Note 6 - Significant Risks and Uncertainties

9 Months Ended

Mar. 31, 2015

Notes to Financial Statements

Concentration Risk Disclosure [Text Block]

Note 6. Significant Risks and Uncertainties

(a) Major Customers.

For the three months ended March 31, 2015 and 2014, approximately 83% and 78%, respectively of consolidated net sales, were derived from two customers. These two customers are in the Company’s Contract Manufacturing Segment and represent approximately 37% and 56% and 58% and 30% of this Segment’s net sales in the three months ended March 31, 2015 and 2014, respectively.

A third customer in the Branded Nutraceutical Segment, while not a significant customer of the Company’s consolidated net sales, represented approximately 82% and 15% of net sales in the three months ended March 31, 2015 and 2014, respectively, of the Branded Nutraceutical Segment.

For the nine months ended March 31, 2015 and 2014, approximately 83% and 80%, respectively of consolidated net sales, were derived from the same two customers. These two customers are in the Company’s Contract Manufacturing Segment and represent approximately 48% and 42% and 68% and 21% of this Segment’s net sales in the nine months ended March 31, 2015 and 2014, respectively. A third customer in the Branded Nutraceutical Segment, while not a significant customer of the Company’s consolidated net sales, represented approximately 79% and 52% of net sales in the nine months ended March 31, 2015 and 2014, respectively, of the Branded Nutraceutical Segment.

Accounts receivable from major customers represented approximately 80% and 74% of total net accounts receivable as of March 31, 2015 and June 30, 2014, respectively. The loss of any of these customers could have an adverse affect on the Company’s operations. Major customers are those customers who account for more than 10% of net sales.

(b) Other Business Risks.

Approximately 62% of the Company’s employees are covered by a union contract and are employed in its New Jersey facilities. The contract was renewed in May 2012 and expires in August 2015.