UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 WASHINGTON,
D.C.   20549
 
 
  FORM
10-Q
  (Mark
One)
 x
              QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the quarterly period ended September 30, 2010OR ̈
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
      1934
  For
the transition period from _________to_________
  Commission
File Number
 000-19932
  RELIV’
INTERNATIONAL, INC.
 (Exact
name of Registrant as specified in its charter)
  Delaware
                  
                  371172197(State
      or other jurisdiction of
                  
                  (I.R.S.
      Employer Identification Number)incorporation
      or organization)136
      Chesterfield Industrial BoulevardChesterfield,
      Missouri
                  
                  63005(Address
      of principal executive offices)
                  
                  (Zip
      Code)
 
 (636)
537-9715
 (Registrant’s
telephone number, including area code)
  Indicate
by check mark whether the Registrant: (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.  Yes þ     No  ̈
 
 Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such
files).   Yes o     No  ̈
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
 Large
accelerated filer  ̈     Accelerated
filer  ̈      Non-accelerated
filer  ̈ Smaller
reporting company  þ
  Indicate
by check mark whether the Registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).  Yes  ̈     No þ
 
 The number of shares outstanding of the
Registrant’s common stock as of November 1, 2010 was 12,380,187 (excluding
treasury shares).
  
  INDEX
 
 PART
      I – FINANCIAL INFORMATIONItem
      No. 1
                Financial
      Statements (Unaudited)
                F-1Item
      No. 2
                Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                4Item
      No. 4
                Controls
      and Procedures
                9PART
      II – OTHER INFORMATIONItem
      No. 2
                Unregistered
      Sales of Equity Securities and Use of Proceeds
                10Item
      No. 6
                Exhibits
                10
  2
  FORWARD-LOOKING
STATEMENTS
 
 This
quarterly report includes both historical and “forward-looking statements”
within the meaning of Section 21E of the Securities Exchange Act of 1934, as
amended.  We have based these forward-looking statements on our
current expectations and projections about future results.  Words such
as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,”
“estimate,” “predict,” “potential,” “continue,” or similar words are intended to
identify forward-looking statements, although not all forward-looking statements
contain these words.  Although we believe that our opinions and
expectations reflected in the forward-looking statements are reasonable, we
cannot guarantee future results, levels of activity, performance or
achievements, and our actual results may differ substantially from the views and
expectations set forth in this quarterly report on Form 10-Q.  We
disclaim any intent or obligation to update any forward-looking statements after
the date of this quarterly report to conform such statements to actual results
or to changes in our opinions or expectations.
  3
  PART
I — FINANCIAL INFORMATION
 
 Item No. 1 - Financial
Statements
 
 Reliv
International, Inc. and Subsidiaries
 
 Consolidated
Balance Sheets
  September 30
                    
                    
                    December 312010
                    
                    
                    2009(unaudited)AssetsCurrent
      assets:Cash
      and cash equivalents
                    
                    $
                    6,404,688
                    
                    
                    $
                    5,760,913Accounts
      and notes receivable, less allowances of $66,400 in 2010 and $59,700 in
      2009
                    
                    
                    234,889
                    
                    
                    
                    326,022Accounts
      due from employees and distributors
                    
                    
                    68,407
                    
                    
                    
                    78,500InventoriesFinished
      goods
                    
                    
                    3,920,065
                    
                    
                    
                    3,073,570Raw
      materials
                    
                    
                    1,425,154
                    
                    
                    
                    1,388,140Sales
      aids and promotional materials
                    
                    
                    625,365
                    
                    
                    
                    622,694Total
      inventories
                    
                    
                    5,970,584
                    
                    
                    
                    5,084,404Refundable
      income taxes
                    
                    
                    26,785
                    
                    
                    
                    23,789Prepaid
      expenses and other current assets
                    
                    
                    801,898
                    
                    
                    
                    652,544Deferred
      income taxes
                    
                    
                    371,000
                    
                    
                    
                    303,000Total
      current assets
                    
                    
                    13,878,251
                    
                    
                    
                    12,229,172Other
      assets
                    
                    
                    1,886,906
                    
                    
                    
                    1,569,079Intangible
      assets, net
                    
                    
                    1,837,365
                    
                    
                    
                    1,991,497Property,
      plant and equipment:Land
      and land improvements
                    
                    
                    868,870
                    
                    
                    
                    852,147Building
                    
                    
                    9,928,707
                    
                    
                    
                    9,851,829Machinery
      & equipment
                    
                    
                    3,485,285
                    
                    
                    
                    3,426,720Office
      equipment
                    
                    
                    1,496,927
                    
                    
                    
                    1,494,915Computer
      equipment & software
                    
                    
                    2,988,992
                    
                    
                    
                    3,003,76618,768,781
                    
                    
                    
                    18,629,377Less:
      Accumulated depreciation
                    
                    
                    10,783,016
                    
                    
                    
                    10,264,692Net
      property, plant and equipment
                    
                    
                    7,985,765
                    
                    
                    
                    8,364,685Total
      assets
                    
                    $
                    25,588,287
                    
                    
                    $
                    24,154,433
 
 See notes
to financial statements.
  F-1
  Reliv
International, Inc. and Subsidiaries
  Consolidated
Balance Sheets
  September 30
                    
                    
                    December 312010
                    
                    
                    2009(unaudited)Liabilities
      and stockholders' equityCurrent
      liabilities:Accounts
      payable and accrued expenses:Trade
      accounts payable and other accrued expenses
                    
                    $
                    3,505,887
                    
                    
                    $
                    2,627,674Distributors
      commissions payable
                    
                    
                    2,595,719
                    
                    
                    
                    2,674,247Sales
      taxes payable
                    
                    
                    375,230
                    
                    
                    
                    362,612Payroll
      and payroll taxes payable
                    
                    
                    397,383
                    
                    
                    
                    577,756Total
      accounts payable and accrued expenses
                    
                    
                    6,874,219
                    
                    
                    
                    6,242,289Current
      maturities of long-term debt
                    
                    
                    3,859,758
                    
                    
                    
                    519,192Total
      current liabilities
                    
                    
                    10,733,977
                    
                    
                    
                    6,761,481Noncurrent
      liabilities:Long-term
      debt, less current maturities
                    
                    
                    991,721
                    
                    
                    
                    4,719,542Other
      noncurrent liabilities
                    
                    
                    401,618
                    
                    
                    
                    406,544Total
      noncurrent liabilities
                    
                    
                    1,393,339
                    
                    
                    
                    5,126,086Stockholders'
      equity:Preferred
      stock, par value $.001 per share; 3,000,000 shares authorized; -0- shares
      issued and outstanding in 2010 and 2009
                    
                    
                    -
                    
                    
                    
                    -Common
      stock, par value $.001 per share; 30,000,000 authorized; 14,425,185 shares
      issued and 12,380,187 shares outstanding as of 9/30/2010; 14,425,185
      shares issued and 12,380,187 shares outstanding as of
      12/31/2009
                    
                    
                    14,425
                    
                    
                    
                    14,425Additional
      paid-in capital
                    
                    
                    30,379,805
                    
                    
                    
                    30,228,573Accumulated
      deficit
                    
                    
                    (10,402,495
                    )
                    
                    
                    (11,279,526
                    )Accumulated
      other comprehensive loss:Foreign
      currency translation adjustment
                    
                    
                    (461,862
                    )
                    
                    
                    (627,704
                    )Treasury
      stock
                    
                    
                    (6,068,902
                    )
                    
                    
                    (6,068,902
                    )Total
      stockholders' equity
                    
                    
                    13,460,971
                    
                    
                    
                    12,266,866Total
      liabilities and stockholders' equity
                    
                    $
                    25,588,287
                    
                    
                    $
                    24,154,433
 
 See notes
to financial statements.
  F-2
  Reliv
International, Inc. and Subsidiaries
  Consolidated
Statements of Income
 (unaudited)
  Three months ended September 30
                    
                    
                    Nine months ended September 302010
                    
                    
                    2009
                    
                    
                    2010
                    
                    
                    2009Product
      sales
                    
                    $
                    16,612,215
                    
                    
                    $
                    18,578,895
                    
                    
                    $
                    53,559,074
                    
                    
                    $
                    57,517,213Handling
      & freight income
                    
                    
                    2,060,849
                    
                    
                    
                    2,306,633
                    
                    
                    
                    6,661,873
                    
                    
                    
                    7,212,434Net
      sales
                    
                    
                    18,673,064
                    
                    
                    
                    20,885,528
                    
                    
                    
                    60,220,947
                    
                    
                    
                    64,729,647Costs
      and expenses:Cost
      of products sold
                    
                    
                    3,820,490
                    
                    
                    
                    4,451,156
                    
                    
                    
                    12,093,367
                    
                    
                    
                    12,800,809Distributor
      royalties and commissions
                    
                    
                    7,011,217
                    
                    
                    
                    7,907,856
                    
                    
                    
                    22,560,625
                    
                    
                    
                    24,480,422Selling,
      general and administrative
                    
                    
                    7,402,210
                    
                    
                    
                    8,056,928
                    
                    
                    
                    23,486,389
                    
                    
                    
                    24,725,653Total
      costs and expenses
                    
                    
                    18,233,917
                    
                    
                    
                    20,415,940
                    
                    
                    
                    58,140,381
                    
                    
                    
                    62,006,884Income
      from operations
                    
                    
                    439,147
                    
                    
                    
                    469,588
                    
                    
                    
                    2,080,566
                    
                    
                    
                    2,722,763Other
      income (expense):Interest
      income
                    
                    
                    12,961
                    
                    
                    
                    10,119
                    
                    
                    
                    35,334
                    
                    
                    
                    45,538Interest
      expense
                    
                    
                    (52,885
                    )
                    
                    
                    (62,195
                    )
                    
                    
                    (159,336
                    )
                    
                    
                    (113,129
                    )Other
      income
                    
                    
                    437
                    
                    
                    
                    76,657
                    
                    
                    
                    21,592
                    
                    
                    
                    202,747Income
      before income taxes
                    
                    
                    399,660
                    
                    
                    
                    494,169
                    
                    
                    
                    1,978,156
                    
                    
                    
                    2,857,919Provision
      for income taxes
                    
                    
                    228,000
                    
                    
                    
                    170,000
                    
                    
                    
                    854,000
                    
                    
                    
                    1,112,000Net
      income
                    
                    $
                    171,660
                    
                    
                    $
                    324,169
                    
                    
                    $
                    1,124,156
                    
                    
                    $
                    1,745,919Earnings
      per common share - Basic
                    
                    $
                    0.01
                    
                    
                    $
                    0.03
                    
                    
                    $
                    0.09
                    
                    
                    $
                    0.13Weighted
      average shares
                    
                    
                    12,380,000
                    
                    
                    
                    12,230,000
                    
                    
                    
                    12,380,000
                    
                    
                    
                    13,109,000Earnings
      per common share - Diluted
                    
                    $
                    0.01
                    
                    
                    $
                    0.03
                    
                    
                    $
                    0.09
                    
                    
                    $
                    0.13Weighted
      average shares
                    
                    
                    12,380,000
                    
                    
                    
                    12,230,000
                    
                    
                    
                    12,380,000
                    
                    
                    
                    13,109,000Cash
      dividends declared per common share
                    
                    $
                    -
                    
                    
                    $
                    -
                    
                    
                    $
                    0.02
                    
                    
                    $
                    0.05
 
 See notes
to financial statements.
  F-3
  Reliv
International, Inc. and Subsidiaries
  Consolidated
Statements of Cash Flows
 (unaudited)
  Nine months ended September 302010
                        
                        
                        2009Operating
      activities:Net
      income
                        
                        $
                        1,124,156
                        
                        
                        $
                        1,745,919Adjustments
      to reconcile net income to net cash provided by operating
      activities:Depreciation
      and amortization
                        
                        
                        910,338
                        
                        
                        
                        855,365Stock-based
      compensation
                        
                        
                        151,232
                        
                        
                        
                        142,492Deferred
      income taxes
                        
                        
                        (142,000
                        )
                        
                        
                        (31,000
                        )Foreign
      currency transaction (gain)/loss
                        
                        
                        (48,919
                        )
                        
                        
                        (120,114
                        )(Increase)
      decrease in accounts and notes receivable
                        
                        
                        115,265
                        
                        
                        
                        454,382(Increase)
      decrease in inventories
                        
                        
                        (815,305
                        )
                        
                        
                        1,255,790(Increase)
      decrease in refundable income taxes
                        
                        
                        (3,251
                        )
                        
                        
                        128,782(Increase)
      decrease in prepaid expenses and other current assets
                        
                        
                        (136,790
                        )
                        
                        
                        158,501(Increase)
      decrease in other assets
                        
                        
                        (271,169
                        )
                        
                        
                        (290,471
                        )Increase
      (decrease) in accounts payable & accrued expenses and other noncurrent
      liabilities
                        
                        
                        553,321
                        
                        
                        
                        480,532Net
      cash provided by operating activities
                        
                        
                        1,436,878
                        
                        
                        
                        4,780,178Investing
      activities:Proceeds
      from the sale of property, plant and equipment
                        
                        
                        2,925
                        
                        
                        
                        -Purchase
      of property, plant and equipment
                        
                        
                        (348,252
                        )
                        
                        
                        (472,544
                        )Purchase
      of distributorship
                        
                        
                        -
                        
                        
                        
                        (716,119
                        )Proceeds
      from final withdrawal from limited partnership investment
                        
                        
                        -
                        
                        
                        
                        488,633Net
      cash used in investing activities
                        
                        
                        (345,327
                        )
                        
                        
                        (700,030
                        )Financing
      activities:Proceeds
      from line of credit borrowings
                        
                        
                        -
                        
                        
                        
                        6,000,000Repayment
      of line of credit borrowings
                        
                        
                        -
                        
                        
                        
                        (5,000,000
                        )Proceeds
      from term loan borrowings
                        
                        
                        -
                        
                        
                        
                        4,120,000Principal
      payments on short and long-term borrowings
                        
                        
                        (387,255
                        )
                        
                        
                        (1,774,901
                        )Common
      stock dividends paid
                        
                        
                        (247,672
                        )
                        
                        
                        (611,681
                        )Purchase
      of stock for treasury
                        
                        
                        -
                        
                        
                        
                        (5,014,115
                        )Other
                        
                        
                        547
                        
                        
                        
                        -Net
      cash used in financing activities
                        
                        
                        (634,380
                        )
                        
                        
                        (2,280,697
                        )Effect
      of exchange rate changes on cash and cash equivalents
                        
                        
                        186,604
                        
                        
                        
                        162,363Increase
      in cash and cash equivalents
                        
                        
                        643,775
                        
                        
                        
                        1,961,814Cash
      and cash equivalents at beginning of period
                        
                        
                        5,760,913
                        
                        
                        
                        4,460,637Cash
      and cash equivalents at end of period
                        
                        $
                        6,404,688
                        
                        
                        $
                        6,422,451Supplementary
      disclosure of cash flow information:Noncash
      investing and financing transactions:Issuance
      of promissory note for purchase of stock for treasury
                        
                        $
                        -
                        
                        
                        $
                        1,106,919Obligation
      for purchase of distributorship
                        
                        $
                        -
                        
                        
                        $
                        1,343,881
  See notes
to financial statements.
  F-4
  Reliv
International, Inc. and Subsidiaries
 Notes to
Consolidated Financial Statements
 (Unaudited)
 
 September
30, 2010
 
 Note
      1—
                Accounting
      Policies
 
 Basis of
Presentation
 
 The
accompanying unaudited consolidated financial statements and notes thereto have
been prepared in accordance with the instructions to Form 10-Q and reflect all
adjustments (which primarily include normal recurring accruals) which management
believes are necessary to present fairly the financial position, results of
operations and cash flows.  These statements, however, do not include
all information and footnotes necessary for a complete presentation of financial
position, results of operations and cash flows in conformity with accounting
principles generally accepted in the United States.  Interim results
may not necessarily be indicative of results that may be expected for any other
interim period or for the year as a whole.  These financial statements
should be read in conjunction with the audited consolidated financial statements
and footnotes included in the annual report on Form 10-K for the year ended
December 31, 2009, filed March 12, 2010 with the Securities and Exchange
Commission.
 Adoption of New Accounting
Standards
  Effective
January 1, 2010, the Company adopted the amendments to ASC 820, "Fair Value
Measurements and Disclosures" ("ASC 820").  The amendments require new
disclosures for transfers in and out of fair value hierarchy Levels 1 and 2 and
activity within fair value hierarchy Level 3.  The amendments also
clarify existing disclosures regarding the disaggregation for each class of
assets and liabilities, and the disclosures about inputs and valuation
techniques.  The amendments to ASC 820 did not have a material impact
on the Company's consolidated financial statements.
 Note
      2—
                Comprehensive
      Income
 
 Comprehensive
income was $330,843 and $1,289,998 for the three and nine months ended September
30, 2010, respectively.  For the three and nine months ended September
30, 2009, comprehensive income was $330,670 and $1,759,667,
respectively.  The Company's only component of other comprehensive
income is the foreign currency translation adjustment.
 Note
      3—
                Basic
      and Diluted Earnings per Share
 
 Basic
earnings per common share are computed using the weighted average number of
common shares outstanding during the period.  Diluted earnings per
share are computed using the weighted average number of common shares and
potential dilutive common shares that were outstanding during the
period.  Potential dilutive common shares consist of outstanding stock
options, outstanding stock warrants, and convertible preferred
stock.
  The
following table sets forth the computation of basic and diluted earnings per
share:
  Three months ended September 30
                        
                        
                        Nine months ended September 302010
                        
                        
                        2009
                        
                        
                        2010
                        
                        
                        2009Numerator:Net
      income
                        
                        $
                        171,660
                        
                        
                        $
                        324,169
                        
                        
                        $
                        1,124,156
                        
                        
                        $
                        1,745,919Denominator:Denominator
      for basic earnings per share—weighted average shares
                        
                        
                        12,380,000
                        
                        
                        
                        12,230,000
                        
                        
                        
                        12,380,000
                        
                        
                        
                        13,109,000Dilutive
      effect of employee stock options and other warrants
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        -Denominator
      for diluted earnings per share—adjusted weighted average
      shares
                        
                        
                        12,380,000
                        
                        
                        
                        12,230,000
                        
                        
                        
                        12,380,000
                        
                        
                        
                        13,109,000Basic
      earnings per share
                        
                        $
                        0.01
                        
                        
                        $
                        0.03
                        
                        
                        $
                        0.09
                        
                        
                        $
                        0.13Diluted
      earnings per share
                        
                        $
                        0.01
                        
                        
                        $
                        0.03
                        
                        
                        $
                        0.09
                        
                        
                        $
                        0.13
 
 Options
and warrants to purchase 806,689 shares of common stock for the three months and
nine months ended September 30, 2010, respectively, were not included in the
denominator for diluted earnings per share because their effect would be
antidilutive. Options and warrants to purchase 835,040 shares of common stock
for the three months and nine months ended September 30, 2009, respectively,
were not included in the denominator for diluted earnings per share because
their effect would be antidilutive.
  F-5
 
 Reliv
International, Inc. and Subsidiaries
 Notes to
Consolidated Financial Statements
 (Unaudited)
  September
30, 2010
 Note
      4—
                Fair
      Value Measurements
 
 Fair
value can be measured using valuation techniques such as the market approach
(comparable market prices), the income approach (present value of future income
or cash flow), and the cost approach (cost to replace the service capacity of an
asset or replacement cost).  Accounting standards utilize a fair value
hierarchy that prioritizes the inputs to valuation techniques used to measure
fair value into three broad levels.  The following is a brief
description of those three levels:
  Level 1:
Observable inputs such as quoted prices (unadjusted) in active markets for
identical assets or liabilities.
 
 Level 2:
Inputs other than quoted prices that are observable for the asset or liability,
either directly or indirectly. These include quoted prices for similar assets or
liabilities in active markets or similar assets or liabilities in markets that
are not active.
  Level 3:
Unobservable inputs that reflect the reporting entity’s own
assumptions.
 
 The
carrying amount and fair value of financial instruments at September 30, 2010
and December 31, 2009 were as follows:
  Fair ValueUsing Quoted
                    
                    
                    Using SignificantTotal
                    
                    
                    Prices in
                    
                    
                    Other ObservableCarrying
                    
                    
                    Fair
                    
                    
                    Active Markets
                    
                    
                    InputsDescription
                    
                    Amount
                    
                    
                    Value
                    
                    
                    (Level 1)
                    
                    
                    (Level 2)September 30, 2010Long-term
      debt (1)
                    
                    $
                    4,851,000
                    
                    
                    $
                    4,809,000
                    
                    
                    $
                    -
                    
                    
                    $
                    4,809,000Marketable
      securities (2)
                    
                    
                    213,000
                    
                    
                    
                    213,000
                    
                    
                    
                    213,000
                    
                    
                    
                    -December 31, 2009Long-term
      debt (1)
                    
                    $
                    5,238,734
                    
                    
                    $
                    5,184,000
                    
                    
                    $
                    -
                    
                    
                    $
                    5,184,000Marketable
      securities (2)
                    
                    
                    200,000
                    
                    
                    
                    200,000
                    
                    
                    
                    200,000
                    
                    
                    
                    -
 (1)
                The
      fair value of the Company's variable interest rate debt approximates
      carrying value due to the short-term duration of the debt and the frequent
      re-setting of its variable interest rate. The fair value of the of the
      Company's fixed interest rate long-term obligation was estimated by
      management based upon the rate available at the balance sheet date for the
      additional unused credit available to the
  Company.
 
 (2)
                Representing
      assets of the Company's Supplemental Executive Retirement Plan (trading
      securities). Presented within Other Assets in the consolidated balance
      sheets.
  The
carrying value of other financial instruments, including cash, accounts
receivable and accounts payable, and accrued liabilities approximate fair value
due to their short maturities or variable-rate nature of the respective
balances.
  F-6
  Item No.
2 - Management’s Discussion and Analysis of FinancialCondition
and Results of Operations
 
 The following discussion and analysis
of our financial condition and results of operations should be read in
conjunction with our financial statements and related notes included elsewhere
in this Quarterly Report on Form 10-Q.  The following discussion and
analysis discusses the financial condition and results of our operations on a
consolidated basis, unless otherwise indicated.
 
 Overview
 
 We are a developer, manufacturer and
marketer of a proprietary line of nutritional supplements addressing basic
nutrition, specific wellness needs, weight management and sports nutrition. We
also offer a line of skin care and food products under our Relivables brand. We
sell our products through an international network marketing system utilizing
independent distributors. Sales in the United States represented approximately
85.3% of worldwide net sales for the nine months ended September 30, 2010 and
88.5% of worldwide net sales for the nine months ended September 30, 2009. Our
international operations currently generate sales through distributor networks
with facilities in Australia, Canada, Indonesia, Malaysia, Mexico, the
Philippines, and the United Kingdom.  We also operate on a
limited basis in Ireland, Germany, Austria and the Netherlands from our U.K.
distribution center, in New Zealand from our Australia office, and in Singapore
and Brunei from our Malaysia office.
 
 We derive our revenues principally
through product sales made by our global independent distributor base, which, as
of September 30, 2010, consisted of approximately 62,230 distributors. Our sales
can be affected by several factors, including our ability to attract new
distributors and retain our existing distributor base, our ability to properly
train and motivate our distributor base and our ability to develop new products
and successfully maintain our current product line.
 
 Sales to distributors outside the
United States are made in the respective local currency; therefore, our
earnings and cash flows are subject to fluctuations due to changes in foreign
currency rates as compared to the U.S. dollar. As a result, exchange rate
fluctuations may have a varying effect on sales and gross margins. Accounting
practices require that our results from operations be converted to
U.S. dollars for reporting purposes. Consequently, our reported earnings
may be significantly affected by fluctuations in currency exchange rates,
generally increasing with a weaker U.S. dollar and decreasing with a
strengthening U.S. dollar. Products manufactured by us for sale to our
foreign subsidiaries are transacted in U.S. dollars. From time to time, we
enter into foreign exchange forward contracts to mitigate our foreign currency
exchange risk.
 
 Components
of Net Sales and Expense
 
 Product sales represent the actual
product purchase price typically paid by our distributors, after giving effect
to distributor allowances, which can range from 20% to 40% of suggested retail
price, depending on the rank of a particular distributor.  Handling
and freight income represents the amounts billed to distributors for shipping
costs.  We record net sales and the related commission expense when
the merchandise is shipped.
 
 Our primary expenses include cost of
products sold, distributor royalties and commissions and selling, general and
administrative expenses.
  4
  Cost of products sold primarily
consists of expenses related to raw materials, labor, quality control and
overhead directly associated with production of our products and sales
materials, as well as shipping costs relating to the shipment of products to
distributors, and duties and taxes associated with product
exports.  Cost of products sold is impacted by the cost of the
ingredients used in our products, the cost of shipping distributors’ orders,
along with our efficiency in managing the production of our
products.
 
 Distributor royalties and commissions
are monthly payments made to Master Affiliates and above, based on products sold
in their downline organization. Based on our distributor agreements, these
expenses typically approximate 23% of sales at suggested retail. Also, we
include other sales leadership bonuses, such as Ambassador bonuses, in this line
item. Distributor royalties and commissions are directly related to the level of
our sales and, absent any changes in our distributor compensation plan, should
continue at comparable levels as a percentage of net sales as in recent
periods.
 
 Selling, general and administrative
expenses include the compensation and benefits paid to our employees except for
those in manufacturing, all other selling expenses, marketing, promotional
expenses, travel and other corporate administrative expenses. These other
corporate administrative expenses include professional fees, non-manufacturing
depreciation and amortization, occupancy costs, communication costs and other
similar operating expenses. Selling, general and administrative expenses can be
affected by a number of factors, including staffing levels and the cost of
providing competitive salaries and benefits; the amount we decide to invest in
distributor training and motivational initiatives; and the cost of regulatory
compliance.
  Results
of Operations
 
 The following table sets forth selected
results of our operations expressed as a percentage of net sales for the three-
and nine-month periods ended September 30, 2010 and 2009. Our results of
operations for the periods described below are not necessarily indicative of
results of operations for future periods.
  Three months ended
                    
                    
                    Nine months endedSeptember 30,
                    
                    
                    September 30,2010
                    
                    
                    2009
                    
                    
                    2010
                    
                    
                    2009Net
      sales
                    
                    
                    100.0
                    %
                    
                    
                    100.0
                    %
                    
                    
                    100.0
                    %
                    
                    
                    100.0
                    %Costs
      and expenses:Cost
      of products sold
                    
                    
                    20.5
                    
                    
                    
                    21.3
                    
                    
                    
                    20.1
                    
                    
                    
                    19.8Distributor
      royalties and commissions
                    
                    
                    37.6
                    
                    
                    
                    37.9
                    
                    
                    
                    37.4
                    
                    
                    
                    37.8Selling,
      general and administrative
                    
                    
                    39.6
                    
                    
                    
                    38.6
                    
                    
                    
                    39.0
                    
                    
                    
                    38.2Income
      from operations
                    
                    
                    2.3
                    
                    
                    
                    2.2
                    
                    
                    
                    3.5
                    
                    
                    
                    4.2Interest
      expense
                    
                    
                    (0.3
                    )
                    
                    
                    (0.3
                    )
                    
                    
                    (0.3
                    )
                    
                    
                    (0.2
                    )Interest
      and other income
                    
                    
                    0.1
                    
                    
                    
                    0.5
                    
                    
                    
                    0.1
                    
                    
                    
                    0.4Income
      before income taxes
                    
                    
                    2.1
                    
                    
                    
                    2.4
                    
                    
                    
                    3.3
                    
                    
                    
                    4.4Provision
      for income taxes
                    
                    
                    1.2
                    
                    
                    
                    0.8
                    
                    
                    
                    1.4
                    
                    
                    
                    1.7Net
      income
                    
                    
                    0.9
                    %
                    
                    
                    1.6
                    %
                    
                    
                    1.9
                    %
                    
                    
                    2.7
                    %
 
 Net Sales.Overall
net sales decreased by 10.6% in the three months ended September 30, 2010
compared to the same period in 2009.  During the third quarter of
2010, sales in the United States decreased by 12.5%, and international sales
increased by 2.8% over the prior-year period.  For the nine months
ended September 30, 2010, consolidated net sales declined 7.0% compared to the
same period in 2009.  In the first nine months of 2010, net sales in
the United States declined by 10.3% and international sales increased by 18.7%
over the same period in 2009.
  5
  The following table summarizes net
sales by geographic market for the three months ended September 30, 2010 and
2009.
  Three months ended September 30,2010
                  
                  
                  2009
                  
                  
                  Change from prior yearAmount
                  
                  
                  % of Net
                    Sales
                  
                  
                  Amount
                  
                  
                  % of Net
                    Sales
                  
                  
                  Amount
                  
                  
                  %(dollars in thousands)United
      States
                  
                  $
                  15,975
                  
                  
                  
                  85.5
                  %
                  
                  $
                  18,262
                  
                  
                  
                  87.4
                  %
                  
                  $
                  (2,287
                  )
                  
                  
                  (12.5
                  )%Australia/New
      Zealand
                  
                  
                  656
                  
                  
                  
                  3.5
                  
                  
                  
                  620
                  
                  
                  
                  3.0
                  
                  
                  
                  36
                  
                  
                  
                  5.8Canada
                  
                  
                  505
                  
                  
                  
                  2.7
                  
                  
                  
                  428
                  
                  
                  
                  2.0
                  
                  
                  
                  77
                  
                  
                  
                  18.0Mexico
                  
                  
                  320
                  
                  
                  
                  1.7
                  
                  
                  
                  392
                  
                  
                  
                  1.9
                  
                  
                  
                  (72
                  )
                  
                  
                  (18.4
                  )Europe
                  
                  
                  439
                  
                  
                  
                  2.4
                  
                  
                  
                  314
                  
                  
                  
                  1.5
                  
                  
                  
                  125
                  
                  
                  
                  39.8Asia
                  
                  
                  778
                  
                  
                  
                  4.2
                  
                  
                  
                  870
                  
                  
                  
                  4.2
                  
                  
                  
                  (92
                  )
                  
                  
                  (10.6
                  )Consolidated
      total
                  
                  $
                  18,673
                  
                  
                  
                  100.0
                  %
                  
                  $
                  20,886
                  
                  
                  
                  100.0
                  %
                  
                  $
                  (2,213
                  )
                  
                  
                  (10.6
                  )%
 
 The following table summarizes net
sales by geographic market for the nine months ended September 30, 2010 and
2009.
  Nine months ended September 30,2010
                  
                  
                  2009
                  
                  
                  Change from prior yearAmount
                  
                  
                  % of Net
                    Sales
                  
                  
                  Amount
                  
                  
                  % of Net
                    Sales
                  
                  
                  Amount
                  
                  
                  %(dollars in thousands)United
      States
                  
                  $
                  51,378
                  
                  
                  
                  85.3
                  %
                  
                  $
                  57,281
                  
                  
                  
                  88.5
                  %
                  
                  $
                  (5,903
                  )
                  
                  
                  (10.3
                  )%Australia/New
      Zealand
                  
                  
                  1,924
                  
                  
                  
                  3.2
                  
                  
                  
                  1,672
                  
                  
                  
                  2.6
                  
                  
                  
                  252
                  
                  
                  
                  15.1Canada
                  
                  
                  1,634
                  
                  
                  
                  2.7
                  
                  
                  
                  1,076
                  
                  
                  
                  1.7
                  
                  
                  
                  558
                  
                  
                  
                  51.9Mexico
                  
                  
                  1,107
                  
                  
                  
                  1.9
                  
                  
                  
                  1,018
                  
                  
                  
                  1.6
                  
                  
                  
                  89
                  
                  
                  
                  8.7Europe
                  
                  
                  1,440
                  
                  
                  
                  2.4
                  
                  
                  
                  927
                  
                  
                  
                  1.4
                  
                  
                  
                  513
                  
                  
                  
                  55.3Asia
                  
                  
                  2,738
                  
                  
                  
                  4.5
                  
                  
                  
                  2,756
                  
                  
                  
                  4.2
                  
                  
                  
                  (18
                  )
                  
                  
                  (0.7
                  )Consolidated
      total
                  
                  $
                  60,221
                  
                  
                  
                  100.0
                  %
                  
                  $
                  64,730
                  
                  
                  
                  100.0
                  %
                  
                  $
                  (4,509
                  )
                  
                  
                  (7.0
                  )%
 
 The following table sets forth, as of
September 30, 2010 and 2009, the number of our active distributors and Master
Affiliates and above.  The total number of active distributors
includes Master Affiliates and above. We define an active distributor as one
that enrolls as a distributor or renews his or her distributorship during the
prior twelve months.  Master Affiliates and above are distributors
that have attained the highest level of discount and are eligible for royalties
generated by Master Affiliate groups in their downline
organization.  Growth in the number of active distributors and Master
Affiliates and above is a key factor in the growth of our business.
 
 September 30, 2010
                  
                  
                  September 30, 2009
                  
                  
                  % ChangeTotal
                    Active
                    Distributors
                  
                  
                  Master
                    Affiliates and
                    Above
                  
                  
                  Total
                    Active
                    Distributors
                  
                  
                  Master
                    Affiliates and
                    Above
                  
                  
                  Total
                    Active
                    Distributors
                  
                  
                  Master
                    Affiliates and
                    AboveUnited
      States
                  
                  
                  48,520
                  
                  
                  
                  6,730
                  
                  
                  
                  54,460
                  
                  
                  
                  8,390
                  
                  
                  
                  (10.9
                  )%
                  
                  
                  (19.8
                  )%Australia/New
      Zealand
                  
                  
                  2,410
                  
                  
                  
                  200
                  
                  
                  
                  2,490
                  
                  
                  
                  190
                  
                  
                  
                  (3.2
                  )
                  
                  
                  5.3Canada
                  
                  
                  1,390
                  
                  
                  
                  180
                  
                  
                  
                  1,190
                  
                  
                  
                  120
                  
                  
                  
                  16.8
                  
                  
                  
                  50.0Mexico
                  
                  
                  2,100
                  
                  
                  
                  300
                  
                  
                  
                  1,960
                  
                  
                  
                  240
                  
                  
                  
                  7.1
                  
                  
                  
                  25.0Europe
                  
                  
                  1,860
                  
                  
                  
                  260
                  
                  
                  
                  1,110
                  
                  
                  
                  160
                  
                  
                  
                  67.6
                  
                  
                  
                  62.5Asia
                  
                  
                  5,950
                  
                  
                  
                  620
                  
                  
                  
                  7,100
                  
                  
                  
                  780
                  
                  
                  
                  (16.2
                  )
                  
                  
                  (20.5
                  )Consolidated
      total
                  
                  
                  62,230
                  
                  
                  
                  8,290
                  
                  
                  
                  68,310
                  
                  
                  
                  9,880
                  
                  
                  
                  (8.9
                  )%
                  
                  
                  (16.1
                  )%
  6
  In the United States, net sales were
down 12.5% in the third quarter of 2010 compared to the same period in
2009.   Sales in the United States continue to be adversely
impacted by distributor uncertainty in the economic recovery and the reduced
availability of consumer credit.  In addition to the direct impact on
sales, these factors lead to fewer distributors qualifying for the level of
Master Affiliate.  In the third quarter of 2010, approximately 503
distributors qualified as new Master Affiliates, compared to approximately 694
in the prior-year quarter, a decline of 27.5%.  In addition, the
number of Master Affiliates and above as of September 30, 2010 decreased by
19.8% as compared to the number of Master Affiliates and above as of September
30, 2009.  This is consistent with reduced number of distributors
qualifying for the level of Master Affiliate discussed
earlier.  Another factor in the decline in sales in the United States
was fewer new distributor enrollments.  During the third quarter of
2010, approximately 3,492 new distributors were enrolled, compared to 4,553 new
distributor enrollments in the prior-year quarter, a decline of
23.3%.  In response to the decline in new distributor enrollments, we
indefinitely reduced the cost to enroll as a distributor to $25 in August
2010.  We also revised the materials that a new distributor receives
by targeting the materials to entry level distributors.  In 2009, we
ran an initiative from January through August 2009 to increase new distributor
enrollments by offering an enrollment fee of $20, half of the then-normal $39.95
fee. The number of active distributors in the United States as of September 30,
2010 decreased by 10.9% to 48,520, compared to the number of active distributors
as of September 30, 2009.  This decline in active distributors was
caused by the decline in new distributor enrollments coupled with slightly lower
distributor retention.  Distributor retention was 61.9% for the first
nine months of 2010 compared to a rate of 63.1% for all of 2009.  As
part of the changes to the distributor enrollment process this August, we also
reduced the cost of the annual distributorship renewal from $30 to
$25.  For the nine-month period ended September 30, 2010, the decline
in net sales in the United States compared to the prior-year period was due to
these same factors.
 
 In the
third quarter of 2010, we processed approximately 64,420 orders in the United
States for products at an average order of $320 at suggested
retail.  In the same period of 2009, we processed approximately 69,970
product orders at an average order of $338 at suggested retail, and the average
order size for all of 2009 was $353 at suggested retail.   This
decline in the average order size is another indicator of the reduced credit
availability and fewer distributors reaching the Master Affiliate
level.
 
 During the three months ended September
30, 2010, net sales in our international operations increased in aggregate by
2.8% to $2.70 million compared to $2.62 million for the three months
ended September 30, 2009.  For the nine-month period ended September
30, 2010, international net sales increased by 18.7% to $8.84 million compared
to $7.45 million in the same period in 2009.  Although international
sales increased in aggregate during the first nine months of 2010, approximately
53% of the increase was the result of foreign currency fluctuation due to a
weaker U.S. dollar.  When net sales are converted using the 2009
exchange rate for both 2009 and 2010, international net sales increased by 8.8%
for the first nine months of 2010 compared to the same period of the prior
year.  For the first nine months of 2010, we had mixed results in our
various foreign regions.  Regional sales results on a constant
currency basis for the first nine months of 2010 compared to the first nine
months of 2009 were as follows:  Australia/New Zealand net sales down
4.1%, Canada net sales up 34.5%, Mexico net sales up 1.3%, European sales up
57.1%, and Asian sales down 6.8%.  Sales results in Australia/New
Zealand have declined slightly in the second and third quarters of 2010
subsequent to price increases on most products that went into effect on April 1,
2010.  New distributor enrollments year-to-date in 2010 are down
approximately 12% from the same period in 2009.  Canada continues to
show strong growth in new distributor enrollments, up 24%, and in new Master
Affiliate qualifications, 68 in the first nine months of 2010 compared to 30 in
the first nine months of 2009.   Net sales in the first nine
months of 2010 in Mexico improved by 1.3% as the result of higher Master
Affiliate qualifications in the current year to date compared to the same period
in 2009.   European sales have shown improvement as the result of
strong growth in both new distributor enrollments, up 137% in the first nine
months of 2010, and in new Master Affiliate qualifications, up 124% in the
current year to date.  Asian sales have declined, particularly in the
second and third quarters of 2010, as the result of departures in our local
management staff in our Malaysian office and declining trends in both new
distributor enrollments and new Master Affiliate qualifications.  We
hired a new general manager late in the second quarter of 2010 to oversee the
Southeast Asia region, which includes our Malaysia, Singapore, Brunei, and
Indonesia operations.
 
 Cost of Products Sold.Cost
of products sold as a percentage of net sales was 20.5% for the three-month
period ended September 30, 2010, compared to 21.3% for the same period in
2009.  For the nine-month period ended September 30, 2010, cost of
products sold as a percentage of net sales was 20.1 %, compared to 19.8% in the
prior year period.  Gross margins in the third quarter of 2010
improved when compared to the prior year quarter as the result of improved plant
operational efficiencies and selected price increases in some of our foreign
markets.  Gross margins for the first nine months of 2010 compared to
the same period in 2009 were impacted by changes in the revenue mix with the
introduction of the new Relivables product line in the third quarter of
2009.  The Relivables product line has a slightly lower gross margin
than the core nutritional products; however, it also has a lower commission rate
than the core nutritional products.
  7
  Distributor Royalties and
Commissions.Distributor royalties and commissions as a
percentage of net sales were 37.6% and 37.4% for the three- and nine-month
periods ended September 30, 2010, respectively, compared to 37.9% and 37.8% for
the same periods in 2009.  The minor reduction is due to the
introduction of the Relivables product line in the third quarter of 2009, which
has a lower commission rate.
 
 Selling, General and Administrative
Expenses.For the three months ended September 30, 2010, selling, general
and administrative, or SGA, expenses decreased by $655,000, compared to the same
period in 2009. SGA expenses as a percentage of net sales were 39.6% and 38.6%
for the three-month periods ended September 30, 2010 and 2009,
respectively.   For the nine-month period ended September 30,
2010, SGA expenses decreased by $1.24 million when compared to the same period
in 2009.  SGA expenses as a percentage of net sales were 39.0% and
38.2% for the nine-month periods ended September 30, 2010 and 2009,
respectively.
 
 Sales and marketing expenses decreased
by approximately $594,000 in the first nine months of 2010, compared to the
prior-year period.  The decrease is the result of lower distributor
bonuses and expenses directly related to the level of sales and a reduction in
meeting and conference expenses, newsletter expenses and marketing consulting
expenses, offset by an increase in promotional expenses due to an additional
distributor incentive trip in February 2010 that did not occur in the prior
year.
 
 Distribution
and warehouse expenses decreased by $130,000 and general and administrative
expenses decreased by approximately $515,000 in the first nine months of 2010,
compared to the prior-year period.  The decrease in general and
administrative expenses consists primarily of reductions in the annual accrual
to the employee stock ownership plan, legal and accounting fees, and business
insurance expense, offset by an increase in general taxes.  During the
third quarter of 2010, we accrued approximately $185,000 in general and
administrative expenses related to a tax audit in the Philippines on VAT and
other transactional taxes.
 
 Interest Income/Expense.Interest income decreased to $35,000 for the nine months ended September
30, 2010, compared to $46,000 for the same period in 2009, due to lower interest
rates in 2010.  Interest expense increased to $159,000 during the
first nine months of 2010 compared to $113,000 in the same period of 2009, as we
entered into two long-term debt agreements during the second half of
2009.
 
 Income Taxes.We recorded
income tax expense of $854,000 for the first nine months of 2010, an
effective rate of 43.2%. In the same period in 2009, we recorded income tax
expense of $1.11 million, which represented an effective rate of
38.9%.  The increase in the effective rate was due to non-deductible
losses in our Philippine subsidiary.  The losses were primarily due to
the accrual for the Philippine tax audit previously discussed.
 
 Net Income.Our net income
for the three and nine months ended September 30, 2010 was $172,000
($0.01 per share basic and diluted) and $1.12 million ($0.09 per share
basic and diluted), respectively, compared to $324,000 ($0.03 per share
basic and diluted) and $1.75 million ($0.13 per share basic and diluted) for the
same periods in 2009. Profitability decreased in the third quarter and first
nine months of 2010 as net sales decreased in the United States as discussed
above.
 
 Financial
Condition, Liquidity and Capital Resources
 
 During the first nine months of 2010,
we generated $1.44 million of net cash from operating activities, used
$345,000 in investing activities, and used $634,000 in financing activities.
This compares to $4.78 million of net cash provided by operating
activities, $700,000 used in investing activities, and $2.28 million used in
financing activities in the same period of 2009. Cash and cash equivalents
increased by $644,000 to $6.40 million as of September 30, 2010 compared to
$5.76 million as of December 31, 2009.
 
 Significant
changes in working capital items consisted of an increase in inventory of
$815,000, an increase in accounts payable and accrued expenses of $553,000, and
an increase in other assets of $271,000 in the first nine months of
2010.  Inventory increased as the result of lower than expected sales
levels, compared to scheduled production.  We also increased inventory
levels in some of our foreign markets to provide better lead time and shipping
efficiencies.   The increase in accounts payable and accrued
expenses is partially related to a financing arrangement for our annual
corporate insurance policy renewals, increases in payables due to raw material
vendors, coupled with various annual accruals.  The change in other
assets is due to a payment made on an officer’s life insurance policy during the
first quarter of 2010.
  8
  Investing
activities during the first nine months of 2010 consisted of a net investment of
$345,000 for capital expenditures.  Financing activities during the
first nine months of 2010 consisted of principal payments of $387,000 on
long-term borrowings and $248,000 in cash dividends paid.
 
 Stockholders’ equity increased to
$13.46 million at September 30, 2010 compared to $12.27 million at
December 31, 2009. The increase is due to net income during the first nine
months of 2010 of $1.12 million, partially offset by our cash dividend payment
of $248,000.  Our working capital balance was $3.14 million at
September 30, 2010 compared to $5.47 million at December 31, 2009. The
current ratio at September 30, 2010 was 1.29 compared to 1.81 at December 31,
2009.  The change in our current ratio is due to the balance sheet
classification of our term loan as explained below.
 
 In late
June 2009, we entered into a term loan with our primary lender in the principal
amount of $4.12 million.  The term of the loan is for a period of two
years with interest accruing on the outstanding principal balance at a floating
interest rate based on the 30-day LIBOR plus 3.0%, subject to a 3.75%
floor.  As of September 30, 2010, we are subject to the 3.75%
floor.  Monthly principal and interest payments are based on a
ten-year amortization.  The aggregate outstanding balance of principal
and interest is due and payable on June 29, 2011.  The loan includes
financial covenants under which we are required to (1) maintain at all times a
tangible net worth of not less than $10 million and (2) maintain at all times a
ratio of total funded debt to EBITDA of not greater than 2.5 to
1.  The proceeds of the term loan were used to reduce the outstanding
balance on the revolving credit facility we had with the lender.  As
the due date of the loan is less than one year, the loan’s September 30, 2010
balance of $3.69 million has been classified as a current liability; however, it
is our intention to refinance this debt with a longer maturity.
 
 The
revolving credit facility is a $5 million secured revolving credit facility
with the same lender that provided our term loan. This facility was renewed in
September 2009 for a one-year term, and then extended to December 31, 2010 while
negotiations on a new loan package are underway.  Any advances accrue
interest at a variable interest rate based on the 30-day LIBOR plus 3.0%,
subject to a 4.0% floor. The term loan and revolving credit facility are secured
by all of our tangible and intangible assets and also by a mortgage on our
building and real estate located in Chesterfield, Missouri. This facility bears
the same financial covenants as the term loan. At September 30, 2010, we had no
outstanding borrowings on the revolving line of credit facility and were in
compliance with all financial covenants of the term loan.
 
 Management believes that our internally
generated funds coupled with the bank loan facilities currently available will
be sufficient to meet working capital requirements for the remainder of 2010 and
through 2011.
 
 Critical Accounting
Policies
 
 A summary of our critical accounting
policies and estimates is presented on pages 24-26 of our 2009 Annual Report on
Form 10-K filed with the Securities and Exchange Commission on March 12,
2010.
 
 Item No. 4 - Controls and
Procedures
 
 Our
management, under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer, has reviewed and evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures as of September 30, 2010.  Based on such review and
evaluation, our Chief Executive Officer and Chief Financial Officer have
concluded that the disclosure controls and procedures were effective as of
September 30, 2010, to ensure that the information required to be disclosed by
us in the reports that we file or submit under the Securities Exchange Act of
1934, as amended, (a) is recorded, processed, summarized and reported within the
time period specified in the SEC’s rules and forms and (b) is accumulated and
communicated to our management, including the officers, as appropriate to allow
timely decisions regarding required disclosure.  There were no
material changes in our internal control over financial reporting during the
third quarter of 2010 that have materially affected or are reasonably likely to
materially affect our internal controls over financial
reporting.
  9
  PART
II – OTHER INFORMATION
 
 Item No. 2
– Unregistered Sales of Equity Securities and Use of
Proceeds
 
 During
the first nine months of 2010, we did not repurchase any shares of our common
stock under our share repurchase plan authorized by our Board of Directors in
May 2007 that provided for share repurchases of up to $15 million through April
2010.  As of April 30, 2010, the repurchase plan expired and a new
plan has not been authorized as of the date of this filing.
 
 Item No. 6 –
Exhibits
 
 ExhibitNumber
                
                Document31.1
                
                Certification
      of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a)
      of the  Securities Exchange Act, as amended (filed
      herewith).31.2
                
                Certification
      of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a)
      of the  Securities Exchange Act, as amended (filed
      herewith).32
                
                Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to 18
      U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
      of 2002 (filed herewith).
  10
  SIGNATURES
  Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly
authorized.
  RELIV’ INTERNATIONAL, INC.By:
                  /s/ Robert L. MontgomeryRobert
      L. Montgomery, Chairman of the Board of Directors, President and Chief
      Executive OfficerDate:  November
      15, 2010By:
                  /s/ Steven D. AlbrightSteven
      D. Albright, Chief Financial Officer (and accounting
    officer)Date:  November
      15, 2010
  11
  Exhibit
Index
  ExhibitNumber
                
                Document31.1
                
                Certification
      of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a)
      of the Securities Exchange Act, as amended (filed
    herewith).31.2
                
                Certification
      of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a)
      of the Securities Exchange Act, as amended (filed
    herewith).32
                
                Certification
      of Chief Executive Officer and Chief Financial Officer pursuant to 18
      U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
      of 2002 (filed herewith).
  12