COMMITMENTS

3 Months Ended

Sep. 30, 2011

Notes to Financial Statements

COMMITMENTS

Leasing Activities

The Company leases its Australian research and development facility from a non-related Australian company under the terms of a lease that expired October 31, 2011.  The rental rate was $75,596 per annum (A$72,431) and is subject to an annual CPI adjustment. Rent expense was $20,193 and $20,592 for the three months ended September 30, 2011 and September 30, 2010, respectively.  The Company renewed the lease on its Australian research and development facility through October 31, 2016 at rental rate of $95,855 per annum (A$95,000) subject to an annual CPI adjustment.  The Company also leases a building from an officer of its subsidiary, Tier Electronics LLC, who is also a shareholder and director, under a lease agreement expiring December 31, 2014.  The first year rental is $84,000 per annum and is subject to an annual CPI adjustment.  The rent expense for the three months ended September 30, 2011 was $21,000.  The Company is required to pay real estate taxes and other occupancy costs related to the facility.  The future payments required under the terms of the leases for fiscal periods subsequent to September 30, 2011are as follows:

2012	$	132,994
2013		179,855
2014		137,855
2015		95,855
	$	546,559

Employment Contracts

The Company has entered into employment contracts with executives and management personnel. The contracts provide for salaries, bonuses and stock option grants, along with other employee benefits. The employment contracts generally have no set term and can be terminated by either party. There is a provision for payments of nine months to eighteen months of annual salary as severance if we terminate a contract without cause, along with the acceleration of certain unvested stock option grants.