Note 8. Related-party Transactions

6 Months Ended

Dec. 31, 2016

Notes

Note 8. Related-party Transactions

NOTE 8.  RELATED-PARTY TRANSACTIONS

The Company currently leases office and warehouse space in Detroit, Michigan and Hopkins, Minnesota from two shareholders and former independent distributors on an annual basis under operating lease arrangements. Management believes the lease agreements are on an arms-length basis and the terms are equal to or more favorable than would be available to the Company from third parties. The expense associated with these related-party transactions totaled $17,700 for the three months ended December 31, 2016 and 2015, and $35,400 for the six months ended December 31, 2016 and 2015.

Certain officers and directors of the Company participated as investors in the private placement of the Company’s Series A Preferred in December 2016 (see Note 4).  The terms of the offering were reviewed and approved by the disinterested members of the Company’s Board of Directors who did not invest in the private placement and who do not own any shares of Series A Preferred. Details of the private placement were included in the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission on January 3, 2017.