Commitments and Contingencies

6 Months Ended

Dec. 31, 2012

Commitments and Contingencies [Abstract]

Commitments and Contingencies

3.      Commitments and Contingencies

Contingencies

During the three months ended September 30, 2012, we were notified by a third party who believes that the Res-Q system infringes upon certain of its US and European patents.  The Company is in the process of gathering information; however, it has not yet collected enough information to assess the validity of the alleged infringement or estimate any potential financial impact; therefore, it has not made an accrual as of December 31, 2012.

On October 24, 2012, Harvest Technologies Corp. filed a suit against us in the federal court in Delaware claiming the Res-Q 60 System infringes two Harvest patents.  The Company has not been served, and has not ascertained the likelihood of any liability.  Regardless, the Company intends to aggressively defend itself against such action assuming it is served and has not made an accrual as of December 31, 2012.

Warranty

We offer a warranty on all of our products of one to two years, except disposable products which we warrant through their expiration date.  We periodically assess the adequacy of our recorded warranty liabilities and adjust the amounts as necessary.

The warranty liability is included in other current liabilities in the unaudited balance sheet.  The change in the warranty liability for the six months ended December 31, 2012 is summarized in the following table:

Balance at July 1, 2012	$	547,000
Warranties issued during the period		129,000
Settlements made during the period		(166,000	)
Changes in liability for pre-existing warranties during the period, including expirations		74,000
Balance at December 31, 2012	$	584,000