NOTE 16. COMMITMENTS AND CONTINGENCIES Operating Leases On July 23, 2014, the Company entered into an agreement with its landlord to extend the facilities lease by five years. The previous ten year lease was to expire on December 31, 2015. The agreement amends the lease to expire on December 31, 2020. The lease amendment was effective August 1, 2014 and included a four month rental abatement in the amount of $117,660. In exchange for the rental abatement, the Company agreed to make improvements to the facility totaling $123,505 within nine months of August 1, 2014. As of March 31, 2019, the Company has completed $101,776 of the leasehold improvements. In addition, the monthly rent on the facility decreased from the current rent of $33,139 to $29,415 per month, beginning on December 1, 2014. Beginning January 1, 2015, the monthly rent is on an escalating schedule with the final year of the lease at $35,123 per month. The rent expense under this lease for the three months ended March 31, 2019 and 2018 and the nine months ended March 31, 2019 and 2018 was $88,120 and $264,359, respectively. The Company also leases certain postage equipment under an operating lease. The monthly lease is $102 per month and expires January 2023. Future minimum lease payments under non-cancelable operating leases at March 31, 2019 are as follows: Years ending June 30, (in thousands) 2019 (three months) $ 103 2020 417 2021 212 2022 1 Thereafter through 2023  Total minimum lease payments $ 733 Capital Leases The Company has acquired equipment under the provisions of long-term leases. For financial reporting purposes, minimum lease payments relating to the equipment have been capitalized. The leased properties under these capital leases have a total cost of $145,916. These assets are included in the fixed assets listed in Note 6 - Equipment and Leasehold Improvements and include computers, software, furniture, and equipment. The capital leases have stated or imputed interest rates ranging from 7.8% to 11.8%. The following is an analysis of the minimum future capital lease payments subsequent to March 31, 2019: Years ending June 30, (in thousands) 2019 (three months) $ 7 2020 8 2021  Future Minimum Lease Payments $ 15 Less Amount Representing Interest  Present Value of Minimum Lease Payments 15 Less Current Portion (15 ) Long-Term Obligations under Leases Payable $  Equipment Notes Payable The Company has acquired equipment under the provisions of long-term equipment notes. For financial reporting purposes, minimum note payments relating to the equipment have been capitalized. The equipment acquired with these equipment notes has a total cost of $546,003. These assets are included in the fixed assets listed in Note 6 - Equipment and Leasehold Improvements and include production equipment. The equipment notes have stated or imputed interest rates ranging from 8.9% to 11.3%. The following is an analysis of the minimum future equipment note payable payments subsequent to March 31, 2019: Years ending June 30, (in thousands) 2019 (three months) 33 2020 129 2021 75 2022 33 2023 16 Future Minimum Note Payable Payments $ 286 Less Amount Representing Interest (34 ) Present Value of Minimum Note Payable Payments 252 Less Current Portion (111 ) Long-Term Obligations under Equipment Notes Payable $ 141 Employment Agreements The Company has entered into an employment agreement with Louis Friedman, President and Chief Executive Officer. The agreement provides for an annual base salary of $150,000 and eligibility to receive a bonus. In certain termination situations, the Company is liable to pay severance compensation to Mr. Friedman for up to nine months at his current salary. Legal Proceedings As of the date of this Quarterly Report, there are no material pending legal or governmental proceedings relating to our company or properties to which we are a party, and to our knowledge there are no material proceedings to which any of our directors, executive officers or affiliates are a party adverse to us or which have a material interest adverse to us.