427	37
Net income	$ 1,041	$ 312
Basic net income per common share (in dollars per share)	$ 0.04	$ 0.01
Diluted net income per common share (in dollars per share)	$ 0.03	$ 0.01
Weighted average common shares outstanding - basic (in shares)	29,645,943	29,565,943
Add: Equivalent shares outstanding - Stock Options (in shares)	2,147,133	1,158,690
Weighted average common shares outstanding - diluted (in shares)	31,793,076	30,724,633

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Sep. 30, 2020	Jun. 30, 2020
Cash	$ 369	$ 402
Accounts receivable, net	4,855	5,507
Inventories	12,756	10,101
Other current assets	594	451
Total current assets	18,574	16,461
Property and equipment, net	1,670	1,696
Operating lease right-of-use assets (includes $2,673 and $2,788 with a related party)	2,704	2,824
Deferred tax assets, net	1,606	1,883
Security deposits and other assets	76	80
Total Assets	24,630	22,944
Advances under revolving credit facility	2,823	4,046
Accounts payable (includes $72 and $62 due to related party)	7,058	4,358
Accrued expenses and other current liabilities	1,433	1,384
Current portion of long term debt, net	2,836	2,823
Current portion of operating lease liabilities (includes $472 and $467 with a related party)	494	488
Total current liabilities	14,644	13,099
Long term debt, net	654	1,436
Operating lease liabilities (includes $2,207 and $2,327 with a related party)	2,216	2,342
Total liabilities	17,514	16,877
Commitments and Contingencies
Stockholders' Equity :
Common Stock, $0.002 par value; 50,000,000 shares authorized; 29,680,843 shares issued and 29,645,943 shares outstanding, respectively	59	59
Additional paid-in capital	50,271	50,263
Accumulated deficit	(43,115)	(44,156)
Less: Treasury stock, at cost, 34,900 shares	(99)	(99)
Total Stockholders' Equity	7,116	6,067
Total Liabilities and Stockholders' Equity	$ 24,630	$ 22,944

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Sep. 30, 2020	Jun. 30, 2020
Operating lease right-of-use assets	$ 2,704	$ 2,824
Current portion of operating lease liabilities	494	488
Operating lease liabilities	$ 2,216	$ 2,342
Common stock, par value (in dollars per share)	$ 0.002	$ 0.002
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	29,680,843	29,680,843
Common stock, shares outstanding (in shares)	29,645,943	29,645,943
Treasury stock, shares (in shares)	34,900	34,900
Vitamin Realty LLC [Member]
Operating lease right-of-use assets	$ 2,673	$ 2,788
Accounts payable, related parties	72	62
Current portion of operating lease liabilities	472	467
Operating lease liabilities	$ 2,207	$ 2,327

XML

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Total
Balance (in shares) at Jun. 30, 2019	29,600,843			34,900
Balance at Jun. 30, 2019	$ 59	$ 50,197	$ (48,264)	$ (99)	$ 1,893
Stock compensation expense employee stock options		15			15
Net income			312		312
Balance (in shares) at Sep. 30, 2019	29,600,843			34,900
Balance at Sep. 30, 2019	$ 59	50,212	(47,952)	$ (99)	2,220
Balance (in shares) at Jun. 30, 2020	29,680,843			34,900
Balance at Jun. 30, 2020	$ 59	50,263	(44,156)	$ (99)	6,067
Stock compensation expense employee stock options		8			8
Net income			1,041		1,041
Balance (in shares) at Sep. 30, 2020	29,680,843			34,900
Balance at Sep. 30, 2020	$ 59	$ 50,271	$ (43,115)	$ (99)	$ 7,116

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows provided by operating activities:
Net income	$ 1,041	$ 312
Depreciation and amortization	83	91
Amortization of operating lease right-of-use assets	120	116
Stock based compensation	8	15
Change in deferred tax assets	277	(5)
Realized gain on sale of investment in iBio Stock	(56)
Unrealized loss on investment in iBio Stock	29	20
Other, Net	5	9
Changes in operating assets and liabilities:
Accounts receivable	652	1,084
Inventories	(2,655)	(1,073)
Other current assets	(185)
Security deposits and other assets	(26)	18
Accounts payable	2,696	1,251
Accrued expenses and other liabilities	49	(37)
Operating lease obligations	(120)	(116)
Net cash provided by operating activities	1,918	1,685
Cash flows from investing activities:
Purchase of property and equipment	(53)	(58)
Proceeds from sale of iBio Stock	96
Net cash provided by (used in) investing activities	43	(58)
Cash flows from financing activities:
Advances under revolving credit facility	13,921	11,040
Repayments of advances under revolving credit facility	(15,144)	(12,075)
Repayments under term note payables	(734)	(482)
Repayments under finance lease obligations	(37)	(60)
Net cash used in financing activities	(1,994)	(1,577)
Net (decrease) increase in cash	(33)	50
Cash at beginning of period	402	475
Cash at end of period	369	525
Supplemental disclosures of cash flow information:
Interest paid	57	123
Income taxes paid
Supplemental disclosures of non-cash flow transactions:
Amount owed on purchase of property and equipment	$ 20

XML

Note 1 - Principles of Consolidation and Basis of Presentation

3 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Note

1.

Principles of Consolidation and Basis of Presentation

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

8

-

03

of Regulation S-

X

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

10

-K for the fiscal year ended

June 30, 2020 (

“Form

10

-K”), as filed with the SEC. The

June 30, 2020

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 preparation of the unaudited condensed financial statements in conformity with these accounting principles requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the period. Ultimate results could differ from the estimates of management. The results of operations for the

three

months ended

September 30, 2020

are

not

necessarily indicative of the results for the full fiscal year ending

June 30, 2021

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

Accounting Policies

Reclassifications.

Certain prior year amounts have been reclassified to conform to the current year presentation.

Accounting Pronouncements Recently Adopted

On

August 28, 2018,

the Financial Accounting Standards Board (“FASB”) issued ASU

2018

-

13,

Fair Value Measurement: Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (Topic

820

), which changes the fair value measurement disclosure requirements of ASC

820.

This ASU removes certain disclosure requirements regarding the amounts and reasons for transfers between Level

1

and Level

2

of the fair value hierarchy and the policy for timing of transfers between the levels. This ASU also adds disclosure requirements regarding unrealized gains and losses included in Other Comprehensive Income for recurring Level

3

fair value measurements and the range and weighted average of unobservable inputs used in Level

3

fair value measurements. ASU

2018

-

13

is effective for the fiscal year beginning

July 1, 2020,

including interim periods therein. Early adoption is permitted for any eliminated or modified disclosures upon issuance of ASU

2018

-

13.

This new guidance did

not

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

Aside from the adoption of ASUs, as described above, there have been

no

material changes during fiscal year

2020

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

10

-K for the fiscal year ended

June 30, 2020.

Significant Accoun

ting P

olicies

Revenue Recognition.

The Company recognizes product sales revenue, the prices of which are fixed and determinable, when title and risk of loss have transferred to the customer, when estimated provisions for product returns, rebates, charge-backs and other sales allowances are reasonably determinable, and when collectability is reasonably assured. Accruals for these items are presented in the consolidated financial statements as reductions to sales. The Company's net sales represent gross sales invoiced to customers, less certain related charges for discounts, returns, rebates, charge-backs and other allowances. Cost of sales includes the cost of raw materials and all labor and overhead associated with the manufacturing and packaging of the products. Gross margins are affected by, among other things, changes in the relative sales mix among our products and valuation and/or charge off of slow moving, expired or obsolete inventories. To perform revenue recognition for arrangements within the scope of ASC

606,

the Company performs the following

five

steps:

● identification of the promised goods or services in the contract;

● determination of whether the promised goods or serves are performance obligations including whether they are distinct in the context of the contract;

● measurement of the transaction price, including the constraint on variable consideration;

● allocation of the transaction price to the performance obligations based on estimated selling prices; and

● recognition of revenue when (or as) the Company satisfies each performance obligation. A performance obligation is a promise to transfer a distinct good or service to the customer and is the unit of account in ASC 606.

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.

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 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

months ended

September 30, 2020

and

2019:

	Three Months Ended
	September 30,
	2020		2019
Anti-dilutive stock options		-		50,000
Total anti-dilutive shares		-		50,000

XML

Note 2 - Inventories

3 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Inventory Disclosure [Text Block]

Note

2

. Inventories

Inventories are stated at the lower of cost or net realizable value using the

first

-in,

first

-out method and consist of the following:

	September 30,		June 30,
	2020		2020
Raw materials	$	9,957	$	6,610
Work-in-process		1,972		2,612
Finished goods		827		879
Total	$	12,756	$	10,101

XML

Note 3 - Property and Equipment, Net

3 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

Note

3

. Property and Equipment, net

Property and equipment, net consists of the following:

	September 30,			June 30,
	2020			2020
Land and building	$	1,250		$	1,250
Leasehold improvements		1,327			1,287
Machinery and equipment		6,470			6,465
Transportation equipment		6			6
		9,053			9,008
Less: Accumulated depreciation and amortization		(7,383	)		(7,312	)
Total	$	1,670		$	1,696

Depreciation and amortization expense recorded on property and equipment for the

three

months ended

September 30, 2020

and

2019

was

$83

 and

$91,

respectively. In the

three

months ended

September 30, 2020,

the Company disposed of fully depreciated property of

$12.

XML

Note 4 - Senior Credit Facility and Other Long Term Debt

3 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Debt Disclosure [Text Block]

Note

4

.

Senior Credit Facility and other Long Term Debt

As of

September 30, 2020

and

June 30, 2020,

the Company had the following debt outstanding:

	Principal Amount						Interest Rate			Maturity Date
	As of September 30, 2020			As of June 30, 2020
Revolving advances under Senior Credit
Facility with PNC Bank, National Association	$	2,823		$	4,046			3.25	%	5/15/2024
Installment Note with PNC Bank		1,850			2,584			3.50	%	5/15/2024
Payroll Protection Program Loan with PNC Bank		1,639			1,639			1.00	%	4/30/2022
Capitalized lease obligations		38			75			4.01% -9.38	%	12/1/2020
Total outstanding debt		6,350			8,344
Less: Revolving Advances		(2,823	)		(4,046	)
Prepaid financing costs		(37	)		(39	)
Current portion of long term debt, net		(2,836	)		(2,823	)
Long term debt, net	$	654		$	1,436

SENIOR CREDIT FACILITY

On

May 15, 2019,

the Company, MDC, AgroLabs, IHT, IHT Properties Corp. (“IHT Properties”) and Vitamin Factory (collectively, the “Borrowers”) amended the Revolving Credit, Term Loan and Security Agreement (the “Amended Loan Agreement”) with PNC Bank, National Association as agent and lender (“PNC”) and the other lenders party thereto entered into on

June 27, 2012,

as amended on

February 19, 2016,

and

May 15, 2019.

The Amended Loan Agreement provides for a total of

$11,585

in senior secured financing (the “Senior Credit Facility”) as follows: (i) discretionary advances (“Revolving Advances”) based on eligible accounts receivable and eligible inventory in the maximum amount of

$8,000

(the “Revolving Credit Facility”), and (ii) a term loan in the amount of

$3,585

(the “Term Loan”). The Senior Credit Facility is secured by all assets of the Borrowers, including, without limitation, machinery and equipment, real estate owned by IHT Properties, and common stock of iBio, Inc. ("iBio Stock") owned by the Company. Revolving Advances bear interest at PNC's Base Rate (

3.25%

as of

September 30, 2020

and

June 30, 2020)

or the Eurodollar Rate, at Borrowers' option, plus

2.50%.

The Term Loan bears interest at PNC's Base Rate (

3.50%

as of

September 30, 2020

and

June 30, 2020)

or the Eurodollar Rate at Borrowers' option, plus

3.00%.

Upon and after the occurrence of any event of default under the Amended Loan Agreement, and during the continuation thereof, interest shall be payable at the interest rate then applicable plus

2%.

The Senior Credit Facility matures on

May 15, 2024 (

the “Senior Maturity Date”).

The principal balance of the Revolving Advances is payable on the Senior Maturity Date, subject to acceleration, based upon a material adverse event clause, as defined, subjective accelerations for borrowing base reserves, as defined or upon the occurrence of any event of default under the Amended Loan Agreement or earlier termination of the Amended Loan Agreement pursuant to the terms thereof. The Term Loan shall be repaid in

eighty-four

(

84

) consecutive monthly installments of principal, the

first

eighty-three

(

83

) of which shall be in the amount of

$43,

commencing on the

first

business day of

June, 2019,

and continuing on the

first

business day of each month thereafter, with a final payment of any unpaid balance of principal and interest payable on the Senior Maturity Date. The foregoing is subject to customary mandatory prepayment provisions and acceleration upon the occurrence of any event of default under the Amended Loan Agreement or earlier termination of the Amended Loan Agreement pursuant to the terms thereof.

The Revolving Advances are subject to the terms and conditions set forth in the Amended Loan Agreement and are made in aggregate amounts at any time equal to the lesser of (

x

)

$8,000

or (y) an amount equal to the sum of: (i) up to

85%,

subject to the provisions in the Amended Loan Agreement, of eligible accounts receivables (“Receivables Advance Rate”), plus (ii) up to the lesser of (A)

75%,

subject to the provisions in the Amended Loan Agreement, of the value of the eligible inventory (“Inventory Advance Rate” and together with the Receivables Advance Rate, collectively, the “Advance Rates”), (B)

85%

of the appraised net orderly liquidation value of eligible inventory (as evidenced by the most recent inventory appraisal reasonably satisfactory to PNC in its sole discretion exercised in good faith) and (C) the inventory sublimit in the aggregate at any

one

time (“Inventory Advance Rate” and together with the Receivables Advance Rate, collectively, the “Advance Rates”), minus (iii) the aggregate Maximum Undrawn Amount of all outstanding Letters of Credit, minus (iv) such reserves as PNC

may

reasonably deem proper and necessary from time to time.

The Amended Loan Agreement contains customary mandatory prepayment provisions, including, without limitation the requirement to use any sales proceeds from the sale of iBio Stock to repay the Term Loan and to prepay the outstanding amount of the Term Note in an amount equal to

twenty-five

percent (

25%

) of Excess Cash Flow (as defined in the Amended Loan Agreement) for each fiscal year commencing with the fiscal year ended

June 30, 2016,

payable upon delivery of the financial statements to PNC referred to in and required by the Amended Loan Agreement for such fiscal year but in any event

not

later than

one hundred twenty

(

120

) days after the end of each such fiscal year, which amount shall be applied ratably to the outstanding principal installments of the Term Loan in the inverse order of the maturities thereof. The Amended Loan Agreement also contains customary representations and warranties, covenants and events of default, including, without limitation, (i) a fixed charge coverage ratio maintenance requirement and (ii) an event of default tied to any change of control as defined in the Amended Loan Agreement. As of

September 30, 2020,

the Company was in compliance with the fixed charge coverage ratio maintenance requirement and with the required annual payments of

25%

of the Excess Cash Flow for each fiscal year commencing with the fiscal year ended

June 30, 2016

and used the proceeds of

$96

from the sale of iBio Stock in the

three

months ended

September 30, 2020

to repay the Term Loan.

In connection with the Senior Credit Facility, the following loan documents were executed: (i) a Stock Pledge Agreement with PNC, pursuant to which the Company pledged to PNC the iBio Stock; (ii) a Mortgage and Security Agreement with PNC with IHT Properties; and (iii) an Environmental Indemnity Agreement with PNC.

OTHER LONG TERM DEBT

Paycheck Protection Program Term Note.

On

April 29, 2020,

the Company entered into a Paycheck Protection Program Term Note (the “PPP Note”) with PNC Bank in the amount of

$1,639.

The PPP Note has an interest rate of

1%

and a maturity date of

April 30, 2022.

The PPP Note was issued by PNC Bank to the Company pursuant to the Coronavirus, Aid, Relief, and Economic Security Act's (the “CARES Act”) (P.L.

116

-

136

) Paycheck Protection Program (the “Program”). Under the Program, all or a portion of the PPP Note

may

be forgiven in accordance with the Program requirements. On

August 20, 2020,

the PPP Note was amended to conform to the provisions under the Paycheck Protection Program Flexibility Act of

2020

(the “Flexibility Act”), which was signed into law on

June 5, 2020.

The Flexibility Act significantly modified the loan forgiveness process and provided other benefits to the PPP loan recipient. The amount of the forgiveness shall be calculated (and

may

be reduced) in accordance with the requirements of the Program, including the provisions of Section

1106

of the Cares Act and the Flexibility Act.

No

more than

40%

of the amount forgiven can be attributable to non-payroll costs, as defined in the Program.

There are

no

payments of interest or principal amortization due under the PPP Note while the PPP Note is in the Deferral Period, which is the period beginning on the date of the PPP Note,

April 29, 2020,

and ending on the Deferral Expiration Date. The Deferral Expiration Date is the date any forgiven amount is remitted to PNC Bank or the date that a final determination is made that

no

portion of the PPP Note will be forgiven. If the Company fails to apply for loan forgiveness, the Deferral Expiration Date will be

August 15, 2021.

Any amounts

not

forgiven under the Program will be payable in equal installments of principal plus any interest owed on the payment date from the Deferral Expiration Date through the Maturity Date. Additionally, any accrued interest that is

not

forgiven under the Program will be due on the First Payment Date, which is the

15th

of the month following the month in which the Deferral Expiration Date occurs.

If the Company fails to make timely payments under the PPP Note, the Company, PNC Bank will charge a late payment fee equal to the lesser of

5%

of the amount of such payment or

$100.

In the event of Default, as defined in the PPP Note, the default rate of interest will

5%

in excess of the interest rate in effect from time to time under the PPP Note.

XML

Note 5 - Significant Risks and Uncertainties

3 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Concentration Risk Disclosure [Text Block]

Note

5.

Significant Risks and Uncertainties

(

a

) Major Customers.

For the

three

months ended

September 30, 2020

and

2019,

approximately

92%

and

91%

of consolidated net sales, respectively, were derived from

two

customers. These

two

customers are in the Company's Contract Manufacturing Segment and represented approximately

69%

and

25%

and

66%

and

29%

in the

three

months ended

September 30, 2020

and

2019,

respectively. Accounts receivable from these

two

major customers represented approximately

89%

and

92%

of total net accounts receivable as of

September 30

and

June 30, 2020,

respectively. The loss of any of these customers could have an adverse effect on the Company's operations. Major customers are those customers who account for more than

10%

of net sales.

(

b

) Other Business Risks.

Approximately

69%

of the Company's employees are covered by a union contract and are employed in its New Jersey facilities. The contract was renewed on

September 1, 2018

and will expire on

August 31, 2021.

The COVID-

19,

or coronavirus, outbreak has the potential to cause a disruption in the Company's supply chain.  Currently, some of our suppliers of certain materials used in the production of our supplements are located in China and other impacted countries or other states within the United States.  Most of these materials

may

be obtained from more than

one

supplier.  However, due to port closures and other restrictions resulting from the coronavirus outbreak throughout the world, these suppliers, located both inside and outside of the United States,

may

have limited supply of the materials, which has caused prices of some materials to increase. These and other disruptions would likely impact the Company's sales and operating results.  If the Company is unable to obtain the necessary materials to produce a supplement within the Company's standard lead times, it

may

delay the production and shipment of those supplements, thereby shifting the timing of recognizing the resulting sale to the Company's customers.  In addition, the significant outbreak of this contagious disease in the human population has resulted in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could affect demand for the Company's products and impact the Company's operating results.

The Company does

not

currently anticipate any negative impact to its margins resulting from the coronavirus outbreak, however; if the Company is unable to obtain the necessary materials to produce a supplement within its standard lead times or the necessary safety and cleaning supplies it

may

delay the production and shipment of those supplements to its customers, thereby shifting the timing of recognizing the resulting sale to its customers. 

XML

Note 6 - Leases and Other Commitments and Contingencies

3 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

Note

6.

Leases and other Commitments and Contingencies

(a)

Leases.

The Company has operating and finance leases for its corporate and sales offices, warehousing and packaging facilities and certain machinery and equipment, including office equipment. The Company's leases have remaining terms of less than

1

year to less than

8

years.

The components of lease expense for the

three

months ended

September 30, 2020

and

2019,

were as follows:

	2020						2019
	Related Party - Vitamin Realty		Other Leases		Totals		Related Party - Vitamin Realty		Other Leases		Totals
Operating lease costs	$	141	$	24	$	165	$	135	$	39	$	174
Finance Operating Lease Costs:
Amortization of right-of use assets	$	-	$	12	$	12	$	-	$	27	$	27
Interest on operating lease liabilities		-		1		1		-		5		5
Total finance lease cost	$	-	$	13	$	13	$	-	$	32	$	32

Operating

Lease

Liabilities

Related Party

Operating

L

e

ase

Liabilities

.

Warehouse and office facilities are leased from Vitamin Realty Associates, LLC (“Vitamin Realty”), which is

100%

owned by the Company's chairman, and a major stockholder and certain of his family members, who are the Co-Chief Executive Officers and directors of the Company. On

January 5, 2012,

MDC entered into a

second

amendment of lease (the “Second Lease Amendment”) with Vitamin Realty for its office and warehouse space in New Jersey increasing its rentable square footage from an aggregate of

74,898

square feet to

76,161

square feet and extending the expiration date to

January 31, 2026.

This Second Lease Amendment provides for minimum annual rental payments of

$533,

plus increases in real estate taxes and building operating expenses. On

May 19, 2014,

AgroLabs entered into an amendment to the lease agreement entered into on

January 5, 2012,

with Vitamin Realty for an additional

2,700

square feet of warehouse space in New Jersey, the term of which was to expire on

January 31, 2019

to extend the expiration date to

June 1, 2024.

This additional lease provides for minimum lease payments of

$27

with annual increases plus the proportionate share of operating expenses.

Rent expense, lease amortization costs and interest expense for the

three

months ended

September 30, 2020

and

2019

on these leases were

$222

and

$213

respectively, and are included in cost of sales, selling and administrative expenses and interest expense in the accompanying Condensed Consolidated Statements of Income. As of

September 30, 2020

and

June 30, 2020,

the Company had outstanding current obligations to Vitamin Realty of

$72

and

$62,

respectively, included in accounts payable in the accompanying Condensed Consolidated Balance Sheet. Additionally, the Company has operating lease obligations of

$2,679

and

$2,794

with Vitamin Realty as noted in the accompany Condensed Consolidated Balance Sheet as of

September 30, 2020

and

June 30, 2020,

respectively.

Other

Operating

Lease

Liabilities

.

The Company has entered into certain non-cancelable operating lease agreements expiring up through

May, 2023,

related to machinery and equipment and office equipment.

As of

September 30, 2020,

the Company's right-of-use assets, lease obligations and remaining cash commitment on these leases were as follows:

	Right-of-use Assets		Current Portion of Operating Lease Obligations		Operating Lease Obligations		Remaining Cash Commitment
Vitamin Realty Leases	$	2,673	$	472	$	2,207	$	2,962
Machinery and equipment leases		13		11		2		13
Office equipment leases		18		11		7		19
	$	2,704	$	494	$	2,216	$	2,994

As of

June 30, 2020,

the Company's ROU assets, lease obligations and remaining cash commitment on these leases were as follows:

	Right-of-use Assets		Current Portion Operating Lease Obligations		Operating Lease Obligations		Remaining Cash Commitment
Vitamin Realty Leases	$	2,788	$	467	$	2,327	$	3,103
Machinery and equipment leases		28		20		8		29
Office equipment leases		8		1		7		9
	$	2,824	$	488	$	2,342	$	3,141

As of

September 30, 2020

and

June 30, 2020,

the Company's weighted average discount rate and remaining term on lease liabilities were approximately

3.75%

and

3.75%

and

5.1

years and

5.4

years, respectively.

Supplemental cash flows information related to leases for the

three

months ended

September 30, 2020,

is as follows:

	Related Party - Vitamin Realty		Other Leases		Totals
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	141	$	24	$	165
Operating cash flows from finance leases		-		1		1
Financing cash flows from finance lease obligations		-		37		37

Supplemental cash flows information related to leases for the

three

months ended

September 30, 2019,

is as follows:

	Related Party - Vitamin Realty		Other Leases		Totals
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	141	$	24	$	165
Operating cash flows from finance leases		-		5		5
Financing cash flows from finance lease obligations		-		60		60

The Company did

not

enter into any lease commitments in the

three

months ended

September 30, 2020.

Maturities of operating lease liabilities as of

September 30, 2020

were as follows:

				Related Party
	Operating Lease			Operating Lease			Financed Lease
Year ending June 30,	Commitment			Commitment			Obligations			Total
2021, remaining	$	16		$	424		$	39		$	479
2022		11			565			-			576
2023		2			565			-			567
2024		2			565			-			567
2025		1			563			-			564
2026		-			280			-			280
Total minimum lease payments		32			2,962			39			3,033
Imputed interest		(1	)		(283	)		(1	)		(285	)
Total	$	31		$	2,679		$	38		$	2,748

Total rent expense, lease amortization costs and interest expense, including real estate taxes and maintenance charges, was approximately

$265

and

$263

for the

three

months ended

September 30, 2020

and

2019,

respectively. Rent and lease amortization and interest expense is included in cost of sales, selling and administrative expenses and interest expense in the accompanying Condensed Consolidated Statements of Income.

(

b

) Legal Proceedings.

The Company is subject, from time to time, to claims by

third

parties under various legal theories. The defense of such claims, or any adverse outcome relating to any such claims, could have a material adverse effect on the Company's liquidity, financial condition and cash flows.

XML

Note 7 - Related Party Transactions

3 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

Note

7.

Related Party Transactions

See Note

6

(a). Leases for related party lease transactions.

XML

Note 8 - Segment Information and Disaggregated Revenue

3 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note

8.

Segment Information

and Disaggregated Revenue

The basis for presenting segment results generally is consistent with overall Company reporting. The Company reports information about its operating segments in accordance with GAAP which establishes standards for reporting information about a company's operating segments.

The Company has divided its operations into

two

reportable segments as follows: Contract Manufacturing, and Other Nutraceutical Businesses. The international sales, concentrated primarily in Europe and Canada, for the

three

months ended

September 30, 2020

and

2019

were

$1,467

and

$2,026,

respectively.

Financial information relating to the

three

months ended

September 30, 2020

and

2019

operations by business segment and disaggregated revenues was as follows:

		Sales, Net						Segment
		U.S.		International				Gross				Capital
		Customers		Customers		Total		Profit (Loss)		Depreciation		Expenditures
Contract Manufacturing	2020	$	13,324	$	1,462	$	14,786	$	2,255	$	82	$	50
	2019		9,001		1,983		10,984		1,250		90		58
Other Nutraceutical Businesses	2020		381		5		386		118		1		3
	2019		379		43		422		149		1		-
Total Company	2020		13,705		1,467		15,172		2,373		83		53
	2019		9,380		2,026		11,406		1,399		91		58

	Total Assets as of
	September 30,		June 30,
	2020		2020
Contract Manufacturing	$	21,429	$	19,581
Other Nutraceutical Businesses		3,201		3,363
Total Company	$	24,630	$	22,944

XML

Significant Accounting Policies (Policies)

3 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

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

8

-

03

of Regulation S-

X

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

10

-K for the fiscal year ended

June 30, 2020 (

“Form

10

-K”), as filed with the SEC. The

June 30, 2020

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 preparation of the unaudited condensed financial statements in conformity with these accounting principles requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the period. Ultimate results could differ from the estimates of management. The results of operations for the

three

months ended

September 30, 2020

are

not

necessarily indicative of the results for the full fiscal year ending

June 30, 2021

or for any other period.

Nature of Operations [Policy Text Block]

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

Reclassification, Comparability Adjustment [Policy Text Block]

Reclassifications.

Certain prior year amounts have been reclassified to conform to the current year presentation.

New Accounting Pronouncements, Policy [Policy Text Block]

Accounting Pronouncements Recently Adopted

On

August 28, 2018,

the Financial Accounting Standards Board (“FASB”) issued ASU

2018

-

13,

Fair Value Measurement: Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (Topic

820

), which changes the fair value measurement disclosure requirements of ASC

820.

This ASU removes certain disclosure requirements regarding the amounts and reasons for transfers between Level

1

and Level

2

of the fair value hierarchy and the policy for timing of transfers between the levels. This ASU also adds disclosure requirements regarding unrealized gains and losses included in Other Comprehensive Income for recurring Level

3

fair value measurements and the range and weighted average of unobservable inputs used in Level

3

fair value measurements. ASU

2018

-

13

is effective for the fiscal year beginning

July 1, 2020,

including interim periods therein. Early adoption is permitted for any eliminated or modified disclosures upon issuance of ASU

2018

-

13.

This new guidance did

not

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

Aside from the adoption of ASUs, as described above, there have been

no

material changes during fiscal year

2020

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

10

-K for the fiscal year ended

June 30, 2020.

Revenue from Contract with Customer [Policy Text Block]

Significant Accoun

ting P

olicies

Revenue Recognition.

The Company recognizes product sales revenue, the prices of which are fixed and determinable, when title and risk of loss have transferred to the customer, when estimated provisions for product returns, rebates, charge-backs and other sales allowances are reasonably determinable, and when collectability is reasonably assured. Accruals for these items are presented in the consolidated financial statements as reductions to sales. The Company's net sales represent gross sales invoiced to customers, less certain related charges for discounts, returns, rebates, charge-backs and other allowances. Cost of sales includes the cost of raw materials and all labor and overhead associated with the manufacturing and packaging of the products. Gross margins are affected by, among other things, changes in the relative sales mix among our products and valuation and/or charge off of slow moving, expired or obsolete inventories. To perform revenue recognition for arrangements within the scope of ASC

606,

the Company performs the following

five

steps:

● identification of the promised goods or services in the contract;

● determination of whether the promised goods or serves are performance obligations including whether they are distinct in the context of the contract;

● measurement of the transaction price, including the constraint on variable consideration;

● allocation of the transaction price to the performance obligations based on estimated selling prices; and

● recognition of revenue when (or as) the Company satisfies each performance obligation. A performance obligation is a promise to transfer a distinct good or service to the customer and is the unit of account in ASC 606.

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 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

months ended

September 30, 2020

and

2019:

	Three Months Ended
	September 30,
	2020		2019
Anti-dilutive stock options		-		50,000
Total anti-dilutive shares		-		50,000

XML

Note 1 - Principles of Consolidation and Basis of Presentation (Tables)

3 Months Ended

Sep. 30, 2020

Notes Tables

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	Three Months Ended
	September 30,
	2020		2019
Anti-dilutive stock options		-		50,000
Total anti-dilutive shares		-		50,000

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Note 2 - Inventories (Tables)

3 Months Ended

Sep. 30, 2020

Notes Tables

Schedule of Inventory, Current [Table Text Block]

	September 30,		June 30,
	2020		2020
Raw materials	$	9,957	$	6,610
Work-in-process		1,972		2,612
Finished goods		827		879
Total	$	12,756	$	10,101

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Note 3 - Property and Equipment, Net (Tables)

3 Months Ended

Sep. 30, 2020

Notes Tables

Property, Plant and Equipment [Table Text Block]

	September 30,			June 30,
	2020			2020
Land and building	$	1,250		$	1,250
Leasehold improvements		1,327			1,287
Machinery and equipment		6,470			6,465
Transportation equipment		6			6
		9,053			9,008
Less: Accumulated depreciation and amortization		(7,383	)		(7,312	)
Total	$	1,670		$	1,696

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Note 4 - Senior Credit Facility and Other Long Term Debt (Tables)

3 Months Ended

Sep. 30, 2020

Notes Tables

Schedule of Debt [Table Text Block]

	Principal Amount						Interest Rate			Maturity Date
	As of September 30, 2020			As of June 30, 2020
Revolving advances under Senior Credit
Facility with PNC Bank, National Association	$	2,823		$	4,046			3.25	%	5/15/2024
Installment Note with PNC Bank		1,850			2,584			3.50	%	5/15/2024
Payroll Protection Program Loan with PNC Bank		1,639			1,639			1.00	%	4/30/2022
Capitalized lease obligations		38			75			4.01% -9.38	%	12/1/2020
Total outstanding debt		6,350			8,344
Less: Revolving Advances		(2,823	)		(4,046	)
Prepaid financing costs		(37	)		(39	)
Current portion of long term debt, net		(2,836	)		(2,823	)
Long term debt, net	$	654		$	1,436

XML

Note 6 - Leases and Other Commitments and Contingencies (Tables)

3 Months Ended

Sep. 30, 2020

Notes Tables

Lease, Cost [Table Text Block]

	2020						2019
	Related Party - Vitamin Realty		Other Leases		Totals		Related Party - Vitamin Realty		Other Leases		Totals
Operating lease costs	$	141	$	24	$	165	$	135	$	39	$	174
Finance Operating Lease Costs:
Amortization of right-of use assets	$	-	$	12	$	12	$	-	$	27	$	27
Interest on operating lease liabilities		-		1		1		-		5		5
Total finance lease cost	$	-	$	13	$	13	$	-	$	32	$	32

Leases and Remaining Commitments [Table Text Block]

	Right-of-use Assets		Current Portion of Operating Lease Obligations		Operating Lease Obligations		Remaining Cash Commitment
Vitamin Realty Leases	$	2,673	$	472	$	2,207	$	2,962
Machinery and equipment leases		13		11		2		13
Office equipment leases		18		11		7		19
	$	2,704	$	494	$	2,216	$	2,994

	Right-of-use Assets		Current Portion Operating Lease Obligations		Operating Lease Obligations		Remaining Cash Commitment
Vitamin Realty Leases	$	2,788	$	467	$	2,327	$	3,103
Machinery and equipment leases		28		20		8		29
Office equipment leases		8		1		7		9
	$	2,824	$	488	$	2,342	$	3,141

Supplemental Cash Flow Information, Leases [Table Text Block]

	Related Party - Vitamin Realty		Other Leases		Totals
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	141	$	24	$	165
Operating cash flows from finance leases		-		1		1
Financing cash flows from finance lease obligations		-		37		37

	Related Party - Vitamin Realty		Other Leases		Totals
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	141	$	24	$	165
Operating cash flows from finance leases		-		5		5
Financing cash flows from finance lease obligations		-		60		60

Lessee, Operating Lease and Finance Lease, Liability, Maturity [Table Text Block]

				Related Party
	Operating Lease			Operating Lease			Financed Lease
Year ending June 30,	Commitment			Commitment			Obligations			Total
2021, remaining	$	16		$	424		$	39		$	479
2022		11			565			-			576
2023		2			565			-			567
2024		2			565			-			567
2025		1			563			-			564
2026		-			280			-			280
Total minimum lease payments		32			2,962			39			3,033
Imputed interest		(1	)		(283	)		(1	)		(285	)
Total	$	31		$	2,679		$	38		$	2,748

XML

Note 8 - Segment Information and Disaggregated Revenue (Tables)

3 Months Ended

Sep. 30, 2020

Notes Tables

Schedule of Segment Reporting Information, by Segment [Table Text Block]

		Sales, Net						Segment
		U.S.		International				Gross				Capital
		Customers		Customers		Total		Profit (Loss)		Depreciation		Expenditures
Contract Manufacturing	2020	$	13,324	$	1,462	$	14,786	$	2,255	$	82	$	50
	2019		9,001		1,983		10,984		1,250		90		58
Other Nutraceutical Businesses	2020		381		5		386		118		1		3
	2019		379		43		422		149		1		-
Total Company	2020		13,705		1,467		15,172		2,373		83		53
	2019		9,380		2,026		11,406		1,399		91		58

	Total Assets as of
	September 30,		June 30,
	2020		2020
Contract Manufacturing	$	21,429	$	19,581
Other Nutraceutical Businesses		3,201		3,363
Total Company	$	24,630	$	22,944

XML

Note 1 - Principles of Consolidation and Basis of Presentation - Antidilutive Securities Excluded From Weighted Average Diluted Common Shares Outstanding (Details) - shares	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Anti-dilutive shares (in shares)		50,000
Share-based Payment Arrangement, Option [Member]
Anti-dilutive shares (in shares)		50,000

XML

Note 2 - Inventories - Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Jun. 30, 2020
Raw materials	$ 9,957	$ 6,610
Work-in-process	1,972	2,612
Finished goods	827	879
Total	$ 12,756	$ 10,101

XML

Note 3 - Property and Equipment, Net (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Depreciation, Total	$ 83	$ 91
Property, Plant and Equipment, Disposals	$ 12

XML

Note 3 - Property and Equipment, Net - Property and Equipment, Net (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Jun. 30, 2020
Property and equipment, gross	$ 9,053	$ 9,008
Less: Accumulated depreciation and amortization	(7,383)	(7,312)
Total	1,670	1,696
Land and Building [Member]
Property and equipment, gross	1,250	1,250
Leasehold Improvements [Member]
Property and equipment, gross	1,327	1,287
Machinery and Equipment [Member]
Property and equipment, gross	6,470	6,465
Transportation Equipment [Member]
Property and equipment, gross	$ 6	$ 6

XML

Note 4 - Senior Credit Facility and Other Long Term Debt (Details Textual) - USD ($) $ in Thousands			3 Months Ended
	Apr. 29, 2020	May 15, 2019	Sep. 30, 2020	Sep. 30, 2019	Jun. 30, 2020
Proceeds from Sale, Maturity and Collection of Investments, Total			$ 96
iBio Stock [Member]
Proceeds from Sale, Maturity and Collection of Investments, Total			$ 96
Amended Loan Agreement [Member]
Senior Notes, Total		$ 11,585
Debt Instrument, Debt Default, Interest Rate Basic Spread		2.00%
Line of Credit Facility Covenant Prepayment Provisions Percentage of Excess Cash flow			25.00%
Amended Loan Agreement [Member] | Term Loan [Member]
Debt Instrument, Face Amount		$ 3,585
Line of Credit Facility, Interest Rate at Period End			3.50%		3.50%
Number of Consecutive Monthly Installments		84
Number of Consecutive Monthly Installments, Fixed Amount		83
Debt Instrument, Periodic Payment, Total		$ 43
Line of Credit Facility Covenant Prepayment Provisions Percentage of Excess Cash flow		25.00%
Amended Loan Agreement [Member] | Term Loan [Member] | Eurodollar [Member]
Debt Instrument, Basis Spread on Variable Rate		3.00%
Amended Loan Agreement [Member] | Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity		$ 8,000
Line of Credit Facility, Interest Rate at Period End			3.25%		3.25%
Line of Credit Facility Covenant Maximum Aggregate Revolving Advance		$ 8,000
Line of Credit Facility Covenant Aggregate Revolving Advance Receivables Advance Rate		85.00%
Line of Credit Facility Covenant Aggregate Revolving Advance Inventory Advance Rate		75.00%
Line of Credit Facility, Covenan,t Aggregate Revolving Advance, Appraised Liquidation Value, Inventory Advance Rate		85.00%
Paycheck Protection Program CARES Act [Member]
Proceeds from Notes Payable, Total	$ 1,639

XML

Note 4 - Senior Credit Facility and Other Long Term Debt - Debt Outstanding (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Jun. 30, 2020
Capitalized lease obligations	$ 38
Total outstanding debt	6,350	$ 8,344
Prepaid financing costs	(37)	(39)
Current portion of long term debt, net	(2,836)	(2,823)
Long term debt, net	$ 654	1,436
Capital Lease [Member]
Maturity Date	Dec. 01, 2020
Capitalized lease obligations	$ 38	75
Capital Lease [Member] | Minimum [Member]
Interest Rate	4.01%
Capital Lease [Member] | Maximum [Member]
Interest Rate	9.38%
Convertible Debt [Member]
Current portion of long term debt, net	$ (2,836)	(2,823)
Paycheck Protection Program CARES Act [Member]
Notes Payable	$ 1,639	1,639
Interest Rate	1.00%
Maturity Date	Apr. 30, 2022
Revolving Advances [Member]
Notes Payable	$ 2,823	4,046
Interest Rate	3.25%
Maturity Date	May 15, 2024
Less: Revolving Advances	$ (2,823)	(4,046)
Installment Note with PNC Bank [Member]
Notes Payable	$ 1,850	$ 2,584
Interest Rate	3.50%
Maturity Date	May 15, 2024

XML

Note 5 - Significant Risks and Uncertainties (Details Textual)	3 Months Ended		12 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Jun. 30, 2020
Revenue Benchmark [Member] | Customer Concentration Risk [Member]
Number of Major Customers	2	2
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Contract Manufacturing [Member]
Number of Major Customers		2	2
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Two Customers [Member]
Concentration Risk, Percentage	92.00%	91.00%
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Major Customer 1 [Member] | Contract Manufacturing [Member]
Concentration Risk, Percentage	69.00%	66.00%
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Major Customer 2 [Member] | Contract Manufacturing [Member]
Concentration Risk, Percentage	25.00%	29.00%
Accounts Receivable [Member] | Customer Concentration Risk [Member]
Number of Major Customers	2		2
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Two Customers [Member]
Concentration Risk, Percentage	89.00%		92.00%
Revenue, Segment Benchmark [Member] | Customer Concentration Risk [Member] | Major Customer 1 [Member] | Branded Nutraceutical [Member]
Concentration Risk, Percentage	10.00%
Number of Employees, Geographic Area [Member] | Unionized Employees Concentration Risk [Member]
Concentration Risk, Percentage	69.00%

XML

Note 6 - Leases and Other Commitments and Contingencies (Details Textual) $ in Thousands			3 Months Ended
	May 19, 2014 USD ($) ft²	Jan. 05, 2012 USD ($) ft²	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2020 USD ($)	Jan. 04, 2012 ft²
Operating Lease, Expense			$ 265	$ 263
Unrelated Party [Member]
Operating Lease, Liability, Total			$ 31
Lessee, Operating Lease, Discount Rate			3.75%		3.75%
Operating Lease, Weighted Average Remaining Lease Term (Year)			5 years 36 days		5 years 146 days
Manhattan Drug Company [Member]
Area of Real Estate Property (Square Foot) | ft²		76,161				74,898
Payments for Rent		$ 533
AgroLabs [Member]
Area of Real Estate Property (Square Foot) | ft²	2,700
Payments for Rent	$ 27
Chairman, Chief Executive Office and Major Stockholder [Member]
Percent of Ownership for Warehouse and Office Facilities Leased			100.00%
Vitamin Realty LLC [Member]
Operating Lease, Expense			$ 222	$ 213
Due to Related Parties, Total			72		$ 62
Operating Lease, Liability, Total			$ 2,679		$ 2,794
Minimum [Member]
Lessee, Lease, Term of Contract (Year)			1 year
Maximum [Member]
Lessee, Lease, Term of Contract (Year)			8 years

XML

Note 6 - Leases and Other Commitments and Contingencies - Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Operating lease costs	$ 165	$ 174
Amortization of right-of use assets	12	27
Interest on operating lease liabilities	1	5
Total finance lease cost	13	32
Unrelated Party [Member]
Operating lease costs	24	39
Amortization of right-of use assets	12	27
Interest on operating lease liabilities	1	5
Total finance lease cost	13	32
Vitamin Realty LLC [Member]
Operating lease costs	141	135
Amortization of right-of use assets
Interest on operating lease liabilities
Total finance lease cost

XML

Note 6 - Leases and Other Commitments and Contingencies - Leases and Commitments (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Jun. 30, 2020
Operating lease right-of-use assets	$ 2,704	$ 2,824
Current portion of operating lease liabilities	494	488
Operating lease liabilities	2,216	2,342
Remaining cash commitment	2,994	3,141
Machinery and Equipment Leases [Member]
Operating lease right-of-use assets	13	28
Current portion of operating lease liabilities	11	20
Operating lease liabilities	2	8
Remaining cash commitment	13	29
Office Equipment Leases [Member]
Operating lease right-of-use assets	18	8
Current portion of operating lease liabilities	11	1
Operating lease liabilities	7	7
Remaining cash commitment	19	9
Vitamin Realty LLC [Member]
Operating lease right-of-use assets	2,673	2,788
Current portion of operating lease liabilities	472	467
Operating lease liabilities	2,207	2,327
Remaining cash commitment	$ 2,962	$ 3,103

XML

Note 6 - Leases and Other Commitments and Contingencies - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Operating cash flows from operating leases	$ 165	$ 165
Operating cash flows from finance leases	1	5
Financing cash flows from finance lease obligations	37	60
Unrelated Party [Member]
Operating cash flows from operating leases	24	24
Operating cash flows from finance leases	1	5
Financing cash flows from finance lease obligations	37	60
Vitamin Realty LLC [Member]
Operating cash flows from operating leases	141	141
Operating cash flows from finance leases
Financing cash flows from finance lease obligations

XML

Note 6 - Leases and Other Commitments and Contingencies - Minimum Rental Commitment for Long-term Non-cancelable Leases (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Jun. 30, 2020
2021, remaining financed lease	$ 39
2021, remaining total	479
2022, Financed Lease Obligations
2022	576
2023, Financed Lease Obligations
2023	567
2024, Financed Lease Obligations
2024	567
2025, Financed Lease Obligations
2025	564
2026, Financed Lease Obligations
2026	280
Total minimum lease payments, Capital Lease Obligation	39
Total minimum lease payments, Total	3,033
Imputed interest, Capital Lease Obligation	(1)
Imputed interest, Total	(285)
Capitalized lease obligations	38
Total	2,748
Vitamin Realty LLC [Member]
2021, remaining operating lease	424
2022, Operating Lease	565
2023, Operating Lease	565
2024, Operating Lease	565
2025, Operating Lease	563
2026, Operating Lease	280
Total minimum lease payments, Operating Lease	2,962
Imputed interest, Operating Lease	(283)
Total, Operating Lease	2,679	$ 2,794
Unrelated Party [Member]
2021, remaining operating lease	16
2022, Operating Lease	11
2023, Operating Lease	2
2024, Operating Lease	2
2025, Operating Lease	1
2026, Operating Lease
Total minimum lease payments, Operating Lease	32
Imputed interest, Operating Lease	(1)
Total, Operating Lease	$ 31

XML

Note 8 - Segment Information and Disaggregated Revenue (Details Textual) $ in Thousands	3 Months Ended
	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)
Number of Reportable Segments	2
Revenue from Contract with Customer, Including Assessed Tax	$ 15,172	$ 11,406
Europe and Canada [Member]
Revenue from Contract with Customer, Including Assessed Tax	$ 1,467	$ 2,026

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Note 8 - Segment Information and Disaggregated Revenue - Operations by Business Segment (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Jun. 30, 2020
Sales, net	$ 15,172	$ 11,406
Gross Profit	2,373	1,399
Depreciation	83	91
Capital Expenditures	53	58
Assets	24,630		$ 22,944
Contract Manufacturing [Member]
Sales, net	14,786	10,984
Gross Profit	2,255	1,250
Depreciation	82	90
Capital Expenditures	50	58
Assets	21,429		19,581
Other Nutraceutical Business [Member]
Sales, net	386	422
Gross Profit	118	149
Depreciation	1	1
Capital Expenditures	3
Assets	3,201		$ 3,363
UNITED STATES
Sales, net	13,705	9,380
UNITED STATES | Contract Manufacturing [Member]
Sales, net	13,324	9,001
UNITED STATES | Other Nutraceutical Business [Member]
Sales, net	381	379
Non-US [Member]
Sales, net	1,467	2,026
Non-US [Member] | Contract Manufacturing [Member]
Sales, net	1,462	1,983
Non-US [Member] | Other Nutraceutical Business [Member]
Sales, net	$ 5	$ 43