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Commitments and Contingencies
 9 Months Ended
Mar. 31, 2013
Commitments and Contingencies  
Commitments and Contingencies

Note 11 — Commitments and Contingencies

 

We are subject to various claims and contingencies in the normal course of business.  In addition, from time to time, we receive communications from government or regulatory agencies concerning investigations or allegations of noncompliance with laws or regulations in jurisdiction in which we operate.  We disclose such matters if we believe it is reasonably possible that a future event or events will confirm a loss through impairment of an asset or the incurrence of a liability. We establish reserves if we believe it is probable that a future event or events will confirm a loss and we can reasonably estimate such loss.  Furthermore, we will disclose any matter that is unasserted if we consider it probable that a claim will be asserted and there is a reasonable possibility that the outcome will be unfavorable.  For legal proceedings, see “Part II, Item I. Legal Proceedings”

 

Lease Commitments.  We have a non-cancelable operating lease for office space that expires on August 1, 2016. Future minimum lease commitments as of March 31, 2013 under this operating lease are as follows:

 

For the twelve months ended March 31,

 

 

 

2013

 

$

159,011

 

2014

 

159,011

 

2015

 

159,011

 

Thereafter

 

53,004

 

Total

 

$

530,037

 

 

Rent expense for the three months ended March 31, 2013 and 2012 was $36,808 and $36,808, respectively.  For the corresponding nine month periods of 2013 and 2012 rent expense was $110,425 and $110,425,  respectively.

 

Employment Contracts.  We have employment agreements with the Company’s three named executive officers.  The employment contracts provide for a severance package for termination by the Company for any reason other than cause or permanent disability, or in the event of a constructive termination, that includes payment of base pay and certain medical and disability benefits from six months to a year after termination.  The total contingent obligation under the employment contracts as of March 31, 2013 is approximately $663,000.