NOTE 11 - COMMITMENTS AND CONTINGENCIES

OBLIGATIONS UNDER OPERATING LEASES

The Company leases approximately 3,400 square feet for its principal offices in Boca Raton, Florida at a monthly rental of approximately $6,900. The lease, which provides for annual increases of base rent of 4%, expires on November 30, 2014.

The Company subleases a portion of its principal offices to a third party on a month to month basis. For the year ended September 30, 2013 the Company's rent was reduced by approximately $26,000 as a result of the sublease agreement.

Future lease commitments are as follows for the years ended September 30:

2014              $   82,800

2015                    13,800

                        $ 96,600

Rental expense incurred during the years ended September 30, 2013 and 2012 was $56,212 and $76,905, respectively.

MAJOR CUSTOMERS

Approximately 36% and 60% of the Company's revenues for the years ended September 30, 2013 and 2012 was derived from 3 customers, respectively.

MAJOR SUPPLIER AND SOLE MANUFACTURING SOURCE

During 2013 and 2012, the Company's unified group communication services business relied primarily on one major vendor to supply its software development platform. During the years ended September 30, 2013 and 2012, this vendor represented approximately 17% and 36%, respectively, of the total cost of revenue. The Company has contracted with a single local manufacturing facility to maintain its component parts inventory and to assemble its developed line of IP gateway devices. Interruption to either its software vendor or manufacturing source presents additional risk to the Company. The Company believes that other commercial facilities exist at competitive rates to match the resources and capabilities of its existing manufacturing source.