11. Commitments and Contingencies

12 Months Ended

Jun. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

11. Commitments and Contingencies

The Company’s current lease for its existing Bohemia, New York premises expires in January 2015, but will terminate upon the Company’s move to a smaller neighboring facility in the same vicinity from the same landlord, at a lower rental rate under a new lease through February 2025, which requires minimum annual rental payments plus other expenses, including real estate taxes and insurance. The future minimum annual rental expense, computed on a straight-line basis, is approximately $177,600 under the terms of the new lease. Rental expense for the Bohemia facility under its current lease amounted to approximately $239,800 in 2014 and $233,500 in 2013. Accrued rent, payable in future years, amounted to $18,700 and $44,200 at June 30, 2014 and 2013, respectively.

The Company is also obligated under an operating lease for its facility in Pittsburgh, Pennsylvania, through November 2017, which requires monthly minimum rental payments through November 2017, plus common area expenses. Total rental expenses for the Pittsburgh facility was $95,000 and $77,200 for the fiscal years ended June 30, 2014 and 2013.

In addition, the Company’s new Torbal division was operating from a Clifton, New Jersey facility and as of mid-July 2014 moved to a significantly smaller office facility in Oradell, New Jersey from which it performs its sales and marketing functions. The Company was obligated under a previous agreement to pay $24,000 for an early lease termination for the Clifton facility. Total rental expenses for the New Jersey facilities, including the fee, was $47,900 for the fiscal year ended June 30, 2014.

The Company’s approximate future minimum rental payments under all operating leases are as follows:

Fiscal Years
2015	$	251,700
2016		255,600
2017		264,000
2018		205,000
2019		174,000
Thereafter		841,600
	$	1,991,900

The Company has employment contracts with its President providing for an annual base salary of $154,000 and $150,000 for the fiscal years ending June 30, 2015 and 2014 and with its Executive Vice President providing for an annual base salary of $139,000 and $135,000 for the fiscal years ending June 30, 2015 and 2014. Both contracts also provide for discretionary performance bonuses. Bonuses of $10,000 and $5,000 were awarded to the President and Executive Vice President, respectively, for the year ended June 30, 2013. No bonuses were awarded for the fiscal year ended June 30, 2014 to either executive except for a stock option granted to the Executive Vice President during the year ended June 30, 2014, valued at $3,500 using the Black-Scholes-Merton option pricing model.

The Company has an employment contract with the President of Altamira through June 30, 2015, which may be extended by mutual consent for an additional year. The contract provides for an annual base salary of $140,000 and $135,000 for each of the fiscal years ending June 30, 2015 and 2014, respectively, plus discretionary bonuses. A bonus of $5,000 was awarded for the fiscal year ended June 30, 2013. No bonus was awarded for the fiscal year ended June 30, 2014, except for a stock option granted during the year ended June 30, 2014, valued at $3,500 using the Black-Scholes-Merton option pricing model.

The Company has a consulting agreement which expires on December 31, 2014 with an affiliate of the Chairman of the Board of Directors for marketing consulting services. The agreement provides that the consultant be paid a monthly fee of $3,600 for a certain number of consulting days as defined in the agreement. Stock options were granted to the Chairman of the Board of Directors valued at $8,700 during the year ended June 30, 2014. Consulting expense related to this agreement amounted to $50,100 and $44,600 for the years ended June 30, 2014 and 2013, respectively.

The Company has an employment agreement dated February 2014 with the President of its Torbal Division which expires in February 2017, which may be extended by mutual consent for another two years. The contract provides for an annual base salary of $140,000 subject to increases commencing with the second year based on percentage increases in the Consumer Price Index from the end of the immediately preceding year’s CPI plus discretionary bonuses. No bonuses were awarded during the fiscal year ended June 30, 2014, however as part of the employment agreement, he was awarded a 2,000 share stock option upon commencement of his employment with the Company valued at $3,900 using the Black-Scholes-Merton option pricing model. In addition, he is to be granted, subject to his continued employment in February 2015, 2016 and 2017 options for 4,000 shares, 5,000 shares and 6,000 shares, respectively.

The Company had a consulting agreement which expired March 31, 2014 with another member of its Board of Directors for administrative services providing that the consultant be paid at the rate of $85 per hour. Consulting expense related to this agreement amounted to $5,700 and $6,100 for the fiscal years ended June 30, 2014 and 2013, respectively.