What changed in this filing

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Item 1. Business

2025-09-23 compared with 2024-09-27 · 39 added, 40 removed, 225 unchanged (26% of the section changed)

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We also own a patent estate related to the raw material ingredient known as beta-alanine, which is primarily commercialized through the direct sale of this raw material and supply agreements with third parties for the distribution and use of this raw material under our CarnoSyn®, SR CarnoSyn® and TriBsyn™ trademarks.

We also sell a branded version of our SR CarnoSyn® tablet product under a brand we created called SustainedRx® and a product named Perfect Synergy®.

We also have SR CarnoSyn® Wellness tablet products – Complete Vision Support and Complete Memory Support.

These products are being offered both as business-to-business private label products and direct to the consumer through Amazon and our own direct to consumer website.

We previously sold a branded version of our SR CarnoSyn® Wellness tablet product under a brand we created called SustainedRx® and a product named Perfect Synergy®.

This product was sold directly to consumers through Amazon and our own direct to consumer website.

This brand was discontinued during fiscal 2025 as it was not commercially successful.

We also sell SR CarnoSyn® tablet products and TriBsyn™ capsule products that are offered as business-to-business private label products.

Originally founded in 1980, Natural Alternatives International, Inc.

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We sell these products under our trademarks CarnoSyn® and SR CarnoSyn®.

As part of our business strategy, we have sought to commercialize our CarnoSyn® patent estate through contract manufacturing, royalty and license agreements, and further patent estate expansion.

As part of our business strategy, we have sought to commercialize our CarnoSyn® patent estate through contract manufacturing, royalty and license agreements, and further expansion of our patent estate.

We recently expanded our licensed product offerings with patent applications associated with a new form of CarnoSyn® beta-alanine trademarked as TriBsyn™.

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Overview of our Facilities and Operations

Our U.S.-based operations are located in Vista and Carlsbad, California and include manufacturing and distribution, sales and marketing, in-house formulation, laboratory, and other research and development services.

Our U.S.-based manufacturing operations are located in Vista and Carlsbad, California and include manufacturing and distribution, sales and marketing, in-house formulation, laboratory, and other research and development services.

Our Vista manufacturing facilities are certified by the Therapeutic Goods Administration (TGA) of Australia after its audit of our GMP’s.

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TGA also conducts a range of assessment and monitoring activities including audits of the manufacturing practices of companies who export and sell products to Australia.

TGA certification enables us to manufacture products for export into countries that have signed the Pharmaceutical Inspection Convention, which include most European countries as well as several Pacific Rim countries.

TGA certification enables us to manufacture products for export into countries that have signed the Pharmaceutical Inspection Convention, which includes most European countries as well as several Pacific Rim countries.

TGA certifications are generally reviewed every eighteen to thirty-six months.

During August 2022, TGA completed an inspection of our Vista, California facility and quality systems for compliance with GMP, and issued a renewed GMP certification valid through August 12, 2025.

As of this report, the TGA is experiencing delays and has yet to confirm timing of a renewal inspection.

NAI’s GMP Certification and authorization to manufacture product for Australia remains in place, and we advise our TGA clients to file for clearance extensions to ensure supply is not interrupted until a renewal inspection may be completed.

Our Vista, California facilities have also been awarded GMP registration annually since October 2002 by NSF International (NSF) through the NSF Dietary Supplements Certification Program and received “GMP for Sport” NSF Certified registration on February 16, 2009.

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This certification demonstrates our facility meets the USDA National Organic Program standards and allows our contract manufacturing and packaging services to include products labeled as Organic.

The certification requires annual renewal and was last renewed in April 2023.

The certification was initially issued in March 2015 and requires annual renewal.

The last renewal inspection was conducted in December 2024.

We are registered with the State of California, Department of Public Health Food and Drug Branch as an organic processor.

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The SSCI is an industry-driven initiative led by retailers to provide a harmonized benchmark to recognize various safety standards throughout the entire dietary supplement supply chain.

Patterned after the Global Food Safety Initiative (GFSI), which has been very successful in implementation across the grocery marketplace and food retail sectors, the program is focused on improved traceability and identification protocols to provide maximum safety for end users.

Patterned after the Global Food Safety Initiative (GFSI), which has been successfully implemented in the grocery marketplace and food retail sectors.

The program is focused on improved traceability and identification protocols to provide maximum safety for end users.

SSCI key objectives include creating effective global systems to ensure traceability, transparency, and quality in the supply chain;

reducing risks by ensuring equivalence between safety management systems’ and driving global change through benchmarking of domestic and international quality standards.

NAI’s SSCI certification was last renewed in July 2023.

NAI’s SSCI certification was last renewed in April 2025.

In August 2021, NAI acquired a new manufacturing and warehouse facility in Carlsbad, California and retrofitted the facility to become a dedicated high-volume powder blending and packaging facility while also providing additional raw material storage capacity.

The state-of-the-art facility commenced full operations in April 2023 and was added to the NFC Organic certification at that time.

We continue to evaluate which of the above referenced additional certifications will be advantageous for this new facility based on the types of products and customers we plan to service out of this facility.

This facility is now also third-party GMP certified through the above-mentioned NSF and NSF for Sport programs as of November 2024 and the SSCI program as of April 2025.

NAIE operates a manufacturing, warehousing, packaging and distribution facility in Manno, Switzerland.

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In January 2013, following an additional upgrade of NAIE’s manufacturing facilities to include the manufacture of pharmaceuticals, NAIE obtained an additional pharmaceutical approval from the Swissmedic Authority certifying that NAIE’s upgraded facilities conform to GMP.

The plan is subject to periodic inspections by the Swissmedic to verify compliance and maintain validity of the GMP certification.

The plant is subject to periodic inspections by the Swissmedic to verify compliance and maintain validity of the GMP certification.

NAIE’s most recent Swissmedic inspection was conducted in July 2024.

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We believe these licenses, certifications and NAIE’s manufacturing capabilities help strengthen our relationships with existing customers and improve our ability to develop relationships with new customers.

In March 2019, the Japanese Minister of Health, Labor, and Welfare approved beta-alanine for use in Japanese food products.

We have partnered with Shimizu Chemical Corporation of Hiroshima Japan to provide exclusive distribution of our CarnoSyn® and SR CarnoSyn® beta-alanine in Japan.

Business Strategy

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leverage our state-of-the-art, California and Swiss facilities to increase the value of the goods and services we provide to our highly valued private-label contract manufacturing customers and to assist in developing relationships with additional quality oriented customers;

expand the commercialization of our beta-alanine patent estate through raw material sales, further development of the Wellness and Healthy Aging distribution channel through sales of our sustained release form of beta-alanine marketed under our SR CarnoSyn® trademark and our newly launched TriBsyn™ product offering, exploiting new contract manufacturing opportunities, introduction of private-label branded products, and license and royalty agreements while protecting our proprietary rights;

expand the commercialization of our beta-alanine patent estate through raw material sales, further development of the Wellness and Healthy Aging distribution channel through sales of our sustained release form of beta-alanine marketed under our SR CarnoSyn® trademark and our recently launched TriBsyn™ product offering, exploiting new contract manufacturing opportunities, introduction of private-label branded products, and license and royalty agreements while protecting our proprietary rights;

improve operational efficiencies and manage costs and business risks to improve profitability.

Overall, we believe there is an opportunity to enhance consumer confidence in the quality of our customer’s nutritional supplements and their adherence to label claims through education provided by direct sales and direct-to-consumer marketing programs.

Overall, we believe there is an opportunity to enhance consumer confidence in the quality of our customers' nutritional supplements and their adherence to label claims through education provided by direct sales and direct-to-consumer marketing programs.

We believe our GMP and TGA certified manufacturing operations, science-based product formulations, peer-reviewed clinical studies and regulatory expertise collectively provide us with a sustainable competitive advantage and provide our customers with a high degree of confidence in the products we manufacture.

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Some of our largest customers operate in the direct sales marketing channel.

Thus, the majority of our business has relied primarily on the effectiveness of our customers in this marketing channel.

Thus, a significant portion of our business relies on the effectiveness of our customers in this marketing channel.

We also believe there is significant opportunity with the commercialization of our patent estate through the introduction of our existing patented ingredients into additional markets and the introduction of new beta-alanine product offerings.

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However, this product offering is limited to solid dose tablet offerings, which limits the potential for customization of the product by our target customers.

With the recent introduction of our new product called TriBsyn™, we believe we now have a product that will allow us to better penetrate the Wellness and Healthy Aging channel.

This groundbreaking new product is a carnosine booster that utilizes CarnoSyn® beta-alanine and other patent-pending technology to increase beta-alanine bioavailability and absorption while effectively eliminating beta-alanine related paresthesia.

With the introduction of our recent product called TriBsyn™, and its patent-pending formulation, we believe we now have a product that will allow us to better penetrate the Wellness and Healthy Aging channel.

This groundbreaking product is a carnosine booster that utilizes CarnoSyn® beta-alanine and other proprietary technology to increase beta-alanine bioavailability and absorption while effectively eliminating beta-alanine related paresthesia.

This product is available as a raw material powder, which allows formulation flexibility for our customers.

The elimination of paresthesia while maintaining efficacy of dosage creates a new opportunity to reach segments of the market that to-date have been untapped, including older adults, vegetarians, and vegans.

In addition, we also sell three versions of our own branded SR CarnoSyn® tablet products under a brand called Sustained RX®.

These products are offered as both business-to-business private label products and direct to consumers through Amazon and our own direct to consumer website.

These product offerings are condition-specific tablet products that include SR CarnoSyn® as the primary ingredient along with other science-backed ingredients that strengthen the claims and marketing around the product and are more recognizable to the consumer.

In addition, we also sell several versions of SR CarnoSyn® tablet products and an encapsulated form of TriBsyn™ that are offered as business-to-business private label products.

The tablet product offerings are condition-specific tablet products that include CarnoSyn® as the primary ingredient along with other science-backed ingredients that strengthen the claims and marketing around the product and are more recognizable to the consumer.

We are also working on several other innovations that could lead to new patentable products for CarnoSyn® Brands in the future.

Our patents related to instant release beta-alanine extend through 2026 and our patents for SR CarnoSyn® extend through 2036.

Our patents related to instant release beta-alanine extend through July 2026, our patents for SR CarnoSyn® extend through 2036, and we have patent applications pending related our TriBsyn™ product.

We believe our comprehensive approach to customer service is unique within our industry.

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Our private-label contract manufacturing customers include companies that market nutritional supplements through direct sales marketing channels, direct to consumer ecommerce channels, and retail stores.

We manufacture products in a variety of forms, including capsules, tablets, chewable wafers, and powders to accommodate a variety of our customer’s preferences.

We manufacture products in a variety of forms, including capsules, tablets, chewable wafers, and powders to accommodate a variety of our customers' preferences.

We provide strategic partnering services to our private-label contract manufacturing customers that include but are not limited to the following:

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In addition, the commercialization of our beta-alanine patents and trademarks depends on the availability of the raw material beta-alanine.

We conduct identity testing for all raw materials we purchase and, on a predetermined testing protocol basis we evaluate raw materials to ensure their quality, purity and potency before we use them in our or our customer’s products.

We conduct identity testing for all raw materials we purchase and, on a predetermined testing protocol basis, we evaluate raw materials to ensure their quality, purity and potency before we use them in our or our customers’ products.

We typically buy raw materials in bulk from qualified vendors located both within and outside the U.S.

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While these impacts have lessened over the past couple of years, there continues to be significant pricing pressures and supply chain challenges associated with various raw materials and packaging components and we continue to manage these circumstances by working closely with our customers and suppliers.

Additionally, there still remains uncertainty related to existing and potentially increased tariffs.

Throughout fiscal 2025, we expect upward pricing pressures for raw materials, packaging components, and other costs will continue as a result of limited supplies of various ingredients and the impact of inflationary factors, including higher labor and transportation costs, and the potential levy of tariffs on goods we import from overseas, including beta-alanine.

Over the past year, sourcing of raw materials for our business has also been impacted by various geo-political issues, including the Ukraine-Russia and Israel-Hamas conflicts.

Additionally, uncertainty remains high related in part to existing and potentially increased tariffs.

Throughout fiscal 2026, we expect upward pricing pressures for raw materials, packaging components, and other costs will continue as a result of limited supplies of various ingredients and the impact of inflationary factors, including higher labor and transportation costs, and tariffs on goods we import from overseas.

Sourcing of raw materials for our business has also been impacted by various geo-political issues, including the Ukraine-Russia and Israel-Hamas conflicts.

These conflicts have impacted the availability and pricing of certain raw materials that we purchase along with impacts to lead times associated with materials brought in by ocean freight.

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We continue to focus on obtaining new private-label contract manufacturing customers to reduce the risks associated with deriving a significant portion of our sales from a limited number of customers.

On August 16, 2023, we announced the temporary closure of our new high-speed powder processing facility in Carlsbad, California due to excess inventory on hand at one of our largest customers and their efforts to rebalance supply and demand.

As a result of this temporary closure, we furloughed a majority of the employees that worked in that facility starting in early October 2023.

We reopened this facility in May 2024 based on new orders received from this customer.

We compete with other manufacturers, distributors and marketers of vitamins, minerals, plant extracts, and other nutritional supplements both within and outside the U.S.

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Under FDA rules, companies that manufacture, package, label, distribute or hold nutritional supplements are required to meet certain GMP’s to ensure such products are of the quality specified and are properly packaged and labeled.

We are committed to meeting or exceeding the standards set by the FDA and believe we are currently operating within the FDA mandated GMP.

We are committed to meeting or exceeding the standards set by the FDA and believe we are currently operating in compliance with the FDA mandated GMP's.

The FDA also regulates the labeling and marketing of dietary supplements and nutritional products, including the following:

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In other markets outside the U.S., we may be required to obtain approvals, licenses or certifications from a country’s Ministry of Health or comparable agency before we or our customers begin operations or the marketing of products in that country.

Approvals or licenses may be conditioned on reformulation of our or our customer’s products for a particular market or may be unavailable for certain products or product ingredients.

Approvals or licenses may be conditioned on reformulation of our or our customers’ products for a particular market or may be unavailable for certain products or product ingredients.

These regulations may limit our or our customer’s ability to enter, or continue to operate in certain markets outside the U.S.

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including 11 registrations in the U.S.

Eight of these U.S.

Seven of these U.S.

registrations are incontestable.

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In addition, rights in a registered mark are dependent upon the continued use of the mark in connection with the goods and/or services set forth in the registration.

We have 40 foreign registered trademarks covering 40 countries including registrations for CarnoSyn®, SR CarnoSyn® or TriBsyn™ in Australia, Brazil, Canada, China, Hong Kong, Cuba, the European Union, Israel, Japan, Mexico, New Zealand, South Korea, Switzerland and the United Kingdom.

We have 46 foreign registered trademarks covering 39 foreign countries including registrations for CarnoSyn®, SR CarnoSyn® or TriBsyn™ in Australia, Brazil, Canada, China, Hong Kong, Cuba, the European Union, Israel, Japan, Mexico, New Zealand, South Korea, Switzerland and the United Kingdom.

Our registered trademarks include CarnoSyn® and the SR CarnoSyn® logos in Switzerland.

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Patents and Patent Licenses .

We currently own 9 U.S.

patents and 8 corresponding non-U.S.

We currently own nine U.S.

patents and eight corresponding non-U.S.

patents registered in countries throughout North America, Europe and Asia.

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Some of our patents extend as far as through 2036.

Licensing, royalties, raw material sales, and revenues we have received associated with the sale and licensing of beta-alanine under the CarnoSyn® and SR CarnoSyn® trade names were primarily related to the direct sale of the raw material beta-alanine and totaled $8.4 million in fiscal 2024.

Licensing, royalties, raw material sales, and revenues we have received associated with the sale and licensing of beta-alanine under the CarnoSyn® and SR CarnoSyn® trade names and TriBsyn™ trademark were primarily related to the direct sale of the raw material beta-alanine and totaled $8.1 million in fiscal 2025.

We incurred intellectual property litigation and patent compliance expenses of approximately $0.4 million during fiscal 2025 primarily in connection with our efforts to procure and protect our proprietary rights and patent estate.

We expect to continue to incur these types of litigation and compliance expenses during fiscal 2026.

As of June 30, 2024, we employed 227 full-time employees in the U.S., 3 of whom are executive officers of the Company.

As of June 30, 2025, we employed 215 full-time employees in the U.S., three of whom are executive officers of the Company.

Of the remaining full-time employees, 45 were employed in research, laboratory and quality control, 13 in sales and marketing, and 154 in manufacturing and administration.

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We manufacture and sell products to customers that operate in many different countries throughout the world and these seasonal factors vary by region.

Although we believe the impact of seasonality on our consolidated results of operations is minimal, our quarterly results may vary significantly in the future due to the timing of private-label contract manufacturing and CarnoSyn®, SR CarnoSyn®, and TriBysn™ beta-alanine raw material orders.

Future revenue trends may not follow historical patterns.

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Private-label contract manufacturing, in which we primarily provide manufacturing services to companies that market and distribute nutritional supplements and other health care products.

Royalty, licensing, and raw material sales associated with the sale and license of beta-alanine under our CarnoSyn®, SR CarnoSyn® and TriBsyn™ trademarks.

Royalty, licensing, and raw material sales primarily associated with the sale and license of beta-alanine under our CarnoSyn®, SR CarnoSyn® and TriBsyn™ trademarks.

Our private-label contract manufacturing products are sold both in the U.S.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business