Financial Analysis

Note 10. Lease Commitments and Contingencies (a) Leases. The Company has operating and finance leases for its corporate and sales offices, warehousing and packaging facilities and certain machinery and equipment, including office equipment. The Companys leases have remaining terms of less than 1 year to less than 5 years. The components of lease expense for the fiscal year ended June 30, 2025 and 2024 were as follows: 2025 2024 Related Party - Vitamin Realty Other Leases Totals Related Party - Vitamin Realty Other Leases Totals Operating Lease Costs $ 842 $ 172 $ 1,014 $ 842 $ 163 $ 1,005 Finance Operating Lease Costs: Amortization of right-of use assets $ - $ 7 $ 7 $ - $ 12 $ 12 Total Finance Lease Costs $ - $ 7 $ 7 $ - $ 12 $ 12 Rent and lease amortization costs are included in cost of sales and selling and administrative expenses in the accompanying Consolidated Statements of Income. Operating Lease Liabilities Related Party Operating Lease Liabilities. Warehouse and office facilities are leased from Vitamin Realty Associates, LLC (Vitamin Realty), which is 100% owned by the estate of the Companys former chairman, and a major stockholder and certain of his family members, who are the Co-Chief Executive Officers and directors of the Company. On January 5, 2012, MDC entered into a second amendment to the lease (the Second Lease Amendment) with Vitamin Realty for its office and warehouse space in New Jersey increasing its rentable square footage from an aggregate of 74,898 sq …

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"Note 5. Lines of Credit and Senior Credit Facility As of April 15, 2025, the Company paid off its outstanding obligations under its Senior Credit Facility, terminating the Credit Facility, and entered into a Loan Agreement (the Loan Agreement) with PNC Bank, National Association (PNC). As of June 30, 2025 and 2024, the Company had no debt outstanding under its Lines of Credit or Senior Credit Facility, respectively. Loan Agreement The Loan Agreement provides a committed revolving line of credit under which the Company may request, and the PNC will make advances to the Company from time to time until April 5, 2026, ( the ""Expiration Date""), in an aggregate amount outstanding at any time not to exceed $4,000 (the ""Line of Credit"") and a Convertible Equipment Line of Credit in an aggregate amount outstanding at any time not to exceed $500 (the ""Convertible ELOC""). Advances under the Convertible ELOC will be used for the purchase of equipment and/or vehicles. The Line of Credit bears interest at a rate per annum which is equal to the sum of (A) Daily one -month SOFR plus (B) 250 basis points (2.50%). Accrued interest will be due and payable on the same day of each month, beginning with the payment due on May 15, 2025. The outstanding principal balance and any accrued but unpaid interest shall be due and payable on the Expiration Date. Prior to any Conversion Date, amounts outstanding under the Convertible ELOC will bear interest at a rate per annum (the ""Daily Rate) equal …

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Note 7. Income Taxes The components of the provision for income taxes consists of the following: For the fiscal year ended June 30, 2025 2024 Current - Federal tax expense $ - $ - Current - State tax expense 18 31 Deferred - Federal tax expense 1,386 124 Deferred - State tax expense (150 ) 1 Income tax expense, net $ 1,254 $ 156 A reconciliation of the statutory tax rate to the effective tax rate is as follows: For the fiscal year ended June 30, 2025 2024 Statutory federal income tax rate 21.0 % 21.0 % State income tax rate 9.1 % 25.6 % Stock compensation 2.3 % 21.1 % Change in valuation allowance 24.5 % (61.6 )% Write-off of valuation allowance 0.0 % 62.1 % Federal and state true-up 0.0 % (10.4 )% Other differences 3.9 % 0.6 % Effective income tax rate 60.8 % 58.4 % Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial accounting purposes and the amounts used for income tax reporting. Significant components of the Companys net deferred tax assets are as follows: June 30, 2025 2024 Deferred Tax Assets Net operating loss $ 4,367 $ 5,032 Capital loss carryover 678 678 Depreciation (223 ) (149 ) Inventory 121 161 Other 170 150 Valuation allowance (1,776 ) (1,271 ) Total deferred tax asset, net $ 3,337 $ 4,601 The Company has net operating losses (NOL) of approximately $19,249 for federal purposes which expire beginning in 2028, which were federal NOLs generated prior to 2018. NOLs generated pos …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Accounting Pronouncements Adopted In November 2023, FASB issued ASU 2023 - 07 - Segment Reporting (Topic 280 ): Improvements to Reportable Segment Disclosures, which requires public entities with a single reportable segment to provide all the disclosures required by this standard and all existing segment disclosures in Topic 280 on an interim and annual basis, including new requirements to disclose significant segment expenses that are regularly provided to the CODM and included within the reported measure(s) of a segment's profit or loss, the amount and composition of any other segment items, the title and position of the CODM, and how the CODM uses the reported measure(s) of a segment's profit or loss to assess performance and decide how to allocate resources. The guidance was effective for this annual period beginning July 1, 2024, and interim periods thereafter, applied retrospectively with early adoption permitted. The adoption of this standard did not have a significant impact on its consolidated financial statements and disclosures. Accounting Pronouncements Not Yet Adopted In December 2023, the FASB issued ASU 2023 - 09 - Income Taxes (Topic 740 ): Improvements to Income Tax Disclosures, which requires public entities to provide greater disaggregation within their annual rate reconciliation, including new requirements to present reconciling items on a gross basis in specified categories, disclose both percentages and dollar amounts, and disaggregate individual reconci …

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Note 8. Profit-Sharing Plan The Company maintains a profit-sharing plan, which qualifies under Section 401 (k) of the Internal Revenue Code, covering all nonunion employees meeting age and service requirements. Contributions are determined by matching a percentage of employee contributions. For the fiscal years ended June 30, 2025 and 2024, the Company contributed approximately $86 and $80, respectively, into the plan for the benefit of the eligible employees participating in the plan.

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Note 11. Related Party Transactions Information related to related party transactions are disclosed in Note 10 (a). Leases for related party lease transactions.

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Note 13. Segment Information In its operation of the business, management, including its chief operating decision makers (CODMs), who are also the Companys Co-Chief Executive Officers, review certain financial information, including segmented internal profit and loss statements. The primary profitability measure used by the CODMs to review segment operating results is gross profit. The CODM uses gross profit to allocate resources during our annual planning process and throughout the year, as well as to assess the performance of the Companys segments, primarily by monitoring actual results compared to prior periods and expected results. During the periods presented, the Company reported its financial performance based on the following segments: Contract Manufacturing and Other Business Lines. The basis for presenting segment results generally is consistent with overall Company reporting. The Company reports information about its operating segments in accordance with GAAP which establishes standards for reporting information about a companys operating segments. The international sales, concentrated primarily in Europe, for the fiscal years ended June 30, 2025 and 2024 were $10,726 and $7,973, respectively. Financial information relating to the fiscal years ended June 30, 2025 and 2024 operations by business segment are as follows: Sales, Net U.S. International Cost of Gross Capital Customers Customers Total Sales Profit Depreciation Expenditures Contract Manufacturing 2025 $ 40 …

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Note 2. Summary of Significant Accounting Policies Principles of Consolidation. The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany transactions and accounts have been eliminated in consolidation. Reclassifications. Certain prior year amounts have been reclassified to conform to the current year presentation. Use of Estimates. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The most significant estimates include: sales returns and allowances; allowance for credit losses; inventory valuation; valuation and recoverability of long-lived assets; income taxes and valuation allowance on deferred income taxes, and; accruals for, and the probability of, the outcome of current litigation, if any. On a continual basis, management reviews its estimates utilizing currently a …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

Note 12. Equity Transactions and Stock-Based Compensation Stock Option Plans. The Company has adopted a stock option plan for the granting of options or restricted shares to employees, officers, directors and consultants of the Company that originally provided for the issuance of up to 7,000,000 shares of common stock, at the discretion of the Board of Directors. Subsequent to the adoption, the Board of Directors and stockholders approved additional common stock shares aggregating 6,000,000 to be available for grant, for a total of 13,000,000 shares of common stock reserved for issuance under the Companys 2001 Stock Option Plan, as amended (the Plan). The Company also has a 1997 Stock Option Plan with 5,000,000 shares of common stock reserved for issuance. Stock option grants may not be priced less than the fair market value of the Companys common stock at the date of grant. Options granted are generally for ten -year periods, except that incentive stock options granted to a 10% stockholder (as defined) are limited to five -year terms. As of June 30, 2025, the Company has 4,659,652 shares of common stock remaining under the Plans. In the fiscal year ended June 30, 2025, the Board of Directors authorized the issuance of 490,000 stock options to Company officers and employees and 400,000 stock options to the Companys non-executive directors. The Company issued 490,000 stock options with an exercise price of $0.31 and $0.34, vesting over three years, to the officers and employee …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing