12. COMMITMENTS

9 Months Ended

Mar. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

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 expires October 31, 2016.  The rental rate was $75,596 per year (A$72,431) and was subject to an annual CPI adjustment.  Rent expense was $20,835 and $66,961 for the three and nine months ended March 31, 2015 and $23,340 and $69,525 for the three and nine months ended March 31, 2014, respectively.  In July of 2011, the Company renewed the lease on its Australian research and development facility through October 2016 at a rental rate of $95,855 per year (A$95,000) subject to an annual CPI adjustment.

The Company also leased a building from an officer of its subsidiary, Tier Electronics LLC, who is also a shareholder and was a director, under a lease agreement that was due to expire on March 31, 2015.  Subsequently a lease termination agreement was entered into on October 20, 2013, which terminated the lease effective December 31, 2013 for a fee of $21,000.  No rent expense was incurred during the three and nine months ended March 31, 2015, and rent expense was $0 and $63,000 for the three and nine months ended March 31, 2014, respectively.  The Company was 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 March 31, 2015 are as follows:

2015	$	19,316
2016		77,264
2017		25,755
	$	122,335

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 up to six months of annual salary as severance if the Company terminates a contract without cause, along with the acceleration of certain unvested stock option grants.