10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2013

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

000-19932

RELIV’ INTERNATIONAL, INC.

(Exact name of Registrant as specified in its charter)

Delaware	371172197
(State or other jurisdiction of	(I.R.S. Employer Identification Number)
incorporation or organization)

136 Chesterfield Industrial Boulevard
Chesterfield, Missouri	63005
(Address of principal executive offices)	(Zip Code)

(636) 537-9715

(Registrant’s telephone number, including area code)

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 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  þ     No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).   Yes  þ     No  o

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

Large accelerated filer  o     Accelerated filer  o      Non-accelerated filer  o Smaller reporting company   þ

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  o     No  þ

The number of shares outstanding of the Registrant’s common stock as of August 2, 2013 was 12,615,595 (excluding treasury shares).

INDEX

Part I – Financial Information
Item No. 1	Financial Statements (Unaudited)	1
Item No. 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
Item No. 4	Controls and Procedures	15
Part II – Other Information
Item No. 2	Unregistered Sales of Equity Securities and Use of Proceeds	15
Item No. 6	Exhibits	16

PART I — FINANCIAL INFORMATION

Item No. 1 - Financial Statements

Reliv International, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

	June 30		December 31
	2013		2012
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	4,255,963	$	5,801,042
Accounts receivable, less allowances of $32,000 in 2013 and $35,700 in 2012		172,899		247,087
Accounts and note due from employees and distributors		141,372		109,346
Inventories
Finished goods		3,691,195		3,661,289
Raw materials		1,634,295		1,332,293
Sales aids and promotional materials		256,520		269,334
Total inventories		5,582,010		5,262,916
Refundable income taxes		22,261		10,632
Prepaid expenses and other current assets		1,396,611		688,669
Deferred income taxes		352,000		371,000
Total current assets		11,923,116		12,490,692
Other assets		231,365		206,022
Cash surrender value of life insurance		2,343,146		2,083,420
Note receivable due from distributor		1,876,119		1,923,000
Intangible assets, net		1,366,630		1,443,635
Property, plant and equipment:
Land and land improvements		883,563		883,563
Building		9,836,895		9,905,967
Machinery & equipment		3,769,327		3,767,910
Office equipment		1,194,484		1,231,215
Computer equipment & software		2,662,325		2,666,150
		18,346,594		18,454,805
Less: Accumulated depreciation		11,471,451		11,343,033
Net property, plant and equipment		6,875,143		7,111,772
Total assets	$	24,615,519	$	25,258,541

See notes to financial statements.

1

Reliv International, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

	June 30		December 31
	2013		2012
	(unaudited)
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and accrued expenses:
Trade accounts payable and other accrued expenses	$	3,441,196	$	2,924,111
Distributors' commissions payable		1,952,110		2,293,019
Sales taxes payable		171,354		283,700
Payroll and payroll taxes payable		354,061		484,170
Total accounts payable and accrued expenses		5,918,721		5,985,000
Current maturities of long-term debt		444,807		629,631
Total current liabilities		6,363,528		6,614,631
Noncurrent liabilities:
Long-term debt, less current maturities		2,194,129		2,401,312
Deferred income taxes		166,000		289,000
Other noncurrent liabilities		630,162		371,728
Total noncurrent liabilities		2,990,291		3,062,040
Stockholders' equity:
Preferred stock, par value $.001 per share; 3,000,000 shares authorized; -0- shares issued and outstanding in 2013 and 2012		-		-
Common stock, par value $.001 per share; 30,000,000 authorized; 14,511,816 shares issued and 12,615,595 shares outstanding as of 6/30/2013; 14,511,816 shares issued and 12,619,640 shares outstanding as of 12/31/2012		14,512		14,512
Additional paid-in capital		30,097,038		30,074,801
Accumulated deficit		(8,828,504)		(8,557,178)
Accumulated other comprehensive loss:
Foreign currency translation adjustment		(560,267)		(494,550)
Treasury stock		(5,461,079)		(5,455,715)
Total stockholders' equity		15,261,700		15,581,870
Total liabilities and stockholders' equity	$	24,615,519	$	25,258,541

See notes to financial statements.

2

Reliv International, Inc. and Subsidiaries

Condensed Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss)

(unaudited)	Three months ended June 30				Six months ended June 30
	2013		2012		2013		2012
Product sales	$	14,165,463	$	14,894,640	$	31,054,921	$	32,509,480
Handling & freight income		1,259,945		1,886,064		3,227,751		4,014,868
Net sales		15,425,408		16,780,704		34,282,672		36,524,348
Costs and expenses:
Cost of products sold		3,057,940		3,220,860		6,961,798		7,121,441
Distributor royalties and commissions		5,617,245		6,319,613		12,620,448		13,774,773
Selling, general and administrative		6,972,599		7,021,658		14,488,088		14,495,904
Total costs and expenses		15,647,784		16,562,131		34,070,334		35,392,118
Income (loss) from operations		(222,376)		218,573		212,338		1,132,230
Other income (expense):
Interest income		38,668		40,863		75,832		50,177
Interest expense		(18,493)		(31,295)		(35,995)		(62,214)
Other income / (expense)		(64,544)		(38,564)		(91,119)		(61,232)
Income (loss) before income taxes		(266,745)		189,577		161,056		1,058,961
Provision (benefit) for income taxes		(53,000)		87,000		180,000		424,000
Net income (loss)	$	(213,745)	$	102,577	$	(18,944)	$	634,961
Other comprehensive income (loss):
Foreign currency translation adjustment		(48,944)		(51,228)		(65,717)		58,544
Comprehensive income (loss)	$	(262,689)	$	51,349	$	(84,661)	$	693,505
Earnings (loss) per common share - Basic	$	(0.02)	$	0.01	$	(0.00)	$	0.05
Weighted average shares		12,616,000		12,507,000		12,617,000		12,499,000
Earnings (loss) per common share - Diluted	$	(0.02)	$	0.01	$	(0.00)	$	0.05
Weighted average shares		12,708,000		12,678,000		12,707,000		12,658,000
Cash dividends declared per common share	$	0.02	$	0.02	$	0.02	$	0.02

See notes to financial statements.

3

Reliv International, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(unaudited)

	Six months ended June 30
	2013		2012
Operating activities:
Net income (loss)	$	(18,944)	$	634,961
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		438,648		486,892
Stock-based compensation		22,237		78,984
Deferred income taxes		(103,000)		(35,000)
Foreign currency transaction (gain)/loss		99,779		14,401
(Increase) decrease in accounts receivable		50,322		(272,892)
(Increase) decrease in inventories		(410,442)		(171,933)
(Increase) decrease in refundable income taxes		(13,190)		96,387
(Increase) decrease in prepaid expenses and other current assets		(719,884)		(400,608)
(Increase) decrease in other assets		(25,343)		(3,155)
Increase (decrease) in income taxes payable		-		6,345
Increase (decrease) in accounts payable & accrued expenses and other     noncurrent liabilities		280,525		910,806
Net cash (used in) provided by operating activities		(399,292)		1,345,188
Investing activities:
Purchase of property, plant and equipment		(130,797)		(191,523)
Purchase of note and mortgage secured by underlying property		-		(2,000,000)
Payments received on distributor note receivable		35,352		-
Payment of life insurance premiums		(259,726)		(259,121)
Net cash used in investing activities		(355,171)		(2,450,644)
Financing activities:
Principal payments on long-term borrowings		(392,008)		(288,681)
Common stock dividends paid		(252,380)		(250,283)
Purchase of stock for treasury		(5,364)		(46,904)
Net cash used in financing activities		(649,752)		(585,868)
Effect of exchange rate changes on cash and cash equivalents		(140,864)		23,127
Increase (decrease) in cash and cash equivalents		(1,545,079)		(1,668,197)
Cash and cash equivalents at beginning of period		5,801,042		7,174,213
Cash and cash equivalents at end of period	$	4,255,963	$	5,506,016

See notes to financial statements.

4

Reliv International, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

June 30, 2013

Note 1— Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements and notes thereto have been prepared in accordance with the instructions to Form 10-Q and reflect all adjustments (which primarily include normal recurring accruals) which management believes are necessary to present fairly the financial position, results of operations and cash flows. These statements, however, do not include all information and 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. Interim results may not necessarily be indicative of results that may be expected for any other interim period or for the year as a whole. These financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in the annual report on Form 10-K for the year ended December 31, 2012, filed March 26, 2013 with the Securities and Exchange Commission.

Note 2—Basic and Diluted Earnings (Loss) per Share

Basic earnings (loss) per common share are computed using the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share are computed using the weighted average number of common shares and potential dilutive common shares that were outstanding during the period. Potential dilutive common shares consist of outstanding stock options, outstanding stock warrants, and convertible preferred stock.

The following table sets forth the computation of basic and diluted earnings (loss) per share:

	Three months ended June 30				Six Months ended June 30
	2013		2012		2013		2012
Numerator:
Net income (loss)	$	(213,745)	$	102,577	$	(18,944)	$	634,961
Denominator:
Denominator for basic earnings (loss) per     share—weighted average shares		12,616,000		12,507,000		12,617,000		12,499,000
Dilutive effect of employee stock options     and other warrants		92,000		171,000		90,000		159,000
Denominator for diluted earnings (loss) per     share—adjusted weighted average shares		12,708,000		12,678,000		12,707,000		12,658,000
Basic earnings (loss) per share	$	(0.02)	$	0.01	$	(0.00)	$	0.05
Diluted earnings (loss) per share	$	(0.02)	$	0.01	$	(0.00)	$	0.05

Options and warrants to purchase 1,287,125 shares of common stock for the three months and six months ended June 30, 2013, respectively, were not included in the denominator for diluted earnings (loss) per share because their effect would be antidilutive or because the shares were deemed contingently issuable. Options and warrants to purchase 1,143,863 shares of common stock for the three months and six months ended June 30, 2012, respectively, were not included in the denominator for diluted earnings (loss) per share because their effect would be antidilutive or because the shares were deemed contingently issuable.

5

Reliv International, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

June 30, 2013

Note 3—Stock-based Compensation

In March 2013, the Company issued performance based stock option grants totaling 230,000 shares. These option grants have an exercise price of $1.17 per share with a five-year term. The options' vesting provisions are contingent upon the Company achieving certain financial performance measurements. The aggregate estimated compensation cost related to the performance based options is $110,400; however, recognition is contingent upon performance vesting. The grant-date fair value of the options is $0.48 per share and was determined using a binomial option pricing model using an average risk-free rate of 0.90%, an average dividend yield of 1.60%, and an average volatility of 52.7%.

The Company recognized stock-based compensation expense from all plans of approximately $10,576 and $25,708 in the three months ended June 30, 2013 and 2012, respectively. The Company recognized stock-based compensation expense from all plans of approximately $22,237 and $78,984 in the six months ended June 30, 2013 and 2012, respectively. This expense is presented in Selling, General and Administrative in the accompanying condensed consolidated statements of net income (loss) and comprehensive income (loss).

Note 4—Fair Value of Financial Instruments

Fair value can be measured using valuation techniques such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). Accounting standards utilize a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs that reflect the reporting entity's own assumptions.

The carrying amount and fair value of the Company's financial instruments are approximately as follows:

Description	Carrying Value		Fair Value		Level 1		Level 2		Level 3
June 30, 2013
Long-term debt	$	2,638,936	$	2,638,936		-	$	2,638,936		-
Note receivable		1,964,648		2,428,000		-		2,428,000		-
Marketable securities (a)		231,000		231,000	$	231,000		-		-
December 31, 2012
Long-term debt	$	3,030,943	$	3,030,943		-	$	3,030,943		-
Note receivable		2,000,000		2,640,000		-		2,640,000		-
Marketable securities (a)		206,000		206,000	$	206,000		-		-

^(a) Representing assets of the Company's Supplemental Executive Retirement Plan (trading securities). Presented within Other Assets in the condensed consolidated balance sheets.

6

Reliv International, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

June 30, 2013

Note 5—Long-Term Debt

Long-term debt consists of the following:	June 30		December 31
	2013		2012
Term loan	$	2,638,936	$	2,807,298
Obligation for purchase of distributorship, as modified		-		223,645
		2,638,936		3,030,943
Less current maturities		444,807		629,631
	$	2,194,129	$	2,401,312

Originating in September 2012 with its primary lender, the term loan is for a period of thirty-eight months with interest accruing at a floating interest rate based on the 30-day LIBOR plus 2%. At June 30, 2013, the term loan's interest rate was 2.1943%. Monthly principal and interest are based on approximately a seven-year amortization. The aggregate outstanding balance of principal and interest is due and payable on November 30, 2015. The Company also has a $5 million revolving loan agreement with its primary lender. As of June 30, 2013, there have not been any revolver borrowings in 2013.

The term loan agreement and the revolving line of credit agreement are secured by all tangible and intangible assets of the Company and also by a mortgage on the real estate of the Company's headquarters. These agreements also include loan covenants requiring the Company to maintain net tangible worth of not less than $11 million, and that borrowings under the agreements shall not exceed EBITDA by a ratio of 2.5 to 1. At June 30, 2013, the Company was in compliance with its loan covenants.

The Company's obligation for purchase of a distributorship required monthly payments of principal and interest of $37,500 which ended in June 2013.

Note 6—Note Receivable Due from Distributor

In March 2012, the Company purchased from a real estate investment management firm a note and mortgage ("Note") on certain properties in Wyoming and Idaho for $2 million. In May 2012, the Company entered into a Loan Modification Agreement ("LMA") with the Note's original and present borrower ("Borrower") to restructure the Note's principal amount due and related terms. The LMA terms are for a principal balance due of $2 million with interest only payable monthly in 2012. The LMA's interest rate is the greater of 6% or prime and there is no prepayment penalty for voluntary principal payments. Concurrently, with the execution of of the LMA, the Company and the Borrower also entered into a Security Agreement in which repayment of the LMA is secured by the Borrower's Reliv distributorship business. 

As originally structured, beginning in 2013, the LMA was to require monthly payment of principal and interest under a five-year amortization period. In the first half of 2013, while a permanent restructuring of the LMA's repayment terms are being negotiated, management and the Borrower have verbally agreed to a temporary LMA modification which prospectively requires the Borrower to make monthly payments of principal and interest under a fifteen-year amortization period. The outstanding balance of the note receivable was $1,964,648 and $2,000,000 as of June 30, 2013 and December 31, 2012, respectively.

7

Reliv International, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

June 30, 2013

Note 7—Taxes

The interim financial statement provision for income taxes is different from the amounts computed by applying the United States federal statutory income tax rate of 34%. In summary, the reasons for these differences are as follows:

	Six Months ended June 30
	2013		2012
Income taxes at U.S. statutory rate	$	55,000	$	360,000
State income taxes, net of federal benefit		26,000		57,000
Higher/(lower) effective taxes on earnings in foreign countries		68,000		(44,000)
Foreign corporate income taxes		21,000		43,000
Other, net		10,000		8,000
	$	180,000	$	424,000

One of the Company's foreign subsidiaries is presently under local country audit for alleged deficiencies (totaling approximately $800,000 plus interest at 20% per annum) in value-added tax (VAT) and withholding tax for the years 2004 through 2006. The Company, in consultation with its legal counsel, believes that there are strong legal grounds that it should not be liable to pay the majority of the alleged tax deficiencies. As of December 31, 2010, management estimated and reserved approximately $185,000 for resolution of this matter and recorded this amount within Selling, General, and Administrative expense in the 2010 Consolidated Statement of Income. In 2011, the Company has made good faith deposits to the local tax authority under the tax agency's administrative judicial resolution process. As of June 30, 2013 and December 31, 2012, management's estimated reserve (net of deposits) for this matter is approximately $70,000. There has been no change in this matter during the first six months of 2013.

Note 8—Long-Term Incentive Compensation Plan

In July 2010, the Company’s Reliv Europe subsidiary entered into a long-term performance-based incentive compensation agreement with the subsidiary’s senior managers. The valuation of the compensation agreement is an EBITDA-based formula derived from the subsidiary’s financial performance and vests in 20% annual increments which began in April 2011. The amount of the incentive, if any, varies in accordance with a 24-month look-back of the subsidiary’s financial performance and the vesting provisions. Upon initial vesting, a manager may elect to exercise his/her put option to receive in cash some or all of his/her respective share of the incentive. Beginning April 2015, the Company may exercise a call option on one or more of the manager’s incentive amount; redeeming such amount in cash or a combination of cash and the Company’s common stock, depending upon the amount of the vested incentive. In the fourth quarter of 2012, the subsidiary’s 24-month financial performance became positive resulting in the recognition of compensation expense and a corresponding non-current liability of $88,500 in the Company’s 2012 consolidated financial statements. For the three months and six months ended June 30, 2013, compensation expense associated with this incentive plan was $156,100 and $201,500, respectively.

Note 9—Subsequent Event

In July 2013, a newly-formed, wholly-owned subsidiary of the Company has entered into a Technology License Agreement (TLA) with a privately-held company. The TLA provides the Company the exclusive license for certain intellectual property related to the nutritional ingredient lunasin and other soy-related peptides and proteins. In consideration, the Company will pay the licensor $2 million; $1.15 million paid at closing, with the remaining obligation paid over the next four years in a series of annual payments ranging from $150,000 to $250,000. Subject to certain minimum and maximum volume thresholds, the Company will also pay the licensor royalties of 5% of sales during the first five years of the TLA and royalties ranging from 1% to 3% of sales during the remaining life of the TLA. The transaction was closed on July 23, 2013, and was primarily funded by a borrowing of $1.15 million from the company’s revolving loan agreement. The Company anticipates accounting for the TLA as a long-term finite-lived asset to be amortized over the life of the agreement.

8

FORWARD-LOOKING STATEMENTS

This quarterly report includes both historical and “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. We have based these forward-looking statements on our current expectations and projections about future results. Words such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” or similar words are intended to identify forward-looking statements, although not all forward-looking statements contain these words. Although we believe that our opinions and expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements, and our actual results may differ substantially from the views and expectations set forth in this quarterly report on Form 10-Q. We disclaim any intent or obligation to update any forward-looking statements after the date of this quarterly report to conform such statements to actual results or to changes in our opinions or expectations.

Item No. 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. The following discussion and analysis discusses the financial condition and results of our operations on a consolidated basis, unless otherwise indicated.

Overview

We are a developer, manufacturer and marketer of a proprietary line of nutritional supplements addressing basic nutrition, specific wellness needs, weight management and sports nutrition. We also offer a line of skin care products and a sweetner. We sell our products through an international network marketing system utilizing independent distributors. Sales in the United States represented approximately 78.6% of worldwide net sales for the six months ended June 30, 2013 and 2012. Our international operations currently generate sales through distributor networks with facilities in Australia, Canada, Indonesia, Malaysia, Mexico, the Philippines, and the United Kingdom. We also operate remotely in Ireland, France, Germany, Austria and the Netherlands from our U.K. distribution center, in New Zealand from our Australia office, and in Singapore and Brunei from our Malaysia office.

We derive our revenues principally through product sales made by our global independent distributor base, which, as of June 30, 2013, consisted of approximately 53,390 distributors. Our sales can be affected by several factors, including our ability to attract new distributors and retain our existing distributor base, our ability to properly train and motivate our distributor base and our ability to develop new products and successfully maintain our current product line.

All of our sales to distributors outside the United States are made in the respective local currency; therefore, our earnings and cash flows are subject to fluctuations due to changes in foreign currency rates as compared to the U.S. dollar. As a result, exchange rate fluctuations may have an effect on sales and gross margins. United States generally accepted accounting practices require that our results from operations be converted to U.S. dollars for reporting purposes. Consequently, our reported earnings may be significantly affected by fluctuations in currency exchange rates, generally increasing with a weaker U.S. dollar and decreasing with a strengthening U.S. dollar. Products manufactured by us for sale to our foreign subsidiaries are transacted in U.S. dollars. From time to time, we enter into foreign exchange forward contracts to mitigate our foreign currency exchange risk.

Components of Net Sales and Expense

Product sales represent the actual product purchase price typically paid by our distributors, after giving effect to distributor allowances, which can range from 20% to 40% of suggested retail price, depending on the rank of a particular distributor. Handling and freight income represents the amounts billed to distributors for shipping costs. We record net sales and the related commission expense when the merchandise is shipped.

Our primary expenses include cost of products sold, distributor royalties and commissions and selling, general and administrative expenses.

9

Cost of products sold primarily consists of expenses related to raw materials, labor, quality control and overhead directly associated with production of our products and sales materials, as well as shipping costs relating to the shipment of products to distributors, and duties and taxes associated with product exports. Cost of products sold is impacted by the cost of the ingredients used in our products, the cost of shipping distributors’ orders, along with our efficiency in managing the production of our products.

Distributor royalties and commissions are monthly payments made to distributors, based on products sold in their downline organization. Based on our distributor agreements, these expenses typically approximate 23% of sales at suggested retail. In the United States effective March 1, 2013, we implemented a retail price increase, offset by a reduced shipping charge. After the price change, wholesale pricing discounts on distributor orders are based on the retail value of the product. Distributor royalties and commissions are paid on an amount referred to as the business value (“BV”), which was generally equal to the retail price of each product prior to the price increase. Also, we include other sales leadership bonuses, such as Ambassador bonuses, within this caption. Overall, distributor royalties and commissions remain directly related to the level of our sales and should continue at comparable levels as a percentage of net sales going forward.

Selling, general and administrative expenses include the compensation and benefits paid to our employees except for those in manufacturing, all other selling expenses, marketing, promotional expenses, travel and other corporate administrative expenses. These other corporate administrative expenses include professional fees, non-manufacturing depreciation and amortization, occupancy costs, communication costs and other similar operating expenses. Selling, general and administrative expenses can be affected by a number of factors, including staffing levels and the cost of providing competitive salaries and benefits; the amount we decide to invest in distributor training and motivational initiatives; and the cost of regulatory compliance.

Results of Operations  

The following table sets forth selected results of our operations expressed as a percentage of net sales for the three- and six-month periods ended June 30, 2013 and 2012. Our results of operations for the periods described below are not necessarily indicative of results of operations for future periods.  

	Three months ended June 30,					Six months ended June 30,
	2013		2012			2013		2012
Net sales	100.0	%		100.0	%	100.0	%		100.0	%
Costs and expenses:
Cost of products sold	19.8			19.2		20.3			19.5
Distributor royalties and commissions	36.4			37.7		36.8			37.7
Selling, general and administrative	45.2			41.8		42.3			39.7
Income (loss) from operations	(1.4)			1.3		0.6			3.1
Interest expense	(0.1)			(0.2)		(0.1)			(0.2)
Interest and other income (expense)	(0.2)			0.0		(0.1)			0.0
Income (loss) before income taxes	(1.7)			1.1		0.4			2.9
Provision (benefit) for income taxes	(0.3)			0.5		0.5			1.2
Net income (loss)	(1.4)	%		0.6	%	(0.1)	%		1.7	%

Net Sales.  Overall net sales decreased by 8.1% in the three months ended June 30, 2013 compared to the same period in 2012. During the second quarter of 2013, sales in the United States decreased by 8.6%, and international sales decreased by 6.3% over the prior-year period. For the six months ended June 30, 2013, consolidated net sales decreased by 6.1% compared to the same period in 2012. In the first half of 2013, net sales in the United States decreased by 6.2% and international sales decreased by 6.0% over the same period in 2012.  

10

The following table summarizes net sales by geographic market for the three months ended June 30, 2013 and 2012.  

	Three months ended June 30,
	2013				2012				Change from prior year
	Amount		% of Net Sales		Amount		% of Net Sales		Amount		%
			(dollars in thousands)
United States	$	11,828	76.7	%	$	12,943	77.1	%	$	(1,115)	(8.6)	%
Australia/New Zealand		524	3.4			480	2.9			44	9.2
Canada		372	2.4			439	2.6			(67)	(15.3)
Mexico		256	1.7			271	1.6			(15)	(5.5)
Europe		1,960	12.7			1,741	10.4			219	12.6
Asia		485	3.1			907	5.4			(422)	(46.5)
Consolidated total	$	15,425	100.0	%	$	16,781	100.0	%	$	(1,356)	(8.1)	%

The following table summarizes net sales by geographic market for the six months ended June 30, 2013 and 2012.

	Six months ended June 30,
	2013				2012				Change from prior year
	Amount		% of Net Sales		Amount		% of Net Sales		Amount		%
			(dollars in thousands)
United States	$	26,938	78.6	%	$	28,713	78.6	%	$	(1,775)	(6.2)	%
Australia/New Zealand		973	2.8			1,020	2.8			(47)	(4.6)
Canada		926	2.7			989	2.7			(63)	(6.4)
Mexico		534	1.6			558	1.6			(24)	(4.3)
Europe		3,979	11.6			3,335	9.1			644	19.3
Asia		933	2.7			1,909	5.2			(976)	(51.1)
Consolidated total	$	34,283	100.0	%	$	36,524	100.0	%	$	(2,241)	(6.1)	%

The following table sets forth, as of June 30, 2013 and 2012, the number of our active distributors and Master Affiliates and above. The total number of active distributors includes Master Affiliates and above. We define an active distributor as one that enrolls as a distributor or renews his or her distributorship during the prior twelve months. Master Affiliates and above are distributors that have attained the highest level of discount and are eligible for royalties generated by Master Affiliate groups in their downline organization. 

	June 30, 2013		June 30, 2012		% Change
	Total Active Distributors	Master Affiliates and Above	Total Active Distributors	Master Affiliates and Above	Total Active Distributors		Master Affiliates and Above
United States	38,860	4,180	42,080	4,790	(7.7)	%	(12.7)	%
Australia/New Zealand	1,570	200	1,940	130	(19.1)		53.8
Canada	1,260	180	1,320	200	(4.5)		(10.0)
Mexico	1,150	130	1,800	150	(36.1)		(13.3)
Europe	6,490	780	6,020	600	7.8		30.0
Asia	4,060	440	6,070	550	(33.1)		(20.0)
Consolidated total	53,390	5,910	59,230	6,420	(9.9)	%	(7.9)	%

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In the United States, net sales were down 8.6% in the second quarter of 2013 compared to the same period in 2012.  Sales declined in the second quarter of 2013 as distributor activity and the number of new and requalifying Master Affiliates and above in the United States continued to decline. This decline is shown in the form of a decrease in the number of active distributors and distributors at the level of Master Affiliate and above, along with a decrease in the number of new distributor enrollments. The number of active distributors in the United States as of June 30, 2013 decreased by 7.7% to 38,860, compared to the number of active distributors as of June 30, 2012. During the second quarter of 2013, approximately 2,637 new distributors were enrolled, compared to 3,146 new distributor enrollments in the prior-year quarter, a decline of 16.2%.  In the second quarter of 2013, approximately 289 distributors qualified as new Master Affiliates, compared to approximately 332 in the prior-year quarter, a decline of 13.0%. As a result, the number of Master Affiliates and above as of June 30, 2013 decreased by 12.7% as compared to the number of Master Affiliates and above as of June 30, 2012. Distributor retention was 65.3% for the first six months of 2013 compared to a rate of 66.5% for all of 2012. For the six-month period ended June 30, 2013, the decline in net sales in the United States compared to the prior-year period were due to these same factors, as new distributor enrollments and new Master Affiliate qualifications in the first half of 2013 declined by 12.2% and 11.6%, respectively, compared to the same period in 2012.  

In the second quarter of 2013, we processed approximately 49,680 orders in the United States for products at an average order of $327 at suggested retail. In the same period of 2012, we processed approximately 54,490 product orders at an average order of $306 at suggested retail. The increase in the average order amount is attributable to the price increase earlier in 2013; however, the decline in the number of orders processed is attributable to the decline in distributor activity. 

In addition to the changes to distributor pricing and freight charges in March 2013, our efforts to increase distributor activity and ordering in the United States is focused on product innovation. We have continued our product developments on our LunaRich™-based products. In January 2013, we launched our latest product, LunaRich X, and a new points-based LunaRich wellness system. LunaRich X is a capsule sold in 30-count bottles and contains the most concentrated form of lunasin currently available. Lunasin is the peptide scientists have identified as the key to many of soy’s documented health benefits. LunaRich X accounted for 8.5 percent of U.S. net sales in the second quarter of 2013.

During the three months ended June 30, 2013, net sales in our international operations decreased in aggregate by 6.3% to $3.60 million compared to $3.84 million for the three months ended June 30, 2012. For the six-month period ended June 30, 2013, international net sales decreased by 6.0% to $7.34 million compared to $7.81 million in the same period in 2012. When measured on a constant currency basis, sales increased in Europe, but were offset by declines in Australia/New Zealand, Canada, Mexico, and Asia during the first half of 2013. When net sales are converted using the 2012 exchange rate for both 2012 and 2013, international net sales decreased by 5.5% for the first half of 2013 compared to the first half of the prior year. Regional sales results on a constant currency basis for the first six months of 2013 compared to the same period of 2012 were as follows: Australia/New Zealand net sales decreased 4.0%, Canada net sales decreased 5.5%, Mexico net sales decreased 9.1%, Europe net sales increased 21.8%, and Asian sales decreased 52.7%. 

 In Europe, strong distributor activity and growth in the number of orders processed, along with a strong base of distributors at the rank of Master Affiliate and above, continued in the second quarter of 2013. Net sales increased by 16.1% in the second quarter of 2013 and increased by 21.8% for the first half of 2013, when measured on a constant currency basis, compared to the prior-year periods. Total order count increased to 11,100 in the first half of 2013 compared to 9,623 in the same period last year, an increase of 15.3%. New distributor enrollments were 2,598 in the first half of 2013, compared to 3,103 in the same period in 2012, a decrease of 16.3%. The number of distributors at the rank of Master Affiliate and above increased by 30.0% as of June 30, 2013 compared to a year ago, and new Master Affiliate qualifications were 265 in the first half of 2013, compared to 274 in the same period in 2012, a decrease of 3.3%.

In Asia, sales declined as the result of an on-going transition of the business model in the region and changes in management in certain of the local markets. In the Philippines, we have introduced initiatives to bring in new Master Affiliates at a lower qualification level and to increase focus on retail sales by distributors. However, sales have declined while we are executing the implementation and distributor training of these initiatives. On a constant currency basis, sales in the Philippines declined by 55.9% in the first half of 2013 compared to the prior-year period. In the Malaysia/Singapore/Brunei markets, similar changes are being introduced and in April 2013 we hired a new sales manager for these markets. In these markets, sales have declined by 30.2% in the first half of 2013 compared to the prior-year period.

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In Australia/New Zealand, sales declined by 4.0% in the first half of 2013 compared to the prior-year first half. To improve sales in that region, we have implemented pricing and freight charge structure changes similar to the United States in May 2013 along with other initiatives. Sales in the region increased by 10.0% on a constant currency basis in the second quarter of 2013 compared to the prior-year quarter.

Cost of Products Sold. Cost of products sold as a percentage of net sales was 19.8% for the three-month period ended June 30, 2013, compared to 19.2% for the same period in 2012. For the six-month period ended June 30, 2013, cost of products sold as a percentage of net sales was 20.3%, compared to 19.5% in the prior-year period. Gross margins decreased in the first six months of 2013 compared to the prior-year period as the result of increases in the cost of various raw materials and other production costs.

Distributor Royalties and Commissions.  Distributor royalties and commissions as a percentage of net sales were 36.4% and 36.8% for both the three- and six-month periods ended June 30, 2013, respectively, compared to 37.7% for both the three- and six-month periods in 2012. The decrease as a percentage of net sales is the result of the retail price increase and commission adjustments effective March 1, 2013 in the United States. After the price change, wholesale discounts on distributor orders are based on the retail value of the product. Distributor royalties and commissions are paid on an amount referred to as the business value (“BV”), which is generally equal to the retail price of each product prior to the price increase.

Selling, General and Administrative Expenses. For the three months ended June 30, 2013, selling, general and administrative, or SGA, expenses decreased by $49,000, compared to the same period in 2012. SGA expenses as a percentage of net sales were 45.2% and 41.8% for the three-month periods ended June 30, 2013 and 2012, respectively.  For the six-month period ended June 30, 2013, SGA expenses decreased by $8,000 when compared to the same period in 2012. SGA expenses as a percentage of net sales were 42.3% and 39.7% for the six-month periods ended June 30, 2013 and 2012, respectively.

Sales and marketing expenses decreased by approximately $182,000 in the first six months of 2013, compared to the prior-year period. The majority of the decrease, $145,000, is attributable to a decrease in distributor bonuses and other expenses directly related to the level of sales.  

Salaries, benefits, and incentive compensation increased by $56,000 in the first six months of 2013, compared to the prior-year period, as increases in salaries and benefit expenses of approximately $161,000 were offset by a decrease in incentive compensation expense of $105,000. Distribution and warehouse expenses increased by $3,000 and other general and administrative expenses increased by approximately $115,000 in the first six months of 2013, compared to the prior-year period. The increase in other general and administrative expenses included $201,000 in compensation expense recognized as part of a long-term incentive agreement with our management team in our European subsidiary that began accruing in the fourth quarter of 2012. 

Interest Income. Interest income increased to $76,000 during the first half of 2013 compared to $50,000 in the first half of 2012. The increase in interest income is the result of interest earned on the note receivable due from a distributor that was entered into in March 2012.

Interest Expense. Interest expense decreased to $36,000 during the first half of 2013 compared to $62,000 in the same period of 2012. The lower interest expense is the result of a decrease in the amount of debt compared to the prior year.

Other Income/Expense. Other income/expense in the first half of 2013 was a net amount of expense of $91,000, compared to a net amount of expense of $61,000 in the first half of 2012. The net expense in both years is primarily the result of foreign currency losses in certain of our subsidiaries.

Income Taxes. We recorded income tax expense of $180,000 for the first six months of 2013, an effective rate of 111.8%. In the same period in 2012, we recorded income tax expense of $424,000, which represented an effective rate of 40.0%. Our effective rate is higher in 2013 due to losses incurred in the Philippines in the six-month period for which there is no tax benefit. Also impacting our effective tax rate is a higher effective state income tax rate due to various state income tax statutes which include or exclude certain portions of our domestic and foreign operating results from the respective states taxable income. If the 2013 year-to-date loss in the Philippines of $201,000 were excluded from the calculation, our effective tax rate would be 49.7%.

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Net Income. Our net loss for the three and six months ended June 30, 2013 was ($214,000), or ($0.02) per share basic and diluted, and ($19,000), or ($0.00) per share basic and diluted, respectively. This compares to net income of $103,000, $0.01 per share basic and diluted, and $635,000, $0.05 per share basic and diluted, for the same periods in 2012. Profitability declined in the second quarter of 2013 when compared to the prior-year period primarily as the result of the decline in net sales in the United States and Asia, coupled with the income tax effect of the non-deductible losses in the Philippines. For the six-month periods, the net loss in 2013 is the result of the same factors.

Financial Condition, Liquidity and Capital Resources

During the first six months of 2013, we used $399,000 of net cash in operating activities, used $355,000 in investing activities, and used $650,000 in financing activities. This compares to $1.35 million of net cash provided by operating activities, $2.45 million used in investing activities, and $586,000 used in financing activities in the same period of 2012. Cash and cash equivalents decreased by $1.55 million to $4.26 million as of June 30, 2013 compared to $5.80 million as of December 31, 2012.

Significant changes in working capital items consisted of an increase in inventory of $410,000, an increase in prepaid expenses/other current assets of $720,000, and an increase in accounts payable and accrued expenses of $280,000 in the first six months of 2013. The increase in inventory is to support the sales growth in Europe and the growth in the sales of the LunaRich X capsules, and the increase in prepaid expenses/other current assets represents the annual premium payments made in the first quarter on most of the corporate insurance policies. The increase in accounts payable and accrued expenses is partially related to a financing arrangement for our annual corporate insurance policy renewals, coupled with various annual accruals and the increase in inventory.

Investing activities during the first six months of 2013 consisted of a net investment of $131,000 for capital expenditures, payments received on a distributor note receivable of $35,000, and $260,000 paid for key-man life insurance. Financing activities during the first six months of 2013 consisted of principal payments of $392,000 on long-term borrowings, $252,000 in cash dividends paid, and $5,000 in treasury stock purchased.

Stockholders’ equity decreased to $15.26 million at June 30, 2013 compared to $15.58 million at December 31, 2012. The decrease is due to our net loss during the first six months of 2013 of $19,000 and a decline in the cumulative foreign currency translation adjustment of $66,000 due to the strengthening of the United States dollar, further offset by cash dividends paid of $252,000. Our working capital balance was $5.56 million at June 30, 2013 compared to $5.88 million at December 31, 2012. The current ratio at June 30, 2013 was 1.87 compared to 1.89 at December 31, 2012.

On September 30, 2012, we entered into a term loan with our primary lender (“the Bank”) in the principal amount of $2.9 million. The loan was renegotiated from a loan that originated with the Bank on November 30, 2010. The term of the loan is for a period of three years and two months with interest accruing on the outstanding principal balance at a floating interest rate based on the 30-day LIBOR plus 2.0%. Monthly principal and interest payments are based on approximately a seven-year amortization. The aggregate outstanding balance of principal and interest is due and payable on November 30, 2015.

We also renewed a revolving credit facility for $5 million with the Bank in September 2012. The credit facility accrues interest on the outstanding principal balance at a floating interest rate based on 30-day LIBOR plus 1.85% and has a maturity date of September 30, 2013. As of June 30, 2013, there were no outstanding borrowings on the revolving credit facility. On August 5, 2013, we drew $1.15 million to fund the amount due under a Technology License Agreement entered into July 23, 2013. This Agreement provides us the exclusive license for certain intellectual property related to lunasin and other soy-related peptides and proteins. Further details regarding the transaction are described in Note 9 to the Consolidated Financial Statements.

The amended terms of the term loan and revolving credit facility are reflected in separate promissory notes dated September 30, 2012 between us and the Bank. A separate letter agreement stating the financial covenants related to the term loan and revolving credit facility was updated and amended on April 4, 2012 and continues in effect.

14

Under the terms of the amended letter agreement, we have agreed to financial covenants under which we are required to (i) maintain at all times a tangible net worth of not less than $11 million and (ii) maintain at all times a ratio of Total Funded Debt to EBITDA of not greater than 2.5 to 1. The term loan and revolving credit facility are secured by all of our tangible and intangible assets and also by a mortgage on our building and real estate located in Chesterfield, Missouri. As of June 30, 2013, we were in compliance with all financial covenants.

Management believes that our internally generated funds coupled with cash on hand and the bank loan facilities will be sufficient to meet working capital requirements for the remainder of 2013.

Critical Accounting Policies

A summary of our critical accounting policies and estimates is presented on pages 25-26 of our 2012 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 26, 2013.

Item No. 4 - Controls and Procedures  

Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, has reviewed and evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2013. Based on such review and evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that the disclosure controls and procedures were effective as of June 30, 2013, to ensure that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, (a) is recorded, processed, summarized and reported within the time period specified in the SEC’s rules and forms and (b) is accumulated and communicated to our management, including the officers, as appropriate to allow timely decisions regarding required disclosure. There were no material changes in our internal control over financial reporting during the second quarter of 2013 that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting.

PART II – OTHER INFORMATION

Item No. 2 – Unregistered Sales of Equity Securities and Use of Proceeds

ISSUER PURCHASES OF EQUITY SHARES

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs(1)
April 1-30, 2013		4,045	$	1.33		4,045		—
Total		4,045				4,045

(1)  The share repurchase plan approved by the Company’s Board of Directors in April 2011 expired at the end of April 2013.

15

Item No. 6 – Exhibits 

Exhibit
Number	Document
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended (filed herewith).
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended (filed herewith).
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
101	Interactive Data Files, including the following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, formatted in XBRL: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss), (iii) the Condensed Consolidated Statements of Cash Flows, and (iv) the Notes to Consolidated Financial Statements.

16

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

RELIV’ INTERNATIONAL, INC.
By:	/s/ Robert L. Montgomery
	Robert L. Montgomery, Chairman of the Board of Directors and Chief Executive Officer
Date: August 14, 2013
By:	/s/ Steven D. Albright
	Steven D. Albright, Chief Financial Officer (and accounting officer)
Date: August 14, 2013

17

 

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Robert L. Montgomery, certify that:

1.          I have reviewed this quarterly report on Form 10-Q of Reliv International, 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 officer 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 fiscal 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; and

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: August 14, 2013

/s/ Robert L. Montgomery

Robert L. Montgomery

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Steven D. Albright, certify that:

1.          I have reviewed this quarterly report on Form 10-Q of Reliv International, 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 officer 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 fiscal 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; and

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: August 14, 2013

/s/ Steven D. Albright

Steven D. Albright

Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Reliv’ International, Inc. (the “Company”) for the quarterly period ended June 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Robert L. Montgomery, as Chief Executive Officer of the Company, and Steven D. Albright, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)           The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

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

/s/ Robert L. Montgomery

Robert L. Montgomery

Chief Executive Officer

Date: August 14, 2013

/s/ Steven D. Albright

Steven D. Albright

Chief Financial Officer

Date: August 14, 2013

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and is not being “filed” as part of the Form 10-Q or as a separate disclosure document for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liability under that section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act except to the extent that this Exhibit 32 is expressly and specifically incorporated by reference in any such filing.

A signed original of this written statement required by Section 906 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.

XML

Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value, by Balance Sheet Grouping [Table Text Block]

The carrying amount and fair value of the Company's financial instruments are approximately as follows:

Description	Carrying Value		Fair Value		Level 1		Level 2		Level 3
June 30, 2013
Long-term debt	$	2,638,936	$	2,638,936		-	$	2,638,936		-
Note receivable		1,964,648		2,428,000		-		2,428,000		-
Marketable securities (a)		231,000		231,000	$	231,000		-		-
December 31, 2012
Long-term debt	$	3,030,943	$	3,030,943		-	$	3,030,943		-
Note receivable		2,000,000		2,640,000		-		2,640,000		-
Marketable securities (a)		206,000		206,000	$	206,000		-		-

^(a) Representing assets of the Company's Supplemental Executive Retirement Plan (trading securities). Presented within Other Assets in the condensed consolidated balance sheets.

XML

Condensed Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Product sales	$ 14,165,463	$ 14,894,640	$ 31,054,921	$ 32,509,480
Handling & freight income	1,259,945	1,886,064	3,227,751	4,014,868
Net sales	15,425,408	16,780,704	34,282,672	36,524,348
Costs and expenses:
Cost of products sold	3,057,940	3,220,860	6,961,798	7,121,441
Distributor royalties and commissions	5,617,245	6,319,613	12,620,448	13,774,773
Selling, general and administrative	6,972,599	7,021,658	14,488,088	14,495,904
Total costs and expenses	15,647,784	16,562,131	34,070,334	35,392,118
Income (loss) from operations	(222,376)	218,573	212,338	1,132,230
Other income (expense):
Interest income	38,668	40,863	75,832	50,177
Interest expense	(18,493)	(31,295)	(35,995)	(62,214)
Other income / (expense)	(64,544)	(38,564)	(91,119)	(61,232)
Income (loss) before income taxes	(266,745)	189,577	161,056	1,058,961
Provision (benefit) for income taxes	(53,000)	87,000	180,000	424,000
Net income (loss)	(213,745)	102,577	(18,944)	634,961
Other comprehensive income (loss):
Foreign currency translation adjustment	(48,944)	(51,228)	(65,717)	58,544
Comprehensive income (loss)	$ (262,689)	$ 51,349	$ (84,661)	$ 693,505
Earnings (loss) per common share - Basic (in dollars per share)	$ (0.02)	$ 0.01	$ 0.00	$ 0.05
Weighted average shares (in shares)	12,616,000	12,507,000	12,617,000	12,499,000
Earnings (loss) per common share - Diluted (in dollars per share)	$ (0.02)	$ 0.01	$ 0.00	$ 0.05
Weighted average shares (in shares)	12,708,000	12,678,000	12,707,000	12,658,000
Cash dividends declared per common share (in dollars per share)	$ 0.02	$ 0.02	$ 0.02	$ 0.02

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Long-Term Debt

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Long-term Debt [Text Block]

Note 5—Long-Term Debt

Long-term debt consists of the following:	June 30		December 31
	2013		2012
Term loan	$	2,638,936	$	2,807,298
Obligation for purchase of distributorship, as modified		-		223,645
		2,638,936		3,030,943
Less current maturities		444,807		629,631
	$	2,194,129	$	2,401,312

Originating in September 2012 with its primary lender, the term loan is for a period of thirty-eight months with interest accruing at a floating interest rate based on the 30-day LIBOR plus 2%. At June 30, 2013, the term loan's interest rate was 2.1943%. Monthly principal and interest are based on approximately a seven-year amortization. The aggregate outstanding balance of principal and interest is due and payable on November 30, 2015. The Company also has a $5 million revolving loan agreement with its primary lender. As of June 30, 2013, there have not been any revolver borrowings in 2013.

The term loan agreement and the revolving line of credit agreement are secured by all tangible and intangible assets of the Company and also by a mortgage on the real estate of the Company's headquarters. These agreements also include loan covenants requiring the Company to maintain net tangible worth of not less than $11 million, and that borrowings under the agreements shall not exceed EBITDA by a ratio of 2.5 to 1. At June 30, 2013, the Company was in compliance with its loan covenants.

The Company's obligation for purchase of a distributorship required monthly payments of principal and interest of $37,500 which ended in June 2013.

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Long-Term Debt (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Term loan	$ 2,638,936	$ 2,807,298
Obligation for purchase of distributorship, as modified	0	223,645
Long-term Debt	2,638,936	3,030,943
Less current maturities	444,807	629,631
Long-term Debt, Excluding Current Maturities	$ 2,194,129	$ 2,401,312

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Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments [Table Text Block]

Long-term debt consists of the following:	June 30		December 31
	2013		2012
Term loan	$	2,638,936	$	2,807,298
Obligation for purchase of distributorship, as modified		-		223,645
		2,638,936		3,030,943
Less current maturities		444,807		629,631
	$	2,194,129	$	2,401,312

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Taxes (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Income taxes at U.S. statutory rate			$ 55,000	$ 360,000
State income taxes, net of federal benefit			26,000	57,000
Higher/(lower) effective taxes on earnings in foreign countries			68,000	(44,000)
Foreign corporate income taxes			21,000	43,000
Other, net			10,000	8,000
Income Tax Expense (Benefit), Total	$ (53,000)	$ 87,000	$ 180,000	$ 424,000

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Note Receivable Due from Distributor (Details Textual) (USD $)			6 Months Ended	12 Months Ended
	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2013 Loan Modification Agreement [Member]	Dec. 31, 2012 Loan Modification Agreement [Member]	May 31, 2012 Loan Modification Agreement [Member]	Mar. 31, 2012 Real Estate Investment [Member]
Due From Related Parties, Noncurrent	$ 1,876,119	$ 1,923,000				$ 2,000,000
Note Receivable Face Amount					2,000,000
Loans Receivable, Description Of Variable Rate Basis				greater of 6% or prime
Notes Receivable, Net	$ 1,964,648	$ 2,000,000
Note Receivable Frequency Of Periodic Payment			monthly payment of principal and interest
Note Receivable, Maturity Date, Description			fifteen-year

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Long-Term Debt (Details Textual) (USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Long Term Loan Maturity Period	thirty-eight months
Debt Instrument, Restrictive Covenants	These agreements also include loan covenants requiring the Company to maintain net tangible worth of not less than $11 million, and that borrowings under the agreements shall not exceed EBITDA by a ratio of 2.5 to 1.
Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 5,000,000
Secured Debt [Member]
Debt Instrument, Description Of Variable Rate Basis	floating interest rate based on the 30-day LIBOR plus 2%.	floating interest rate based on the 30-day LIBOR plus 2%.
Debt Instrument, Maturity Date	Nov. 30, 2015
Debt Instrument, Interest Rate At Period End	2.1943%
Debt Instrument, Frequency Of Periodic Payment	Monthly
Debt Instrument, Maturity Date, Description	seven-year
Obligation For Purchase Of Distributorship [Member]
Debt Instrument, Frequency Of Periodic Payment	monthly
Debt Instrument, Maturity Date, Description	June 2013
Debt Instrument, Periodic Payment	$ 37,500

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Accounting Policies

6 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Business Description and Accounting Policies [Text Block]

Note 1— Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements and notes thereto have been prepared in accordance with the instructions to Form 10-Q and reflect all adjustments (which primarily include normal recurring accruals) which management believes are necessary to present fairly the financial position, results of operations and cash flows. These statements, however, do not include all information and 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. Interim results may not necessarily be indicative of results that may be expected for any other interim period or for the year as a whole. These financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in the annual report on Form 10-K for the year ended December 31, 2012, filed March 26, 2013 with the Securities and Exchange Commission.

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Stock-based Compensation

6 Months Ended

Jun. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 3—Stock-based Compensation

In March 2013, the Company issued performance based stock option grants totaling 230,000 shares. These option grants have an exercise price of $1.17 per share with a five-year term. The options' vesting provisions are contingent upon the Company achieving certain financial performance measurements. The aggregate estimated compensation cost related to the performance based options is $110,400; however, recognition is contingent upon performance vesting. The grant-date fair value of the options is $0.48 per share and was determined using a binomial option pricing model using an average risk-free rate of 0.90%, an average dividend yield of 1.60%, and an average volatility of 52.7%.

The Company recognized stock-based compensation expense from all plans of approximately $10,576 and $25,708 in the three months ended June 30, 2013 and 2012, respectively. The Company recognized stock-based compensation expense from all plans of approximately $22,237 and $78,984 in the six months ended June 30, 2013 and 2012, respectively. This expense is presented in Selling, General and Administrative in the accompanying condensed consolidated statements of net income (loss) and comprehensive income (loss).

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Note Receivable Due from Distributor

6 Months Ended

Jun. 30, 2013

Receivables [Abstract]

Note Receivable Due From Distributor [Text Block]

Note 6—Note Receivable Due from Distributor

In March 2012, the Company purchased from a real estate investment management firm a note and mortgage ("Note") on certain properties in Wyoming and Idaho for $2 million. In May 2012, the Company entered into a Loan Modification Agreement ("LMA") with the Note's original and present borrower ("Borrower") to restructure the Note's principal amount due and related terms. The LMA terms are for a principal balance due of $2 million with interest only payable monthly in 2012. The LMA's interest rate is the greater of 6% or prime and there is no prepayment penalty for voluntary principal payments. Concurrently, with the execution of of the LMA, the Company and the Borrower also entered into a Security Agreement in which repayment of the LMA is secured by the Borrower's Reliv distributorship business. 

As originally structured, beginning in 2013, the LMA was to require monthly payment of principal and interest under a five-year amortization period. In the first half of 2013, while a permanent restructuring of the LMA's repayment terms are being negotiated, management and the Borrower have verbally agreed to a temporary LMA modification which prospectively requires the Borrower to make monthly payments of principal and interest under a fifteen-year amortization period. The outstanding balance of the note receivable was $1,964,648 and $2,000,000 as of June 30, 2013 and December 31, 2012, respectively.

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Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

Note 4—Fair Value of Financial Instruments

Fair value can be measured using valuation techniques such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). Accounting standards utilize a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs that reflect the reporting entity's own assumptions.

The carrying amount and fair value of the Company's financial instruments are approximately as follows:

Description	Carrying Value		Fair Value		Level 1		Level 2		Level 3
June 30, 2013
Long-term debt	$	2,638,936	$	2,638,936		-	$	2,638,936		-
Note receivable		1,964,648		2,428,000		-		2,428,000		-
Marketable securities (a)		231,000		231,000	$	231,000		-		-
December 31, 2012
Long-term debt	$	3,030,943	$	3,030,943		-	$	3,030,943		-
Note receivable		2,000,000		2,640,000		-		2,640,000		-
Marketable securities (a)		206,000		206,000	$	206,000		-		-

^(a) Representing assets of the Company's Supplemental Executive Retirement Plan (trading securities). Presented within Other Assets in the condensed consolidated balance sheets.

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Taxes (Details Textual) (USD $)	6 Months Ended	12 Months Ended	36 Months Ended
	Jun. 30, 2013	Dec. 31, 2010	Dec. 31, 2006	Dec. 31, 2012
Effective Income Tax Rate Reconciliation, Percent, Total	34.00%
Vat And Withholding Taxes			$ 800,000
Interest Penalty Percentage			20.00%
Selling, General and Administrative Expense		185,000
Management Estimated Reserve For Tax	$ 70,000			$ 70,000

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Condensed Consolidated Balance Sheets [Parenthetical] (USD $)	Jun. 30, 2013	Dec. 31, 2012
Allowance for accounts receivable (in dollars)	$ 32,000	$ 35,700
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	3,000,000	3,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	30,000,000	30,000,000
Common stock, shares, issued	14,511,816	14,511,816
Common stock, shares, outstanding	12,615,595	12,619,640

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Subsequent Event

6 Months Ended

Jun. 30, 2013

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Note 9—Subsequent Event

In July 2013, a newly-formed, wholly-owned subsidiary of the Company has entered into a Technology License Agreement (TLA) with a privately-held company. The TLA provides the Company the exclusive license for certain intellectual property related to the nutritional ingredient lunasin and other soy-related peptides and proteins. In consideration, the Company will pay the licensor $2 million; $1.15 million paid at closing, with the remaining obligation paid over the next four years in a series of annual payments ranging from $150,000 to $250,000. Subject to certain minimum and maximum volume thresholds, the Company will also pay the licensor royalties of 5% of sales during the first five years of the TLA and royalties ranging from 1% to 3% of sales during the remaining life of the TLA. The transaction was closed on July 23, 2013, and was primarily funded by a borrowing of $1.1 million from the company’s revolving loan agreement. The Company anticipates accounting for the TLA as a long-term finite-lived asset to be amortized over the life of the agreement.

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Condensed Consolidated Statements of Cash Flows (USD $)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Operating activities:
Net income (loss)	$ (18,944)	$ 634,961
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	438,648	486,892
Stock-based compensation	22,237	78,984
Deferred income taxes	(103,000)	(35,000)
Foreign currency transaction (gain)/loss	99,779	14,401
(Increase) decrease in accounts receivable	50,322	(272,892)
(Increase) decrease in inventories	(410,442)	(171,933)
(Increase) decrease in refundable income taxes	(13,190)	96,387
(Increase) decrease in prepaid expenses and other current assets	(719,884)	(400,608)
(Increase) decrease in other assets	(25,343)	(3,155)
Increase (decrease) in income taxes payable	0	6,345
Increase (decrease) in accounts payable & accrued expenses and other noncurrent liabilities	280,525	910,806
Net cash (used in) provided by operating activities	(399,292)	1,345,188
Investing activities:
Purchase of property, plant and equipment	(130,797)	(191,523)
Purchase of note and mortgage secured by underlying property	0	(2,000,000)
Payments received on distributor note receivable	35,352	0
Payment of life insurance premiums	(259,726)	(259,121)
Net cash used in investing activities	(355,171)	(2,450,644)
Financing activities:
Principal payments on long-term borrowings	(392,008)	(288,681)
Common stock dividends paid	(252,380)	(250,283)
Purchase of stock for treasury	(5,364)	(46,904)
Net cash used in financing activities	(649,752)	(585,868)
Effect of exchange rate changes on cash and cash equivalents	(140,864)	23,127
Increase (decrease) in cash and cash equivalents	(1,545,079)	(1,668,197)
Cash and cash equivalents at beginning of period	5,801,042	7,174,213
Cash and cash equivalents at end of period	$ 4,255,963	$ 5,506,016

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Condensed Consolidated Balance Sheets (USD $)	Jun. 30, 2013	Dec. 31, 2012
Assets
Cash and cash equivalents	$ 4,255,963	$ 5,801,042
Accounts receivable, less allowances of $32,000 in 2013 and $35,700 in 2012	172,899	247,087
Accounts and note due from employees and distributors	141,372	109,346
Inventories
Finished goods	3,691,195	3,661,289
Raw materials	1,634,295	1,332,293
Sales aids and promotional materials	256,520	269,334
Total inventories	5,582,010	5,262,916
Refundable income taxes	22,261	10,632
Prepaid expenses and other current assets	1,396,611	688,669
Deferred income taxes	352,000	371,000
Total current assets	11,923,116	12,490,692
Other assets	231,365	206,022
Cash surrender value of life insurance	2,343,146	2,083,420
Note receivable due from distributor	1,876,119	1,923,000
Intangible assets, net	1,366,630	1,443,635
Property, plant and equipment:
Land and land improvements	883,563	883,563
Building	9,836,895	9,905,967
Machinery & equipment	3,769,327	3,767,910
Office equipment	1,194,484	1,231,215
Computer equipment & software	2,662,325	2,666,150
Property, plant, and equipment	18,346,594	18,454,805
Less: Accumulated depreciation	11,471,451	11,343,033
Net property, plant and equipment	6,875,143	7,111,772
Total assets	24,615,519	25,258,541
Liabilities and stockholders' equity
Trade accounts payable and other accrued expenses	3,441,196	2,924,111
Distributors' commissions payable	1,952,110	2,293,019
Sales taxes payable	171,354	283,700
Payroll and payroll taxes payable	354,061	484,170
Total accounts payable and accrued expenses	5,918,721	5,985,000
Current maturities of long-term debt	444,807	629,631
Total current liabilities	6,363,528	6,614,631
Noncurrent liabilities:
Long-term debt, less current maturities	2,194,129	2,401,312
Deferred income taxes	166,000	289,000
Other noncurrent liabilities	630,162	371,728
Total noncurrent liabilities	2,990,291	3,062,040
Stockholders' equity:
Preferred stock, par value $.001 per share; 3,000,000 shares authorized; -0- shares issued and outstanding in 2013 and 2012	0	0
Common stock, par value $.001 per share; 30,000,000 authorized; 14,511,816 shares issued and 12,615,595 shares outstanding as of 6/30/2013; 14,511,816 shares issued and 12,619,640 shares outstanding as of 12/31/2012	14,512	14,512
Additional paid-in capital	30,097,038	30,074,801
Accumulated deficit	(8,828,504)	(8,557,178)
Accumulated other comprehensive loss:
Foreign currency translation adjustment	(560,267)	(494,550)
Treasury stock	(5,461,079)	(5,455,715)
Total stockholders' equity	15,261,700	15,581,870
Total liabilities and stockholders' equity	$ 24,615,519	$ 25,258,541

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Long-Term Incentive Compensation Plan (Details Textuals) (USD $)	3 Months Ended	6 Months Ended	12 Months Ended
	Jun. 30, 2013	Jun. 30, 2013	Dec. 31, 2012
Other Liabilities, Noncurrent	$ 630,162	$ 630,162	$ 371,728
Incentive Compensation Plan [Member]
Performance Based Incentive Compensation Vest Based On Annual Increment Percentage			20.00%
Other Liabilities, Noncurrent			88,500
Deferred Compensation Arrangement with Individual, Compensation Expense	$ 156,100	$ 201,500

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Fair Value of Financial Instruments (Details) (USD $)	Jun. 30, 2013		Dec. 31, 2012
Long-term debt, Carrying Value	$ 2,638,936		$ 3,030,943
Note receivable, Carrying Value	1,964,648		2,000,000
Marketable securities, Carrying Value	231,000	[1]	206,000	[1]
Long-term debt, Fair Value	2,638,936		3,030,943
Note receivable, Fair Value	2,428,000		2,640,000
Marketable securities, Fair Value	231,000	[1]	206,000	[1]
Fair Value, Inputs, Level 1 [Member]
Long-term debt, Fair Value	0		0
Note receivable, Fair Value	0		0
Marketable securities, Fair Value	231,000	[1]	206,000	[1]
Fair Value, Inputs, Level 2 [Member]
Long-term debt, Fair Value	2,638,936		3,030,943
Note receivable, Fair Value	2,428,000		2,640,000
Marketable securities, Fair Value	0	[1]	0	[1]
Fair Value, Inputs, Level 3 [Member]
Long-term debt, Fair Value	0		0
Note receivable, Fair Value	0		0
Marketable securities, Fair Value	$ 0	[1]	$ 0	[1]

[1] Representing assets of the Company's Supplemental Executive Retirement Plan (trading securities). Presented within Other Assets in the condensed consolidated balance sheets.

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Long-Term Incentive Compensation Plan

6 Months Ended

Jun. 30, 2013

Compensation Related Costs [Abstract]

Compensation Related Costs, General [Text Block]

Note 8—Long-Term Incentive Compensation Plan

In July 2010, the Company’s Reliv Europe subsidiary entered into a long-term performance-based incentive compensation agreement with the subsidiary’s senior managers. The valuation of the compensation agreement is an EBITDA-based formula derived from the subsidiary’s financial performance and vests in 20% annual increments which began in April 2011. The amount of the incentive, if any, varies in accordance with a 24-month look-back of the subsidiary’s financial performance and the vesting provisions. Upon initial vesting, a manager may elect to exercise his/her put option to receive in cash some or all of his/her respective share of the incentive. Beginning April 2015, the Company may exercise a call option on one or more of the manager’s incentive amount; redeeming such amount in cash or a combination of cash and the Company’s common stock, depending upon the amount of the vested incentive. In the fourth quarter of 2012, the subsidiary’s 24-month financial performance became positive resulting in the recognition of compensation expense and a corresponding non-current liability of $88,500 in the Company’s 2012 consolidated financial statements. For the three months and six months ended June 30, 2013, compensation expense associated with this incentive plan was $156,100 and $201,500, respectively.

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Subsequent Event (Details Textual) (Intellectual Property [Member], Subsequent Event [Member], USD $)	1 Months Ended
	Jul. 23, 2013
Finitelived Intangible Asset Acquired	$ 2,000,000
Technology License Agreement, Contractual Obligation Paid	1,150,000
Technology License Agreement, Percentage of Royalties, First Five Years	5.00%
Line of Credit Facility, Amount Outstanding	1,150,000
Minimum [Member]
Technology License Agreement, Contractual Obligation, Due in One to Fourth Year	150,000
Technology License Agreement, Percentage of Royalties, Remaining Life	1.00%
Maximum [Member]
Technology License Agreement, Contractual Obligation, Due in One to Fourth Year	$ 250,000
Technology License Agreement, Percentage of Royalties, Remaining Life	3.00%

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Basic and Diluted Earnings (Loss) per Share (Tables)

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

Schedule of Calculation of Numerator and Denominator in Earnings Per Share [Table Text Block]

The following table sets forth the computation of basic and diluted earnings (loss) per share:

	Three months ended June 30				Six Months ended June 30
	2013		2012		2013		2012
Numerator:
Net income (loss)	$	(213,745)	$	102,577	$	(18,944)	$	634,961
Denominator:
Denominator for basic earnings (loss) per     share—weighted average shares		12,616,000		12,507,000		12,617,000		12,499,000
Dilutive effect of employee stock options     and other warrants		92,000		171,000		90,000		159,000
Denominator for diluted earnings (loss) per     share—adjusted weighted average shares		12,708,000		12,678,000		12,707,000		12,658,000
Basic earnings (loss) per share	$	(0.02)	$	0.01	$	(0.00)	$	0.05
Diluted earnings (loss) per share	$	(0.02)	$	0.01	$	(0.00)	$	0.05

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Taxes

6 Months Ended

Jun. 30, 2013

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note 7—Taxes

The interim financial statement provision for income taxes is different from the amounts computed by applying the United States federal statutory income tax rate of 34%. In summary, the reasons for these differences are as follows:

	Six Months ended June 30
	2013		2012
Income taxes at U.S. statutory rate	$	55,000	$	360,000
State income taxes, net of federal benefit		26,000		57,000
Higher/(lower) effective taxes on earnings in foreign countries		68,000		(44,000)
Foreign corporate income taxes		21,000		43,000
Other, net		10,000		8,000
	$	180,000	$	424,000

One of the Company's foreign subsidiaries is presently under local country audit for alleged deficiencies (totaling approximately $800,000 plus interest at 20% per annum) in value-added tax (VAT) and withholding tax for the years 2004 through 2006. The Company, in consultation with its legal counsel, believes that there are strong legal grounds that it should not be liable to pay the majority of the alleged tax deficiencies. As of December 31, 2010, management estimated and reserved approximately $185,000 for resolution of this matter and recorded this amount within Selling, General, and Administrative expense in the 2010 Consolidated Statement of Income. In 2011, the Company has made good faith deposits to the local tax authority under the tax agency's administrative judicial resolution process. As of June 30, 2013 and December 31, 2012, management's estimated reserve (net of deposits) for this matter is approximately $70,000. There has been no change in this matter during the first six months of 2013.

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Basic and Diluted Earnings (Loss) per Share

6 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

Note 2—Basic and Diluted Earnings (Loss) per Share

Basic earnings (loss) per common share are computed using the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share are computed using the weighted average number of common shares and potential dilutive common shares that were outstanding during the period. Potential dilutive common shares consist of outstanding stock options, outstanding stock warrants, and convertible preferred stock.

The following table sets forth the computation of basic and diluted earnings (loss) per share:

	Three months ended June 30				Six Months ended June 30
	2013		2012		2013		2012
Numerator:
Net income (loss)	$	(213,745)	$	102,577	$	(18,944)	$	634,961
Denominator:
Denominator for basic earnings (loss) per     share—weighted average shares		12,616,000		12,507,000		12,617,000		12,499,000
Dilutive effect of employee stock options     and other warrants		92,000		171,000		90,000		159,000
Denominator for diluted earnings (loss) per     share—adjusted weighted average shares		12,708,000		12,678,000		12,707,000		12,658,000
Basic earnings (loss) per share	$	(0.02)	$	0.01	$	(0.00)	$	0.05
Diluted earnings (loss) per share	$	(0.02)	$	0.01	$	(0.00)	$	0.05

Options and warrants to purchase 1,287,125 shares of common stock for the three months and six months ended June 30, 2013, respectively, were not included in the denominator for diluted earnings (loss) per share because their effect would be antidilutive or because the shares were deemed contingently issuable. Options and warrants to purchase 1,143,863 shares of common stock for the three months and six months ended June 30, 2012, respectively, were not included in the denominator for diluted earnings (loss) per share because their effect would be antidilutive or because the shares were deemed contingently issuable.

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Taxes (Tables)

6 Months Ended

Jun. 30, 2013

Income Tax Disclosure [Abstract]

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

In summary, the reasons for these differences are as follows:

	Six Months ended June 30
	2013		2012
Income taxes at U.S. statutory rate	$	55,000	$	360,000
State income taxes, net of federal benefit		26,000		57,000
Higher/(lower) effective taxes on earnings in foreign countries		68,000		(44,000)
Foreign corporate income taxes		21,000		43,000
Other, net		10,000		8,000
	$	180,000	$	424,000

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Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements and notes thereto have been prepared in accordance with the instructions to Form 10-Q and reflect all adjustments (which primarily include normal recurring accruals) which management believes are necessary to present fairly the financial position, results of operations and cash flows. These statements, however, do not include all information and 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. Interim results may not necessarily be indicative of results that may be expected for any other interim period or for the year as a whole. These financial statements should be read in conjunction with the audited consolidated financial statements and footnotes included in the annual report on Form 10-K for the year ended December 31, 2012, filed March 26, 2013 with the Securities and Exchange Commission.

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Stock-based Compensation (Details Textual) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Net Of Forfeitures			230,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price			$ 1.17
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term			5 years
Share-Based Compensation Arrangement By Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate			0.90%
Share-Based Compensation Arrangement By Share-Based Payment Award, Fair Value Assumptions, Expected Dividend Rate			1.60%
Share-Based Compensation Arrangement By Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate			52.70%
Share-based Compensation, Total			$ 22,237	$ 78,984
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Weighted Average Grant Date Fair Value			$ 0.48
Performance Based Options [Member]
Employee Service Share-Based Compensation, Nonvested Awards, Total Compensation Cost Not Yet Recognized, Stock Options	110,400		110,400
Vesting Stock Option [Member]
Share-based Compensation, Total	$ 10,576	$ 25,708	$ 22,237	$ 78,984

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Basic and Diluted Earnings (Loss) per Share (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Numerator:
Net income (loss) (in dollars)	$ (213,745)	$ 102,577	$ (18,944)	$ 634,961
Denominator:
Denominator for basic earnings (loss) per share—weighted average shares	12,616,000	12,507,000	12,617,000	12,499,000
Dilutive effect of employee stock options and other warrants	92,000	171,000	90,000	159,000
Denominator for diluted earnings (loss) per share—adjusted weighted average shares	12,708,000	12,678,000	12,707,000	12,658,000
Basic earnings (loss) per share (in dollars per share)	$ (0.02)	$ 0.01	$ 0.00	$ 0.05
Diluted earnings (loss) per share (in dollars per share)	$ (0.02)	$ 0.01	$ 0.00	$ 0.05

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Document And Entity Information	6 Months Ended
	Jun. 30, 2013	Aug. 02, 2013
Document Information [Line Items]
Entity Registrant Name	RELIV INTERNATIONAL INC
Entity Central Index Key	0000768710
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	RELV
Entity Common Stock, Shares Outstanding		12,615,595
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2013
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2013

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Basic and Diluted Earnings (Loss) per Share (Details Textual)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Antidilutive Securities Excluded From Computation Of Earnings Per Share, Amount	1,287,125	1,143,863	1,287,125	1,143,863