Note 5 - Significant Risks and Uncertainties

6 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Concentration Risk Disclosure [Text Block]

Note

5.

Significant Risks and Uncertainties

(

a

) Major Customers.

In each of the

three

months ended

December 31, 2019

and

2018,

approximately

93%

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

26%

and

75%

and

20%

in the

three

months ended

December 31, 2019

and

2018,

respectively. In the

six

months ended

December 31, 2019

and

2018,

approximately

92%

and

91%

of consolidated net sales, respectively, were derived from the same

two

customers and net sales to these

two

customers represented approximately

68%

and

27%

in the

six

months ended

December 31, 2019

and

70%

and

24%

of net sales in the

six

months ended

December 31, 2018,

respectively. Accounts receivable from these

two

major customers represented approximately

89%

and

88%

of total net accounts receivable as of

December 31

and

June 30, 2019,

respectively. 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

73%

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, 2018

and will expire on

August 31, 2021.