Note

. 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

year to less than

years.

The components of lease expense for the fiscal year ended

June 30, 2020

and

2019

were as follows:

	2020						2019
	Related Party - Vitamin Realty		Other Leases		Totals		Related Party - Vitamin Realty		Other Leases		Totals

Operating Lease Costs	$	566	$	104	$	670	$	563	$	112	$	675

Finance Operating Lease Costs:
Amortization of right-of use assets	$	-	$	57	$	57	$	-	$	91	$	91
Interest on operating lease liabilities		-		13		13		-		18		18
Total Finance Lease Costs	$	-	$	70	$	70	$	-	$	109	$	109

Operating

Lease

Liabilities

Related Party

Operating

ase

Liabilities

Warehouse and office facilities are leased from Vitamin Realty, which is

100%

owned by the Company's chairman, and a major stockholder and certain of his family members, who are the Co-Chief Executive Officers and directors 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 provides for minimum annual rental payments of

$533,

plus increases in real estate taxes and building operating expenses. On

May 19, 2014,

AgroLabs entered into an amendment to the lease agreement entered into on

January 5, 2012,

with Vitamin Realty for an additional

2,700

square feet of warehouse space in New Jersey, the term of which was to expire on

January 31, 2019

to extend the expiration date to

June 1, 2024.

This additional lease provides for minimum lease payments of

$27

with annual increases plus the proportionate share of operating expenses.

Rent expense, lease amortization costs and imputed interest costs on these related party leases were

$862

and

$843

for the fiscal years ended

June 30, 2020

and

2019,

respectively, and are included in cost of sales and selling and administrative expenses in the accompanying Consolidated Statements of Income. As of

June 30, 2020

and

2019,

the Company had outstanding current obligations to Vitamin Realty of

$62

and

$67,

respectively, included in accounts payable and accrued expenses and other liabilities in the accompanying Consolidated Balance Sheets. Additionally, as of

June 30, 2020

and

2019,

the Company has operating lease obligations of

$2,794

and

$3,243,

respectively, with Vitamin Realty as noted in the accompany Consolidated Balance Sheet.

Other Operating Lease Liabilities.

The Company has entered into certain non-cancelable operating lease agreements expiring up through

May, 2023,

related to machinery and equipment and office equipment.

As of

June 30, 2020,

the Company's ROU assets, lease obligations and remaining cash commitment on these leases is as follows:

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

Vitamin Realty Leases	$	2,788	$	467	$	2,327	$	3,103
Machinery and equipment leases		28		20		8		29
Office equipment leases		8		1		7		9
	$	2,824	$	488	$	2,342	$	3,141

As of

June 30, 2019,

the Company's ROU assets, lease obligations and remaining cash commitment on these leases is as follows:

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

Vitamin Realty Leases	$	3,236	$	450	$	2,793	$	3,668
Machinery and equipment leases		26		11		15		27
Office equipment leases		22		9		14		24
	$	3,284	$	470	$	2,822	$	3,719

As of

June 30, 2020

and

2019,

the Company's weighted average discount rate and remaining term on lease liabilities is approximately

3.75%

and

3.76%

and

5.4

years and

6.4

years, respectively.

Supplemental cash flows information related to leases for the fiscal year ended

June 30, 2020

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	$	565	$	92	$	657
Operating cash flows from finance lease obligations		-		13		13
Financing cash flows from finance lease obligations		-		194		194

Supplemental cash flows information related to leases for the fiscal year ended

June 30, 2019

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	$	565	$	92	$	657
Operating cash flows from finance lease obligations		-		18		18
Financing cash flows from finance lease obligations		-		233		233

In the fiscal year ended

June 30, 2020,

the Company renewed, for

one

year, an operating lease for office space with an annual commitment of

$25

and entered into a

five

-year lease agreement for the rental of office equipment with an annual commitment of

$2.

The Company entered into a sales/lease back commitment in the fiscal year ended

June 30, 2019

in the amount of

$233,

see Note

- Senior Credit Facility and other Long Term Debt.

Maturities of operating lease liabilities as of

June 30, 2020

were as follows:

Year ending June 30,	Operating Lease Commitment			Related Party Operating Lease Commitment			Financed Lease Obligations			Total

2021	$	22		$	565		$	77		$	664
2022		11			565			-			576
2023		2			565			-			567
2024		2			565			-			567
2025		1			563			-			564
Thereafter		-			280			-			280
Total minimum lease payments		38			3,103			77			3,218
Imputed interest		(2	)		(309	)		(2	)		(313	)
Total	$	36		$	2,794		$	75		$	2,905

Total rent expense, including real estate taxes and maintenance charges, was approximately

$1,040

and

$1,013

for the fiscal year ended

June 30, 2020

and

2019,

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

(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.