NASDAQ: NAII

History

Originally founded in 1980, Natural Alternatives International, Inc. (NAI) reorganized as a Delaware corporation in 1989. Our principal executive offices are located at 1535 Faraday Ave, Carlsbad, CA 92008. Our primary U.S. manufacturing facility is located approximately three miles away in Vista, California. We also have another manufacturing and warehousing facility located approximately one mile away from our executive offices in Carlsbad, California.

In January 1999, we formed our wholly owned subsidiary Natural Alternatives International Europe S.A. (NAIE), a Swiss corporation based in Manno, Switzerland. In September 1999, NAIE opened its manufacturing facility in Manno, Switzerland, which has grown over the ensuing years and currently possesses manufacturing capabilities in encapsulation, powders, tablets, finished goods packaging, quality control, laboratory testing, warehousing, distribution and administration.

In 1997, we licensed certain patent rights related to instant-release beta-alanine and have since expanded this patent estate by applying for and obtaining patents to include sustained-release beta-alanine. 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 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 CarnoSyn® 4X and TriBsyn®. We directly sell CarnoSyn®, SR CarnoSyn®, CarnoSyn® 4X, and TriBsyn® and license our related patent and trademark rights to others for use in or with their products.

Unless the context requires otherwise, all references in this report to the “Company,” “NAI,” “we,” “our,” and “us” refer to Natural Alternatives International, Inc. and, as applicable NAIE.

Overview of our Facilities and Operations

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 services, and research and development.

Our Vista, California manufacturing facilities maintain third-party certifications supporting the manufacture of dietary supplements and nutritional products for domestic and international markets. The facilities have maintained annual Good Manufacturing Practices (GMP) registration through the NSF Dietary Supplements Certification Program since 2002 and have been certified under the NSF Certified for Sport® program since 2009, enabling the manufacture of products bearing the NSF Certified for Sport® mark. The facilities are also recognized by Health Canada as compliant with the Good Manufacturing Practices requirements of the Canadian Natural Health Products Regulations, supporting customers who market products in Canada.

Our Vista, California facilities are certified as an Organic Processor and Handler by Natural Food Certifiers (NFC) under the USDA National Organic Program, allowing the manufacture and packaging of certified organic products. These facilities are also registered with the California Department of Public Health as an organic processor and maintain certifications to manufacture Kosher and Halal products. These certifications are maintained through periodic inspections and renewals.

In April 2021, NAI became the first company to achieve certification under the Supplement Safety & Compliance Initiative (SSCI), an industry benchmarking program focused on supply chain safety, traceability, and quality management. NAI's SSCI certification was most recently renewed in May 2026.

In August 2021, NAI acquired a manufacturing and warehouse facility in Carlsbad, California, which was retrofitted as a dedicated high-volume powder blending and packaging facility and commenced full operations in April 2023. The Carlsbad facility is certified under the NSF Dietary Supplements Certification Program, the NSF Certified for Sport® program, the SSCI program, the NFC Organic program, and maintains certifications to manufacture Kosher and Halal products.

NAIE operates a manufacturing, packaging, warehousing, distribution, and analytical laboratory facility in Manno, Switzerland. The facility is licensed and periodically inspected by the Swissmedic Authority of Bern, Switzerland and operates in compliance with applicable pharmaceutical Good Manufacturing Practice (GMP) requirements. NAIE manufactures and packages food supplements and nutritional products under these quality standards. Swissmedic conducts periodic inspections to verify continued compliance, with the most recent inspection completed in September 2025. The facility also maintains FSSC 22000 certification, demonstrating compliance with internationally recognized food safety management system requirements. The certification was most recently renewed in April 2026. We believe these licenses, certifications, and manufacturing capabilities strengthen our relationships with existing customers and support opportunities to develop new business.

Business Strategy

Our goals are to achieve long-term growth and profitability and to diversify our sales base. To accomplish these goals, we have sought, and intend to continue to seek, to do the following:

•

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

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Expanding the commercialization of our beta-alanine patent and trademark estate in Sports Nutrition, Wellness and Healthy Aging and Medical food channels with our CarnoSyn®, SR CarnoSyn®, CarnoSyn® 4X, and TriBsyn® beta-alanine product lines; exploiting new contract manufacturing opportunities, license and royalty agreements, and protecting our proprietary rights; and

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Consolidating our facilities and factories to 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 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 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.

While today’s consumer may have access to a variety of information, we believe many consumers remain uneducated about nutrition and nutritional supplementation, uncertain about the relevance or reliability of the information available to them, or confused about conflicting claims or information. We believe this state of the market creates a significant opportunity for the direct sales marketing channel. The direct sales marketing channel has proved, and we believe will continue to prove, to be a highly effective method for marketing high-quality nutritional supplements because it allows associates or other individuals to educate consumers on the benefits of science-based nutritional supplements. Some of our largest customers operate in the direct sales 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. Currently, the majority of our CarnoSyn® sales are to companies operating in the Sports Nutrition market, where products are primarily formulated with the instant-release form of beta-alanine. We believe several additional markets and distribution channels represent significant growth opportunities for our SR CarnoSyn®, CarnoSyn® 4X, and TriBsyn® product offerings. We believe SR CarnoSyn® provides a superior delivery system for CarnoSyn® beta-alanine due to its sustained-release profile, which supports higher daily dosing and improved muscle carnosine retention. However, this product is currently limited to solid-dose tablet formulations, reducing the potential for customization by our target customers. With the introduction of CarnoSyn® 4X and TriBsyn®, along with their patent-pending formulations, we believe we are well positioned to expand our presence in the Wellness and Healthy Aging markets. This groundbreaking product is a carnosine booster that utilizes CarnoSyn® beta-alanine and proprietary technology to enhance beta-alanine bioavailability and absorption while effectively eliminating beta-alanine related paresthesia. Available as a raw material powder, it offers formulation flexibility for our customers. By eliminating paresthesia while maintaining an efficacious dosage, this product creates new opportunities to reach previously untapped market segments, including older adults, vegetarians, and vegans. It is well suited for a wide range of applications, including ready-to-drink beverages, protein drinks, dairy-based products, gummies, and medical nutrition products. We are also developing several additional innovations that could result in new patentable products for the CarnoSyn® Brands portfolio. Our patents covering instant-release beta-alanine expired in July 2026. However, our patents for SR CarnoSyn® extend through 2036, and we have patent applications pending for our TriBsyn® and CarnoSyn® 4X products.

We believe our comprehensive approach to customer service is unique within our industry. We believe this comprehensive approach, together with our commitment to high quality, product development and manufacturing capabilities, will provide the means to implement our strategies and achieve our goals. There can be no assurance, however, that we will successfully implement any of our business strategies or that we will increase or diversify our sales, successfully commercialize our patent estate, or improve our overall financial results.

Products, Principal Markets and Methods of Distribution

Our primary business activity is to provide private-label contract manufacturing services to companies that market and distribute vitamins, minerals, herbs, and other nutritional supplements, as well as other health care products, to consumers both within and outside the U.S. 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 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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customized product formulation;

•

clinical study design and support;

•

manufacturing;

•

marketing support;

•

international regulatory and label law compliance;

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international product registration; and

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packaging in multiple formats and labeling design.

We also seek to commercialize our patent and trademarks through the direct distribution and sale of CarnoSyn®, SR CarnoSyn®, CarnoSyn® 4X, TriBsyn®, new contract manufacturing opportunities, and various license, royalty, and similar arrangements.

For the last two fiscal years ended June 30, our net sales were derived from the following (in thousands):

2026

2025

$

%

$

%

Private-label Contract Manufacturing

$
134,615

94

$
121,779

94

Patent and Trademark Licensing

7,900

6

8,081

6

Total Net Sales

$
142,515

100

$
129,860

100

Research and Development

We are committed to quality research and development. We focus on the development of new science-based products and the improvement of existing products. We periodically test and validate products we manufacture to help ensure their stability, potency, efficacy and safety. We maintain quality control procedures to verify that products we manufacture comply with applicable specifications and standards established by the FDA and other regulatory agencies. We also both direct and participate in clinical research studies, often in collaboration with scientists and research institutions, to validate the benefits of an ingredient or a product and provide scientific support for product claims and marketing initiatives. We believe our commitment to research and development, as well as to our facilities and strategic alliances with our suppliers and customers, allow us to effectively identify, develop and market high-quality and innovative products.

As part of the services we provide to our private-label contract manufacturing customers, we may perform certain research and development activities related to the development or improvement of their products. Our customers are usually charged for our services but are often reimbursed for these costs if their products are ultimately commercialized and manufactured by NAI. Research and development costs, including costs associated with international regulatory compliance services we provide to our customers, are expensed as incurred.

Our research and development expenses for the fiscal year ended June 30, 2026 were $2.3 million, compared to $1.8 million for the fiscal year ended June 30, 2025.

Sources and Availability of Raw Materials

We use many raw materials in our operations including powders, excipients, empty capsules, and components for packaging and distributing our finished products. 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 customers’ products. We typically buy raw materials in bulk from qualified vendors located both within and outside the U.S.

Like many companies and industries, we experienced challenges within our supply chain as a result of the effects of the COVID-19 pandemic. In particular, we encountered difficulties related to the supply of raw materials and packaging components. These challenges were driven by, but were not limited to, increased demand for certain ingredients with a limited supply, our supplier’s inability to meet demand due to capacity constraints, and increased lead times associated with constrained transportation availability. 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, uncertainty remains high related in part to existing and potentially increased tariffs. Throughout fiscal 2027, we expect upward pricing pressures will continue for raw materials, packaging components, and other costs as a result of limited supplies of various ingredients and the impact of inflationary factors, including higher labor, 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 conflicts, including the 2026 Iran War in the Middle East, the Russo-Ukrainian war in Eastern Europe, and ongoing conflicts in Sudan and Syria. 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. We have actively worked with our customers to identify alternative sources of these materials, which has mostly mitigated the impact of these conflicts.

Customers

We have two private-label contract manufacturing customers that each individually represent more than 10% of our consolidated net sales. The loss of either of these customers could result in a significant negative impact to our financial position and results of operations. 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.

Competition

We compete with other manufacturers, distributors and marketers of vitamins, minerals, plant extracts, and other nutritional supplements both within and outside the U.S. The nutritional supplement industry is highly fragmented and competition for the sale of nutritional supplements comes from many sources. These products are sold primarily through retailers (i.e. drug store chains, supermarkets, and mass market discount retailers), ecommerce, health and natural food stores, and direct sales channels (i.e. network marketing and internet sales).

We believe private-label contract manufacturing competition in our industry is based on, among other things, customized services offered, product quality and safety, innovation, price and customer service. We believe we compete favorably with other companies because of our ability to provide comprehensive solutions for customers, our certified manufacturing operations, our commitment to quality and safety, and our research and development activities.

Our future competitive position for private-label contract manufacturing and patent and trademark licensing will likely depend on, but not be limited to, the following:

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growing acceptance of our products by new and current customers and by consumers;

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our ability to protect our proprietary rights in our patent estate and the continued validity of such patents;

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our ability to successfully expand our product offerings related to our patent and trademark estate;

•

our ability to maintain compliance with debt covenants or in the event of non-compliance with our debt covenants; our ability to obtain amendments, waivers, or modifications from our lenders on acceptable terms, or at all;

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the sufficiency of our available cash, cash equivalents and restricted cash, including continued access to borrowings under our credit facilities, and potential cash flows from our operations to fund our working capital and capital expenditure needs through the next 12 months and longer;

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our ability to recover the carrying value of long-lived assets and accurately estimate their impairment if and when circumstances arise;

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our ability to maintain adequate inventory levels to meet our customers' demands;

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our ability to continue to manufacture high quality products at competitive prices;

•

our ability to attract and retain qualified personnel;

•

the effect of any future governmental regulations on our products and business;

•

the results of, and publicity from, product safety and performance studies performed by governments and other research institutions;

•

continued growth of the global nutrition industry; and

•

our ability to respond to changes within the industry and consumer demand, financially and otherwise.

The nutritional supplement industry is highly competitive, and we expect the level of competition to remain high over the near term. We do not have sufficient information to accurately estimate the total number or size of our competitors.

Government Regulation

Our business is subject to varying degrees of regulation by a number of government authorities in the U.S., including the FDA, the Federal Trade Commission (FTC), the Consumer Product Safety Commission, the U.S. Department of Agriculture, and the Environmental Protection Agency. Various state and local agencies in areas where we operate and in which our or our customers' products are sold also regulate our business, such as the California Department of Health Services, Food and Drug Branch. The areas of our business regulated by both these, and other authorities include, among others:

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product claims and advertising;

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product labels;

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product ingredients;

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how we manufacture, package, distribute, import, export, sell and store our or our customers' products; and

•

our classification as an essential business and our right to continue operations during government shutdowns.

The FDA, in particular, regulates the formulation, manufacturing, packaging, storage, labeling, promotion, distribution and sale of vitamins and other nutritional supplements in the U.S., while the FTC regulates marketing and advertising claims. 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 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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the identification of dietary supplements or nutritional products and their nutrition and ingredient labeling;

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requirements related to the wording used for claims about nutrients, health claims, and statements of nutritional support;

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labeling requirements for dietary supplements or nutritional products for which “high potency” and “antioxidant” claims are made;

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notification procedures for statements on dietary supplements or nutritional products; and

•

premarket notification procedures for new dietary ingredients in nutritional supplements.

The Dietary Supplement Health and Education Act of 1994 (DSHEA) revised the provisions of the Federal Food, Drug and Cosmetic Act concerning the composition and labeling of dietary supplements and re-defined dietary supplements to include vitamins, minerals, herbs, amino acids and other dietary substances. DSHEA generally provides a regulatory framework to help ensure safe, quality dietary supplements and the dissemination of accurate information about such products. The FDA is generally prohibited from regulating active ingredients in dietary supplements as drugs unless product claims about such supplements trigger regulatory status, such as claims that a product may heal, mitigate, cure or prevent an illness, disease or malady.

In December 2006, the Dietary Supplement and Nonprescription Drug Consumer Protection Act (the “2006 Act”) was passed, and further revised the provisions of the Federal Food, Drug and Cosmetic Act. Under the 2006 Act, manufacturers, packers or distributors whose name appears on the product label of a dietary supplement or nonprescription drug are required to include contact information on the product label for consumers to use in reporting adverse events associated with the product’s use and to notify the FDA of any serious adverse event report. Events reported to the FDA are not considered an admission from a company that its product caused or contributed to the reported event. We believe we are in compliance with the 2006 Act, and we are committed to meeting or exceeding the requirements of the 2006 Act.

We are also subject to a variety of other regulations in the U.S., including those relating to health, safety, bioterrorism, taxes, labor, employment, import and export, the environment and intellectual property. All of these regulations require significant financial and operational resources to ensure compliance, and we cannot assure you we will always be in compliance despite our best efforts to do so or that being in compliance will not become prohibitively costly to our business.

Our operations outside the U.S. are similarly regulated by various agencies and entities in the countries in which we operate and in which our or our customers' products are sold. The regulations of these countries may conflict with those in the U.S. and may vary from country to country. The sale of our and our customers' products in certain European countries are subject to the rules and regulations of the European Union, which may be interpreted differently among the countries within the European Union. 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 customers’ products for a particular market or may be unavailable for certain products or product ingredients. These regulations may limit our or our customers' ability to enter, or continue to operate in certain markets outside the U.S. As with the costs of regulatory compliance in the U.S., foreign regulations require significant financial and operational resources to ensure compliance, and we cannot provide assurances we will always be in compliance despite our best efforts to do so or that being in compliance will not become prohibitively costly to our business. Our failure to maintain regulatory compliance within and outside the U.S. could impact our or our customers' ability to sell products and thus, adversely impact our financial position and results of operations.

Intellectual Property

Trademarks. We have developed and use trademarks in our business, particularly relating to corporate, brand and product names. We own 61 registered trademarks; including 13 registrations in the U.S. Seven of these U.S. registrations are incontestable. Federal registration of a trademark in the United States affords the owner nationwide exclusive trademark rights to the registered mark and the ability to prevent subsequent users from using the same or similar mark. However, to the extent any other business operator has acquired trademark rights in a mark by its consistent use of such mark in connection with similar goods or services in a particular geographic area, the nationwide rights conferred by federal registration can be subject to that user’s prior established non-statutory (“common law”) rights in that geographic area. 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 48 foreign registered trademarks covering 40 foreign countries, including registrations for CarnoSyn®, SR CarnoSyn®, CarnoSyn® 4X or TriBsyn® in Australia, Brazil, Canada, China, Cuba, Hong Kong, the European Union, Israel, Japan, Mexico, New Zealand, South Korea, Switzerland, the United Kingdom and Vietnam. Our registered trademarks include CarnoSyn® and the SR CarnoSyn® logos in Switzerland. We also claim common law ownership and protection of certain trademarks based upon our continued use of the tradenames. In some countries, such as the United States, common law can provide some protection of a name or mark within the particular geographic area in which it is continually and deliberately used.

We believe our registered trademarks and our tradenames constitute valuable assets adding to the recognition of our products and services in the marketplace. These and other proprietary rights have been and may continue to be important in enabling us to compete; however, we cannot provide assurances our current or future trademark applications will be granted, or our current trademark registrations will be maintained.

Trade Secrets. We own certain intellectual property, including trade secrets, which we seek to protect, in part, through confidentiality agreements with employees and other parties. We regard our proprietary technology, trade secrets, trademarks and similar intellectual property as critical to our success, and we rely on a combination of trade secrets, contract, patent, copyright and trademark law (including established but non-statutory law) to establish and protect the rights in our products and technology. The laws of certain foreign countries may not protect our intellectual property rights to the same extent as the laws of the U.S.

Patents and Patent Licenses. We currently own two U.S. patents and one corresponding non-U.S. patent registered in countries throughout North America and Europe. All of these patents and patent rights relate to the ingredient known as beta-alanine. Certain of these patents were assigned to NAI, and we made ongoing royalty payments to the prior owners of the patents until expiration of those patents in July 2026. We also sell beta-alanine and license our patent and trademark rights related to beta-alanine. 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®, SR CarnoSyn®, CarnoSyn® 4X and TriBsyn® trademarks were primarily related to the direct sale of the raw material beta-alanine and totaled $7.9 million in fiscal 2026. We incurred patent compliance expenses of approximately $0.4 million during fiscal 2026 primarily in connection with our efforts to procure, protect and support our proprietary rights and patent estate. We expect to continue to incur these types of compliance expenses during fiscal 2027 and beyond.

Employees

As of June 30, 2026, we employed 219 employees in the U.S., 46 who were employed in research, laboratory and quality control, 10 in sales and marketing, and 162 in manufacturing and administration. From time to time, we use temporary personnel to help us meet shorter-term operating requirements. These positions typically are in manufacturing and manufacturing support. As of June 30, 2026, we had 11 temporary personnel in the U.S.

As of June 30, 2026, NAIE employed an additional 82 employees and 11 temporary employees. Most of these positions were in the areas of manufacturing and manufacturing support.

Our employees are not represented by a collective bargaining agreement, and we have not experienced any work stoppages as a result of labor disputes. We believe our relationship with our employees is good. We cannot assure this will continue in the future.

Seasonality

In addition to general economic factors, we are impacted by seasonal factors and trends, such as major cultural events and vacation patterns. 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®, CarnoSyn® 4X and TriBsyn® beta-alanine raw material orders. Future revenue trends may not follow historical patterns. The market price of our common stock may be adversely affected by these seasonal factors.

Financial Information about Our Business Segments and Geographic Areas

Our operations are comprised of two reportable segments:

•

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 primarily associated with the sale and license of beta-alanine under our CarnoSyn®, SR CarnoSyn®, CarnoSyn® 4X and TriBsyn® trademarks.

Our private-label contract manufacturing products are sold both in the U.S. and in markets outside the U.S., including Europe, Australia, Asia, Mexico, and Canada. Our primary markets outside the U.S. are Europe and Asia. Our patent and trademark licensing activities are primarily based in the U.S.

For additional financial information, including financial information about our business segment and geographic areas, please see the consolidated financial statements and accompanying notes to the consolidated financial statements included under Item 8 of this report.

Our activities in markets outside the U.S. are subject to political, economic and other risks in the countries in which our and our customers' products are sold and in which we operate. For more information about these and other risks, please see Item 1A in this report.