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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

____________

FORM 10-Q

☑ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2026

☐ 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 001-31668

INTEGRATED BIOPHARMA, INC.

(Exact name of registrant, as specified in its charter)

Delaware	22-2407475
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

225 Long Ave., Hillside, New Jersey 07205

(Address of principal executive offices) (Zip Code)

(888) 319-6962

(Registrant’s telephone number, including Area Code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	None	None

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 and 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 ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

						Smaller reporting company ☑
Large accelerated filer ☐		Accelerated filer ☐		Non-accelerated filer ☑		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

As of May 8, 2026, there were 31,059,610 shares of common stock, $0.002 par value per share, of the registrant outstanding.

INTEGRATED BIOPHARMA, INC. AND SUBSIDIARIES

FORM 10-Q QUARTERLY REPORT

For the Quarter Ended March 31, 2026

INDEX

		Page
	Part I. Financial Information
Item 1.	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended March 31, 2026 and 2025 (unaudited)	2
	Condensed Consolidated Balance Sheets as of March 31, 2026 and June 30, 2025 (unaudited)	3
	Condensed Consolidated Statement of Stockholders’ Equity for the Three and Nine Months Ended March 31, 2026 and 2025 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2026 and 2025 (unaudited)	5
	Notes to Condensed Consolidated Financial Statements (unaudited)	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	23

Item 4.	Controls and Procedures	23

	Part II. Other Information

Item 1.	Legal Proceedings	24

Item 1A.	Risk Factors	24

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24

Item 3.	Defaults Upon Senior Securities	24

Item 4.	Mine Safety Disclosure	24

Item 5.	Other Information	24

Item 6.	Exhibits	25
	Other
Signatures		26

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q may constitute “forward-looking” statements as defined in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Private Securities Litigation Reform Act of 1995 (the “PSLRA”) or in releases made by the Securities and Exchange Commission (“SEC”), all as may be amended from time to time. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of Integrated BioPharma, Inc. and its subsidiaries (collectively, the “Company”) or industry results, to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, changes in general economic and business conditions; loss of market share through competition; introduction of competing products by other companies; the timing of regulatory approval and the introduction of new products by the Company; changes in industry capacity; pressure on prices from competition or from purchasers of the Company's products; regulatory changes in the pharmaceutical manufacturing industry and nutraceutical industry; regulatory obstacles to the introduction of new technologies or products that are important to the Company; availability of qualified personnel; the loss of any significant customers or suppliers; inflation (including those caused by tariffs) and tightened labor markets; and other factors both referenced and not referenced in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025 (“Form 10-K”) as filed with the SEC. Statements that are not historical fact are forward-looking statements. Forward-looking statements can be identified by, among other things, the use of forward-looking language, such as the words, “plan”, “believe”, “expect”, “anticipate”, “intend”, “estimate”, “project”, “may”, “will”, “would”, “could”, “should”, “seeks”, or “scheduled to”, or other similar words, or the negative of these terms or other variations of these terms or comparable language, or by discussion of strategy or intentions. These cautionary statements are being made pursuant to the Securities Act, the Exchange Act and the PSLRA with the intention of obtaining the benefits of the “safe harbor” provisions of such laws. The Company cautions investors that any forward-looking statements made by the Company are not guarantees or indicative of future performance. Important assumptions and other important factors that could cause actual results to differ materially from those forward-looking statements with respect to the Company, include, but are not limited to, the risks and uncertainties affecting their businesses described in Item 1A of the Company’s Form 10-K and in other filings by the Company with the SEC. Although the Company believes that its plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, actual results could differ materially from a projection or assumption in any of its forward-looking statements. The Company’s future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The forward-looking statements contained in this Quarterly Report on Form 10-Q are made only as of the date hereof and the Company does not have or undertake any obligation to update or revise any forward-looking statements whether as a result of new information, subsequent events or otherwise, unless otherwise required by law.

ITEM 1. FINANCIAL STATEMENTS

INTEGRATED BIOPHARMA, INC. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

(Unaudited)

	Three months ended					Nine months ended
	March 31,					March 31,
	2026			2025		2026			2025

Sales, net	$	10,107		$	13,947	$	34,076		$	40,178
Cost of sales		10,383			12,396		33,304			36,085

Gross (loss) profit		(276	)		1,551		772			4,093
Selling and administrative expenses		809			812		2,608			2,662

Operating (loss) income		(1,085	)		739		(1,836	)		1,431

Other income, net
Interest income, net		39			5		112			30
Other income, net		11			34		11			6
Other income, net		50			39		123			36

(Loss) income before income taxes		(1,035	)		778		(1,713	)		1,467

Income tax (benefit) expense, net		(198	)		167		(237	)		481

Net (loss) income	$	(837	)	$	611	$	(1,476	)	$	986

Basic net (loss) income per common share	$	(0.03	)	$	0.02	$	(0.05	)	$	0.03

Diluted net (loss) income per common share	$	(0.03	)	$	0.02	$	(0.05	)	$	0.03

Weighted average common shares outstanding - basic		31,059,610			30,300,720		31,059,610			30,190,869
Add: Equivalent shares outstanding - Stock Options		-			1,213,871		-			770,047
Weighted average common shares outstanding - diluted		31,059,610			31,514,591		31,059,610			30,960,916

See accompanying notes to unaudited condensed consolidated financial statements.

INTEGRATED BIOPHARMA, INC. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

(Unaudited)

	March 31,			June 30,
	2026			2025
Assets
Current Assets:
Cash	$	5,826		$	3,615
Accounts receivable, net		3,655			5,430
Inventories		8,119			9,362
Other current assets		374			356
Total current assets		17,974			18,763

Property and equipment, net		1,697			1,723
Operating lease right-of-use assets (includes $2,946 and $485 with a related party)		3,204			855
Finance lease right-of-use assets		151			171
Deferred tax assets, net		3,591			3,337
Security deposits and other assets		52			52
Total Assets	$	26,669		$	24,901

Liabilities and Stockholders' Equity:
Current Liabilities:
Accounts payable	$	2,965		$	2,267
Accrued expenses and other current liabilities		1,376			1,302
Current portion of finance lease obligations		47			45
Current portion of operating lease liabilities (includes $987 and $485 with a related party)		1,139			634
Total current liabilities		5,527			4,248

Financed lease obligations		80			115
Operating lease liabilities (includes $1,974 and $0 with a related party)		2,080			221
Total liabilities		7,687			4,584

Commitments and Contingencies (Note 6)

Stockholders' Equity :
Common Stock, $0.002 par value; 50,000,000 shares authorized;
31,094,510 and 31,059,610 shares issued and outstanding, respectively		62			62
Additional paid-in capital		51,914			51,773
Accumulated deficit		(32,895	)		(31,419	)
Less: Treasury stock, at cost, 34,900 shares		(99	)		(99	)
Total Stockholders' Equity		18,982			20,317
Total Liabilities and Stockholders' Equity	$	26,669		$	24,901

See accompanying notes to unaudited condensed consolidated financial statements.

INTEGRATED BIOPHARMA, INC. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2026 AND 2025

(in thousands, except share and per share amounts)

(Unaudited)

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2026:

															Total
	Common Stock				Additional		Accumulated			Treasury Stock					Stockholders'
	Shares		Par Value		Paid-in-Capital		Deficit			Shares		Cost			Equity

Balance, July 1, 2025		31,094,510	$	62	$	51,773	$	(31,419	)		34,900	$	(99	)	$	20,317
Stock compensation expense for employee stock options		-		-		49		-			-		-			49
Net income		-		-		-		123			-		-			123
Balance, September 30, 2025		31,094,510		62		51,822		(31,296	)		34,900		(99	)		20,489
Stock compensation expense for employee stock options		-		-		42		-			-		-			42
Net loss		-		-		-		(762	)		-		-			(762	)
Balance, December 31, 2025		31,904,510		62		51,864		(32,058	)		34,900		(99	)		19,769
Stock compensation expense for employee stock options		-		-		50		-			-		-			50
Net loss		-		-		-		(837	)		-		-			(837	)
Balance, March 31, 2026		31,094,510	$	62	$	51,914	$	(32,895	)		34,900	$	(99	)	$	18,982

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2025:

	Common Stock				Additional		Accumulated			Treasury Stock					Total Stockholders'
	Shares		Par Value		Paid-in-Capital		Deficit			Shares		Cost			Equity

Balance, July 1, 2024		30,134,510	$	60	$	51,504	$	(32,227	)		34,900	$	(99	)	$	19,238
Stock compensation expense for employee stock options		-		-		53		-			-		-			53
Net loss		-		-		-		259			-		-			259
Balance, September 30, 2024		30,134,510		60		51,557		(31,968	)		34,900		(99	)		18,550
Stock compensation expense for employee stock options		-		-		43		-			-		-			43
Shares issued upon exercise of stock options		201,110		1		17		-			-		-			18
Net loss		-		-		-		116			-		-			116
Balance, December 31, 2024		30,335,620		61		51,617		(31,852	)		34,900		(99	)		19.727
Stock compensation expense for employee stock options		-		-		45		-			-		-			45
Net income		-		-		-		611			-		-			611
Balance, March 31, 2025		30,335,620	$	61	$	51,662	$	(31,242	)		34,900	$	(99	)	$	20,383

See accompanying notes to unaudited condensed consolidated financial statements.

INTEGRATED BIOPHARMA, INC. AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, except share and per share amounts)

(Unaudited)

	Nine months ended
	March 31,
	2026			2025
Cash flows provided by operating activities:
Net (loss) income	$	(1,476	)	$	986
Adjustments to reconcile net (loss) income to net cash from operating activities:
Amortization of right-of-use assets		791			695
Depreciation and amortization		223			247
Stock based compensation		141			141
Change in deferred tax assets		(254	)		492
Impairment charge on equipment		-			28
Other, net		6			(25	)
Changes in operating assets and liabilities:
Decrease (increase) in:
Accounts receivable, net		1,775			(412	)
Inventories		1,243			1,167
Security deposits and other assets		(30	)		(152	)
(Decrease) increase in:
Accounts payable		698			27
Accrued expenses and other liabilities		74			(1,024	)
Operating lease obligations		(756	)		(696	)
Net cash provided by operating activities		2,435			1,474

Cash flows from investing activities:
Purchase of property and equipment		(197	)		(201	)
Proceeds from sale of property and equipment		6			-
Net cash used in investing activities		(191	)		(201	)

Cash flows from financing activities:
Proceeds from exercise of employee stock options		-			18
Repayments under finance lease obligations		(33	)		(7	)
Net cash (used in) provided by financing activities		(33	)		11

Net increase in cash		2,211			1,284
Cash at beginning of period		3,615			1,677
Cash at end of period	$	5,826		$	2,961

Supplemental disclosures of cash flow information:
Interest paid	$	7	$	26
Income taxes paid	$	-	$	100

Supplemental disclosures of non-cash flow transactions:
Transfer of finance right-of-use asset, net to property and equipment, net	$	-	$	80
Acquisition of right-of-use asset, net and operating lease liability, net	$	3,120	$	10
Acquisition of right-of-use asset, net and finance lease liability, net	$	-	$	41

See accompanying notes to unaudited condensed consolidated financial statements.

INTEGRATED BIOPHARMA, INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(Unaudited)

Note 1. Nature of Operations, Principles of Consolidation and Basis of Presentation of Interim Financial Statements

Nature of Operations

Integrated BioPharma, Inc., a Delaware corporation (together with its subsidiaries, the “Company”), is engaged primarily in the business of manufacturing, distributing, marketing and sales of vitamins, nutritional supplements and herbal products. The Company’s customers are located primarily in the United States and Luxembourg. The Company was originally incorporated in the state of Delaware on August 31, 1995 under the name Chem International, Inc., on December 5, 2000, changed its name to Integrated Health Technologies, Inc. and on January 29, 2003 changed its name to Integrated BioPharma, Inc. The Company restated its certificate of incorporation in Delaware in June 2006. The Company continues to do business as Chem International, Inc. with certain of its customers and certain vendors.

The Company’s business segments include: (a) Contract Manufacturing operated by Manhattan Drug Company, Inc. (“MDC”), which manufactures vitamins and nutritional supplements for sale to distributors, multilevel marketers and specialized health-care providers and (b) Other Business Lines which includes the operations of (i) MDC Warehousing and Distribution, Inc. (“MDCWHD”), a service provider for warehousing and fulfillment services, (ii) Chem International, Inc. (“Chem”), a distributor of certain raw materials for DSM Nutritional Products LLC and the holding entity of the Company and (iii) all other inactive subsidiaries of the Company.

Principles of Consolidation

The accompanying condensed consolidated financial statements for the interim periods are unaudited and include the accounts of the Company. Intercompany transactions and accounts have been eliminated in consolidation.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation.

Basis of Presentation of Interim Financial Statements

The accompanying condensed consolidated financial statements for the interim periods are unaudited and include the accounts of Integrated BioPharma, Inc., a Delaware corporation (together with its subsidiaries, the “Company”). The interim condensed consolidated financial statements have been prepared in conformity with Rule 8-03 of Regulation S-X of the Securities and Exchange Commission (“SEC”) and therefore do not include information or 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 of America (“GAAP”). However, all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the periods presented have been included. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto, together with Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025 (“Form 10-K”), as filed with the SEC. The June 30, 2025 balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP. The preparation of the unaudited condensed financial statements in conformity with these accounting principles requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the period. Ultimate results could differ from the estimates of management. The results of operations for the three and nine months ended March 31, 2026 are not necessarily indicative of the results for the full fiscal year ending June 30, 2026 or for any other period.

INTEGRATED BIOPHARMA, INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(Unaudited)

Significant Accounting Policies

Revenue Recognition. The Company recognizes product sales revenue, the prices of which are fixed and determinable, when title and risk of loss have transferred to the customer, when estimated provisions for product returns, rebates, charge-backs and other sales allowances are reasonably determinable, and when collectability is reasonably assured. Accruals for these items are presented in the condensed consolidated financial statements as reductions to sales. The Company’s net sales represent gross sales invoiced to customers, less certain related charges for discounts, returns, rebates, charge-backs and other allowances. Cost of sales includes the cost of raw materials and all labor and overhead associated with the manufacturing and packaging of the products. Gross margins are affected by, among other things, changes in the relative sales mix among our products and valuation and/or charge off of slow moving, expired or obsolete inventories. The Company also recognizes revenue for warehousing and fulfillment services provided to MDCWHD customers. To perform revenue recognition for arrangements within the scope of ASC 606, the Company performs the following five steps:

●

identification of the promised goods or services in the contract;

●

determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract;

●

measurement of the transaction price, including the constraint on variable consideration;

●

allocation of the transaction price to the performance obligations based on estimated selling prices; and

●

recognition of revenue when (or as) the Company satisfies each performance obligation. A performance obligation is a promise to transfer a distinct good or service to the customer and is the unit of account in ASC 606.

Income Taxes. The Company accounts for income taxes using the asset and liability method. Accordingly, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in the tax rate is recognized in income or expense in the period that the change is effective. Tax benefits are recognized when it is probable that the deduction will be sustained. A valuation allowance is established when it is more likely than not that all or a portion of a deferred tax asset will not be realized.

For the three months ended March 31, 2026 and 2025, the Company had a federal income tax benefit of $113 and a federal income tax expense of $415, respectively and a state income tax benefit, net of approximately $85 and $248, respectively. For the nine months ended March 31, 2026 and 2025, the Company had a net federal income tax benefit of $108 and a net federal income tax expense of approximately $651, respectively and a state income tax net benefit of approximately $129 and $170, respectively. In the nine months ended March 31, 2025, the Company released the valuation allowance on its state net operating losses as the operating loss carryovers became available to offset the then current state taxable income.

Leases. The Company determines if an arrangement is a lease at inception. Operating and finance leases are included in right-of-use (“ROU”) assets, other current liabilities, and lease obligations on its condensed consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

INTEGRATED BIOPHARMA, INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(Unaudited)

The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For certain equipment leases, such as vehicles, the Company accounts for the lease and non-lease components as a single lease component.

Earnings Per Share. Basic earnings per common share amounts are based on weighted average number of common shares outstanding. Diluted earnings per share amounts are based on the weighted average number of common shares outstanding, plus the incremental shares that would have been outstanding upon the assumed exercise of all potentially dilutive stock options, subject to anti-dilution limitations using the treasury stock method.

The following options and potentially dilutive shares for stock options were not included in the computation of weighted average diluted common shares outstanding as the effect of doing so would be anti-dilutive for the three and nine months ended March 31, 2026 and 2025:

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2026		2025		2026		2025

Anti-dilutive stock options		4,914,350		1,817,517		4,914,350		2,247,517
Total anti-dilutive shares		4,914,350		1,817,517		4,914,350		2,247,517

Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09 - Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities to provide greater disaggregation within their annual rate reconciliation, including new requirements to present reconciling items on a gross basis in specified categories, disclose both percentages and dollar amounts, and disaggregate individual reconciling items by jurisdiction and nature when the effect of the items meet a quantitative threshold. The guidance also requires disaggregating the annual disclosure of income taxes paid, net of refunds received, by federal (national), state, and foreign taxes, with separate presentation of individual jurisdictions that meet a quantitative threshold. The guidance is effective for the Company's annual periods beginning July 1, 2025 on a prospective basis, with a retrospective option, and early adoption is permitted. The Company is currently evaluating the impact of adoption of this standard on its condensed consolidated financial statements and disclosures.

In November 2024, the FASB issued ASU 2024-03 (updated ASU 2025-01 issued in January 2025), Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires the disaggregation of certain expense captions into specified categories in disclosures within the notes to the financial statements to provide enhanced transparency into the expense captions presented on the face of the income statement. The guidance is effective for the Company’s annual periods beginning July 1, 2027 and interim periods thereafter, on a prospective basis, with a retrospective option, and early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.

In July 2025, the FASB issued ASU 2025-05 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides for an election for a practical expedient to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset. The update is effective for the Company’s annual periods beginning July 1, 2027 and interim periods thereafter on a prospective basis, with a retrospective option, and early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2025-05.

INTEGRATED BIOPHARMA, INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(Unaudited)

Note 2. Inventories

Inventories are stated at the lower of cost or net realizable value using the first-in, first-out method and consist of the following:

	March 31,		June 30,
	2026		2025

Raw materials	$	6,061	$	5,725
Work-in-process		1,086		2,736
Finished goods		972		901
Total	$	8,119	$	9,362

Note 3. Property and Equipment, net

Property and equipment, net consists of the following:

	March 31,			June 30,
	2026			2025

Land and building	$	1,250		$	1,250
Leasehold improvements		1,423			1,414
Machinery and equipment		7,426			7,249
		10,099			9,913
Less: Accumulated depreciation and amortization		(8,402	)		(8,190	)
Total	$	1,697		$	1,723

Depreciation and amortization expense recorded on property and equipment was $68 and $76 and $223 and $247 for the three and nine months ended March 31, 2026 and 2025, respectively. Additionally, the Company recognized a permanent impairment of $0 and $28, in each of the three and nine months ended March 31, 2026 and 2025, respectively and sold fully depreciated machinery in the amount of $11 and recognized a gain on sale of $6 in the three and nine months ended March 31, 2026.

Note 4. Lines of Credit

On April 15, 2025, the Company entered into a Loan Agreement (the “Loan Agreement”) with PNC Bank, National Association (“PNC”). As of March 31, 2026 and June 30, 2025, the Company had no debt outstanding under its Lines of Credit.

The Loan Agreement provides a committed revolving line of credit under which the Company may request, and the PNC will make advances to the Company from time to time until April 15, 2026, (the "Expiration Date"), in an aggregate amount outstanding at any time not to exceed $4,000 (the "Line of Credit") and a Convertible Equipment Line of Credit in an aggregate amount outstanding at any time not to exceed $500 (the "Convertible ELOC"). Advances under the Convertible ELOC will be used for the purchase of equipment and/or vehicles. On April 14, 2026, PNC notified the Company that it extended the Expiration Date on the Loan Agreement to July 14, 2026, or such late date as may, in PNC’s sole discretion, be designated by PNC by written notice from PNC to the Companies, effective on April 16, 2026. As of May 8, 2026, the Company has received no other written notices from PNC.

INTEGRATED BIOPHARMA, INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(Unaudited)

The Line of Credit bears interest at a rate per annum which is equal to the sum of (A) Daily one-month SOFR plus (B) 250 basis points (2.50%). Accrued interest will be due and payable on the same day of each month, beginning with the payment due on May 15, 2025. The outstanding principal balance and any accrued but unpaid interest shall be due and payable on the Expiration Date.

Prior to any Conversion Date, amounts outstanding under the Convertible ELOC will bear interest at a rate per annum (the "Daily Rate”) equal to the sum of (i) Daily one-month SOFR plus (ii) 250 basis points (2.50%) and from and after the Conversion Date, amounts outstanding under this Convertible ELOC will bear interest for the remaining term at either: (i) a rate per annum equal to the Daily Rate; or (ii) a fixed rate of interest per annum as offered to the Borrower by PNC in its sole discretion and agreed upon in writing between the Borrower and PNC.

The Company also entered into a Reimbursement Agreement for Standby and Commercial Letter(s) of Credit whereby, from time to time, the Borrower may request the issuance of one or more letters of credit (each a "Credit"). The Credit bears interest at the same rate as the Line of Credit under the Loan Agreement as described above.

In addition, in connection with the Loan Agreement, the Company and MDC (collectively, the "Grantors") each entered into a Security Agreement with PNC, pursuant to which each of the Grantors assigned and granted to PNC, as secured party, a continuing lien on and security interest in all right, title and interest of such Grantor in, to, and under all of the assets of such Grantor.

Note 5. Significant Risks and Uncertainties

(a) Major Customers. In the three months ended March 31, 2026 and 2025, approximately 90% and 85%, respectively, of consolidated net sales were derived from two customers. These two customers are in the Company’s Contract Manufacturing Segment and represented approximately 70% and 23% and 58% and 31% in the three months ended March 31, 2026 and 2025, respectively of the Contract Manufacturing Segment net sales. In the nine months ended March 31, 2026 and 2025, approximately 90% and 83% of consolidated net sales, respectively, were derived from the same two customers and net sales to these two customers represented approximately 69% and 24% in the nine months ended March 31, 2026 and 62% and 26% of net sales in the nine months ended March 31, 2025, respectively, of the Contract Manufacturing Segment net sales. Accounts receivable from these two major customers represented approximately 86% and 76% of total net accounts receivable as of March 31, 2026 and June 30, 2025, respectively. Two other customers in the Other Business Lines Segment, while not significant customers of the Company’s consolidated net sales, represented approximately 43%, and 0% and 20%, and 40% of net sales of the Other Business Lines Segment in the three months ended March 31, 2026 and 2025, respectively. In the nine months ended March 31, 2026, three other customers represented 28%, 11% and 12% of net sales of the Other Business Lines Segment and in the nine months ended March 31, 2025, three other customers represented 38%, 26% and 12% of the net sales of the Other Business Lines Segment.

The loss of any of these customers could have an adverse effect on the Company’s operations. Major customers are those customers who account for more than 10% of net sales.

(b) Other Business Risks. Approximately 77% of the Company’s employees are covered by a union contract and are employed in its New Jersey facilities. The contract was renewed effective September 1, 2022 and will expire on August 31, 2026.

The Company has seen a negative impact in its margins due to inflation, tariffs and to a lesser extent, tightened labor markets as the Company strives to increase prices to customers as its operating costs increase. The Company may not be able to timely increase its selling prices to its customer resulting from price increases from its suppliers due to various economic factors, including tariffs and other inflationary costs, labor and shipping costs and its own increases in shipping, labor and other operating costs. The Company’s results of operations may also be affected by economic conditions, including tariffs and other inflationary pressures, that can impact consumer disposable income levels and spending habits, thereby reducing the orders it may receive from the Company’s significant customers.

Note 6. Leases and other Commitments and Contingencies

(a) Leases. The Company has operating and finance leases for its corporate and sales offices, warehousing and packaging facilities and certain machinery and equipment, including office equipment. The Company’s leases have remaining terms of less than 1 year to less than 5 years.

INTEGRATED BIOPHARMA, INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(Unaudited)

The components of lease expense for the three months ended March 31, 2026 and 2025, were as follows:

	Three months ended March 31,
	2026						2025
	Related Party - Vitamin Realty		Other Leases		Totals		Related Party - Vitamin Realty		Other Leases		Totals

Operating lease costs	$	254	$	44	$	298	$	211	$	43	$	254

Finance lease costs:
Amortization of right-of use assets	$	-	$	7	$	7	$	-	$	-	$	-
Interest on lease liabilities		-		2		2		-		-		-
Total finance lease costs	$	-	$	9	$	9	$	-	$	-	$	-

The components of lease expense for the nine months ended March 31,2026 and 2025, were as follows:

	Nine months ended March 31,
	2026						2025
	Related Party - Vitamin Realty		Other Leases		Totals		Related Party - Vitamin Realty		Other Leases		Totals

Operating lease costs	$	675	$	130	$	805	$	632	$	127	$	759

Finance lease costs:
Amortization of right-of use assets	$	-	$	20	$	20	$	-	$	3	$	3
Interest on lease liabilities		-		7		7		-		-		-
Total finance lease costs	$	-	$	27	$	27	$	-	$	3	$	3

Rent and lease amortization costs are included in cost of sales and selling and administrative expenses in the accompanying Condensed Consolidated Statements of Operations.

Operating Lease Liabilities

Related Party Operating Lease Liabilities. Warehouse and office facilities are leased from Vitamin Realty Associates, LLC (“Vitamin Realty”), which is controlled with 41% ownership by each of the Company’s Co-Chief Executive Officers and directors of the Company and 18% by their mother, a major stockholder of the Company. On January 5, 2012, MDC entered into a second amendment of lease (the “Second Lease Amendment”) with Vitamin Realty for its office and warehouse space in New Jersey increasing its rentable square footage from an aggregate of 74,898 square feet to 76,161 square feet and extending the expiration date to January 31, 2026. This Second Lease Amendment provided for minimum annual rental payments of $533, plus increases in real estate taxes and building operating expenses. On July 15, 2022, MDC entered into a third amendment of the lease (the “Third Lease Amendment”) with Vitamin Realty, increasing its rentable square footage to 116,175. The Third Lease Amendment provides for minimum annual rental payments of $842, plus increases in real estate taxes and the building operating expenses allocation percentage and is effective as of July 1, 2022. On February 17, 2026, MDC entered into a fourth amendment of the lease (the “Fourth Lease Amendment”). The Fourth Amendment, decreases the rentable square footage to 110,095, provides for minimum annual rental payments of $1,101 and extended the expiration date to January 31, 2029.

Rent expense and lease amortization costs for the three months ended March 31, 2026 and 2025 on this lease was $415 and $348, respectively, and for the nine months ended March 31, 2026 and 2025 was $1,148 and $1,000, respectively, and are included in cost of sales and selling and administrative expenses in the accompanying Condensed Consolidated Statements of Operations. As of March 31, 2026 and June 30, 2025, the Company had no current obligations to Vitamin Realty. Additionally, the Company has operating lease obligations of $2,961 and $485 with Vitamin Realty, as noted in the accompanying Condensed Consolidated Balance Sheet as of March 31, 2026 and June 30, 2025, respectively.

INTEGRATED BIOPHARMA, INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(Unaudited)

Other Operating Lease Liabilities. The Company has entered into certain non-cancelable operating lease agreements expiring up through May 9, 2027, related to office equipment.

As of March 31, 2026, the Company’s right-of-use assets, lease obligations and remaining cash commitment on these leases were as follows:

	Right-of-use Assets		Current Portion of Operating Lease Obligations		Operating Lease Obligations		Remaining Cash Commitment

Vitamin Realty lease	$	2,946	$	987	$	1,974	$	3,219
Warehouse lease		224		131		93		247
Transportation lease		26		19		7		27
Office equipment leases		8		2		6		9
	$	3,204	$	1,139	$	2,080	$	3,502

As of June 30, 2025, the Company’s ROU assets, lease obligations and remaining cash commitment on these leases were as follows:

	Right-of-use Assets		Current Portion Operating Lease Obligations		Operating Lease Obligations		Remaining Cash Commitment

Vitamin Realty lease	$	485	$	485	$	-	$	491
Warehouse lease		317		125		192		354
Transportation lease		39		18		21		43
Office equipment leases		14		6		8		16
	$	855	$	634	$	221	$	904

As of March 31, 2026 and June 30, 2025, the Company’s weighted average discount rate and remaining term on operating lease liabilities were approximately 6.40% and 5.31% and 2.8 years and 1.4 years, respectively.

On April 27, 2026, the Company entered into an operating lease with First American Commercial Bancorp, Inc. in the amount of $22 for office equipment with an annual commitment of approximately $5, and an expiration date of April 30, 2031.

INTEGRATED BIOPHARMA, INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(Unaudited)

Financed Lease Obligations.

As of March 31, 2026, the Company’s ROU assets, lease obligations and remaining cash commitment on such leases is as follows:

	Right-of-use Assets		Current Portion Finance Lease Obligations		Finance Lease Obligations		Remaining Cash Commitment

US Bank	$	118	$	39	$	53	$	100
ByLine Financial Group		33		8		27		39
	$	151	$	47	$	80	$	139

As of June 30, 2025, the Company’s ROU assets, lease obligations and remaining cash commitment on such leases is as follows:

	Right-of-use Assets		Current Portion Finance Lease Obligations		Finance Lease Obligations		Remaining Cash Commitment

US Bank	$	133	$	38	$	83	$	133
ByLine Financial Group		38		7		32		46
	$	171	$	45	$	115	$	179

As of March 31, 2026 and June 30, 2025, the Company’s weighted average discount rate is 6.89% and 4.51% for the fiscal years then ended, respectively, and the remaining term on lease liabilities is approximately 2.7 years and 3.4 years, respectively.

Supplemental cash flows information related to leases for the nine months ended March 31, 2026, is as follows:

	Related Party - Vitamin Realty		Other Leases		Totals

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases	$	675	$	130	$	805
Operating cash flows from finance leases		-		7		7
Financing cash flows from finance lease obligations		-		33		33

Supplemental cash flows information related to leases for the nine months ended March 31, 2025, is as follows:

	Related Party - Vitamin Realty		Other Leases		Totals

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases	$	632	$	141	$	773
Operating cash flows from finance leases		-		-		-
Financing cash flows from finance lease obligations		-		7		7

INTEGRATED BIOPHARMA, INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(Unaudited)

Maturities of operating lease liabilities as of March 31, 2026 were as follows:

	Operating			Related Party				Finance
Year ending	Lease			Operating Lease				Lease
June 30,	Commitments			Commitment				Commitments		Total

2026, remaining	$	41		$	275		$	14		$	330
2027		171			1,115			54			1,340
2028		67			1,148			54			1,269
2029		2			681			9			692
2030		2			-			8			10
Total minimum lease payments		283			3,219			139			3,641
Imputed interest		(25	)		(258	)		(12	)		(295	)
*Total*	$	258		$	2,961		$	127		$	3,346

(b) Legal Proceedings.

The Company is subject, from time to time, to claims by third parties under various legal theories. The defense of such claims, or any adverse outcome relating to any such claims, could have a material adverse effect on the Company’s liquidity, financial condition and cash flows.

Note 7. Related Party Transactions

Information related to related party transactions are disclosed in Note 6(a). Leases for related party lease transactions.

Note 8. Equity Transactions and Stock-Based Compensation

In December 2025, the Board of Directors adopted the Integrated BioPharma, Inc. Equity Incentive Plan (the “Plan”) which authorized the issuance of 7,500,000 shares of the Company’s Common Stock.

In December 2025, the Board of Directors authorized the issuance of up to 534,000 stock options to the Company officers and employees. The Company issued 526,500 stock options with an exercise price ranging from $0.31 to $0.35, vesting over three years, with expiration terms of ten years from the date of grant.

For the three and nine months ended March 31, 2026 and 2025, the Company incurred stock-based compensation expenses of $50 and $44, and $141 and $141, respectively. The Company expects to record additional stock-based compensation of $254 over the remaining vesting periods of approximately one to three years for all non-vested stock options.

The Company used the following assumptions to calculate the fair value of the stock option grants using the Black-Scholes option pricing model on the measurement date during the nine months ended March 31, 2026:

Risk Free Interest Rate		3.94% to 4.17	%
Volatility		96.9% to 110.9	%
Term	7.5 to 10 years
Dividend Rate		0.00	%
Closing Price of Common Stock		$0.32

The Company calculates expected volatility for a stock-based grant based on historic daily stock price observations of its common stock during the period immediately preceding the grant that is equal in length to the expected term of the grant. The expected term of the options is estimated based on the Company’s historical exercise rate and forfeiture rates are estimated based on employment termination experience. The risk free interest rate is based on U.S. Treasury yields for securities in effect at the time of grants with terms approximating the term of the grants. The assumptions used in the Black-Scholes option valuation model are highly subjective, and can materially affect the resulting valuations.

INTEGRATED BIOPHARMA, INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(Unaudited)

A summary of the Company’s stock option activity, and related information for the nine months ended March 31, 2026, is as follows:

				Weighted
				Average
				Exercise
	Options			Price

Outstanding as of June 30, 2025		4,481,350		$	0.39
Granted		526,500			0.33
Exercised		-			-
Terminated		(51,666	)		0.30
Expired		(41,834	)		0.54
Outstanding as of March 31, 2026		4,914,350		$	0.38
Exercisable at March 31, 2026		3,850,350		$	0.40

Note 9. Segment Information and Disaggregated Revenue

In its operation of the business, management, including its chief operating decision makers (“CODMs”), who are also the Company’s Co-Chief Executive Officers, review certain financial information, including segmented internal profit and loss statements. The primary profitability measure used by the CODMs to review segment operating results is gross profit. The CODM uses gross profit to allocate resources during our annual planning process and throughout the year, as well as to assess the performance of the Company’s segments, primarily by monitoring actual results compared to prior periods and expected results. During the periods presented, the Company reported its financial performance based on the following segments: Contract Manufacturing and Other Business Lines.

The basis for presenting segment results generally is consistent with overall Company reporting. The Company reports information about its operating segments in accordance with GAAP which establishes standards for reporting information about a company’s operating segments.

International sales, concentrated primarily in Europe, for the three months ended March 31, 2026 and 2025 were $1,955 and $3,228, respectively and for the nine months ended March 31,2026 and 2025 were $6,566 and $7,768, respectively.

INTEGRATED BIOPHARMA, INC. AND ITS SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share amounts)

(Unaudited)

Financial information relating to the three months ended March 31, 2026 and 2025 operations by business segment and disaggregated revenues was as follows:

		Sales, Net
		U.S.		International				Cost of		Gross					Capital
		Customers		Customers		Total		Sales		(Loss) Profit			Depreciation		Expenditures
Contract Manufacturing	*2026*	$	7,868	$	1,955	$	9,823	$	10,015	$	(192	)	$	67	$	-
	2025		10,231		3,228		13,459		11,937		1,522			76		116

Other Business Lines	*2026*		284		-		284		368		(84	)		1		-
	2025		488		-		488		459		29			-		-

Total Company	*2026*		8,152		1,995		10,107		10,383		(276	)		68		-
	2025		10,719		3,228		13,947		12,396		1,551			76		116

Financial information relating to the nine months ended March 31, 2026 and 2025 operations by business segment and disaggregated revenues was as follows:

		Sales, Net
		U.S.		International				Cost of		Gross					Capital
		Customers		Customers		Total		Sales		Profit (Loss)			Depreciation		Expenditures
Contract Manufacturing	*2026*	$	26,344	$	6,566	$	32,910	$	32,105	$	805		$	221	$	182
	2025		30,334		7,768		38,102		34,605		3,497			246		201

Other Business Lines	*2026*		1,166		-		1,166		1,199		(33	)		2		15
	2025		2,076		-		2,076		1,480		596			1		-

Total Company	*2026*		27,510		6,566		34,076		33,304		772			223		197
	2025		32,410		7,768		40,178		36,085		4,093			247		201

	Total Assets as of
	March 31,		June 30,
	2025		2025

Contract Manufacturing	$	22,354	$	20,278
Other Business Lines		4,315		4,623
Total Company	$	26,669	$	24,901

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION (dollars in thousands)

Certain statements set forth under this caption constitute “forward-looking statements.” See “Disclosure Regarding Forward-Looking Statements” on page 1 of this Quarterly Report on Form 10-Q for additional factors relating to such statements. The following discussion should also be read in conjunction with the condensed consolidated financial statements of the Company and Notes thereto included herein and the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025.

The Company is engaged primarily in the business of manufacturing, distributing, marketing and sales of vitamins, nutritional supplements and herbal products. The Company’s customers are located primarily in the United States and Luxembourg.

Business Outlook

Our future results of operations and the other forward-looking statements contained in this Quarterly Report on Form 10-Q, including this “Management’s Discussion and Analysis of Financial Condition and Results of Operation”, involve a number of risks and uncertainties—in particular, the statements regarding our goals and strategies, new product introductions, plans to cultivate new businesses, future economic conditions, revenue, pricing, gross margin and costs, competition, the tax rate, and potential legal proceedings. We are focusing our efforts to improve operational efficiency and reduce spending that may have an impact on expense levels and gross margin. In addition to the various important factors discussed above, a number of other important factors could cause actual results to differ significantly from our expectations. See the risks described in “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025.

For the nine months ended March 31, 2026, our net sales from operations decreased by $6,102 to approximately $34,076 from approximately $40,178 in the nine months ended March 31, 2025, or approximately 15%. Our net sales in the Contract Manufacturing Segment decreased by $5,192 or approximately 14%, and our Other Business Lines Segment decreased by $910 or approximately 44%. Net sales decreased in our Contract Manufacturing Segment primarily due to decreased sales volumes to customers other than our two major customers, of $2,267 and a decrease of $2,925 from our two major customers. Net sales in the nine months ended March 31, 2026 were also lower by approximately $910 from the nine months ended March 31, 2025 in our Other Business Lines Segment, primarily due to decreased sales for MDC Warehousing. The decrease in the Other Business Lines Segment was primarily from a major customer in this segment in the amount of $778, which customer represented 38% of net sales in the nine months ended March 31, 2025 compared to 1% of net sales in the nine months ended March 31, 2026. The loss of any of these customers could have a significant adverse impact on our financial condition and results of operations.

For the nine months ended March 31, 2026, we had an operating loss of approximately $1,836, a decrease of approximately $3,267 from operating income of approximately $1,431 for the nine months ended March 31, 2025. Our profit margins decreased from approximately 10.2% of net sales in the nine months ended March 31, 2025 to approximately 2.3% of net sales in the nine months ended March 31, 2026, primarily as a result of the decreased sales of $6,102 and a decrease in cost of sales of $2,781. Our consolidated selling and administrative expenses were lower by approximately 2% or $54, $2,608 and $2,662 in the nine months ended March 31, 2026 and 2025, respectively. Salaries and employee benefits decreased by approximately $102, offset, by an increase in professional fees and all other selling and administrative expenses of $18 and $30, respectively.

Our revenue from our two significant customers in our Contract Manufacturing Segment is dependent on their demand within their respective distribution channels for the products we manufacture for them. As in any competitive market, our ability to match or beat other contract manufacturers pricing for the same items may also alter our outlook and the ability to maintain or increase revenues. We will continue to focus on our core businesses and push forward in maintaining our cost structure in line with our sales and expanding our customer base. We believe that this focus may reduce our reliance on our two significant customers.

We have seen a negative impact in our margins due to inflation, tariffs and to a lesser extent, tightened labor markets as we strive to increase prices to our customers as our operating costs increase. We may not be able to timely increase our selling prices to our customers resulting from price increases from our suppliers due to various economic factors, including tariffs and other inflationary costs, labor and shipping costs and our own increases in shipping, labor and other operating costs. Our results of operations may also be affected by economic conditions, including tariffs and other inflationary pressures, that can impact consumer disposable income levels and spending habits, thereby reducing the orders we may receive from our significant customers.

Critical Accounting Estimates

There have been no changes to our critical accounting estimates in the nine months ended March 31, 2026. Critical accounting estimates made in accordance with our accounting policies are regularly discussed by management with our Audit Committee. Those estimates are discussed under “Critical Accounting Estimates” in our “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Item 7 of our Annual Report on Form 10-K for the year ended June 30, 2025.

Results of Operations (in thousands, except share and per share amounts)

Our results from operations in the following table, sets forth the income statement data of our results as a percentage of net sales for the periods indicated:

	For the three months						For the nine months
	ended March 31,						ended March 31,
	2026			2025			2026			2025

Sales, net		100.0	%		100.0	%		100.0	%		100.0	%

Costs and expenses:
Cost of sales		102.7	%		88.9	%		97.7	%		89.8	%
Selling and administrative		8.0	%		5.8	%		7.7	%		6.6	%
		110.7	%		94.7	%		105.4	%		96.4	%
(Loss) income from operations		(10.7%	)		5.3	%		(5.4%	)		3.6	%

Other income, net
Interest income, net		0.4	%		0.0	%		0.3	%		0.1	%
Other income, net		0.1	%		0.3	%		0.0	%		0.0	%
Other income, net		0.5	%		0.3	%		0.4	%		0.1	%


(Loss) income before income taxes		(10.2%	)		5.6	%		(5.0%	)		3.7	%

Income tax (benefit) expense, net		(1.9%	)		1.2	%		(0.7%	)		1.2	%

Net (loss) income		(8.3%	)		4.4	%		(4.3%	)		2.5	%

For the Nine Months Ended March 31, 2026 compared to the Nine Months Ended March 31, 2025

Sales, net. Sales, net, for the nine months ended March 31, 2026 and 2025 were $34,076 and $40,178, respectively, a decrease of 15.2%, and were comprised of the following:

	Nine months ended				Dollar			Percentage
	March 31,				Change			Change
	2026		2025		2026 vs 2025			2026 vs 2025
	(amounts in thousands)
Contract Manufacturing:
US Customers	$	26,344	$	30,334	$	(3,990	)		(13.2%	)
International Customers		6,566		7,768		(1,202	)		(15.5%	)
Net sales, Contract Manufacturing		32,910		38,102		(5,192	)		(13.6%	)

Other Nutraceuticals:
US Customers		1,166		2,076		(910	)		(43.8%	)
International Customers		-		-		-			-
Net sales, Other Nutraceuticals		1,166		2,076		(910	)		(43.8%	)

*Total net sales*	$	34,076	$	40,178	$	(6,102	)		(15.2%	)

In each of the nine months ended March 31, 2026 and 2025, a significant portion of our consolidated net sales, approximately 90%, were concentrated among two customers in our Contract Manufacturing Segment, Life Extension and Herbalife. Life Extension and Herbalife represented approximately 69% and 24% and 62% and 26%, respectively, of our Contract Manufacturing Segment’s net sales in the nine months ended March 31, 2026 and 2025, respectively.

The decrease in net sales of approximately $6,102 in the nine months ended March 31, 2026 was the result of decreased sales in both of our segments. Our Contract Manufacturing Segment decrease of $5,192 from the nine months ended March 31, 2025 was primarily from existing and new customers as well as our two major customers of $2,268 and $2,925, respectively. The decrease in the Other Business Lines Segment of approximately $910 was primarily from a major customer in this segment in the amount of $778, which customer represented 38% of net sales in the nine months ended March 31, 2025 compared to 1% of net sales in the nine months ended March 31, 2026.

The loss of any of these customers could have a significant adverse impact on our financial condition and results of operations.

Cost of sales. Cost of sales decreased by approximately $2,781 to $33,304 for the nine months ended March 31, 2026, as compared to $36,085 for the nine months ended March 31, 2025, or approximately 7.7%. Cost of sales increased as a percentage of sales to 97.7% for the nine months ended March 31, 2026 as compared to 89.8% for the nine months ended March 31, 2025. The decrease of $2,781 in the cost of goods sold is primarily a result of the decreased sales. The increase in the cost of goods sold as a percentage of net sales, was primarily the result of the decrease in net sales in both segments used to offset the fixed manufacturing costs in the Contract Manufacturing Segment and the cost of sales in the Other Business Lines Segment.

Selling and Administrative Expenses. Our selling and administrative expenses were lower by $54, $2,608 and $2,662 in the nine months ended March 31, 2026 and 2025, respectively. As a percentage of sales, net, selling and administrative expenses were approximately 7.7% and 6.6% in the nine months ended March 31, 2026 and 2025, respectively. We had a decrease in employee salaries and benefit costs of $102 and increases in professional fees and all other general and administrative expenses of $18 and $30, respectively.

Other income, net. Other income, net was approximately $123 and $36 for the nine months ended March 31, 2026 and 2025, respectively and was composed of:

	Nine months ended
	March 31,
	2025		2024
	(dollars in thousands)
Interest income, net	$	112	$	30
Other expense, net		11		6
Other income, net	$	123	$	36

Interest income, net increased due to the lower cost of financing following the renewal of the PNC Credit Facility in May 2025, as well as higher cash balances during the nine months ended March 31, 2026 compared to the same period in the prior year. In the nine months ended March 31, 2025, we recognized a permanent impairment in our machinery and equipment of $28 offset by a gain on disposal of assets of $34 and in the nine months ended March 31, 2026, recognized a gain on sale of machinery and equipment of $6 and had other income of $5.

Income tax expense (benefit), net. For the nine months ended March 31, 2026 and 2025, we had federal income tax (benefit) expense of $(108) and $651, respectively and state income tax benefits, net of approximately $129 and $170 in the nine months ended March 31, 2026 and 2025, respectively. In the nine months ended March 31, 2025, we released the valuation allowance on our state net operating losses as they became available to offset current state taxable income.

Net (loss) income. In the nine months ended March 31, 2026, we had a net loss of $1,476 compared to net income of $986 in the nine months ended March 31, 2025. The decrease of approximately $2,462 was primarily the result of decreased operating income of $3,267, offset by the decrease in income tax expense of $718.

For the Three Months Ended March 31, 2026 compared to the Three Months Ended March 31, 2025

Sales, net. Sales, net, for the three months ended March 31, 2026 and 2025 were $10,107 and $13,947, respectively, a decrease of 27.5%, and are comprised of the following:

	Three months ended				Dollar			Percentage
	March 31,				Change			Change
	2026		2025		2025 vs 2025			2026 vs 2025
	(amounts in thousands)
Contract Manufacturing:
US Customers	$	7,868	$	10,231	$	(2,363	)		(23.1%	)
International Customers		1,955		3,228		(1,273	)		(39.4%	)
Net sales, Contract Manufacturing		9,823		13,459		(3,636	)		(27.0%	)

Other Nutraceuticals:
US Customers		284		488		(204	)		(41.8%	)
International Customers		-		-		-			-
Net sales, Other Nutraceuticals		284		488		(204	)		(41.8%	)

*Total net sales*	$	10,107	$	13,947	$	(3,840	)		(27.5%	)

For the three months ended March 31, 2026 and 2025, a significant portion of our consolidated net sales, approximately 90% and 85%, respectively, were concentrated among two customers, Life Extension and Herbalife, in our Contract Manufacturing Segment. Life Extension and Herbalife, represented approximately 70% and 23% and 58% and 31%, respectively, of our Contract Manufacturing Segment’s net sales in the three months ended March 31, 2026 and 2025, respectively.

The decrease in net sales of approximately $3,840 in the three months ended March 31, 2026, was primarily the result of decreased net sales in our Contract Manufacturing Segment of $3,636 due to decreased sales volumes to customers from our two major customers in the amount of $2,788 and all other customers of $847. Sales, net in the Other Business Lines Segment decreased by $204 compared to the same period in the prior year and was primarily the result of the loss of two major customers in this segment, resulting in lower sales in this segment of $193. These two customers represented approximately 20% of net sales in this segment in the three months ended March 31, 2025.

The loss of any of these customers could have a significant adverse impact on our financial condition and results of operations.

Cost of sales. Cost of sales decreased by approximately $2,013 to $10,383 for the three months ended March 31, 2026, as compared to $12,396 for the three months ended March 31, 2025 or approximately 16.2%. Cost of sales decreased as a percentage of sales to 102.7% for the three months ended March 31, 2026 as compared to 88.9% for the three months ended March 31, 2025. The increase in the cost of goods sold as a percentage of net sales, was primarily the result of decreased net sales used to offset the fixed manufacturing overhead and cost of sales.

Selling and Administrative Expenses. Selling and administrative expenses were substantially the same in the three months ended March 31, 2026 and 2025, approximately $809 and $812, respectively. As a percentage of sales, net, selling and administrative expenses were approximately 8.0% and 7.7% in the three months ended March 31, 2026 and 2025, respectively.

Other income, net. Other income, net for the three months ended March 31, 2026 and 2025, was approximately $50 and $39, respectively, and is composed of:

	Three months ended
	March 31,
	2026		2025
	(dollars in thousands)
Interest income, net	$	39	$	5
Other expense, net		11		34
Other income, net	$	50	$	39

Interest income, net increased due to the lower cost of financing following the renewal of the PNC Credit Facility in May 2025, as well as higher cash balances during the three months ended March 31, 2026 compared to the same period in the prior year. In the three months ended March 31, 2026 and 2025, we had a gain on disposal of machinery of $6 and a gain on disposals of assets of $34, respectively. In the three months ended March 31, 2026 we also had other income of $5.

Income tax (benefit) expense, net. For the three months ended March 31, 2026 we had a federal and state tax net benefit of $113 and $85, respectively, compared to federal income tax expense, net of $415 and a state income tax benefit of $248, in the three months ended March 31, 2025. In the three months ended March 31, 2025, we released the valuation allowance on our state net operating losses as they became available to offset current state taxable income.

Net (loss) income. For the three months ended March 31, 2026 we had a net loss of $837 compared to net income of $611 in the three months ended March 31, 2025. The change of approximately $1,448 was primarily the result of decreased operating income of $1,824, offset by the change from income tax expense, net to income tax benefit, net of $365.

Seasonality

The nutraceutical business can be seasonal. Due to our current customer base in our contract manufacturing segment, we have not experienced a seasonality impact on our sales volumes as we had seen in the past. In the past we had experienced some seasonality in the December quarters based on the demands of our customer base at the time.

The Company believes that there are non-seasonal factors that may influence the variability of quarterly results including, but not limited to, general economic and industry conditions that affect consumer spending, changing consumer demands and current news on nutritional supplements. Accordingly, a comparison of the Company’s results of operations from consecutive periods is not necessarily meaningful, and the Company’s results of operations for any period are not necessarily indicative of future periods.

Liquidity and Capital Resources

The following table sets forth, for the periods indicated, the Company’s net cash flows used in operating, investing and financing activities, its period end cash and cash equivalents and other operating measures:

	For the nine months ended
	March 31,
	2026			2025
	(dollars in thousands)

Net cash provided by operating activities	$	2,435		$	1,474
Net cash used in investing activities	$	(191	)	$	(201	)
Net cash (used in) provided by financing activities	$	(33	)	$	11

Cash at end of period	$	5,826		$	2,961

As of March 31, 2026, our working capital was approximately $12,447, a decrease of $2,068 from our working capital of $14,515 as of June 30, 2025. The decrease in our working capital was the result of our current assets decreasing by $789 and an increase in our current liabilities of $1,279. The decrease in our currents assets was from decreases in accounts receivable and inventories of $1,775 and $1,243, respectively, offset by increases in cash and other current assets of $2,211 and $18, respectively. The increase in our current liabilities was primarily from the increases in accounts payable and accrued expenses and other liabilities of $772 and current lease obligations of $507.

Net cash provided by operating activities of $2,435 in the nine months ended March 31, 2026 includes a net loss of approximately $1,476. After excluding the effects of non-cash expenses, including depreciation and amortization, and changes in deferred tax assets, the adjusted cash used in operations before the effect of the changes in working capital components was $569. Net cash used in our operations in the nine months ended March 31, 2026 was offset by cash provided by our working capital assets and liabilities in the amount of approximately $3,004 and was primarily the result of decreases in accounts receivable and inventories of $1,775 and $1,243, respectively and increases in accounts payable, accrued expenses and other liabilities of $771. These sources of cash were offset by a decrease in operating leases of $755.

Net cash provided by operating activities of $1,474 in the nine months ended March 31, 2025 includes net income of approximately $986. After excluding the effects of non-cash expenses, including depreciation and amortization, and changes in deferred tax assets, the adjusted cash provided from operations before the effect of the changes in working capital components was $2,564. Net cash provided by our operations in the nine months ended March 31, 2025 was offset by cash used in our working capital assets and liabilities in the amount of approximately $1,090 and was primarily the result of an increases in our accounts receivable of $412 and prepaid expenses and other assets of $152, the decrease in operating lease obligations of $696 and accounts payable and other liabilities of $1,024 offset by a decrease in inventory of $1,167.

Investing Activities

Cash used in investing activities of $191 and $201 in the nine months ended March 31, 2026 and 2025, respectively, was primarily for the purchase of machinery and equipment.

Financing Activities

Cash used in financing activities was approximately $33 for the nine months ended March 31, 2026, and was primarily from principal payments under our financed lease obligations.

Cash provided by financing activities was approximately $11 for the nine months ended March 31, 2025, and was primarily from proceeds from exercises of stock options of $18, offset by principal payments under our financed lease obligations of $7.

As of March 31, 2026, we had cash of $5,826, funds available under our credit lines of approximately $4,500 and working capital of approximately $12,448 and an operating loss of $1,836 in the nine months ended March 31, 2026. After taking into consideration our interim results and current projections, management believes that operations, together with the revolving credit facility will support our working capital requirements at least through the period ending May 8, 2027.

Our current total annual commitments as of March 31, 2026 for long term non-cancelable leases of approximately $1,340 consists of obligations under operating leases for office and warehouse facilities and operating and finance lease obligations for the rental of machinery, transportation and office equipment. Additionally, on April 27, 2026, we entered into an operating lease of office equipment with an additional annual commitment of approximately $5.

Capital Expenditures

The Company's capital expenditures for the nine months ended March 31, 2026 and 2025 were approximately $197 and $201, respectively. The Company has budgeted approximately $200 for capital expenditures for the remaining fiscal year 2026. The total amount is expected to be funded from lease financing and cash provided from the Company’s operations.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

Recent Accounting Pronouncements

See Note 1. Nature of Operations, Principles of Consolidation and Basis of Presentation of Interim Financial Statements to the Condensed Consolidated Financial Statements in Item 1 in this Quarterly Report.

Impact of Inflation

The Company may not be able to timely increase its selling prices to its customer resulting from price increases from its suppliers due to various economic factors, including tariffs and other inflationary factors, labor and shipping costs and its own increases in shipping, labor and other operating costs. The Company’s results of operations may also be affected by economic conditions, including tariffs and other inflationary pressures, that can impact consumer disposable income levels and spending habits, thereby reducing the orders it may receive from the Company’s significant customers.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

Item 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by the Company in the reports it files or submits under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized, and reported within the time periods specified by the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to management, including the Co-Chief Executive Officers and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of management, including the Co-Chief Executive Officers and Chief Financial Officer, the Company has evaluated the effectiveness of its disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2026, and, based upon this evaluation, the Co-Chief Executive Officers and Chief Financial Officer have concluded that these controls and procedures are effective in providing reasonable assurance of compliance.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting occurred during the three months ended March 31, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits and legal proceedings that arise in the ordinary course of business. However, litigation is subject to inherent uncertainties and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

Item 1A. Risk Factors

There have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025.

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

Recent Sales of Unregistered Securities

None

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 4. MINE SAFETY DISCLOSURE

Not Applicable.

Item 5. OTHER INFORMATION

None

Item 6. EXHIBITS

(a) Exhibits

Exhibit

Number

31.1	Certification of pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer.
31.2	Certification of pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer.
32.1	Certification of periodic financial report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief Executive Officer.
32.2	Certification of periodic financial report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by Chief Financial Officer.
101.INS***	Inline XBRL Instance	Furnished herewith
101.SCH***	Inline XBRL Taxonomy Extension Schema	Furnished herewith
101.CAL***	Inline XBRL Taxonomy Extension Calculation	Furnished herewith
101.DEF***	Inline XBRL Taxonomy Extension Definition	Furnished herewith
101.LAB***	Inline XBRL Taxonomy Extension Labels	Furnished herewith
101.PRE***	Inline XBRL Taxonomy Extension Presentation	Furnished herewith
104	Cover Page Interactive Date File (formatted as Inline XBRL and contained in Exhibit 101)

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

INTEGRATED BIOPHARMA, INC.

Date: May 8, 2026	By: /s/ Christina Kay
	Christina Kay,
	Co-Chief Executive Officer

Date: May 8, 2026	By: /s/ Riva Sheppard
	Riva Sheppard,
	Co-Chief Executive Officer

	By: /s/ Dina L. Masi
Date: May 8, 2026	Dina L. Masi,
	Chief Financial Officer & Senior Vice President

INTEGRATED BIOPHARMA INC 10-Q