Annual report pursuant to Section 13 and 15(d)

Consolidated Statements of Cash Flows

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Consolidated Statements of Cash Flows (USD $)
 12 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Cash flows from operating activities:    
Net loss $ (2,385,000) $ (1,313,000)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation 30,000 22,000
Amortization of prepaid advisory fees 68,000  
Write-off of excess inventory (26,000)  
Change in fair value of warrant liability 526,000  
Stock-based compensation 45,000 58,000
Changes in operating assets and liabilities:    
Accounts receivable (13,000) (40,000)
Inventories 1,263,000 (1,697,000)
Inventories, prepaid 56,000 550,000
Prepaid expenses and other current assets 15,000 (10,000)
Accounts payable 284,000 (6,000)
Accrued expenses 339,000 30,000
Customer deposits (207,000) (347,000)
Customer deposits from related party (167,000) 208,000
Deferred revenue (1,322,000) 1,802,000
Net cash used in operating activities (1,494,000) (743,000)
Cash flows from investing activities:    
Purchases of equipment (60,000) (14,000)
Net cash used in investing activities (60,000) (14,000)
Cash flows from financing activities:    
Issuance of common shares in financing 3,000  
Proceeds from the sale of common stock and warrants, net of offering costs paid 1,123,000  
Proceeds from issuance of stockholders note payable 1,000,000 930,000
Net cash provided by financing activities 2,126,000 930,000
Net increase in cash 572,000 173,000
Cash, beginning of period 240,000 67,000
Cash, end of period 812,000 240,000
Supplemental disclosures of Non-cash Investing and Financing Activities::    
Conversion of debt 1,264,000  
Cash paid during the year for:    
Income taxes 1,000  
Advisory Agreement
    
Supplemental disclosures of Non-cash Investing and Financing Activities::    
Issuance of warrants 3,258,000  
Securities Purchase Agreements
    
Supplemental disclosures of Non-cash Investing and Financing Activities::    
Issuance of warrants $ 1,159,000