Note 12 - Business Condition and Management Plan	15 Months Ended
Dec. 31, 2012
Going Concern Note	12. Business Condition and Management Plan The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has suffered recurring losses from operations during the past several years due primarily to decreasing sales of existing product lines and a general economic downturn in all markets the Company serves. The resulting lower sales levels reduced the Company's accounts receivable and cash balances until the arrangements described below were consummated that substantially increased the cash availability of the Company. Management revised its strategic plan in late fiscal 2010 and has been executing that Plan since. It continues to believe in the viability of its strategy to increase revenues and profitability through increased sales of existing products and the introduction of new products to the market place. Management believes that the actions presently being taken by the Company will provide the stimulus for it to reverse the revenue trend and increase profitability in fiscal 2012, however, because of the inherent uncertainties there can be no assurance to that effect. In December of 2008 management took steps to reduce non-direct product related expenses throughout the Company in response to the economic downturn and the uncertainty in the markets the Company serves. The steps included a substantial reduction in personnel, wage reductions for all personnel and expenditure restrictions in most aspects of the Company’s operations. Management took additional steps in April 2009 and April 2011 including additional reductions in personnel and an additional wage reduction for the CEO due to the continued decline in sales to the markets the Company serves. A senior OEM sales executive resigned in March 2011 and management decided to eliminate that position from the Marketing department. Further, the Board of Directors reduced and then eliminated all Board of Directors fees until Company financial conditions improve. These additional expense reductions were expected to save approximately $46,000 per month beginning in April 2011 or $552,000 on an annual basis. For the three and six month periods ended March 31, 2012 the Company achieved the savings that were anticipated from the cost cutting measures implemented in April 2011. On December 30, 2011, Management entered into two unsecured convertible loan agreements and an additional revolving line of credit that may provide approximately $1,179,000 of liquidity to meet on going working capital requirements. One agreement is with a current shareholder and the others are with an outside investor as discussed in Note 4. The accompanying consolidated financial statements include the proceeds from the Roundball Convertible Loan Agreement of approximately $504,000 including the conversion of approximately $233,439 into Class A Common Shares of the Company and $37,000 from the sale of 20,000 Class B Common Shares. Proceeds from the Aplin Family Trust Convertible Loan Agreement of approximately $208,591 are also included in the accompanying consolidated financial statements. In addition, the Company was able to negotiate an extension until April 2013 of a $250,000 unsecured line of credit from one of the Company's major shareholders. Management has determined that in light of the investments described below a more aggressive plan to increase sales is warranted. The short-term plan includes a limited increase in personnel and small increase in the compensation of existing personnel. These changes are intended to accelerate both the introduction of new products and to enhance the sales of existing products through improved market presence and promotion.

Note 12 - Business Condition and Management Plan

15 Months Ended

Dec. 31, 2012

12. Business Condition and Management Plan

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has suffered recurring losses from operations during the past several years due primarily to decreasing sales of existing product lines and a general economic downturn in all markets the Company serves. The resulting lower sales levels reduced the Company's accounts receivable and cash balances until the arrangements described below were consummated that substantially increased the cash availability of the Company. Management revised its strategic plan in late fiscal 2010 and has been executing that Plan since. It continues to believe in the viability of its strategy to increase revenues and profitability through increased sales of existing products and the introduction of new products to the market place. Management believes that the actions presently being taken by the Company will provide the stimulus for it to reverse the revenue trend and increase profitability in fiscal 2012, however, because of the inherent uncertainties there can be no assurance to that effect.

In December of 2008 management took steps to reduce non-direct product related expenses throughout the Company in response to the economic downturn and the uncertainty in the markets the Company serves. The steps included a substantial reduction in personnel, wage reductions for all personnel and expenditure restrictions in most aspects of the Company’s operations. Management took additional steps in April 2009 and April 2011 including additional reductions in personnel and an additional wage reduction for the CEO due to the continued decline in sales to the markets the Company serves. A senior OEM sales executive resigned in March 2011 and management decided to eliminate that position from the Marketing department. Further, the Board of Directors reduced and then eliminated all Board of Directors fees until Company financial conditions improve. These additional expense reductions were expected to save approximately $46,000 per month beginning in April 2011 or $552,000 on an annual basis. For the three and six month periods ended March 31, 2012 the Company achieved the savings that were anticipated from the cost cutting measures implemented in April 2011.

On December 30, 2011, Management entered into two unsecured convertible loan agreements and an additional revolving line of credit that may provide approximately $1,179,000 of liquidity to meet on going working capital requirements. One agreement is with a current shareholder and the others are with an outside investor as discussed in Note 4. The accompanying consolidated financial statements include the proceeds from the Roundball Convertible Loan Agreement of approximately $504,000 including the conversion of approximately $233,439 into Class A Common Shares of the Company and $37,000 from the sale of 20,000 Class B Common Shares. Proceeds from the Aplin Family Trust Convertible Loan Agreement of approximately $208,591 are also included in the accompanying consolidated financial statements. In addition, the Company was able to negotiate an extension until April 2013 of a $250,000 unsecured line of credit from one of the Company's major shareholders.

Management has determined that in light of the investments described below a more aggressive plan to increase sales is warranted. The short-term plan includes a limited increase in personnel and small increase in the compensation of existing personnel. These changes are intended to accelerate both the introduction of new products and to enhance the sales of existing products through improved market presence and promotion.