Commitments and Contingencies

12 Months Ended

Jun. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE N – COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases its facility under a ten year operating lease which was signed in September 2005 and expires December 31, 2015. The lease is on an escalating schedule with the final year on the lease at $34,358 per month. The liability for this difference in the monthly payments is accounted for as a deferred rent liability and the balance in this account at June 30, 2013 and 2012 is $193,516 and $250,174. The rent expense under this lease for the years ended June 30, 2013 and 2012 was $323,722.

The Company also leases certain postage equipment under an operating lease.  The monthly lease is $104 per month and expires January 2017.

The Company entered into an operating lease for certain material handling equipment in September 2010.  The monthly lease amount is $1,587 per month and expires in September 2015.

Future minimum lease payments under non-cancelable operating leases at June 30, 2013 are as follows:

Year ending June 30,
2014	$	411,974
2015		425,274
2016		210,569
Thereafter through 2017		1,038
Total minimum lease payments	$	1,048,855

Capital Leases

The Company has acquired equipment under the provisions of long-term leases. For financial reporting purposes, minimum lease payments relating to the equipment have been capitalized. The leased properties under these capital leases have a total cost of $162,000. These assets are included in the fixed assets listed in Note G and include computers, software, furniture, and equipment. The capital leases have stated or imputed interest rates ranging from 7% to 21%.

The following is an analysis of the minimum future lease payments subsequent to the year ended June 30, 2013:

Year ending June 30,
2014	$	29,112
2015		19,975
2016		18,879
2017		10,881
2018		440
Future Minimum Lease Payments	$	79,287
Less Amount Representing Interest		(16,938	)
Present Value of Minimum Lease Payments		62,349
Less Current Portion		(21,422	)
Long-Term Obligations under Leases Payable	$	40,927

Employment Agreements

The Company has entered into an employment agreement with Louis Friedman, President and Chief Executive Officer. The agreement provides for an annual base salary of $150,000 and eligibility to receive a bonus.  By virtue of Mr. Friedman’s ownership of 100% of the Series A Convertible Preferred Stock, Mr. Friedman has 70.2 % of the combined voting power of the Common Stock and Series A Convertible Preferred Stock, voting as a single class and will control the election of any directors and the outcome of any corporate transaction or other matter submitted to the shareholders for approval.  In certain termination situations, the Company is liable to pay severance compensation to Mr. Friedman for up to nine months at his current salary.

Legal Proceedings

As of the date of this Annual Report, there are no material pending legal or governmental proceedings relating to our company or properties to which we are a party, and to our knowledge there are no material proceedings to which any of our directors, executive officers or affiliates are a party adverse to us or which have a material interest adverse to us.