Note 8 - Commitments and Contingencies

3 Months Ended

Sep. 30, 2011

Commitments and Contingencies Disclosure [Text Block]

Note 8. Commitments and Contingencies

(a) Leases

Related Party Leases. Warehouse and office facilities are leased from Vitamin Realty, which is 90% owned by the Chairman of the Company’s Board of Directors, a director and majority shareholder and certain of his family members. The lease provides for minimum annual rental payment of $324 through May 31, 2015 plus increases in real estate taxes and building operating expenses. On July 1, 2004, the Company leased an additional 24,810 square feet of warehouse space on a month-to month basis.

Rent expense for the three months ended September 30, 2011 and 2010 on these leases were $184 and $202, respectively, and are included in cost of sales in the accompanying Condensed Consolidated Statements of Operations. As of September 30, 2011 and June 30, 2011, the Company had an outstanding obligation of $715 and $738, respectively, included in accounts payable in the accompanying Condensed Consolidated Balance Sheet.

Other Lease Commitments. The Company has entered into certain non-cancelable operating lease agreements expiring up through May 31, 2015, related to office and warehouse space, equipment and vehicles.

The minimum rental commitment for long-term non-cancelable leases is as follows:

			Related Party
Year ending	Lease		Lease
June 30,	Commitment		Commitment		Total
2012, remaining	$	34	$	243	$	277
2013		15		324		339
2014		13		324		337
2015		-		297		297
Total	$	62	$	1,188	$	1,250

Total rent expense, including real estate taxes and maintenance charges, was approximately $276 and $294 for the three months ended September 30, 2011 and 2010, respectively. Rent expense is included in cost of sales, selling and administrative expenses and income (loss) from discontinued operations in the accompanying Condensed Consolidated Statements of Operations.  The Company has a remaining lease commitment of $170 ($139 remaining in the fiscal year ending June 30, 2012) in relating to operations classified as discontinued.

(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 of any such claims, could have a material adverse effect on the Company’s liquidity, financial condition and cash flows.  The Company believes that there are no significant legal matters pending that would have a material effect on the Company’s liquidity, financial condition or cash flows.