0000896429 2010-07-01 2010-09-30 0000896429 2011-06-30 0000896429 us-gaap:ConvertiblePreferredStockMember 2011-06-30 0000896429 2011-07-01 2011-09-30 0000896429 us-gaap:CommonStockMember 2011-07-01 2011-09-30 0000896429 us-gaap:RetainedEarningsMember 2011-07-01 2011-09-30 0000896429 2011-09-30 0000896429 us-gaap:ConvertiblePreferredStockMember 2011-09-30 0000896429 2011-10-25 0000896429 2010-06-30 0000896429 2010-09-30 0000896429 us-gaap:CommonStockMember 2011-06-30 0000896429 us-gaap:CommonStockMember 2011-09-30 0000896429 us-gaap:RetainedEarningsMember 2011-06-30 0000896429 us-gaap:RetainedEarningsMember 2011-09-30 iso4217:USD xbrli:shares iso4217:USDxbrli:shares 26125531 3138056 26297040 3138056 219772598 220023061 -196785123 -196864077 442968 442968 32281140 32378356 32281140 32378356 442968 442968 -1886614 -78954 -78954 183365 418493 8316 -22056 -10380 12991511 11099937 7604324 5467381 113000 53000 1634719 1469274 285786 377232 2670332 2509534 846033 906641 18428381 16362618 7395775 8623561 195601 147946 7663208 7663208 2194353 1935753 126687 108112 36004005 34841198 5638361 4981809 1088090 1615431 155428 330669 6881879 6927909 97633 398880 2996595 1616249 9878474 8544158 3138056 3138056 219772598 220023061 -196785123 -196864077 1800000 1800000 442968 442968 640000000 640000000 32281140 32378356 36004005 34841198 266306 563125 61303 -143576 -187501 -111824 43791 961778 1073810 -132920 -48339 -19818 -656552 -67895 582357 -1934777 -1731397 89999 60348 -89999 -60348 120252 109839 8085 10010 -112167 -99829 -2136943 -1891574 false --06-30 2011-09-30 usat No Yes Smaller Reporting Company USA TECHNOLOGIES INC 0000896429 32467842 2011 Q1 10-Q <div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >1. Accounting Policies<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="font-style:italic;display:inline;font-family:times new roman;font-size:10pt;" >Business<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >USA Technologies, Inc. (the &#8220;Company&#8221;, &#8220;We&#8221; or &#8220;Our&#8221;) was incorporated in the Commonwealth of Pennsylvania in January 1992. The Company is a leading supplier of cashless, remote management, reporting and energy management solutions serving the unattended Point of Sale (&#8220;POS&#8221;) market. Our networked devices and associated services enable the owners and operators of everyday, stand-alone, distributed assets, such as vending machines, kiosks, personal computers, photocopiers, and laundry equipment, the ability to remotely monitor, control and report on the results of these distributed assets, as well as the ability to offer their customers cashless payment options. The Company also manufactures and sells energy management products which reduce the electrical power consumption of various equipment such as refrigerated vending machines and glass front coolers, thus reducing the electrical energy costs associated with operating this equipment. The Company&#8217;s customers are primarily located in the United States.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="font-style:italic;display:inline;font-family:times new roman;font-size:10pt;" >Interim Financial Information<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >The accompanying unaudited consolidated financial statements of USA Technologies, Inc. have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements and therefore should be read in conjunction with the Company&#8217;s Annual Report on Form 10-K for the year ended June 30, 2011. In the opinion of management, all adjustments considered necessary for a fair presentation, consisting of normal recurring adjustments, have been included. Operating results for the three month period ended September 30, 2011 are not necessarily indicative of the results that may be expected for the year ending June 30, 2012. The balance sheet at June 30, 2011 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >The Company has incurred losses from its inception through June 30, 2011 and losses have continued through September 30, 2011 and are expected to continue during fiscal year 2012. The Company&#8217;s ability to meet its future obligations is dependent upon the success of its products and services in the marketplace and available capital resources. Until the Company&#8217;s products and services can generate sufficient operating revenues, the Company will be required to use its cash and cash equivalents on hand, as well as raise capital to meet its cash flow requirements including the potential issuance of Common Stock.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="font-style:italic;display:inline;font-family:times new roman;font-size:10pt;" >Consolidation<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Stitch Networks Corporation (&#8220;Stitch&#8221;) and USAT Capital Corp LLC (&#8220;USAT Capital&#8221;). All significant intercompany accounts and transactions have been eliminated in consolidation.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="font-style:italic;display:inline;font-family:times new roman;font-size:10pt;" >Use of Estimates<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="font-style:italic;display:inline;font-family:times new roman;font-size:10pt;" >Cash and Cash Equivalents<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Cash and cash equivalents represent all highly liquid investments with original maturities of three months or less. Cash equivalents are comprised of money market funds. The Company maintains its cash in bank deposit accounts, which may exceed federally insured limits at times. </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Included in cash and cash equivalents at September 30, 2011 and June 30, 2011 was approximately $0 and $410,000, respectively, of cash received by the Company for transaction processing services which is payable to our customers. Included in accounts receivable are amounts for transactions processed with our card processers for which cash has not been received by the Company and included in accounts payable are amounts for transactions processed with our card processers and due to our customers, which are recorded net of fees due to the Company. Generally, contractual terms require us to remit amounts owed to our customers on a weekly basis. </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;margin-left:0pt;margin-right:0pt;" ><div><div style="width:100%;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:8pt;" > </font> </div> </div><div style="page-break-after:always;width:100%;" ><div style="text-align:center;width:100%;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </div><div style="text-align:center;width:100%;" > </div> </div><div><div style="width:100%;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:8pt;" > </font> </div> </div> </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" > </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" > </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="font-style:italic;display:inline;font-family:times new roman;font-size:10pt;" >Inventory<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Inventory consists of finished goods and packaging materials. The Company&#8217;s inventory is stated at the lower of cost (average cost basis) or market.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="font-style:italic;display:inline;font-family:times new roman;font-size:10pt;" >Fair Value of Financial Instruments<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >In September 2009, the Financial Accounting Standards Board (&#8220;FASB&#8221;) issued Accounting Standards Update (&#8220;ASU&#8221;) 2010-06, &#8220;Fair Value Measurements and Disclosures (&#8220;Topic 820&#8221;): Improving Disclosures about Fair Value Measurements.&#8221; ASU 2009-06 amends certain disclosure requirements of Subtopic 820-10. This ASU provides additional disclosures for transfers in and out of Levels 1 and 2 and for activity in Level 3. This ASU also clarifies certain other existing disclosure requirements including level of desegregation and disclosures around inputs and valuation techniques.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >The Company&#8217;s financial assets and liabilities are measured using inputs from the three levels of the fair value hierarchy. The three levels are as follows:<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Level 1- Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Level 2- Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Level 3- Inputs are unobservable and reflect the Company&#8217;s assumptions that market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >The Company&#8217;s financial instruments, principally cash equivalents, accounts receivable, finance receivables, prepaid expenses and other assets, accounts payable and accrued expenses, are carried at cost which approximates fair value due to the short-term maturity of these instruments. The fair value of the Company&#8217;s obligations under its long-term debt and credit agreements approximates their carrying value as such instruments are at market rates currently available to the Company.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="font-style:italic;display:inline;font-family:times new roman;font-size:10pt;" >Income Taxes<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >No provision for income taxes has been made for the three months ended September 30, 2011 and 2010 given the Company&#8217;s losses in 2011 and 2010 and available net operating loss carryforwards. A benefit has not been recorded as the realization of the net operating losses is not assured and the timing in which the Company can utilize its net operating loss carryforwards in any year or in total may be limited by provisions of the Internal Revenue Code regarding changes in ownership of corporations.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="font-style:italic;display:inline;font-family:times new roman;font-size:10pt;" >Equity Awards<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >In accordance with the FASB Accounting Standards Codification (&#8220;ASC&#8221;) Topic 718 the cost of employee and director services received in exchange for an award of equity instruments is based on the grant-date fair value of the award and allocated over the vesting period of the award.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >The Company recorded stock compensation expense of $240,453 and $8,103 related to common stock grants and vesting of shares previously granted to employees and directors, excluding the Long-Term Equity Incentive Program (&#8220;LTIP&#8221; or the &#8220;LTIP Program&#8221;) during the three months ended September 30, 2011 and 2010, respectively. The Company recorded stock compensation expense of $0 and $61,303 related to the vesting of shares under the fiscal year 2010 LTIP Program during the three months ended September 30, 2011 and 2010, respectively. There were no common stock options granted, vested or recorded as expense during the three months ended September 30, 2011 and 2010. </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;margin-left:0pt;margin-right:0pt;" ><div><div style="width:100%;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:8pt;" > </font> </div> </div><div><p> </p> </div><div><div style="width:100%;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:8pt;" > </font> </div> </div> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" > </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >On September 15, 2011, at the recommendation of the Compensation Committee, the board of directors adopted the Fiscal Year 2012 Performance Share Plan (the &#8220;2012 Plan&#8221;) covering the Company&#8217;s executive officers. On that date there were not sufficient shares available under the existing stock plans that had been approved by the shareholders of the Company. Pursuant to the 2012 Plan the Company may be required to pay the executives an amount of cash equal to the value of shares earned but not available to be issued to the executives. As such and in accordance with ASC Topic 718, &#8220;Stock Compensation&#8221;, this award is accounted for as a liability of the Company. As of September 30, 2011 and for the three months then ended the Company recorded a liability as if the award will be settled in cash and recorded expense of $47,582 as its estimate of the award earned by Company&#8217;s executive officers.<br></br> </font> </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="font-style:italic;display:inline;font-family:times new roman;font-size:10pt;" > </font> </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="font-style:italic;display:inline;font-family:times new roman;font-size:10pt;" >Loss Per Common Share<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Basic earnings per share is calculated by dividing income (loss) applicable to common shares by the weighted average common shares outstanding for the period. Diluted earnings per share is calculated by dividing income (loss) applicable to common shares by the weighted average common shares outstanding for the period plus the dilutive effect (unless such effect is anti-dilutive) of potential common shares. No exercise of stock options, stock purchase warrants, or the conversion of preferred stock or cumulative preferred dividends was assumed during the periods presented because the assumed exercise of these securities would be anti-dilutive.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="font-style:italic;display:inline;font-family:times new roman;font-size:10pt;" >Recent Accounting Pronouncement<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >In December 2010, the Financial Accounting Standards Board issued ASU 2010-28 Intangibles&#8212;Goodwill and Other (Topic 350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts Consensus reached in EITF Issue No. 10-A. This will be effective for the Company beginning with the fiscal year ending June 30, 2013.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >In April 2011, the Financial Accounting Standards Board issued ASU Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP. This will be effective for the Company beginning with the quarter ending March 31, 2012.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >In September 2011, the Financial Accounting Standards Board issued ASU 2011-08 Intangibles&#8212;Goodwill and Other (Topic 350): Testing Goodwill for Impairment. This will be effective for the Company beginning with the fiscal year ending June 30, 2013.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >The Company does not believe that these or any other recently issued, but not yet effective accounting standards will have a material effect on the Company&#8217;s consolidated financial position, results of operations, or cash flows. </font> </div> </div> <div><div><table cellspacing="0" cellpadding="0" width="100%" style="font-family:times new roman;font-size:10pt;" ><tr><td valign="top" width="3%" style="text-align:left;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >2.<br></br> </font> </div> </td><td valign="top" width="84%" style="text-align:left;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Finance Receivables </font> </div> </td> </tr> </table> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Finance receivables include sales-type leases to accommodate extended payment terms for equipment purchases to certain customers. Finance receivables are carried at their contractual amount and charged off against the allowance for credit losses when management determines that recovery is unlikely and the Company ceases collection efforts. Monthly payments for the receivables are collected by deduction from our customers&#8217; vending and equipment transaction funds. The Company recognizes a portion of the lease payments as interest income in the accompanying consolidated financial statements based on the effective interest rate method.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Finance receivables consist of the following: </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-align:center;text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;" ><table cellspacing="0" cellpadding="0" width="70%" style="font-family:times new roman;font-size:10pt;" ><tr><td valign="bottom" width="46%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >September 30, </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >June 30, </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr><td valign="bottom" width="46%" style="padding-bottom:2px;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" style="border-bottom:black 2px solid;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >2011 </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" style="border-bottom:black 2px solid;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >2011 </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr><td valign="bottom" width="46%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >(unaudited) </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#cceeff;" ><td valign="bottom" width="46%" style="text-align:left;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Total finance receivables </font> </div> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >525,178 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >481,387 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#ffffff;" ><td valign="bottom" width="46%" style="padding-bottom:2px;text-align:left;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Less current portion </font> </div> </td><td valign="bottom" width="1%" style="padding-bottom:2px;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 2px solid;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="9%" style="border-bottom:black 2px solid;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >377,232 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="border-bottom:black 2px solid;text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 2px solid;padding-bottom:2px;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 2px solid;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="9%" style="border-bottom:black 2px solid;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >285,786 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#cceeff;" ><td valign="bottom" width="46%" style="padding-bottom:4px;text-align:left;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Non-current portion of finance receivables </font> </div> </td><td valign="bottom" width="1%" style="padding-bottom:4px;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 4px double;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="border-bottom:black 4px double;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >147,946 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:4px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:4px;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 4px double;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="border-bottom:black 4px double;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >195,601 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:4px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr> </table><br></br> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >As of September 30, 2011 and June 30, 2011, there was no allowance for credit losses of finance receivables. As the Company collects monthly payments of the receivables from the customers&#8217; transaction funds the risk of loss was determined to be remote.<br></br> </font> </div><div> </div><div style="text-indent:0pt;margin-left:0pt;margin-right:0pt;" ><div><div style="width:100%;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:8pt;" > </font> </div> </div><div style="page-break-after:always;width:100%;" ><div style="text-align:center;width:100%;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </div><div style="text-align:center;width:100%;" > </div> </div><div><div style="width:100%;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:8pt;" > </font> </div> </div> </div><div> </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" > </div><div style="text-indent:0pt;display:block;" > </div><div><div><table cellspacing="0" cellpadding="0" width="100%" style="font-family:times new roman;font-size:10pt;" ><tr><td valign="top" width="3%" style="text-align:left;" ><div style="text-align:left;text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </div> </td><td valign="top" width="84%" style="text-align:left;" ><div style="text-align:left;text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </div> </td> </tr> </table> </div> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-align:center;text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;" ><div style="text-align:center;" ><table cellspacing="0" cellpadding="0" width="50%" style="font-family:times new roman;font-size:10pt;" ><tr><td valign="bottom" width="49%" colspan="4" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Credit Quality Indicators </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr><td valign="bottom" width="49%" colspan="4" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >As of September 30, 2011 </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr><td valign="bottom" width="38%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr><td valign="bottom" width="49%" colspan="4" style="text-align:left;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Credit risk profile based on payment activity: </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr><td valign="bottom" width="38%" style="padding-bottom:2px;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" style="border-bottom:black 2px solid;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Leases </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr><td valign="bottom" width="38%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#cceeff;" ><td valign="bottom" width="38%" style="text-align:left;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Performing </font> </div> </td><td valign="bottom" width="1%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >525,178 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#ffffff;" ><td valign="bottom" width="38%" style="padding-bottom:2px;text-align:left;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Nonperforming </font> </div> </td><td valign="bottom" width="1%" style="padding-bottom:2px;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 2px solid;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="9%" style="border-bottom:black 2px solid;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >- </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#cceeff;" ><td valign="bottom" width="38%" style="padding-bottom:4px;text-align:left;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Total </font> </div> </td><td valign="bottom" width="1%" style="padding-bottom:4px;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 4px double;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="border-bottom:black 4px double;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >525,178 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:4px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr> </table><br></br> </div> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-align:center;text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;" ><div style="margin-left:9pt;text-align:left;" ><table cellspacing="0" cellpadding="0" width="80%" style="font-family:times new roman;font-size:10pt;" ><tr><td valign="bottom" width="79%" colspan="24" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Age Analysis of Past Due Finance Receivables </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr><td valign="bottom" width="79%" colspan="24" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >As of September 30, 2011 </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr><td valign="bottom" width="20%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="8%" colspan="2" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="8%" colspan="2" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="8%" colspan="2" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="8%" colspan="2" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="8%" colspan="2" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="8%" colspan="2" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr><td valign="bottom" width="20%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="7%" style="text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >31 &#8211; 60 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="7%" style="text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >61 &#8211; 90 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="8%" colspan="2" style="text-align:center;" ><div style="text-align:center;text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Greater </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="8%" colspan="2" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="8%" colspan="2" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="8%" colspan="2" style="text-align:center;" ><div style="text-align:center;text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Total </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr><td valign="bottom" width="20%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="8%" colspan="2" style="border-bottom:black 2px solid;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Days Past<br /> Due </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="8%" colspan="2" style="border-bottom:black 2px solid;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Days Past<br /> Due </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="8%" colspan="2" style="border-bottom:black 2px solid;text-align:center;" ><div style="text-align:center;text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >90 Days<br /> Past Due </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="8%" colspan="2" style="border-bottom:black 2px solid;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Total Past<br /> Due </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="8%" colspan="2" style="border-bottom:black 2px solid;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Current </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="8%" colspan="2" style="border-bottom:black 2px solid;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Finance<br /> Receivables </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr><td valign="bottom" width="20%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="7%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="7%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="8%" colspan="2" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="8%" colspan="2" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="8%" colspan="2" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="8%" colspan="2" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#cceeff;" ><td valign="bottom" width="20%" style="text-align:left;padding-bottom:2px;text-indent:0pt;margin-left:0pt;margin-right:0pt;" ><div style="text-align:left;text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Finance </font> </div> </td><td valign="bottom" width="1%" style="padding-bottom:2px;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 2px solid;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="7%" style="border-bottom:black 2px solid;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >- </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 2px solid;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="7%" style="border-bottom:black 2px solid;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >- </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 2px solid;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="7%" style="border-bottom:black 2px solid;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >- </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 2px solid;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="7%" style="border-bottom:black 2px solid;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >- </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 2px solid;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="7%" style="border-bottom:black 2px solid;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >525,178 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 2px solid;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="7%" style="border-bottom:black 2px solid;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >525,178 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#ffffff;" ><td valign="bottom" width="20%" style="text-align:left;padding-bottom:4px;text-indent:0pt;margin-left:0pt;margin-right:0pt;" ><div style="text-align:left;text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Total </font> </div> </td><td valign="bottom" width="1%" style="padding-bottom:4px;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 4px double;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="7%" style="border-bottom:black 4px double;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >- </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:4px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:4px;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 4px double;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="7%" style="border-bottom:black 4px double;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >- </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:4px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:4px;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 4px double;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="7%" style="border-bottom:black 4px double;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >- </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:4px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:4px;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 4px double;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="7%" style="border-bottom:black 4px double;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >- </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:4px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:4px;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 4px double;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="7%" style="border-bottom:black 4px double;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >525,178 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:4px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:4px;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 4px double;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="7%" style="border-bottom:black 4px double;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >525,178 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:4px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr> </table> </div> </div> </div> <div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >3. Accrued Expenses<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Accrued expenses consist of the following:<br></br> </font> </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><table cellspacing="0" cellpadding="0" width="80%" style="font-family:times new roman;font-size:10pt;" ><tr><td valign="bottom" width="56%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >September 30, </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >June 30, </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr><td valign="bottom" width="56%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" style="border-bottom:black 2px solid;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >2011 </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" style="border-bottom:black 2px solid;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >2011 </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr><td valign="bottom" width="56%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >(unaudited) </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#cceeff;" ><td valign="bottom" width="56%" style="text-align:left;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Accrued compensation and related sales commissions </font> </div> </td><td valign="bottom" width="1%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >347,564 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >269,335 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#ffffff;" ><td valign="bottom" width="56%" style="text-align:left;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Accrued professional fees </font> </div> </td><td valign="bottom" width="1%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >336,437 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >197,964 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#cceeff;" ><td valign="bottom" width="56%" style="text-align:left;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Accrued taxes and filing fees </font> </div> </td><td valign="bottom" width="1%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >574,793 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >302,147 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#ffffff;" ><td valign="bottom" width="56%" style="text-align:left;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Advanced customer billings </font> </div> </td><td valign="bottom" width="1%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >167,688 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >100,398 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#ffffff;" ><td valign="bottom" width="56%" style="padding-bottom:2px;text-align:left;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Accrued other </font> </div> </td><td valign="bottom" width="1%" style="padding-bottom:2px;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 2px solid;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="9%" style="border-bottom:black 2px solid;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >410,674 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 2px solid;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="9%" style="border-bottom:black 2px solid;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >384,955 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#cceeff;" ><td valign="bottom" width="56%" style="padding-bottom:4px;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:4px;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 4px double;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="border-bottom:black 4px double;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >1,837,156 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:4px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:4px;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 4px double;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="border-bottom:black 4px double;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >1,254,799 </font> </td> </tr> </table> </div> </div> <div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >4. Long-Term Debt<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Long-term debt consists of the following: </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><table cellspacing="0" cellpadding="0" width="60%" style="font-family:times new roman;font-size:10pt;" ><tr><td valign="bottom" width="36%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >September 30, </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >June 30, </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr><td valign="bottom" width="36%" style="padding-bottom:2px;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" style="border-bottom:black 2px solid;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >2011 </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" style="border-bottom:black 2px solid;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >2011 </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr><td valign="bottom" width="36%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >(unaudited) </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#cceeff;" ><td valign="bottom" width="36%" style="text-align:left;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Capital lease obligations </font> </div> </td><td valign="bottom" width="1%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >509,424 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >84,043 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#ffffff;" ><td valign="bottom" width="36%" style="padding-bottom:2px;text-align:left;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Loan agreement </font> </div> </td><td valign="bottom" width="1%" style="padding-bottom:2px;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 2px solid;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="9%" style="border-bottom:black 2px solid;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >220,125 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 2px solid;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="9%" style="border-bottom:black 2px solid;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >169,018 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#cceeff;" ><td valign="bottom" width="36%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >729,549 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >253,061 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#ffffff;" ><td valign="bottom" width="36%" style="padding-bottom:2px;text-align:left;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Less current portion </font> </div> </td><td valign="bottom" width="1%" style="padding-bottom:2px;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 2px solid;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="9%" style="border-bottom:black 2px solid;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >330,669 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 2px solid;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="9%" style="border-bottom:black 2px solid;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >155,428 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#cceeff;" ><td valign="bottom" width="36%" style="padding-bottom:4px;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:4px;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 4px double;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="border-bottom:black 4px double;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >398,880 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:4px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:4px;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 4px double;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="border-bottom:black 4px double;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >97,633 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:4px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr> </table><br></br> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >During July 2011, the Company financed a portion of the premiums for various insurance policies totaling $90,372 due in nine equal monthly installment payments of $10,283 at an interest rate of 5.57%.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >During August 2011, the Company entered into a capital lease for network equipment totaling approximately $496,000, due in thirty-six monthly payments of $14,145 through August 2014 at an interest rate of 6.8%. </font> </div> </div> <div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >5. Fair Value of Financial Instruments<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >In accordance with the fair value hierarchy described in Note 1, the following table shows the fair value of the Company&#8217;s financial instruments that are required to be measured at fair value as of September 30, 2011 and June 30, 2011:<br></br> </font> </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><div><div style="text-align:center;" ><table cellspacing="0" cellpadding="0" width="90%" style="font-family:times new roman;font-size:10pt;" ><tr><td valign="bottom" width="42%" style="border-bottom:black 2px solid;text-align:left;" ><div style="text-align:left;text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >September 30, 2011 </font> </div> </td><td valign="bottom" width="1%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" style="border-bottom:black 2px solid;" ><div style="text-align:center;text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Level 1 </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" style="border-bottom:black 2px solid;" ><div style="text-align:center;text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Level 2 </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" style="border-bottom:black 2px solid;" ><div style="text-align:center;text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Level 3 </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" style="border-bottom:black 2px solid;" ><div style="text-align:center;text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Total </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr><td valign="bottom" width="42%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#cceeff;" ><td valign="bottom" width="42%" style="text-align:left;" ><div style="text-align:left;text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Cash equivalents </font> </div> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >99,475 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >- </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >- </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >99,475 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#ffffff;" ><td valign="bottom" width="42%" style="text-align:left;text-indent:0pt;margin-left:0pt;margin-right:0pt;" ><div style="text-align:left;text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Common stock warrant liability, warrants exercisable at $2.6058 from September 18, 2011 through September 18, 2016 </font> </div> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >- </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >- </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >964,208 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >964,208 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#cceeff;" ><td valign="bottom" width="42%" style="text-align:left;text-indent:0pt;margin-left:0pt;margin-right:0pt;" ><div style="text-align:left;text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Common stock warrant liability, warrants exercisable at $5.90 through September 14, 2013 </font> </div> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >- </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >- </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >31,436 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >31,436 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr> </table> </div><div><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </div><div style="text-align:center;" ><div><table cellspacing="0" cellpadding="0" width="90%" style="font-family:times new roman;font-size:10pt;" ><tr style="background-color:#ffffff;" ><td valign="bottom" width="42%" style="border-bottom:black 2px solid;text-align:left;" ><div style="text-align:left;text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >June 30, 2011 </font> </div> </td><td valign="bottom" width="1%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" style="border-bottom:black 2px solid;" ><div style="text-align:center;text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Level 1 </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" style="border-bottom:black 2px solid;" ><div style="text-align:center;text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Level 2 </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" style="border-bottom:black 2px solid;" ><div style="text-align:center;text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Level 3 </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" style="border-bottom:black 2px solid;" ><div style="text-align:center;text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Total </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#ffffff;" ><td valign="bottom" width="42%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#cceeff;" ><td valign="bottom" width="42%" style="text-align:left;" ><div style="text-align:left;text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Cash equivalents </font> </div> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >83,267 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >- </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >- </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >83,267 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#ffffff;" ><td valign="bottom" width="42%" style="text-align:left;text-indent:0pt;margin-left:0pt;margin-right:0pt;" ><div style="text-align:left;text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Common stock warrant liability, warrants exercisable at $2.6058 from September 18, 2011 through September 18, 2016 </font> </div> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >- </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >- </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >2,638,629 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >2,638,629 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#cceeff;" ><td valign="bottom" width="42%" style="text-align:left;text-indent:0pt;margin-left:0pt;margin-right:0pt;" ><div style="text-align:left;text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Common stock warrant liability, warrants exercisable at $5.90 through September 14, 2013 </font> </div> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >- </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >- </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >93,624 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >93,624 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr> </table><p> </p><p> </p> </div> </div> </div><div style="text-indent:0pt;display:block;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </div> </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >As of September 30, 2011 and June 30, 2011, the fair values of the Company&#8217;s Level 1 financial instruments were $99,475 and $83,267, respectively. These financial instruments consist of money market accounts classified as cash equivalents on the Company&#8217;s consolidated balance sheets.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >As of September 30, 2011 and June 30, 2011, the Company held no Level 2 financial instruments.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >As of September 30, 2011 and June 30, 2011, the fair values of the Company&#8217;s Level 3 financial instruments totaled $995,644 and $2,732,253, respectively. The Level 3 financial instruments consist of common stock warrants issued by the Company in March 2011 and March 2007, which include features requiring liability treatment of the warrants. The fair value of warrants issued in March 2011 to purchase 3.9 million shares of the Company&#8217;s common stock is based on valuations performed by an independent third party valuation firm. The fair value was determined using proprietary valuation models using the quality of the underlying securities of the warrants, restrictions on the warrants and security underlying the warrants, time restrictions and precedent sale transactions completed in the secondary market or in other private transactions. The fair value of warrants issued in March 2007 to purchase 903,955 shares of the Company&#8217;s common stock was estimated by the Company using the Black-Scholes model and applying an estimated fair value adjustment primarily related to the illiquidity of the warrants. Prior to March 31, 2011, the fair value of these warrants was determined to be de minimus and was not included on the Company&#8217;s consolidated balance sheets.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >There were no transfers of assets or liabilities between level 1, level 2, or level 3 during the three months ended September 30, 2011 and 2010. </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><div style="text-align:center;" ><table cellspacing="0" cellpadding="0" width="90%" style="font-family:times new roman;font-size:10pt;" ><tr><td valign="bottom" width="66%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="22%" colspan="6" style="text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Three months ended September 30, </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr><td valign="bottom" width="66%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" style="border-bottom:black 2px solid;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >2011 </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" style="border-bottom:black 2px solid;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >2010 </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr><td valign="bottom" width="66%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >(unaudited) </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >(unaudited) </font> </div> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr><td valign="bottom" width="66%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="10%" colspan="2" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#cceeff;" ><td valign="bottom" width="66%" style="text-align:left;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Balance, beginning of period </font> </div> </td><td valign="bottom" width="1%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >(2,732,253 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >) </font> </td><td valign="bottom" width="1%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >- </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#ffffff;" ><td valign="bottom" width="66%" style="text-align:left;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Unrealized gains included in other income related to the change in the fair value of warrant liabilities </font> </div> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >1,736,609 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="9%" style="text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >- </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#cceeff;" ><td valign="bottom" width="66%" style="padding-bottom:2px;text-align:left;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Purchases, sales, issuances, settlements, or transfers </font> </div> </td><td valign="bottom" width="1%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 2px solid;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="9%" style="border-bottom:black 2px solid;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >- </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 2px solid;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="9%" style="border-bottom:black 2px solid;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >- </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:2px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr><tr style="background-color:#ffffff;" ><td valign="bottom" width="66%" style="padding-bottom:4px;text-align:left;" ><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Balance, end of period </font> </div> </td><td valign="bottom" width="1%" style="padding-bottom:4px;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 4px double;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="border-bottom:black 4px double;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >(995,644 </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:4px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >) </font> </td><td valign="bottom" width="1%" style="padding-bottom:4px;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td><td valign="bottom" width="1%" style="border-bottom:black 4px double;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >$ </font> </td><td valign="bottom" width="9%" style="border-bottom:black 4px double;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >- </font> </td><td valign="bottom" width="1%" nowrap="nowrap" style="text-align:left;padding-bottom:4px;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </td> </tr> </table> </div> </div> </div> <div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >6. Common Stock and Preferred Stock<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >On September 27, 2011, the Company and Mr. Jensen, the Company&#8217;s Chief Executive Officer at that date, entered into an amended and restated employment agreement, as well as the Jensen Stock Agreement described below. The new employment agreement continued substantially all of the previous terms and conditions of his employment agreement other than the provisions related to the Jensen Shares. The new agreement did not continue the provisions of his prior agreement which obligated the Company to pay any excise taxes attributable to any excess parachute payments which would be payable to Mr. Jensen upon the occurrence of a USA Transaction as well as the Company&#8217;s obligation to pay tax gross up payments attributable to such excise taxes. The new agreement also stated that the premiums for Mr. Jensen&#8217;s supplemental long term disability policy being paid by the Company would now be included in his wages and be taxable to him. In exchange for modifying the excise tax and related gross up provisions, the Company issued an aggregate of 150,000 shares of common stock to Mr. Jensen under its stock incentive plans which vest as follows: 50,000 on the date the agreement was signed (September 27, 2011) by Mr. Jensen and the Company; 50,000 on the first anniversary of the date of signing (September 27, 2012); and 50,000 on the second anniversary of the date of signing (September 27, 2013). Pursuant to the Separation Agreement and Release (the &#8220;Separation Agreement&#8221;) entered into by the Company and Mr. Jensen (see Subsequent Events, Note 9, for a more detailed discussion on the Separation Agreement), the 50,000 shares of the Company&#8217;s common stock vesting on September 27, 2012 became vested to Mr. Jensen as of October 14, 2011, and the 50,000 shares vesting on September 27, 2013 were forfeited. The Company recorded no expense or reduction of expense for the change in vesting of these shares for the three months ended September 30, 2011.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >On September 27, 2011, the Company and Mr. Jensen also entered into a new agreement (the &#8220;Jensen Stock Agreement&#8221;) which contained the provisions relating to the issuance by the Company to Mr. Jensen of the Jensen Shares which had previously been set forth in his employment agreement. The provisions of Mr. Jensen&#8217;s prior employment agreement which required the Company to pay any excise taxes attributable to the excess parachute payments attributable to the Jensen Shares as well as the related obligation to make tax gross up payments have been retained in the Jensen Stock Agreement and continue to apply to the Jensen Shares.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >On September 27, 2011, the Company and Mr. Herbert entered into a second amendment to his employment agreement. The amendment eliminated the provisions of his prior agreement which obligated the Company to pay any excise taxes attributable to any excess parachute payments which would be received by Mr. Herbert upon the occurrence of a USA Transaction as well as the Company&#8217;s related obligation to make tax gross up payments. The new agreement also stated that the premiums for Mr. Herbert&#8217;s supplemental long term disability policy being paid by the Company would now be included in his wages and be taxable to him. In exchange for eliminating the excise tax and related gross up provisions, the Company issued an aggregate of 100,000 shares of common stock to Mr. Herbert under its stock incentive plans which vest as follows: 33,333 on the date the agreement was signed by Mr. Herbert and the Company (September 27, 2011); 33,333 on the first anniversary of the date of signing (September 27, 2012); and 33,334 on the second anniversary of the date of signing (September 27, 2013).<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >On September 27, 2011, the Company and Mr. DeMedio entered into a fifth amendment to his employment agreement pursuant to which Mr. DeMedio was granted an aggregate of 25,000 shares of common stock as a bonus for his performance during the last six months of the 2011 fiscal year which vest as follows: 8,333 on the date of signing the amendment (September 27, 2011); 8,333 on the first anniversary of such signing date (September 27, 2012); and 8,334 on the second anniversary of such signing date (September 27, 2013). Mr. DeMedio also agreed that the premiums for his supplemental long term disability policy being paid by the Company would now be included in his wages and be taxable to him.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >On September 15, 2011, at the recommendation of the Compensation Committee, the board of directors adopted the Fiscal Year 2012 Performance Share Plan (the &#8220;2012 Plan&#8221;) covering the Company&#8217;s executive officers. Under the 2012 Plan, each executive officer will be awarded common stock in the event the Company achieves target goals during the fiscal year ending June 30, 2012 relating to the total number of connections, total revenues, operating expenses, and operating earnings. Operating earnings is defined as earnings before interest and taxes (after bonus accruals and stock awards) and before non-operating gains or losses. The number of eligible shares to be awarded to the executives is based upon the following weightings: 30% by the total number of connections; 30% by total revenues; 10% by operating expenses; and 30% by operating earnings. No awards would be made under the 2012 Plan if either (i) none of the minimum, threshold performance target goals have been achieved, or (ii) if operating earnings for the 2012 fiscal year are not equal or better than those during the 2011 fiscal year.<br></br> </font> </div><div> </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" > </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" > </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >If all of the target performance goals are achieved, the executive officers would be awarded the following number of shares: Mr. Herbert &#8211; 120,000 shares; and Mr. DeMedio &#8211; 50,000 shares. If all of the minimum, threshold performance target goals are achieved, the executive officers would be awarded 20% of the number of shares which would have been awarded to them if all of the target performance goals had been achieved. If all of the maximum, distinguished performance target goals are achieved, the executive officers would be awarded 150% of the number of shares which would have been awarded to them if all of the target performance goals had been achieved. If the actual results for the fiscal year are less than the target goals (but greater than the minimum, threshold performance target goals), each executive would be awarded a lesser <font style="font-style:italic;display:inline;font-family:times new roman;font-size:10pt;" >pro rata </font> portion of the number of eligible shares.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >In the event of the occurrence of a USA Transaction during the fiscal year, and provided that the executive is an employee of USA on the date of such USA Transaction, the Plan shall be terminated and each executive shall be awarded shares as of the date of such USA Transaction as if all of the target performance goals had been met. In the event that the executive&#8217;s employment with the Company is terminated by the Company for cause during the fiscal year, or if the executive resigns his employment for any reason other than for good reason during the fiscal year, then the executive shall not be entitled to earn any award under the 2012 Plan. In the event that the executive&#8217;s employment with the Company shall be terminated by the Company during the fiscal year for any reason whatsoever other than for cause, or if the executive&#8217;s employment is terminated by the executive for good reason during the fiscal year, then the executive shall be awarded shares as if all of the target performance goals had been meet. If the executive&#8217;s employment is terminated during the fiscal year as a result of death or disability, the executive shall nevertheless be eligible to earn shares under the 2012 Plan as if he had remained employed with the Company through the end of the fiscal year.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Notwithstanding the above description of the 2012 Plan, the executives would receive shares from the Company pursuant to the 2012 Plan only if and to the extent that shares would be available to be issued to the executives under the existing 2011 stock incentive plan or another stock plan that has been approved by the shareholders of the Company in accordance with NASDAQ Listing Rule 5635(c). If there would not be a sufficient number of shares available to be issued to the executives, the Company would pay to the executives an amount of cash equal to the value of those shares not available to be issued to the executives. In such event, the executives would be required to utilize the cash payment, net of any withholding, payroll or other taxes attributable to the cash payment, to purchase shares of common stock of the Company on the open market.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >As of September 15, 2011, there were not sufficient shares available under the existing 2011 stock incentive plan or another stock plan that had been approved by the shareholders of the Company; consequently, the Company may be required the executives an amount of cash equal to the value of shares earned but not available to be issued to the executives. Therefore, in accordance with ASC Topic 718, &#8220;Stock Compensation&#8221;, this award is accounted for as a liability of the Company. As of September 30, 2011 and for the three months then ended the Company recorded a liability as if the award will be settled in cash and recorded expense of $47,582 as its estimate of the award earned by Messrs. Herbert and DeMedio.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Pursuant to the Separation Agreement entered into by the Company and Mr. Jensen (see Subsequent Events, Note 9, for a more detailed discussion on the Separation Agreement), Mr. Jensen is not entitled to earn shares under the 2012 Plan, and therefore no award was estimated for Mr. Jensen for the three months ended September 30, 2011. </font> </div> </div> <div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >7. Common Stock Warrants<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >As of September 30, 2011, there were 15,562,649 Common Stock warrants outstanding, all of which were currently exercisable at exercise prices ranging from $1.13 to $7.70 per share. In accordance with ASC Topic 815, <font style="font-style:italic;display:inline;font-family:times new roman;font-size:10pt;" >Derivatives and Hedging</font>, 4,803,955 of the warrants are subject to liability accounting. Therefore, the fair value of the warrants is included on the Company&#8217;s consolidated balance sheets and changes in the fair value are included in the Company&#8217;s consolidated statements of operations (see Note 5). </font> </div><div style="text-indent:0pt;display:block;" > </div> </div> <div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >8. Commitments<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Various legal actions and claims occurring in the normal course of business are pending or may be instituted or asserted in the future against the Company. The Company does not believe that the resolution of these matters will have a material effect on the financial position or results of operations of the Company. Legal fees will be expensed as occurred. </font> </div> </div> <div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >9. Subsequent Events<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="font-style:italic;display:inline;font-family:times new roman;font-size:10pt;" >Resignation and Separation Agreement<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >On October 5, 2011, the Company suspended George R. Jensen, Jr., as the Chairman and Chief Executive Officer of the Company pending investigation by the Audit Committee of the Board of Directors of postings by Mr. Jensen concerning the Company made on an Internet message board. During such suspension, Mr. Jensen continued to receive the compensation and benefits provided for under his employment agreement.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >On October 14, 2011, the Company and Mr. Jensen entered into a Separation Agreement and Release. Pursuant to the Separation Agreement, Mr. Jensen resigned as Chairman, Chief Executive Officer and as a Director of the Company, effective immediately. The Separation Agreement states that the Company shall provide Mr. Jensen with (i) a lump sum payment of $365,000 which is equal to one year&#8217;s base salary subject to applicable payroll and tax withholding; (ii) a lump sum payment of $17,875 which is equal to one year&#8217;s car allowance subject to applicable payroll and tax withholding; (iii) a lump sum payment of $28,077 which is attributable to Mr. Jensen&#8217;s unused vacation subject to applicable payroll and tax withholding; (iv) group medical and dental insurance coverage for one year at no cost to Mr. Jensen; (v) the 41,667 shares of the Company&#8217;s common stock which were awarded to Mr. Jensen in connection with the signing of an amendment to his employment agreement in April 2011 and which would not have otherwise vested until April 2012; and (vi) the 50,000 shares of the Company&#8217;s common stock which were awarded to Mr. Jensen in connection with the signing of his amended and restated employment agreement in September 2011 and which would not have otherwise vested until September 2012. The Separation Agreement provides that the confidentiality and restrictive covenant provisions of Mr. Jensen&#8217;s September 2011 amended and restated employment agreement shall remain in full force and effect in accordance with their terms. Mr. Jensen has released the Company and certain other parties from and against any and all claims he may have, subject to any rights to indemnification or coverage which he may have under any existing insurance policies of the Company, the bylaws of the Company, or the existing indemnification agreement between him and the Company. Mr. Jensen has also agreed to certain standstill provisions for a three year period.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >Pursuant to the Separation Agreement, 41,667 shares of common stock that would have vested in April 2013 in connection with the signing of an amendment to Mr. Jensen&#8217;s employment agreement in April 2011 and 50,000 shares of common stock that would have vested in September 2013 in connection with the signing of his amended and restated employment agreement in September 2011 were forfeited.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >On October 5, 2011, the Company appointed Stephen P. Herbert, age 48, as interim Chief Executive Officer and Chairman. Since August 1999, Mr. Herbert has been the President and Chief Operating Officer of the Company, and will retain these roles. Mr. Herbert has been an officer and Director of the Company since 1996.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="font-style:italic;display:inline;font-family:times new roman;font-size:10pt;" >Visa Agreement<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >On October 12, 2011, the Company and Visa U.S.A. Inc. (&#8220;Visa&#8221;) entered into a one-year agreement (the &#8220;Visa Agreement&#8221;) pursuant to which Visa has agreed to make available to the Company reduced interchange fees for debit card transactions. Pursuant to regulations promulgated under the Durbin Amendment to the Dodd Frank Wall Street Reform And Consumer Protection Act of 2010, effective October 1, 2011, the interchange fees for small ticket category transactions paid for through debit cards issued by regulated banks would increase from 1.55% plus $0.04 per transaction to 0.05% plus $0.22 per transaction. The interchange reimbursement fees made available to the Company through the Visa Agreement will allow the Company to continue to accept Visa&#8217;s debit products over the one-year term without adversely impacting the Company&#8217;s historical gross profit from license and transaction fee revenues. During its fiscal year 2011, approximately 82% of the transactions handled by the Company&#8217;s network consisted of small ticket debit card transactions, of which approximately 75% were attributable to Visa debit cards.<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >During the term of the Visa Agreement, the Company does not anticipate accepting any debit cards with interchange fees that are higher than the rates provided under the Visa Agreement. </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >The Visa Agreement completely supersedes the prior Acceptance and Promotional Agreement (the &#8220;Prior Agreement&#8221;) entered into between the Company and Visa dated as of August 16, 2010. The Visa Agreement also provides that any funds received by the Company from Visa pursuant to the Prior Agreement are not subject to clawback by Visa, and all of the rights and obligations of Visa and the Company under the Prior Agreement have been terminated. </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;margin-left:0pt;margin-right:0pt;" ><div><div style="width:100%;text-align:left;" ><font style="display:inline;font-family:times new roman;font-size:8pt;" > </font> </div> </div><div style="page-break-after:always;width:100%;" ><div style="text-align:center;width:100%;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </div><div style="text-align:center;width:100%;" > </div> </div><div><div style="width:100%;text-align:right;" ><font style="display:inline;font-family:times new roman;font-size:8pt;" > </font> </div> </div> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:center;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" > </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="font-style:italic;display:inline;font-family:times new roman;font-size:10pt;" >Commitments<br></br> </font> </div><div style="text-indent:0pt;display:block;" > </div><div style="text-indent:0pt;display:block;margin-left:0pt;margin-right:0pt;text-align:justify;" ><font style="display:inline;font-family:times new roman;font-size:10pt;" >In October 2011, the Company amended the lease of its operations site in Malvern, Pennsylvania, to extend the lease term from December 31, 2011 to December 31, 2012 with the option to extend the lease thereafter for an additional 24 month period. The amendment includes monthly rental payments of approximately $15,100 to $16,200. Beginning in January 2012 the straight-lined rent expense for this office will be approximately $15,600 per month for the duration of the amended lease period. </font> </div> </div> 166709 221725 2732253 995644 14697100 15029326 -1736609 25842604 32288638 1096193 1286085 3344472 5419663 4440665 6705748 648898 895135 2436200 3761577 1355567 2049036 341541 403232 2913298 3468070 3254839 3871302 -1899272 -1822266 25310 17867 12658 1743312 12652 11164 333351 332226 -2219965 -411180 -0.09 -0.01 8103 240453 13472 11708 495955 94311 90372 493587 1234608 140931 20407 258600 258600 10010 10010 4550 240453 240453 92666 2.20