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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-Q



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

For the quarter ended September 30, 2007

or



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | -----------------------------------------------------------------------------------------

Commission File Number 001-16185



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GEOPHARMA, INC.

(Name of small
business issuer as specified in its charter)



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|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|STATE OF FLORIDA                                               |  | 59-2600232                       
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification No.)



|                                         |  |           
|---------------------------------------- |  | ----------
|6950 Bryan Dairy Road, Largo, Florida    |  | 33777     
|(Address of principal executive offices) |  | (Zip Code)

Issuers telephone number, including area code: (727) 544-8866



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Indicate by check mark whether the
issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.    x  Yes ̈No

The number of shares outstanding of the Issuers common stock at $.01 par value as of
November 1, 2007 was 11,903,467.

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



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|Item 1. | CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
|------- | --------------------------------------------

GEOPHARMA, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

ASSETS



|                                               |  |                   |            |   |                |   |           
|---------------------------------------------- |  | ----------------- | ---------- | - | -------------- | - | ----------
|                                               |  | September 30,2007 |            |   | March 31, 2007
|Current assets:                                |  |                   | (unaudited | ) |                |   |           
|Cash and cash equivalents                      |  | $                 | 1,697,013  |   |                | $ | 735,000   
|Certificate of deposit                         |  |                   | 6,163,105  |   |                |   |          
|Accounts receivable, net                       |  |                   | 3,272,008  |   |                |   | 8,055,147 
|Accounts receivable, other                     |  |                   | 465,996    |   |                |   | 474,073   
|Inventories, net                               |  |                   | 8,488,343  |   |                |   | 7,356,295 
|Prepaid expenses and other current assets      |  |                   | 398,651    |   |                |   | 654,552   
|Due from affiliates                            |  |                   | 259,876    |   |                |   | 576,768   
|                                               |  |                   |            |   |                |   |           
|Total current assets                           |  | $                 | 20,744,992 |   |                | $ | 17,851,835
|                                               |  |                  
|Property, plant, leaseholds and equipment, net |  |                   | 12,900,210 |   |                |   | 11,610,506
|                                               |  |                  
|Goodwill, net                                  |  |                   | 728,896    |   |                |   | 728,896   
|Intangible assets, net                         |  |                   | 6,348,842  |   |                |   | 4,944,650 
|Deferred compensation                          |  |                   | 2,659,886  |   |                |   | 1,971,931 
|Media Credits, net                             |  |                   | 286,166    |   |                |   | 286,166   
|Deferred tax asset, net                        |  |                   | 2,262,000  |   |                |   | 576,595   
|Other assets, net                              |  |                   | 196,188    |   |                |   | 197,987   
|                                               |  |                   |            |   |                |   |           
|Total assets                                   |  | $                 | 46,127,180 |   |                | $ | 38,168,566
|                                               |  |                   |            |   |                |   |           

See accompanying notes to consolidated financial statements



2



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LIABILITIES AND SHAREHOLDERS EQUITY



|                                                                                                                                                           |  |                    |             |   |                |   |             |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | ----------- | - | -------------- | - | ----------- | -
|                                                                                                                                                           |  | September 30, 2007 |             |   | March 31, 2007 |  
|Current liabilities:                                                                                                                                       |  |                    | (unaudited  | ) |                |   |             |  
|Accounts payable                                                                                                                                           |  | $                  | 2,541,301   |   |                | $ | 4,793,483   |  
|Credit line payable                                                                                                                                        |  |                    | 1,262,626   |   |                |   |            |  
|Current portion of long-term obligations                                                                                                                   |  |                    | 2,695,059   |   |                |   | 1,771,884   |  
|Accrued expenses, other liabilities and related party obligations                                                                                          |  |                    | 2,737,377   |   |                |   | 4,658,756   |  
|                                                                                                                                                           |  |                    |             |   |                |   |             |  
|Total current liabilities                                                                                                                                  |  | $                  | 9,236,363   |   |                | $ | 11,224,123  |  
|Long-term obligations, less current portion                                                                                                                |  |                    | 906,691     |   |                |   | 3,085,172   |  
|                                                                                                                                                           |  |                    |             |   |                |   |             |  
|Total liabilities                                                                                                                                          |  | $                  | 10,143,054  |   |                | $ | 14,309,295  |  
|                                                                                                                                                           |  |                   
|8% Convertible debt                                                                                                                                        |  |                    | 10,000,000  |   |                |   |            |  
|                                                                                                                                                           |  |                   
|Commitments and contingencies                                                                                                                              |  |                    |             |   |                |   |             |  
|                                                                                                                                                           |  |                   
|Minority interest                                                                                                                                          |  |                    | (1,355,119  | ) |                |   | (912,664    | )
|                                                                                                                                                           |  |                   
|Shareholders equity:                                                                                                                                      |  |                    |             |   |                |   |             |  
|6% convertible preferred stock, Series B, $.01 par value (5,000 shares authorized, 5,000 shares issued and outstanding (liquidation preference
$5,000,000) |  |                    | 50          |   |                |   | 50          |  
|Common stock, $.01 par value; 24,000,000 shares authorized; 11,903,467 and 10,232,985 shares issued and outstanding                                        |  |                    | 119,035     |   |                |   | 102,330     |  
|Treasury stock (110,379 common shares, $.01 par value)                                                                                                     |  |                    | (1,104      | ) |                |   | (1,104      | )
|Additional paid-in capital                                                                                                                                 |  |                    | 53,277,960  |   |                |   | 47,753,274  |  
|Retained earnings (deficit)                                                                                                                                |  |                    | (26,056,696 | ) |                |   | (23,082,615 | )
|                                                                                                                                                           |  |                    |             |   |                |   |             |  
|Total shareholders equity                                                                                                                                 |  | $                  | 27,339,245  |   |                | $ | 24,771,935  |  
|                                                                                                                                                           |  |                    |             |   |                |   |             |  
|Total liabilities and shareholders equity                                                                                                                 |  | $                  | 46,127,180  |   |                | $ | 38,168,566  |  
|                                                                                                                                                           |  |                    |             |   |                |   |             |  

See accompanying notes to consolidated financial statements.



3



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GEOPHARMA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)



|                                                                                                                     |  |                                 |            |   |                               |   |            |      |  |   |            |   |  |   |            |  
|-------------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ---------- | - | ----------------------------- | - | ---------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                                                                                                     |  | Three Months EndedSeptember 30, |            |   | Six Months EndedSeptember 30, |  
|                                                                                                                     |  | 2007                            |            |   | 2006                          |   |            | 2007 |  |   | 2006       |  
|Revenues:                                                                                                            |  |                                 |            |   |                               |   |            |      |  |   |            |   |  |   |            |  
|                                                                                                                     |  |                                 |            |  
|PBM (a discontinued operation)                                                                                       |  | $                               |           |   |                               | $ | 4,673,611  |      |  | $ |           |   |  | $ | 9,551,393  |  
|Distribution                                                                                                         |  |                                 | 1,360,751  |   |                               |   | 3,323,298  |      |  |   | 3,217,271  |   |  |   | 6,495,174  |  
|Manufacturing                                                                                                        |  |                                 | 4,660,406  |   |                               |   | 8,643,527  |      |  |   | 9,582,511  |   |  |   | 15,028,499 |  
|Pharmaceutical                                                                                                       |  |                                 |           |   |                               |   | 38,360     |      |  |   | 41,199     |   |  |   | 251,846    |  
|                                                                                                                     |  |                                 |            |   |                               |   |            |      |  |   |            |   |  |   |            |  
|Total revenues                                                                                                       |  | $                               | 6,021,157  |   |                               | $ | 16,678,796 |      |  | $ | 12,840,981 |   |  | $ | 31,326,911 |  
|                                                                                                                     |  |                                 |            |   |                               |   |            |      |  |   |            |   |  |   |            |  
|Cost of goods sold:                                                                                                  |  |                                 |            |   |                               |   |            |      |  |   |            |   |  |   |            |  
|PBM (a discontinued operation)                                                                                       |  |                                 |           |   |                               |   | 4,637,583  |      |  |   |           |   |  |   | 9,476,037  |  
|Distribution                                                                                                         |  |                                 | 721,542    |   |                               |   | 1,384,061  |      |  |   | 1,737,435  |   |  |   | 2,762,226  |  
|Manufacturing (excluding depreciation and amortization presented below)                                              |  |                                 | 3,327,391  |   |                               |   | 5,759,086  |      |  |   | 6,788,026  |   |  |   | 10,308,317 |  
|Pharmaceutical                                                                                                       |  |                                 | 740,755    |   |                               |   | 233,082    |      |  |   | 1,573,380  |   |  |   | 608,700    |  
|                                                                                                                     |  |                                 |            |   |                               |   |            |      |  |   |            |   |  |   |            |  
|Total cost of goods sold                                                                                             |  | $                               | 4,789,688  |   |                               | $ | 12,013,812 |      |  | $ | 10,098,841 |   |  | $ | 23,155,280 |  
|                                                                                                                     |  |                                 |            |   |                               |   |            |      |  |   |            |   |  |   |            |  
|Gross profit:                                                                                                        |  |                                 |            |   |                               |   |            |      |  |   |            |   |  |   |            |  
|PBM (a discontinued operation)                                                                                       |  |                                 |           |   |                               |   | 36,028     |      |  |   |           |   |  |   | 75,356     |  
|Distribution                                                                                                         |  |                                 | 639,209    |   |                               |   | 1,939,237  |      |  |   | 1,479,836  |   |  |   | 3,732,948  |  
|Manufacturing                                                                                                        |  |                                 | 1,333,015  |   |                               |   | 2,884,441  |      |  |   | 2,794,485  |   |  |   | 4,820,182  |  
|Pharmaceutical                                                                                                       |  |                                 | (740,755   | ) |                               |   | (194,722   | )    |  |   | (1,532,181 | ) |  |   | (356,854   |  
|                                                                                                                     |  |                                 |            |   |                               |   |            |      |  |   |            |   |  |   |            |  
|Total gross profit                                                                                                   |  | $                               | 1,231,469  |   |                               | $ | 4,664,984  |      |  | $ | 2,742,140  |   |  | $ | 8,171,631  |  
|                                                                                                                     |  |                                 |            |   |                               |   |            |      |  |   |            |   |  |   |            |  
|Selling, general and administrative expenses:                                                                        |  |                                 |            |   |                               |   |            |      |  |   |            |   |  |   |            |  
|Selling, general and administrative expenses                                                                         |  |                                 | 3,430,179  |   |                               |   | 3,307,757  |      |  |   | 6,307,385  |   |  |   | 5,931,207  |  
|Stock option compensation expense                                                                                    |  |                                 | 264,247    |   |                               |   | 427,675    |      |  |   | 420,837    |   |  |   | 855,350    |  
|Depreciation and amortization                                                                                        |  |                                 | 372,231    |   |                               |   | 245,565    |      |  |   | 819,358    |   |  |   | 481,627    |  
|                                                                                                                     |  |                                 |            |   |                               |   |            |      |  |   |            |   |  |   |            |  
|Selling, general and administrative expenses                                                                         |  |                                 | 4,066,657  |   |                               |   | 3,980,997  |      |  |   | 7,547,580  |   |  |   | 7,268,184  |  
|                                                                                                                     |  |                                 |            |   |                               |   |            |      |  |   |            |   |  |   |            |  
|Operating income (loss) before other income and expense, minority interest, income taxes and discontinued operations |  | $                               | (2,835,188 | ) |                               | $ | 683,987    |      |  | $ | (4,805,440 | ) |  | $ | 903,447    |  
|Other income (expense), net:                                                                                         |  |                                 |            |   |                               |   |            |      |  |   |            |   |  |   |            |  
|Other income (expense), net                                                                                          |  |                                 | 126        |   |                               |   | 166,197    |      |  |   | 2,249      |   |  |   | 164,301    |  
|Interest income (expense), net                                                                                       |  |                                 | (33,178    | ) |                               |   | (25,204    | )    |  |   | (72,969    | ) |  |   | (28,617    | )
|                                                                                                                     |  |                                 |            |   |                               |   |            |      |  |   |            |   |  |   |            |  
|Total other income (expense), net                                                                                    |  | $                               | (33,052    | ) |                               | $ | 140,993    |      |  | $ | (70,719    | ) |  | $ | 135,684    |  
|                                                                                                                     |  |                                 |            |   |                               |   |            |      |  |   |            |   |  |   |            |  
|Income (loss) before minority interest, income taxes and discontinued operations                                     |  | $                               | (2,868,240 | ) |                               | $ | 824,980    |      |  | $ | (4,876,160 | ) |  | $ | 1,039,131  |  
|Minority interest benefit (expense)                                                                                  |  |                                 | 216,793    |   |                               |   | 327,057    |      |  |   | 442,456    |   |  |   | 664,328    |  
|Income tax benefit (expense)                                                                                         |  |                                 | 877,802    |   |                               |   | (284,000   | )    |  |   | 1,685,402  |   |  |   | (588,000   | )
|                                                                                                                     |  |                                 |            |   |                               |   |            |      |  |   |            |   |  |   |            |  
|Net income (loss) from continuing operations                                                                         |  | $                               | (1,773,645 | ) |                               | $ | 868,037    |      |  | $ | (2,748,302 | ) |  | $ | 1,115,459  |  
|Discontinued operations:                                                                                             |  |                                 |            |   |                               |   |            |      |  |   |            |   |  |   |            |  
|Revenues: PBM                                                                                                        |  | $                               |           |   |                               | $ |           |      |  | $ | 2,925,139  |   |  | $ |           |  
|Cost of goods sold: PBM                                                                                              |  |                                 |           |   |                               |   |           |      |  |   | 2,904,274  |   |  |   |           |  
|                                                                                                                     |  |                                 |            |   |                               |   |            |      |  |   |            |   |  |   |            |  
|Gross profit: PBM                                                                                                    |  | $                               |           |   |                               | $ |           |      |  | $ | 20,865     |   |  | $ |           |  
|Selling, general and administrative expenses: PBM                                                                    |  |                                 |           |   |                               |   |           |      |  |   | 20,785     |   |  |   |           |  
|PBM segment exit income (expense)                                                                                    |  |                                 |           |   |                               |   |           |      |  |   | 8,300      |   |  |   |           |  
|                                                                                                                     |  |                                 |            |   |                               |   |            |      |  |   |            |   |  |   |            |  
|Discontinued operations net income (net of income tax)                                                               |  | $                               |           |   |                               | $ |           |      |  | $ | 8,380      |   |  | $ |           |  
|                                                                                                                     |  |                                 |            |   |                               |   |            |      |  |   |            |   |  |   |            |  
|Net income (loss)                                                                                                    |  | $                               | (1,773,645 | ) |                               | $ | 868,037    |      |  | $ | (2,739,922 | ) |  | $ | 1,115,459  |  
|Preferred stock dividends                                                                                            |  |                                 | 100,002    |   |                               |   | 75,000     |      |  |   | 208,335    |   |  |   | 150,000    |  
|                                                                                                                     |  |                                 |            |   |                               |   |            |      |  |   |            |   |  |   |            |  
|Net income (loss) available to common shareholders                                                                   |  | $                               | (1,873,647 | ) |                               | $ | 793,037    |      |  | $ | (2,948,257 | ) |  | $ | 965,459    |  
|                                                                                                                     |  |                                 |            |   |                               |   |            |      |  |   |            |   |  |   |            |  
|Basic income (loss) per share                                                                                        |  | $                               | (0.16      | ) |                               | $ | .08        |      |  | $ | (0.27      | ) |  |   | .10        |  
|                                                                                                                     |  |                                 |            |   |                               |   |            |      |  |   |            |   |  |   |            |  
|Basic weighted average Number of common shares outstanding                                                           |  |                                 | 11,436,721 |   |                               |   | 9,927,195  |      |  |   | 11,042,688 |   |  |   | 9,907,322  |  
|                                                                                                                     |  |                                 |            |   |                               |   |            |      |  |   |            |   |  |   |            |  
|Diluted income (loss) per share                                                                                      |  | $                               | (0.16      | ) |                               | $ | .07        |      |  | $ | (0.27      | ) |  | $ | .08        |  
|                                                                                                                     |  |                                 |            |   |                               |   |            |      |  |   |            |   |  |   |            |  
|Diluted weighted average number of common shares outstanding                                                         |  |                                 | 11,436,721 |   |                               |   | 13,331,543 |      |  |   | 11,042,688 |   |  |   | 13,311,670 |  

See accompanying notes to condensed consolidated financial statements.



4



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GEOPHARMA, INC. AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS



|                                                                                  |  |                                  |            |   |                                    |   |            |  
|--------------------------------------------------------------------------------- |  | -------------------------------- | ---------- | - | ---------------------------------- | - | ---------- | -
|                                                                                  |  | Six Months Ended September 30,   |           
|                                                                                  |  | 2007                             |            |   | 2006                               |  
|                                                                                  |  | (Unaudited)                      |            |   | (Unaudited)                        |  
|Cash flows from operating activities:                                             |  |                                  |            |   |                                    |   |            |  
|Net income (loss)                                                                 |  | $                                | (2,739,922 | ) |                                    | $ | 1,115,459  |  
|Adjustments to reconcile net income (loss) to net cash from operating activities: |  |                                  |            |   |                                    |   |            |  
|Depreciation and amortization                                                     |  |                                  | 819,358    |   |                                    |   | 481,627    |  
|Accrued interest income                                                           |  |                                  | (163,105   | ) |                                    |   | (5,453     | )
|Amortization of stock option deferred compensation                                |  |                                  | 420,837    |   |                                    |   | 970,495    |  
|Amortization of debt discount to interest expense                                 |  |                                  |           |   |                                    |   |           |  
|Change in net deferred taxes                                                      |  |                                  | (1,685,402 | ) |                                    |   | 588,000    |  
|Changes in operating assets and liabilities:                                      |  |                                  |            |   |                                    |   |            |  
|Accounts receivable, net                                                          |  |                                  | 4,783,139  |   |                                    |   | (1,762,414 | )
|Accounts receivable, other                                                        |  |                                  | 8,077      |   |                                    |   | 106,278    |  
|Inventory, net                                                                    |  |                                  | (1,132,048 | ) |                                    |   | 904,358    |  
|Prepaid expenses and other current assets                                         |  |                                  | 255,901    |   |                                    |   | (712,041   | )
|Other assets, net                                                                 |  |                                  | 1,799      |   |                                    |   | (126,757   | )
|Accounts payable                                                                  |  |                                  | (2,252,182 | ) |                                    |   | (776,592   | )
|Accrued expenses                                                                  |  |                                  | (45,808    | ) |                                    |   | (115,691   | )
|Due from affiliates, net                                                          |  |                                  | 321,673    |   |                                    |   | (195,299   | )
|                                                                                  |  |                                  |            |   |                                    |   |            |  
|Net cash provided by (used in) operating activities                               |  | $                                | (1,407,692 | ) |                                    | $ | 399,970    |  
|Cash flows from investing activities:                                             |  |                                  |            |   |                                    |   |            |  
|Purchases of property, leaseholds and equipment                                   |  | $                                | (2,025,062 | ) |                                    | $ | (1,397,961 | )
|Purchase of certificate of deposit                                                |  |                                  | (7,007,608 | ) |                                    |   |           |  
|Proceeds from certificate of deposit maturity                                     |  |                                  | 1,007,608  |   |                                    |   |           |  
|Purchase of intangible assets                                                     |  |                                  | (1,223,844 | ) |                                    |   |           |  
|Proceeds (uses) due to minority interest investment, net                          |  |                                  | (442,445   | ) |                                    |   | (81,718    | )
|                                                                                  |  |                                  |            |   |                                    |   |            |  
|Net cash used in investing activities                                             |  | $                                | (9,691,361 | ) |                                    | $ | (1,479,679 | )
|Cash flows from financing activities:                                             |  |                                  |            |   |                                    |   |            |  
|Proceeds from private placement  Convertible debt                                |  | $                                | 10,000,000 |   |                                    | $ |           |  
|Proceeds from private placement  Common stock issuance                           |  |                                  | 2,500,000  |   |                                    |   |           |  
|Proceeds from credit line, net                                                    |  |                                  | 1,262,626  |   |                                    |   |           |  
|Proceeds from issuance of long-term obligations                                   |  |                                  |           |   |                                    |   | 750,000    |  
|Payments of long-term obligations                                                 |  |                                  | (518,846   | ) |                                    |   | (174,977   | )
|Payments of private placement costs                                               |  |                                  | (989,078   | ) |                                    |   |           |  
|Payments of acquisition costs                                                     |  |                                  | (197,886   | ) |                                    |   |           |  
|Proceeds from stock option exercise                                               |  |                                  | 4,250      |   |                                    |   | 69,756     |  
|                                                                                  |  |                                  |            |   |                                    |   |            |  
|Net cash provided by (used in) financing activities                               |  | $                                | 12,061,066 |   |                                    | $ | 644,779    |  
|                                                                                  |  |                                  |            |   |                                    |   |            |  
|Net increase (decrease) in cash                                                   |  |                                  | 962,013    |   |                                    |   | (434,930   | )
|Cash at beginning of period                                                       |  |                                  | 735,000    |   |                                    |   | 1,206,017  |  
|                                                                                  |  |                                  |            |   |                                    |   |            |  
|Cash at end of period                                                             |  | $                                | 1,697,013  |   |                                    | $ | 771,087    |  
|                                                                                  |  |                                  |            |   |                                    |   |            |  
|SUPPLEMENTAL INFORMATION:                                                         |  |                                  |            |   |                                    |   |            |  
|Cash paid during the period for interest                                          |  | $                                | 103,389    |   |                                    | $ | 28,389     |  
|                                                                                  |  |                                  |            |   |                                    |   |            |  
|Cash paid during the period for income taxes                                      |  | $                                | 850,000    |   |                                    | $ | 140,000    |  
|                                                                                  |  |                                  |            |   |                                    |   |            |  
|                                                                                  |  |                                 
|                                                                                  |  | Six monthsendedSeptember 30,2007 |            |   | Six monthsendedSeptember 30,2006 , |  
|NON-CASH INVESTING AND FINANCING ACTIVITIES:                                      |  |                                  |            |   |                                    |   |            |  
|Value of common stock issued to pay preferred stock dividend                      |  | $                                | 208,335    |   |                                    | $ | 150,000    |  

See accompanying notes to condensed consolidated financial statements.



5



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GEOPHARMA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX
MONTHS ENDED SEPTEMBER 30, 2007 AND 2006

(UNAUDITED)

NOTE 1  BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instruction to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by U.S. generally accepted accounting principles for complete consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the three and six month periods ended September 30, 2007 and 2006 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2008. For
further information, refer to the consolidated financial statements and footnotes included in the Companys Form-10K as of March 31, 2007 and 2006 and for the years ended March 31, 2007, 2006 and 2005 as filed with the Securities and
Exchange Commission on June 29, 2007.

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Principles of Consolidation

The condensed
consolidated financial statements as of September 30, and March 31, 2007 and for the three and six months ended September 30, 2007 and 2006 include the accounts of GeoPharma, Inc. (the Company), (GeoPharma),
which is continuing to do manufacturing business as Innovative Health Products, Inc. (Innovative), and its Florida wholly-owned subsidiaries Breakthrough Engineered Nutrition, Inc. (Breakthrough), Belcher Pharmaceuticals,
Inc., (Belcher), Breakthrough Marketing Inc., (B-Marketing), IHPMarketing, Inc., (IHP-Marketing), Libi Labs, Inc (Libi), Go2PBM Services, Inc. (PBM) and its Delaware wholly-owned
subsidiary, Belcher Capital Corporation, (Belcher Capital). Effective August 2005, the Company had a 51% controlling interest in our Florida-incorporated subsidiary, American Antibiotics, LLC ( American), which is accounted
for given the consideration of the 49% minority interest. During June 2007, the Company acquired and formed EZ-Med Technologies, Inc., a Florida corporation and a wholly owned subsidiary. All transactions relating to significant intercompany
balances and transactions have been eliminated in consolidation.

b. Industry Segment

In accordance with the provisions of Statement of Financial Accounting Standards No. 131, (SFAS 131), Disclosures about Segments of an Enterprise and Related Information, a company is required to disclose
selected financial and other related information about its operating segments. Operating segments are components of an enterprise about which separate financial information is available and is utilized by the chief operating decision maker related
to the allocation of resources and in the resulting assessment of the segments overall performance. As of September 30, 2007 and March 31, 2007, the Company had four industry segments in addition to corporate: manufacturing,
distribution, pharmacy benefit management and pharmaceutical. Effective May 15, 2007, the Company mutually terminated its Pharmacy Benefit Management contract with AmeriGroup, formerly known as CarePlus, and as a result, the pharmacy benefit
management segment was therefore ended. See further consideration in Note 9.



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The $46,127,180 of total assets as of September 30, 2007 were comprised of $14,113,475 attributable to corporate,
$12,891,732 attributable to manufacturing, $3,624,088 attributable to distribution and $15,497,885 attributable to pharmaceutical. The $38,168,566 of total assets as of March 31, 2007 were comprised of $3,167,367 attributable to corporate,
$14,179,674 attributable to manufacturing, $6,301,940 attributable to distribution, $420,249 attributable to pharmacy benefit management and $14,099,336 attributable to pharmaceutical

c. Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid
debt instruments purchased with a maturity of three months or less to be cash equivalents.

d. Inventories

Inventories are stated at lower of cost or market. Cost is determined using the first-in, first-out method (FIFO).

e. Property, Leasehold Improvements and Equipment

Depreciation is
provided for using the straight-line method, in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives (asset categories range from three to seven years). Leasehold improvements are amortized
using the straight-line method over the lives of the respective leases or the service lives of the improvements, whichever is shorter. Leased equipment under capital leases is amortized using the straight-line method over the lives of the respective
leases or over the service lives of the assets, whichever is shorter, for those leases that substantially transfer ownership. Accelerated depreciation methods are used for tax purposes.



7



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NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

f. Intangible Assets

Intangible assets consist primarily of goodwill
and intellectual property. FAS 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead be tested for impairment at least annually. The Company has selected January 1 as the annual date
to test these assets for impairment. FAS 142 also requires the intangible assets with definite useful lives be amortized over their respective estimated useful lives, and reviewed for impairment in accordance with SFAS No. 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of.

For the three and six months ended September 30, 2007 and
2006, amortization expense associated with goodwill was $0. The unamortized balance of goodwill at September 30, and March 31, 2007 was $728,896. No impairment loss was required to be recorded.

g. Impairment of Assets

In accordance with the provisions of
Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the Companys policy is to evaluate whether there has been a permanent impairment in the value of long-lived assets,
certain identifiable intangibles and goodwill when certain events have taken place that indicate the remaining unamortized balance may not be recoverable. When factors indicate that the intangible assets should be evaluated for possible impairment,
the Company uses an estimate of related undiscounted cash flows. There have been no impairment losses recorded.

h. Income Taxes

The Company utilizes the guidance provided by Statement of Financial Accounting Standards No. 109 (SFAS 109), Accounting for Income Taxes. Under the liability method
specified by SFAS 109, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities as measured by the enacted tax rates which will be in effect when these
differences reverse. Deferred tax expense is the result of changes in deferred tax assets and liabilities.

i. Earnings (Loss) Per Common Share

Earnings (loss) per share are computed using the basic and diluted calculations on the face of the statement of operations. Basic earnings (loss) per share
are calculated by dividing net income (loss) available to common stockholders by the weighted average number of shares of common stock outstanding for the period. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the
weighted average number of shares of common stock outstanding for the period, adjusted for the dilutive effect of common stock equivalents, using the treasury stock method. Convertible debt, preferred stock and common stock warrants, officer,
employee and nonemployee stock options that are considered potentially dilutive are included in the fully diluted share calculation at September 30, 2007 and 2006. The reconciliation between basic and fully diluted shares are as follows:



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|                                                      |  |                            |            |                          |                    |   |                    |  |   |                    |   |  |   |           
|----------------------------------------------------- |  | -------------------------- | ---------- | ------------------------ | ------------------ | - | ------------------ |  | - | ------------------ | - |  | - | ----------
|                                                      |  | For the Three Months Ended |            | For the Six Months Ended
|                                                      |  | September 30, 2007         |            |                          | September 30, 2006 |   | September 30, 2007 |  |   | September 30, 2006
|Net income (loss) per share  basic:                  |  |                            |            |                          |                    |   |                    |  |   |                    |   |  |   |           
|Net income (loss)                                     |  | $                          | (1,873,647 | )                        |                    | $ | 793,037            |  | $ | (2,948,257         | ) |  | $ | 965,459   
|Weighted average shares  basic                       |  |                            | 11,436,721 |                          |                    |   | 9,927,195          |  |   | 11,042,688         |   |  |   | 9,909,219 
|Net income (loss) per share  basic                   |  | $                          | (0.16      | )                        |                    | $ | 0.08               |  | $ | (0.27              | ) |  | $ | 0.10      
|Net income (loss) per share  diluted:                |  |                            |            |                          |                    |   |                    |  |   |                    |   |  |   |           
|Net income (loss)                                     |  | $                          | (1,873,647 | )                        |                    | $ | 793,037            |  | $ | (2,948,257         | ) |  | $ | 965,459   
|Preferred stock dividend                              |  |                            | 100,002    |                          |                    |   | 75,000             |  |   | 208,335            |   |  |   | 150,000   
|                                                      |  |                            |            |                          |                    |   |                    |  |   |                    |   |  |   |           
|                                                      |  | $                          | (1,773,645 | )                        |                    |   | 868,037            |  | $ | (2,739,922         | ) |  | $ | 1,115,459 
|                                                      |  |                            |            |                         
|Weighted average shares  basic                       |  |                            | 11,436,721 |                          |                    |   | 9,927,195          |  |   | 11,042,688         |   |  |   | 9,907,322 
|Effect of convertible instruments prior to conversion |  |                            |           |                          |                    |   | 833,333            |  |   |                   |   |  |   | 833,333   
|Effect of warrants prior to conversion                |  |                            |           |                          |                    |   | 562,500            |  |   |                   |   |  |   | 562,500   
|Effect of stock options                               |  |                            |           |                          |                    |   | 2,008,515          |  |   |                   |   |  |   | 2,008,515 
|                                                      |  |                            |            |                          |                    |   |                    |  |   |                    |   |  |   |           
|Weighted average shares-diluted                       |  |                            | 11,436,721 |                          |                    |   | 13,331,543         |  |   | 11,042,688         |   |  |   | 13,311,670
|Net income (loss) per share  diluted                 |  | $                          | (0.16      | )                        |                    | $ | 0.07               |  | $ | (0.27              | ) |  | $ | 0.08      



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Since there was a net loss incurred for the three and six months ended September 30, 2007, the diluted loss per
share equals the basic loss per share.

j. Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles, requires management to make estimates, assumptions and apply certain critical accounting policies that affect
the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at September 30, 2007 and March 31, 2007, as well as the reported amounts of revenues and expenses for the three and six months ended
September 30, 2007 and 2006. Estimates and assumptions used in our financial statements are based on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis
for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. These estimates and assumptions also require the application of certain accounting policies, many of which require estimates
and assumptions about future events and their effect on amounts reported in the financial statements and related notes. We periodically review our accounting policies and estimates and makes adjustments when facts and circumstances dictate. Actual
results may differ from these estimates under different assumptions or conditions. Any differences may have a material impact on our financial condition, results of operations and cash flows.

k. Concentration of Credit Risk

Concentrations of
credit risk with respect to trade accounts receivable are customers with balances that exceed 5% of total consolidated trade accounts receivable. At September 30, and March 31, 2007. three customers, Spectrum Group with 19.2%, General
Nutrition Distribution with 14.5%, Product Excellence with 6.8% and CVS with 6.7%. Four customers, General Nutrition Distribution with 31.5%, Spectrum Group with 20.9%, Berkeley Premium Nutraceuticals with 16.4% and CVS with 5.3% of the total trade
receivable as of March 31, 2007.

For the three months ended September 30, 2007, three customers individually exceeded 5% of our
total consolidated revenues which included 21.9% for Jacks Distribution, 11.9% for Berkeley Premium Nutraceuticals and 7.3% for CVS in relation to total consolidated revenues and for the three months ended September 30, 2006, five customers
individually exceeded 5% of our total consolidated revenues which included General Nutrition Distribution for 16.3%, 14.9% for Spectrum Group, 10.6% for NutraCea, 10.1% for Berkeley Premium Nutraceuticals and 33.2% for CarePlus Health, a related
party, in relation to total consolidated revenues,

For the six months ended September 30, 2007, four customers individually exceeded
5% of our total consolidated revenues which included Spectrum Group for 11.8%, General Nutrition Distribution for 9.2%, 7% for Jacks Distribution and 30% for CarePlus Health, a related party, in relation to total consolidated revenues and for the
six months ended September 30, 2006, five customers individually exceeded 5% of our total consolidated revenues which included General Nutrition Distribution for 14.8%, 14.0% for Spectrum Group, 10.3% for NutraCea, 6.6% for Berkeley Premium
Nutraceuticals and 30.5% for CarePlus Health, a related party, in relation to total consolidated revenues



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The Company has no concentration of customers within specific geographic areas outside the United States
that would give rise to significant geographic credit risk.

l. Revenue and Cost of Sales Recognition

In accordance with SAB 101, Revenue Recognition, revenues are recognized by the Company when the merchandise is shipped which is when title and risk of
loss has passed to the external customer. The Company analyzes the status of the allowance for uncollectible accounts based on historical experience, customer history and overall credit outstanding. For our distribution segment, any charge backs or
other sales allowances immediately reduce the gross receivable with the corresponding reduction effected through increases in sales allowances which directly reduce sales revenue. For our PBM segment, service revenues are recognized once the member
service of completing and fulfilling delivery of the members prescription.

Cost of Sales is recognized for the manufacturing and
distribution business segments simultaneously with the recognition of revenues with a direct charge to cost of goods sold and with an equal reduction to inventory at FIFO cost. For the PBM segment, cost of sales is recognized based on actual costs
incurred and are recognized as the related revenue is recognized.

m. Advertising Costs

The Company charges advertising costs to expense as incurred. Advertising expense was $136,800 and $160,131 for the three months ended September 30, 2007 and 2006,
respectively with $302,326 and $345,079 of advertising expense for the six months ended September 30, 2007 and 2006, respectively.

n. Research and
Development Costs

Costs incurred to develop our generic pharmaceutical products are expensed as incurred and charged to research and development
(R&D). R&D expensed for the three months ended September 30, 2007 and 2006 were $365,666 and $367,216, respectively and was $791,820 and $633,747 for the six months ended September 30 ,2007 and 2006.



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o. Fair Value of Financial Instruments

The Company, in estimating its fair value disclosures for financial instruments, uses the following methods and assumptions:

Cash, Accounts Receivable, Accounts Payable and Accrued Expenses: The carrying amounts reported in the balance sheet for cash, accounts receivable, accounts payable and accrued expenses approximate their fair value due to their relatively
short maturity.

Long-term Obligations: The fair value of the Companys fixed-rate long-term obligations is estimated using discounted cash flow
analyses, based on the Companys current incremental borrowing rates for similar types of borrowing arrangements. At September 30 and March 31, 2007, the fair value of the Companys long-term obligations approximated its carrying
value.

Credit Lines Payable: The carrying amount of the Companys credit lines payable approximates fair market value since the interest rate on
these instruments corresponds to market interest rates.

p. Stock-Based Compensation

Effective April 1, 2006, the Company was required to adopt Statement of Financial Accounting Standards (SFAS) No. 123R
Share-Based Payment (SFAS 123R) which replaces SFAS 123 and SFAS 148, and supersedes Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees. SFAS 123R requires
the cost relating to share-based payment transactions in which an entity exchanges its equity instruments for goods and services from either employees or non-employees be recognized in the financial statements as the goods are received or when the
services are rendered. That cost will be measured based on the fair value of the equity instrument issued. We will no longer be permitted to follow the previously-followed intrinsic value accounting method that APB No. 25 allowed which resulted
in no expense being recorded for stock option grants where the exercise price was equal to or greater than the fair market value of the underlying stock on the date of grant and further permitted disclosure-only proforma compensation expense effects
on net income.

SFAS 123R now applies to all of our existing outstanding unvested share-based payment stock option awards as well as any
and all future awards. We elected to use the modified prospective transition as opposed to the modified retrospective transition method such that financial statements prior to adoption remain unchanged. The Black-Scholes model was applied to value
the Companys stock option compensation expense as was used by the Company previously in the proforma disclosures. Effective March 31, 2007, the Company converted all unvested stock options to the Companys three year restricted
common stock.

q. Accounting for Financial Instruments

The Company entered into registration rights agreements with regard to the January 29, 2004 convertible debt financing on January 29, 2004, and with regard to the February 10, 2004 convertible preferred stock Series A
financing on February 10, 2004 and with regard to the March 5, 2004



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convertible stock Series B on March 5, 2004. Pursuant to all of the registration rights agreements, we agreed to file a resale registration statement
covering the resale of the shares issuable to the investors upon the exercise of their warrants and conversion of their debentures and preferred stock by February 29,2004, March 10, 2004 and April 5, 2004 respectively. At
inception, the registration rights agreements required us to pay monthly liquidated damages if a registration statement was not declared effective on or prior to April 29, 2004, May 10, 2004 and September 5, 2004 respectively or
after declared effective if the registration statements cease for any reason to remain continuously effective as to all registrable securities for which it is required to be effective or the investors are not permitted to utilize the prospectus
therein to resell such registrable securities for 20 consecutive calendar days but no more than an aggregate of 30 calendar days during any 12 month period. The amount of monthly liquidating damages equals 1%, 1% and 2% respectively of the aggregate
purchase price paid by the investors for any registrable securities held by the investors. Any late payment beyond seven days is subject to interest at an annual rate of 18%. The Company filed its registration statement with regard to the Series A
and B preferred stock, the convertible debt and debentures on April 2, 2004 and it was declared effective on April 23, 2004. Therefore, the Company has met the registration requirements and will continue to do so in the future. Under FASB
Staff Position EITF 00-19-2 Accounting for Registration Payment Agreements, the Company has reviewed the status of the registration agreement and has determined that the likelihood of the issuer having to make any payments under the
arrangement is remote.



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r. Reclassifications

Certain reclassifications have been made to the financial statements as of March 31, 2007 and for the three and six months ended September 30, 2006 to conform to the presentation as of and for the three and six months ended
September 30, 2007.

NOTE 3  ACCOUNTS RECEIVABLE, NET

Accounts receivable, net, consists of the following:



|                                          |  |                   |           |   |               |   |           |  
|----------------------------------------- |  | ----------------- | --------- | - | ------------- | - | --------- | -
|                                          |  | September 30,2007 |           |   | March 31,2007 |  
|Trade accounts receivable                 |  | $                 | 3,573,442 |   |               | $ | 8,319,002 |  
|Less allowance for uncollectible accounts |  |                   | (301,434  | ) |               |   | (263,855  | )
|                                          |  |                   |           |   |               |   |           |  
|                                          |  | $                 | 3,272,008 |   |               | $ | 8,055,147 |  
|                                          |  |                   |           |   |               |   |           |  

As of September 30, 2007, the total accounts receivable balance of $3,573,442 includes
$1,871,550 related to the Companys manufacturing segment and $1,201,892 as related to the Companys distribution segment. As of March 31, 2007, the total accounts receivable balance of $8,319,002 includes $4,198,976 related to the
Companys manufacturing segment and $4,120,026 related to the Companys distribution segment.

The Company recognizes revenues
for product sales when title and risk of loss pass to its external customers and analyzes the status of the allowance for uncollectible accounts based on historical experience, customer history and overall credit outstanding. For our distribution
segment, any charge backs or other sales allowances immediately reduce the gross receivable with the corresponding reduction effected through increases in sales allowances which directly reduce sales revenue.

NOTE 4  INVENTORIES, NET

Inventories, net,
consist of the following:



|                                      |  |                   |           |   |               |   |           |  
|------------------------------------- |  | ----------------- | --------- | - | ------------- | - | --------- | -
|                                      |  | September 30,2007 |           |   | March 31,2007 |  
|Processed raw materials and packaging |  | $                 | 5,963,468 |   |               | $ | 4,838,639 |  
|Work in process                       |  |                   | 662,508   |   |               |   | 646,158   |  
|Finished goods                        |  |                   | 1,903,183 |   |               |   | 1,912,314 |  
|                                      |  |                   |           |   |               |   |           |  
|                                      |  | $                 | 8,529,159 |   |               | $ | 7,397,111 |  
|Less reserve for obsolescence         |  |                   | (40,816   | ) |               |   | (40,816   | )
|                                      |  |                   |           |   |               |   |           |  
|                                      |  | $                 | 8,488,343 |   |               | $ | 7,356,295 |  
|                                      |  |                   |           |   |               |   |           |  

As of September 30, 2007, the total inventory balance of $8,529,159 includes $6,541,467
related to the Companys manufacturing segment, $644,501 related to the Companys distribution segment and $1,343,191 related to the Companys pharmaceutical segment. As of March 31, 2007, the total inventory balance of
$7,397,111 includes $5,404,217 related to the Companys manufacturing segment, $736,338 related to the Companys distribution segment and $1,256,556 as related to the pharmaceutical segment.



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NOTE 5  INTANGIBLE ASSETS, NET

Intangible assets, net consist of the following:



|                              |  |                   |           |   |               |   |           |  
|----------------------------- |  | ----------------- | --------- | - | ------------- | - | --------- | -
|                              |  | September 30,2007 |           |   | March 31,2007 |  
|Loan and lease costs          |  | $                 | 1,120,417 |   |               | $ | 26,025    |  
|Intellectual property         |  |                   | 2,002,220 |   |               |   | 1,858,933 |  
|Generic drug ANDAs            |  |                   | 3,152,289 |   |               |   | 3,115,500 |  
|Patents                       |  |                   | 9,554     |   |               |   | 9,554     |  
|                              |  |                   |           |   |               |   |           |  
|                              |  | $                 | 6,414,204 |   |               | $ | 5,010,012 |  
|Less accumulated amortization |  |                   | (65,362   | ) |               |   | (65,362   | )
|                              |  |                   |           |   |               |   |           |  
|                              |  | $                 | 6,348,842 |   |               | $ | 4,944,650 |  
|                              |  |                   |           |   |               |   |           |  



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The lease and loan costs, $1,120,417, are related to corporate all of which have an identifiable life and are amortized
over that life. Of the $2,002,220 intellectual property, $1,040,696 costs relate to the distribution segment with the $961,524 balance related to pharmaceutical segment, all of which have no identifiable life and are therefore evaluated annually for
impairment. The generic drug ANDAs relate to the pharmaceutical segment and do not have an identifiable life and are therefore evaluated annually for impairment.

NOTE 6  DEFERRED COMPENSATION

The deferred compensation of $2,659,886 and $1,971,931 as of September 30, and March 31, 2007 relates
to corporate and is amortized over its three-year life, the length of the common stock restriction. The deferred compensation asset relates to shares of 3 year restricted stock issued pursuant to the 2005-2007 Compensation Incentive Plan effective
beginning with the fiscal year ended March 31, 2006. The Plan documents the incentive plan and related awards for Plan achievements for the Chairman of the Board of Directors and the Companys three executive officers, which include the
Chief Executive Officer, the President and the Vice President/Chief Financial Officer. The asset was recorded based on the number of shares awarded and the discounted fair market value of the restricted stock the date of the award as based on an
independent valuation and is amortized over its three year life, the length of the restriction.

NOTE 7  INCOME TAXES

Income taxes for the six months ended September 30, 2007 and 2006 differ from the amounts computed by applying the effective income tax rates to income before income
taxes as a result of the following:



|                                                    |  |                    |            |   |                    |   |         |  
|--------------------------------------------------- |  | ------------------ | ---------- | - | ------------------ | - | ------- | -
|                                                    |  | September 30, 2007 |            |   | September 30, 2006 |  
|Computed tax expense at the statutory rate (37.63%) |  | $                  | (1,605,000 | ) |                    | $ | 641,000 |  
|Increase (decrease) in taxes resulting from:        |  |                    |            |   |                    |   |         |  
|Effect of permanent differences:                    |  |                    |            |   |                    |   |         |  
|Non deductible                                      |  |                    | 6,100      |   |                    |   | 7,000   |  
|Other, net                                          |  |                    | (233,100   | ) |                    |   | (95,800 | )
|Change in valuation allowance                       |  |                    | 146,600    |   |                    |   | 35,800  |  
|                                                    |  |                    |            |   |                    |   |         |  
|Income tax (benefit) expense                        |  | $                  | (1,685,400 | ) |                    | $ | 588,000 |  
|                                                    |  |                    |            |   |                    |   |         |  



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GEOPHARMA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)

Temporary
differences that give rise to deferred tax assets and liabilities are as follows:



|                                            |  |   |           |   |  |   |          |  
|------------------------------------------- |  | - | --------- | - |  | - | -------- | -
|Deferred tax assets:                        |  |   |           |   |  |   |          |  
|Bad debts                                   |  | $ | 127,700   |   |  | $ | 137,000  |  
|Inventories                                 |  |   | 15,400    |   |  |   | 50,000   |  
|Accrued vacation                            |  |   | 45,300    |   |  |   | 38,600   |  
|Deposits                                    |  |   | 85,000    |   |  |   | 94,000   |  
|Deferred rent                               |  |   | 163,400   |   |  |   | 113,300  |  
|Research credit carryforward                |  |   |          |   |  |   |         |  
|Net operating loss carryforwards            |  |   | 1,782,800 |   |  |   |         |  
|Stock option                                |  |   | 622,800   |   |  |   | 324,300  |  
|                                            |  |   |           |   |  |   |          |  
|                                            |  | $ | 2,842,400 |   |  | $ | 757,200  |  
|Valuation allowance                         |  |   | (355,300  | ) |  |   | 163,000  |  
|                                            |  |   |           |   |  |   |          |  
|Deferred tax asset                          |  |   | 2,487,100 |   |  | $ | 497,200  |  
|                                            |  |   |           |   |  |   |          |  
|Deferred tax liabilities:                   |  |   |           |   |  |   |          |  
|Fixed asset basis differences               |  |   | (164,400  | ) |  | $ | (224,300 | )
|Amortization                                |  |   | (60,700   | ) |  |   | (78,700  | )
|                                            |  |   |           |   |  |   |          |  
|                                            |  |   | (225,100  | ) |  | $ | (303,000 | )
|                                            |  |   |           |   |  |   |          |  
|Net deferred tax asset (liability) recorded |  | $ | 2,262000  |   |  | $ | 291,200  |  
|                                            |  |   |           |   |  |   |          |  

On September 30, 2007 and 2006, the Company has a net operating loss carry forward of approximately $4,782,800 and
$0 to offset future taxable income. The tax net operating loss carry forward will expire by 2028.

The Company adopted Financial Standards Board
Interpretation No. 48, Accounting for Income Taxes (FIN 48). As a result of the adoption of FIN 48, the Company has not recognized a material adjustment in the liability for unrecognized tax benefits and has not recorded any provision
for penalties or interest related to uncertain tax positions.



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NOTE 8  RELATED PARTY TRANSACTIONS

Revenues: For the three months ended September 30, 2007 and 2006, manufacturing revenues of approximately $13,119 and $30,051 respectively, were recorded from sales by the Company to subsidiaries of Dynamic
Health Products, an affiliate of the Company, and of which Jugal K. Taneja, the Chairman of the Board of the Company, is a principal shareholder. For the three months ended September 30, 2007 and 2006, manufacturing revenues of $287,760 and
$233,627, respectively, were recorded from sales by the Company to VerticalHealth Inc., an affiliate of the Company, and of which Jugal K. Taneja, the Chairman of the Board of the Company, is a shareholder.

For the six months ended September 30, 2007 and 2006, manufacturing revenues of approximately $29,018 and $60,123 respectively, were recorded from
sales by the Company to subsidiaries of Dynamic Health Products, an affiliate of the Company, and of which Jugal K. Taneja, the Chairman of the Board of the Company, is a principal shareholder. For the six months ended September 30, 2007 and
2006, manufacturing revenues of $551,006 and $412,244, respectively, were recorded from sales by the Company to VerticalHealth Inc., an affiliate of the Company, and of which Jugal K. Taneja, the Chairman of the Board of the Company, is a
shareholder.

Trade Accounts Receivable/ Trade Accounts PayableAmounts due from affiliates and amounts due to affiliates represent
balances owed to or amounts owed by the Company for sales occurring in the normal course of business. Amounts due from and amounts to these affiliates are in the nature of trade receivables or payables and fluctuate based on sales volume and
payments received.

As of September 30, and March 31, 2007, for the manufacturing segment, $49,320 and $25,302 was due from
subsidiaries of Dynamic Health Products and $210,556 and $182,199 was due from Vertical Health, Inc.

NOTE 9  DISCONTINUED OPERATIONS

As presented on the face of the statement of operations under Discontinued operations, effective May 15, 2007, the Company mutually
terminated its Pharmacy Benefit Management and Services Agreement (the Agreement). Under the Agreement, the Company previously managed AmeriGroups (formerly known as CarePlus) health care plan members and administrated the
members related pharmacy claims. No amounts were due from or due to AmeriGroup and therefore, the business segment will not continue.

NOTE 10
 LEGAL

On September 29, 2006, Schering Corporation
(Schering) filed an action in the United States District Court for the District of New Jersey, against Belcher Pharmaceuticals, Inc. and GeoPharma, Inc. (along with nineteen other defendants) alleging that the filing of
BelcherPharmaceuticals Abbreviated new Drug Application (ANDA) for 5 mg Desloratadine Tablets, AB-rated to Clarinex®, infringed U.S. Patent No. 6,100,274 (the
274 patent) Case No. 3:06-cv-04715-MLC-TJB. On November 8, 2006, Belcher filed a motion to dismiss in the New Jersey case for lack of jurisdiction. On October 5, 2006



18



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Schering filed an action in the United States District Court for the MiddleDistrict of Florida, Tampa Division, Case No. 8:06-cv-01843-SCB-EAJ, against
Belcher Pharmaceuticals, Inc. and Geopharma, Inc. alleging that the filing of Belcher Pharmaceuticals ANDA for 5 mg Desloratadine Tablets, AB-rated to Clarinex®, infringed the
274 patent. Company management and Belcher disputes Scherings claims in the two actions and believes its proposed desloratadine product does not infringe the 274 patent. The possible outcome cannot be determined at this time.



19



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From time to time the Company is subject to litigation incidental to its business. Such claims, if successful, could
exceed applicable insurance coverage. The Company is not currently a party to any material legal proceedings other than what is currently disclosed herein.

NOTE 11  SUBSEQUENT EVENTS

As previously reported, on May 14, 2007, the Company, Dynamic Health Products, Inc.
(DHP) and Florida Merger Subsidiary Corp., a wholly-owned subsidiary of the company entered into an Agreement and Plan of Reorganization (the Merger Agreement) under which DHP will merge with and into Florida Merger
Subsidiary Corp. (the Merger). The Board of Directors of the Company determined that the Merger would further the Companys long-term business objectives, including without limitation, providing additional capital to support
continued growth. On October 1, 2007, GeoPharma and DHP entered into a 6-month, 7.35% loan for $3.5 million in order for DHP to satisfy a portion of its maturing loan with their financial institution. On October 15, 2007, the merger was
effective and will be accounted for under purchase accounting. The Company filed Form 8K on October 4, 2007 for the loan transaction, filed Form 8K on October 19, 2007 for the acquisition consummation and will be filing Form 8K/A which will include
DHP audited financial statements and the required proformas within 75 days of the October 15, 2007 transaction date.

In contemplation
of the acquisition, the Company entered into an unconditional guaranty agreement as Guarantor on a loan agreement entered into on October 12, 2007 by Dynamic Marketing I. Inc and Bob OLeary Health Food Distributor Co., Inc. (collectively, the
Borrowers), and Wachovia Bank National Association pursuant to which the Borrowers received a loan in the amount of $4,000,000.

Under the terms of the Merger Agreement, DHP will exchange one-seventh (1/7th) of one share for every one share GeoPharma common stock; any fractional shares will be rounded up to the nearest whole share. The total amount of shares to
be issued is approximately 2.4 million shares which includes an estimate for fractional shares.

GeoPharmas closing price of its
common stock on October 15, 2007 was $ 3.55 per share and based on the estimated 2.4 million shares issued, the transaction would be valued at approximately $12 million inclusive of the October 1, 2007 $3.5 million loan.



|Item 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|------- | --------------------------------------------------------------------------------------

The statements contained in this Report that are not historical are forward-looking statements, including statements regarding the Companys
expectations, intentions, beliefs or strategies regarding the future. Forward-looking statements include the Companys statements regarding liquidity, anticipated cash needs and availability and anticipated expense levels. All forward-looking
statements included in this Report are based on information available to the Company on the date hereof, and the Company assumes no obligation to update any such forward-looking statement. It is important to note that the Companys actual
results could differ materially from those in such forward-looking statements. Additionally, the following discussion and analysis should be read in conjunction with the Financial Statements and notes thereto appearing elsewhere in this Report. The
discussion is based upon such financial statements which have been prepared in accordance with U.S. Generally Accepted Accounting Principles and the Standards of the Public Company Accounting Oversight Board (United States).



20



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Managements Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

The following table sets forth
selected consolidated statements of operations data as a percentage of revenues for the periods indicated.



|                                                                                       |  |                                     |    |  |       |   
|-------------------------------------------------------------------------------------- |  | ----------------------------------- | -- |  | ----- | --
|                                                                                       |  | Three Months Ended <1>September 30, |   
|                                                                                       |  | 2007                                |    |  | 2006  |   
|Revenues                                                                               |  | 100.0                               | %  |  | 100.0 | % 
|Cost of goods sold (excluding depreciation and amortization)                           |  | 79.5                                | %  |  | 72.0  | % 
|                                                                                       |  |                                     |    |  |       |   
|Gross profit                                                                           |  | 20.5                                | %  |  | 28.0  | % 
|Selling, general and administrative expenses (including depreciation and amortization) |  | 68.5                                | %  |  | 20.9  | % 
|Stock and stock option compensation expense                                            |  | 5.5                                 | %  |  | 2.9   | % 
|Other income (expense), net                                                            |  | 2.0                                 | %  |  | 0.9   | % 
|                                                                                       |  |                                     |    |  |       |   
|Income (loss) before minority interest, income taxes and preferred dividends           |  | (45.0                               | )% |  | 4.9   | % 
|Minority interest benefit                                                              |  | 4.5                                 | %  |  | 1.9   | % 
|Income tax (expense) / benefit                                                         |  | 14.9                                | %  |  | (1.7  | )%
|Preferred dividends                                                                    |  | 1.7                                 | %  |  | 0.5   | % 
|                                                                                       |  |                                     |    |  |       |   
|Net income (loss)                                                                      |  | (28.5                               | )% |  | 4.8   | % 
|                                                                                       |  |                                     |    |  |       |   

---

|<1> | Due to the presentation of discontinued operations, revenue amounts included within discontinued operations are excluded from top-line revenues, on the face of the statement
of operations, but are included here within top-line revenues in order for comparable tabular presentation.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Three Months Ended
September 30, 2007, Compared to the Three Months Ended September 30, 2006

Revenues. Total consolidated
revenues decreased approximately $10.7 million, or 63.9%, to approximately $6.0 million for the three months ended September 30, 2007, as compared to approximately $16.7 million for the three months ended September 30, 2006.

Manufacturing revenues decreased approximately $4.0 million, or 46.1%, to approximately $4.7 million for the three months ended September 30, 2007,
as compared to approximately $8.6 million for the corresponding period. The number and size of three of our largest contract manufacturing customers has declined in the current 2007 period as compared to the three months ended September 2006. This
is due to an overall economic decline due to timing of our customers advertising and period-sensitive promotions which directly affects our business segments manufacturing orders related to our customers branded product demands
which is outside of the Companys control. Manufacturing capacities and capabilities continue to be increased as we continue to enhance our existing core manufacturing equipment and standard operating procedures. As customer advertising and
period-sensitive promotions are expected to increase, the Company expects to have increases in the number and size of orders for the December 2007 quarter.



21



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Distribution revenues decreased approximately $2.0 million or 59.1% to approximately $1.4 million for the
three months ended September 30, 2007, as compared to $3.3 million for the three months ended September 30, 2006. Overall, sales prices vary for all product lines dependent upon a customers individual as well as aggregate purchase
volumes in addition to the number of distribution points of sale and advertising dollars projected to be spent. For the three months ended September 30, 2007, 2,599 cases of Hoodia Dex-L10 were sold versus 5,177 cases sold for the three months
ended September 30, 2006 based on increased competition at the mass retail chain level where the majority of the product is sold in addition to the previous 2006 period included new mass chain store introductions.

Pharmacy benefit management segment had no revenues for the three months ended September 30, 2007 as compared to $4.7 million for the three months
ended September 30, 2007, a $4.7 million decline, based on the May 15, 2007 contract termination by and between the AmeriGroup, formerly known as CarePlus, and the Company. This business segment is presented with Discontinued
operations on the face of the statement of operations.

Pharmaceutical segment had no revenues for the three months ended
September 30, 2007 as compared to $38,000 for the three months ended September 30, 2007. The Company is awaiting a drug approval from the FDA. The pharmaceutical business segment generated its revenues for the three months ended
September 30, 2006 based on sales of Mucotrol, its branded 510(k) medical device product.

Gross Profit. Total
gross profit decreased approximately $3.4 million or 73.6%, to $1.2 million for the three months ended September 30, 2007, as compared to $4.6 million for the three months ended September 30, 2006. Total gross margins decreased to 20.5%
for the three months ended September 30, 2007 from 27.9% for the three months ended September 30, 2006.

Manufacturing gross
profit decreased approximately $4.0 million or 46.1%, to approximately $4.7 million for the three months ended September 30, 2007, as compared to approximately $8.6 million in the corresponding period in 2006. For the three months ended
September 30, 2007 manufacturing gross margin decreased to 28.7%, from 33.4% in the corresponding period in 2006. Sales, gross profits and margins have decreased this 2007 three month period as compared to the previous 2006 three month period,
due to decreased orders, higher costs due to increases in freight charges due to increased fuel costs, increases in resin and plastic-based packaging component costs as well as increased labor costs. Current increases in this type of labor-based
direct overhead costs are in line with the Companys planned improvements surrounding enhanced standard operating and manufacturing procedures in all its manufacturing plants. The Company expects that these improvements will continue to
increase the Companys visibility in the marketplaces that the Company competes in for new and expanded business for the upcoming fiscal year.

Distribution gross profits decreased 67% or approximately $1.3 million to approximately $639,000 for the three months ended September 30, 2007, as compared to approximately $1.9 million for the three months ended September 30,
2006, with distribution gross margins decreasing to 47% for the three months ended September 30, 2007 as compared to 58.4% for the three months ended September 30, 2006. Gross profits and gross margins have declined based on increased
competition which caused additional short-term price concessions and a change in the chain store sales mix.

Pharmacy Benefit Management
gross profit decreased to zero for the three months ended September 30, 2007, as compared to approximately $36,000 for the three months ended September 30, 2006. The gross profit decline is primarily due to the mutual termination of the
contract effective May 15, 2007 as presented on the face of the statement of operations and will therefore allow the Company to focus on its core manufacturing and distribution businesses.



22



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Pharmaceutical gross profit deficit increased $546,000 to a deficit of $(741,000) for the three months
ended September 30, 2007 as compared to approximately $(195,000) in gross profit deficit for this business segment for the three months ended September 30, 2006. This was based primarily on the generic drug, Cephalasporin Beta-Lactam
facilities have no material revenue streams but have costs associated with overall research and product development, and production and laboratory direct labor costs. The Largo, Florida Cephalasporin and generic drug plants incurred $554,000 of
costs with the Baltimore, Maryland Beta-Lactam facility incurred $187,000 of costs with no revenue offsets. The Baltimore Beta-Lactam and the Largo, Florida Cephalosporin and generic drug facility plants expect to derive revenues during the third
fiscal quarter ended December 31, 2007.

Selling, General and Administrative Expenses. Selling, general and
administrative (SGA) expenses consist of advertising and promotional expenses; insurance costs, research and development costs associated with the generic drug segment, personnel costs related to general management functions, finance,
accounting and information systems, payroll expenses and sales commissions; professional fees related to legal, audit and tax matters; stock compensation expense and depreciation and amortization expenses. Selling, general and administrative
expenses, inclusive of stock compensation expense, depreciation and amortization, increased approximately $169,000, or 1.8%, to approximately $4.1 million for the three months ended September 30, 2007, as compared to approximately $4.0 million
in the corresponding 2006 period. The increase is primarily attributable to additional expenses associated with increased insurance costs, including health, general and product liability insurances; health insurance increased primarily due to an
increase in the cost per employee and the number of employees; in addition to external insurance market influences surrounding higher premium costs for all of the Companys business segments based on our overall annually increasing sales
revenues, increased rents due to facility expansion, officer and employee salaries have increased in total based on increases in the number of personnel in addition to merit increases all of which were partially offset by approximately $160,000
decrease in the stock compensation expense directly related to the prior 2006 periods implementation of SFAS 123R where the Company recognized the value of unvested stock options whereas effective March 31, 2007, the Company replaced all
unvested stock options with the Companys three-year restricted stock therefore reducing the amount of expense needed to be recognized. As a percentage of sales, selling, general and administrative expenses increased to 68.5% for the three
months ended September 30, 2007 from 24.3% in the corresponding period in 2006.

Other Income (Expense), Net. For the
three months ended September 30, 2007, the balance in other income/(expense), net, was $(33,000) net expense primarily attributable to interest expense incurred on outstanding long-term obligations as partially offset by interest capitalized on
the Companys generic pharmaceutical leasehold construction.

Income Tax (Expense) Benefit. At September 30, 2007,
the Company had recorded $878,000 of income tax benefit as compared to $(284,000) expense for the three months ended September 30, 2006. The tax benefit was based on the Companys tax calculation based on temporary and permanent
differences using the effective tax rates applied to our net loss amounts this period, changes in information gained related to underlying assumptions about the future operations of the Company as well as the utilization of available operating loss
carryforwards.

Management believes that there was no material effect on operations or the financial condition of the Company as a result
of inflation as of and for the three months ended September 30, 2007. Management also believes that its business is not seasonal, however significant promotional activities can have a direct impact on sales volume in any given quarter.



23



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The following table sets forth selected consolidated statements of operations data as a percentage of
revenues for the periods indicated.



|                                                                                       |  |                                   |    |  |       |   
|-------------------------------------------------------------------------------------- |  | --------------------------------- | -- |  | ----- | --
|                                                                                       |  | Six Months Ended <1>September 30, |   
|                                                                                       |  | 2007                              |    |  | 2006  |   
|Revenues                                                                               |  | 100.0                             | %  |  | 100.0 | % 
|Cost of goods sold (excluding depreciation and amortization)                           |  | 82.5                              | %  |  | 73.9  | % 
|                                                                                       |  |                                   |    |  |       |   
|Gross profit                                                                           |  | 17.5                              | %  |  | 26.1  | % 
|Selling, general and administrative expenses (including depreciation and amortization) |  | 45.3                              | %  |  | 20.1  | % 
|Stock and stock option compensation expense                                            |  | 2.6                               | %  |  | 3.1   | % 
|Other income (expense), net                                                            |  | 0.6                               | %  |  | 0.4   | % 
|                                                                                       |  |                                   |    |  |       |   
|Income (loss) before minority interest, income taxes and preferred dividends           |  | (29.9                             | )% |  | 3.3   | % 
|Minority interest benefit                                                              |  | 2.8                               | %  |  | 2.1   | % 
|Income tax (expense) / benefit                                                         |  | 10.7                              | %  |  | (1.9  | )%
|Preferred dividends                                                                    |  | 1.3                               | %  |  | 0.5   | % 
|                                                                                       |  |                                   |    |  |       |   
|Net income (loss)                                                                      |  | (17.7                             | )% |  | 3.1   | % 
|                                                                                       |  |                                   |    |  |       |   

---

|<1> | Due to the presentation of discontinued operations, revenue amounts included within discontinued operations are excluded from top-line revenues, on the face of the statement
of operations, but are included here within top-line revenues in order for comparable tabular presentation.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Six Months Ended
September 30, 2007, Compared to the Six Months Ended September 30, 2006

Revenues. Total consolidated
revenues decreased approximately $15.6 million, or 50%, to approximately $15.8 million for the six months ended September 30, 2007, as compared to approximately $31.3 million for the six months ended September 30, 2006.

Manufacturing revenues decreased approximately $5.4 million, or 36.2%, to approximately $9.6 million for the six months ended September 30, 2007, as
compared to approximately $15.0 million for the corresponding period. The number and size of three of our largest contract manufacturing customers has declined in the current 2007 period as compared to the six months ended September 2006. This is
due to an overall economic decline due to timing of our customers advertising and period-sensitive promotions which directly affects our business segments manufacturing orders related to our customers branded product demands which
is outside of the Companys control. Manufacturing capacities and capabilities continue to be increased as we continue to enhance our existing core manufacturing equipment and standard operating procedures. As customer advertising and
period-sensitive promotions are expected to increase, the Company expects to have increases in the number and size of orders for the December 2007 quarter.

Distribution revenues decreased approximately $3.3 million or 50.5% to approximately $3.2 million for the six months ended September 30, 2007, as compared to $6.5 million for the six months ended
September 30, 2006. Overall, sales prices vary for all product lines dependent upon a customers individual as well as aggregate purchase volumes in addition to the number of distribution points of sale and advertising dollars projected to
be spent. For the six months ended September 30, 2007, 5,072 cases of Hoodia Dex-L10 were sold versus 10,747 cases sold for the six months ended September 30, 2006 based on increased competition at the mass retail chain level where the
majority of the product is sold in addition to the previous 2006 period included new mass chain store introductions.



24



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Pharmacy benefit management had $2.9 revenues for the six months ended September 30, 2007 as
compared to $9.5 million for the six months ended September 30, 2007, a $6.7 million decline, based on the May 15, 2007 contract termination by and between the AmeriGroup, formerly known as CarePlus, and the Company. This business segment
is presented with Discontinued operations on the face of the statement of operations.

Pharmaceutical segment had revenues of
$41,000 for the six months ended September 30, 2007 as compared to $252,000 for the six months ended September 30, 2007. The Company sold Mucotrol during the six months ended September 30, 2007 and is awaiting a drug approval from the
FDA. The pharmaceutical business segment generated its revenues for the six months ended September 30, 2006 based on drug repackaging sales and for sales of Mucotrol, its branded 510(k) medical device product.

Gross Profit. Total gross profit decreased approximately $5.4 million or 66.2%, to $2.8 million for the six months ended
September 30, 2007, as compared to $8.2 million for the six months ended September 30, 2006. Total gross margins decreased to 17.5% for the six months ended September 30, 2007 from 26.1% for the six months ended September 30,
2006.

Manufacturing gross profit decreased approximately $5.4 million or 66.2%, to approximately $2.8 million for the six months ended
September 30, 2007, as compared to approximately $8.2 million in the corresponding period in 2006. For the six months ended September 30, 2007 manufacturing gross margin decreased to 17.5%, from 26.1% in the corresponding period in 2006.
Sales, gross profits and margins have decreased this 2007 six month period as compared to the previous 2006 six month period, due to decreased orders, higher costs due to increases in freight charges due to increased fuel costs, increases in resin
and plastic-based packaging component costs as well as increased labor costs. Current increases in this type of labor-based direct overhead costs are in line with the Companys planned improvements surrounding enhanced standard operating and
manufacturing procedures in all its manufacturing plants. The Company expects that these improvements will continue to increase the Companys visibility in the marketplaces that the Company competes in for new and expanded business for the
upcoming fiscal year.

Distribution gross profits decreased 60.4% or approximately $2.3 million to approximately $1.5 million for the six
months ended September 30, 2007, as compared to approximately $3.7 million for the six months ended September 30, 2006, with distribution gross margins decreasing to 46% for the six months ended September 30, 2007 as compared to 57.5%
for the six months ended September 30, 2006. Gross profits and gross margins have declined based on increased competition which caused additional short-term price concessions and a change in the chain store sales mix.

Pharmacy Benefit Management gross profit decreased to $21,000 for the six months ended September 30, 2007, as compared to approximately $75,000 for
the six months ended September 30, 2006. The gross profit decline is primarily due to the mutual termination of the contract effective May 15, 2007 as presented on the face of the statement of operations and will therefore allow the
Company to focus on its core manufacturing and distribution businesses.

Pharmaceutical gross profit deficit increased $1.2 million to a
deficit of $(1.5) million for the six months ended September 30, 2007 as compared to approximately $(357,000) in gross profit deficit for this business segment for the six months ended September 30, 2006. This was based primarily on the
generic drug, Cephalasporin Beta-Lactam facilities have no material revenue streams but have costs associated with overall research and product development, and production and laboratory direct labor



25



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costs. The Largo, Florida Cephalasporin and generic drug plants incurred $1.1 million of costs with the Baltimore, Maryland Beta-Lactam facility incurred
$424,000 of costs with no revenue offsets. The Baltimore Beta-Lactam and the Largo, Florida Cephalosporin and generic drug facility plants expect to derive revenues during the third fiscal quarter ended December 31, 2007.

Selling, General and Administrative Expenses. Selling, general and administrative (SGA) expenses consist of advertising and
promotional expenses; insurance costs, research and development costs associated with the generic drug segment, personnel costs related to general management functions, finance, accounting and information systems, payroll expenses and sales
commissions; professional fees related to legal, audit and tax matters; stock compensation expense and depreciation and amortization expenses. Selling, general and administrative expenses, inclusive of stock compensation expense, depreciation and
amortization, increased approximately $330,000, or 1.8%, to approximately $7.5 million for the six months ended September 30, 2007, as compared to approximately $7.2 million in the corresponding 2006 period. The increase is primarily
attributable to additional expenses associated with increased insurance costs, including health, general and product liability insurances; health insurance increased primarily due to an increase in the cost per employee and the number of employees;
in addition to external insurance market influences surrounding higher premium costs for all of the Companys business segments based on our overall annually increasing sales revenues, increased rents due to facility expansion, officer and
employee salaries have increased in total based on increases in the number of personnel in addition to merit increases all of which were partially offset by approximately $400,000 decrease in the stock compensation expense directly related to the
prior 2006 periods implementation of SFAS 123R where the Company recognized the value of unvested stock options whereas effective March 31, 2007, the Company replaced all unvested stock options with the Companys three-year
restricted stock therefore reducing the amount of expense needed to be recognized. As a percentage of sales, selling, general and administrative expenses increased to 48.5% for the six months ended September 30, 2007 from 24.3% in the
corresponding period in 2006.

Other Income (Expense), Net. For the six months ended September 30, 2007, the balance in
other income/(expense), net, was $62,000 net, other expense, primarily attributable to interest expense incurred on long-term obligations as partially offset by interest capitalized on the Companys generic pharmaceutical leasehold
construction.

Income Tax (Expense) Benefit. At September 30, 2007, the Company had recorded $1.7 million of income tax
benefit as compared to $(588,000) expense for the six months ended September 30, 2006. The tax benefit was based on the Companys tax calculation based on temporary and permanent differences using the effective tax rates applied to our net
loss amounts this period, changes in information gained related to underlying assumptions about the future operations of the Company as well as the utilization of available operating loss carryforwards.

Management believes that there was no material effect on operations or the financial condition of the Company as a result of inflation as of and for the
six months ended September 30, 2007. Management also believes that its business is not seasonal, however significant promotional activities can have a direct impact on sales volume in any given quarter.

Financial Condition, Liquidity and Capital Resources

The Company has financed its cash provided from operations and from the April 5, 2007 closing of $12.5 million of gross private placement funding in a combination of $10 million 8% convertible debt and $2.5
million of common stock, or 573,395 shares. Attached to the $2.5 million of common stock is 400,000 warrants with an exercise price of $5.23. The Company paid an investment banker $750,000 in debt and equity costs together with 143,400 warrants with
an exercise price of $5.23.



26



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Prior to the current 2007 funding, the Company funded its operations from cash provided from operations
along with receipt of $15 million of gross private placement proceeds based on a $10 million 6% convertible preferred stock private placement together with a total of 412,500 warrants exercisable through February 2011 and a $5 million convertible
6%, three-year term debt together with a total of 150,000 warrants exercisable through January 2011 closed during the months of January 2004 through March 2004. During December 2004, the holders of the $5 million Series A convertible preferred stock
converted all of their preferred shares outstanding in exchange for 800,000 of the Companys $.01 par value common stock. During February 2006, the Company paid off the remaining $2.4 million 6% interest convertible debt balance along with all
fees and penalties by issuing approximately 530,000 shares and simultaneously wrote-off approximate $300,000 to interest expense representing the debt discount remaining balance.

The Company had working capital of approximately $11.5 million at September 30, 2007, inclusive of current portion of long-term obligations, as
compared to a working capital of approximately $6.6 at March 31, 2007. The increase in working capital in primarily due to increases in cash as a direct result of the $12.5 private placement, less approximately $835,000 in private placement
fees, increases in inventory and prepaid assets due to increases in manufacturing and distribution back orders with consist levels of current liabilities for both periods as all of which is partially offset by other operational uses of cash related
to the payment of generic drug expenses during the September 30, 2007 period.

Net cash used in operating activities was $(1.4)
million for the six months ended September 30, 2007, as compared to net cash provided by operating activities of $400,000 for the six months ended September 30, 2006. Cash used was primarily attributable to a net loss before preferred
dividends of approximately $2.7 million based on consolidated gross profits decreases of approximately $5.4 million, gross profits declined based on a decline in manufacturing and distribution sales primarily due to one of the Companys
significant customers sale of their product line to a third party as related to manufacturing segment, and increased competition at the mass chain store level for its branded products as related to the distribution segment, a change in current
and deferred taxes of $1.7 million based on the net loss, an increase in inventory of $1.1 million based on increased purchases to meet known and estimated manufacturing, pharmaceutical and distribution orders, a decrease in accounts payable of $2.3
million based on inventory amounts purchased and due for payment, as partially offset by amortization to expense of the deferred compensation all of which is partially offset by $4.8 million decrease in accounts receivable representing credit sale
customer remittances, $256,000 decrease in prepaid expenses, $819,000 of depreciation and amortization, $743,000 increase in accrued expenses, $421,000 of deferred compensation expense amortization and $322,000 decrease in amounts due from
affiliates.

Net cash used in investing activities was $(9.7) million for the six months ended September 30, 2007 as compared to the
net cash used of $(1.5) million for the six months ended September 30, 2006. Investing activities represented $7 million certificate of deposit investment with the source of those funds being a portion of the $12.5 million gross proceeds
received from the Whitebox private placement closed in April 2007, $2.0 million of leasehold and equipment purchases, $1.2 million in intangible asset purchases and $442,000 usage attributable to the American Antibiotics minority interest all of
which was partially offset by $1 million of proceeds received from a matured certificate of deposit.



27



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Net provided by financing activities was $12.1 million for the six months ended September 30, 2007
as compared to cash provided by financing activities of $645,000 for the six months ended September 30, 2006. The 2007 financing activity cash provided was primarily attributable to the $12.5 million gross private placement proceeds closed in
April 2007, the $1.3 million of net credit line draw downs as all of which is partially offset by payments of private placement fees of $989,000 and payments on long term obligations of $519,000 and $198,000 in acquisition costs.

Management believes that cash expected to be generated from operations, current cash reserves, and existing financial arrangements will be sufficient for
the Company to meet its capital expenditures and working capital needs for the its short-term operational plans as presently conducted. In consideration of the Companys long-term strategic plans, the Company is currently evaluating funding
options in order to expedite our generic drug, Beta-Lactam and Cephalosporin facility and research and development expansion plans. The Companys future liquidity and cash requirements will depend on a wide range of factors, including the level
of business in our existing operations, the timing and related outcomes in our drug research and development efforts including when we will receive FDA approvals of any pending ANDAs filed, any continued expansion of manufacturing equipment lines
and related facilities and possible acquisitions. In particular, we have added additional manufacturing lines and have purchased additional fully automated manufacturing equipment to meet our present and future growth. Our plans may require the
leasing of additional facilities and/or the leasing or purchase of additional equipment in the future to accommodate further expansion of our manufacturing, warehousing and related storage needs. If cash flows from operations, current cash reserves
and available credit facilities are not sufficient, it will be necessary for the Company to seek additional financing. There can be no assurance that such financing would be available in amounts and on terms acceptable to the Company.



|Item 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|------- | -----------------------------------------------------------

We are not exposed to significant interest rate or foreign currency exchange rate risk.



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|Item 4. | CONTROLS AND PROCEDURES.
|------- | ------------------------

Evaluation of disclosure
controls and procedures. An evaluation was performed under the supervision and with the participation of our management, including the chief executive officer or CEO, and the chief financial officer, or CFO, of the effectiveness of the design and
operation of our disclosure procedures. Based on managements evaluation as the end of the period covered by this report, our principal executive officer and principal financial officer have concluded that the Companys disclosure controls
and procedures (an defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act), were effective to ensure that the information required to the disclosed by us in the reports that we
filed under the Exchange Act gathered, analyzed and disclosed with adequate timelines, accuracy and completeness and to ensure that such information is accumulated and communicated to our management, including our chief executive officer and chief
financial officer, to allow timely decisions regarding required disclosure.

Changes in internal controls. There have been no significant
changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation referred to above, nor were there any significant deficiencies or material weaknesses in our internal
controls. Accordingly, no corrective actions were required or undertaken.



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Part II - OTHER INFORMATION



|Item 1. | LEGAL PROCEEDINGS.
|------- | ------------------

On September 29, 2006, Schering Corporation (Schering) filed an action in the United States District Court for the District of New Jersey, against Belcher Pharmaceuticals, Inc. and GeoPharma, Inc. (along with nineteen other
defendants) alleging that the filing of Belcher Pharmaceuticals Abbreviated new Drug Application (ANDA) for 5 mg Desloratadine Tablets, AB-rated to Clarinex®, infringed
U.S. Patent No. 6,100,274 (the 274 patent) Case No. 3:06-cv-04715-MLC-TJB. On November 8, 2006, Belcher filed a motion to dismiss in the New Jersey case for lack of jurisdiction. On October 5, 2006 Schering
filed an action in the United States District Court for the Middle District of Florida, Tampa Division, Case No. 8:06-cv-01843-SCB-EAJ, against Belcher Pharmaceuticals, Inc. and Geopharma, Inc. alleging that the filing of Belcher
Pharmaceuticals ANDA for 5 mg Desloratadine Tablets, AB-rated to Clarinex®, infringed the 274 patent. Company management and Belcher disputes Scherings claims in the two
actions and believes its proposed desloratadine product does not infringe the 274 patent. The possible outcome cannot be determined at this time.

From time to time the Company is subject to litigation incidental to its business. Such claims, if successful, could exceed applicable insurance coverage. The Company is not currently a party to any material legal proceedings other than
what is currently disclosed herein.



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

None.



|Item 3. | DEFAULTS UPON SENIOR SECURITIES.
|------- | --------------------------------

Not applicable.



|Item 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
|------- | ----------------------------------------------------

On August 10, 2007, we held a special meeting of our shareholders. At this meeting our shareholders approved the Agreement and Plan of Reorganization between us, Dynamic Health Products, Inc. and Florida Merger Subsidiary Corp., our
wholly-owned subsidiary. Of the 10,898,449 shares of our common stock of record and entitled to vote 5,591,069 shares were voted in favor of the proposal, 29,060 shares voted against and 36,569 shares abstained.



|Item 5. | OTHER INFORMATION.
|------- | ------------------

Not applicable.



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|Item 6. | EXHIBITS
|------- | --------



|             |  |                                                 
|------------ |  | ------------------------------------------------
|Exhibits.    |  |                                                 
|Exhibit 31.1 |  | Certification of Principal Financial Officer    
|             | 
|Exhibit 31.2 |  | Certification of Principal Executive Officer    
|             | 
|Exhibit 32.1 |  | Certification Pursuant to 18 U.S.C. Section 1350
|             | 
|Exhibit 32.2 |  | Certification Pursuant to 18 U.S.C. Section 1350



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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                        |  |                 |  |                                                
|----------------------- |  | --------------- |  | -----------------------------------------------
|                        |  | GeoPharma, Inc.
|                        |  |                
|Date: November 14, 2007 |  | By:             |  | /s/ Mihir K. Taneja                            
|                        |  |                 |  | Mihir K. Taneja                                
|                        |  |                 |  | Chief Executive Officer, Secretary and Director
|                        |  |                
|Date: November 14, 2007 |  | By:             |  | /s/ Carol Dore-Falcone                         
|                        |  |                 |  | Carol Dore-Falcone                             
|                        |  |                 |  | Vice President and Chief Financial Officer     



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