FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


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


                For the quarterly period ended June 30, 2000

                           Commission File No. 1-11768


                           RELIV' INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)


             Delaware                                      37-1172197
      (State or other jurisdiction of                   (I.R.S. Employer
      incorporation or organization)                  Identification Number)


                     136 Chesterfield Industrial Boulevard,
                   P.O. Box 405, Chesterfield, Missouri 63006
               (Address of principal executive offices) (Zip Code)


                                 (636) 537-9715
              (Registrant's telephone number, including area code)



         Registrant 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 and
has been subject to such filing requirements for the past 90 days.


                      APPLICABLE ONLY TO CORPORATE ISSUERS:

         COMMON STOCK 9,555,295 outstanding Shares as of June 30, 2000

<PAGE>


<PAGE>

Part I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

                  The  following   consolidated   financial  statements  of  the
Registrant are attached to this Form 10-Q:

          1.   Interim Balance Sheet as of June 30, 2000 and Balance Sheet as of
               December 31, 1999.

          2.   Interim  Statements  of  Operations  for the  three and six month
               periods ending June 30, 2000 and June 30, 1999.

          3.   Interim Statements of Cash Flows for the six month periods ending
               June 30, 2000 and June 30, 1999.

         The  Financial  Statements  reflect all  adjustments  which are, in the
opinion of management, necessary for a fair statement of results for the periods
presented.

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operation

Financial Condition

         Current assets of the Company  increased during the first six months of
2000, to  $10,775,000  from  $8,497,000  as of December 31, 1999.  Cash and cash
equivalents  remained  relatively constant at $1,539,000 at June 30, as compared
to  $1,532,000  on  December  31,  1999.  Inventory  increased  by  $477,000  to
$5,182,000 as of June 30, 2000.  The increase in the Company's  inventory is due
to sales growth in the network  marketing  segment,  particularly  in the United
States,  along with  additional  inventory  required  for the  primary  contract
packaging  customer.  Accounts  receivable  has  increased  to  $2,750,000  from
$794,000 as of December 31, 1999.  The increase is primarily  due to the Company
implementing  a "full  turnkey"  operation  for its primary  contract  packaging
customer.  This means the Company is responsible  for purchasing all ingredients
and  packaging  for  this  customer's  product.  Previously,  the  Company  only
purchased  a  portion  of the  ingredients.  Trade  accounts  payable  has  also
increased as a result of this "turnkey" arrangement.

         The Company purchased $237,000 of property,  plant and equipment during
the first six  months of 2000,  as  compared  to  $886,000  during the first six
months of 1999.  This is the  result of the  Company's  decision  to reduce  the
emphasis on the manufacturing and packaging business.


<PAGE>


         Current  liabilities  increased by  $1,725,000  from  $8,307,000  as of
December 31, 1999 to $10,032,000  as of June 30, 2000. The primary  component of
the increase was in trade accounts payable.  Trade accounts payable increased by
$1,422,000  from $3,994,000 as of December 31, 1999 to $5,416,000 as of June 30,
2000.  This  increase  is related to the change to a "full  turnkey"  program as
discussed earlier.

         Long-term debt increased by $28,000 from  $4,991,000 as of December 31,
1999 to $5,019,000 as of June 30, 2000.  The Company  issued a series of private
placement notes totaling $220,000 as part of the capital investment  required to
fund the Company's upcoming entry into the Philippines.

         Stockholders'  equity increased from $6,819,000 as of December 31, 1999
to $7,024,000 as of June 30, 2000, as the result of the net income for the first
six months of 2000.  However,  equity  declined by $138,000 as the result of the
foreign currency translation adjustment at June 30, 2000 as compared to December
31, 1999. The Australian,  New Zealand and Canadian dollars weakened against the
US dollar over the course of the first half of 2000.

         The  Company's  working  capital  balance has  improved to a balance of
$744,000 as of June 30, 2000,  up from  $190,000 as of December  31,  1999.  The
current  ratio  has also  improved  slightly  to 1.07 as of June 30,  2000.  The
Company's line of credit is formula-based  and provides a borrowing  arrangement
based on a  percentage  of accounts  receivable  and  inventory  up to a maximum
borrowing limit. As of December 31, 1999, the Company had borrowed more than the
amount  allowed under the collateral  calculation,  but has obtained a waiver to
allow it to borrow the maximum amount under the line through September 30, 2000.
Management believes that the Company's  internally generated funds together with
the loan agreement will be sufficient to meet working  capital  requirements  in
2000.

Results of Operations

         The  Company  had net income of  $177,000,  or $.02 per share ($.02 per
share diluted),  for the quarter ended June 30, 2000,  compared to a net loss of
$367,000,  or $.04 per share  ($.04 per share  diluted),  for the same period in
1999.  The Company  expected net sales to decline as the result of the reduction
in the  manufacturing and packaging  business,  but net sales and profits in the
network marketing segment improved,  led by the introduction of a new product in
the United  States.  For the six months ended June 30, 2000, the Company had net
income of  $340,000,  as  compared  to a net loss of  $300,000  in the first six
months of 1999.


<PAGE>


         Net sales  decreased to  $15,187,000  in the second  quarter of 2000 as
compared to  $18,962,000  in the second  quarter of the prior year. The decrease
was primarily due to the decrease in sales by the  Company's  manufacturing  and
packaging  services segment.  Sales in this portion of the business decreased to
$4,373,000 in the second quarter of 2000, as compared to $9,122,000 in the prior
year.  However,   net  sales  in  the  network  marketing  segment  improved  to
$10,814,000  in the second  quarter of 2000,  as compared to  $9,840,000  in the
second quarter of 1999.  Network  marketing sales in the United States increased
by 7% from  $8,671,000 in the second quarter of 1999 to $9,247,000 in the second
quarter of 2000. The increase in US sales was due primarily to the  introduction
of a new product,  Reliv  ReversAge (TM), a nutritional  product.  Additionally,
sales in the Company's international subsidiaries improved overall. Sales in the
foreign subsidiaries of Australia,  New Zealand,  Canada,  Mexico and the United
Kingdom  overall  increased by 34% from $1,169,000 in the second quarter of 1999
to $1,566,000 in the second quarter of 2000, led by sales increases in Mexico of
150% and in Australia of 20%. In Australia, a new GST tax was instituted on July
1, 2000 and this led to advance  purchases by  distributors in the month of June
in order to avoid  the new tax.  Also,  sales  commenced  in the  Company's  new
operation in the country of Colombia in April of 2000.

         The  Company  also  provides   manufacturing  and  packaging  services,
including  blending,  processing and packaging food products in accordance  with
specifications  provided by its customers.  Net sales decreased to $4,373,000 in
the second quarter of 2000 from $9,122,000 in the prior year.  Through the first
six months of the year, net sales in this segment had declined from  $15,331,000
in 1999 to $8,891,000 in 2000. This decrease  follows the Company's  decision to
place  less  emphasis  on this  business.  The  Company's  sales to third  party
customers   primarily   consist  of  the  Company   purchasing   raw  materials,
customer-specified  packaging  materials  and selling a finished  product to the
customer.  For the second  quarter of 2000,  cost of goods sold for these  sales
were 93% of net sales.  Even under  optimal  operating  efficiencies,  the gross
margin for unrelated  customers is  substantially  less than margins obtained in
the sales of the network  marketing  products.  The Company has  eliminated  its
unprofitable business in this segment and is continuing to take steps to improve
margins with its remaining customer.  As a result, this segment showed its first
quarterly profit ever of $ 137,000.

         Cost of products sold for the network marketing segment as a percentage
of net sales  improved  from  17.1% in the second  quarter  of 1999 to 15.2%.  A
by-product of the increased  business for unrelated  customers is the purchasing
power it  provides  the  Company on the  materials  it uses to  manufacture  the
network marketing  products.  This, coupled with a price increase on some of the
Company's network  marketing  products in the first quarter of 2000 accounts for
the improvement.

         Distributor  royalties  and  commissions  as a  percentage  of  network
marketing sales decreased slightly from 37% in the second quarter of 1999 to 36%
in the second quarter of 2000.  These  expenses are governed by the  distributor
agreements  and are directly  related to the level of sales.  The Company pays a
percent of sales up to 18% in  royalties  and as much as 45% in  commissions.  A
portion of this decreased percentage is due the Company allowing distributors in
the United States to purchase individual cans of the products at their specified
discount  level.  This change went into  effect in  February  2000.  Previously,
distributors  had to pay full retail price through the Direct Select  program to
buy individual cans of product.


<PAGE>


         During the second  quarter of 2000,  the  Company  closed its  Canadian
administrative  office facility and has replaced it with a smaller  distribution
center. All customer service, sales and marketing support,  accounting and other
administrative  services for the Canadian  operation are being provided from the
corporate office in Chesterfield,  Missouri.  All of the expenses  incurred with
closing the Canadian  facility,  including  severance payments to the office and
sales staff,  were  incurred  during the second  quarter.  The Company  incurred
approximately US$70,000 in expenses to close the office.

         Interest expense  increased from $140,000 in the second quarter of 1999
to  $158,000  in the second  quarter of 2000.  This  increase is due the greater
reliance on the line of credit, along with higher interest rates.

Safe Harbor  Provision  of the  Private  Securities  Litigation  Act of 1995 and
Forward Looking Statements.

         The  statements  contained  in  Item  2  (Management's  Discussion  and
Analysis  of  Financial  Condition  and  Results  of  Operation)  that  are  not
historical facts may be  forward-looking  statements (as such term is defined in
the rules promulgated  pursuant to the Securities Exchange Act of 1934) that are
subject to a variety of risks and uncertainties.  The forward-looking statements
are based on the beliefs of the  Company's  management,  as well as  assumptions
made by,  and  information  currently  available  to the  Company's  management.
Accordingly,  these statements are subject to significant  risks,  uncertainties
and  contingencies  which  could cause the  Company's  actual  growth,  results,
performance  and  business  prospects  and  opportunities  in 2000 and beyond to
differ   materially   from  those   expressed   in,  or  implied  by,  any  such
forward-looking  statements.  Wherever  possible,  words  such as  "anticipate",
"plan", "expect," "believe",  "estimate", and similar expressions have been used
to identify these forward-looking statements, but are not the exclusive means of
identifying  such  statements.  These  risks,  uncertainties  and  contingencies
include,  but are not limited to, the Company's  ability to continue to attract,
maintain and motivate its  distributors,  changes in the regulatory  environment
affecting network marketing sales and sales of food and dietary  supplements and
other risks and uncertainties detailed in the Company's other SEC filings.

Item 3.  Quantitative and Qualitative Disclosure of Market Risk

         The Company's earnings and cash flow are subject to fluctuations due to
changes in foreign  currency rates as it has several  foreign  subsidiaries  and
continues  to explore  expansion  into  other  foreign  countries.  As a result,
exchange  rate  fluctuations  may have an effect on its sales and the  Company's
gross  margins.  Accounting  practices  require that the Company's  results from
operations be converted to U.S.  dollars for reporting  purposes.  Consequently,
the  reported  earnings  of the Company in future  periods may be  significantly
affected by fluctuations in currency exchange rates, generally increasing with a
weaker U.S.  dollar and decreasing with a strengthening  U.S.  dollar.  Products
manufactured by the Company for sale to the Company's  foreign  subsidiaries are
transacted in U.S. dollars.  As the Company's  foreign  operations  expand,  its
operating results will be subject to the risks of exchange rate fluctuations and
the Company may not be able to accurately estimate the impact of such changes on
its future  business,  product  pricing,  results  of  operations  or  financial
condition.


<PAGE>


         The Company also is exposed to market risk in changes in interest rates
on its  long-term  debt  arrangements  and  commodity  prices in some of the raw
materials it purchases for its manufacturing needs. However,  neither presents a
risk that would have a material effect on the Company's results of operations or
financial condition.

Part II.          OTHER INFORMATION

Item 1.  Legal Proceedings

         In May 1998, the former sales/general manager of the Company's Canadian
subsidiary filed a lawsuit claiming unlawful termination and breach of contract.
The  individual had been  terminated by the Company in March,  1998. The Company
believes the claim is without merit and intends to vigorously defend itself. The
Company has engaged  Canadian  counsel to defend this suit. The probable outcome
of this matter is uncertain, and a range of loss cannot reasonably be estimated.
However,  management  believes  that the final  outcome will not have a material
adverse  effect on the  financial  position  or  results  of  operations  of the
Company.

Item 2.  Changes in Securities

         Not applicable.

Item 3.  Defaults Upon Senior Securities

         Not applicable.

Item 4.  Submission of Matters to a Vote of Security Holders

         The Company's  annual meeting was held on May 25, 2000. At such meeting
the Company's Board of Directors was re-elected.

Item 5.  Other Information

         Not applicable.

Item 6.  Exhibits and Reports on Form 8-K

               (a)  Exhibits*

               (b)  The  Company  has not  filed a  Current  Report  during  the
                    quarter covered by this report.

               *    Also incorporated by reference the Exhibits filed as part of
                    the S-18 Registration Statement of the Registrant, effective
                    November 5, 1985, and subsequent periodic filings.


<PAGE>


                                                     SIGNATURES

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

         Dated: August 14, 2000            RELIV' INTERNATIONAL, INC.

                                           By: /s/ Robert L. Montgomery
                                               ---------------------------------
                                               Robert L. Montgomery, President,
                                               Chief Executive Officer and
                                               Principal Financial Officer




<PAGE>

Reliv International, Inc. and Subsidiaries

Consolidated Balance Sheets

                                                       June 30      December 31
                                                        2000           1999
                                                    ------------   ------------
                                                    (unaudited)     (see notes)
Assets

Current assets:
  Cash and cash equivalents .....................   $  1,539,151   $  1,531,700
  Accounts and notes receivable, less allowances
    of $3,500 in 2000 and $430,000 in 1999 ......      2,750,480        794,037
  Note receivable from officer ..................         59,250        164,250
  Inventories
          Finished goods ........................      2,717,023      1,826,748
          Raw materials .........................      1,966,544      2,402,006
          Sales aids and promotional materials ..        498,595        476,708
                                                    ------------   ------------
                     Total inventories ..........      5,182,162      4,705,462

  Refundable income taxes .......................        853,223        855,178
  Prepaid expenses and other current assets .....        250,420        304,734
  Deferred income taxes .........................        140,464        141,236
                                                    ------------   ------------

Total current assets ............................     10,775,150      8,496,597

Other assets:
  Goodwill, net of accumulated amortization of
    $91,969 in 2000 and $65,692 in 1999 .........        433,569        459,846
  Other assets ..................................        981,082      1,013,130
                                                    ------------   ------------

Total other assets ..............................      1,414,651      1,472,976

Property, plant and equipment:
            Land ................................        829,222        829,222
            Building ............................      8,382,982      8,384,105
            Machinery & equipment ...............      3,933,966      3,870,695
            Office equipment ....................        487,064        454,729
            Computer equipment & software .......      1,905,936      1,823,832
                                                    ------------   ------------
                                                      15,539,170     15,362,583
Less: Accumulated depreciation ..................     (5,045,174)    (4,560,338)
                                                    ------------   ------------
          Net property, plant and equipment .....     10,493,996     10,802,245
                                                    ------------   ------------

Total assets ....................................   $ 22,683,797   $ 20,771,818
                                                    ============   ============

See notes to financial statements.

<PAGE>

Reliv International, Inc. and Subsidiaries

Consolidated Balance Sheets

                                                       June 30      December 31
                                                        2000           1999
                                                    ------------   ------------
                                                    (unaudited)     (see notes)
Liabilities and stockholders' equity

Current liabilities:
  Accounts payable and accrued expenses:
            Trade accounts payable ..............   $  5,415,553   $  3,993,555
            Distributors commissions payable ....      1,525,740      1,421,286
            Sales taxes payable .................        263,864        204,552
            Interest expense payable ............         45,060         31,871
            Payroll and payroll taxes payable ...        209,681        127,800
            Other accrued expenses ..............        384,474        103,548
                                                    ------------   ------------
Total accounts payable and accrued expenses .....      7,844,372      5,882,612

    Income taxes payable ........................        219,054          3,391
    Borrowings under line of credit .............      1,332,904      1,792,986
    Current maturities of long-term debt and
      capital lease obligations .................        630,267        622,973
    Unearned income .............................          5,003          5,003
                                                    ------------   ------------

  Total current liabilities .....................     10,031,600      8,306,965

Capital lease obligations, less current maturities       226,064        305,081
Long-term debt, less current maturities .........      5,019,174      4,990,639
Other non-current liabilities ...................        383,279        350,415

Stockholders' equity:
  Common stock, no par value; 20,000,000 shares
   authorized; 9,555,295 shares issued and
   outstanding    as of 6/30/2000 and 9,551,102
   as of 12/31/1999 .............................      9,082,382      9,082,382
  Notes receivable-officers and directors .......        (34,802)       (38,217)
  Accumulated deficit ...........................     (1,549,288)    (1,889,297)
  Accumulated other comprehensive loss:
  Foreign currency translation adjustment .......       (474,612)      (336,150)
                                                    ------------   ------------

Total stockholders' equity ......................      7,023,680      6,818,718
                                                    ------------   ------------


Total liabilities and stockholders' equity ......   $ 22,683,797   $ 20,771,818
                                                    ============   ============

See notes to financial statements.
<PAGE>

Reliv International, Inc. and Subsidiaries
Consolidated Statements of Operations
<TABLE>
<CAPTION>

                                                             Three months ended June 30           Six months ended June 30
                                                               2000             1999             2000                  1999
                                                          --------------   --------------   --------------   ---------------
                                                           (unaudited)       (unaudited)      (unaudited)       (unaudited)

<S>                                                         <C>              <C>             <C>               <C>
Sales at suggested retail                                   $20,932,750      $23,714,422      $41,800,132       $47,488,833
  Less: distributor allowances on product purchases           5,745,941        4,752,259       11,524,950        10,831,359
                                                          --------------   --------------   --------------   ---------------

Net sales                                                    15,186,809       18,962,163       30,275,182        36,657,474

Costs and expenses:
  Cost of products sold                                       5,721,333       10,912,666       11,852,530        18,987,398
  Distributor royalties and commissions                       3,865,982        3,680,025        7,698,406         8,190,800
  Selling, general and administrative                         5,130,995        4,875,618        9,816,536         9,799,447
                                                          --------------   --------------   --------------   ---------------

Total costs and expenses                                     14,718,310       19,468,309       29,367,472        36,977,645
                                                          --------------   --------------   --------------   ---------------

Income from operations                                          468,499         (506,146)         907,710          (320,171)

Other income (expense):
  Interest income                                                11,634           42,900           25,172            61,700
  Interest expense                                             (158,250)        (140,295)        (325,920)         (270,693)
  Other income/(expense)                                        (33,022)          10,147          (50,875)           44,380
                                                          --------------   --------------   --------------   ---------------

Income before income taxes                                      288,861         (593,394)         556,087          (484,784)
Provision for income taxes                                      111,990         (226,289)         216,078          (184,667)
                                                          --------------   --------------   --------------   ---------------

Net income                                                     $176,871        ($367,105)        $340,009         ($300,117)
                                                          ==============   ==============   ==============   ===============

Earnings per common share                                         $0.02           ($0.04)           $0.04            ($0.03)
                                                          ==============   ==============   ==============   ===============

Earnings per common share - assuming dilution                     $0.02           ($0.03)           $0.03            ($0.03)
                                                          ==============   ==============   ==============   ===============

See notes to financial statements.
</TABLE>
<PAGE>
Reliv International, Inc. and Subsidiaries

Consolidated Statements of Cash Flows
(unaudited)
                                                      Six months ended June 30
                                                        2000           1999
                                                     -----------    -----------
Operating activities:
Net income ........................................  $   340,009    ($  300,117)
Adjustments to reconcile net income to
  net cash provided by (used in) operating
  activities:
    Depreciation and amortization .................      562,237        528,848
    Foreign currency translation (gain) loss ......       33,905         (6,789)
    (Increase) decrease in accounts and notes
      receivable ..................................   (1,896,612)    (1,274,279)
    (Increase) decrease in inventories ............     (527,902)    (2,099,327)
    (Increase) decrease in refundable income taxes          --         (189,587)
    (Increase) decrease in prepaid expenses
      and other current assets ....................       50,114        (60,842)
    (Increase) decrease in other assets ...........       23,538       (225,254)
    Increase (decrease) in accounts payable and
      accrued expenses ............................    2,022,460      2,795,327
    Increase (decrease) in income taxes payable ...      217,980         86,383
    Increase (decrease) in unearned income ........         --             --
                                                     -----------    -----------

Net cash provided by operating activities .........      825,729       (745,637)

Investing activities:
Purchase of property, plant and equipment .........     (237,329)      (885,685)
Repayment of loans by officers and directors ......       33,415          3,216
                                                     -----------    -----------

Net cash used in investing activities .............     (203,914)      (882,469)

Financing activities:
Net borrowings (repayments) under line of credit ..     (460,082)       842,562
Proceeds from long-term borrowings ................      220,000        300,000
Principal payments on long-term borrowings ........     (227,411)      (204,714)
Principal payments under capital lease obligations       (35,778)       (74,434)
Dividends paid ....................................         --          (96,505)
Purchase of treasury stock ........................         --           (7,682)
                                                     -----------    -----------

Net cash used in financing activities .............     (503,271)       759,227

Effect of exchange rate changes on cash and cash
  equivalents .....................................     (111,093)       110,569
                                                     -----------    -----------

Decrease in cash and cash equivalents .............        7,451       (758,310)

Cash and cash equivalents at beginning of period ..    1,531,700      2,816,804
                                                     -----------    -----------

Cash and cash equivalents at end of period ........  $ 1,539,151    $ 2,058,494
                                                     ===========    ===========

See notes to financial statements

<PAGE>
Reliv' International, Inc. and Subsidiaries
Notes to Consolidated Financial Statements

(Unaudited)

June 30, 2000

Note 1--      Basis of Presentation

The accompanying  unaudited consolidated financial statements have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial  information and with the  instructions to Form 10-Q and Article 10 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
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 six-month  period ended June 30, 2000
are not necessarily  indicative of the results that may be expected for the year
ended December 31, 2000.

The  balance  sheet at  December  31,  1999 has been  derived  from the  audited
financial  statements  at that date but does not include all of the  information
and footnotes required by generally accepted  accounting  priciples for complete
financial statements.

For further  information,  refer to the  consolidated  financial  statements and
footnotes thereto included in the Registrant  Company and  Subsidiaries'  annual
report on Form 10-K for the year ended December 31, 1999.
<PAGE>

Note 2--      Earnings per Share

              The  following  table  sets  forth  the  computation  of basic and
diluted earnings per share:
<TABLE>
<CAPTION>

                                            Three months ended June 30    Six months ended June 30
                                                2000          1999           2000          1999
                                             -----------   -----------   -----------   ------------
Numerator:
Numerator for basic and diluted
<S>                                         <C>           <C>            <C>           <C>
earnings per share--net income/(loss) ...   $   176,871   ($  367,105)   $   340,009   ($  300,117)
Denominator:
Denominator per basic earnings per
share--weighted average shares ..........     9,552,000     9,651,000      9,552,000     9,651,000
Effect of dilutive securities:
Employee stock options and other warrants       375,000          --          375,000          --
                                             -----------   -----------   -----------   ------------
Denominator for diluted earnings per
share--adjusted weighted average shares .     9,927,000     9,651,000      9,927,000     9,651,000
                                             ===========   ===========   ===========   ============

Basic earnings/(loss) per share .........   $      0.02   ($     0.04)   $      0.04   ($     0.03)
                                             ===========   ===========   ===========   ============
Diluted earnings/(loss) per share .......   $      0.02   ($     0.04)   $      0.03   ($     0.03)
                                             ===========   ===========   ===========   ============
</TABLE>


Note 3--      Comprehensive Income

Total  comprehensive  income was  $143,724 and $201,547 for the three months and
six months ended June 30, 2000, respectively. For the three and six months ended
June 30, 1999, comprehensive loss was $292,647 and $164,034,  respectively.  The
Company's only component of other  comprehensive  income is the foreign currency
translation adjustment.

Note 4--      Segment Information
<TABLE>
<CAPTION>
                                         Three months ended         Three months ended
                                            June 30, 2000             June 30, 1999
                                            -------------             -------------
                                        Network    Manufacturing    Network    Manufacturing
                                       marketing   and packaging   marketing   and packaging
                                       -------------------------- --------------------------
<S>                                    <C>            <C>           <C>          <C>
Net sales to external customers        10,813,596     4,373,213     9,839,828    9,122,335
Intersegment net sales                       --       1,816,027          --      1,599,654
Segment profit/(loss)                     792,578       137,269       309,620     (448,291)
</TABLE>

<TABLE>
<CAPTION>
                                           Six months ended         Six months ended
                                            June 30, 2000             June 30, 1999
                                            -------------             -------------
                                        Network    Manufacturing    Network    Manufacturing
                                       marketing   and packaging   marketing   and packaging
                                       -------------------------- --------------------------
<S>                                    <C>            <C>          <C>           <C>
Net sales to external customers        21,384,572     8,890,610    21,326,943    15,330,531
Intersegment net sales                       --       3,365,954          --       3,284,913
Segment profit/(loss)                   1,717,726        (8,440)      958,626      (545,036)
Segment assets                         14,362,051     6,782,595    13,799,595     7,944,478
</TABLE>
<PAGE>


              A reconciliation  of combined  operating profit for the reportable
              segments to consolidated income before income taxes is as follows:
<TABLE>
<CAPTION>
                                       Three months ended June 30   Six months ended June 30
                                           2000         1999           2000         1999
                                       -------------------------   -------------------------

<S>                                       <C>          <C>          <C>             <C>
Total profit for reportable segments      929,847      (138,671)    1,709,286       413,590
Corporate expenses                       (461,348)     (367,476)     (801,576)     (733,762)
Non operating - net                       (21,388)       53,048       (25,703)      106,081
Interest expense                         (158,250)     (140,295)     (325,920)     (270,693)
                                        ----------    ----------    ----------    ----------
Income before income taxes                288,861      (593,394)      556,087      (484,784)
                                        ==========    ==========    ==========    ==========
</TABLE>


Note 5--      Legal Proceedings

In  May  1998,  the  former  sales/general  manager  of the  Company's  Canadian
subsidiary filed lawsuit claiming  unlawful  termination and breach of contract.
The  individual  had been  terminated by the Company in March 1998.  The Company
believes the claim is without merit and intends to vigorously  defend itself. At
this time, the outcome of this matter is uncertain and a range of loss cannot be
reasonably estimated;  however,  management believes that the final outcome will
not have a  material  adverse  effect on the  financial  position  or results of
operations of the Company.
<PAGE>