Integrated BioPharma Stock

Integrated BioPharma, Inc., together with its subsidiaries, engages primarily in manufacturing, distributing, marketing, and selling vitamins, nutritional supplements, and herbal products. The company’s customers are located primarily in the United States and Luxembourg.

Segments

The company operates through two segments, Contract Manufacturing and Other Nutraceutical Businesses.

Contract Manufacturing

This segment operated by Manhattan Drug Company, Inc. (MDC), which manufactures vitamins and nutritional supplements for sale to distributors, multilevel marketers, and specialized health-care providers.

Other Nutraceutical Businesses

This segment includes the operations of AgroLabs, Inc. (AgroLabs), which distributed healthful nutritional products for sale through major mass market, grocery and drug and vitamin retailers under the following brands: Peaceful Sleep, and Wheatgrass and other products introduced into the market using the AgroLabs name (these are referred to as the company’s branded products).

This segment also includes The Vitamin Factory (the ‘Vitamin Factory’), which sells private label MDC products, as well as the company’s AgroLabs products, through the Internet; IHT Health Products, Inc. (IHT), a distributor of fine natural botanicals, including multi minerals produced under a license agreement; MDC Warehousing and Distribution, Inc., a service provider for warehousing and fulfilment services; and Chem International, Inc., a distributor of certain raw materials for DSM Nutritional Products LLC. The Vitamin Factory had no products available for sale and AgroLabs had no sale of its branded products in the year ended June 30, 2022.

Major Customers

In the year ended June 30, 2022, a significant portion of the company’s consolidated net sales, approximately 90%, were concentrated among two customers, Life Extension Quality Supplements and Vitamins, Inc. (Life Extension) and Herbalife Nutrition LTD (Herbalife), both customers in the company’s Contract Manufacturing segment. Life Extension and Herbalife represented approximately 67% and 26% of the company’s Contract Manufacturing segment’s net sales in the year ended June 30, 2022. Thermosource Tooling and Manufacturing and ThermoFisher Scientific (customers of the company’s Other Nutraceutical Businesses segment), while not significant customers of the company’s consolidated net sales, represented approximately 40% and 19% of the Other Nutraceutical Businesses net sales in the year ended June 30, 2022.

Suppliers

The company has one principal supplier for its Other Nutraceutical Businesses segment, DSM Nutritional Products LLC and several suppliers in the company’s Contract Manufacturing segment.

Development and Supply Agreement

Effective July 15, 2009, the company entered into development and supply agreements with Herbalife International of America, Inc. and Herbalife International of Luxembourg S.à.R.L, subsidiaries of Herbalife, pursuant to which the company develops, manufactures, and supplies certain nutritional products to Herbalife. This agreement was amended on May 14, 2019 to extend the term through December 31, 2022.

Seasonality

The nutraceutical business tends to be seasonal. The company has found that in its first fiscal quarter ending on September 30th of each year, orders for its branded proprietary nutraceutical products usually slow (absent the addition of new customers or a new product launch with a significant first time order), as buyers in various markets may have purchased sufficient inventory to carry them through the summer months. Conversely, in the company’s second fiscal quarter, ending on December 31st of each year, orders for its products increase as the demand for the company’s branded nutraceutical products, as well as sales orders from the company’s customers in the company’s Contract Manufacturing segment, seem to increase in late December to early January as consumers become health conscious as they enter the new year.

Government Regulations

The manufacturing, processing, formulation, packaging, labeling and advertising of the company’s products are subject to regulation by a number of federal agencies, including the Food and Drug Administration (FDA), the Federal Trade Commission (FTC), the United States Postal Service, the Consumer Product Safety Commission, and the United States Department of Agriculture. The FDA is primarily responsible for the regulation of the manufacturing, labeling and sale of the company’s products. The operation of the company’s vitamin manufacturing facility is subject to regulation by the FDA as a dietary supplement manufacturing facility.

The United States Postal Service and the FTC regulate advertising claims with respect to the company’s products. In addition, the company manufactures and markets certain of its products in compliance with the guidelines promulgated by the United States Pharmacopoeia Convention, Inc. (USP) and other voluntary standards organizations.

As authorized by the Dietary Supplement Health and Education Act of 1994, the FDA adopted Good Manufacturing Practices (GMP) specifically for dietary supplements (21 CFR Part 111). These GMP regulations, which became effective in June 2008, are more detailed than the GMPs that previously applied to dietary supplements and require, among other things, dietary supplements to be prepared, packaged and held in compliance with specific rules, and require quality controls similar to those required by GMP regulations for drugs. The company’s manufacturing and distribution practices comply with these rules.

The FTC regulates the marketing practices and advertising of all the company’s products.

History

Integrated BioPharma, Inc., a Delaware corporation, was incorporated in 1980.