**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
                1934****For
                the quarterly period ended June 30, 2007****OR**o
            **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**


**1-11768**




**RELIV’
      INTERNATIONAL, INC.**


(Exact
      name of Registrant as specified in its charter)





Delaware
            371172197(State
                or other jurisdiction of
            (I.R.S.
                Employerincorporation
                or organization)
            Identification
                Number)





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 o




Indicate
      by check mark whether the Registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.
      (Check one):





Large
      accelerated filer o Accelerated
      filer þ Non-accelerated
      filer o




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





The
      number of shares outstanding of the Registrant’s common stock as of July 26,
      2007 was 15,973,451 (excluding treasury shares).







**INDEX**





Part
                I - Financial InformationItem
                No. 1
            Financial
                Statements
            
            1Item
                No. 2
            Management’s
                Discussion and Analysis ofFinancial
                Condition and Results of Operations
            
            7Item
                No. 3
            Quantitative
                and Qualitative Disclosures Regarding Market Risk
            
            13Item
                No. 4
            Controls
                and Procedures
            
            13Part
                II - Other InformationItem
                No. 1A
            Risk
                Factors
            
            14Item
                No. 2
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            
            15Item
                No. 4
            Submission
                of Matters to a Vote of Security Holders
            
            15Item
                No. 6
            Exhibits
            
            16








**PART
                  I -- FINANCIAL INFORMATION****Item
                  No. 1 - Financial Statements**Reliv
                  International, Inc. and SubsidiariesConsolidated
                  Balance SheetsJune
                  30
              
              December
                  312007
              
              2006(unaudited)AssetsCurrent
                  assets:Cash
                  and cash equivalents
              
              $
              5,482,699
              
              $
              9,332,810Short-term
                  investments
              
              
              6,934,592
              
              
              7,864,000Accounts
                  and notes receivable, less allowances of$6,300
                  in 2007 and $6,200 in 2006
              
              
              797,971
              
              
              669,379Accounts
                  due from employees and distributors
              
              
              329,264
              
              
              223,246InventoriesFinished
                  goods
              
              
              3,517,676
              
              
              2,752,770Raw
                  materials
              
              
              1,559,577
              
              
              1,337,661Sales
                  aids and promotional materials
              
              
              662,436
              
              
              687,790Total
                  inventories
              
              
              5,739,689
              
              
              4,778,221Refundable
                  income taxes
              
              
              1,223,635
              
              
              279,096Prepaid
                  expenses and other current assets
              
              
              1,314,426
              
              
              1,103,996Deferred
                  income taxes
              
              
              469,430
              
              
              594,430Total
                  current assets
              
              
              22,291,706
              
              
              24,845,178Other
                  assets
              
              
              3,003,463
              
              
              2,639,537Accounts
                  due from employees and distributors
              
              
              386,675
              
              
              362,959Property,
                  plant and equipment:Land
              
              
              829,222
              
              
              829,222Building
              
              
              9,753,573
              
              
              9,565,221Machinery
                  & equipment
              
              
              3,747,133
              
              
              4,199,714Office
                  equipment
              
              
              1,547,272
              
              
              1,520,297Computer
                  equipment & software
              
              
              2,724,848
              
              
              2,441,26418,602,048
              
              
              18,555,718Less:
                  Accumulated depreciation
              
              
              9,051,845
              
              
              9,121,172Net
                  property, plant and equipment
              
              
              9,550,203
              
              
              9,434,546Total
                  assets
              
              $
              35,232,047
              
              $
              37,282,220
  See
          notes
          to financial statements.
  1
  Reliv
                  International, Inc. and SubsidiariesConsolidated
                  Balance SheetsJune
                  30
              
              December
                  312007
              
              2006(unaudited)Liabilities
                  and stockholders' equityCurrent
                  liabilities:Accounts
                  payable and accrued expenses:Trade
                  accounts payable and other accrued expenses
              
              $
              5,455,074
              
              $
              3,824,951Distributors
                  commissions payable
              
              
              3,483,581
              
              
              3,449,687Sales
                  taxes payable
              
              
              444,735
              
              
              421,923Payroll
                  and payroll taxes payable
              
              
              580,078
              
              
              918,695Total
                  accounts payable and accrued expenses
              
              
              9,963,468
              
              
              8,615,256Income
                  taxes payable
              
              
              -
              
              
              -Total
                  current liabilities
              
              
              9,963,468
              
              
              8,615,256Noncurrent
                  liabilities:Deferred
                  income taxes
              
              
              27,000
              
              
              42,000Other
                  non-current liabilities
              
              
              1,137,077
              
              
              891,113Total
                  noncurrent liabilities
              
              
              1,164,077
              
              
              933,113Stockholders'
                  equity:Preferred
                  stock, par value $.001 per share; 3,000,000shares
                  authorized; -0- shares issued and outstandingin
                  2007 and 2006
              
              
              -
              
              
              -Common
                  stock, par value $.001 per share; 30,000,000authorized;
                  16,195,462 shares issued and 15,981,559shares
                  outstanding as of 6/30/2007; 16,730,465 sharesissued
                  and 16,605,523 shares outstanding as of 12/31/2006
              
              
              16,196
              
              
              16,731Additional
                  paid-in capital
              
              
              33,696,882
              
              
              34,732,421Accumulated
                  deficit
              
              
              (6,941,054
              )
              
              (5,336,866
              )Accumulated
                  other comprehensive loss:Foreign
                  currency translation adjustment
              
              
              (463,911
              )
              
              (540,653
              )Treasury
                  stock
              
              
              (2,203,611
              )
              
              (1,137,782
              )Total
                  stockholders' equity
              
              
              24,104,502
              
              
              27,733,851Total
                  liabilities and stockholders' equity
              
              $
              35,232,047
              
              $
              37,282,220
  See
          notes
          to financial statements.
  2
  Reliv
                    International, Inc. and SubsidiariesConsolidated
                    Statements of Income(unaudited)Three
                    months ended June 30
                
                Six
                    months ended June 302007
                
                2006
                
                2007
                
                2006Product
                    sales
                
                $
                23,550,919
                
                $
                24,990,986
                
                $
                54,948,885
                
                $
                53,032,320Handling
                    & freight income
                
                
                2,773,618
                
                
                2,858,082
                
                
                6,339,296
                
                
                6,012,100Net
                    sales
                
                
                26,324,537
                
                
                27,849,068
                
                
                61,288,181
                
                
                59,044,420Costs
                    and expenses:Cost
                    of products sold
                
                
                4,398,940
                
                
                4,722,823
                
                
                10,460,332
                
                
                9,805,004Distributor
                    royalties and commissions
                
                
                10,602,827
                
                
                11,156,285
                
                
                24,531,390
                
                
                23,783,317Selling,
                    general and administrative
                
                
                10,199,831
                
                
                9,484,876
                
                
                21,229,680
                
                
                18,951,617Total
                    costs and expenses
                
                
                25,201,598
                
                
                25,363,984
                
                
                56,221,402
                
                
                52,539,938Income
                    from operations
                
                
                1,122,939
                
                
                2,485,084
                
                
                5,066,779
                
                
                6,504,482Other
                    income (expense):Interest
                    income
                
                
                163,514
                
                
                197,446
                
                
                376,116
                
                
                282,122Interest
                    expense
                
                
                (447
                )
                
                (11,026
                )
                
                (573
                )
                
                (45,467
                )Other
                    income
                
                
                98,305
                
                
                37,883
                
                
                195,238
                
                
                98,519Income
                    before income taxes
                
                
                1,384,311
                
                
                2,709,387
                
                
                5,637,560
                
                
                6,839,656Provision
                    for income taxes
                
                
                561,000
                
                
                1,089,000
                
                
                2,194,000
                
                
                2,769,000Net
                    income
                
                $
                823,311
                
                $
                1,620,387
                
                $
                3,443,560
                
                $
                4,070,656Earnings
                    per common share - Basic
                
                $
                0.05
                
                $
                0.10
                
                $
                0.21
                
                $
                0.25Weighted
                    average shares
                
                
                16,135,000
                
                
                16,667,000
                
                
                16,282,000
                
                
                16,121,000Earnings
                    per common share - Diluted
                
                $
                0.05
                
                $
                0.09
                
                $
                0.21
                
                $
                0.25Weighted
                    average shares
                
                
                16,308,000
                
                
                17,106,000
                
                
                16,453,000
                
                
                16,554,000Cash
                    dividends declared per common share
                
                $
                0.05
                
                $
                0.05
                
                $
                0.05
                
                $
                0.05
  See
          notes
          to financial statements.
  3
  Reliv
                  International, Inc. and SubsidiariesConsolidated
                  Statements of Cash Flows(unaudited)Six
                  months ended June 302007
              
              2006Operating
                  activities:Net
                  income
              
              $
              3,443,560
              
              $
              4,070,656Adjustments
                  to reconcile net income tonet
                  cash provided by operating activities:Depreciation
                  and amortization
              
              
              525,069
              
              
              634,351Stock-based
                  compensation
              
              
              40,013
              
              
              58,120Deferred
                  income taxes
              
              
              110,000
              
              
              (11,000
              )Foreign
                  currency transaction (gain)/loss
              
              
              (126,570
              )
              
              (116,772
              )(Increase)
                  decrease in accounts and notes receivable
              
              
              (246,060
              )
              
              101,596(Increase)
                  decrease in inventories
              
              
              (904,016
              )
              
              870,400(Increase)
                  decrease in refundable income taxes
              
              
              (946,952
              )
              
              (847,542
              )(Increase)
                  decrease in prepaid expensesand
                  other current assets
              
              
              (200,604
              )
              
              (743,538
              )(Increase)
                  decrease in other assets
              
              
              (382,155
              )
              
              (250,866
              )Increase
                  (decrease) in accounts payable and accrued expenses
              
              
              1,543,712
              
              
              2,026,716Increase
                  (decrease) in income taxes payable
              
              
              -
              
              
              (820,252
              )Net
                  cash provided by operating activities
              
              
              2,855,997
              
              
              4,971,869Investing
                  activities:Proceeds
                  from the sale of property, plant and equipment
              
              
              4,532
              
              
              6,295Purchase
                  of property, plant and equipment
              
              
              (620,689
              )
              
              (322,923
              )Purchase
                  of investments
              
              
              (1,398,592
              )
              
              (6,000,000
              )Proceeds
                  from sales or maturities of investments, at cost
              
              
              2,328,000
              
              
              -Net
                  cash provided by (used in) investing activities
              
              
              313,251
              
              
              (6,316,628
              )Financing
                  activities:Principal
                  payments on long-term borrowings
              
              
              -
              
              
              (3,108,261
              )Net
                  proceeds from issuance of common stock
              
              
              -
              
              
              11,918,792Common
                  stock dividends paid
              
              
              (806,763
              )
              
              (840,887
              )Proceeds
                  from options and warrants exercised
              
              
              49,626
              
              
              65,749Purchase
                  of stock for treasury
              
              
              (6,432,527
              )
              
              -Net
                  cash provided by (used in) financing activities
              
              
              (7,189,664
              )
              
              8,035,393Effect
                  of exchange rate changes on cash and cash equivalents
              
              
              170,305
              
              
              25,978Increase
                  in cash and cash equivalents
              
              
              (3,850,111
              )
              
              6,716,612Cash
                  and cash equivalents at beginning of period
              
              
              9,332,810
              
              
              5,653,594Cash
                  and cash equivalents at end of period
              
              $
              5,482,699
              
              $
              12,370,206
  See
        notes
        to financial statements
  4
  Reliv'
                  International, Inc. and SubsidiariesNotes
                  to Consolidated Financial Statements(Unaudited)June
                  30, 2007**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 management believes necessary (which primarily include
          normal
          recurring accruals) 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, 2006,
          filed March 15, 2007 with the Securities and Exchange Commission. The accounting
          policies used in preparing these financial statements are the same as those
          applied in the prior year, except that the Company adopted a new financial
          accounting standard at the beginning of its 2007 fiscal year concerning
          its
          income tax accounting which is discussed in Note 5. This new standard was
          adopted prospectively and comparative periods were not restated.
  *Reclassification
                      -- Consolidated Statements of Cash
                      Flows*
  Investment
            grade, variable rate debt obligations issued by various state and municipal
            governments comprise a portion of the Company’s short-term investments. As a
            result of the regularly resetting interest rates, no cumulative gross
            unrealized
            or realized holding gains or losses exist from these investments. In
            accordance
            with management’s objective for these available-for-sale investments, each reset
            of these securities' interest rates is not considered a separate or individual
            sale and subsequent repurchase. To conform to the 2007 presentation of
            the
            consolidated statements of cash flows, amounts previously presented in
            the
            corresponding 2006 period as individual purchase and sales transactions
            have
            been reclassified and presented on a net basis. This reclassification
            had no
            impact to total net cash provided by (used in) investing activities within
            the
            consolidated statements of cash flows.
  **Note
                    2--****Recent
                    Accounting Standards Pending
                    Adoption**
  In
          February 2007, the Financial Accounting Standards Board ("FASB") issued
          Statement of Financial Accounting Standards (SFAS) No. 159, "The Fair Value
          Option for Financial Assets and Financial Liabilities, Including an Amendment
          of
          FASB Statement No. 115," which will become effective in 2008. SFAS No.
          159
          permits entities to measure eligible financial assets, financial liabilities,
          and firm commitments at fair value, on an instrument-by-instrument basis,
          that
          are otherwise not permitted to be accounted for at fair value under other
          generally accepted accounting principles. The fair value measurement election
          is
          irrevocable and subsequent changes in fair value must be recorded in earnings.
          The Company will adopt this Statement as of January 1, 2008 and is currently
          evaluating if it will elect the fair value option for any of its eligible
          financial instruments and other items.
 
 In
          September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements"
          which
          defines fair value, establishes a framework for measuring fair value, and
          expands disclosures about fair value measurements. This Statement clarifies
          how
          to measure fair value as permitted under other accounting pronouncments
          but does
          not require any new fair value measurements. The Company will be required
          to
          adopt SFAS No. 157 as of January 1, 2008. The Company is currently evaluating
          the impact of SFAS No. 157 and has not yet determined the impact on its
          financial statements.
  **Note
                    3--****Comprehensive
                    Income**
  Total
          comprehensive income was $894,016 and $3,520,302 for the three and six
          months
          ended June 30, 2007, respectively. For the three and six months ended June
          30,
          2006, comprehensive income was $1,550,429 and $3,998,470, respectively.
          The
          Company's only component of other comprehensive income is the foreign currency
          translation adjustment.
  5
  Reliv'
                  International, Inc. and SubsidiariesNotes
                  to Consolidated Financial Statements(Unaudited)June
                  30, 2007
 **Note
                    4--****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 June 30
              
              Six
                  months ended June 302007
              
              2006
              
              2007
              
              2006Numerator:Net
                  income
              
              $
              823,311
              
              $
              1,620,387
              
              $
              3,443,560
              
              $
              4,070,656Denominator:Denominator
                  for basic earnings pershare--weighted
                  average shares
              
              
              16,135,000
              
              
              16,667,000
              
              
              16,282,000
              
              
              16,121,000Dilutive
                  effect of employee stock optionsand
                  other warrants
              
              
              173,000
              
              
              439,000
              
              
              171,000
              
              
              433,000Denominator
                  for diluted earnings pershare--adjusted
                  weighted average shares
              
              
              16,308,000
              
              
              17,106,000
              
              
              16,453,000
              
              
              16,554,000Basic
                  earnings per share
              
              $
              0.05
              
              $
              0.10
              
              $
              0.21
              
              $
              0.25Diluted
                  earnings per share
              
              $
              0.05
              
              $
              0.09
              
              $
              0.21
              
              $
              0.25
  Warrants
          to purchase 25,303 of common stock for the three months and six months
          ended
          June 30, 2007 and 2006, respectively, were not included in the denominator for
          diluted earnings per share because their effect would be
          antidilutive.
  **Note
                    5--****Income
                    Taxes**
 The
          Company adopted the provisions of FASB Interpretation No. 48, “Accounting for
          Uncertainty in Income Taxes” (“FIN No. 48”) on January 1, 2007. As a result of
          the implementation of FIN No. 48, the Company recognized no material adjustment
          in its estimated liability for unrecognized income tax benefits. At June
          30,
          2007, the Company had unrecognized tax benefits, including estimated interest
          and penalties thereon, totaling $140,000. This amount is included in “Other
          non-current liabilities” in the consolidated balance sheet. There has been no
          material change in this amount during the three months and six months ended
          June
          30, 2007. In 2007, the Company is continuing its practice to recognize
          interest
          and/or penalties related to income tax matters in income tax
          expense.
 
 The
          Company, including its domestic and foreign subsidiaries, is subject to
          U.S
          federal income tax as well as income tax of multiple state and foreign
          jurisdictions. The Company has concluded all U.S. federal income tax matters
          for
          years through 2002 and substantially concluded years through 2005 with
          its
          primary state jurisdiction.
  6


**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. These forward-looking statements are affected by risks,
      uncertainties and assumptions that we make, including, among other things,
      the
      factors that are described in “Item No. 1A - Risk Factors” in our 2006 Annual
      Report on Form 10-K filed with the Securities and Exchange Commission on March
      15, 2007, as the same may be updated or amended in our quarterly reports on
      Form
      10-Q.




**Item
      No. 2 - Management’s Discussion and Analysis of
      Financial**  **Condition
      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 products.
      We
      sell our products through an international network marketing system using
      independent distributors. Sales in the United States represented approximately
      90.1% of worldwide net sales for the six months ended June 30, 2007 and 90.8%
      of
      worldwide net sales for the six months ended June 30, 2006. Our international
      operations currently generate sales through distributor networks in Australia,
      Canada, Germany, Ireland, Malaysia, Mexico, New Zealand, the Philippines,
      Singapore and the United Kingdom. We also operate on a limited basis in
      Austria and the Netherlands from our German office.





We
      derive
      our revenues principally through product sales made by our global independent
      distributor base, which, as of June 30, 2007, consisted of approximately 69,470
      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.





All
      of
      our 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 an 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**





Net
      sales
      are comprised of two components. Product sales represent the actual product
      purchase price typically paid by our distributors, after giving effect to
      distributor allowances, which range from 20% to 40% of suggested retail prices.
      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.




7





Our
      primary expenses include cost of products sold, distributor royalties and
      commissions and selling, general and administrative expenses.





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 and the cost of shipping the 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 by Master Affiliates and above sponsored by such
      Master Affiliates or higher-level distributors. “Master Affiliates and above”
are active distributors that have attained the highest level of discount on
      purchases of our products and are eligible for royalties from sales volume
      generated by Master Affiliates and above that they sponsor. 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. We generally expect total distributor
      royalties and commissions to approximate 40% of our net sales. 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, all other selling expenses, marketing, promotional expenses,
      travel and other corporate administrative expenses. These other corporate
      administrative expenses include professional fees, 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; the cost of regulatory compliance, such
      as the costs incurred to comply with the various provisions of the
      Sarbanes-Oxley Act of 2002; and other administrative costs.





**Results
      of Operations**





The
      following table sets forth selected results of our operations expressed as
      a
      percentage of net sales for the three- and six-month periods ended June 30,
      2007
      and 2006. Our results of operations for the periods described below are not
      necessarily indicative of results of operations for future
      periods.




**Three
                months ended**
              **June
                30,**
            
            **Six
                months ended**
              **June
                30,****2007**
            
            **2006**
            
            **2007**
            
            **2006**Net
                sales
            
            
            100.0
            %
            
            100.0
            %
            
            100.0
            %
            
            100.0
            %Costs
                and expenses:Cost
                of products sold
            
            
            16.7
            
            
            17.0
            
            
            17.1
            
            
            16.6Distributor
                royalties and commissions
            
            
            40.3
            
            
            40.1
            
            
            40.0
            
            
            40.3Selling,
                general and administrative
            
            
            38.8
            
            
            34.0
            
            
            34.6
            
            
            32.1Income
                from operations
            
            
            4.2
            
            
            8.9
            
            
            8.3
            
            
            11.0Interest
                expense
            
            
            (0.0
            )
            
            (0.0
            )
            
            (0.0
            )
            
            (0.1
            )Interest
                and other income
            
            
            1.0
            
            
            0.8
            
            
            0.9
            
            
            0.7Income
                before income taxes
            
            
            5.2
            
            
            9.7
            
            
            9.2
            
            
            11.6Provision
                for income taxes
            
            
            2.1
            
            
            3.9
            
            
            3.6
            
            
            4.7Net
                income
            
            
            3.1
            %
            
            5.8
            %
            
            5.6
            %
            
            6.9
            %





8




*Net
      Sales.* Overall
      net sales decreased by 5.5% in the three months ended June 30, 2007 compared
      to
      the same period in 2006. During the second quarter of 2007, sales in the United
      States decreased by 7.0%, whereas our international sales increased by 8.4%
      over
      the prior year period.





The
      following table summarizes net sales by geographic market ranked by the date
      we
      began operations in each market for the three months ended June 30, 2007 and
      2006.




**Three
                months ended June 30,****2007**
            
            **2006**
            
            **Change
                from prior year****Amount**
            
            **%
                of**
              **Net
                Sales**
            
            **Amount**
            
            **%
                of Net**
              **Sales**
            
            **Amount**
            
            **%****(dollars
                in thousands)**United
                States
            
            $
            23,303
            
            
            88.5
            %
            $
            25,061
            
            
            90.0
            %
            $
            (1,758
            )
            
            (7.0
            )%Australia/New
                Zealand
            
            
            722
            
            
            2.7
            
            
            576
            
            
            2.1
            
            
            146
            
            
            25.3Canada
            
            
            378
            
            
            1.4
            
            
            412
            
            
            1.5
            
            
            (34
            )
            
            (8.3
            )Mexico
            
            
            393
            
            
            1.5
            
            
            314
            
            
            1.1
            
            
            79
            
            
            25.2United
                Kingdom/Ireland
            
            
            252
            
            
            1.0
            
            
            319
            
            
            1.1
            
            
            (67
            )
            
            (21.0
            )Philippines
            
            
            671
            
            
            2.6
            
            
            514
            
            
            1.9
            
            
            157
            
            
            30.5Malaysia/Singapore
            
            
            424
            
            
            1.6
            
            
            457
            
            
            1.6
            
            
            (33
            )
            
            (7.2
            )Germany
            
            
            182
            
            
            0.7
            
            
            196
            
            
            0.7
            
            
            (14
            )
            
            (7.1
            )Consolidated
                total
            
            $
            26,325
            
            
            100.0
            %
            $
            27,849
            
            
            100.0
            %
            $
            (1,524
            )
            
            (5.5
            )%




The
      following table summarizes net sales by geographic market ranked by the date
      we
      began operations in each market for the six months ended June 30, 2007 and
      2006.




**Six
                months ended June 30,****2007**
            
            **2006**
            
            **Change
                from prior year****Amount**
            
            **%
                of**
              **Net
                Sales**
            
            **Amount**
            
            **%
                of Net**
              **Sales**
            
            **Amount**
            
            **%****(dollars
                in thousands)**United
                States
            
            $
            55,206
            
            
            90.1
            %
            $
            53,592
            
            
            90.8
            %
            $
            1,614
            
            
            3.0
            %Australia/New
                Zealand
            
            
            1,375
            
            
            2.3
            
            
            1,155
            
            
            2.0
            
            
            220
            
            
            19.0Canada
            
            
            818
            
            
            1.3
            
            
            820
            
            
            1.4
            
            
            (2
            )
            
            (0.2
            )Mexico
            
            
            804
            
            
            1.3
            
            
            643
            
            
            1.1
            
            
            161
            
            
            25.0United
                Kingdom/Ireland
            
            
            539
            
            
            0.9
            
            
            592
            
            
            1.0
            
            
            (53
            )
            
            (9.0
            )Philippines
            
            
            1,299
            
            
            2.1
            
            
            1,007
            
            
            1.7
            
            
            292
            
            
            29.0Malaysia/Singapore
            
            
            754
            
            
            1.2
            
            
            915
            
            
            1.5
            
            
            (161
            )
            
            (17.6
            )Germany
            
            
            493
            
            
            0.8
            
            
            320
            
            
            0.5
            
            
            173
            
            
            54.1Consolidated
                total
            
            $
            61,288
            
            
            100.0
            %
            $
            59,044
            
            
            100.0
            %
            $
            2,244
            
            
            3.8
            %




The
      following table sets forth, as of June 30, 2007 and 2006, 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 Affiliates and above in their downline
      organization. Growth in the number of active distributors and Master Affiliates
      and above is a key factor in continuing the growth of our business.




9




**June
                  30, 2007**
              
              **June
                  30, 2006**
              
              **%
                  Change****Active
                  Distributors**
              
              **Master
                  Affiliates and Above**
              
              **Active
                  Distributors**
              
              **Master
                  Affiliates and Above**
              
              **Active
                  Distributors**
              
              **Master
                  Affiliates and Above**United
                  States
              
              
              56,930
              
              
              13,200
              
              
              52,270
              
              
              14,160
              
              
              8.9
              %
              
              (6.8
              )%Australia/New
                  Zealand
              
              
              2,510
              
              
              280
              
              
              2,380
              
              
              210
              
              
              5.5
              
              
              33.3Canada
              
              
              1,130
              
              
              150
              
              
              1,150
              
              
              160
              
              
              (1.7
              )
              
              (6.3
              )Mexico
              
              
              1,300
              
              
              190
              
              
              1,180
              
              
              200
              
              
              10.2
              
              
              (5.0
              )United
                  Kingdom/Ireland
              
              
              830
              
              
              130
              
              
              870
              
              
              140
              
              
              (4.6
              )
              
              (7.1
              )Philippines
              
              
              3,990
              
              
              300
              
              
              3,320
              
              
              300
              
              
              20.2
              
              
              0.0Malaysia/Singapore
              
              
              2,260
              
              
              290
              
              
              3,020
              
              
              400
              
              
              (25.2
              )
              
              (27.5
              )Germany
              
              
              520
              
              
              150
              
              
              260
              
              
              90
              
              
              100.0
              
              
              66.7Consolidated
                  total
              
              
              69,470
              
              
              14,690
              
              
              64,450
              
              
              15,660
              
              
              7.8
              %
              
              (6.2
              )%




In
      the
      United States, net sales were down 7.0% in the second quarter of 2007 compared
      to the same period in 2006. The sales decline was the result of fewer
      distributors qualifying for the level of Master Affiliate during the second
      quarter of 2007, compared to the same period in 2006. In the second quarter
      of
      2007, approximately 1,230 qualified as new Master Affiliates, compared to
      approximately 1,900 in the prior year quarter, a decline of 35%. As a result,
      the average order size declined during the second quarter of 2007 compared
      to
      the prior year period and historical norms. In the second quarter of 2007,
      we
      processed approximately 84,260 orders for products at an average order of $360
      at suggested retail. In the same period of 2006, we processed approximately
      81,190 product orders at an average order of $409 at suggested retail. The
      average order size for all of 2006 was $421 at suggested retail. Over the past
      year, we have emphasized the importance of bringing in new distributors at
      all
      levels, not just directly into the Master Affiliate level. We intend to continue
      our distributor growth strategy of bringing in new distributors at all levels.
      However, we will continue to focus on efforts to teach our newest distributors
      to build their business to the Master Affiliate level through training and
      other
      programs.





In
      the
      second quarter of 2007, new distributor enrollments in the United States were
      approximately 5,348 compared to 5,043 in the prior year quarter, an increase
      of
      6.0%. Distributor retention was 67.2% for the first six months of 2007 compared
      to a rate of 62.4% for all of 2006. The net number of active Distributors in
      the
      United States as of June 30, 2007 increased by 8.9% to 56,930, compared to
      the
      number of active Distributors as of June 30, 2006. However, the net number
      of
      Master Affiliates and above as of June 30, 2007 decreased by 6.8%, as compared
      to the net number of Master Affiliates and above as of June 30, 2006. This
      is
      consistent with reduced number of distributors qualifying for the level of
      Master Affiliate, as discussed above.





In
      February 2007, we launched our new weight control product line, SlimplicityTM.
      Slimplicity replaces the Ultrim-Plus meal replacement product line. In the
      second quarter of 2007, sales of the Slimplicity product line represented
      approximately 10% of net sales in the United States. In comparison, sales of
      the
      previous weight control product line historically represented approximately
      3 to
      4% of net sales in the United States annually.





During
      the three months ended June 30, 2007, net sales in our international operations
      improved in aggregate by 8.4% to $3.02 million compared to
      $2.79 million for the three months ended June 30 2006. For the six-month
      period ended June 30, 2007, international net sales increased by 11.5% to $6.08
      million compared to $5.45 million in the same period in 2006. Foreign currency
      fluctuation had an impact on the foreign sales results, as the U.S. dollar
      weakened against all of the other currencies of the countries we conduct
      business in, except Mexico, when compared to the rates over the first six months
      of 2006. When net sales are converted using the 2006 exchange rate for both
      2006
      and 2007, international net sales improved 4.9% for the first six months of
      2007
      compared to the first six months of the prior year. Sales results were strong
      in
      our Australia/New Zealand, Mexico and Philippine markets, with sales increases
      in the second quarter of 2007 of 25.3%, 25.2% and 30.5%, respectively, compared
      to the same period in 2006.




10





Net
      sales
      in Australia/New Zealand increased by 25.3% in the second quarter of 2007
      compared to the same period in 2006 as we continue our investment in sales
      development in that region by supporting leading U.S. distributors as part
      of a
      sustained plan to develop more activity in this market. In addition, we
      introduced our Reliv NOW for Kids products for sale in this region in late
      June
      2007.





Net
      sales
      in Mexico increased by 25.2% in the second quarter of 2007 compared to the
      second quarter of 2006. In August 2006, we appointed a new national sales
      manager for our Reliv Mexico operations. Our sales director for the US/Hispanic
      market also oversees sales in our Mexico market.





Net
      sales
      in the Philippines increased by 30.5% in the second quarter of 2007 compared
      to
      the prior year quarter. We used targeted advertising and local promotions to
      help increase sales in this market.





*Cost
      of Products Sold.* Cost
      of
      products sold as a percentage of net sales was 16.7% and 17.1% for the three-
      and six-month periods ended June 30, 2007, respectively, compared to 17.0%
      and
      16.6% for the same periods in 2006. Gross margins improved slightly in the
      second quarter of 2007 compared to the same period of 2006 due to improved
      operating efficiencies. However, these improvements were partially offset by
      raw
      material price increases and higher outbound freight costs. On a six-month
      basis, these factors coupled with a slightly lower margin due to the change
      in
      the sales mix with the 2007 introduction of the Slimplicity product line
      contributed to the reduction in the gross margin.





*Distributor
      Royalties and Commissions.* Distributor
      royalties and commissions as a percentage of net sales were 40.3% and 40.0%
      for
      the three- and six-month periods ended June 30, 2007, respectively, compared
      to
      40.1% and 40.3% for the same periods in 2006. Due to the structure of our
      distributor compensation plan, we do not expect to experience significant
      fluctuations in distributor royalties and commissions as a percentage of net
      sales.





*Selling,
      General and Administrative Expenses.* For
      the
      three and six months ended June 30, 2007, selling, general and administrative,
      or SGA, expenses increased by $715,000 and $2.3 million, respectively, compared
      to the same periods in 2006. SGA expenses as a percentage of net sales were
      38.8% and 34.6% for the three- and six-month periods ended June 30, 2007,
      respectively, compared to 34.0% and 32.1% for the same periods of 2006.





Sales
      and
      marketing expenses represented approximately $1.6 million of the increase in
      the
      first six months of 2007. The primary components of the increase were increased
      promotional bonuses, such as the “Mega Bonus”, and promotional trip expenses
      related to sales volume. At our international distributor conference in St.
      Louis in late July 2006, we announced a special bonus program, called “Mega
      Bonus.” Under the new “Mega Bonus” program, we will award more than $700,000 in
      bonuses at our international conference in August 2007. The bonuses will be
      awarded to the top 50 distributors in group sales volume between August 1,
      2006
      and July 31, 2007, with the first-place winner receiving $100,000. The
      promotional trip expenses relate to an incentive trip to Germany earned by
      our
      top 50 distributorships when we reached $15 million in worldwide retail sales
      in
      two consecutive months during the first quarter of 2007. Another significant
      item in sales and marketing expenses is costs incurred for our regional
      leadership conferences which increased by $218,000 in the first six months
      of
      2007, compared to the same period in 2006.





Distribution
      and warehouse expenses increased by $270,000 due to higher wages, contract
      labor
      expenses, and shipping supply expenses. General and administrative expenses
      increased by approximately $418,000, primarily in salaries and benefits,
      professional/consulting fees, and corporate travel expenses. These increases
      were partially offset by lower business insurance expenses.




*Interest
      Income/Expense.* Interest
      income increased to $376,000 for the six months ended June 30, 2007, compared
      to
      $282,000 for the same period in 2006. Interest expense decreased to $1,000
      for
      the six months ended June 30, 2007 compared to $45,000 for the same period
      in
      2006. The decrease is the result of having no long-term debt outstanding during
      the six-month period ended June 30, 2007, compared to the same period in 2006.
      In April 2006, we completed a public offering of our common stock, which yielded
      $11.9 million in net proceeds to us. A portion of the proceeds was used to
      pay
      off the remaining balance of $2.2 million on a note we entered into in March
      2005 to purchase the shares of our common stock owned by a former officer and
      director and his wife. The increase in interest income is the result of the
      earnings on the remaining proceeds from the public offering and higher interest
      rates compared to the prior year.




11





*Income
      Taxes.* We
      recorded income tax expense of $2.2 million for the first six months of
      2007, an effective rate of 38.9%. In the same period in 2006, we recorded income
      tax expense of $2.8 million, which represented an effective rate of 40.5%.
      The decreased effective rate is the result of the benefit of tax-exempt interest
      income, coupled with an increase in the Domestic Manufacturing Deduction in
      2007.





*Net
      Income.* Our
      net
      income for the three and six months ended June 30, 2007 was $823,000
      ($0.05 per share basic and diluted) and $3.4 million ($0.21 per share basic
      and diluted), respectively, compared to $1.6 million ($0.10 per share
      basic and $0.09 per share diluted) and $4.1 million ($0.25 per share basic
      and
      diluted) for the same periods in 2006. Profitability decreased in the second
      quarter of 2007 as net sales decreased in the United States, coupled with the
      higher SGA expenses as discussed above.





**Financial
      Condition, Liquidity and Capital Resources**





During
      the first six months of 2007, we generated $2.9 million of net cash from
      operating activities, $313,000 was provided by investing activities, and we
      used
      $7.2 million in financing activities. This compares to $5.0 million of
      net cash provided by operating activities, $6.3 million used in investing
      activities, and $8.0 million generated by financing activities in the same
      period of 2006. Cash and cash equivalents decreased by $3.9 million to
      $5.5 million as of June 30, 2007 compared to December 31, 2006.





Significant
      changes in working capital items consisted of an increase in inventories of
      $904,000, an increase in prepaid expenses/other current assets of $201,000,
      an
      increase in other assets of $382,000, an increase in accounts payable and
      accrued expenses of $1.5 million, and an increase in refundable income taxes
      of
      $947,000 in the first six months of 2007. The increase in inventory is a result
      of the inventory levels being maintained of the new Slimplicity product line
      and
      lower than expected sales levels. The increase in prepaid expenses/other current
      assets represent the annual premium payments on most of the corporate insurance
      policies, which renew in March. The increase in other assets is primarily due
      to
      premiums paid in the first quarter of 2007 on corporate life insurance policies.
      The increase in accounts payable and accrued expenses is due to accruals for
      distributor incentive programs, and other accrued expenses related to our
      upcoming international distributor conference in August 2007. The increase
      in
      refundable income taxes is the result of our decrease in taxable income, coupled
      with the timing of estimated tax payments.





Investing
      activities during the first six months of 2007 consist of $621,000 for capital
      expenditures, along with net proceeds of $929,000 in short-term
      investments.





Financing
      activities in the first six months of 2007 included $6.4 million in treasury
      stock purchases, common stock dividends paid of $807,000, and $50,000 in
      proceeds from stock options and warrants exercised.





Stockholders’
      equity decreased to $24.1 million at June 30, 2007 compared with
      $27.7 million at December 31, 2006. The decrease is due to the
      treasury stock purchases of $6.4 million and common stock dividends paid, offset
      by our net income during the first six months of 2007 of $3.4 million. Our
      working capital balance was $12.3 million at June 30, 2007 compared to
      $16.2 million at December 31, 2006. The current ratio at June 30, 2007
      was 2.2 compared to 2.9 at December 31, 2006.





We
      also
      have a $5 million secured revolving credit facility with our primary lender
      that we entered into in June 2006. This facility replaces the previous agreement
      which had a $15 million limit, expires in April 2008, and any advances accrue
      interest at a variable interest rate based on LIBOR. The credit facility is
      secured by all of our assets. The facility includes covenants to maintain total
      stockholders’ equity of not less than $10.5 million, and that the ratio of
      borrowings under the facility to EBITDA shall not exceed 3.5 to 1.0. At
      June 30, 2007, we had not utilized any of the revolving line of credit facility
      and were in compliance with the minimum stockholders’ equity covenant.





Management
      believes that our internally generated funds and the borrowing capacity under
      the revolving line of credit facility will be sufficient to meet working capital
      requirements for the remainder of 2007.




12





**Critical
      Accounting Policies**





A
      summary
      of our critical accounting policies and estimates is presented on pages 38
      and
      39 of our 2006 Annual Report on Form 10-K filed with the Securities and Exchange
      Commission on March 15, 2007.





**Item
      No. 3 - Quantitative and Qualitative Disclosures Regarding Market
      Risk**





We
      are
      exposed to various market risks, primarily foreign currency risks and interest
      rate risks.




**Foreign
      Currency Risk**





Our
      earnings and cash flows are subject to fluctuations due to changes in foreign
      currency rates as we have several foreign subsidiaries and continue to explore
      expansion into other foreign countries. As a result, exchange rate fluctuations
      may have an 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 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 us for sale to our foreign subsidiaries are transacted in U.S.
      dollars.





From
      time
      to time, we enter into foreign exchange forward contracts with a financial
      institution to sell Canadian dollars in order to protect against currency
      exchange risk associated with expected future cash flows. We have accounted
      for
      these contracts as free standing derivatives, such that gains or losses on
      the
      fair market value of these forward exchange contracts are recorded as other
      income and expense in the consolidated statements of operations. The net change
      in the fair value of these forward contracts as of June 30, 2007 was a
      cumulative expense of $26,000. As of June 30, 2007, we had no hedging
      instruments in place to offset exposure to the Australian or New Zealand
      dollars, Mexican or Philippine pesos, the Malaysian ringgit, the Singapore
      dollar, the EU Euro, or the British pound.





There
      have been no other material changes in market risk exposures during the first
      six months of 2007 that affect the disclosures presented in Item 7A -
“Quantitative and Qualitative Disclosures Regarding Market Risk” on pages 40 and
      41 of our 2006 Annual Report on Form 10-K filed with the Securities and Exchange
      Commission on March 15, 2007.





**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 June 30, 2007. 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 June 30, 2007, 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 second quarter of 2007 that have materially
      affected or are reasonably likely to materially affect our internal controls
      over financial reporting.





13




**PART
      II - OTHER INFORMATION**





**Item
      No. 1A - Risk Factors**





The
      below
      risk factor associated with our business activities has changed materially
      from
      the disclosure in our 2006 Annual Report on Form 10-K filed with the Securities
      and Exchange Commission on March 15, 2007.





***We
      are affected by extensive laws, governmental regulations, administrative
      determinations, court decisions and similar constraints, both domestically
      and
      abroad, and our or our distributors’ failure to comply with these restraints
      could lead to the imposition of significant penalties or claims, which could
      harm our financial condition and operating results.***





In
      both
      domestic and foreign markets, the formulation, manufacturing, packaging,
      labeling, distribution, importation, exportation, licensing, sale and storage
      of
      our products are affected by extensive laws, governmental regulations,
      administrative determinations, court decisions and similar constraints. There
      can be no assurance that we or our distributors are in compliance with all
      of
      these regulations. Our or our distributors’ failure to comply with these
      regulations or new regulations could lead to the imposition of significant
      penalties or claims and could negatively impact our business. In addition,
      the
      adoption of new regulations or changes in the interpretations of existing
      regulations may result in significant compliance costs or discontinuation of
      product sales and may negatively impact the marketing of our products, resulting
      in significant loss of sales.





On
      April 12, 2006, the Federal Trade Commission issued its Notice of Proposed
      Rulemaking in respect of The Business Opportunity Rule, R511993. The proposed
      rule, if enacted in its current form, would likely cause us, as well as most
      other direct sellers, to be regulated as a seller of business opportunities
      in
      the United States. Under the current Business Opportunity Rule, we do not
      qualify as a seller of a business opportunity because we offer U.S. distributors
      the opportunity to join our business for $40, well below the $500 threshold
      required for a company to be subject to the current rule. The proposed rule
      would eliminate that threshold. In addition, the proposed rule would require
      all
      sellers of business opportunities to deliver
      written disclosure of certain information to a prospective purchaser seven
      days
      prior to the time the prospective purchaser could sign any agreement or make
      any
      payment in
      connection with the business opportunity. The information that a seller of
      a
      business opportunity would have to provide all prospective purchasers would
      include: (1) the seller’s and distributor’s identification information, (2)
      whether an earnings claim is made and, if so, provide a detailed earnings claim
      statement with substantiating information and certain representations relating
      to the earnings of other business opportunity purchasers, (3) legal actions
      involving deceptive practices or other matters filed against the seller, its
      affiliates and other related parties and/or the presenting distributor in the
      last 10 years, (4) whether a cancellation or refund policy is available and,
      if
      so, a statement describing the policy, (5) the number of business opportunity
      purchasers that have canceled within the past two years, and (6) a reference
      list of the 10 nearest current or past business opportunity purchasers to the
      prospect, with personal information available to allow the prospect to contact
      a
      listed purchaser. We, along with the Direct Selling Association, other direct
      selling companies, and other interested parties have filed comments with the
      FTC
      opposing adoption of the proposed rule in its current form and suggesting
      alternative means to regulate fraudulent business activities without imposing
      undue burdens on legitimate companies in the direct selling industry. According
      to information we have received from the Direct Selling Association, we expect
      that the adoption of a final rule will not likely occur until after public
      hearings and discussions are held between members of the direct selling industry
      and the staff of the Federal Trade Commission, which may delay adoption of
      the
      final rule a number of years and result in a final rule that is substantially
      different from the proposed rule. Notwithstanding the foregoing, if the business
      opportunity rule is adopted as proposed, it could negatively impact our business
      and result in a decrease in our ability to attract new distributors in the
      United States.





On
      June
      22, 2007, the FDA announced a final rule establishing current good manufacturing
      practices, or cGMPs, affecting the manufacture, packing and holding of dietary
      supplements. The new rule creates standards to ensure that dietary supplements
      and dietary ingredients are not adulterated with contaminants or impurities
      and
      are labeled to accurately reflect the active ingredients and other ingredients
      in the products. It also includes requirements for designing and constructing
      physical plants, establishing quality control procedures, and testing
      manufactured dietary ingredients and dietary supplements, as well as
      requirements for maintaining records. Under the new rule, we are considered
      a
      small business and, accordingly, have until June 2009 to comply with the final
      rule. Currently, we are evaluating the impact of the final rule on our
      manufacturing facilities and procedures. If we are required to significantly
      alter our manufacturing facilities and/or procedures or make a material
      investment in order to comply with the final rule, it could have a material
      adverse impact on our financial condition and operating results.





14




**Item
      No. 2 - Unregistered Sales of Equity Securities and Use of
      Proceeds**




**ISSUER
      PURCHASES OF EQUITY SHARES**




Period
            
            Total
                Number of SharesPurchased
            
            Average
                PricePaid
                per Share
            
            Total
                Number of Shares Purchased as Part of Publicly AnnouncedPrograms
            
            Approximate
                Dollar Value of Shares that May Yet Be Purchased Under the Plans
                orPrograms(1)April
                1-30, 2007
            
            
            61,105
            
            $
            10.97
            
            
            61,105
            
            $
            18,096,000May
                1-31, 2007
            
            
            145,703
            
            $
            10.43
            
            
            145,703
            
            $
            16,577,000June
                1-30, 2007
            
            
            85,775
            
            $
            10.40
            
            
            85,775
            
            $
            15,685,000Total
            
            
            292,583
            
            
            
            
            
            292,583


(1)
              In
                  March 2005, the Company’s Board of Directors approved a share repurchase
                  plan of up to $15 million over the following 36 months. As of June
                  30,
                  2007, only $685,000 was available under that plan. In May 2007,
                  the
                  Company’s Board of Directors approved another share repurchase plan of
                  up
                  to $15 million through April
                  2010.





**Item
      No. 4 - Submission of Matters to a Vote of Security
      Holders**





At
      the
      Annual Meeting of Shareholders on May 24, 2007, the following actions were
      submitted and approved by a vote of the shareholders:





1.
            Election
                of nine directors; and





2.
            Ratification
                of the Board’s selection of Ernst & Young LLP as our independent
                certified public accountants.




15




A
      total
      of 14,490,724 shares (approximately 87% of our issued and outstanding shares)
      were represented by proxy or in person at the meeting. These shares were voted
      on the matters presented at the meeting as follows:





1.  For
      the
      election of directors:


**Name**
              
              **Total
                  Votes For**
              
              **Total
                  Votes Against or Withheld**Robert
                  L. Montgomery
              
              
              13,653,070
              
              
              837,652Carl
                  W. Hastings
              
              
              13,655,621
              
              
              835,101Donald
                  L. McCain
              
              
              13,196,388
              
              
              1,294,334Stephen
                  M. Merrick
              
              
              13,627,880
              
              
              862,843John
                  B. Akin
              
              
              13,973,968
              
              
              516,754Denis
                  St. John
              
              
              14,384,071
              
              
              106,651Robert
                  M. Henry
              
              
              14,461,214
              
              
              29,508Michael
                  D. Smith
              
              
              13,638,929
              
              
              851,794Patrick
                  G. Doherty
              
              
              14,356,738
              
              
              133,985




2.
            Ratification
                of the Board of Directors selection of Ernst & Young LLP as our
                certified public accountants.


**Total
                  Votes For**
              
              **Total
                  Votes Against**
              
              **Total
                  Broker Non-Votes and Total Votes Abstain**14,460,281
              
              
              7,482
              
              
              22,957





**Item
      No. 6 - Exhibits**


ExhibitNumber
              
              Document10.1
              
              Reliv
                  International, Inc. Incentive Compensation Plan effective January
                  1, 2007
                  (incorporated by reference to Exhibit 10.1 to the Form 8-K of the
                  Registrant filed May 31, 2007).10.2
              
              Robert
                  L. Montgomery Employment Agreement dated June 19, 2007 (incorporated
                  by
                  reference to Exhibit 10.1 to the Form 8-K of the Registrant filed
                  June 25,
                  2007).31.1
              
              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).
 
 16


**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. Montgomery





Robert
      L.
      Montgomery,


Chairman
      of the Board of Directors,


President
      and Chief Executive Officer





Date:
      August 7, 2007








By: /s/
      Steven D. Albright





Steven
      D.
      Albright,


Chief
      Financial Officer (and accounting officer)





Date:
      August 7, 2007





17


**Exhibit
      Index**


ExhibitNumber
              
              Document10.1
              
              Reliv
                  International, Inc. Incentive Compensation Plan effective January
                  1, 2007
                  (incorporated by reference to Exhibit 10.1 to the Form 8-K of the
                  Registrant filed May 31, 2007).10.2
              
              Robert
                  L. Montgomery Employment Agreement dated June 19, 2007 (incorporated
                  by
                  reference to Exhibit 10.1 to the Form 8-K of the Registrant filed
                  June 25,
                  2007).31.1
              
              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).
  18