Note 6 - Significant Risks and Uncertainties

9 Months Ended

Mar. 31, 2016

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, 2016 and 2015, approximately 90% and 83%, respectively of consolidated net sales, were derived from two customers. These two customers are in the Company’s Contract Manufacturing Segment and represent approximately 32% and 37% and 64% and 58% of this Segment’s net sales in the three months ended March 31, 2016 and 2015, respectively.

A third customer in the Branded Nutraceutical Segment, while not a significant customer of the Company’s consolidated net sales, represented approximately 23% and 82% of net sales in the three months ended March 31, 2016 and 2015, respectively, of the Branded Nutraceutical Segment.

For the nine months ended March 31, 2016 and 2015, approximately 90% and 83%, 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 36% and 48% and 59% and 68% of this Segment’s net sales in the nine months ended March 31, 2016 and 2015, respectively. A third customer in the Branded Nutraceutical Segment, while not a significant customer of the Company’s consolidated net sales, represented approximately 42% and 79% of net sales in the nine months ended March 31, 2016 and 2015, respectively, of the Branded Nutraceutical Segment.

Accounts receivable from these two major customers represented approximately 87% and 83% of total net accounts receivable as of March 31, 2016 and June 30, 2015, 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 on September 1, 2015 and expires on August 31, 2018.