NOTE 15   COMMITMENTS AND CONTINGENCIES Operating leases The Company leases office equipment and vehicles under operating leases with terms ranging from 13 months to 60 months. The annual non-cancelable operating lease payments on these leases are as follows: 2012 $ 11,690 2013 5,667 Thereafter - $ 17,357 On November 1, 2008, the Company began leasing the remaining 11,834 sq. ft. of space at its existing facility in Bethel, CT. The lease is a triple net lease commencing November 1, 2008 and terminated October 31, 2011. The base rent for the first year is $5.50 per sq. ft. with 3% increases for each of the following two years. The Company entered into a lease agreement for 11,856 square feet of office and operations space in Bethel, Connecticut. Rent commenced on May 1, 2006 and terminated on May 31, 2011. On August 24, 2011 the Company commenced leasing 13,000 square feet of warehouse space in Bethlehem, PA $5,500 per month for 24 months. The two year lease commences October 1, 2011 and terminating September 30, 2013. The straight line monthly expense in accordance with ASC 840-20, Leases, operating leases; is $18,431 and the annual non-cancelable lease payments on the one lease is: 2012 66,000 2013 49,500 Thereafter $ 115,500 Litigation The Company is subject to other legal proceedings and claims, which arise in the ordinary course of its business. Although occasional adverse decisions or settlements may occur, the Company believes that the final disposition of such matters should not have a material adverse effect on its financial position, results of operations or liquidity. There was no outstanding litigation as of December 31, 2011. Employee and consulting contracts The Company has consulting agreements with outside contractors to provide certain marketing and financial advisory services. The Agreements are generally for a term of 12 months from inception and renewable automatically from year to year unless either the Company or Consultant terminates such engagement by written notice.