NOTE 8 - COMMITMENTS AND CONTINGENCIES

OBLIGATIONS UNDER OPERATING LEASES

The Company leases approximately 1,700 square feet for its principal offices in Boca Raton, Florida at a monthly rental of approximately $3,200. The lease, which provides for annual increases of base rent of 4%, expires on November 30, 2018.

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

2016     

6,400

2017

41,880                     

2018

43,560

2019

7,260

$99,100

Rental expense incurred during the years ended September 30, 2016 and 2015 was $42,454 and $43,673, respectively.

MAJOR CUSTOMERS

No customer accounted for more than 10% of the Company’s revenues for the year ended September 30, 2016. Approximately 38% of the Company's revenues for the year ended September 30, 2015 were derived from 3 customers.  For the year ended September 30, 2016 two customers accounted for approximately 78% of the Company’s total outstanding accounts receivable. For the year ended September 30, 2015, three customers accounted for approximately 80% of the Company’s total outstanding accounts receivable.

MAJOR SUPPLIER AND SOLE MANUFACTURING SOURCE

During 2014, the Company developed a proprietary interoperable communications solution. The Company relies on no major supplier for its products and services. The Company has contracted with a single local manufacturing facility to provide completed circuit boards used in the assembly of its IP gateway devices. Interruption to the 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.

Employment Agreements

Under the terms of an employment agreement effective on November 28, 2016, Mr. Moore as CEO receives an annual salary of $200,000. The term of agreement is for a one-year period beginning on the effective date and shall automatically renew andcontinue in effect for additional one-year periods.

Under the terms of an employment agreement effective on March 13, 2015, Mr. Reid as CFO receives an annual salary of $96,000. The term of agreement is for a one-year period beginning on the effective date and shall automatically renew andcontinue in effect for additional one-year periods.