Note 8 - Commitments and Contingencies

6 Months Ended

Dec. 31, 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 December 31, 2011 and 2010 on these leases were $172 and $167, respectively, and $355 and $368 for the six months ended December 31, 2011 and 2010, respectively, and are included in cost of sales in the accompanying Condensed Consolidated Statements of Operations. As of December 31, 2011 and June 30, 2011, the Company had an outstanding obligation of $686 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:

Year ending June 30,	Lease Commitment		Related Party Lease Commitment		Total
2012, remaining	$	22	$	162	$	184
2013		36		324		360
2014		26		324		350
2015		13		297		310
2016		12		-		12
2017		4		-		4
Total	$	113	$	1,107	$	1,220

Total rent expense, including real estate taxes and maintenance charges, was approximately $267 and $261 for the three months ended December 31, 2011 and 2010, respectively, and $543 and $555 for the six months ended December 31, 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 $108 ($93 remaining in the fiscal year ending June 30, 2012) 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.