Note 5 - Significant Risks and Uncertainties

6 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Concentration Risk Disclosure [Text Block]

Note

5.

Significant Risks and Uncertainties

(a) Major Customers.

For the

three

months ended

December

31,

2016

and

2015,

approximately

92%

and

91%,

respectively of consolidated net sales, were derived from

two

customers. These

two

customers are in the Company’s Contract Manufacturing Segment and represent approximately

35%

and

60%

and

31%

and

65%

of this Segment’s net sales in the

three

months ended

December

31,

2016

and

2015,

respectively. A

third

customer in the Branded Nutraceutical Segment, while not a significant customer of the Company’s consolidated net sales, represented approximately

53%

and

25%

of net sales in the

three

months ended

December

31,

2016

and

2015,

respectively, of the Branded Nutraceutical Segment.

For the

six

months ended

December

31,

2016

and

2015,

approximately

92%

and

89%,

respectively of consolidated net sales, were derived from

two

customers. These

two

customers are in the Company’s Contract Manufacturing Segment and represent approximately

42%

and

54%

and

39%

and

57%

of this Segment’s net sales in the

six

months ended

December

31,

2016

and

2015,

respectively. A

third

customer in the Branded Nutraceutical Segment, while not a significant customer of the Company’s consolidated net sales, represented approximately

57%

and

62%

of net sales in the

six

months ended

December

31,

2016

and

2015,

respectively, of the Branded Nutraceutical Segment. Accounts receivable from these

two

major customers represented approximately

90%

and

87%

of total net accounts receivable as of

December

31

and

June

30,

2016,

respectively. The loss of any of these customers could have an adverse affect on the Company’s operations. Major customers are those customers who account for more than

10%

of net sales.

(b) Other Business Risks.

Approximately

66%

of the Company’s employees are covered by a union contract and are employed in its New Jersey facilities. The contract was renewed on

September

1,

2015

and will expire on

August

31,

2018.