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<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>UNITED STATES SECURITIES AND EXCHANGE COMMISSION</b></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Washington D.C. 20549</b></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>____________</b></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>FORM 10-Q</b></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&#9746;&nbsp;<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934</font></b></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">For the quarterly period ended <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31, 2016</font></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>OR</b></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">&#9744;&nbsp;<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;<b>Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934</b></font></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">For the transition period from to</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt 0pt 0pt 55.2%; text-align: center; text-indent: -288pt; font-family: Times New Roman, Times, serif; font-size: 10pt;">Commission File Number <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>001-31668</u></font></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 12pt;"><u><b>INTEGRATED BIOPHARMA, INC.</b></u></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(Exact name of registrant, as specified in its charter)</i></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>&nbsp;</i></p>

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			<td style="width: 1.9px;">&nbsp;</td>
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			<p style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;"><u><b>Delaware</b></u></p>
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			<p style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;"><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><u><b>22-2407475</b></u></font></p>
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			<td style="width: 2px;">&nbsp;</td>
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			<p style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;"><i>(State or other jurisdiction of </i></p>

			<p style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;"><i>incorporattion or organization)</i></p>
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			<p style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;"><i><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">(I.R.S. Employer</font></i></p>

			<p style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;"><i><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">Identification No.)</font></i></p>
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<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>&nbsp;</i></p>

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			<p style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;"><u><b>225 Long Ave., Hillside, New Jersey</b></u></p>
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			<p style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;"><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><u><b>07205</b></u></font></p>
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			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(Address of principal executive offices)</i></p>
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			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>&nbsp;<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;(Zip Code)</font></i></p>
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<p style="margin: 0pt 0pt 0pt 62.1%; text-align: center; text-indent: -324pt; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></i></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>&nbsp;</i></p>

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			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><u><b>(888) 319-6962</b></u></p>
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			<td colspan="2">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(Registrant</i><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>&rsquo;s telephone number, including Area Code)</i></font></p>
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<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

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			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><u><b>Not Applicable</b></u></p>
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			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(Former name, former address and forme</i><i>r fiscal year, if changed since last report)</i></p>
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<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

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			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Yes <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>X </u>&nbsp;&nbsp;&nbsp;No ____</font></p>
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<p style="margin: 0pt; text-align: justify; text-indent: 108pt; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">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 &ldquo;large accelerated filer,&rdquo; &ldquo;accelerated filer&rdquo; and &ldquo;smaller reporting company&rdquo; in Rule<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;12b-2 of the Exchange Act. (Check one): </font></p>

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			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>
			</td>
			<td style="width: 2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>
			</td>
			<td style="width: 23.5%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>
			</td>
			<td style="width: 2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>
			</td>
			<td style="width: 23.5%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>
			</td>
			<td style="width: 2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>
			</td>
			<td style="width: 23.4%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>
			</td>
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			<td style="width: 23.5%; vertical-align: top;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Large accelerated filer<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&#61551; </font></p>
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			<td style="width: 2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>
			</td>
			<td style="width: 23.5%; vertical-align: top;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Accelerated filer<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&#61551; </font></p>
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			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>
			</td>
			<td style="width: 23.5%; vertical-align: top;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Non-accelerated filer<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&#61551;</font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</font></p>
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			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>
			</td>
			<td style="width: 23.4%; vertical-align: top;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Smaller reporting company<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&#9745;</font></p>
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<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

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			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Indicate by check whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).</p>
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			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Yes <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>&nbsp;&nbsp;&nbsp;</u>&nbsp;&nbsp;&nbsp;No __<u>X</u>__</font></p>
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<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; text-indent: 108pt; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Applicable only to Corporate Issuers:</b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

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			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">The number of shares outstanding of each of the issuer<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&rsquo;s class of common stock, as of the latest practicable date:</font></p>
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			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>Class</i></p>
			</td>
			<td style="width: 489.27px;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>Outstanding at </i><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>February 10, 2017</i></font></p>
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			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>Common Stock, $0.002 par value</u></p>
			</td>
			<td style="width: 489.27px;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><u> 21,130,174 Shares</u></font></p>
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<p style="margin: 0pt; text-align: left; text-indent: 36pt; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

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<div id="PGNUM" style="width: 100%; text-align: center;">&nbsp;</div>

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<p style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt;"><b>INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES</b></p>

<p style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt;"><b>&nbsp;</b></p>

<p style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt;"><b>FORM 10-Q QUARTERLY REPORT</b></p>

<p style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt;"><b>For the <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">Six Months Ended December 31, 2016</font></b></p>

<p style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt;"><b>INDEX</b></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

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			<td style="width: 78.2%; vertical-align: top;">&nbsp;</td>
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			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><u><b>Page</b></u></p>
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			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Part I. Financial Information</b></p>
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			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Item 1.</p>
			</td>
			<td style="width: 78.2%; vertical-align: top;">
			<p style="margin: 0pt 0pt 0pt 11.05pt; text-align: left; text-indent: -11.05pt; font-family: Times New Roman, Times, serif; font-size: 10pt;">Condensed Consolidated Statements of Operations for the <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">Three and Six Months Ended&nbsp;December 31, 2016 and 2015 (unaudited)</font></p>
			</td>
			<td style="width: 8%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">2</p>
			</td>
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			<td style="width: 13.8%; vertical-align: top;">&nbsp;</td>
			<td style="width: 78.2%; vertical-align: top;">
			<p style="margin: 0pt 0pt 0pt 11.05pt; text-align: left; text-indent: -11.05pt; font-family: Times New Roman, Times, serif; font-size: 10pt;">Condensed Consolidated Balance Sheets as of <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31, 2016 and </font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">June 30, 2016&nbsp;</font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">(unaudited)</font></p>
			</td>
			<td style="width: 8%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">3</p>
			</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">&nbsp;</td>
			<td style="width: 78.2%; vertical-align: top;">
			<p style="margin: 0pt 0pt 0pt 11.05pt; text-align: left; text-indent: -11.05pt; font-family: Times New Roman, Times, serif; font-size: 10pt;">Condensed Consolidated Statements of Cash Flows for the <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">Six Months Ended&nbsp;December 31, 2016 and 2015 (unaudited)</font></p>
			</td>
			<td style="width: 8%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">4</p>
			</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">&nbsp;</td>
			<td style="width: 78.2%; vertical-align: top;">
			<p style="margin: 0pt 0pt 0pt 11.05pt; text-align: left; text-indent: -11.05pt; font-family: Times New Roman, Times, serif; font-size: 10pt;">Notes to Condensed Consolidated Statements</p>
			</td>
			<td style="width: 8%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">5</p>
			</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">&nbsp;</td>
			<td style="width: 78.2%; vertical-align: top;">&nbsp;</td>
			<td style="width: 8%; vertical-align: top;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Item 2.</p>
			</td>
			<td style="width: 78.2%; vertical-align: top;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Management<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations</font></p>
			</td>
			<td style="width: 8%; vertical-align: top;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">1<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">6</font></p>
			</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">&nbsp;</td>
			<td style="width: 78.2%; vertical-align: top;">&nbsp;</td>
			<td style="width: 8%; vertical-align: top;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Item 3.</p>
			</td>
			<td style="width: 78.2%; vertical-align: top;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Quantitative and Qualitative Disclosures about Market Risk</p>
			</td>
			<td style="width: 8%; vertical-align: top;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">2<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">3</font></p>
			</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">&nbsp;</td>
			<td style="width: 78.2%; vertical-align: top;">&nbsp;</td>
			<td style="width: 8%; vertical-align: top;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Item 4.</p>
			</td>
			<td style="width: 78.2%; vertical-align: top;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Controls and Procedures</p>
			</td>
			<td style="width: 8%; vertical-align: top;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">2<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">3</font></p>
			</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">&nbsp;</td>
			<td style="width: 78.2%; vertical-align: top;">&nbsp;</td>
			<td style="width: 8%; vertical-align: top;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">&nbsp;</td>
			<td style="width: 78.2%; vertical-align: top;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Part II. Other Information</b></p>
			</td>
			<td style="width: 8%; vertical-align: top;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">&nbsp;</td>
			<td style="width: 78.2%; vertical-align: top;">&nbsp;</td>
			<td style="width: 8%; vertical-align: top;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Item 1.</p>
			</td>
			<td style="width: 78.2%; vertical-align: top;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Legal Proceedings</p>
			</td>
			<td style="width: 8%; vertical-align: top;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">2<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">4</font></p>
			</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">&nbsp;</td>
			<td style="width: 78.2%; vertical-align: top;">&nbsp;</td>
			<td style="width: 8%; vertical-align: top;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Item 1A.</p>
			</td>
			<td style="width: 78.2%; vertical-align: top;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Risk Factors</p>
			</td>
			<td style="width: 8%; vertical-align: top;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">2<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">4</font></p>
			</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">&nbsp;</td>
			<td style="width: 78.2%; vertical-align: top;">&nbsp;</td>
			<td style="width: 8%; vertical-align: top;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Item 2.</p>
			</td>
			<td style="width: 78.2%; vertical-align: top;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Unregistered Sales of Equity Securities and Use of Proceeds</p>
			</td>
			<td style="width: 8%; vertical-align: top;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">2<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">4</font></p>
			</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">&nbsp;</td>
			<td style="width: 78.2%; vertical-align: top;">&nbsp;</td>
			<td style="width: 8%; vertical-align: top;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Item 3.</p>
			</td>
			<td style="width: 78.2%; vertical-align: top;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Defaults Upon Senior Securities</p>
			</td>
			<td style="width: 8%; vertical-align: top;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">2<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">4</font></p>
			</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">&nbsp;</td>
			<td style="width: 78.2%; vertical-align: top;">&nbsp;</td>
			<td style="width: 8%; vertical-align: top;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Item 4.</p>
			</td>
			<td style="width: 78.2%; vertical-align: top;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Mine Safety Disclosure</p>
			</td>
			<td style="width: 8%; vertical-align: top;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">2<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">4</font></p>
			</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">&nbsp;</td>
			<td style="width: 78.2%; vertical-align: top;">&nbsp;</td>
			<td style="width: 8%; vertical-align: top;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Item 5.</p>
			</td>
			<td style="width: 78.2%; vertical-align: top;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Other Information</p>
			</td>
			<td style="width: 8%; vertical-align: top;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">2<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">4</font></p>
			</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">&nbsp;</td>
			<td style="width: 78.2%; vertical-align: top;">&nbsp;</td>
			<td style="width: 8%; vertical-align: top;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Item 6.</p>
			</td>
			<td style="width: 78.2%; vertical-align: top;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Exhibits</p>
			</td>
			<td style="width: 8%; vertical-align: top;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">2<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">4</font></p>
			</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">&nbsp;</td>
			<td style="width: 78.2%; vertical-align: top;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Other</b></p>
			</td>
			<td style="width: 8%; vertical-align: top;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Signatures</p>
			</td>
			<td style="width: 78.2%; vertical-align: top;">&nbsp;</td>
			<td style="width: 8%; vertical-align: top;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">2<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">5</font></p>
			</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">&nbsp;</td>
			<td style="width: 78.2%; vertical-align: top;">&nbsp;</td>
			<td style="width: 8%; vertical-align: top;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">&nbsp;</td>
			<td style="width: 78.2%; vertical-align: top;">&nbsp;</td>
			<td style="width: 8%; vertical-align: top;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 13.8%; vertical-align: top;">&nbsp;</td>
			<td style="width: 78.2%; vertical-align: top;">&nbsp;</td>
			<td style="width: 8%; vertical-align: top;">&nbsp;</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center;">&nbsp;</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Cautionary Statement Regarding Forward-Looking Statements</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">Certain statements in this Quarterly Report on Form 10-Q may constitute &ldquo;forward-looking&rdquo; statements as defined in Section 27A of the Securities Act of 1933, as amended (the &ldquo;Securities Act&rdquo;), Section 21E of the Securities Act of 1934, as amended (the &ldquo;Exchange Act&rdquo;), the Private Securities Litigation Reform Act of 1995 (the &ldquo;PSLRA&rdquo;) or in releases made by the Securities and Exchange Commission (&ldquo;SEC&rdquo;), all as may be amended from time to time. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of Integrated BioPharma, Inc. and its subsidiaries (the &ldquo;Company&rdquo;) or industry results, to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors including, among others, changes in general economic and business conditions; loss of market share through competition; introduction of competing products by other companies; the timing of regulatory approval and the introduction of new products by the Company; changes in industry capacity; pressure on prices from competition or from purchasers of the Company&#39;s products; regulatory changes in the pharmaceutical manufacturing industry and nutraceutical industry; regulatory obstacles to the introduction of new technologies or products that are important to the Company; availability of qualified personnel; the loss of any significant customers or suppliers; and other factors both referenced and not referenced in the Company&rsquo;s Annual Report on Form 10-K for the fiscal year ended June 30, 2016 (&ldquo;Form 10-K&rdquo;), as filed with the SEC. Statements that are not historical fact are forward-looking statements. Forward-looking statements can be identified by, among other things, the use of forward-looking language, such as the words, &ldquo;plan&rdquo;, &ldquo;believe&rdquo;, &ldquo;expect&rdquo;, &ldquo;anticipate&rdquo;, &ldquo;intend&rdquo;, &ldquo;estimate&rdquo;, &ldquo;project&rdquo;, &ldquo;may&rdquo;, &ldquo;will&rdquo;, &ldquo;would&rdquo;, &ldquo;could&rdquo;, &ldquo;should&rdquo;, &ldquo;seeks&rdquo;, or &ldquo;scheduled to&rdquo;, or other similar words, or the negative of these terms or other variations of these terms or comparable language, or by discussion of strategy or intentions. These cautionary statements are being made pursuant to the Securities Act, the Exchange Act and the PSLRA with the intention of obtaining the benefits of the &ldquo;safe harbor&rdquo; provisions of such laws. The Company cautions investors that any forward-looking statements made by the Company are not guarantees or indicative of future performance. Important assumptions and other important factors that could cause actual results to differ materially from those forward-looking statements with respect to the Company, include, but are not limited to, the risks and uncertainties affecting its businesses described in Item 1 of the Company&rsquo;s Annual Report filed on Form 10-K for the year ended </font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">June 30, 2016</font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> and in other securities filings by the Company. Although the Company believes that its plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, actual results could differ materially from a projection or assumption in any of the forward-looking statements. The Company&rsquo;s future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The forward-looking statements contained in this Quarterly Report on Form 10-Q are made only as of the date hereof and the Company does not have or undertake any obligation to update or revise any forward-looking statements whether as a result of new information, subsequent events or otherwise, unless otherwise required by law.</font></p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: Times New Roman; font-size: 10pt;">-1-</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>ITEM 1. FINANCIAL STATEMENTS </b></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="TBL32" style="margin: 0pt 7.5%; width: 85%; text-indent: 0px; font-size: 11pt;">

		<tr>
			<td colspan="11" style="width: 100%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES</b></p>
			</td>
		</tr>
		<tr>
			<td colspan="11" style="width: 100%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS</b></p>
			</td>
		</tr>
		<tr>
			<td colspan="11" style="width: 100%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>(in thousands, except for share and per share amounts)</b></i></p>
			</td>
		</tr>
		<tr>
			<td colspan="11" style="width: 100%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>(Unaudited)</b></p>
			</td>
		</tr>
		<tr>
			<td style="width: 34.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 117.41px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 13.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 9.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 34.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td colspan="4" style="width: 262.26px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Three months ended</b></p>
			</td>
			<td colspan="3" style="width: 261.73px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Six months ended</b></p>
			</td>
		</tr>
		<tr>
			<td style="width: 34.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td colspan="3" style="width: 191.45px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31,</p>
			</td>
			<td style="width: 9.26px; vertical-align: middle;">&nbsp;</td>
			<td colspan="3" style="width: 261.73px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31,</p>
			</td>
		</tr>
		<tr>
			<td style="width: 34.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 117.41px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2016</p>
			</td>
			<td style="width: 13.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2015</p>
			</td>
			<td style="width: 9.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2016</p>
			</td>
			<td style="width: 1.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2015</p>
			</td>
		</tr>
		<tr>
			<td style="width: 34.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 117.41px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 13.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 9.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 34.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Sales, net</p>
			</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 117.41px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 12,372</p>
			</td>
			<td style="width: 13.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 10,413</p>
			</td>
			<td style="width: 9.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 25,053</p>
			</td>
			<td style="width: 1.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 19,859</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 34.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 117.41px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 13.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 9.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 34.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Cost of sales</p>
			</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 117.41px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10,902</p>
			</td>
			<td style="width: 13.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9,438</p>
			</td>
			<td style="width: 9.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21,432</p>
			</td>
			<td style="width: 1.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17,569</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 34.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 117.41px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 13.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 9.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 34.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Gross profit</p>
			</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 117.41px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,470</p>
			</td>
			<td style="width: 13.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;975</p>
			</td>
			<td style="width: 9.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,621</p>
			</td>
			<td style="width: 1.4%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,290</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 34.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 117.41px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 13.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 9.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="3" style="width: 221.69px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Selling and administrative expenses</p>
			</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 117.41px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;900</p>
			</td>
			<td style="width: 13.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;807</p>
			</td>
			<td style="width: 9.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,693</p>
			</td>
			<td style="width: 1.4%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,637</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 34.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 117.41px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 13.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 9.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="2" style="width: 34.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Operating income</p>
			</td>
			<td style="width: 1px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 117.41px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;570</p>
			</td>
			<td style="width: 13.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;168</p>
			</td>
			<td style="width: 9.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,928</p>
			</td>
			<td style="width: 1.4%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;653</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 34.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 117.41px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 13.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 9.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="3" style="width: 221.69px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Other income (expense), net</p>
			</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 117.41px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 13.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 9.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="2" style="width: 34.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Interest expense</p>
			</td>
			<td style="width: 1px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 117.41px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(227)</p>
			</td>
			<td style="width: 13.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(243)</p>
			</td>
			<td style="width: 9.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(459)</p>
			</td>
			<td style="width: 1.4%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(480)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="4" style="width: 230.54px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Change in fair value of derivative liabilities</p>
			</td>
			<td style="width: 117.41px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(364)</p>
			</td>
			<td style="width: 13.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6</p>
			</td>
			<td style="width: 9.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(731)</p>
			</td>
			<td style="width: 1.4%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="2" style="width: 34.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Other income</p>
			</td>
			<td style="width: 1px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 117.41px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15</p>
			</td>
			<td style="width: 13.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26</p>
			</td>
			<td style="width: 9.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;31</p>
			</td>
			<td style="width: 1.4%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;50</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="3" style="width: 221.69px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Other income (expense), net</p>
			</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 117.41px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(576)</p>
			</td>
			<td style="width: 13.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(211)</p>
			</td>
			<td style="width: 9.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1,159)</p>
			</td>
			<td style="width: 1.4%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(427)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 34.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 117.41px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 13.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 9.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="3" style="width: 221.69px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">(Loss) income before income taxes</p>
			</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 117.41px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)</p>
			</td>
			<td style="width: 13.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(43)</p>
			</td>
			<td style="width: 9.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; 769</p>
			</td>
			<td style="width: 1.4%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;226</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 34.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 117.41px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 13.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 9.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="2" style="width: 34.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Income tax expense, net</p>
			</td>
			<td style="width: 1px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 117.41px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;71</p>
			</td>
			<td style="width: 13.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20</p>
			</td>
			<td style="width: 9.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;197</p>
			</td>
			<td style="width: 1.4%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;48</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 34.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 117.41px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 13.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 9.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="2" style="width: 34.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Net (loss) income</p>
			</td>
			<td style="width: 1px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 117.41px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ (77)</p>
			</td>
			<td style="width: 13.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ (63)</p>
			</td>
			<td style="width: 9.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 572</p>
			</td>
			<td style="width: 1.4%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 178</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 34.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 117.41px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 13.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 9.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="4" style="width: 230.54px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Basic net (loss) income per common share</p>
			</td>
			<td style="width: 117.41px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ (0.00)</p>
			</td>
			<td style="width: 13.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ (0.00)</p>
			</td>
			<td style="width: 9.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 0.03</p>
			</td>
			<td style="width: 1.4%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 0.01</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 34.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 117.41px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 13.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 9.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="4" style="width: 230.54px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Diluted net (loss) income per common share</p>
			</td>
			<td style="width: 117.41px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ (0.00)</p>
			</td>
			<td style="width: 13.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ (0.00)</p>
			</td>
			<td style="width: 9.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 0.03</p>
			</td>
			<td style="width: 1.4%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 0.01</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 34.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 117.41px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 13.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 9.26px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="4" style="width: 230.54px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Weighted average common shares outstanding - basic</p>
			</td>
			<td style="width: 117.41px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21,106,098</p>
			</td>
			<td style="width: 13.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21,105,174</p>
			</td>
			<td style="width: 9.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21,105,636</p>
			</td>
			<td style="width: 1.4%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21,105,174</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="3" style="width: 221.69px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Add: Equivalent shares outstanding</p>
			</td>
			<td style="width: 6.54px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 117.41px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</p>
			</td>
			<td style="width: 13.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</p>
			</td>
			<td style="width: 9.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; 567,964</p>
			</td>
			<td style="width: 1.4%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="4" style="width: 230.54px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Weighted average common shares outstanding - diluted</p>
			</td>
			<td style="width: 117.41px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21,106,098</p>
			</td>
			<td style="width: 13.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 116.73px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21,105,174</p>
			</td>
			<td style="width: 9.26px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 118.73px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21,673,600</p>
			</td>
			<td style="width: 1.4%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.8%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21,105,174</p>
			</td>
		</tr>

</table>

<p style="margin: 0pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">See accompanying notes to condensed consolidated financial statements.</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: Times New Roman; font-size: 10pt;">-2-</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt 0pt 0pt 9pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 9pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 9pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 9pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 9pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 9pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 9pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 9pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 9pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 9pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="TBL30" style="margin: 0pt 7.5%; width: 85%; text-indent: 0px; font-size: 11pt;">

		<tr>
			<td colspan="10" style="width: 100%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>INTEGRATED BIOPHARMA, INC.&nbsp;AND SUBSIDIARIES</b></p>
			</td>
		</tr>
		<tr>
			<td colspan="10" style="width: 100%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>CONDENSED CONSOLIDATED BALANCE SHEETS</b></p>
			</td>
		</tr>
		<tr>
			<td colspan="10" style="width: 100%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>(in thousands, except for share and per share amounts)</b></i></p>
			</td>
		</tr>
		<tr>
			<td colspan="10" style="width: 100%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>(Unaudited)</b></p>
			</td>
		</tr>
		<tr>
			<td style="width: 50.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>
			</td>
			<td colspan="3" style="width: 1.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>
			</td>
			<td colspan="6" style="width: 48.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>
			</td>
		</tr>
		<tr>
			<td style="width: 50.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31,</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">June 30,</p>
			</td>
		</tr>
		<tr>
			<td style="width: 50.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2016</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2016</p>
			</td>
		</tr>
		<tr>
			<td style="width: 50.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Assets</b></p>
			</td>
			<td style="width: 0.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td colspan="2" style="width: 51%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Current Assets:</b></p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 50.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Cash</p>
			</td>
			<td style="width: 0.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 66</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 395</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="3" style="width: 51.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Accounts receivable, net</p>
			</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,420</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,135</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="2" style="width: 51%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Inventories</p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,827</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7,756</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="3" style="width: 51.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Investment in iBio, Inc.</p>
			</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;501</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;501</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="2" style="width: 51%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Other current assets</p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;273</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;283</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="3" style="width: 51.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Total current assets</b></p>
			</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13,087</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12,070</p>
			</td>
		</tr>
		<tr>
			<td style="width: 50.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="3" style="width: 51.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Property and equipment, net</p>
			</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,498</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,567</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="3" style="width: 51.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Security deposits and other assets</p>
			</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td nowrap="false" style="padding: 0px; width: 24%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;413</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td nowrap="false" style="padding: 0px; width: 23%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;448</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="2" style="width: 51%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Total Assets</b></p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 14,998</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 14,085</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 50.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td colspan="4" style="width: 51.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Liabilities and Stockholders&#39; Deficiency:</b></p>
			</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td colspan="2" style="width: 51%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Current Liabilities:</b></p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="4" style="width: 51.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Advances under revolving credit facility</p>
			</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 4,004</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 4,210</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="5" style="width: 52%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Accounts payable (includes $74 and $331 due to related party)</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,635</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,469</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="4" style="width: 51.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Accrued expenses and other current liabilities</p>
			</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,403</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,211</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="3" style="width: 51.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Current portion of long term debt</p>
			</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;946</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;934</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="3" style="width: 51.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Total current liabilities</b></p>
			</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11,988</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11,824</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 50.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td colspan="2" style="width: 51%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Long term debt</p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,707</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,306</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="5" style="width: 52%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Subordinated convertible note, net - CD Financial, LLC</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,225</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,206</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="2" style="width: 51%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Derivative liabilities</p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;808</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;76</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="2" style="width: 51%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Total liabilities</b></p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22,728</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22,412</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 50.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="3" style="width: 51.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Commitments and Contingencies</b></p>
			</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 50.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td colspan="3" style="width: 51.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Stockholders&#39; Deficiency:</b></p>
			</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td colspan="5" style="width: 52%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Common Stock, $0.002 par value; 50,000,000 shares authorized;</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td colspan="7" style="width: 52.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">21,145,074 and 21,140,074 shares issued, 21,110,174 and 21,105,174 shares outstanding</p>
			</td>
			<td style="width: 24.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;42</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;42</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="2" style="width: 51%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Additional paid-in capital</p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;44,732</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;44,707</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="2" style="width: 51%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Accumulated deficit</p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(52,405)</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(52,977)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="4" style="width: 51.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Less: Treasury stock, at cost, 34,900 shares</p>
			</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(99)</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(99)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="3" style="width: 51.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Total Stockholders&#39; Deficiency</b></p>
			</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td nowrap="false" style="padding: 0px; width: 24%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7,730)</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td nowrap="false" style="padding: 0px; width: 23%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8,327)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="5" style="width: 52%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Total Liabilities and Stockholders&#39; Deficiency</b></p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 14,998</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 14,085</p>
			</td>
		</tr>
		<tr>
			<td style="width: 50.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 50.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 50.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 50.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 50.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 50.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 50.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 50.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 50.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 50.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 50.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td colspan="10" style="width: 52.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">See accompanying notes to condensed consolidated financial statements.</p>
			</td>
		</tr>
		<tr>
			<td style="width: 50.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 24.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 23%; vertical-align: middle;">&nbsp;</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 9pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: Times New Roman; font-size: 10pt;">-3-</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="TBL32" style="margin: 0pt 7.5%; width: 85%; text-indent: 0px; font-size: 11pt;">

		<tr>
			<td colspan="7" style="width: 100%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES</b></p>
			</td>
		</tr>
		<tr>
			<td colspan="7" style="width: 100%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS</b></p>
			</td>
		</tr>
		<tr>
			<td colspan="7" style="width: 100%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>(in thousands, except share and per share amounts)</b></i></p>
			</td>
		</tr>
		<tr>
			<td colspan="7" style="width: 100%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>(Unaudited)</b></p>
			</td>
		</tr>
		<tr>
			<td style="width: 58.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 58.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td colspan="3" style="width: 40.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Six months ended</p>
			</td>
		</tr>
		<tr>
			<td style="width: 58.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td colspan="3" style="width: 40.9%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31,</p>
			</td>
		</tr>
		<tr>
			<td style="width: 58.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2016</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2015</p>
			</td>
		</tr>
		<tr>
			<td colspan="2" style="width: 58.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Cash flows from operating activities:</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 58.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Net income</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 572</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 178</p>
			</td>
		</tr>
		<tr>
			<td colspan="2" style="width: 58.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Adjustments to reconcile net income to net cash</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 58.7%; vertical-align: middle;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">from operating activities:</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="2" style="width: 58.8%; vertical-align: middle;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Depreciation and amortization</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;202</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;171</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="3" style="width: 59%; vertical-align: middle;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Accretion of financing instruments and other non-cash interest</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;52</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;121</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 58.7%; vertical-align: middle;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Stock based compensation</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="2" style="width: 58.8%; vertical-align: middle;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Change in fair value of derivative liabilities</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;731</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 58.7%; vertical-align: middle;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Gain on sale of fixed assets</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)</p>
			</td>
		</tr>
		<tr>
			<td colspan="2" style="width: 58.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Changes in operating assets and liabilities:</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 58.7%; vertical-align: middle;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Decrease (increase) in:</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 58.7%; vertical-align: middle;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Accounts receivable</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1,285)</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1,353)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 58.7%; vertical-align: middle;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Inventories</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(70)</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1,240)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 58.7%; vertical-align: middle;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Other current assets</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(34)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="2" style="width: 58.8%; vertical-align: middle;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Security deposits and other assets</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(48)</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</p>
			</td>
		</tr>
		<tr>
			<td style="width: 58.7%; vertical-align: middle;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">(Decrease) increase in:</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 58.7%; vertical-align: middle;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Accounts payable</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;166</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,378</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="2" style="width: 58.8%; vertical-align: middle;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Accrued expenses and other liabilities</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;191</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(388)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="3" style="width: 59%; vertical-align: middle;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Net cash provided by (used in) operating activities</b></p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;547</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1,156)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 58.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td colspan="2" style="width: 58.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Cash flows from investing activities:</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="2" style="width: 58.8%; vertical-align: middle;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Purchase of property and equipment</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(83)</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(40)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="2" style="width: 58.8%; vertical-align: middle;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Cash proceeds from sale of equipment</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td nowrap="false" style="padding: 0px; width: 20%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td nowrap="false" style="padding: 0px; width: 20%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="2" style="width: 58.8%; vertical-align: middle;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Net cash used in investing activities</b></p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(83)</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(38)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 58.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td colspan="2" style="width: 58.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Cash flows from financing activities:</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td colspan="2" style="width: 58.8%; vertical-align: middle;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Advances under revolving credit facility</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;23,040</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19,022</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="2" style="width: 58.8%; vertical-align: middle;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Proceeds from Line of Credit Note</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;43</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="3" style="width: 59%; vertical-align: middle;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Repayments of advances under revolving credit facility</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(23,246)</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(17,518)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="2" style="width: 58.8%; vertical-align: middle;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Repayments under term note payables</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(515)</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(300)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="2" style="width: 58.8%; vertical-align: middle;">
			<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Repayments under capitalized lease obligations</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td nowrap="false" style="padding: 0px; width: 20%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(72)</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td nowrap="false" style="padding: 0px; width: 20%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(64)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="3" style="width: 59%; vertical-align: middle;">
			<p style="margin: 0pt 0pt 0pt 18pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Net cash (used in) provided by financing activities</b></p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(793)</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,183</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 58.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 58.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Net decrease in cash</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(329)</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 58.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Cash at beginning of period</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td nowrap="false" style="padding: 0px; width: 20%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;395</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td nowrap="false" style="padding: 0px; width: 20%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;71</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 58.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Cash at end of period</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ &nbsp; &nbsp;66</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ &nbsp; &nbsp;60</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 58.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td colspan="2" style="width: 58.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Supplemental disclosures of cash flow information:</b></p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td colspan="2" style="width: 58.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Cash paid during the periods for:</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 58.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Interest</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 472</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 344</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 58.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Income taxes</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 227</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ &nbsp;54</p>
			</td>
		</tr>
		<tr>
			<td colspan="2" style="width: 58.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Supplemental disclosures of non-cash transactions:</b></p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="3" style="width: 59%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Accretion on embedded derivative feature of convertible note payable</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 19</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ &nbsp; 56</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="2" style="width: 58.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Amortization of prepaid financing costs</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 33</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ &nbsp; 65</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="2" style="width: 58.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Financing on capitalized lease obligations</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ &nbsp; &nbsp;-</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 182</p>
			</td>
		</tr>
		<tr>
			<td style="width: 58.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 58.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td colspan="7" style="width: 59%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">See accompanying notes to condensed consolidated financial statements.</p>
			</td>
		</tr>
		<tr>
			<td style="width: 58.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.4%; vertical-align: middle;">&nbsp;</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: Times New Roman; font-size: 10pt;">-4-</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(in thousands, except share and per share amounts)</i></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(Unaudited)</i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>Note 1. Principles of Consolidation and Basis of Presentation</b></i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>Basis of Presentation of Interim Financial Statements</b></i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The accompanying <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">condensed consolidated financial statements for the interim periods are unaudited and include the accounts of Integrated BioPharma, Inc., a Delaware corporation (together with its subsidiaries, the &ldquo;Company&rdquo;). The interim condensed consolidated financial statements have been prepared in conformity with Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (&ldquo;SEC&rdquo;) and therefore do not include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America. However, all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the periods presented have been included. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto, together with Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations, contained in the Company&rsquo;s Annual Report on Form 10-K for the fiscal year ended June 30, 2016 (&ldquo;Form 10-K&rdquo;), as filed with the SEC. The June 30, 2016 balance sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. The results of operations for the three and six months ended December 31, 2016 are not necessarily indicative of the results for the full fiscal year ending June 30, 2017 or for any other period.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>&nbsp;</b></i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>Nature of Operations</b></i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">Company is engaged primarily in manufacturing, distributing, marketing and sales of vitamins, nutritional supplements and herbal products. The Company&rsquo;s customers are located primarily in the United States, Luxembourg and Canada. The Company was previously known as Integrated Health Technologies, Inc. and, prior to that, as Chem International, Inc. The Company was reincorporated in its current form in Delaware in 1995. The Company continues to do business as Chem International, Inc. with certain of its customers and certain vendors. </font></p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The Company<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&rsquo;s business segments include: (a) Contract Manufacturing operated by InB:Manhattan Drug Company, Inc. (&ldquo;MDC&rdquo;), which manufactures vitamins and nutritional supplements for sale to distributors, multilevel marketers and specialized health-care providers; (b) Branded Proprietary Products operated by AgroLabs, Inc. (&ldquo;AgroLabs&rdquo;), which distributes healthful nutritional products for sale through major mass market, grocery, drug and vitamin retailers, under the following brands: Naturally Noni, Coconut Water, Aloe Pure, Peaceful Sleep, Green Envy, ACAI Extra, ACAI Cleanse, Wheatgrass and other products which are being introduced into the market (these are referred to as our branded proprietary nutraceutical business and/or products); and (c) Other Nutraceutical Businesses which includes the operations of (i) The Vitamin Factory (the &ldquo;Vitamin Factory&rdquo;), which sells private label MDC products, as well as our AgroLabs products, through the Internet, (ii) IHT Health Products, Inc. (&ldquo;IHT&rdquo;) a distributor of fine natural botanicals, including multi minerals produced under a license agreement and (iii) Chem International, Inc. (&ldquo;Chem&rdquo;), a distributor of certain raw materials for DSM Nutritional Products LLC.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>Significant Accounting Policies</b></i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">There have been no material changes during fiscal <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">year 2017 in the Company&rsquo;s significant accounting policies to those previously disclosed in the Company&rsquo;s Annual Report on Form 10-K for the fiscal year ended June 30, 2016.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>&nbsp;</b></i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>&nbsp;</b></i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>&nbsp;</b></i></p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: Times New Roman; font-size: 10pt;">-5-</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>&nbsp;</b></i></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(in thousands, except share and per share amounts)</i></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(Unaudited)</i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>&nbsp;</b></i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>&nbsp;</b></i><i><b>&nbsp;</b></i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>Investment in iBio, Inc</b></i><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>.</b></i><i><b> </b></i>The Company accounts for its investment in iBio, Inc. (&ldquo;iBio&rdquo;) common stock on the cost basis as it retained approximately 6% of its interest in iBio (1,266,706 common shares) (the &ldquo;iBio Stock&rdquo;) at the time of the spin-off of this subsidiary in August 2008.&nbsp;&nbsp;The Company reviews its investment in iBio for impairment and records a loss when there is deemed to be a permanent impairment of the investment. To date, there were cumulative impairment charges of approximately $2.2 million. The market value of the iBio Stock as of December 31, 2016 was approximately $0.5 million based on the trade price at the close of trading on December 31, 2016. </font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Pursuant to the Company<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&rsquo;s Loan Agreement with PNC Bank, National Association (&ldquo;PNC&rdquo;), the Company was required to sell the iBio Stock when the trading price of the iBio Stock is less than $0.88 per share for a period of fifteen (15) consecutive trading days on the applicable exchange and utilize all proceeds from such sale to prepay the outstanding principal of the term loan outstanding under the Loan Agreement at such time. During certain historic periods, the trading price of the iBio Stock was less than $0.88 for a period of fifteen (15) consecutive trading days. Although PNC did not require the Company to sell shares of iBio Stock, the Company sold 73,191 shares of iBio Stock in the quarter ended June 30, 2015.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">On February 19, 2016, the Loan Agreement with PNC was amended&nbsp;whereby&nbsp;the requirement to sell the iBio Stock based on the selling price of $0.88 per share was removed; however, the requirement to use all the net proceeds from the sale of any of the iBio Stock to prepay the outstanding principal of the term loan outstanding under the Amended Loan Agreement remains. (See Note 4. Senior Credit Facility, Subordinated Convertible Note, net - CD Financial, LLC and other Long Term Debt).</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>Earnings Per Share</b></i><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">. Basic earnings per common share amounts are based on weighted average number of common shares outstanding. Diluted earnings per share amounts are based on the weighted average number of common shares outstanding, plus the incremental shares that would have been outstanding upon the assumed exercise of all potentially dilutive stock options, warrants, and convertible debt, subject to anti-dilution limitations using the treasury stock method and if converted method. </font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The following options and potentially dilutive shares for convertible notes payable <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">(see Note 4. Senior Credit Facility, Subordinated Convertible Note, net - CD Financial, LLC and other Long Term Debt) were not included in the computation of weighted average diluted common shares outstanding as the effect of doing so would be anti-dilutive for the three and six months ended December 31, 2016 and 2015:</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="TBL36" style="margin: 0pt 22.5%; width: 55%; text-indent: 0px; font-family: Times New Roman; font-size: 10pt;">

		<tr>
			<td style="width: 39%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td colspan="3" style="width: 142%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Three Months Ended</p>
			</td>
			<td style="width: 2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td colspan="3" style="width: 142%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Six Months Ended</p>
			</td>
			<td style="width: 1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 39%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td colspan="3" nowrap="false" style="padding: 0px; width: 142%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31,</p>
			</td>
			<td nowrap="false" style="padding: 0px; width: 2%; vertical-align: middle;">&nbsp;</td>
			<td colspan="3" nowrap="false" style="padding: 0px; width: 142%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31,</p>
			</td>
			<td style="width: 1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 39%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2016</p>
			</td>
			<td style="width: 2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2015</p>
			</td>
			<td style="width: 2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2016</p>
			</td>
			<td style="width: 2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2015</p>
			</td>
			<td style="width: 1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 39%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 39%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Anti-dilutive stock options</p>
			</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">2,935,116</p>
			</td>
			<td style="width: 2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">2,900,450</p>
			</td>
			<td style="width: 2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">391,033</p>
			</td>
			<td style="width: 2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">2,900,450</p>
			</td>
			<td style="width: 1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 39%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Anti-dilutive shares for</p>
			</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 39%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">convertible notes payable</p>
			</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">8,230,769</p>
			</td>
			<td style="width: 2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">8,230,769</p>
			</td>
			<td style="width: 2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">8,230,769</p>
			</td>
			<td style="width: 2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">8,230,769</p>
			</td>
			<td style="width: 1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 39%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 39%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Anti-dilutive shares</p>
			</td>
			<td nowrap="false" style="padding: 0px; width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: medium; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">11,165,885</p>
			</td>
			<td style="width: 2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td nowrap="false" style="padding: 0px; width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: medium; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">11,131,219</p>
			</td>
			<td style="width: 2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td nowrap="false" style="padding: 0px; width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: medium; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">8,621,802</p>
			</td>
			<td style="width: 2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td nowrap="false" style="padding: 0px; width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: medium; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">11,131,219</p>
			</td>
			<td style="width: 1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 39%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
			<td style="width: 1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">&nbsp;</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>&nbsp;</b></i><i><b>&nbsp;</b></i></p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: Times New Roman; font-size: 10pt;">-6-</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>&nbsp;</b></i></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(in thousands, except share and per share amounts)</i></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(Unaudited)</i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>&nbsp;</b></i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>&nbsp;</b></i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>Note</b></i><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b> 2</b></i><i><b>. Inventories</b></i></font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Inventories are stated at the lower of cost or market using the first-in, first-out method and consist of the following:</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="TBL34" style="margin: 0pt 25%; width: 50%; text-indent: 0px; font-size: 10pt;">

		<tr>
			<td style="width: 19.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 22.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 29.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31,</p>
			</td>
			<td style="width: 6.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 22.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">June 30,</p>
			</td>
		</tr>
		<tr>
			<td style="width: 19.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 22.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 29.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2016</p>
			</td>
			<td style="width: 6.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 22.3%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2016</p>
			</td>
		</tr>
		<tr>
			<td style="width: 19.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 22.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 29.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 22.3%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td colspan="2" style="width: 42.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Raw materials</p>
			</td>
			<td style="width: 29.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 4,314</p>
			</td>
			<td style="width: 6.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 22.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 4,040</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td colspan="2" style="width: 42.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Work-in-process</p>
			</td>
			<td style="width: 29.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,284</font></p>
			</td>
			<td style="width: 6.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 22.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,212</font></p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="2" style="width: 42.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Finished goods</p>
			</td>
			<td style="width: 29.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,229</font></p>
			</td>
			<td style="width: 6.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 22.3%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,504</font></p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 19.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Total</p>
			</td>
			<td style="width: 22.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 29.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 7,827</p>
			</td>
			<td style="width: 6.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 22.3%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 7,756</p>
			</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</font></b></i></p>

<p style="text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 121.5pt;">&nbsp;</p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt;"><i><b>Note </b></i><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>3</b></i><i><b>. Property and Equipment, net</b></i></font></p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt;">&nbsp;</p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt;">Property and equipment, net consists of the following:</p>

<table border="0" cellpadding="0" cellspacing="0" id="TBL37" style="margin: 0pt 18.5%; width: 63%; text-indent: 0px; font-size: 10pt;">

		<tr>
			<td style="width: 45.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 26.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31,</p>
			</td>
			<td style="width: 4.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 22.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">June 30,</p>
			</td>
		</tr>
		<tr>
			<td style="width: 45.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 26.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2016</p>
			</td>
			<td style="width: 4.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 22.6%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2016</p>
			</td>
		</tr>
		<tr>
			<td style="width: 45.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 26.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 4.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 22.6%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 45.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Land and building</p>
			</td>
			<td style="width: 1.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 26.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 1,250</p>
			</td>
			<td style="width: 4.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 22.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 1,250</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 45.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Leasehold improvements</p>
			</td>
			<td style="width: 1.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 26.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,220</p>
			</td>
			<td style="width: 4.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 22.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,210</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 45.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Machinery and equipment</p>
			</td>
			<td style="width: 1.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 26.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,599</p>
			</td>
			<td style="width: 4.4%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 22.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,536</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 45.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Transportation equipment</p>
			</td>
			<td style="width: 1.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 26.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11</p>
			</td>
			<td style="width: 4.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 22.6%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 45.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 26.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,080</p>
			</td>
			<td style="width: 4.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 22.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,007</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 45.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Less: Accumulated depreciation</p>
			</td>
			<td style="width: 1.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 26.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 4.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 22.6%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 45.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and amortization</p>
			</td>
			<td style="width: 1.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 26.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6,582)</p>
			</td>
			<td style="width: 4.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 22.6%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6,440)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 45.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Total</p>
			</td>
			<td style="width: 1.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 26.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 1,498</p>
			</td>
			<td style="width: 4.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 22.6%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 1,567</p>
			</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 72pt;"><i><b>&nbsp;</b></i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Depreciation and amortization expense <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">recorded on property and equipment was $80 and $56&nbsp;for the three months ended December 31, 2016 and 2015, respectively and $152 and $115 for the six months ended December 31, 2016 and 2015, respectively. Additionally, the Company disposed of fully depreciated property of $10 and $131&nbsp;in the six months ended December 31, 2016 and 2015, respectively. </font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>&nbsp;</b></i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>&nbsp;</b></i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>&nbsp;</b></i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>&nbsp;</b></i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>&nbsp;</b></i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>&nbsp;</b></i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>&nbsp;</b></i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>&nbsp;</b></i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>&nbsp;</b></i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>&nbsp;</b></i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>&nbsp;</b></i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>&nbsp;</b></i></p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: Times New Roman; font-size: 10pt;">-7-</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>&nbsp;</b></i><i><b>&nbsp;</b></i></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(in thousands, except share and per share amounts)</i></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(Unaudited)</i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>&nbsp;</b></i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>N</b></i><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>ote </b></i><i><b>4</b></i><i><b>. </b></i><i><b>Senior Credit Facility, Subordinated Convertible Note, net - CD Financial, LLC and other Long Term Debt</b></i></font></p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 18pt;"><i><b>&nbsp;</b></i></p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt;">As of <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31, 2016 and June 30, 2016, the Company had the following debt outstanding:</font></p>

<table border="0" cellpadding="0" cellspacing="0" id="TBL38" style="width: 100%; text-indent: 0px; font-family: Times New Roman, Times, serif; font-size: 10pt;">

		<tr>
			<td style="width: 49.3%; vertical-align: middle;">&nbsp;</td>
			<td colspan="3" style="width: 28.3%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Principal Amount</p>
			</td>
			<td style="width: 1.6%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>
			</td>
			<td style="width: 8.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Interest Rate</p>
			</td>
			<td style="width: 1.8%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>
			</td>
			<td style="width: 11%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Maturity Date</p>
			</td>
		</tr>
		<tr>
			<td style="width: 49.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">As of December 31, 2016</p>
			</td>
			<td style="width: 2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">As of June 30, 2016</p>
			</td>
			<td style="width: 1.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 11%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 49.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Revolving advances under Senior Credit</p>
			</td>
			<td style="width: 14.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 11%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 49.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Facility with PNC Bank, National Association</p>
			</td>
			<td style="width: 14.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 4,004</p>
			</td>
			<td style="width: 2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 4,210</p>
			</td>
			<td style="width: 1.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">3.75%</p>
			</td>
			<td style="width: 1.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 11%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">2/19/2020</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 49.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Installment Note with PNC Bank</p>
			</td>
			<td style="width: 14.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,786</p>
			</td>
			<td style="width: 2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,259</p>
			</td>
			<td style="width: 1.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">4.25%</p>
			</td>
			<td style="width: 1.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 11%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">2/19/2020</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 49.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Installment Note with PNC Equipment Finance</p>
			</td>
			<td style="width: 14.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;233</p>
			</td>
			<td style="width: 2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;275</p>
			</td>
			<td style="width: 1.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">4.57%</p>
			</td>
			<td style="width: 1.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 11%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">7/29/2019</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 49.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Promissory Note with CD Financial, LLC</p>
			</td>
			<td style="width: 14.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,714</p>
			</td>
			<td style="width: 2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,714</p>
			</td>
			<td style="width: 1.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">6.00%</p>
			</td>
			<td style="width: 1.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 11%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">2/29/2020</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 49.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Promissory Note with Vitamin Realty, LLC</p>
			</td>
			<td style="width: 14.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;686</p>
			</td>
			<td style="width: 2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;686</p>
			</td>
			<td style="width: 1.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">4.00%</p>
			</td>
			<td style="width: 1.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 11%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">2/29/2020</p>
			</td>
		</tr>
		<tr style="text-align: center; background-color: rgb(204, 238, 255);">
			<td colspan="1" nowrap="false" rowspan="2" style="padding: 0px; width: 49%; text-align: left; vertical-align: middle;">
			<p style="margin: 0pt; font-family: Times New Roman, Times, serif; font-size: 10pt;">Capitalized lease obligations</p>
			</td>
			<td colspan="1" nowrap="false" rowspan="2" style="padding: 0px; width: 14%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;234</p>
			</td>
			<td style="width: 2%; vertical-align: middle;">&nbsp;</td>
			<td colspan="1" rowspan="2" style="width: 12.2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">306</p>
			</td>
			<td style="width: 1.6%; vertical-align: middle;">&nbsp;</td>
			<td colspan="2" style="width: 9.9%; vertical-align: middle;">
			<p style="margin: 0pt 0pt 0pt -18pt; font-family: 'Times New Roman', Times, serif; font-size: 10pt; text-align: right;">4.00% - &nbsp; &nbsp; &nbsp; &nbsp;</p>
			</td>
			<td style="width: 11%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">3/6/2018-</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">11.43%</p>
			</td>
			<td style="width: 1.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 11%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">12/8/2020</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 49.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Total outstanding debt</p>
			</td>
			<td style="width: 14.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9,657</p>
			</td>
			<td style="width: 2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: none;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10,450</p>
			</td>
			<td style="width: 1.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 11%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 49.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Less: Revolving Advances</p>
			</td>
			<td style="width: 14.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4,004)</p>
			</td>
			<td style="width: 2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4,210)</p>
			</td>
			<td style="width: 1.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 11%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 49.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current portion of long term debt</p>
			</td>
			<td style="width: 14.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(946)</p>
			</td>
			<td style="width: 2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(934)</p>
			</td>
			<td style="width: 1.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 11%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 49.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Long term debt</p>
			</td>
			<td style="width: 14.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 4,707</p>
			</td>
			<td style="width: 2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 5,306</p>
			</td>
			<td style="width: 1.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 11%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 49.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 11%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 49.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Convertible Note payable - CD Financial, LLC</p>
			</td>
			<td style="width: 14.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 5,350</p>
			</td>
			<td style="width: 2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 5,350</p>
			</td>
			<td style="width: 1.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">6.00%</p>
			</td>
			<td style="width: 1.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 11%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">2/29/2020</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 49.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Discount for embedded derivative</p>
			</td>
			<td style="width: 14.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(125)</p>
			</td>
			<td style="width: 2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(144)</p>
			</td>
			<td style="width: 1.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 11%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 49.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Convertible Note payable, net - CD Financial, LLC</p>
			</td>
			<td style="width: 14.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 5,225</p>
			</td>
			<td style="width: 2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 5,206</p>
			</td>
			<td style="width: 1.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 11%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 49.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 1.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 11%; vertical-align: middle;">&nbsp;</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt;">&nbsp;</p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt;"><b>SENIOR CREDIT FACILITY</b></p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 18pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">On February 1<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">9, 2016, the Company, MDC, AgroLabs, IHT, IHT Properties Corp. (&ldquo;IHT Properties&rdquo;) and Vitamin Factory (collectively, the &ldquo;Borrowers&rdquo;) amended the Revolving Credit, Term Loan and Security Agreement (the &ldquo;Amended Loan Agreement&rdquo;) with PNC Bank, National Association as agent and lender (&ldquo;PNC&rdquo;) and the other lenders party thereto entered into on June 27, 2012.</font></p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 18pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">Amended Loan Agreement provides for a total of $11,422 in senior secured financing (the &ldquo;Senior Credit Facility&rdquo;) as follows: (i) discretionary advances (&ldquo;Revolving Advances&rdquo;) based on eligible accounts receivable and eligible inventory in the maximum amount of $8,000 (the &ldquo;Revolving Credit Facility&rdquo;) and (ii) a term loan in the amount of $3,422 (the &ldquo;Term Loan&rdquo;). The Senior Credit Facility is secured by all assets of the Borrowers, including, without limitation, machinery and equipment, real estate owned by IHT Properties, and common stock of iBio owned by the Company. Revolving Advances bear interest at PNC&rsquo;s Base Rate or the Eurodollar Rate, at Borrowers&rsquo; option, plus 2.75% (3.75% and 3.50% as of December 31, 2016 and June 30, 2016, respectively). The Term Loan bears interest at PNC&rsquo;s Base Rate or the Eurodollar Rate, at Borrowers&rsquo; option, plus 3.25% (4.25% and 4.00% as of December 31, 2016 and June 30, 2016, respectively). Upon and after the occurrence of any event of default under the Amended Loan Agreement, and during the continuation thereof, interest shall be payable at the interest rate then applicable plus 2%. The Senior Credit Facility matures on February 19, 2020 (the &ldquo;Senior Maturity Date&rdquo;). </font></p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 18pt;">&nbsp;</p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 18pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: Times New Roman; font-size: 10pt;">-8-</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 18pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(in thousands, except share and per share amounts)</i></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(Unaudited)</i></p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 18pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The principal balance of the Revolving Advances is payable on the Senior Maturity Date, subject to acceleration, based upon a material adverse event clause, as defined, subjective accelerations for borrowing base reserves, as defined or upon the occurrence of any event of default under the <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">Amended Loan Agreement or earlier termination of the Amended Loan Agreement pursuant to the terms thereof. The Term Loan shall be repaid in eighty-four (84) consecutive monthly installments of principal, the first eighty-three (83) of which shall be in the amount of $41, commencing on the first business day of March, 2016, and continuing on the first business day of each month thereafter, with a final payment of any unpaid balance of principal and interest payable on the Senior Maturity Date. The foregoing is subject to customary mandatory prepayment provisions and acceleration upon the occurrence of any event of default under the Amended Loan Agreement or earlier termination of the Amended Loan Agreement pursuant to the terms thereof.</font></p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 18pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The Revolving Advances are subject to the terms and conditions set forth in the <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">Amended Loan Agreement and are made in aggregate amounts at any time equal to the lesser of (x) $8.0 million or (y) an amount equal to the sum of: (i) up to 85%, subject to the provisions in the Amended Loan Agreement, of eligible accounts receivables (&ldquo;Receivables Advance Rate&rdquo;), plus (ii) up to the lesser of (A) 75%, subject to the provisions in the Amended Loan Agreement, of the value of the eligible inventory (&ldquo;Inventory Advance Rate&rdquo; and together with the Receivables Advance Rate, collectively, the &ldquo;Advance Rates&rdquo;), (B) 85% of the appraised net orderly liquidation value of eligible inventory (as evidenced by the most recent inventory appraisal reasonably satisfactory to PNC in its sole discretion exercised in good faith) and (C) the inventory sublimit in the aggregate at any one time (&ldquo;Inventory Advance Rate&rdquo; and together with the Receivables Advance Rate, collectively, the &ldquo;Advance Rates&rdquo;), minus (iii) the aggregate Maximum Undrawn Amount of all outstanding Letters of Credit, minus (iv) such reserves as PNC may reasonably deem proper and necessary from time to time.</font></p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 18pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">Amended Loan Agreement contains customary mandatory prepayment provisions, including, without limitation the requirement to use any sales proceeds from the sale of iBio Stock to repay the Term Loan and to</font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> </font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">prepay the outstanding amount of the Revolving Advances in an amount equal to twenty-five percent (25%) of Excess Cash Flow for each fiscal year commencing with the fiscal year ending June 30, 2016, payable upon delivery of the financial statements to PNC referred to in and required by the Amended Loan Agreement for such fiscal year but in any event not later than one hundred twenty (120) days after the end of each such fiscal year, which amount shall be applied ratably to the outstanding principal installments of the Term Loan in the inverse order of the maturities thereof. The Amended Loan Agreement also contains customary representations and warranties, covenants and events of default, including, without limitation, (i) a fixed charge coverage ratio maintenance requirement and (ii) an event of default tied to any change of control as defined in the Amended Loan Agreement. As of December 31, 2016, the Company was in compliance with the fixed charge coverage ratio maintenance requirement.</font></p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The Loan Agreement (prior to giving effect to the February 19, 2016 amendment described above) required the Company to sell iBio Stock if the per share price fell below $0.88. This requirement is not in the Amended Loan Agreement, however, the requirement to use all the net proceeds from the sale of any of the iBio Stock to prepay the outstanding principal of the term loan outstanding under the Amended Loan Agreement remains a requirement under the Amended Loan Agreement. During certain historic periods, the trading price of the iBio Stock was less than $0.88 for a period of fifteen (15) consecutive trading days; however, PNC temporarily waived the requirement to sell the iBio Stock due to certain trading rules and restrictions under Rule 144 under the Securities Act of 1933, as amended. Although not required to sell the iBio Stock by PNC, in the quarter ended June 30, 2015, the Company sold 73,191 shares of iBio Stock.</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">I<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">n connection with the Senior Credit Facility, PNC and CD Financial entered into the Intercreditor and Subordination Agreement (the &ldquo;Intercreditor Agreement&rdquo;), which was acknowledged by the Borrowers, pursuant to which, among other things, (a) the lien of CD Financial on assets of the Borrowers is subordinated to the lien of PNC on such assets during the effectiveness of the Senior Credit Facility, and (b) priorities for payment of the debt for the Company and its subsidiaries (as described in this Note 4) are established.</font></p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: Times New Roman; font-size: 10pt;">-9-</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(in thousands, except share and per share amounts)</i></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(Unaudited)</i></p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">In addition, in connection with the Senior Credit Facility, the following lo<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">an documents were executed: (i) a Stock Pledge Agreement with PNC, pursuant to which the Company pledged to PNC the iBio Stock; (ii) a Mortgage and Security Agreement with PNC with IHT Properties; and (iii) an Environmental Indemnity Agreement with PNC.</font></p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 18pt;">&nbsp;</p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 18pt;"><b>CD FINANCIAL, LLC</b></p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 18pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">On June 27, 2012, the Company also entered into an Amended and Restated Securities Purchase Agreement (the &ldquo;CD SPA&rdquo;) with CD Financial, which amended and restated the Securities Purchase Agreement, dated as of February 21, 2008, between the Company and CD Financial, pursuant to which the Company issued to CD Financial a 9.5% Convertible Senior Secured Note in the original principal amount of $4,500 (the &ldquo;Original CD Note&rdquo;). Pursuant to the CD SPA, the Company issued to CD Financial (i) the Amended and Restated Convertible Promissory Note in the principal amount of $5,350 (the &ldquo;CD Convertible Note&rdquo;) and (ii) the Promissory Note in the principal amount of $1,714 (the &ldquo;Liquidity Note&rdquo;, and collectively with the CD Convertible Note, the &ldquo;CD Notes&rdquo;). The CD Notes <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">originally matured on July 7, 2017, however, on February 19, 2016, the CD Notes were amended to extend the maturity date to February 29, 2020. </font></p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 18pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The CD Notes are secured by all assets of the Borrowers, including, without limitation, machinery and equipment, real estate owned by IHT Properties, and iBio Stock owned by the Company. The CD Notes bear interest at an annual rate of 6% and have a default rate of 10%.</p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 18pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The CD Convertible Note is convertible at the option of CD Financial into common stock of the Company at a conversion price of $0.65 per share, subject to customary adjustments including conversion price protection provisions.</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Pursuant to the terms of the <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">Amended Loan Agreement and the Intercreditor Agreement, during the effectiveness of the Senior Credit Facility, (i) the principal of the CD Convertible Note may not be repaid, (ii) the principal of the Liquidity Note may only be repaid if certain conditions under the Amended Loan Agreement are satisfied, and (iii) interest in respect of the CD Notes may only be paid if certain conditions under the Intercreditor Agreement are satisfied. </font></p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 18pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The CD SPA contains customary representations and warranties, covenants and events of default, including, without limitation, an event of default tied to any change of control as defined in the CD SPA.</p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 18pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">In connection with the CD SPA, the Borrowers entered into an Amended and Restated Security Agreement and Amended and Restated Subsidiary Guaranty.</p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 18pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">As of <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31, 2016 and June 30, 2016, the related embedded derivative liability with respect to conversion price protection provisions on the CD Convertible Note has an estimated fair value of $808 and $76, respectively. </font></p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: Times New Roman; font-size: 10pt;">-10-</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(in thousands, except share and per share amounts)</i></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(Unaudited)</i></p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The Company used the following assumptions to calculate the fair value of the derivative liability using the Black-Scholes option pricing model:</p>

<table border="0" cellpadding="0" cellspacing="0" id="TBL39" style="margin: 0pt 18%; width: 64%; text-indent: 0px; font-size: 10pt;">

		<tr>
			<td style="width: 182px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 5px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 18%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31,</p>
			</td>
			<td style="width: 3.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 18%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">June 30,</p>
			</td>
			<td style="width: 4.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">June 27,</p>
			</td>
		</tr>
		<tr>
			<td style="width: 182px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 5px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 18%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2016</p>
			</td>
			<td style="width: 3.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 18%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2016</p>
			</td>
			<td style="width: 4.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2012</p>
			</td>
		</tr>
		<tr>
			<td style="width: 182px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 5px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 18%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 3.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 18%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 4.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 182px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Risk Free Interest Rate</p>
			</td>
			<td style="width: 5px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 18%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">1.57%</p>
			</td>
			<td style="width: 3.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 18%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">0.81%</p>
			</td>
			<td style="width: 4.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">0.72%</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 182px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Volatility</p>
			</td>
			<td style="width: 5px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 18%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">99.30%</p>
			</td>
			<td style="width: 3.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 18%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">63.20%</p>
			</td>
			<td style="width: 4.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">144.10%</p>
			</td>
		</tr>
		<tr>
			<td style="width: 182px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 5px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 18%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">3 years</p>
			</td>
			<td style="width: 3.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 18%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">3 years</p>
			</td>
			<td style="width: 4.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">5 years</p>
			</td>
		</tr>
		<tr>
			<td style="width: 182px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Term</p>
			</td>
			<td style="width: 5px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 18%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2&nbsp;months</p>
			</td>
			<td style="width: 3.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 18%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">8 months</p>
			</td>
			<td style="width: 4.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 182px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Dividend Rate</p>
			</td>
			<td style="width: 5px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 18%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">0.00%</p>
			</td>
			<td style="width: 3.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 18%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">0.00%</p>
			</td>
			<td style="width: 4.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">0.00%</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 182px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Closing Price of Common Stock</p>
			</td>
			<td style="width: 5px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 18%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 0.23</p>
			</td>
			<td style="width: 3.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 18%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 0.11</p>
			</td>
			<td style="width: 4.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 0.09</p>
			</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 18pt;"><b>&nbsp;</b></p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 18pt;"><b>OTHER LONG TERM DEBT</b></p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 18pt;">&nbsp;</p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Related Party Debt</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>. </b>On June 27, 2012, MDC and the Company entered into separate promissory notes with (i) Vitamin Realty Associates, LLC (&ldquo;Vitamin Realty&rdquo;), and E. Gerald Kay, the Company&rsquo;s Chief Executive Officer, Chairman of the Board, President and a major shareholder, in the principal amounts of approximately $686 (the &ldquo;Vitamin Note&rdquo;) and $27 (the &ldquo;Kay Note&rdquo;), respectively (collectively the &ldquo;Related Party Notes&rdquo;). The principal amount of the Vitamin Note represents the aggregate amount of unpaid, past due rent owing by MDC under the Lease Agreement, dated as of January 10, 1997, between MDC, as lessor, and Vitamin Realty, as landlord, pertaining to the real property located at 225 Long Avenue, Hillside, New Jersey. (See Note 6. Commitments and Contingencies (a) Leases &ndash; Related Party Leases). The Kay Note represented amounts owed to Mr. Kay for unreimbursed business expenses incurred by Mr. Kay in the fiscal year ended June 30, 2008. (See Note 7 Related Party Transactions). </font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">On May 27, 2016, the Kay Note in the amount of $27 was paid in full, prior to its maturity date of July 7, 2017, after satisfying the conditions set forth in the Amended Loan Agreement and cancelled accordingly. The Vitamin Realty Note matures on February 29, 2020, as amended on February 19, 2016. The Vitamin Realty Note accrues interest at an annual rate of 4% per annum. Interest in respect of the Vitamin Realty Note is payable on the first business day of each calendar month. Pursuant to the terms of the Loan Agreement, during the effectiveness of the Senior Credit Facility, the Related Party Notes may only be repaid or prepaid if certain conditions set forth in the Amended Loan Agreement are satisfied. </font></p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Capitalized Lease Obligations.</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b> </b>On November 20, 2016, the capitalized lease obligation the Company entered into on December 5, 2013, De Lage Landen Financial Services in the amount of $72, which lease was secured by certain machinery and equipment, was satisfied with all payments being made under the capitalized lease obligation. The monthly lease payment was approximately $2 and had an imputed interest rate of 5.3%. </font></p>

<p style="margin: 0pt 0pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>Note <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">5. Significant Risks and Uncertainties</font></i></b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>(a) Major Customers. </i></b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">For the three months ended December 31, 2016 and 2015, approximately 92% and 91%, respectively of consolidated net sales, were derived from two customers. These two customers are in the Company&rsquo;s Contract Manufacturing Segment and represent approximately 35% and 60% and 31% and 65% of this Segment&rsquo;s net sales in the three months ended December 31, 2016 and 2015, respectively. A third customer in the Branded Nutraceutical Segment, while not a significant customer of the Company&rsquo;s consolidated net sales, represented approximately 53% and 25% of net sales in the three months ended December 31, 2016 and 2015, respectively, of the Branded Nutraceutical Segment. </font></p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: Times New Roman; font-size: 10pt;">-11-</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(in thousands, except share and per share amounts)</i></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(Unaudited)</i></p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">For the six months ended <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31, 2016 and 2015, approximately 92% and 89%, respectively of consolidated net sales, were derived from two customers. These two customers are in the Company&rsquo;s Contract Manufacturing Segment and represent approximately 42% and 54% and 39% and 57% of this Segment&rsquo;s net sales in the six months ended December 31, 2016 and 2015, respectively. A third customer in the Branded Nutraceutical Segment, while not a significant customer of the Company&rsquo;s consolidated net sales, represented approximately 57% and 62% of net sales in the six months ended December 31, 2016 and 2015, respectively, of the Branded Nutraceutical Segment. Accounts receivable from these two major customers represented approximately 90% and 87% of total net accounts receivable as of December 31 and June 30, 2016, respectively. The loss of any of these customers could have an adverse affect on the Company&rsquo;s operations. Major customers are those customers who account for more than 10% of net sales. </font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>(b) Other Business Risks. </i></b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">Approximately 66% of the Company&rsquo;s employees are covered by a union contract and are employed in its New Jersey facilities. The contract was renewed on September 1, 2015 and will expire on August 31, 2018.</font></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt;"><b><i>Note <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">6. Commitments and Contingencies</font></i></b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>(a) Leases</i></b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>&nbsp;</i></b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>Related Party Leases.</i></b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> Warehouse and office facilities are leased from Vitamin Realty, which is 100% owned by the Company&rsquo;s chairman, Chief Executive Officer and major stockholder and certain of his family members, who are also executive officers and directors of the Company. On January 5, 2012, MDC, a wholly-owned subsidiary of the Company, entered into a second amendment of lease (the &ldquo;Second Lease Amendment&rdquo;) with Vitamin Realty for its office and warehouse space in New Jersey increasing its rentable square footage from an aggregate of 74,898 square feet to 76,161 square feet and extending the expiration date to January 31, 2026. This Second Lease Amendment provides for minimum annual rental payments of $533, plus increases in real estate taxes and building operating expenses. On May 19, 2014, AgroLabs entered into an Amendment to the lease agreement entered into on January 5, 2012, with Vitamin Realty for an additional 2,700 square feet of warehouse space in New Jersey, the term of which was to expire on January 31, 2019 to extend the expiration date to January 1, 2024. This additional lease provides for minimum lease payments of $27 with annual increases plus the proportionate share of operating expenses.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Rent expense for the three <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">and six months ended December 31, 2016 and 2015 on these leases were $214 and $219 and $411 and $403, respectively, and are included in both cost of sales and selling and administrative expenses in the accompanying Condensed Consolidated Statements of Operations. As of December 31, 2016 and June 30, 2016, the Company had an outstanding obligation to Vitamin Realty of $0.8 million and $1.1 million, respectively, included in accounts payable, accrued expenses and other liabilities and long term debt in the accompanying Condensed Consolidated Balance Sheet. </font></p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>Other Lease Commitments.</i></b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> The Company has entered into certain non-cancelable operating lease agreements expiring up through January 31, 2026, related to office and warehouse space, equipment and vehicles (inclusive of the related party lease with Vitamin Realty). </font></p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: Times New Roman; font-size: 10pt;">-12-</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(in thousands, except share and per share amounts)</i></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(Unaudited)</i></p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt;">&nbsp;</p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt;">The minimum rental commitments for long-term non-cancelable leases are as follows:</p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="TBL40" style="margin: 0pt 24%; width: 52%; text-indent: 0px; font-size: 10pt;">

		<tr>
			<td style="width: 23.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 25.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Operating</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 25.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Related Party</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 17.1%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 23.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Year ending</p>
			</td>
			<td style="width: 2.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 25.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Lease</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 25.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Lease</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 17.1%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 23.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">June 30,</p>
			</td>
			<td style="width: 2.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 25.7%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Commitment</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 25.7%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Commitment</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 17.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Total</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td colspan="2" style="width: 26.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">2017, remaining</p>
			</td>
			<td style="width: 25.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 29</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 25.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 281</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 17.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 310</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 23.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">2018</p>
			</td>
			<td style="width: 2.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 25.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;40</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 25.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;563</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 17.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;603</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 23.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">2019</p>
			</td>
			<td style="width: 2.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 25.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;27</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 25.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;563</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 17.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;590</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 23.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">2020</p>
			</td>
			<td style="width: 2.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 25.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;22</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 25.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;563</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 17.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;585</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 23.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">2021</p>
			</td>
			<td style="width: 2.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 25.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 25.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;563</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 17.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;584</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 23.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">2022</p>
			</td>
			<td style="width: 2.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 25.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 25.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;563</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 17.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;571</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 23.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Thereafter</p>
			</td>
			<td style="width: 2.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 25.7%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 25.7%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,955</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 17.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,955</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 23.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>Total</b></i></p>
			</td>
			<td style="width: 2.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 25.7%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 147</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 25.7%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 5,051</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 17.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 5,198</p>
			</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="text-align: justify;">Total rent expense, including real estate taxes and maintenance charges, was approximately $<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">255 and $259 and $492 and $485 for the three and six months ended December 31, 2016 and 2015, respectively.&nbsp; Rent expense is included in cost of sales and selling and administrative expenses in the accompanying Condensed Consolidated Statements of Operations.</font></p>

<p style="margin: 0pt 27pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>&nbsp;</i></b><b><i>(b) Legal Proceedings. </i></b></p>

<p style="margin: 0pt 27pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The Company is subject, from time to time, to claims by third parties under various legal theories. The defense of such claims, or any adverse outcome relating to any such claims, could have a material adverse effect on the Company<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&rsquo;s liquidity, financial condition and cash flows. </font></p>

<p style="margin: 0pt 27pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>&nbsp;</i></b></p>

<p style="margin: 0pt 27pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>(c) Other Claims. </i></b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">On May 15, 2012, Cedarburg Pharmaceuticals, Inc. (&quot;Cedarburg&quot;) sent <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">the Company a letter (the &quot;Demand Letter&quot;) setting forth a demand for indemnification under the Stock Purchase Agreement, dated March 17, 2009 (the &quot;Cedarburg SPA&quot;), by and among Cedarburg, InB: Hauser Pharmaceutical Services, Inc., InB: Paxis Pharmaceuticals, Inc. and the Company. In the Demand Letter, Cedarburg demanded payment by the Company of $0.6 million in respect of the Company&#39;s indemnification obligations under the Cedarburg SPA. In addition, in the Demand Letter, Cedarburg informed the Company that there are also environmental issues pending which may lead to additional costs to Cedarburg which will likely be in excess of $0.3 million. </font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">On May 30, 2012, <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">the Company sent a letter responding to the Demand Letter and setting forth the Company&rsquo;s position that it has no obligation to indemnify Cedarburg as demanded. On June 18, 2012, Cedarburg responded to the Company&rsquo;s letter and, on July 27, 2012, the Company sent another letter to Cedarburg reiterating its position that the Company has no obligation to indemnify Cedarburg as demanded. On December 18, 2012, Cedarburg responded to the Company&rsquo;s letter and, on January 15, 2013, the Company sent another letter to Cedarburg reiterating its position that the Company has no obligation to indemnify Cedarburg as demanded. As of February 10, 2017, the Company has not received any further communication from Cedarburg with respect to its demand for indemnification as set forth in the Demand Letter. The Company intends to vigorously contest Cedarburg&#39;s demand as set forth in the Demand Letter.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>&nbsp;</i></b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>Note <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">7. Related Party Transactions</font></i></b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">See Note 4<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">. Senior Credit Facility, Subordinated Convertible Note, net - CD Financial, LLC and other Long Term Debt for related party securities transactions.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">See Note 6<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">(a). Leases for related party lease transactions.</font></p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: Times New Roman; font-size: 10pt;">-13-</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(in thousands, except share and per share amounts)</i></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(Unaudited)</i></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>Note <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">8. Segment Information</font></i></b></p>

<p style="margin: 0pt 0.2pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The basis for presenting segment results generally is consistent with overall Company reporting. The Company reports information about its operating segments in accordance with GAAP which establishes standards for reporting information about a company<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&rsquo;s operating segments. </font></p>

<p style="margin: 0pt 0.2pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The Company has divided its operations into three reportable segments as follows: Contract Manufacturing, <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">Branded Proprietary Products and Other Nutraceutical Businesses. The international sales, concentrated primarily in Europe and Canada, for the three months ended December 31, 2016 and 2015 were $1,797 and $1,826, respectively and for the six months ended December 31, 2016 and 2015 were $4,673 and $3,818, respectively.</font></p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Financial information relating to the <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">three months ended December 31, 2016 and 2015 operations by business segment are as follows:</font></p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="TBL41" style="margin: 0pt auto 0pt 0pt; width: 89%; text-indent: 0px; font-family: Times New Roman; font-size: 10pt;">

		<tr>
			<td style="width: 18.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.1%; vertical-align: middle;">&nbsp;</td>
			<td colspan="5" rowspan="1" style="width: 12.6%; text-align: center; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">Sales, Net</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 7.8%; text-align: center; vertical-align: middle;">Segment</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.9%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.2%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 18.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">U.S.</p>
			</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">International</p>
			</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 7.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Gross</p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.9%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Capital</p>
			</td>
		</tr>
		<tr>
			<td style="width: 18.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.6%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Customers</p>
			</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.7%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Customers</p>
			</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.4%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Total</p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 7.8%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Profit (loss)</p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.9%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Depreciation</p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Expenditures</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 18.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Contract Manufacturing</b></p>
			</td>
			<td style="width: 6.1%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>2016</b></p>
			</td>
			<td style="width: 12.6%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>$ 10,207 </b></p>
			</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.7%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>$ 1,687 </b></p>
			</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.4%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>$ 11,894 </b></p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 7.8%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>$ 1,344 </b></p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.9%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>$ 80 </b></p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>$ 42 </b></p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 18.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">2015</p>
			</td>
			<td style="width: 12.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,077</p>
			</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,814</p>
			</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9,891</p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 7.8%; vertical-align: middle;">
			<p style="margin: 0pt; font-family: 'Times New Roman', Times, serif; font-size: 10pt; text-align: right;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;842</p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;55</p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;176</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 18.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Branded Proprietary Products</b></p>
			</td>
			<td style="width: 6.1%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>2016</b></p>
			</td>
			<td style="width: 12.6%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;61 </b></p>
			</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.7%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;101 </b></p>
			</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.4%; vertical-align: bottom;">
			<p style="margin: 0pt; font-family: 'Times New Roman', Times, serif; font-size: 10pt; text-align: right;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;162 </b></p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 7.8%; vertical-align: bottom;">
			<p style="margin: 0pt; font-family: 'Times New Roman', Times, serif; font-size: 10pt; text-align: right;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17 </b></p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.9%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </b></p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </b></p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 18.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">2015</p>
			</td>
			<td style="width: 12.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;84</p>
			</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3</p>
			</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.4%; vertical-align: middle;">
			<p style="margin: 0pt; font-family: 'Times New Roman', Times, serif; font-size: 10pt; text-align: right;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;87</p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 7.8%; vertical-align: middle;">
			<p style="margin: 0pt; font-family: 'Times New Roman', Times, serif; font-size: 10pt; text-align: right;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(19)</p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 18.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Other Nutraceutical Businesses</b></p>
			</td>
			<td style="width: 6.1%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>2016</b></p>
			</td>
			<td style="width: 12.6%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;307 </b></p>
			</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.7%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9 </b></p>
			</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.4%; vertical-align: bottom;">
			<p style="margin: 0pt; font-family: 'Times New Roman', Times, serif; font-size: 10pt; text-align: right;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;316 </b></p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 7.8%; vertical-align: bottom;">
			<p style="margin: 0pt; font-family: 'Times New Roman', Times, serif; font-size: 10pt; text-align: right;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;109 </b></p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.9%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </b></p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </b></p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 18.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">2015</p>
			</td>
			<td style="width: 12.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;426</p>
			</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9</p>
			</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.4%; vertical-align: middle;">
			<p style="margin: 0pt; font-family: 'Times New Roman', Times, serif; font-size: 10pt; text-align: right;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;435</p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 7.8%; vertical-align: middle;">
			<p style="margin: 0pt; font-family: 'Times New Roman', Times, serif; font-size: 10pt; text-align: right;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;152</p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1</p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 18.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Total Company</b></p>
			</td>
			<td style="width: 6.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>2016</b></p>
			</td>
			<td style="width: 12.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10,575 </b></p>
			</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,797 </b></p>
			</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.4%; vertical-align: middle;">
			<p style="margin: 0pt; font-family: 'Times New Roman', Times, serif; font-size: 10pt; text-align: right;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12,372 </b></p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 7.8%; vertical-align: middle;">
			<p style="margin: 0pt; font-family: 'Times New Roman', Times, serif; font-size: 10pt; text-align: right;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,470 </b></p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;80 </b></p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;42 </b></p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 18.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">2015</p>
			</td>
			<td style="width: 12.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,587</p>
			</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.7%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,826</p>
			</td>
			<td style="width: 0.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.4%; vertical-align: middle;">
			<p style="margin: 0pt; font-family: 'Times New Roman', Times, serif; font-size: 10pt; text-align: right;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10,413</p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 7.8%; vertical-align: middle;">
			<p style="margin: 0pt; font-family: 'Times New Roman', Times, serif; font-size: 10pt; text-align: right;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;975</p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;56</p>
			</td>
			<td style="width: 0.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;176</p>
			</td>
		</tr>

</table>

<p>&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: Times New Roman; font-size: 10pt;">-14-</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(in thousands, except share and per share amounts)</i></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(Unaudited)</i></p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Financial <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">information relating to the six months ended December 31, 2016 and 2015 operations by business segment are as follows:</font></p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="TBL42" style="width: 91%; text-indent: 0px; font-family: Times New Roman, Times, serif; font-size: 10pt;">

		<tr>
			<td style="width: 18.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 5.9%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 10.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.9%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 18.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 5.9%; vertical-align: middle;">&nbsp;</td>
			<td colspan="5" style="width: 35%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Sales, Net</p>
			</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 10.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Segment</p>
			</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.9%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 18.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 5.9%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">U.S.</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">International</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 10.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Gross</p>
			</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Capital</p>
			</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 18.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 5.9%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Customers</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.4%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Customers</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Total</p>
			</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 10.2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Profit (loss)</p>
			</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Depreciation</p>
			</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.9%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Expenditures</p>
			</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 18.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Contract Manufacturing</b></p>
			</td>
			<td style="width: 5.9%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>2016</b></p>
			</td>
			<td style="width: 12.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>$ 19,528 </b></p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.4%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>$ 4,398 </b></p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>$ 23,926 </b></p>
			</td>
			<td style="width: 0.3%; text-align: right; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 10.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>$ 3,240 </b></p>
			</td>
			<td style="width: 0.3%; text-align: right; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 14.5%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>$ 151 </b></p>
			</td>
			<td style="width: 0.3%; text-align: right; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 14.9%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>$ 83 </b></p>
			</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 18.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 5.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">2015</p>
			</td>
			<td style="width: 12.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15,007</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,629</p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18,636</p>
			</td>
			<td style="width: 0.3%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 10.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,883</p>
			</td>
			<td style="width: 0.3%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;114</p>
			</td>
			<td style="width: 0.3%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;230</p>
			</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 18.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Branded Proprietary Products</b></p>
			</td>
			<td style="width: 5.9%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>2016</b></p>
			</td>
			<td style="width: 12.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;90 </b></p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 14.4%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;196 </b></p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;286 </b></p>
			</td>
			<td style="width: 0.3%; text-align: right; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 10.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;51 </b></p>
			</td>
			<td style="width: 0.3%; text-align: right; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 14.5%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </b></p>
			</td>
			<td style="width: 0.3%; text-align: right; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 14.9%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;- </b></p>
			</td>
			<td style="width: 0.3%; vertical-align: bottom;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 18.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 5.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">2015</p>
			</td>
			<td style="width: 12.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;232</p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;175</p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;407</p>
			</td>
			<td style="width: 0.3%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 10.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;109</p>
			</td>
			<td style="width: 0.3%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</p>
			</td>
			<td style="width: 0.3%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</p>
			</td>
			<td style="width: 0.3%; text-align: right; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 18.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Other Nutraceutical Businesses</b></p>
			</td>
			<td style="width: 5.9%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>2016</b></p>
			</td>
			<td style="width: 12.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;762 </b></p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 14.4%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;79 </b></p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;841 </b></p>
			</td>
			<td style="width: 0.3%; text-align: right; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 10.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;330 </b></p>
			</td>
			<td style="width: 0.3%; text-align: right; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 14.5%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1 </b></p>
			</td>
			<td style="width: 0.3%; text-align: right; vertical-align: bottom;">&nbsp;</td>
			<td style="width: 14.9%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1 </b></p>
			</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 18.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 5.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">2015</p>
			</td>
			<td style="width: 12.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;802</p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14</p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;816</p>
			</td>
			<td style="width: 0.3%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 10.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;298</p>
			</td>
			<td style="width: 0.3%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1</p>
			</td>
			<td style="width: 0.3%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1</p>
			</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 18.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Total Company</b></p>
			</td>
			<td style="width: 5.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>2016</b></p>
			</td>
			<td style="width: 12.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20,380 </b></p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,673 </b></p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25,053 </b></p>
			</td>
			<td style="width: 0.3%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 10.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,621 </b></p>
			</td>
			<td style="width: 0.3%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;152 </b></p>
			</td>
			<td style="width: 0.3%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;84 </b></p>
			</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 18.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 5.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">2015</p>
			</td>
			<td style="width: 12.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16,041</p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,818</p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19,859</p>
			</td>
			<td style="width: 0.3%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 10.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,290</p>
			</td>
			<td style="width: 0.3%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;115</p>
			</td>
			<td style="width: 0.3%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;231</p>
			</td>
			<td style="width: 0.3%; text-align: right; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 18.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 5.9%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.4%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 8.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 10.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 14.9%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.3%; vertical-align: middle;">&nbsp;</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<table border="0" cellpadding="0" cellspacing="0" id="TBL44" style="width: 53.8%; text-indent: 0px; font-family: Times New Roman, Times, serif; font-size: 10pt;">

		<tr>
			<td style="width: 52%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2%; vertical-align: middle;">&nbsp;</td>
			<td colspan="3" style="width: 46%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Total Assets as of</p>
			</td>
		</tr>
		<tr>
			<td style="width: 52%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 26.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31,</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 19.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">June 30,</p>
			</td>
		</tr>
		<tr>
			<td style="width: 52%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 26.8%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2016</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 19.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2016</p>
			</td>
		</tr>
		<tr>
			<td style="width: 52%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Contract Manufacturing</b></p>
			</td>
			<td style="width: 2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 26.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>$ 12,674 </b></p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 19.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 11,853</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 52%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Branded Proprietary Products</b></p>
			</td>
			<td style="width: 2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 26.8%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;746 </b></p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 19.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;676</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 52%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Other Nutraceutical Businesses</b></p>
			</td>
			<td style="width: 2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 26.8%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,578 </b></p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 19.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,556</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 52%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Total Company</b></p>
			</td>
			<td style="width: 2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 26.8%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>$ 14,998 </b></p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 19.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 14,085</p>
			</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: Times New Roman; font-size: 10pt;">-15-</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Item 2. <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> MANAGEMENT&rsquo;S DISCUSSION AND ANALYSIS OF FINANICAL CONDITION AND RESULTS OF OPERATION </font></b></p>

<p style="margin: 0pt 0pt 0pt 36pt; text-align: left; text-indent: -36pt; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Certain statements set forth under this caption constitute &ldquo;forward-looking statements.&rdquo; See &ldquo;Disclosure Regarding Forward-Looking Statements&rdquo; on page 1 of this <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">Quarterly Report on Form 10-Q for additional factors relating to such statements. The following discussion should also be read in conjunction with the condensed consolidated financial statements of the Company and Notes thereto included herein and the Company&rsquo;s Annual Report on Form 10-K for the fiscal year ended June 30, 2016.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The Company is engaged primarily in the manufacturing, distributing, marketing and sales of vitamins, nutritional supplements and herbal products. <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">The Company&rsquo;s customers are located primarily in the United States, Luxembourg and Canada.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>&nbsp;</i></b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>Business Outlook</i></b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Our future results of operations and the other forward-looking statements contained in this Quarterly Report on Form 10-Q, including this MD&amp;A, involve a number of risks and uncertainties<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&mdash;in particular, the statements regarding our goals and strategies, new product introductions, plans to cultivate new businesses, pending divestitures, future economic conditions, revenue, pricing, gross margin and costs, the tax rate, and potential legal proceedings. We are focusing our efforts to improve operational efficiency and reduce spending that may have an impact on expense levels and gross margin. In addition to the various important factors discussed above, a number of other important factors could cause actual results to differ significantly from our expectations. See the risks described in &ldquo;Risk Factors&rdquo; in Part II, Item 1A of this Quarterly Report on Form 10-Q.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">For <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">the six months ended December 31, 2016, our net sales from operations increased by $5.2 million to approximately $25.1 million from approximately $19.9 million in the six months ended December 31, 2015. Substantially all the increase in net sales was from the Contract Manufacturing Segment ($2.8&nbsp;million and $2.4 million from our significant customers, Herbalife and Life Extension, respectively), our other two segments had an offsetting net decrease in net sales of less than $0.1 million. The increase in sales from Herbalife and to a lesser extent Life Extension, was the result of filling back orders from the prior fiscal year and is not necessarily indicative of future growth for these customers. For the six months ended December 31, 2016 we had operating income of approximately $1.9 million, an increase of approximately $1.3 million from the six months ended December 31, 2015 of approximately $0.6 million. Our profit margins increased from approximately 11.5% of net sales in the six months ended December 31, 2015 to approximately 15% of net sales in the six months ended December 31, 2016, primarily as a result of increased weighted gross margins in our Contract Manufacturing Segment of approximately 3%. This improvement was the direct result of the increased sales while our fixed manufacturing costs remaining substantially the same in the year over year reporting period. Our consolidated selling and administrative expenses increased approximately 3% or approximately $0.1 million from $1.6 million for the six months ended December 31, 2015 to approximately $1.7 million in the six months ended December 31, 2016.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>Critical Accounting Policies and Estimates</i></b></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">There have been no changes to our critical accounting policies in the <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">six months ended December 31, 2016. Critical accounting policies and the significant estimates made in accordance with them are regularly discussed by management with our Audit Committee. Those policies are discussed under &ldquo;Critical Accounting Policies&rdquo; in our &ldquo;Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations&rdquo; included in Item 7 of our Annual Report on Form 10-K for the year ended June 30, 2016.</font></p>

<p style="font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>&nbsp;</i></b></p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: Times New Roman; font-size: 10pt;">-16-</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>Results of Operations</i></b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Our results from operations in the following table, sets forth the income statement data of our results as a percentage of net sales for the periods indicated:</p>

<table border="0" cellpadding="0" cellspacing="0" id="TBL45" style="margin: 0pt 7.5%; width: 85%; text-indent: 0px; font-size: 11pt;">

		<tr>
			<td style="width: 47.2%; vertical-align: middle;">&nbsp;</td>
			<td colspan="3" style="width: 25%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">For the three months</p>
			</td>
			<td style="width: 2.7%; vertical-align: middle;">&nbsp;</td>
			<td colspan="3" style="width: 25%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">For the six months</p>
			</td>
		</tr>
		<tr>
			<td style="width: 47.2%; vertical-align: middle;">&nbsp;</td>
			<td colspan="3" style="width: 25%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">ended December 31,</p>
			</td>
			<td style="width: 2.7%; vertical-align: middle;">&nbsp;</td>
			<td colspan="3" style="width: 25%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">ended December 31,</p>
			</td>
		</tr>
		<tr>
			<td style="width: 47.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2016</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2015</p>
			</td>
			<td style="width: 2.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2016</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2015</p>
			</td>
		</tr>
		<tr>
			<td style="width: 47.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 47.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Sales, net</p>
			</td>
			<td style="width: 12.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;100.0%</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;100.0%</p>
			</td>
			<td style="width: 2.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;100.0%</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;100.0%</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 47.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 47.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Costs and expenses:</p>
			</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 47.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Cost of sales</p>
			</td>
			<td style="width: 12.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;88.1%</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;90.6%</p>
			</td>
			<td style="width: 2.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;85.5%</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;88.5%</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 47.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Selling and administrative</p>
			</td>
			<td style="width: 12.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3%</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.8%</p>
			</td>
			<td style="width: 2.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.8%</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2%</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 47.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;95.4%</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;98.4%</p>
			</td>
			<td style="width: 2.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;92.3%</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;96.7%</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 47.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Income from operations</p>
			</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6%</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.6%</p>
			</td>
			<td style="width: 2.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.7%</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3%</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 47.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 47.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Other income (expense), net</p>
			</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 47.2%; font-family: Times New Roman; font-size: 10pt; vertical-align: middle;">Interest expense</td>
			<td style="width: 12.5%; vertical-align: middle;">
			<p style="margin: 0pt; font-family: 'Times New Roman', Times, serif; font-size: 10pt; text-align: left;"><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;(1.8%)</font></p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">
			<p style="margin: 0pt; font-family: 'Times New Roman', Times, serif; font-size: 10pt; text-align: left;">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;(2.3%)</p>
			</td>
			<td style="width: 2.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; text-align: left; font-family: 'Times New Roman'; font-size: 10pt; vertical-align: middle; padding: 0pt;">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;(1.8%)</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; text-align: left; font-family: 'Times New Roman'; font-size: 10pt; vertical-align: middle; padding: 0pt;">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;(2.4%)</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 47.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Change in fair value of derivative liabilities</p>
			</td>
			<td style="width: 12.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2.9%)</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.1%</p>
			</td>
			<td style="width: 2.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2.9%)</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.0%</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 47.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Other income, net</p>
			</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.1%</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.2%</p>
			</td>
			<td style="width: 2.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.1%</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.2%</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 47.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Other income (expense), net</p>
			</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4.6%)</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2.0%)</p>
			</td>
			<td style="width: 2.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4.6%)</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2.2%)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 47.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 47.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">(Loss) income before income taxes</p>
			</td>
			<td style="width: 12.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.0%)</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.4%)</p>
			</td>
			<td style="width: 2.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1%</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1%</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 47.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 47.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Federal and state income taxes, net</p>
			</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.6%</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.2%</p>
			</td>
			<td style="width: 2.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.8%</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.2%</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 47.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 47.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Net (loss)&nbsp;income</p>
			</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.6%)</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(0.6%)</p>
			</td>
			<td style="width: 2.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3%</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.9%</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 47.2%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2.7%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 12.5%; vertical-align: middle;">&nbsp;</td>
		</tr>

</table>

<p style="margin: 0pt 0pt 0pt 9pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>For </i></b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>t</i></b><b><i>he </i></b><b><i>S</i></b><b><i>ix </i></b><b><i>M</i></b><b><i>onths </i></b><b><i>E</i></b><b><i>nded</i></b><b><i> </i></b><b><i>December 31, 2016</i></b><b><i> compared to </i></b><b><i>t</i></b><b><i>he </i></b><b><i>S</i></b><b><i>ix </i></b><b><i>M</i></b><b><i>onths </i></b><b><i>E</i></b><b><i>nded</i></b><b><i> </i></b><b><i>December 31, 2015</i></b></font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Sales, net.</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b> </b></font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">Sales, net, for the six months ended December 31, 2016 and 2015 were $25.1 million and $19.9 million, respectively, an increase of 26.2%, and are comprised of the following:</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="TBL46" style="margin: 0pt 7.5%; width: 85%; text-indent: 0px; font-size: 11pt;">

		<tr>
			<td style="width: 288.72px; vertical-align: middle;">&nbsp;</td>
			<td colspan="3" style="width: 113.08px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Six months ended</p>
			</td>
			<td style="width: 9.91px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Dollar</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Percentage</p>
			</td>
		</tr>
		<tr>
			<td style="width: 288.72px; vertical-align: middle;">&nbsp;</td>
			<td colspan="3" style="width: 113.08px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31,</p>
			</td>
			<td style="width: 9.91px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Change</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Change</p>
			</td>
		</tr>
		<tr>
			<td style="width: 288.72px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 54.27px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2016</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 55.08px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2015</p>
			</td>
			<td style="width: 9.91px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2016 vs 2015</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2016 vs 2015</p>
			</td>
		</tr>
		<tr>
			<td style="width: 288.72px; vertical-align: middle;">&nbsp;</td>
			<td colspan="5" style="width: 222.27px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(amounts in thousands)</i></p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 288.72px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Contract Manufacturing:</b></p>
			</td>
			<td style="width: 54.27px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 55.08px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 9.91px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 288.72px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">US Customers</p>
			</td>
			<td style="width: 54.27px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 19,528</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 55.08px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 15,007</p>
			</td>
			<td style="width: 9.91px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 4,521</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;30.1%</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 288.72px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">International Customers</p>
			</td>
			<td style="width: 54.27px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4,398</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 55.08px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,629</p>
			</td>
			<td style="width: 9.91px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;769</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21.2%</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 288.72px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Net sales, Contract Manufacturing</p>
			</td>
			<td style="width: 54.27px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;23,926</p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 55.08px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;18,636</p>
			</td>
			<td style="width: 9.91px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,290</p>
			</td>
			<td style="width: 2.5%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;28.4%</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 288.72px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 54.27px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 55.08px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 9.91px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 288.72px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Branded Nutraceutical Products:</b></p>
			</td>
			<td style="width: 54.27px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 55.08px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 9.91px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 288.72px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">US Customers</p>
			</td>
			<td style="width: 54.27px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;90</p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 55.08px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;232</p>
			</td>
			<td style="width: 9.91px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(142)</p>
			</td>
			<td style="width: 2.5%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(61.2%)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 288.72px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">International Customers</p>
			</td>
			<td style="width: 54.27px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;196</p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 55.08px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;175</p>
			</td>
			<td style="width: 9.91px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21</p>
			</td>
			<td style="width: 2.5%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.0%</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 288.72px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Net sales, Branded Nutraceutical Products</p>
			</td>
			<td style="width: 54.27px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;286</p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 55.08px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;407</p>
			</td>
			<td style="width: 9.91px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(121)</p>
			</td>
			<td style="width: 2.5%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(29.7%)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 288.72px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 54.27px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 55.08px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 9.91px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 288.72px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Other Nutraceuticals:</b></p>
			</td>
			<td style="width: 54.27px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 55.08px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 9.91px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 288.72px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">US Customers</p>
			</td>
			<td style="width: 54.27px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;762</p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 55.08px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;802</p>
			</td>
			<td style="width: 9.91px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(40)</p>
			</td>
			<td style="width: 2.5%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5.0%)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 288.72px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">International Customers</p>
			</td>
			<td style="width: 54.27px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;79</p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 55.08px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14</p>
			</td>
			<td style="width: 9.91px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;65</p>
			</td>
			<td style="width: 2.5%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;464.3%</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 288.72px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Net sales, Other Nutraceuticals</p>
			</td>
			<td style="width: 54.27px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;841</p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 55.08px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;816</p>
			</td>
			<td style="width: 9.91px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;25</p>
			</td>
			<td style="width: 2.5%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1%</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 288.72px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 54.27px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 55.08px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 9.91px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 288.72px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>Total net sales</b></i></p>
			</td>
			<td style="width: 54.27px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 25,053</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 55.08px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 19,859</p>
			</td>
			<td style="width: 9.91px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 5,194</p>
			</td>
			<td style="width: 2.5%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26.2%</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 288.72px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 54.27px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 55.08px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 9.91px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle;">&nbsp;</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: Times New Roman; font-size: 10pt;">-17-</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">For the <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">six months ended December 31, 2016 and 2015 a significant portion of our consolidated net sales, approximately 92% and 89%, respectively, were concentrated among two customers, Herbalife and Life Extension, customers in our Contract Manufacturing Segment. Herbalife and Life Extension represented approximately 42% and 54% and 39% and 57%, respectively of our Contract Manufacturing Segment&rsquo;s net sales in the six months ended December 31, 2016 and 2015, respectively. The loss of any of these customers could have a significant adverse impact on our financial condition and results of operations. Costco Wholesale Corporation (&ldquo;Costco&rdquo;) (a customer of our Branded Proprietary Products Segment), while not a significant customer of our consolidated net sales represented approximately 57% and 62% of net sales in the six months ended December 31, 2016 and 2015, respectively of the Branded Propriety Products Segment. </font></p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The in<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">crease in net sales of approximately $5.2 million was primarily the result of:</font></p>

<p style="margin: 0pt 0.2pt 0pt 18pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="MTAB7" style="width: 100%; font-family: Times New Roman, Times, serif; font-size: 10pt;">

		<tr>
			<td style="width: 54pt;">&nbsp;</td>
			<td style="width: 18pt; vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">&#9679;</p>
			</td>
			<td style="vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">Net sales <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">increase in our Contract Manufacturing Segment by $5.3 million primarily due to increased sales volumes to our major customers, Herbalife and Life Extension, in the six months ended December 31, 2016, of approximately $2.8 million and $2.4 million, respectively compared to the comparable prior period. </font></p>
			</td>
		</tr>

</table>

<table border="0" cellpadding="0" cellspacing="0" id="MTAB8" style="width: 100%; font-family: Times New Roman, Times, serif; font-size: 10pt;">

		<tr>
			<td style="width: 54pt;">&nbsp;</td>
			<td style="width: 18pt; vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">&#9679;</p>
			</td>
			<td style="vertical-align: top;">
			<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt;">Net sales in our Branded Nutraceutical Segment <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">decreased by approximately $0.1 million in the six months ended December 31, 2016, primarily as the result of the release of an estimated sales allowance of approximately $0.1 million in the six months ended December 31, 2015, for a customer the Company has not done business with in the past five years with no such release in the six months ended December 31, 2016.</font></p>
			</td>
		</tr>

</table>

<p style="margin: 0pt 0pt 0pt 72pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Cost</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b> of sales.</b> Cost of sales increased by $3.8 million to $21.4 million for the six months ended December 31, 2016, as compared to $17.6 million, an increase of 22%, for the six months ended December 31, 2015. As a percentage of sales to 85.5% for the six months ended December 31, 2016 as compared to 88.5% for the six months ended December 31, 2015. The increase in the cost of goods sold amount is consistent with the increased net sales of approximately 26%. The decrease in the cost of goods sold as a percentage of net sales, was primarily the result of the increased sales of $5.3 million in the Contracting Manufacturing Segment resulting in the absorption of the fixed manufacturing overhead costs of this segment. There were no significant changes in the cost of goods sold in our other two segments.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Selling and Administrative Expenses.</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> There was a slight increase in selling and administrative expenses of $56 or approximately 3.4% in the six months ended December 31, 2016 as compared to the six months ended December 31, 2015. As a percentage of sales, net, selling and administrative expenses were approximately 7% and 8% for the six months ended December 31, 2016 and 2015, respectively. The increase in selling and administrative expenses was primarily the result of increased salaries and employee benefits of approximately $87, offset in part by a decrease in marketing and advertising expenses in the Branded Nutraceutical Segment of approximately $35. Salaries and employee benefits increased as the result of salary increases, primarily for the executive officers of the Company. No other expense within our selling and administrative expenses changed by more than $27.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Other income (expense)</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>, net.</b> Other income (expense), net was approximately $1.1 million for the six months ended December 31, 2016 compared to $0.4 million for the six months ended December 31, 2015, and is composed of:</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="TBL47" style="margin: 0pt 22%; width: 56%; text-indent: 0px; font-size: 11pt;">

		<tr>
			<td style="width: 63.9%; vertical-align: middle;">&nbsp;</td>
			<td colspan="3" style="width: 36.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Six months ended</p>
			</td>
		</tr>
		<tr>
			<td style="width: 63.9%; vertical-align: middle;">&nbsp;</td>
			<td colspan="3" style="width: 36.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31,</p>
			</td>
		</tr>
		<tr>
			<td style="width: 63.9%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 18%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2016</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 17.9%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2015</p>
			</td>
		</tr>
		<tr>
			<td style="width: 63.9%; vertical-align: middle;">&nbsp;</td>
			<td colspan="3" style="width: 36.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">(dollars in thousands)</p>
			</td>
		</tr>
		<tr>
			<td style="width: 63.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Interest expense</p>
			</td>
			<td style="width: 18%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ (459)</p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 17.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ (480)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 63.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Change in fair value of derivative instruments</p>
			</td>
			<td style="width: 18%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(731)</p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 17.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 63.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Other income</p>
			</td>
			<td style="width: 18%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;31</p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 17.9%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;50</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 63.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Other income (expense), net</p>
			</td>
			<td style="width: 18%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ (1,159)</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 17.9%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ (427)</p>
			</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: Times New Roman; font-size: 10pt;">-18-</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The variance in the<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> change in fair value of derivative liabilities from the six months ended December 31, 2015 to the December 31, 2016 was mainly the result of the increased closing trading price of our common stock from $0.11 as of June 30, 2016 to $0.23 as of December 31, 2016 </font>and the change in the volatility of the closing trading price of our common stock from 63.2% as of June 30, 2016 to 99.3% as of December 31, 2016.<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">&nbsp; The closing trading price and the volatility of the closing trading price of our common stock are two</font> <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">of the variables used to calculate the estimated fair value of our derivative liabilities associated with the underlying derivative instrument. &nbsp;Our interest expense for the six months ended December 31, 2016 was slightly less the for the six months ended December 31, 2015 primarily as the result of decreased non cash interest charges from the accretion for the embedded derivative in our Convertible Note Payable &ndash; CD Financial, LLC (See Note 4. Senior Credit Facility, Subordinated Convertible Note, net - CD Financial, LLC and other Long Term Debt</font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> in this Quarterly Report on Form 10-Q) and the amortization of prepaid financing charges of approximately $69, offset by increased interest expense of approximately $48 on our outstanding debt. The other component of other income (expense) is not significant and did not vary significantly from the six months ended December 31, 2015.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Federal and state income tax, net.</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> For the six months ended December 31, 2016 and 2015, we had federal and state tax expense of approximately $197,000 and $48,000, respectively. We continue to maintain a full reserve on our deferred tax assets as it has been determined that based upon past losses, the Company&rsquo;s past liquidity concerns and the current economic environment, that it is &ldquo;more likely than not&rdquo; the Company&rsquo;s deferred tax assets may not be realized. The state tax expense is the result of MDC using all of its state net operating losses in the fiscal year ended 2013 tax period. All of our other subsidiaries still have adequate net operating losses for state income tax purposes to absorb any taxable income for state tax purposes.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Net </b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>income</b><b>.</b> Our net income for the six months ended December 31, 2016 and 2015 was approximately $0.6 million and $0.2 million, respectively. The increase of approximately $0.4 million was primarily the result of our increased operating income of $1.3 million offset by the change in fair value of derivative instruments of approximately $0.7 million and increased income tax expense of approximately $0.2 million.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>&nbsp;</i></b></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>For </i></b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>t</i></b><b><i>he </i></b><b><i>T</i></b><b><i>hree </i></b><b><i>M</i></b><b><i>onths </i></b><b><i>E</i></b><b><i>nded </i></b><b><i>December 31, 2016</i></b><b><i> compared to</i></b><b><i> </i></b><b><i>t</i></b><b><i>he </i></b><b><i>T</i></b><b><i>hree </i></b><b><i>M</i></b><b><i>onths </i></b><b><i>E</i></b><b><i>nded </i></b><b><i>December 31, 2015</i></b></font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Sales, net.</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b> </b></font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">Sales, net, for the three months ended December 31, 2016 and 2015 were $12.4 million and $10.4 million, respectively, an increase of 18.8%, and are comprised of the following:</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="TBL48" style="margin: 0pt 7.5%; width: 85%; text-indent: 0px; font-size: 11pt;">

		<tr>
			<td style="width: 274.63px; vertical-align: middle;">&nbsp;</td>
			<td colspan="3" style="width: 125px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Three months ended</p>
			</td>
			<td style="width: 6px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Dollar</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: bottom;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Percentage</p>
			</td>
		</tr>
		<tr>
			<td style="width: 274.63px; vertical-align: middle;">&nbsp;</td>
			<td colspan="3" style="width: 125px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31,</p>
			</td>
			<td style="width: 6px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Change</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Change</p>
			</td>
		</tr>
		<tr>
			<td style="width: 274.63px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 63.36px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2016</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 58px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2015</p>
			</td>
			<td style="width: 6px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2016 vs 2015</p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2016 vs 2015</p>
			</td>
		</tr>
		<tr>
			<td style="width: 274.63px; vertical-align: middle;">&nbsp;</td>
			<td colspan="5" style="width: 229.36px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(amounts in thousands)</i></p>
			</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 274.63px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Contract Manufacturing:</b></p>
			</td>
			<td style="width: 63.36px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 58px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 274.63px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">US Customers</p>
			</td>
			<td style="width: 63.36px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 10,207</p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 58px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 8,077</p>
			</td>
			<td style="width: 6px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 2,130</p>
			</td>
			<td style="width: 2.5%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26.4%</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 274.63px; vertical-align: middle;">
			<p style="margin: 0pt; font-family: Times New Roman, Times, serif; font-size: 10pt;">International Customers</p>
			</td>
			<td style="width: 63.36px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,687</p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 58px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,814</p>
			</td>
			<td style="width: 6px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(127)</p>
			</td>
			<td style="width: 2.5%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7.0%)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 274.63px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Net sales, Contract Manufacturing</p>
			</td>
			<td style="width: 63.36px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;11,894</p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 58px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9,891</p>
			</td>
			<td style="width: 6px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2,003</p>
			</td>
			<td style="width: 2.5%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.3%</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 274.63px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 63.36px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 58px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 274.63px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Branded Nutraceutical Products:</b></p>
			</td>
			<td style="width: 63.36px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 58px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 274.63px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">US Customers</p>
			</td>
			<td style="width: 63.36px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;61</p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 58px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;84</p>
			</td>
			<td style="width: 6px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(23)</p>
			</td>
			<td style="width: 2.5%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(27.4%)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 274.63px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">International Customers</p>
			</td>
			<td style="width: 63.36px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;101</p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 58px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3</p>
			</td>
			<td style="width: 6px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;98</p>
			</td>
			<td style="width: 2.5%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,266.7%</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 274.63px; vertical-align: middle;">
			<p style="margin: 0pt; font-family: Times New Roman, Times, serif; font-size: 10pt;">Net sales, Branded Nutraceutical Products</p>
			</td>
			<td style="width: 63.36px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;162</p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 58px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;87</p>
			</td>
			<td style="width: 6px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;75</p>
			</td>
			<td style="width: 2.5%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;86.2%</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 274.63px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 63.36px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 58px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 274.63px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Other Nutraceuticals:</b></p>
			</td>
			<td style="width: 63.36px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 58px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 274.63px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">US Customers</p>
			</td>
			<td style="width: 63.36px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;307</p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 58px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;426</p>
			</td>
			<td style="width: 6px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(119)</p>
			</td>
			<td style="width: 2.5%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(27.9%)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 274.63px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">International Customers</p>
			</td>
			<td style="width: 63.36px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9</p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 58px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9</p>
			</td>
			<td style="width: 6px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-</p>
			</td>
			<td style="width: 2.5%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">0%</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 274.63px; vertical-align: middle;">
			<p style="margin: 0pt; font-family: Times New Roman, Times, serif; font-size: 10pt;">Net sales, Other Nutraceuticals</p>
			</td>
			<td style="width: 63.36px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;316</p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 58px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;435</p>
			</td>
			<td style="width: 6px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(119)</p>
			</td>
			<td style="width: 2.5%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(27.4%)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 274.63px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 63.36px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 58px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 274.63px; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i><b>Total net sales</b></i></p>
			</td>
			<td style="width: 63.36px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 12,372</p>
			</td>
			<td style="width: 0.1%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 58px; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 10,413</p>
			</td>
			<td style="width: 6px; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 1,959</p>
			</td>
			<td style="width: 2.5%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.8%</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 274.63px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 63.36px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 58px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 6px; vertical-align: middle;">&nbsp;</td>
			<td style="width: 15.3%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 2.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 16.2%; vertical-align: middle;">&nbsp;</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">For the three months ended <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31, 2016 and 2015 a significant portion of our consolidated net sales, approximately 92% and 91%, respectively, were concentrated among two customers, Herbalife and Life Extension, customers in our Contract Manufacturing Segment. Herbalife and Life Extension represented approximately 35% and 60% and 31% and 65%, respectively of our Contract Manufacturing Segment&rsquo;s net sales in the three months ended December 31, 2016 and 2015, respectively. </font></p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: Times New Roman; font-size: 10pt;">-19-</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">The loss of any of these customers could have a significant adverse impact on our financial condition and results of operations. Costco Wholesale Corporation (&ldquo;Costco&rdquo;) (a customer of our Branded Proprietary Products Segment), while not a significant customer of our consolidated net sales represented approximately 53% and 25% of net sales in the three months ended December 31, 2016 and 2015, respectively of the Branded Propriety Products Segment. </font></p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">increase in net sales of approximately $2.0 million was primarily the result of net sales increasing in our Contract Manufacturing Segment primarily due to increased sales volumes to our major customers, Herbalife and Life Extension of approximately $1.1 million and $0.7 million, respectively, in the three months ended December 31, 2016, compared to the comparable prior period. </font></p>

<p style="margin: 0pt 0pt 0pt 72pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Cost</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b> of sales.</b> Cost of sales increased by $1.5 million to $10.9 million for the three months ended December 31, 2016, as compared to $9.4 million or approximately 16% for the three months ended December 31, 2015. Cost of sales decreased as a percentage of sales to 88.1% for the three months ended December 31, 2016 as compared to 90.6% for the three months ended December 31, 2015. The increase in the cost of goods sold amount is consistent with the increased net sales of approximately 19%. The decrease in the cost of goods sold as a percentage of net sales, was primarily the result of the increased sales of $2.0 million in the Contracting Manufacturing Segment resulting in the absorption of the fixed manufacturing overhead costs of this segment. There were no significant changes in the cost of goods sold in our other two segments.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Selling and Administrative Expenses.</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> There was an increase in selling and administrative expenses of $93 in the three months ended December 31, 2016 as compared to the three months ended December 31, 2015 or approximately 12%. As a percentage of sales, net, selling and administrative expenses were approximately 7% and 8% for the three months ended December 31, 2016 and 2015, respectively. The increase in selling and administrative expenses was primarily the result of increased salaries and employee benefits of approximately $66 and in other expenses of $29 in the three months ended December 31, 2016 compared to the comparable prior three month period. Salaries and employee benefits increased as the result of salary increases, primarily for the executive officers of the Company</font>&nbsp;<font style="font-family:Times New Roman, Times, serif;font-size:10pt;">(these&nbsp;increases were&nbsp;effective October 1, 2016 and were&nbsp;the first increases for the executive officers in approximately 10 years)&nbsp;</font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">and other expenses increased as the result of the release of a contingent liability reducing other expenses by $25 in the three month period ended December 31, 2015, absent this release, other expenses would have increased by $4. No other expense within our selling and administrative expenses changed by more than $10.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Other income (expense)</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>, net.</b> Other income (expense), net was approximately $0.6 million and $0.2 million for the three months ended December 31, 2016 and 2015, respectively, and is composed of:</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" id="TBL49" style="margin: 0pt 22%; width: 56%; text-indent: 0px; font-size: 11pt;">

		<tr>
			<td style="width: 63.9%; vertical-align: middle;">&nbsp;</td>
			<td colspan="3" style="width: 36.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">Three months ended</p>
			</td>
		</tr>
		<tr>
			<td style="width: 63.9%; vertical-align: middle;">&nbsp;</td>
			<td colspan="3" style="width: 36.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31,</p>
			</td>
		</tr>
		<tr>
			<td style="width: 63.9%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 17.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2016</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 18.4%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2015</p>
			</td>
		</tr>
		<tr>
			<td style="width: 63.9%; vertical-align: middle;">&nbsp;</td>
			<td colspan="3" style="width: 36.1%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">(dollars in thousands)</p>
			</td>
		</tr>
		<tr>
			<td style="width: 63.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Interest expense</p>
			</td>
			<td style="width: 17.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ (227)</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 18.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ (243)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 63.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Change in fair value of derivative instruments</p>
			</td>
			<td style="width: 17.5%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(364)</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 18.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 63.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Other income</p>
			</td>
			<td style="width: 17.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 18.4%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: thin; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;26</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 63.9%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Other income (expense), net</p>
			</td>
			<td style="width: 17.5%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ (576)</p>
			</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 18.4%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ (211)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 63.9%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 17.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 0.1%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 18.4%; vertical-align: middle;">&nbsp;</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">The variance in the<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> change in fair value of derivative liabilities from the three months ended December 31, 2015 to the December 31, 2016 was mainly the result of the increased closing trading price of our common stock from $0.15 as of September 30, 2016 to $0.23 as of December 31, 2016. The volatility of the closing trading price of our stock is one of the variables used to calculate the estimated fair value of our derivative liabilities associated with the underlying derivative instrument. Our interest expense in the three months ended December 31, 2016 decreased by approximately $16 from the three months ended December 31, 2015, as the result of decreased non cash interest charges from the accretion for the embedded derivative in our Convertible Note Payable &ndash; CD Financial, LLC (</font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">See Note 4. Senior Credit Facility, Subordinated Convertible Note, net - CD Financial, LLC and other Long Term Debt</font><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> in this Quarterly Report on Form 10-Q) and the amortization of prepaid financing charges of approximately $35, offset by increased interest expense of approximately $19 on our outstanding debt. </font></p>

<p>&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: Times New Roman; font-size: 10pt;">-20-</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">Other income decreased by approximately $11 as the result of earning less income from providing back office support, logistics and operational support for a start-up company which sells over the counter pharmaceutical and nutraceutical products through retail and internet based outlets.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Federal and state income tax, net.</b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"> For the three months ended December 31, 2016 and 2015, we had federal and state tax expense of approximately $71 and $20, respectively. We continue to maintain a full reserve on our deferred tax assets as it has been determined that based upon past losses, the Company&rsquo;s past liquidity concerns and the current economic environment, that it is &ldquo;more likely than not&rdquo; the Company&rsquo;s deferred tax assets may not be realized. The state income tax expense is the result of MDC using all of its state net operating losses in the fiscal year ended 2013 tax period. All of our other subsidiaries still have adequate net operating losses for state income tax purposes to absorb any taxable income for state tax purposes. </font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Net </b><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>loss</b><b>.</b> Our net loss for the three months ended December 31, 2016 and 2015 was approximately $77 and $63, respectively. </font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>&nbsp;</i></b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>Seasonality</i></b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The nutraceutical business tends to be seasonal. We have found that in our first fiscal quarter ending on <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">September 30th of each year, orders for our 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 our second fiscal quarter, ending on December 31st of each year, orders for our products increase as the demand for our branded nutraceutical products, as well as sales orders from our customers in our contract manufacturing segment, seem to increase in late December to early January as consumers become health conscious as they enter the new year. </font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The Company believes that there are other non-seasonal factors that also <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">may influence the variability of quarterly results including, but not limited to, general economic and industry conditions that affect consumer spending, changing consumer demands and current news on nutritional supplements. Accordingly, a comparison of the Company&rsquo;s results of operations from consecutive periods is not necessarily meaningful, and the Company&rsquo;s results of operations for any period are not necessarily indicative of future periods.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>&nbsp;</i></b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>Liquidity and Capital Resources</i></b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The following table sets forth, for the periods indicated, the Company<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&rsquo;s net cash flows used in operating, investing and financing activities, its period end cash and cash equivalents and other operating measures:</font></p>

<table border="0" cellpadding="0" cellspacing="0" id="TBL50" style="margin: 0pt 9%; width: 82%; text-indent: 0px; font-size: 11pt;">

		<tr>
			<td style="width: 54.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 19.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 5.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.1%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr>
			<td style="width: 54.6%; vertical-align: middle;">&nbsp;</td>
			<td colspan="3" style="width: 45.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">For the six months ended</p>
			</td>
		</tr>
		<tr>
			<td style="width: 54.6%; vertical-align: middle;">&nbsp;</td>
			<td colspan="3" style="width: 45.4%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31,</p>
			</td>
		</tr>
		<tr>
			<td style="width: 54.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 19.8%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2016</p>
			</td>
			<td style="width: 5.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 1px; border-bottom-style: solid;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">2015</p>
			</td>
		</tr>
		<tr>
			<td style="width: 54.6%; vertical-align: middle;">&nbsp;</td>
			<td colspan="3" style="width: 45.4%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><i>(dollars in thousands)</i></p>
			</td>
		</tr>
		<tr>
			<td style="width: 54.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 19.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 5.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.1%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 54.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Net cash provided by (used in) operating activities</p>
			</td>
			<td style="width: 19.8%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 547</p>
			</td>
			<td style="width: 5.5%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ (1,156)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 54.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Net cash used in investing activities</p>
			</td>
			<td style="width: 19.8%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ (83)</p>
			</td>
			<td style="width: 5.5%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ (38)</p>
			</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 54.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Net cash (used in) provided by financing activities</p>
			</td>
			<td style="width: 19.8%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ (793)</p>
			</td>
			<td style="width: 5.5%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 1,183</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 54.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 19.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 5.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.1%; vertical-align: middle;">&nbsp;</td>
		</tr>
		<tr style="background-color: rgb(204, 238, 255);">
			<td style="width: 54.6%; vertical-align: middle;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Cash at end of period</p>
			</td>
			<td style="width: 19.8%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 66</p>
			</td>
			<td style="width: 5.5%; text-align: right; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.1%; vertical-align: middle; border-bottom-color: rgb(0, 0, 0); border-bottom-width: 3px; border-bottom-style: double;">
			<p style="margin: 0pt; text-align: right; font-family: Times New Roman, Times, serif; font-size: 10pt;">$ 60</p>
			</td>
		</tr>
		<tr style="background-color: rgb(255, 255, 255);">
			<td style="width: 54.6%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 19.8%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 5.5%; vertical-align: middle;">&nbsp;</td>
			<td style="width: 20.1%; vertical-align: middle;">&nbsp;</td>
		</tr>

</table>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">At <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31, 2016 and June 30, 2016, our working capital was approximately $1.1 million and $0.2 million, respectively. Our current assets increased by $1.0 million and current liabilities increased by approximately $0.1 million, resulting in a net increase in our working capital of $0.9 million.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: Times New Roman; font-size: 10pt;">-21-</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Net cash <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">provided by operating activities of $0.5 million in the six months ended December 31, 2016, includes net income of approximately $0.6 million. After excluding the effects of non-cash expenses, including depreciation and amortization, and changes in the fair value of derivative liabilities, the adjusted cash provided from operations before the effect of the changes in working capital components was $1.6 million. Cash was used in operations from our working capital assets and liabilities in the amount of approximately $1.0 million and was primarily the result of increases in accounts receivable of $1.3 million offset, in part, by a net increase in accounts payable and accrued expenses and other liabilities of approximately $0.4 million.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Net cash used in operating activities of $1.<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">2 million in the six months ended December 31, 2015, includes net income of approximately $0.2 million. After excluding the effects of non-cash expenses, including depreciation and amortization, and changes in the fair value of derivative liabilities, the adjusted cash provided from operations before the effect of the changes in working capital components was $0.5 million. Cash was used in operations from our working capital assets and liabilities in the amount of approximately $1.6 million and was primarily the result of increases in accounts receivable of $1.4 million and inventories of $1.2 million offset, in part, by a net increase in accounts payable and accrued expenses and other liabilities of approximately $1.0 million.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Cash used in investing activities <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">of $83 and $38 in the six months ended December 31, 2016 and 2015, respectively, was for the purchase of property and equipment primarily in our Contract Manufacturing Segment. </font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Cash <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">used in financing activities was approximately $0.8 million for the six months ended December 31, 2016, $23.0 million from advances under our revolving credit facility offset, in part, by repayments of advances under our revolving credit facility of $23.2 million and repayments of principal under our term notes in the amount of $0.5 million.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Cash provided by financing activities was approximately <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">$1.2 million for the six months ended December 31, 2015, $19.0 million from advances under our revolving credit facility offset, in part, by repayments of advances under our revolving credit facility of $17.5 million and repayments of principal under our term notes in the amount of $0.3 million.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">As of <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31, 2016, we had cash of $66, funds available under our revolving credit facility of approximately $2.8 million and working capital of approximately $1.1 million. Our working capital includes $4.0 million outstanding under our revolving line of credit which is not due until February 2020 but classified as current due to a subjective acceleration clause that could cause the advances to become currently due. (See Note 4 to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q). Furthermore, we had income from operations of approximately $1.9 million in the six months ended December 30, 2016. After taking into consideration our interim results and current projections, management believes that operations, together with the revolving credit facility will support our working capital requirements through the period ending December 31, 2017. </font></p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Our total annual commitments at <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31, 2016 for long term non-cancelable leases of approximately $0.6 million consists of obligations under operating leases for facilities and operating lease agreements for the rental of warehouse equipment, office equipment and automobiles.</font></p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">On May 15, 2012, Cedarburg Pharmaceuticals, Inc. (&quot;Cedarburg&quot;) sent us a letter (the &quot;Demand Letter&quot;) setting forth a demand for indemnification under the Stock Purchase Agreement, dated March 17, 2009 (the &quot;Cedarburg SPA&quot;), by and among Cedarburg, InB: Hauser Pharmaceutical Services, Inc., InB: Paxis Pharmaceuticals, Inc. and the Company. In the Demand Letter, Cedarbur<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">g demanded payment by us of $0.6 million in respect of the Company&#39;s indemnification obligations under the Cedarburg SPA. In addition, in the Demand Letter, Cedarburg informed us that there are also environmental issues pending which may lead to additional costs to Cedarburg which will likely be in excess of $0.3 million. </font></p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">On May 30, 2012, we sent a letter responding to the Demand Letter and setting forth our position that we have no obligation to indemnify Cedarburg as demanded. On June 18, 2012, Cedarburg responded to our letter and, on July 27, 2012, we sent another letter to Cedarburg reiterating our position that <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">we have no obligation to indemnify Cedarburg as demanded. On December 18, 2012,</font></p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: Times New Roman; font-size: 10pt;">-22-</div>

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<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt 0.2pt 0pt 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">Cedarburg responded to our letter and, on January 15, 2013, we sent another letter to Cedarburg reiterating our position that we have no obligation to indemnify Cedarburg as demanded. As of February 10, 2017, we have not received any further communication from Cedarburg with respect to its demand for indemnification as set forth in the Demand Letter. We intend to vigorously contest Cedarburg&#39;s demand as set forth in the Demand Letter.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>&nbsp;</i></b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>Capital Expenditures</i></b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The Company&#39;s capital expenditures for the <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">six months ended December 31, 2016 and 2015 were approximately $83 and $0.2 million ($43 funded with proceeds under our convertible line of credit for equipment financing and $0.2 million funded with capitalized lease financing), respectively. The Company has budgeted approximately $0.3 million for capital expenditures for fiscal year 2017. The total amount is expected to be funded from lease financing and cash provided from the Company&rsquo;s operations.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>&nbsp;</i></b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>Off-Balance Sheet Arrangements</i></b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The Company has no off-balance sheet arrangements.</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>Recent Accounting Pronouncement<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">s</font></i></b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>&nbsp;</i></b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">None<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>&nbsp;</i></b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>Impact of Inflation</i></b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><i>&nbsp;</i></b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The Company does not believe that inflation has significantly affected its results of operations.</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Not applicable.</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Item 4. CONTROLS AND PROCEDURES</b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Disclosure Controls and Procedures</b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;the Company in the reports&nbsp;it files or submits&nbsp;under the Securities Exchange Act of 1934, as amended (the &ldquo;Exchange Act&rdquo;) is recorded, processed, summarized, and reported within the time periods specified by the Commission&rsquo;s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by&nbsp;the Company&nbsp;in the reports&nbsp;it files&nbsp;or submits under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company has evaluated the effectiveness of its disclosure controls and procedures (as such term is defined in Rule<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2016, and, based upon this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these controls and procedures are effective in providing reasonable assurance of compliance.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Changes in Internal Control over Financial Reporting</b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">No change in our internal control over financial reporting occurred during the six months ended <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">December 31, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.</font></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<div id="PGBK" style="width: 100%; margin-right: 0pt; margin-left: 0pt;">
<div id="PGNUM" style="width: 100%; text-align: center; font-family: Times New Roman; font-size: 10pt;">-23-</div>

<hr style="border: currentColor; border-image: none; width: 100%; height: 2px; color: rgb(0, 0, 0); page-break-after: always; background-color: rgb(0, 0, 0);">
<div id="PGHDR" style="width: 100%; text-align: left;">&nbsp;</div>
</div>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>PART II <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&ndash; OTHER INFORMATION</font></b></p>

<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Item 1. LEGAL PROCEEDINGS</b></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">None.</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Item 1A. Risk Factors</b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The risks described in Item 1A, Risk Factors, in our Annual Report on Form 10-K for the year ended <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">June 30, 2016, could materially and adversely affect our business, financial condition and results of operations. The risk factors discussed in that Form 10-K do not identify all risks that we face because our business operations could also be affected by additional factors that are not presently known to us or that we currently consider to be immaterial to our operations. There have been no material changes to our risk factors from those disclosed in our Form 10-K for the year ended June 30, 2016.</font></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS</b></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">None.</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Item 3. DEFAULTS UPON SENIOR SECURITIES</b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">None.</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Item 4. MINE SAFETY DISCLOSURE</b></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Not Applicable.</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Item 5. OTHER <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">INFORMATION</font></b></p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">None.</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Item 6. EXHIBITS </b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>(a)<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exhibits</font></b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>Exhibit</b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b><u>Number</u></b></p>

<table border="0" cellpadding="0" cellspacing="0" id="TBL9" style="width: 90.3%; text-indent: 0px; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-left: 0%;">

		<tr>
			<td style="width: 7.5%; vertical-align: top;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">31.1</p>
			</td>
			<td style="width: 93.6%; vertical-align: top;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Certification of pursuant to Section 302 of Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer.</p>
			</td>
		</tr>
		<tr>
			<td style="width: 7.5%; vertical-align: top;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">31.2</p>
			</td>
			<td style="width: 93.6%; vertical-align: top;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Certification of pursuant to Section 302 of Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer.</p>
			</td>
		</tr>
		<tr>
			<td style="width: 7.5%; vertical-align: top;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">32.1</p>
			</td>
			<td style="width: 93.6%; vertical-align: top;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Certification of periodic financial report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer.</p>
			</td>
		</tr>
		<tr>
			<td style="width: 7.5%; vertical-align: top;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">32.2</p>
			</td>
			<td style="width: 93.6%; vertical-align: top;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Certification of periodic financial report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer.</p>
			</td>
		</tr>
		<tr>
			<td style="width: 7.5%; vertical-align: top;">
			<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;">10<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">1</font></p>
			</td>
			<td style="width: 93.6%; vertical-align: top;">
			<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">The following financial information from <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">Integrated BioPharma, Inc.&rsquo;s Quarterly Report on Form&nbsp;10-Q for the quarter ended December 31, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations for the&nbsp;three and six months ended&nbsp;December 31, 2016 and 2015, (ii)&nbsp;Condensed Consolidated Balance Sheets as of&nbsp;December 31, 2016&nbsp;and June 30, 2016, (iii)&nbsp;Condensed Consolidated Statements of Cash Flows for the six months ended&nbsp;December 31, 2016 and 2015, and (iv)&nbsp;the Notes to Condensed Consolidated Statements.</font></p>
			</td>
		</tr>

</table>

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<p style="margin: 0pt; text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>SIGNATURES</b></p>

<p style="text-align: center; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>&nbsp;</b></p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.</p>

<p style="margin: 0pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;</p>

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<p style="margin: 0pt 0pt 0pt 168.7pt; text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt;"><b>INTEGRATED BIOPHARMA, INC.</b></p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt;"><b>&nbsp;</b></p>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt;">&nbsp;</p>

<table border="0" cellpadding="0" cellspacing="0" style="width: 100%; font-size: 10pt;">

		<tr>
			<td style="width: 50%;">Date:&nbsp; February 10, 2017</td>
			<td style="width: 50%;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">By: <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;"><u>/s/ E. Gerald Kay </u></font></p>
			</td>
		</tr>
		<tr>
			<td>&nbsp;</td>
			<td>
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">E. Gerald Kay,</font></p>
			</td>
		</tr>
		<tr>
			<td>&nbsp;</td>
			<td>
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; President and Chief Executive Officer</p>
			</td>
		</tr>

</table>

<p style="text-align: justify; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt;">&nbsp;</p>

<p style="text-align: justify; text-indent: 252pt; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p>

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			<td colspan="2" rowspan="1" style="width: 33%;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">Date:<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;February 10, 2017&nbsp;</font></p>
			</td>
			<td style="width: 33%;">
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;"><font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">By: <u>/s/ Dina L. Masi </u></font></p>
			</td>
		</tr>
		<tr>
			<td colspan="2" rowspan="1">&nbsp;</td>
			<td>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Dina L. Masi,</td>
		</tr>
		<tr>
			<td colspan="2" rowspan="1">&nbsp;</td>
			<td>
			<p style="margin: 0pt; text-align: left; font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Chief Financial Officer &amp; Senior Vice Presiden</p>
			</td>
		</tr>

</table>

<p style="text-align: justify; text-indent: 252pt; font-family: Times New Roman, Times, serif; font-size: 10pt; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt;">&nbsp;<font style="font-family: Times New Roman, Times, serif; font-size: 10pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p>

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[{"type": "10-Q", "sequence": "1", "filename": "inbp20161231_10q.htm", "description": "FORM 10-Q", "secsgml_size_bytes": 544654}]
{"company-data": {"conformed-name": "INTEGRATED BIOPHARMA INC", "cik": "0001016504", "assigned-sic": "2834", "irs-number": "222407475", "state-of-incorporation": "DE", "fiscal-year-end": "0630"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "001-31668", "film-number": "17593513"}, "business-address": {"street1": "225 LONG AVENUE", "street2": "BUILDING 15", "city": "HILLSIDE", "state": "NJ", "zip": "07205", "phone": "9739260816"}, "mail-address": {"street1": "225 LONG AVENUE", "street2": "BUILDING 15", "city": "HILLSIDE", "state": "NJ", "zip": "07205"}, "former-company": [{"former-conformed-name": "INTEGRATED HEALTH TECHNOLOGIES INC", "date-changed": "20020912"}, {"former-conformed-name": "CHEM INTERNATIONAL INC", "date-changed": "19960716"}]}
inbp20161231_10q.htm
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
____________
FORM 10-Q
☒
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended
December 31, 2016
OR
☐
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from to
Commission File Number
001-31668
INTEGRATED BIOPHARMA, INC.
(Exact name of registrant, as specified in its charter)
Delaware
22-2407475
(State or other jurisdiction of
incorporattion or organization)
(I.R.S. Employer
Identification No.)
225 Long Ave., Hillside, New Jersey
07205
(Address of principal executive offices)
(Zip Code)
(888) 319-6962
(Registrant
's telephone number, including Area Code)
Not Applicable
(Former name, former address and forme
r fiscal year, if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes
X
No ____
Indicate by check mark whether the registrant 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

Accelerated filer

Non-accelerated filer

Smaller reporting company
☑
Indicate by check whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
No __
X
__
Applicable only to Corporate Issuers:
The number of shares outstanding of each of the issuer
's class of common stock, as of the latest practicable date:
Class
Outstanding at
February 10, 2017
Common Stock, $0.002 par value
21,130,174 Shares
INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES
FORM 10-Q QUARTERLY REPORT
For the
Six Months Ended December 31, 2016
INDEX
Page
Part I. Financial Information
Item 1.
Condensed Consolidated Statements of Operations for the
Three and Six Months Ended December 31, 2016 and 2015 (unaudited)
2
Condensed Consolidated Balance Sheets as of
December 31, 2016 and
June 30, 2016
(unaudited)
3
Condensed Consolidated Statements of Cash Flows for the
Six Months Ended December 31, 2016 and 2015 (unaudited)
4
Notes to Condensed Consolidated Statements
5
Item 2.
Management
's Discussion and Analysis of Financial Condition and Results of Operations
1
6
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
2
3
Item 4.
Controls and Procedures
2
3
Part II. Other Information
Item 1.
Legal Proceedings
2
4
Item 1A.
Risk Factors
2
4
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
2
4
Item 3.
Defaults Upon Senior Securities
2
4
Item 4.
Mine Safety Disclosure
2
4
Item 5.
Other Information
2
4
Item 6.
Exhibits
2
4
Other
Signatures
2
5
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this Quarterly Report on Form 10-Q may constitute "forward-looking" statements as defined in Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), Section 21E of the Securities Act of 1934, as amended (the "Exchange Act"), the Private Securities Litigation Reform Act of 1995 (the "PSLRA") or in releases made by the Securities and Exchange Commission ("SEC"), all as may be amended from time to time. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of Integrated BioPharma, Inc. and its subsidiaries (the "Company") or industry results, to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors including, among others, changes in general economic and business conditions; loss of market share through competition; introduction of competing products by other companies; the timing of regulatory approval and the introduction of new products by the Company; changes in industry capacity; pressure on prices from competition or from purchasers of the Company's products; regulatory changes in the pharmaceutical manufacturing industry and nutraceutical industry; regulatory obstacles to the introduction of new technologies or products that are important to the Company; availability of qualified personnel; the loss of any significant customers or suppliers; and other factors both referenced and not referenced in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2016 ("Form 10-K"), as filed with the SEC. Statements that are not historical fact are forward-looking statements. Forward-looking statements can be identified by, among other things, the use of forward-looking language, such as the words, "plan", "believe", "expect", "anticipate", "intend", "estimate", "project", "may", "will", "would", "could", "should", "seeks", or "scheduled to", or other similar words, or the negative of these terms or other variations of these terms or comparable language, or by discussion of strategy or intentions. These cautionary statements are being made pursuant to the Securities Act, the Exchange Act and the PSLRA with the intention of obtaining the benefits of the "safe harbor" provisions of such laws. The Company cautions investors that any forward-looking statements made by the Company are not guarantees or indicative of future performance. Important assumptions and other important factors that could cause actual results to differ materially from those forward-looking statements with respect to the Company, include, but are not limited to, the risks and uncertainties affecting its businesses described in Item 1 of the Company's Annual Report filed on Form 10-K for the year ended
June 30, 2016
and in other securities filings by the Company. Although the Company believes that its plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, actual results could differ materially from a projection or assumption in any of the forward-looking statements. The Company's future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The forward-looking statements contained in this Quarterly Report on Form 10-Q are made only as of the date hereof and the Company does not have or undertake any obligation to update or revise any forward-looking statements whether as a result of new information, subsequent events or otherwise, unless otherwise required by law.
-1-
ITEM 1. FINANCIAL STATEMENTS
INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for share and per share amounts)
(Unaudited)
Three months ended
Six months ended
December 31,
December 31,
2016
2015
2016
2015
Sales, net
$ 12,372
$ 10,413
$ 25,053
$ 19,859
Cost of sales
10,902
9,438
21,432
17,569
Gross profit
1,470
975
3,621
2,290
Selling and administrative expenses
900
807
1,693
1,637
Operating income
570
168
1,928
653
Other income (expense), net
Interest expense
(227)
(243)
(459)
(480)
Change in fair value of derivative liabilities
(364)
6
(731)
3
Other income
15
26
31
50
Other income (expense), net
(576)
(211)
(1,159)
(427)
(Loss) income before income taxes
(6)
(43)
769
226
Income tax expense, net
71
20
197
48
Net (loss) income
$ (77)
$ (63)
$ 572
$ 178
Basic net (loss) income per common share
$ (0.00)
$ (0.00)
$ 0.03
$ 0.01
Diluted net (loss) income per common share
$ (0.00)
$ (0.00)
$ 0.03
$ 0.01
Weighted average common shares outstanding - basic
21,106,098
21,105,174
21,105,636
21,105,174
Add: Equivalent shares outstanding
-
-
567,964
-
Weighted average common shares outstanding - diluted
21,106,098
21,105,174
21,673,600
21,105,174
See accompanying notes to condensed consolidated financial statements.
-2-
INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except for share and per share amounts)
(Unaudited)
December 31,
June 30,
2016
2016
Assets
Current Assets:
Cash
$ 66
$ 395
Accounts receivable, net
4,420
3,135
Inventories
7,827
7,756
Investment in iBio, Inc.
501
501
Other current assets
273
283
Total current assets
13,087
12,070
Property and equipment, net
1,498
1,567
Security deposits and other assets
413
448
Total Assets
$ 14,998
$ 14,085
Liabilities and Stockholders' Deficiency:
Current Liabilities:
Advances under revolving credit facility
$ 4,004
$ 4,210
Accounts payable (includes $74 and $331 due to related party)
5,635
5,469
Accrued expenses and other current liabilities
1,403
1,211
Current portion of long term debt
946
934
Total current liabilities
11,988
11,824
Long term debt
4,707
5,306
Subordinated convertible note, net - CD Financial, LLC
5,225
5,206
Derivative liabilities
808
76
Total liabilities
22,728
22,412
Commitments and Contingencies
Stockholders' Deficiency:
Common Stock, $0.002 par value; 50,000,000 shares authorized;
21,145,074 and 21,140,074 shares issued, 21,110,174 and 21,105,174 shares outstanding
42
42
Additional paid-in capital
44,732
44,707
Accumulated deficit
(52,405)
(52,977)
Less: Treasury stock, at cost, 34,900 shares
(99)
(99)
Total Stockholders' Deficiency
(7,730)
(8,327)
Total Liabilities and Stockholders' Deficiency
$ 14,998
$ 14,085
See accompanying notes to condensed consolidated financial statements.
-3-
INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, except share and per share amounts)
(Unaudited)
Six months ended
December 31,
2016
2015
Cash flows from operating activities:
Net income
$ 572
$ 178
Adjustments to reconcile net income to net cash
from operating activities:
Depreciation and amortization
202
171
Accretion of financing instruments and other non-cash interest
52
121
Stock based compensation
26
17
Change in fair value of derivative liabilities
731
(3)
Gain on sale of fixed assets
-
(3)
Changes in operating assets and liabilities:
Decrease (increase) in:
Accounts receivable
(1,285)
(1,353)
Inventories
(70)
(1,240)
Other current assets
10
(34)
Security deposits and other assets
(48)
-
(Decrease) increase in:
Accounts payable
166
1,378
Accrued expenses and other liabilities
191
(388)
Net cash provided by (used in) operating activities
547
(1,156)
Cash flows from investing activities:
Purchase of property and equipment
(83)
(40)
Cash proceeds from sale of equipment
-
2
Net cash used in investing activities
(83)
(38)
Cash flows from financing activities:
Advances under revolving credit facility
23,040
19,022
Proceeds from Line of Credit Note
-
43
Repayments of advances under revolving credit facility
(23,246)
(17,518)
Repayments under term note payables
(515)
(300)
Repayments under capitalized lease obligations
(72)
(64)
Net cash (used in) provided by financing activities
(793)
1,183
Net decrease in cash
(329)
(11)
Cash at beginning of period
395
71
Cash at end of period
$    66
$    60
Supplemental disclosures of cash flow information:
Cash paid during the periods for:
Interest
$ 472
$ 344
Income taxes
$ 227
$  54
Supplemental disclosures of non-cash transactions:
Accretion on embedded derivative feature of convertible note payable
$ 19
$   56
Amortization of prepaid financing costs
$ 33
$   65
Financing on capitalized lease obligations
$    -
$ 182
See accompanying notes to condensed consolidated financial statements.
-4-
INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
(Unaudited)
Note 1. Principles of Consolidation and Basis of Presentation
Basis of Presentation of Interim Financial Statements
The accompanying
condensed consolidated financial statements for the interim periods are unaudited and include the accounts of Integrated BioPharma, Inc., a Delaware corporation (together with its subsidiaries, the "Company"). The interim condensed consolidated financial statements have been prepared in conformity with Rule 10-01 of Regulation S-X of the Securities and Exchange Commission ("SEC") and therefore do not include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America. However, all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the periods presented have been included. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto, together with Management's Discussion and Analysis of Financial Condition and Results of Operations, contained in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2016 ("Form 10-K"), as filed with the SEC. The June 30, 2016 balance sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. The results of operations for the three and six months ended December 31, 2016 are not necessarily indicative of the results for the full fiscal year ending June 30, 2017 or for any other period.
Nature of Operations
The
Company is engaged primarily in manufacturing, distributing, marketing and sales of vitamins, nutritional supplements and herbal products. The Company's customers are located primarily in the United States, Luxembourg and Canada. The Company was previously known as Integrated Health Technologies, Inc. and, prior to that, as Chem International, Inc. The Company was reincorporated in its current form in Delaware in 1995. The Company continues to do business as Chem International, Inc. with certain of its customers and certain vendors.
The Company
's business segments include: (a) Contract Manufacturing operated by InB:Manhattan Drug Company, Inc. ("MDC"), which manufactures vitamins and nutritional supplements for sale to distributors, multilevel marketers and specialized health-care providers; (b) Branded Proprietary Products operated by AgroLabs, Inc. ("AgroLabs"), which distributes healthful nutritional products for sale through major mass market, grocery, drug and vitamin retailers, under the following brands: Naturally Noni, Coconut Water, Aloe Pure, Peaceful Sleep, Green Envy, ACAI Extra, ACAI Cleanse, Wheatgrass and other products which are being introduced into the market (these are referred to as our branded proprietary nutraceutical business and/or products); and (c) Other Nutraceutical Businesses which includes the operations of (i) The Vitamin Factory (the "Vitamin Factory"), which sells private label MDC products, as well as our AgroLabs products, through the Internet, (ii) IHT Health Products, Inc. ("IHT") a distributor of fine natural botanicals, including multi minerals produced under a license agreement and (iii) Chem International, Inc. ("Chem"), a distributor of certain raw materials for DSM Nutritional Products LLC.
Significant Accounting Policies
There have been no material changes during fiscal
year 2017 in the Company's significant accounting policies to those previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2016.
-5-
INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
(Unaudited)
Investment in iBio, Inc
.
The Company accounts for its investment in iBio, Inc. ("iBio") common stock on the cost basis as it retained approximately 6% of its interest in iBio (1,266,706 common shares) (the "iBio Stock") at the time of the spin-off of this subsidiary in August 2008.  The Company reviews its investment in iBio for impairment and records a loss when there is deemed to be a permanent impairment of the investment. To date, there were cumulative impairment charges of approximately $2.2 million. The market value of the iBio Stock as of December 31, 2016 was approximately $0.5 million based on the trade price at the close of trading on December 31, 2016.
Pursuant to the Company
's Loan Agreement with PNC Bank, National Association ("PNC"), the Company was required to sell the iBio Stock when the trading price of the iBio Stock is less than $0.88 per share for a period of fifteen (15) consecutive trading days on the applicable exchange and utilize all proceeds from such sale to prepay the outstanding principal of the term loan outstanding under the Loan Agreement at such time. During certain historic periods, the trading price of the iBio Stock was less than $0.88 for a period of fifteen (15) consecutive trading days. Although PNC did not require the Company to sell shares of iBio Stock, the Company sold 73,191 shares of iBio Stock in the quarter ended June 30, 2015.
On February 19, 2016, the Loan Agreement with PNC was amended whereby the requirement to sell the iBio Stock based on the selling price of $0.88 per share was removed; however, the requirement to use all the net proceeds from the sale of any of the iBio Stock to prepay the outstanding principal of the term loan outstanding under the Amended Loan Agreement remains. (See Note 4. Senior Credit Facility, Subordinated Convertible Note, net - CD Financial, LLC and other Long Term Debt).
Earnings Per Share
. Basic earnings per common share amounts are based on weighted average number of common shares outstanding. Diluted earnings per share amounts are based on the weighted average number of common shares outstanding, plus the incremental shares that would have been outstanding upon the assumed exercise of all potentially dilutive stock options, warrants, and convertible debt, subject to anti-dilution limitations using the treasury stock method and if converted method.
The following options and potentially dilutive shares for convertible notes payable
(see Note 4. Senior Credit Facility, Subordinated Convertible Note, net - CD Financial, LLC and other Long Term Debt) were not included in the computation of weighted average diluted common shares outstanding as the effect of doing so would be anti-dilutive for the three and six months ended December 31, 2016 and 2015:
Three Months Ended
Six Months Ended
December 31,
December 31,
2016
2015
2016
2015
Anti-dilutive stock options
2,935,116
2,900,450
391,033
2,900,450
Anti-dilutive shares for
convertible notes payable
8,230,769
8,230,769
8,230,769
8,230,769
Anti-dilutive shares
11,165,885
11,131,219
8,621,802
11,131,219
-6-
INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
(Unaudited)
Note
2
. Inventories
Inventories are stated at the lower of cost or market using the first-in, first-out method and consist of the following:
December 31,
June 30,
2016
2016
Raw materials
$ 4,314
$ 4,040
Work-in-process
1,284
2,212
Finished goods
2,229
1,504
Total
$ 7,827
$ 7,756
Note
3
. Property and Equipment, net
Property and equipment, net consists of the following:
December 31,
June 30,
2016
2016
Land and building
$ 1,250
$ 1,250
Leasehold improvements
1,220
1,210
Machinery and equipment
5,599
5,536
Transportation equipment
11
11
8,080
8,007
Less: Accumulated depreciation
and amortization
(6,582)
(6,440)
Total
$ 1,498
$ 1,567
Depreciation and amortization expense
recorded on property and equipment was $80 and $56 for the three months ended December 31, 2016 and 2015, respectively and $152 and $115 for the six months ended December 31, 2016 and 2015, respectively. Additionally, the Company disposed of fully depreciated property of $10 and $131 in the six months ended December 31, 2016 and 2015, respectively.
-7-
INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
(Unaudited)
N
ote
4
.
Senior Credit Facility, Subordinated Convertible Note, net - CD Financial, LLC and other Long Term Debt
As of
December 31, 2016 and June 30, 2016, the Company had the following debt outstanding:
Principal Amount
Interest Rate
Maturity Date
As of December 31, 2016
As of June 30, 2016
Revolving advances under Senior Credit
Facility with PNC Bank, National Association
$ 4,004
$ 4,210
3.75%
2/19/2020
Installment Note with PNC Bank
2,786
3,259
4.25%
2/19/2020
Installment Note with PNC Equipment Finance
233
275
4.57%
7/29/2019
Promissory Note with CD Financial, LLC
1,714
1,714
6.00%
2/29/2020
Promissory Note with Vitamin Realty, LLC
686
686
4.00%
2/29/2020
Capitalized lease obligations
234
306
4.00% -
3/6/2018-
11.43%
12/8/2020
Total outstanding debt
9,657
10,450
Less: Revolving Advances
(4,004)
(4,210)
Current portion of long term debt
(946)
(934)
Long term debt
$ 4,707
$ 5,306
Convertible Note payable - CD Financial, LLC
$ 5,350
$ 5,350
6.00%
2/29/2020
Discount for embedded derivative
(125)
(144)
Convertible Note payable, net - CD Financial, LLC
$ 5,225
$ 5,206
SENIOR CREDIT FACILITY
On February 1
9, 2016, the Company, MDC, AgroLabs, IHT, IHT Properties Corp. ("IHT Properties") and Vitamin Factory (collectively, the "Borrowers") amended the Revolving Credit, Term Loan and Security Agreement (the "Amended Loan Agreement") with PNC Bank, National Association as agent and lender ("PNC") and the other lenders party thereto entered into on June 27, 2012.
The
Amended Loan Agreement provides for a total of $11,422 in senior secured financing (the "Senior Credit Facility") as follows: (i) discretionary advances ("Revolving Advances") based on eligible accounts receivable and eligible inventory in the maximum amount of $8,000 (the "Revolving Credit Facility") and (ii) a term loan in the amount of $3,422 (the "Term Loan"). The Senior Credit Facility is secured by all assets of the Borrowers, including, without limitation, machinery and equipment, real estate owned by IHT Properties, and common stock of iBio owned by the Company. Revolving Advances bear interest at PNC's Base Rate or the Eurodollar Rate, at Borrowers' option, plus 2.75% (3.75% and 3.50% as of December 31, 2016 and June 30, 2016, respectively). The Term Loan bears interest at PNC's Base Rate or the Eurodollar Rate, at Borrowers' option, plus 3.25% (4.25% and 4.00% as of December 31, 2016 and June 30, 2016, respectively). Upon and after the occurrence of any event of default under the Amended Loan Agreement, and during the continuation thereof, interest shall be payable at the interest rate then applicable plus 2%. The Senior Credit Facility matures on February 19, 2020 (the "Senior Maturity Date").
-8-
INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
(Unaudited)
The principal balance of the Revolving Advances is payable on the Senior Maturity Date, subject to acceleration, based upon a material adverse event clause, as defined, subjective accelerations for borrowing base reserves, as defined or upon the occurrence of any event of default under the
Amended Loan Agreement or earlier termination of the Amended Loan Agreement pursuant to the terms thereof. The Term Loan shall be repaid in eighty-four (84) consecutive monthly installments of principal, the first eighty-three (83) of which shall be in the amount of $41, commencing on the first business day of March, 2016, and continuing on the first business day of each month thereafter, with a final payment of any unpaid balance of principal and interest payable on the Senior Maturity Date. The foregoing is subject to customary mandatory prepayment provisions and acceleration upon the occurrence of any event of default under the Amended Loan Agreement or earlier termination of the Amended Loan Agreement pursuant to the terms thereof.
The Revolving Advances are subject to the terms and conditions set forth in the
Amended Loan Agreement and are made in aggregate amounts at any time equal to the lesser of (x) $8.0 million or (y) an amount equal to the sum of: (i) up to 85%, subject to the provisions in the Amended Loan Agreement, of eligible accounts receivables ("Receivables Advance Rate"), plus (ii) up to the lesser of (A) 75%, subject to the provisions in the Amended Loan Agreement, of the value of the eligible inventory ("Inventory Advance Rate" and together with the Receivables Advance Rate, collectively, the "Advance Rates"), (B) 85% of the appraised net orderly liquidation value of eligible inventory (as evidenced by the most recent inventory appraisal reasonably satisfactory to PNC in its sole discretion exercised in good faith) and (C) the inventory sublimit in the aggregate at any one time ("Inventory Advance Rate" and together with the Receivables Advance Rate, collectively, the "Advance Rates"), minus (iii) the aggregate Maximum Undrawn Amount of all outstanding Letters of Credit, minus (iv) such reserves as PNC may reasonably deem proper and necessary from time to time.
The
Amended Loan Agreement contains customary mandatory prepayment provisions, including, without limitation the requirement to use any sales proceeds from the sale of iBio Stock to repay the Term Loan and to
prepay the outstanding amount of the Revolving Advances in an amount equal to twenty-five percent (25%) of Excess Cash Flow for each fiscal year commencing with the fiscal year ending June 30, 2016, payable upon delivery of the financial statements to PNC referred to in and required by the Amended Loan Agreement for such fiscal year but in any event not later than one hundred twenty (120) days after the end of each such fiscal year, which amount shall be applied ratably to the outstanding principal installments of the Term Loan in the inverse order of the maturities thereof. The Amended Loan Agreement also contains customary representations and warranties, covenants and events of default, including, without limitation, (i) a fixed charge coverage ratio maintenance requirement and (ii) an event of default tied to any change of control as defined in the Amended Loan Agreement. As of December 31, 2016, the Company was in compliance with the fixed charge coverage ratio maintenance requirement.
The Loan Agreement (prior to giving effect to the February 19, 2016 amendment described above) required the Company to sell iBio Stock if the per share price fell below $0.88. This requirement is not in the Amended Loan Agreement, however, the requirement to use all the net proceeds from the sale of any of the iBio Stock to prepay the outstanding principal of the term loan outstanding under the Amended Loan Agreement remains a requirement under the Amended Loan Agreement. During certain historic periods, the trading price of the iBio Stock was less than $0.88 for a period of fifteen (15) consecutive trading days; however, PNC temporarily waived the requirement to sell the iBio Stock due to certain trading rules and restrictions under Rule 144 under the Securities Act of 1933, as amended. Although not required to sell the iBio Stock by PNC, in the quarter ended June 30, 2015, the Company sold 73,191 shares of iBio Stock.
I
n connection with the Senior Credit Facility, PNC and CD Financial entered into the Intercreditor and Subordination Agreement (the "Intercreditor Agreement"), which was acknowledged by the Borrowers, pursuant to which, among other things, (a) the lien of CD Financial on assets of the Borrowers is subordinated to the lien of PNC on such assets during the effectiveness of the Senior Credit Facility, and (b) priorities for payment of the debt for the Company and its subsidiaries (as described in this Note 4) are established.
-9-
INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
(Unaudited)
In addition, in connection with the Senior Credit Facility, the following lo
an documents were executed: (i) a Stock Pledge Agreement with PNC, pursuant to which the Company pledged to PNC the iBio Stock; (ii) a Mortgage and Security Agreement with PNC with IHT Properties; and (iii) an Environmental Indemnity Agreement with PNC.
CD FINANCIAL, LLC
On June 27, 2012, the Company also entered into an Amended and Restated Securities Purchase Agreement (the "CD SPA") with CD Financial, which amended and restated the Securities Purchase Agreement, dated as of February 21, 2008, between the Company and CD Financial, pursuant to which the Company issued to CD Financial a 9.5% Convertible Senior Secured Note in the original principal amount of $4,500 (the "Original CD Note"). Pursuant to the CD SPA, the Company issued to CD Financial (i) the Amended and Restated Convertible Promissory Note in the principal amount of $5,350 (the "CD Convertible Note") and (ii) the Promissory Note in the principal amount of $1,714 (the "Liquidity Note", and collectively with the CD Convertible Note, the "CD Notes"). The CD Notes
originally matured on July 7, 2017, however, on February 19, 2016, the CD Notes were amended to extend the maturity date to February 29, 2020.
The CD Notes are secured by all assets of the Borrowers, including, without limitation, machinery and equipment, real estate owned by IHT Properties, and iBio Stock owned by the Company. The CD Notes bear interest at an annual rate of 6% and have a default rate of 10%.
The CD Convertible Note is convertible at the option of CD Financial into common stock of the Company at a conversion price of $0.65 per share, subject to customary adjustments including conversion price protection provisions.
Pursuant to the terms of the
Amended Loan Agreement and the Intercreditor Agreement, during the effectiveness of the Senior Credit Facility, (i) the principal of the CD Convertible Note may not be repaid, (ii) the principal of the Liquidity Note may only be repaid if certain conditions under the Amended Loan Agreement are satisfied, and (iii) interest in respect of the CD Notes may only be paid if certain conditions under the Intercreditor Agreement are satisfied.
The CD SPA contains customary representations and warranties, covenants and events of default, including, without limitation, an event of default tied to any change of control as defined in the CD SPA.
In connection with the CD SPA, the Borrowers entered into an Amended and Restated Security Agreement and Amended and Restated Subsidiary Guaranty.
As of
December 31, 2016 and June 30, 2016, the related embedded derivative liability with respect to conversion price protection provisions on the CD Convertible Note has an estimated fair value of $808 and $76, respectively.
-10-
INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
(Unaudited)
The Company used the following assumptions to calculate the fair value of the derivative liability using the Black-Scholes option pricing model:
December 31,
June 30,
June 27,
2016
2016
2012
Risk Free Interest Rate
1.57%
0.81%
0.72%
Volatility
99.30%
63.20%
144.10%
3 years
3 years
5 years
Term
2 months
8 months
Dividend Rate
0.00%
0.00%
0.00%
Closing Price of Common Stock
$ 0.23
$ 0.11
$ 0.09
OTHER LONG TERM DEBT
Related Party Debt
.
On June 27, 2012, MDC and the Company entered into separate promissory notes with (i) Vitamin Realty Associates, LLC ("Vitamin Realty"), and E. Gerald Kay, the Company's Chief Executive Officer, Chairman of the Board, President and a major shareholder, in the principal amounts of approximately $686 (the "Vitamin Note") and $27 (the "Kay Note"), respectively (collectively the "Related Party Notes"). The principal amount of the Vitamin Note represents the aggregate amount of unpaid, past due rent owing by MDC under the Lease Agreement, dated as of January 10, 1997, between MDC, as lessor, and Vitamin Realty, as landlord, pertaining to the real property located at 225 Long Avenue, Hillside, New Jersey. (See Note 6. Commitments and Contingencies (a) Leases – Related Party Leases). The Kay Note represented amounts owed to Mr. Kay for unreimbursed business expenses incurred by Mr. Kay in the fiscal year ended June 30, 2008. (See Note 7 Related Party Transactions).
On May 27, 2016, the Kay Note in the amount of $27 was paid in full, prior to its maturity date of July 7, 2017, after satisfying the conditions set forth in the Amended Loan Agreement and cancelled accordingly. The Vitamin Realty Note matures on February 29, 2020, as amended on February 19, 2016. The Vitamin Realty Note accrues interest at an annual rate of 4% per annum. Interest in respect of the Vitamin Realty Note is payable on the first business day of each calendar month. Pursuant to the terms of the Loan Agreement, during the effectiveness of the Senior Credit Facility, the Related Party Notes may only be repaid or prepaid if certain conditions set forth in the Amended Loan Agreement are satisfied.
Capitalized Lease Obligations.
On November 20, 2016, the capitalized lease obligation the Company entered into on December 5, 2013, De Lage Landen Financial Services in the amount of $72, which lease was secured by certain machinery and equipment, was satisfied with all payments being made under the capitalized lease obligation. The monthly lease payment was approximately $2 and had an imputed interest rate of 5.3%.
Note
5. Significant Risks and Uncertainties
(a) Major Customers.
For the three months ended December 31, 2016 and 2015, approximately 92% and 91%, respectively of consolidated net sales, were derived from two customers. These two customers are in the Company's Contract Manufacturing Segment and represent approximately 35% and 60% and 31% and 65% of this Segment's net sales in the three months ended December 31, 2016 and 2015, respectively. A third customer in the Branded Nutraceutical Segment, while not a significant customer of the Company's consolidated net sales, represented approximately 53% and 25% of net sales in the three months ended December 31, 2016 and 2015, respectively, of the Branded Nutraceutical Segment.
-11-
INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
(Unaudited)
For the six months ended
December 31, 2016 and 2015, approximately 92% and 89%, respectively of consolidated net sales, were derived from two customers. These two customers are in the Company's Contract Manufacturing Segment and represent approximately 42% and 54% and 39% and 57% of this Segment's net sales in the six months ended December 31, 2016 and 2015, respectively. A third customer in the Branded Nutraceutical Segment, while not a significant customer of the Company's consolidated net sales, represented approximately 57% and 62% of net sales in the six months ended December 31, 2016 and 2015, respectively, of the Branded Nutraceutical Segment. Accounts receivable from these two major customers represented approximately 90% and 87% of total net accounts receivable as of December 31 and June 30, 2016, respectively. The loss of any of these customers could have an adverse affect on the Company's operations. Major customers are those customers who account for more than 10% of net sales.
(b) Other Business Risks.
Approximately 66% of the Company's employees are covered by a union contract and are employed in its New Jersey facilities. The contract was renewed on September 1, 2015 and will expire on August 31, 2018.
Note
6. Commitments and Contingencies
(a) Leases
Related Party Leases.
Warehouse and office facilities are leased from Vitamin Realty, which is 100% owned by the Company's chairman, Chief Executive Officer and major stockholder and certain of his family members, who are also executive officers and directors of the Company. On January 5, 2012, MDC, a wholly-owned subsidiary of the Company, entered into a second amendment of lease (the "Second Lease Amendment") with Vitamin Realty for its office and warehouse space in New Jersey increasing its rentable square footage from an aggregate of 74,898 square feet to 76,161 square feet and extending the expiration date to January 31, 2026. This Second Lease Amendment provides for minimum annual rental payments of $533, plus increases in real estate taxes and building operating expenses. On May 19, 2014, AgroLabs entered into an Amendment to the lease agreement entered into on January 5, 2012, with Vitamin Realty for an additional 2,700 square feet of warehouse space in New Jersey, the term of which was to expire on January 31, 2019 to extend the expiration date to January 1, 2024. This additional lease provides for minimum lease payments of $27 with annual increases plus the proportionate share of operating expenses.
Rent expense for the three
and six months ended December 31, 2016 and 2015 on these leases were $214 and $219 and $411 and $403, respectively, and are included in both cost of sales and selling and administrative expenses in the accompanying Condensed Consolidated Statements of Operations. As of December 31, 2016 and June 30, 2016, the Company had an outstanding obligation to Vitamin Realty of $0.8 million and $1.1 million, respectively, included in accounts payable, accrued expenses and other liabilities and long term debt in the accompanying Condensed Consolidated Balance Sheet.
Other Lease Commitments.
The Company has entered into certain non-cancelable operating lease agreements expiring up through January 31, 2026, related to office and warehouse space, equipment and vehicles (inclusive of the related party lease with Vitamin Realty).
-12-
INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
(Unaudited)
The minimum rental commitments for long-term non-cancelable leases are as follows:
Operating
Related Party
Year ending
Lease
Lease
June 30,
Commitment
Commitment
Total
2017, remaining
$ 29
$ 281
$ 310
2018
40
563
603
2019
27
563
590
2020
22
563
585
2021
21
563
584
2022
8
563
571
Thereafter
-
1,955
1,955
Total
$ 147
$ 5,051
$ 5,198
Total rent expense, including real estate taxes and maintenance charges, was approximately $
255 and $259 and $492 and $485 for the three and six months ended December 31, 2016 and 2015, respectively.  Rent expense is included in cost of sales and selling and administrative expenses in the accompanying Condensed Consolidated Statements of Operations.
(b) Legal Proceedings.
The Company is subject, from time to time, to claims by third parties under various legal theories. The defense of such claims, or any adverse outcome relating to any such claims, could have a material adverse effect on the Company
's liquidity, financial condition and cash flows.
(c) Other Claims.
On May 15, 2012, Cedarburg Pharmaceuticals, Inc. ("Cedarburg") sent
the Company a letter (the "Demand Letter") setting forth a demand for indemnification under the Stock Purchase Agreement, dated March 17, 2009 (the "Cedarburg SPA"), by and among Cedarburg, InB: Hauser Pharmaceutical Services, Inc., InB: Paxis Pharmaceuticals, Inc. and the Company. In the Demand Letter, Cedarburg demanded payment by the Company of $0.6 million in respect of the Company's indemnification obligations under the Cedarburg SPA. In addition, in the Demand Letter, Cedarburg informed the Company that there are also environmental issues pending which may lead to additional costs to Cedarburg which will likely be in excess of $0.3 million.
On May 30, 2012,
the Company sent a letter responding to the Demand Letter and setting forth the Company's position that it has no obligation to indemnify Cedarburg as demanded. On June 18, 2012, Cedarburg responded to the Company's letter and, on July 27, 2012, the Company sent another letter to Cedarburg reiterating its position that the Company has no obligation to indemnify Cedarburg as demanded. On December 18, 2012, Cedarburg responded to the Company's letter and, on January 15, 2013, the Company sent another letter to Cedarburg reiterating its position that the Company has no obligation to indemnify Cedarburg as demanded. As of February 10, 2017, the Company has not received any further communication from Cedarburg with respect to its demand for indemnification as set forth in the Demand Letter. The Company intends to vigorously contest Cedarburg's demand as set forth in the Demand Letter.
Note
7. Related Party Transactions
See Note 4
. Senior Credit Facility, Subordinated Convertible Note, net - CD Financial, LLC and other Long Term Debt for related party securities transactions.
See Note 6
(a). Leases for related party lease transactions.
-13-
INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
(Unaudited)
Note
8. Segment Information
The basis for presenting segment results generally is consistent with overall Company reporting. The Company reports information about its operating segments in accordance with GAAP which establishes standards for reporting information about a company
's operating segments.
The Company has divided its operations into three reportable segments as follows: Contract Manufacturing,
Branded Proprietary Products and Other Nutraceutical Businesses. The international sales, concentrated primarily in Europe and Canada, for the three months ended December 31, 2016 and 2015 were $1,797 and $1,826, respectively and for the six months ended December 31, 2016 and 2015 were $4,673 and $3,818, respectively.
Financial information relating to the
three months ended December 31, 2016 and 2015 operations by business segment are as follows:
Sales, Net
Segment
U.S.
International
Gross
Capital
Customers
Customers
Total
Profit (loss)
Depreciation
Expenditures
Contract Manufacturing
2016
$ 10,207
$ 1,687
$ 11,894
$ 1,344
$ 80
$ 42
2015
8,077
1,814
9,891
842
55
176
Branded Proprietary Products
2016
61
101
162
17
-
-
2015
84
3
87
(19)
-
-
Other Nutraceutical Businesses
2016
307
9
316
109
-
-
2015
426
9
435
152
1
-
Total Company
2016
10,575
1,797
12,372
1,470
80
42
2015
8,587
1,826
10,413
975
56
176
-14-
INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except share and per share amounts)
(Unaudited)
Financial
information relating to the six months ended December 31, 2016 and 2015 operations by business segment are as follows:
Sales, Net
Segment
U.S.
International
Gross
Capital
Customers
Customers
Total
Profit (loss)
Depreciation
Expenditures
Contract Manufacturing
2016
$ 19,528
$ 4,398
$ 23,926
$ 3,240
$ 151
$ 83
2015
15,007
3,629
18,636
1,883
114
230
Branded Proprietary Products
2016
90
196
286
51
-
-
2015
232
175
407
109
-
-
Other Nutraceutical Businesses
2016
762
79
841
330
1
1
2015
802
14
816
298
1
1
Total Company
2016
20,380
4,673
25,053
3,621
152
84
2015
16,041
3,818
19,859
2,290
115
231
Total Assets as of
December 31,
June 30,
2016
2016
Contract Manufacturing
$ 12,674
$ 11,853
Branded Proprietary Products
746
676
Other Nutraceutical Businesses
1,578
1,556
Total Company
$ 14,998
$ 14,085
-15-
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANICAL CONDITION AND RESULTS OF OPERATION
Certain statements set forth under this caption constitute "forward-looking statements." See "Disclosure Regarding Forward-Looking Statements" on page 1 of this
Quarterly Report on Form 10-Q for additional factors relating to such statements. The following discussion should also be read in conjunction with the condensed consolidated financial statements of the Company and Notes thereto included herein and the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2016.
The Company is engaged primarily in the manufacturing, distributing, marketing and sales of vitamins, nutritional supplements and herbal products.
The Company's customers are located primarily in the United States, Luxembourg and Canada.
Business Outlook
Our future results of operations and the other forward-looking statements contained in this Quarterly Report on Form 10-Q, including this MD&A, involve a number of risks and uncertainties
—in particular, the statements regarding our goals and strategies, new product introductions, plans to cultivate new businesses, pending divestitures, future economic conditions, revenue, pricing, gross margin and costs, the tax rate, and potential legal proceedings. We are focusing our efforts to improve operational efficiency and reduce spending that may have an impact on expense levels and gross margin. In addition to the various important factors discussed above, a number of other important factors could cause actual results to differ significantly from our expectations. See the risks described in "Risk Factors" in Part II, Item 1A of this Quarterly Report on Form 10-Q.
For
the six months ended December 31, 2016, our net sales from operations increased by $5.2 million to approximately $25.1 million from approximately $19.9 million in the six months ended December 31, 2015. Substantially all the increase in net sales was from the Contract Manufacturing Segment ($2.8 million and $2.4 million from our significant customers, Herbalife and Life Extension, respectively), our other two segments had an offsetting net decrease in net sales of less than $0.1 million. The increase in sales from Herbalife and to a lesser extent Life Extension, was the result of filling back orders from the prior fiscal year and is not necessarily indicative of future growth for these customers. For the six months ended December 31, 2016 we had operating income of approximately $1.9 million, an increase of approximately $1.3 million from the six months ended December 31, 2015 of approximately $0.6 million. Our profit margins increased from approximately 11.5% of net sales in the six months ended December 31, 2015 to approximately 15% of net sales in the six months ended December 31, 2016, primarily as a result of increased weighted gross margins in our Contract Manufacturing Segment of approximately 3%. This improvement was the direct result of the increased sales while our fixed manufacturing costs remaining substantially the same in the year over year reporting period. Our consolidated selling and administrative expenses increased approximately 3% or approximately $0.1 million from $1.6 million for the six months ended December 31, 2015 to approximately $1.7 million in the six months ended December 31, 2016.
Critical Accounting Policies and Estimates
There have been no changes to our critical accounting policies in the
six months ended December 31, 2016. Critical accounting policies and the significant estimates made in accordance with them are regularly discussed by management with our Audit Committee. Those policies are discussed under "Critical Accounting Policies" in our "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in Item 7 of our Annual Report on Form 10-K for the year ended June 30, 2016.
-16-
Results of Operations
Our results from operations in the following table, sets forth the income statement data of our results as a percentage of net sales for the periods indicated:
For the three months
For the six months
ended December 31,
ended December 31,
2016
2015
2016
2015
Sales, net
100.0%
100.0%
100.0%
100.0%
Costs and expenses:
Cost of sales
88.1%
90.6%
85.5%
88.5%
Selling and administrative
7.3%
7.8%
6.8%
8.2%
95.4%
98.4%
92.3%
96.7%
Income from operations
4.6%
1.6%
7.7%
3.3%
Other income (expense), net
Interest expense
(1.8%)
(2.3%)
(1.8%)
(2.4%)
Change in fair value of derivative liabilities
(2.9%)
0.1%
(2.9%)
0.0%
Other income, net
0.1%
0.2%
0.1%
0.2%
Other income (expense), net
(4.6%)
(2.0%)
(4.6%)
(2.2%)
(Loss) income before income taxes
(0.0%)
(0.4%)
3.1%
1.1%
Federal and state income taxes, net
0.6%
0.2%
0.8%
0.2%
Net (loss) income
(0.6%)
(0.6%)
2.3%
0.9%
For
t
he
S
ix
M
onths
E
nded
December 31, 2016
compared to
t
he
S
ix
M
onths
E
nded
December 31, 2015
Sales, net.
Sales, net, for the six months ended December 31, 2016 and 2015 were $25.1 million and $19.9 million, respectively, an increase of 26.2%, and are comprised of the following:
Six months ended
Dollar
Percentage
December 31,
Change
Change
2016
2015
2016 vs 2015
2016 vs 2015
(amounts in thousands)
Contract Manufacturing:
US Customers
$ 19,528
$ 15,007
$ 4,521
30.1%
International Customers
4,398
3,629
769
21.2%
Net sales, Contract Manufacturing
23,926
18,636
5,290
28.4%
Branded Nutraceutical Products:
US Customers
90
232
(142)
(61.2%)
International Customers
196
175
21
12.0%
Net sales, Branded Nutraceutical Products
286
407
(121)
(29.7%)
Other Nutraceuticals:
US Customers
762
802
(40)
(5.0%)
International Customers
79
14
65
464.3%
Net sales, Other Nutraceuticals
841
816
25
3.1%
Total net sales
$ 25,053
$ 19,859
$ 5,194
26.2%
-17-
For the
six months ended December 31, 2016 and 2015 a significant portion of our consolidated net sales, approximately 92% and 89%, respectively, were concentrated among two customers, Herbalife and Life Extension, customers in our Contract Manufacturing Segment. Herbalife and Life Extension represented approximately 42% and 54% and 39% and 57%, respectively of our Contract Manufacturing Segment's net sales in the six months ended December 31, 2016 and 2015, respectively. The loss of any of these customers could have a significant adverse impact on our financial condition and results of operations. Costco Wholesale Corporation ("Costco") (a customer of our Branded Proprietary Products Segment), while not a significant customer of our consolidated net sales represented approximately 57% and 62% of net sales in the six months ended December 31, 2016 and 2015, respectively of the Branded Propriety Products Segment.
The in
crease in net sales of approximately $5.2 million was primarily the result of:
●
Net sales
increase in our Contract Manufacturing Segment by $5.3 million primarily due to increased sales volumes to our major customers, Herbalife and Life Extension, in the six months ended December 31, 2016, of approximately $2.8 million and $2.4 million, respectively compared to the comparable prior period.
●
Net sales in our Branded Nutraceutical Segment
decreased by approximately $0.1 million in the six months ended December 31, 2016, primarily as the result of the release of an estimated sales allowance of approximately $0.1 million in the six months ended December 31, 2015, for a customer the Company has not done business with in the past five years with no such release in the six months ended December 31, 2016.
Cost
of sales.
Cost of sales increased by $3.8 million to $21.4 million for the six months ended December 31, 2016, as compared to $17.6 million, an increase of 22%, for the six months ended December 31, 2015. As a percentage of sales to 85.5% for the six months ended December 31, 2016 as compared to 88.5% for the six months ended December 31, 2015. The increase in the cost of goods sold amount is consistent with the increased net sales of approximately 26%. The decrease in the cost of goods sold as a percentage of net sales, was primarily the result of the increased sales of $5.3 million in the Contracting Manufacturing Segment resulting in the absorption of the fixed manufacturing overhead costs of this segment. There were no significant changes in the cost of goods sold in our other two segments.
Selling and Administrative Expenses.
There was a slight increase in selling and administrative expenses of $56 or approximately 3.4% in the six months ended December 31, 2016 as compared to the six months ended December 31, 2015. As a percentage of sales, net, selling and administrative expenses were approximately 7% and 8% for the six months ended December 31, 2016 and 2015, respectively. The increase in selling and administrative expenses was primarily the result of increased salaries and employee benefits of approximately $87, offset in part by a decrease in marketing and advertising expenses in the Branded Nutraceutical Segment of approximately $35. Salaries and employee benefits increased as the result of salary increases, primarily for the executive officers of the Company. No other expense within our selling and administrative expenses changed by more than $27.
Other income (expense)
, net.
Other income (expense), net was approximately $1.1 million for the six months ended December 31, 2016 compared to $0.4 million for the six months ended December 31, 2015, and is composed of:
Six months ended
December 31,
2016
2015
(dollars in thousands)
Interest expense
$ (459)
$ (480)
Change in fair value of derivative instruments
(731)
3
Other income
31
50
Other income (expense), net
$ (1,159)
$ (427)
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The variance in the
change in fair value of derivative liabilities from the six months ended December 31, 2015 to the December 31, 2016 was mainly the result of the increased closing trading price of our common stock from $0.11 as of June 30, 2016 to $0.23 as of December 31, 2016
and the change in the volatility of the closing trading price of our common stock from 63.2% as of June 30, 2016 to 99.3% as of December 31, 2016.
The closing trading price and the volatility of the closing trading price of our common stock are two
of the variables used to calculate the estimated fair value of our derivative liabilities associated with the underlying derivative instrument.  Our interest expense for the six months ended December 31, 2016 was slightly less the for the six months ended December 31, 2015 primarily as the result of decreased non cash interest charges from the accretion for the embedded derivative in our Convertible Note Payable – CD Financial, LLC (See Note 4. Senior Credit Facility, Subordinated Convertible Note, net - CD Financial, LLC and other Long Term Debt
in this Quarterly Report on Form 10-Q) and the amortization of prepaid financing charges of approximately $69, offset by increased interest expense of approximately $48 on our outstanding debt. The other component of other income (expense) is not significant and did not vary significantly from the six months ended December 31, 2015.
Federal and state income tax, net.
For the six months ended December 31, 2016 and 2015, we had federal and state tax expense of approximately $197,000 and $48,000, respectively. We continue to maintain a full reserve on our deferred tax assets as it has been determined that based upon past losses, the Company's past liquidity concerns and the current economic environment, that it is "more likely than not" the Company's deferred tax assets may not be realized. The state tax expense is the result of MDC using all of its state net operating losses in the fiscal year ended 2013 tax period. All of our other subsidiaries still have adequate net operating losses for state income tax purposes to absorb any taxable income for state tax purposes.
Net
income
.
Our net income for the six months ended December 31, 2016 and 2015 was approximately $0.6 million and $0.2 million, respectively. The increase of approximately $0.4 million was primarily the result of our increased operating income of $1.3 million offset by the change in fair value of derivative instruments of approximately $0.7 million and increased income tax expense of approximately $0.2 million.
For
t
he
T
hree
M
onths
E
nded
December 31, 2016
compared to
t
he
T
hree
M
onths
E
nded
December 31, 2015
Sales, net.
Sales, net, for the three months ended December 31, 2016 and 2015 were $12.4 million and $10.4 million, respectively, an increase of 18.8%, and are comprised of the following:
Three months ended
Dollar
Percentage
December 31,
Change
Change
2016
2015
2016 vs 2015
2016 vs 2015
(amounts in thousands)
Contract Manufacturing:
US Customers
$ 10,207
$ 8,077
$ 2,130
26.4%
International Customers
1,687
1,814
(127)
(7.0%)
Net sales, Contract Manufacturing
11,894
9,891
2,003
20.3%
Branded Nutraceutical Products:
US Customers
61
84
(23)
(27.4%)
International Customers
101
3
98
3,266.7%
Net sales, Branded Nutraceutical Products
162
87
75
86.2%
Other Nutraceuticals:
US Customers
307
426
(119)
(27.9%)
International Customers
9
9
-
0%
Net sales, Other Nutraceuticals
316
435
(119)
(27.4%)
Total net sales
$ 12,372
$ 10,413
$ 1,959
18.8%
For the three months ended
December 31, 2016 and 2015 a significant portion of our consolidated net sales, approximately 92% and 91%, respectively, were concentrated among two customers, Herbalife and Life Extension, customers in our Contract Manufacturing Segment. Herbalife and Life Extension represented approximately 35% and 60% and 31% and 65%, respectively of our Contract Manufacturing Segment's net sales in the three months ended December 31, 2016 and 2015, respectively.
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The loss of any of these customers could have a significant adverse impact on our financial condition and results of operations. Costco Wholesale Corporation ("Costco") (a customer of our Branded Proprietary Products Segment), while not a significant customer of our consolidated net sales represented approximately 53% and 25% of net sales in the three months ended December 31, 2016 and 2015, respectively of the Branded Propriety Products Segment.
The
increase in net sales of approximately $2.0 million was primarily the result of net sales increasing in our Contract Manufacturing Segment primarily due to increased sales volumes to our major customers, Herbalife and Life Extension of approximately $1.1 million and $0.7 million, respectively, in the three months ended December 31, 2016, compared to the comparable prior period.
Cost
of sales.
Cost of sales increased by $1.5 million to $10.9 million for the three months ended December 31, 2016, as compared to $9.4 million or approximately 16% for the three months ended December 31, 2015. Cost of sales decreased as a percentage of sales to 88.1% for the three months ended December 31, 2016 as compared to 90.6% for the three months ended December 31, 2015. The increase in the cost of goods sold amount is consistent with the increased net sales of approximately 19%. The decrease in the cost of goods sold as a percentage of net sales, was primarily the result of the increased sales of $2.0 million in the Contracting Manufacturing Segment resulting in the absorption of the fixed manufacturing overhead costs of this segment. There were no significant changes in the cost of goods sold in our other two segments.
Selling and Administrative Expenses.
There was an increase in selling and administrative expenses of $93 in the three months ended December 31, 2016 as compared to the three months ended December 31, 2015 or approximately 12%. As a percentage of sales, net, selling and administrative expenses were approximately 7% and 8% for the three months ended December 31, 2016 and 2015, respectively. The increase in selling and administrative expenses was primarily the result of increased salaries and employee benefits of approximately $66 and in other expenses of $29 in the three months ended December 31, 2016 compared to the comparable prior three month period. Salaries and employee benefits increased as the result of salary increases, primarily for the executive officers of the Company
(these increases were effective October 1, 2016 and were the first increases for the executive officers in approximately 10 years)
and other expenses increased as the result of the release of a contingent liability reducing other expenses by $25 in the three month period ended December 31, 2015, absent this release, other expenses would have increased by $4. No other expense within our selling and administrative expenses changed by more than $10.
Other income (expense)
, net.
Other income (expense), net was approximately $0.6 million and $0.2 million for the three months ended December 31, 2016 and 2015, respectively, and is composed of:
Three months ended
December 31,
2016
2015
(dollars in thousands)
Interest expense
$ (227)
$ (243)
Change in fair value of derivative instruments
(364)
6
Other income
15
26
Other income (expense), net
$ (576)
$ (211)
The variance in the
change in fair value of derivative liabilities from the three months ended December 31, 2015 to the December 31, 2016 was mainly the result of the increased closing trading price of our common stock from $0.15 as of September 30, 2016 to $0.23 as of December 31, 2016. The volatility of the closing trading price of our stock is one of the variables used to calculate the estimated fair value of our derivative liabilities associated with the underlying derivative instrument. Our interest expense in the three months ended December 31, 2016 decreased by approximately $16 from the three months ended December 31, 2015, as the result of decreased non cash interest charges from the accretion for the embedded derivative in our Convertible Note Payable – CD Financial, LLC (
See Note 4. Senior Credit Facility, Subordinated Convertible Note, net - CD Financial, LLC and other Long Term Debt
in this Quarterly Report on Form 10-Q) and the amortization of prepaid financing charges of approximately $35, offset by increased interest expense of approximately $19 on our outstanding debt.
-20-
Other income decreased by approximately $11 as the result of earning less income from providing back office support, logistics and operational support for a start-up company which sells over the counter pharmaceutical and nutraceutical products through retail and internet based outlets.
Federal and state income tax, net.
For the three months ended December 31, 2016 and 2015, we had federal and state tax expense of approximately $71 and $20, respectively. We continue to maintain a full reserve on our deferred tax assets as it has been determined that based upon past losses, the Company's past liquidity concerns and the current economic environment, that it is "more likely than not" the Company's deferred tax assets may not be realized. The state income tax expense is the result of MDC using all of its state net operating losses in the fiscal year ended 2013 tax period. All of our other subsidiaries still have adequate net operating losses for state income tax purposes to absorb any taxable income for state tax purposes.
Net
loss
.
Our net loss for the three months ended December 31, 2016 and 2015 was approximately $77 and $63, respectively.
Seasonality
The nutraceutical business tends to be seasonal. We have found that in our first fiscal quarter ending on
September 30th of each year, orders for our 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 our second fiscal quarter, ending on December 31st of each year, orders for our products increase as the demand for our branded nutraceutical products, as well as sales orders from our customers in our contract manufacturing segment, seem to increase in late December to early January as consumers become health conscious as they enter the new year.
The Company believes that there are other non-seasonal factors that also
may influence the variability of quarterly results including, but not limited to, general economic and industry conditions that affect consumer spending, changing consumer demands and current news on nutritional supplements. Accordingly, a comparison of the Company's results of operations from consecutive periods is not necessarily meaningful, and the Company's results of operations for any period are not necessarily indicative of future periods.
Liquidity and Capital Resources
The following table sets forth, for the periods indicated, the Company
's net cash flows used in operating, investing and financing activities, its period end cash and cash equivalents and other operating measures:
For the six months ended
December 31,
2016
2015
(dollars in thousands)
Net cash provided by (used in) operating activities
$ 547
$ (1,156)
Net cash used in investing activities
$ (83)
$ (38)
Net cash (used in) provided by financing activities
$ (793)
$ 1,183
Cash at end of period
$ 66
$ 60
At
December 31, 2016 and June 30, 2016, our working capital was approximately $1.1 million and $0.2 million, respectively. Our current assets increased by $1.0 million and current liabilities increased by approximately $0.1 million, resulting in a net increase in our working capital of $0.9 million.
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Net cash
provided by operating activities of $0.5 million in the six months ended December 31, 2016, includes net income of approximately $0.6 million. After excluding the effects of non-cash expenses, including depreciation and amortization, and changes in the fair value of derivative liabilities, the adjusted cash provided from operations before the effect of the changes in working capital components was $1.6 million. Cash was used in operations from our working capital assets and liabilities in the amount of approximately $1.0 million and was primarily the result of increases in accounts receivable of $1.3 million offset, in part, by a net increase in accounts payable and accrued expenses and other liabilities of approximately $0.4 million.
Net cash used in operating activities of $1.
2 million in the six months ended December 31, 2015, includes net income of approximately $0.2 million. After excluding the effects of non-cash expenses, including depreciation and amortization, and changes in the fair value of derivative liabilities, the adjusted cash provided from operations before the effect of the changes in working capital components was $0.5 million. Cash was used in operations from our working capital assets and liabilities in the amount of approximately $1.6 million and was primarily the result of increases in accounts receivable of $1.4 million and inventories of $1.2 million offset, in part, by a net increase in accounts payable and accrued expenses and other liabilities of approximately $1.0 million.
Cash used in investing activities
of $83 and $38 in the six months ended December 31, 2016 and 2015, respectively, was for the purchase of property and equipment primarily in our Contract Manufacturing Segment.
Cash
used in financing activities was approximately $0.8 million for the six months ended December 31, 2016, $23.0 million from advances under our revolving credit facility offset, in part, by repayments of advances under our revolving credit facility of $23.2 million and repayments of principal under our term notes in the amount of $0.5 million.
Cash provided by financing activities was approximately
$1.2 million for the six months ended December 31, 2015, $19.0 million from advances under our revolving credit facility offset, in part, by repayments of advances under our revolving credit facility of $17.5 million and repayments of principal under our term notes in the amount of $0.3 million.
As of
December 31, 2016, we had cash of $66, funds available under our revolving credit facility of approximately $2.8 million and working capital of approximately $1.1 million. Our working capital includes $4.0 million outstanding under our revolving line of credit which is not due until February 2020 but classified as current due to a subjective acceleration clause that could cause the advances to become currently due. (See Note 4 to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q). Furthermore, we had income from operations of approximately $1.9 million in the six months ended December 30, 2016. After taking into consideration our interim results and current projections, management believes that operations, together with the revolving credit facility will support our working capital requirements through the period ending December 31, 2017.
Our total annual commitments at
December 31, 2016 for long term non-cancelable leases of approximately $0.6 million consists of obligations under operating leases for facilities and operating lease agreements for the rental of warehouse equipment, office equipment and automobiles.
On May 15, 2012, Cedarburg Pharmaceuticals, Inc. ("Cedarburg") sent us a letter (the "Demand Letter") setting forth a demand for indemnification under the Stock Purchase Agreement, dated March 17, 2009 (the "Cedarburg SPA"), by and among Cedarburg, InB: Hauser Pharmaceutical Services, Inc., InB: Paxis Pharmaceuticals, Inc. and the Company. In the Demand Letter, Cedarbur
g demanded payment by us of $0.6 million in respect of the Company's indemnification obligations under the Cedarburg SPA. In addition, in the Demand Letter, Cedarburg informed us that there are also environmental issues pending which may lead to additional costs to Cedarburg which will likely be in excess of $0.3 million.
On May 30, 2012, we sent a letter responding to the Demand Letter and setting forth our position that we have no obligation to indemnify Cedarburg as demanded. On June 18, 2012, Cedarburg responded to our letter and, on July 27, 2012, we sent another letter to Cedarburg reiterating our position that
we have no obligation to indemnify Cedarburg as demanded. On December 18, 2012,
-22-
Cedarburg responded to our letter and, on January 15, 2013, we sent another letter to Cedarburg reiterating our position that we have no obligation to indemnify Cedarburg as demanded. As of February 10, 2017, we have not received any further communication from Cedarburg with respect to its demand for indemnification as set forth in the Demand Letter. We intend to vigorously contest Cedarburg's demand as set forth in the Demand Letter.
Capital Expenditures
The Company's capital expenditures for the
six months ended December 31, 2016 and 2015 were approximately $83 and $0.2 million ($43 funded with proceeds under our convertible line of credit for equipment financing and $0.2 million funded with capitalized lease financing), respectively. The Company has budgeted approximately $0.3 million for capital expenditures for fiscal year 2017. The total amount is expected to be funded from lease financing and cash provided from the Company's operations.
Off-Balance Sheet Arrangements
The Company has no off-balance sheet arrangements.
Recent Accounting Pronouncement
s
None
.
Impact of Inflation
The Company does not believe that inflation has significantly affected its results of operations.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
Item 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by
the Company in the reports it files or submits under the Securities Exchange Act of 1934, as amended (the "Exchange Act") is recorded, processed, summarized, and reported within the time periods specified by the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company has evaluated the effectiveness of its disclosure controls and procedures (as such term is defined in Rule
13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2016, and, based upon this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these controls and procedures are effective in providing reasonable assurance of compliance.
Changes in Internal Control over Financial Reporting
No change in our internal control over financial reporting occurred during the six months ended
December 31, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
-23-
PART II
– OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None.
Item 1A. Risk Factors
The risks described in Item 1A, Risk Factors, in our Annual Report on Form 10-K for the year ended
June 30, 2016, could materially and adversely affect our business, financial condition and results of operations. The risk factors discussed in that Form 10-K do not identify all risks that we face because our business operations could also be affected by additional factors that are not presently known to us or that we currently consider to be immaterial to our operations. There have been no material changes to our risk factors from those disclosed in our Form 10-K for the year ended June 30, 2016.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
Item 4. MINE SAFETY DISCLOSURE
Not Applicable.
Item 5. OTHER
INFORMATION
None.
Item 6. EXHIBITS
(a)
Exhibits
Exhibit
Number
31.1
Certification of pursuant to Section 302 of Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer.
31.2
Certification of pursuant to Section 302 of Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer.
32.1
Certification of periodic financial report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer.
32.2
Certification of periodic financial report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer.
10
1
The following financial information from
Integrated BioPharma, Inc.'s Quarterly Report on Form 10-Q for the quarter ended December 31, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations for the three and six months ended December 31, 2016 and 2015, (ii) Condensed Consolidated Balance Sheets as of December 31, 2016 and June 30, 2016, (iii) Condensed Consolidated Statements of Cash Flows for the six months ended December 31, 2016 and 2015, and (iv) the Notes to Condensed Consolidated Statements.
-24-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
INTEGRATED BIOPHARMA, INC.
Date:  February 10, 2017
By:
/s/ E. Gerald Kay
E. Gerald Kay,
President and Chief Executive Officer
Date:
February 10, 2017
By:
/s/ Dina L. Masi
Dina L. Masi,
Chief Financial Officer & Senior Vice Presiden
-25-