FORM 10-Q SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549 QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2005 Commission File No. 1-11768 RELIV INTERNATIONAL, INC.(Exact name of registrant as specified in its
charter) Delaware
  
  37-1172197(State or other jurisdiction of
  
  (I.R.S. Employer Identification
  Number)incorporation or organization) 136 Chesterfield Industrial Boulevard,
Chesterfield, Missouri 63005
(Address of principal executive offices) (Zip Code) (636) 537-9715
(Registrants telephone number, including area code) Registrant
has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months and has been
subject to such filing requirements for the past 90 days. Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange
Act).    Yes x   No o As of June
30, 2005, 15,521,581 shares of the Registrants common stock were outstanding.    Part I.
  FINANCIAL INFORMATIONItem 1.
  Financial StatementsThe
following consolidated financial statements of the Registrant are attached to
this Form 10-Q:

1.
  Interim
  Balance Sheet as of June 30, 2005 and Balance Sheet as of December 31, 2004.2.
  Interim
  Statements of Income for the three- and six-month periods ended June 30, 2005
  and June 30, 2004.3.
  Interim
  Statements of Cash Flows for the six-month periods ended June 30, 2005 and
  June 30, 2004.The Financial
Statements reflect all adjustments which are, in the opinion of management,
necessary for a fair statement of results for the periods presented.

Item 2.
  Managements Discussion and Analysis of Financial Condition and
  Results of OperationsOverview

The
Company produces a line of food products including nutritional supplements,
diet management products and sports drink mixes.  The Company also sells a line of skin care products.  These products are
sold by subsidiaries of
the Company to a sales force of independent distributors of the Company that
sell products directly to consumers. The Company and its subsidiaries sell
products to distributors throughout the United States and in Australia/New
Zealand, Canada, Mexico, the United Kingdom/Ireland, the Philippines, Malaysia,
and Singapore.  As of June 30, 2005, the
Company had approximately 70,230 distributors worldwide.

The
Company receives payment by credit card, personal check or guaranteed funds for
orders from independent distributors and makes related commission payments in
the following month. The net sales price is the suggested retail price less the
distributor discount of 20% to 40% of such suggested retail price. Sales
revenue and commission expenses are recorded when the merchandise is
shipped.  In the six months ended June
30, 2005, sales in the United States made up approximately 90% of worldwide net
sales, with the remainder from our international operations.  This compares to 86% for all of 2004.  The sales breakdown by
country is given in
greater detail in the Net Sales by Region table below.

Cost
of products sold primarily consists of expenses related to raw materials,
labor, quality control and overhead directly associated with the production and

2


distribution
of products and sales materials, as well as shipping costs, duties and taxes
associated with product exports.

Distributor
royalties and commissions are paid to Master Affiliates monthly, based on the
sales of their distributor organization in the prior month.  These expenses are governed by the
distributor agreements.  Also, included
in this payment are other sales leadership bonuses that are directly related to
the level of sales.

Selling,
general and administrative expenses include compensation and benefits, all
other selling expenses, marketing, promotional expenses, travel and other
corporate administrative expenses.

Results
of Operations

The
Company had net income available to common shareholders of $1,979,000 ($0.12
per share basic and $0.12 per share diluted) for the quarter ended June 30,
2005, compared to net income available to common shareholders of $1,201,000 ($0.08
per share basic and $0.07 per share diluted) for the same period in 2004.
Profitability continued to improve as net sales improved worldwide by 19%, led
by a 28% increase in net sales in the United States, the Companys primary
market.

For the six
months ended June 30, 2005, net income available to common shareholders was
$4,042,000 ($0.25 per share basic and $0.24 per share diluted) compared to
$2,830,000 ($0.19 per share basic and $0.17 per share diluted) for the six
months ended June 30, 2004.

The
following table summarizes the net sales by geographic region for the three-month periods ended June 30, 2005 and 2004.

Net Sales by Region
  
  Three
  months ended June 30(in
  thousands)
  
  2005
  
  2004
  
  Change from$
  
  
  % of sales
  
  
  $
  
  
  % of sales
  
  prior year
  
  Change in %United States
  
  $
  26,088
  
  
  91.4
  %
  $
  20,446
  
  
  85.6
  %
  $
  5,642
  
  
  27.6
  %Australia/New Zealand
  
  
  505
  
  
  1.8
  %
  
  565
  
  
  2.4
  %
  
  (60
  )
  
  -10.6
  %Canada
  
  
  456
  
  
  1.6
  %
  
  378
  
  
  1.6
  %
  
  78
  
  
  20.6
  %Mexico
  
  
  293
  
  
  1.0
  %
  
  664
  
  
  2.8
  %
  
  (371
  )
  
  -55.9
  %United Kingdom/Ireland
  
  
  235
  
  
  0.8
  %
  
  145
  
  
  0.6
  %
  
  90
  
  
  62.1
  %Philippines
  
  
  479
  
  
  1.7
  %
  
  674
  
  
  2.8
  %
  
  (195
  )
  
  -28.9
  %Malaysia/Singapore
  
  
  490
  
  
  1.7
  %
  
  1,019
  
  
  4.3
  %
  
  (529
  )
  
  -51.9
  %Consolidated total
  
  $
  28,546
  
  
  100.0
  %
  $
  23,891
  
  
  100.0
  %
  $
  4,655
  
  
  19.5
  %The
following table summarizes the net sales by geographic region for the six-month periods ended June 30, 2005 and 2004.

3


Net Sales by Region
  
  Six
  months ended June 30(in
  thousands)
  
  2005
  
  
  2004
  
  Change from$
  
  
  % of sales
  
  $
  
  
  % of sales
  
  prior year
  
  Change in %United States
  
  $
  52,057
  
  
  90.5
  %
  $
  41,017
  
  
  86.6
  %
  $
  11,040
  
  
  26.9
  %Australia/New Zealand
  
  
  1,081
  
  
  1.9
  %
  
  1,158
  
  
  2.4
  %
  
  (77
  )
  
  -6.6
  %Canada
  
  
  907
  
  
  1.6
  %
  
  776
  
  
  1.6
  %
  
  131
  
  
  16.9
  %Mexico
  
  
  835
  
  
  1.5
  %
  
  1,335
  
  
  2.8
  %
  
  (500
  )
  
  -37.5
  %United Kingdom/Ireland
  
  
  402
  
  
  0.7
  %
  
  289
  
  
  0.6
  %
  
  113
  
  
  39.1
  %Philippines
  
  
  1,280
  
  
  2.2
  %
  
  1,370
  
  
  2.9
  %
  
  (90
  )
  
  -6.6
  %Malaysia/Singapore
  
  
  963
  
  
  1.7
  %
  
  1,424
  
  
  3.0
  %
  
  (461
  )
  
  -32.4
  %Consolidated total
  
  $
  57,525
  
  
  100.0
  %
  $
  47,369
  
  
  100.0
  %
  $
  10,156
  
  
  21.4
  %The
following table illustrates the Companys active distributors and Master
Affiliates as of June 30, 2005 and 2004. 
The total amount of distributors also includes the Master
Affiliates.  The Company defines an
active distributor as one that enrolls as a distributor or renews their
distributorship during the prior twelve months.  Growth in the number of active distributors and Master Affiliates
is a key factor in continuing the growth of the business.

Active Distributors and Master
Affiliates by Region

as of
  6/30/2005
  
  as of
  6/30/2004
  
  Change in
  %Master
  
  
  
  
  Master
  
  
  
  
  MasterDistributors
  
  Affiliates
  
  Distributors
  
  Affiliates
  
  Distributors
  
  AffiliatesUnited States
  
  
  50,240
  
  
  13,090
  
  
  45,040
  
  
  9,870
  
  
  11.5
  %
  
  32.6
  %Australia/New Zealand
  
  
  2,790
  
  
  240
  
  
  2,770
  
  
  230
  
  
  0.7
  %
  
  4.3
  %Canada
  
  
  1,370
  
  
  190
  
  
  1,350
  
  
  160
  
  
  1.5
  %
  
  18.8
  %Mexico
  
  
  5,880
  
  
  420
  
  
  7,740
  
  
  760
  
  
  -24.0
  %
  
  -44.7
  %United Kingdom/Ireland
  
  
  530
  
  
  60
  
  
  410
  
  
  50
  
  
  29.3
  %
  
  20.0
  %Philippines
  
  
  5,640
  
  
  500
  
  
  6,510
  
  
  580
  
  
  -13.4
  %
  
  -13.8
  %Malaysia/Singapore
  
  
  3,780
  
  
  680
  
  
  4,080
  
  
  520
  
  
  -7.4
  %
  
  30.8
  %Consolidated total
  
  
  70,230
  
  
  15,180
  
  
  67,900
  
  
  12,170
  
  
  3.4
  %
  
  24.7
  %In
the United States, new distributor enrollments, strong retention and strong
growth in the number of Master Affiliates continue to be factors in the
increased sales in this market. In the first six months of 2005, over 12,700
new distributors were enrolled, as compared to approximately 12,200 in the same
period of 2004.  Distributor retention
was approximately 62%, compared to a rate of 58% for all of 2004.  The number of distributors reaching Master
Affiliate, the highest level of discount a distributor can attain, has also
continued to improve in the United States. 
In the first six months of 2005, over 4,400 distributors achieved Master
Affiliate status, as compared to approximately 3,600 in the same period of
2004.  The Company attributes the
increase in sales and other sales statistics in part to the momentum created by
the consistency and reinforcement of its training programs and business
opportunity presentations, in the form of regional distributor conferences and
other corporate-sponsored meetings. 
This has resulted in

4


more
distributors reaching the Master Affiliate level, who are more experienced and
productive distributors.

Also
contributing to the sales increase in the second quarter of 2005 are sales from
the introduction of the Companys newest product, CardioSentials®.  Introduced in February 2005, net sales of
this product were $1,102,000 in the second quarter of 2005.

During
the second quarter of 2005, sales in the Companys international subsidiaries
declined overall.  In aggregate,
international sales decreased by 29% to $2,458,000 in the second quarter of
2005, compared to $3,446,000 in the second quarter of 2004.  For the first six months of 2005,
international sales declined by 14%, compared to the same period in 2004.

Sales
in Canada increased by 20% in the second quarter.  Sales in the United Kingdom increased by 62% in the second
quarter of 2005, as the efforts of the new general manager and national sales
manager in the UK are beginning to show positive results. Sales in
Australia/New Zealand decreased by 11% in the second quarter of 2005, compared
to the same period in 2004.  The sales
manager for that region was terminated during the second quarter of 2005 and a
search is ongoing to find a replacement. 
Sales in Malaysia/Singapore decreased by approximately 50% in the second
quarter of 2005.

Sales
in Mexico decreased over 50% in the second quarter of 2005, compared to the
same period in 2004.   Sales declined
subsequent to price a increase and change in distributor qualification
requirements, effective March 1, 2005, to put the Mexican business model in
line with the rest of the markets operated by the Company.  Similar changes were made in the Philippines
and sales in that market declined by 29% in the second quarter of 2005,
compared to the same period in 2004.

The
following table summarizes selected items from the consolidated statement of
operations, expressed as a percentage of net sales, for the periods indicated,
and should be read in conjunction with the discussion of the components of the
consolidated statements of operations that follow:

Selected data from the Consolidated
  
  
  Three Months Ended
  
  
  Six Months EndedStatements of Operations
  
  
  June 30
  
  
  June 302005
  
  
  2004
  
  
  2005
  
  
  2004Cost of products sold
  
  
  16.5
  %
  
  16.7
  %
  
  16.8
  %
  
  16.6
  %Distributor royalties and commissions
  
  
  39.9
  %
  
  40.0
  %
  
  40.1
  %
  
  39.9
  %Selling, general, and administrative
  
  
  32.2
  %
  
  34.8
  %
  
  31.6
  %
  
  33.4
  %Provision for income taxes
  
  
  4.5
  %
  
  3.4
  %
  
  4.5
  %
  
  4.0
  %Net income
  
  
  6.9
  %
  
  5.0
  %
  
  7.0
  %
  
  6.0
  %5


Cost
of products sold as a percentage of net sales was 16.5% in the second quarter
of 2005, as compared to 16.8% in the second quarter of 2004. Cost of products
sold as a percentage of net sales continues to gradually improve as the
operating efficiency of the new production equipment installed in the third and
fourth quarter of 2004 continues to improve and production volumes have
increased. The cost of products sold as a percentage of net sales for the
fourth quarter of 2004 was 18.3% and was 17.1% for the first quarter of 2005.
The increase in cost of products sold for those quarters was due to start-up
inefficiencies related to the installation of new production equipment.

Distributor
royalties and commissions as a percentage of net sales were 39.9% and 40.0% in
the second quarter of 2005 and 2004, respectively. These expenses are governed
by the distributor agreements and are directly related to the level of sales.
During the first quarter of 2005, changes were made to the distributor
compensation plan in the Philippines and Mexico, resulting in commission
payments being made on the full retail value of the products sold. With these
changes, commission payments are now being made on the full retail value of the
products sold worldwide.

Selling,
general and administrative (SGA) expenses increased $876,000 in the second
quarter of 2005, as compared to the second quarter of 2004. However, SGA
expenses as a percentage of net sales decreased to 32.2% in the second quarter
of 2005 compared to 34.8% in the second quarter of 2004. Sales expenses
represented approximately $232,000 of the increase, including increased credit
card fees due to the higher sales volume, and increased promotional bonuses
related to sales volume. General and administrative expenses increased by
approximately $718,000, primarily in salaries and bonuses, fringe benefit
expenses, professional service fees, and directors fees. Accounting fees and
related expenses decreased by $148,000 in the second quarter of 2005, compared
to the second quarter of 2004, in part because the Company has established an
internal audit department to supplement the effort related to managements
documentation and assessment of the Companys internal control environment. In
the prior year, the Company incurred additional third party expenses with the
adoption of the internal control documentation requirements of the
Sarbanes-Oxley Act.

For
the first six months of 2005, SGA expenses increased by $2,318,000 compared to
the first six months of 2004. However, SGA expenses as a percentage of net
sales declined from 33.4% in the first six months of 2004 to 31.6% in the same
period of 2005. The same items creating the significant changes during the
second quarter of 2005, as compared to the same period in 2004, were
responsible for the increase from the first six months of 2004 to the same
period of 2005.

During
the second quarter of 2005, the Company incurred SGA expenses of approximately
$143,000 in preparing for its most recent market entry, Germany. Reliv Germany
GmbH began sales on July 18, 2005.

The
Company recorded income tax expense of $1,295,000 for the second quarter of
2005, an effective rate of 39.6%. In the second quarter of 2004, the Company
recorded income tax expense of $802,000, an effective rate of 40.0%.

6


Financial Condition, Liquidity and Capital
Resources

The
Company generated $10,125,000 of net cash during the first six months of 2005
from operating activities, $1,203,000 was used in investing activities, and the
Company used $13,134,000 in financing activities. This compares to $3,627,000
of net cash provided by operating activities, $1,348,000 used in investing
activities, and $2,733,000 used in financing activities in the first six months
of 2004. Cash and cash equivalents decreased by $4,315,000 to $5,837,000 as of
June 30, 2005, compared to December 31, 2004.

Significant changes in working capital items consisted of an increase in
prepaid expenses and other current assets of $687,000, an increase in accounts
payable and accrued expenses of $3,055,000, and a decrease in refundable
income taxes payable of $1,262,000 in the first six months of 2005. The
increase in prepaid expenses and other current assets is due to prepayments for
future promotional trips and for policy payments for various types of business
insurance to be expensed over the lives of the policies. The increase in
accounts payable and accrued expenses is due to increased production volume and
other expenses related to the increase in sales volume, coupled with the
increase in distributor commissions payable at June 30, 2005, compared to
December 31, 2004. This increase in distributor commissions payable is the
result of higher worldwide sales in June 2005, compared to December 2004. The
decrease in the refundable income taxes is the result of a refund received from
the Internal Revenue Service on the overpayment of income tax deposits.

The
Companys net investing activities in the first six months of 2005 consisted
of $1,203,000 for capital expenditures. The most significant financing activity
in the first six months of 2005 was $8,952,000 in purchases of treasury stock.
The majority of this treasury stock was purchased from related parties and is
described in Note 7 of the Consolidated Financial Statements. In March 2005,
the Company announced that its Board of Directors had approved a stock
repurchase plan of its common stock of up to $15 million over the next three
years. Approximately $2,538,000 of stock was purchased from the open market
during the first six months of 2005. In June 2005, the Company also paid the
remaining balance of the long-term debt on its headquarters facility totaling
approximately $3.5 million.

Stockholders
equity decreased to $10,908,000 at June 30, 2005, compared with $18,191,000 at
December 31, 2004. The decrease is primarily due to a stock repurchase
agreement of $4.05 million of the Companys common stock from a former
officer/director of the Company in the first quarter of 2005, stock purchases
from three officer/directors of the Company totaling $5.08 million that took
place in May 2005, and other treasury stock purchases that took place during
the second quarter of 2005, offset by the net income of the Company during the
first six months of 2005. Under the stock repurchase agreement with the former
officer/director of the Company, the Company paid cash of $900,000 in March
2005 and entered into a promissory note for $3,150,000. The stock repurchase agreement
is described in Note 7 of the Consolidated Financial

7


Statements. Stockholders
equity also increased by $1,185,000 as the result of the tax benefit from the
exercise of nonqualified options and warrants during the first six months of
2005.

The
Companys working capital balance was $1,985,000 at June 30, 2005, compared to
$11,467,000 at December 31, 2004. The current ratio at June 30, 2005 was 1.15,
compared to 2.41 at previous year-end. In June 2005, the Company entered into a
new $15 million revolving line of credit facility with the Companys primary
lender. This new facility replaced the Companys previous operating line of
credit that had a maximum borrowing limit of $1 million. The new facility
expires in April 2007, and any advances accrue interest at a variable interest
rate based on LIBOR. The new facility includes covenants to maintain total
stockholders equity of not less than $10.5 million, and that the ratio of
borrowings under the facility shall not exceed EBITDA by a ratio of 3.5:1. At
June 30, 2005, the Company had not utilized any of the new revolving line of
credit facility and was in compliance with the minimum stockholders equity
covenant.

Management
believes that the Companys internally generated funds, and the borrowing
capacity under the new revolving line of credit facility will be sufficient to
meet working capital requirements for the remainder of 2005.

Critical
Accounting Policies

A
summary of our critical accounting policies and estimates is presented on page
35 of our 2004 Annual Report on Form 10-K filed with the Securities and
Exchange Commission on March 16, 2005.

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

The
statements contained in Item 2 (Managements Discussion and Analysis of
Financial Condition and Results of Operation) that are not historical facts may
be forward-looking statements (as such term is defined in the rules promulgated
pursuant to the Securities Exchange Act of 1934) that are subject to a variety
of risks and uncertainties. The forward-looking statements are based on the
beliefs of the Companys management, as well as assumptions made by, and
information currently available to the Companys management. Accordingly, these
statements are subject to significant risks, uncertainties and contingencies
which could cause the Companys actual growth, results, performance and
business prospects and opportunities in 2005 and beyond to differ materially
from those expressed in, or implied by, any such forward-looking statements.
Wherever possible, words such as anticipate, plan, expect, believe,
estimate, and similar expressions have been used to identify these
forward-looking statements, but are not the exclusive means of identifying such
statements. These risks, uncertainties and contingencies include, but are not
limited to, the Companys ability to continue to attract, maintain and motivate
its distributors, changes in the regulatory environment affecting network
marketing sales and sales of food and dietary supplements and other risks and
uncertainties detailed in the Companys other SEC filings.

8


Item 3.
  Quantitative and Qualitative Disclosures of
  Market RiskThe
Company is exposed to various market risks, primarily foreign currency risks
and interest rate risks.

Foreign
Currency Risk

The
Companys earnings and cash flows are subject to fluctuations due to changes in
foreign currency rates as it has several foreign subsidiaries and continues to
explore expansion into other foreign countries. As a result, exchange rate
fluctuations may have an effect on sales and gross margins. Accounting
practices require that the Companys results from operations be converted to
U.S. dollars for reporting purposes. Consequently, the reported earnings of the
Company in future periods may be significantly affected by fluctuations in
currency exchange rates, generally increasing with a weaker U.S. dollar and decreasing
with a strengthening U.S. dollar. Products manufactured by the Company for sale
to the Companys foreign subsidiaries are transacted in U.S. dollars.

The
Company enters 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. The Company has
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 changes in the fair value of these forward contracts as of
June 30, 2005 was a cumulative expense of $57,000. As of June 30, 2005, the Company
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, or the British pound.

There
have been no other material changes in market risk exposures during the first
six months of 2005 that affect the disclosures presented in Item 7A 
Qualitative and Quantitative Disclosures Regarding Market Risk on pages 37
and 38 of our 2004 Annual Report on Form 10-K filed with the Securities and
Exchange Commission on March 16, 2005.

Item 4.
  Controls and ProceduresOur
management, under the supervision and with the participation of our chief
executive officer and principal financial officer, has reviewed and evaluated
the effectiveness of the Companys disclosure controls and procedures as of
June 30, 2005. Based on such review and evaluation, our chief executive officer
and principal financial officer have concluded that the disclosure controls and
procedures were effective at the reasonable assurance level as of June 30,
2005, to ensure that the information required to be disclosed by the Company in
the reports that it files or submits under the Securities Exchange Act of 1934,
as amended, (a) is recorded, processed, summarized and reported

9


within the
time period specified in the SECs rules and forms and (b) is accumulated and
communicated to the Companys management, including the officers, as
appropriate to allow timely decisions regarding required disclosure. There were
no material changes in the Companys internal control over financial reporting
during the second quarter of 2005 that have materially affected or are
reasonably likely to materially affect the Companys internal controls over
financial reporting.

Part II.
  OTHER INFORMATIONItem 2.
  Unregistered Sales of Equity Securities and
  Use of ProceedsISSUER
PURCHASES OF EQUITY SHARES

Period
  
  Total Number
  of Shares
  Purchased
  
  Average Price
  Paid per Share
  
  Total Number of Shares
  Purchased as Part of
  Publicly Announced
  Programs
  
  Approximate Dollar
  Value of Shares that
  May Yet Be Purchased
  Under the Plans or
  Programs(1)April 1-30, 2005
  
  
  118,511
  
  
  $
  9.69
  
  
  
  118,511
  
  
  $
  13,774,000May 1-31, 2005
  
  
  593,253
  (2)
  
  $
  9.57
  
  
  
  58,245
  
  
  $
  13,177,000June 1-30, 2005
  
  
  67,451
  
  
  $
  10.66
  
  
  
  67,451
  
  
  $
  12,458,000Total
  
  
  779,215
  
  
  
  
  
  
  
  244,207(1) In
March 2005, the Companys Board of Directors approved a share repurchase plan
of up to $15 million over the next 36 months.

(2) In May 2005, the Company purchased 535,008
shares of its common stock from certain of the Companys officers/directors at
a purchase price of $9.50 per share. These purchases are described in Note 7 of
the Consolidated Financial Statements.

Item 4.
  Submission of Matters to a Vote of Security
  HoldersAt the Annual
Meeting of Shareholders on May 19, 2005, the following actions were submitted
and approved by a vote of the shareholders:

1.
  Election of
  seven directors; and2.
  Ratification
  of the Boards selection of Ernst & Young LLP as the Companys
  independent certified public accountants.A total of 16,716,722 shares
(approximately 91% of the issued and outstanding shares of the Company) were
represented by proxy or in person at the meeting. These shares were voted on
the matters presented at the meeting as follows:

10


1.
  For the
  election of directors:Name
  
  
  Total
  Votes For
  
  
  Total
  Votes AgainstRobert L.
  Montgomery
  15,213,917
  26,151Carl W.
  Hastings
  15,221,329
  18,739Donald L.
  McCain
  15,187,537
  52,531Stephen M. Merrick
  15,194,791
  45,277John B. Akin
  15,161,080
  76,592Denis St.
  John
  15,189,587
  48,085Robert M.
  Henry
  15,185,741
  51,9322.
  Ratification
  of the Board of Directors selection of Ernst & Young LLP as the Companys
  certified public accountants.Total
  Votes For
  
  
  Total
  Votes Against
  
  
  Total
  Broker Non-Votes
  and Total Votes Abstain15,180,544
  14,473
  45,051Item 6.
  ExhibitsExhibit No.
  
  
  Description3.1
  
  Certificate
  of Incorporation (incorporated by reference to Appendix B of Form 14A of the
  Registrant filed on April 22, 1999).3.2
  
  By-Laws
  (incorporated by reference to Appendix C of Form 14A of the Registrant filed
  on April 22, 1999).3.3
  
  Amendment to
  By-Laws dated March 22, 2001 (incorporated by reference to Exhibit 3.3 of
  Form 10-K of the Registrant for the year ended December 31, 2001).10.1
  
  Letter
  Agreement dated June 7, 2005, between the Registrant and Southwest Bank of
  St. Louis.10.2
  
  Promissory
  Note dated June 7, 2005, between the Registrant and Southwest Bank of St.
  Louis.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.11


Exhibit No.
  
  
  Description31.2
  
  Certification
  of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of
  the Securities Exchange Act, as amended.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 2002.12


SIGNATURES

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

Dated:  August 9, 2005
  RELIV
  INTERNATIONAL, INC.By:
  /s/ Robert
  L. MontgomeryRobert L.
  Montgomery, President,Chief
  Executive OfficerBy:
  /s/ Steven
  D. AlbrightSteven D.
  Albright, ChiefFinancial
  Officer13


Reliv International, Inc. and
Subsidiaries

Consolidated Balance Sheets

June 30
  2005
  
  December 31
  2004(unaudited)AssetsCurrent
  assets:Cash and cash equivalents
  
  $
  5,836,812
  
  $
  10,151,503Accounts and notes receivable, less
  allowances of $23,700 in 2005 and $11,500 in 2004
  
  
  568,017
  
  
  872,592Accounts due from employees and
  distributors
  
  
  81,850
  
  
  70,620InventoriesFinished goods
  
  
  4,399,137
  
  
  3,528,135Raw materials
  
  
  1,635,865
  
  
  1,877,210Sales aids and promotional materials
  
  
  526,066
  
  
  491,437Total inventories
  
  
  6,561,068
  
  
  5,896,782Refundable income taxes
  
  
  
  
  
  1,288,260Prepaid expenses and other current assets
  
  
  1,738,316
  
  
  1,052,428Deferred income taxes
  
  
  320,430
  
  
  286,430Total
  current assets
  
  
  15,106,493
  
  
  19,618,615Other assets
  
  
  1,380,648
  
  
  1,196,780Accounts due
  from employees and distributors
  
  
  485,772
  
  
  213,123Property,
  plant and equipment:Land
  
  
  829,222
  
  
  829,222Building
  
  
  9,579,887
  
  
  9,027,577Machinery & equipment
  
  
  4,943,662
  
  
  4,926,048Office equipment
  
  
  1,395,298
  
  
  1,092,285Computer equipment & software
  
  
  2,432,969
  
  
  2,719,06519,181,038
  
  
  18,594,197Less: Accumulated depreciation
  
  
  8,678,108
  
  
  8,626,048Net property, plant and equipment
  
  
  10,502,930
  
  
  9,968,149Total assets
  
  $
  27,475,843
  
  $
  30,996,667See notes to financial
statements.


Reliv
International, Inc. and Subsidiaries

Consolidated
Balance Sheets

June 30
  2005
  
  December 31
  2004(unaudited)Liabilities
  and stockholders equityCurrent
  liabilities:Accounts payable and accrued expenses:Trade accounts payable and other accrued
  expenses
  
  $
  5,386,029
  
  $
  3,155,071Distributors commissions payable
  
  
  4,085,660
  
  
  3,561,110Sales taxes payable
  
  
  474,721
  
  
  493,571Interest expense payable
  
  
  14,823
  
  
  18,000Payroll and payroll taxes payable
  
  
  926,638
  
  
  598,321Total accounts payable and accrued expenses
  
  
  10,887,871
  
  
  7,826,073Income taxes payable
  
  
  1,311,216
  
  
  Current maturities of long-term debt
  
  
  922,308
  
  
  325,895Total current liabilities
  
  
  13,121,395
  
  
  8,151,968Noncurrent
  liabilities:Long-term debt, less current maturities
  
  
  19,068
  
  
  3,357,691Promissory note (see Note 7)
  
  
  2,200,000
  
  
  Deferred income taxes
  
  
  232,000
  
  
  289,000Other non-current liabilities
  
  
  995,298
  
  
  1,007,255Total
  noncurrent liabilities
  
  
  3,446,366
  
  
  4,653,946Stockholders
  equity:Preferred stock, par value $.001 per share;
  3,000,000 shares authorized; -0- shares issued and outstanding as of 6/30/2005
  and as of 12/31/2004
  
  
  
  
  
  Common stock, par value $.001 per share;
  30,000,000 authorized; 15,641,759 shares issued and 15,521,581 shares
  outstanding as of 6/30/2005; 16,323,668 shares issued and 16,320,931 shares
  outstanding as of 12/31/2004
  
  
  15,642
  
  
  16,324Additional paid-in capital
  
  
  22,823,676
  
  
  22,661,179Accumulated deficit
  
  
  (9,985,348
  )
  
  (3,719,711
  )Accumulated other comprehensive loss:Foreign currency translation adjustment
  
  
  (707,542
  )
  
  (758,331
  )Treasury stock
  
  
  (1,238,346
  )
  
  (8,708
  )Total
  stockholders equity
  
  
  10,908,082
  
  
  18,190,753Total
  liabilities and stockholders equity
  
  $
  27,475,843
  
  $
  30,996,667See notes to financial statements.

Reliv International, Inc. and
Subsidiaries

Consolidated
Statements of Income
(unaudited)

Three
  months ended June 30
  
  Six months
  ended June 302005
  
  2004
  
  2005
  
  2004Sales at
  suggested retail
  
  $
  41,055,868
  
  $
  34,280,799
  
  $
  83,011,088
  
  $
  68,139,940Less: distributor allowances on product
  purchases
  
  
  12,509,782
  
  
  10,389,594
  
  
  25,485,906
  
  
  20,770,903Net sales
  
  
  28,546,086
  
  
  23,891,205
  
  
  57,525,182
  
  
  47,369,037Costs and
  expenses:Cost of products sold
  
  
  4,711,472
  
  
  4,000,626
  
  
  9,654,776
  
  
  7,854,905Distributor royalties and commissions
  
  
  11,379,011
  
  
  9,562,686
  
  
  23,090,727
  
  
  18,883,076Selling, general and administrative
  
  
  9,190,021
  
  
  8,314,261
  
  
  18,153,307
  
  
  15,835,211Total costs
  and expenses
  
  
  25,280,504
  
  
  21,877,573
  
  
  50,898,810
  
  
  42,573,192Income from
  operations
  
  
  3,265,582
  
  
  2,013,632
  
  
  6,626,372
  
  
  4,795,845Other income
  (expense):Interest income
  
  
  79,513
  
  
  27,883
  
  
  149,536
  
  
  48,353Interest expense
  
  
  (117,177
  )
  
  (46,671
  )
  
  (202,667
  )
  
  (111,902
  )Other income
  
  
  45,856
  
  
  8,023
  
  
  48,922
  
  
  22,218Income
  before income taxes
  
  
  3,273,774
  
  
  2,002,867
  
  
  6,622,163
  
  
  4,754,514Provision
  for income taxes
  
  
  1,295,000
  
  
  802,000
  
  
  2,580,000
  
  
  1,912,000Net income
  
  
  1,978,774
  
  
  1,200,867
  
  
  4,042,163
  
  
  2,842,514Preferred
  dividends accrued and paid
  
  
  
  
  
  
  
  
  
  
  
  12,292Net income
  available to common shareholders
  
  $
  1,978,774
  
  $
  1,200,867
  
  $
  4,042,163
  
  $
  2,830,222Earnings per
  common share - Basic
  
  $
  0.12
  
  $
  0.08
  
  $
  0.25
  
  $
  0.19Weighted average shares
  
  
  16,096,000
  
  
  15,393,000
  
  
  16,216,000
  
  
  15,285,000Earnings per
  common share - Diluted
  
  $
  0.12
  
  $
  0.07
  
  $
  0.24
  
  $
  0.17Weighted average shares
  
  
  16,622,000
  
  
  17,389,000
  
  
  16,825,000
  
  
  16,976,000See notes to financial
statements.


Reliv
International, Inc. and Subsidiaries

Consolidated
Statements of Cash Flows
(unaudited)

Six months
  ended June 302005
  
  2004Operating
  activities:Net income
  
  $
  4,042,163
  
  $
  2,842,514Adjustments to reconcile net income to net
  cash provided by operating activities:Depreciation
  
  
  662,159
  
  
  508,767Stock-based third party compensation
  
  
  33,374
  
  
  38,667Tax benefit from exercise of options
  
  
  1,185,000
  
  
  Deferred income taxes
  
  
  (91,000
  )
  
  Foreign currency transaction (gain)/loss
  
  
  148,115
  
  
  (21,046
  )(Increase) decrease in accounts and notes
  receivable
  
  
  33,748
  
  
  (96,522
  )(Increase) decrease in inventories
  
  
  (672,345
  )
  
  (1,410,092
  )(Increase) decrease in refundable income
  taxes
  
  
  1,261,764
  
  
  (122,158
  )(Increase) decrease in prepaid expenses and
  other current assets
  
  
  (686,844
  )
  
  (222,207
  )(Increase) decrease in other assets
  
  
  (183,847
  )
  
  (218,817
  )Increase (decrease) in accounts payable and
  accrued expenses
  
  
  3,055,235
  
  
  2,476,295Increase (decrease) in income taxes payable
  
  
  1,337,393
  
  
  (147,560
  )Net cash
  provided by operating activities
  
  
  10,124,915
  
  
  3,627,841Investing
  activities:Purchase of
  property, plant and equipment
  
  
  (1,203,294
  )
  
  (1,348,385
  )Net cash
  used in investing activities
  
  
  (1,203,294
  )
  
  (1,348,385
  )Financing
  activities:Principal payments on long-term borrowings
  and capital lease obligations
  
  
  (3,641,559
  )
  
  (172,488
  )Proceeds
  from sale of common stock
  
  
  
  
  
  48,601Redemption
  of preferred stock
  
  
  
  
  
  (975,000
  )Preferred
  stock dividends paid
  
  
  
  
  
  (12,292
  )Common stock
  dividends paid
  
  
  (565,158
  )
  
  (460,319
  )Repayment of
  loans by officers and directors
  
  
  
  
  
  Proceeds
  from options exercised
  
  
  24,183
  
  
  132,388Purchase of
  stock for treasury
  
  
  (8,951,805
  )
  
  (1,293,980
  )Net cash
  used in financing activities
  
  
  (13,134,339
  )
  
  (2,733,090
  )Effect of
  exchange rate changes on cash and cash equivalents
  
  
  (101,973
  )
  
  (39,218
  )Decrease in
  cash and cash equivalents
  
  
  (4,314,691
  )
  
  (492,852
  )Cash and
  cash equivalents at beginning of period
  
  
  10,151,503
  
  
  7,902,508Cash and
  cash equivalents at end of period
  
  $
  5,836,812
  
  $
  7,409,656See notes to
financial statements


Reliv
International, Inc. and Subsidiaries 
Notes to Consolidated Financial Statements
(Unaudited)

June 30, 2005

Note 1
  Basis of PresentationThe 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, 2004, filed March 16, 2005 with
  the Securities and Exchange Commission.Note 2
  ReclassificationsCertain prior year amounts have been reclassified to conform to the
  current year presentation.Note 3
  Earnings per ShareThe following table sets forth the computation of basic and diluted
  earnings per share:Three
  months ended June 30
  
  Six months
  ended June 302005
  
  2004
  
  2005
  
  2004Numerator:Numerator for basic and diluted earnings
  per sharenet income available to common shareholders
  
  $
  1,978,774
  
  $
  1,200,867
  
  $
  4,042,163
  
  $
  2,830,222Effect of convertible preferred stock:Dividends on preferred stock
  
  
  
  
  
  
  
  
  
  
  
  12,292Numerator for diluted earnings per share
  
  $
  1,978,774
  
  $
  1,200,867
  
  $
  4,042,163
  
  $
  2,842,514Denominator:Denominator for basic earnings per
  shareweighted average shares
  
  
  16,096,000
  
  
  15,393,000
  
  
  16,216,000
  
  
  15,285,000Effect of convertible preferred stock and
    dilutive securities:Convertible preferred stock
  
  
  
  
  
  
  
  
  
  
  
  106,000Employee stock options and other warrants
  
  
  526,000
  
  
  1,996,000
  
  
  609,000
  
  
  1,585,000Denominator for diluted earnings per
  shareadjusted weighted average shares
  
  
  16,622,000
  
  
  17,389,000
  
  
  16,825,000
  
  
  16,976,000Basic earnings per share
  
  $
  0.12
  
  $
  0.08
  
  $
  0.25
  
  $
  0.19Diluted earnings per share
  
  $
  0.12
  
  $
  0.07
  
  $
  0.24
  
  $
  0.17Reliv
International, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)

June 30, 2005

Note 4
  New PronouncementsThe Securities and Exchange Commission has deferred the adoption date
  of Statement of Financial Accounting Standard (SFAS) No. 123R, Share-Based
  Payment, to the beginning of the fiscal year that begins after June 15,
  2005, (January 1, 2006 for calendar year companies) from a July 1, 2005
  adoption date previously set by the FASB. SFAS No. 123R requires the
  recognition of share-based payments, including employee stock options, in the
  income statement based on their fair values. The Company expects to adopt
  this standard on January 1, 2006. Based on stock option grants made in prior
  years, the Company estimates it will (assuming the modified prospective
  method is used) recognize expense for stock options for the year ending December
  31, 2006 of $63,000, net of taxes.Note 5
  Comprehensive IncomeTotal comprehensive income was $2,013,889 and $4,092,951 for the
  three and six months ended June 30, 2005, respectively. For the three and six
  months ended June 30, 2004, comprehensive income was $1,082,067 and
  $2,750,443, respectively. The Companys only component of other comprehensive
  income is the foreign currency translation adjustment.Note 6
  Stock-Based CompensationThe Company accounts for its stock-based compensation plans under the
  recognition and measurement principles of APB Opinion No. 25, Accounting for Stock Issued to Employees,
  and related Interpretations. No stock-based employee compensation cost is
  reflected in net income, as all options granted under those plans had an
  exercise price equal to the market value of the underlying common stock on
  the date of grant.  The following
  table illustrates the effect on net income and earnings per share if the
  Company had applied the fair value recognition provisions of FASB Statement
  No. 123, Accounting for Stock-Based Compensation, to
  stock-based employee compensation.Three
  months ended June 30
  
  Six months
  ended June 302005
  
  2004
  
  2005
  
  2004Net income available to common
  shareholders, as reported
  
  $
  1,978,774
  
  $
  1,200,867
  
  $
  4,042,163
  
  $
  2,830,222Deduct: Total stock-based employee compensation expense determined
  under fair value based method for all awards, net of related tax effects
  
  
  636,095
  
  
  369
  
  
  1,490,595
  
  
  46,328Pro forma net income available to common
  shareholders
  
  $
  1,342,679
  
  $
  1,200,498
  
  $
  2,551,568
  
  $
  2,783,894Earnings per share:Basicas reported
  
  $
  0.12
  
  $
  0.08
  
  $
  0.25
  
  $
  0.19Basicpro forma
  
  $
  0.08
  
  $
  0.08
  
  $
  0.16
  
  $
  0.18Dilutedas reported
  
  $
  0.12
  
  $
  0.07
  
  $
  0.24
  
  $
  0.17Dilutedpro forma
  
  $
  0.08
  
  $
  0.07
  
  $
  0.15
  
  $
  0.16The Company issued 523,109 shares for the six months ended June 30,
  2005, for stock option and warrant exercises. For the six months ended June
  30, 2004, 785,494 shares were issued for such exercises.Reliv
International, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Unaudited)

June 30, 2005

Note 7
  Related Party TranactionsOn March 14, 2005, the Company entered into an employment agreement
  and a stock redemption agreement with an officer/director. The employment
  agreement has a term of three years and includes a non-compete clause which
  extends for six years. Under the stock redemption agreement, the Company will
  purchase 450,000 shares of the common stock of the Company at a price of
  $9.00 per share. Payment of the purchase price for the shares will be made in
  installments over a period not to exceed four years at an interest rate of
  4%. The first principal payment of $900,000 was made on March 31, 2005, and
  future principal payments of $900,000 are due on March 31, 2006, and 2007,
  and principal payments of $675,000 are due on March 31, 2008 and 2009.On March 22, 2005, the Company purchased 39,193 shares of the
  Companys common stock from a former officer of the Company at a price of
  $9.00 per share.In May 2005, the Company purchased an aggregate of 535,008 shares of
  the Companys common stock from three officer/directors at a price of $9.50
  per share.The retirement of the shares purchased in these various transactions
  reduced stockholders equity by $9,485,000 as of June 30, 2005.