Note 9. Significant Risks and Uncertainties

(a) Concentrations of Credit Risk-Cash. The Company maintains balances at several financial institutions. Deposits at each institution are insured by the Federal Deposit Insurance Corporation up to $250. As of June 30, 2026, the Company had $4,381 in uninsured deposits at these financial institutions.

(b) Concentrations of Credit Risk-Receivables. The Company routinely assesses the financial strength of its customers and, based upon factors surrounding the credit risk of its customers, establishes an allowance for uncollectible accounts and, as a consequence, believes that its accounts receivable credit risk exposure beyond such allowances is limited. The Company does not require collateral in relation to its trade accounts receivable credit risk.

(c) Major Customers. In the fiscal years ended June 30, 2026 and 2025, approximately 90% and 84% of consolidated net sales, were derived from two customers. These two customers are in the Company’s Contract Manufacturing Segment and represent approximately 68% and 25% and 62% and 26%, respectively, of this segment’s net sales in the fiscal years ended June 30, 2026 and 2025, respectively. Accounts receivable from these two major customers represented approximately 81% and 76% of total net accounts receivable as of June 30, 2026 and 2025, respectively. The loss of any of these customers could have an adverse effect on the Company’s operations. One and four customers in the Other Business Lines Segment, while not significant customers of the Company’s consolidated net sales, represented approximately 29% and 32%, 25%, 11% and 10%, respectively, of net sales of the Other Business Lines Segment in the fiscal years ended June 30, 2026 and 2025, respectively. Major customers are those customers who account for more than 10% of net sales.

(d) Business Risks. The Company insures its business and assets against insurable risks, to the extent that it deems appropriate, based upon an analysis of the relative risks and costs. The Company believes that the risk of loss from non-insurable events would not have a material adverse effect on the Company’s operations as a whole.

The raw materials used by the Company are primarily commodities and agricultural-based products. Raw materials used by the Company in the manufacture of its nutraceutical products are purchased from independent suppliers. Raw materials are available from numerous sources and the Company believes that it will continue to obtain adequate supplies.

As of June 30, 2026, approximately 77% of the Company’s employees are covered by a union contract and are employed in its New Jersey facilities. The contract was renewed effective September 1, 2022 and will expire on September 30, 2026, as extended on July 21, 2026 from an original expiration date of August 31, 2026.

The Company has seen a negative impact in our margins due to inflation, tariffs and to a lesser extent, tightened labor markets as we strive to increase prices to our customers as our operating costs increase.  We may not be able to timely increase our selling prices to our customers resulting from price increases from our suppliers due to various economic factors, including tariffs and other inflationary costs, labor and shipping costs and our own increases in shipping, labor and other operating costs. Our results of operations may also be affected by economic conditions, including tariffs and other inflationary pressures, that can impact consumer disposable income levels and spending habits, thereby reducing the orders we may receive from our significant customers.