10-K/A

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K/A

Amendment No 2

x	ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2012
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 0-24635

Hypertension Diagnostics, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Minnesota (State or Other Jurisdiction of Incorporation or Organization)	41-1618036
	(I.R.S. Employer
	Identification No.)

10501 Wayzata Blvd, Suite 102, Minnetonka, MN 55305

(Address of Principal Executive Offices, including Zip Code)

Registrant’s Telephone Number, including area code: (952) 545-2457

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered under Section 12(g) of the Exchange Act:

Title of Each Class	Title of Each Class	Name of Each Exchange on Which Registered
Common Stock ($.01 par value)	Redeemable Class B Warrant	OTC QB

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes o       No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes  o      No x

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  x      No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes o       No x

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K.   x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer   o Accelerated filer   o Non-accelerated filer   o Smaller reporting company   x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  o   No x

The aggregate market value of voting Common Stock held by non-affiliates of the Registrant, based upon the average of the closing bid and ask prices of our Common Stock on the OTCQB tier of the OTC market on December 31, 2011 of $0.055 was approximately $2,382,921.

There were 52,388,750 shares of the registrant’s common stock, $.01 par value per share, outstanding as of September 27, 2012.

DOCUMENTS INCORPORATED BY REFERENCE

None.

,

Explanatory Note

Hypertension Diagnostics, Inc. (the “Company”) is filing this Amendment No. 2 on Form 10-K/A (the “Amendment”) to the Company’s Annual Report on Form 10-K for the period ended June 30, 2012 (the “Form 10-K”) filed with the Securities and Exchange Commission on September 28, 2012 (the “Original Filing Date”), solely to furnish the following updated Exhibits:

14.1	Code of Ethics of Company dated July 19, 2009
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Schema
101.CAL	XBRL Taxonomy Calculation Linkbase
101.DEF	XBRL Taxonomy Definition Linkbase
101.LAB	XBRL Taxonomy Label Linkbase
101.PRE	XBRL Taxonomy Presentation Linkbase

No other changes have been made to the Form 10-K. This Amendment speaks as of the Original Filing Date, and does not, in any way, modify or update disclosures made in the Form 10-K

Pursuant to Rule 406T of Regulation S-T, the foregoing interactive data files attached as Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

EXHIBIT INDEX

(a)

The following Exhibits are furnished pursuant to Item 601 of Regulation S-K:

(b)

Exhibits

3.1	Articles of Incorporation (incorporated by reference to Exhibit 3.1 of the Company’s Registration Statement on Form SB-2 (File No. 333-53025) filed on May 19, 1998 (the “1998 Registration Statement”))
3.2	Bylaws (incorporated by reference to Exhibit 3.2 of the Company’s 1998 Registration Statement.)
3.3	Articles of Amendment of Incorporation dated June 2, 1998 (incorporated by reference to Exhibit 3.3 of the Company’s 1998 Registration Statement.)
4.1	Specimen of common stock Certificate (incorporated by reference to Exhibit 4.1 of the Company’s 1998 Registration Statement.)
4.2	Specimen of Redeemable Class B Warrant Certificate (incorporated by reference to  Exhibit 4.6 of Registration Statement on Form S-3 (File No. 333-53200) as dated January 4, 2001 and as subsequently amended.)
4.3	Amendment No. 1 dated October 17, 2002 to Amended and Restated Class B Warrant Agreement between Hypertension Diagnostics, Inc. and Mellon Investor Services, LLC. (incorporated by reference to Exhibit 4.2 of Current Report on Form 8-K dated October 17, 2002.)
4.4	Form of Common Stock Purchase Warrant issued dated March 27, 2002. (incorporated by reference to Exhibit 10.3 of the Current Report on Form 8-K dated March 27, 2002.)
4.5	Certificate of Designation, Preferences and Rights of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K dated August 28, 2003(the “August 8-K”))
4.6	Form of Common Stock Warrant originally issued August 28, 2003 (incorporated by reference to Exhibit 4.7 of the August 8-K.)
4.7	Form of Preferred Stock Purchase Warrant originally issued August 28, 2003 (incorporated by reference to Exhibit 4.6 of the August 8-K.)
4.8	Registration Rights Agreement dated as of August 28, 2003 among Hypertension Diagnostics, Inc. and the purchaser parties thereto. (incorporated by reference to Exhibit 4.4 of the August 8-K.)
4.9	Shareholders’ Agreement dated as of August 28, 2003 by and among Hypertension Diagnostics, Inc. and the holders of Hypertension Diagnostics, Inc. Series A Convertible Preferred Stock. (incorporated by reference to Exhibit 4.5 of the August 8-K.)
4.10	Form of Irrevocable Proxy executed in connection with the Securities Purchase Agreement dated as of August 28, 2003 (incorporated by reference to Exhibit 4.8 of the August 8-K.)
4.11	Form of Irrevocable Proxy dated August 4, 2003 executed by Messrs. Brimmer, Cohn, Guettler, Murphy, and Dr. Chesney. (incorporated by reference to Exhibit 4.10 of the August 8-K.)
9.1	Voting Agreement dated as of August 28, 2003 by and among the holders of Hypertension Diagnostics, Inc. Series A Convertible Preferred Stock. (incorporated by reference to Exhibit 4.3 of the August 8-K.)
10.1	1995 Long-Term Incentive and Stock Option Plan* (incorporated by reference to Exhibit 10.1 of the Company’s 1998 Registration Statement.)
10.2	1998 Stock Option Plan * (incorporated by reference to Exhibit 10.2 of the Company’s 1998 Registration Statement.)
10.3	Form of Stock Option Agreement for 1998 Stock Option Plan (incorporated by reference to Exhibit 10.3 of the Company’s 1998 Registration Statement.)
10.4	Research and License Agreement between the Company and the Regents of the University of Minnesota, dated September 23, 1998 (incorporated by reference to Exhibit 10.4 of the Company’s 1998 Registration Statement.)
10.5	Manufacturing Services Agreement between Apollo Research Corporation and the Company, dated May 14, 1998 (incorporated by reference to Exhibit 10.13 of the Company’s 1998 Registration Statement.)
10.6	Letter Agreement dated February 21, 2001 by and between Hypertension Diagnostics, Inc. and Apollo Research Corporation, M. Terry Riggs and Randy Thorton (incorporated by reference to Exhibit 10.14 of the Company’s Annual Report on Form 10-KSB for the year ended June 30, 2003.)
10.7	Employment Agreement between Mark Schwartz and the Company, dated August 28, 2003 (incorporated by reference to Exhibit 10.16 of the Company’s Annual Report on Form 10-KSB for the year )ended June 30, 2004)
10.8	Deferred Equity Incentive Agreement between Mark N. Schwartz and the Company, dated June 5, 2006 (incorporated by reference to Exhibit 10.17 to the Company's Annual Report on Form 10-K for the year ended June 30, 2011)
10.9	2003 Stock Option Plan (incorporated by reference to Exhibit 10.1 of the Company’s Registration Statement on Form S-8 filed August 22, 2006.)
10.10	2005 Stock Option Plan* (incorporated by reference to Exhibit 10.2 of the Company’s Registration Statement on Form S-8 filed August 22, 2006.)
10.11	Asset Purchase Agreement dated August 24, 2011 by and between HDI and Cohn Prevention Centers, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed August 31, 2011).
10.12	Sublease Agreement dated August 2011 by and between HDI and Cohn Prevention Centers, LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed August 31, 2011).
10.13	Sublicense Agreement dated August 2011 by and between HDI and Cohn Prevention Centers, LLC (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed August 31, 2011).
10.14	Retention and Separation Agreement by and between HDI and Greg Guettler (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed August 31, 2011).
10.15	Lease Agreement dated September 20, 2011 by and between HDI Plastics, Inc., a wholly owned subsidiary of HDI, and Flemtex Properties Corp. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed September 26, 2011).
10.16	Tri-Party Sale Agreement dated September 23, 2011 by and between HDI Plastics, Inc., a wholly owned subsidiary of HDI, Compass Bank and Cycled Plastics, Ltd. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed September 26, 2011).
10.17	Accounts Receivable Discount Line Facility with Charter Capital Holdings, L.P. (incorporated by reference to the Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the quarter ended December 31, 2011)
14.1*	Code of Ethics of Company dated July 19, 2009
21.1	Subsidiaries of Registrant (incorporated by reference to Exhibit 23.2 to the Company’s Annual Report on Form 10-K filed on September 28, 2012).
23.1	Consent of Independent Registered Public Accounting Firm (incorporated by reference to Exhibit 23.2 to the Company’s Annual Report on Form 10-K filed on September 28, 2012).
31.1*	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document**
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document**
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document**
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document**
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document**
101.SCH*	XBRL Taxonomy Extension Schema Document**
*	Filed herewith
**	In accordance with Rule 406T of Regulation S-T, this information deemed not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

HYPERTENSION DIAGNOSTICS, INC.

/s/ KENNETH W. BRIMMER  

Kenneth W. Brimmer,

Chief Executive Officer

Dated:  October 26, 2012

In accordance with the requirements of the Exchange Act, this report has been signed below on behalf of the registrant and in the capacities indicated on October 26, 2012.

Each person whose signature appears below constitutes and appoints Kenneth W. Brimmer as his true and lawful attorneys-in-fact and agents, each acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K and to file the same, with all exhibits thereto, and other documents in connection therewith, with the U.S. Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all said attorneys-in-fact and agents, each acting alone, or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

Signature	Title
/s/ KENNETH W. BRIMMER Kenneth W. Brimmer	Chief Executive Officer and Principal Financial Officer
/s/ * Mark N. Schwartz	Chairman of the Board of Directors
/s/ *	Director
Larry Leitner
/s/ *	Director
Alan Stern

*By:

/s/ Kenneth W. Brimmer

Kenneth W. Brimmer, Attorney-in-fact

EX-14

EX-31

     Exhibit 31.1

CERTIFICATION

I, Kenneth W. Brimmer, certify that:

1.

I have reviewed this Form 10-K/A of Hypertension Diagnostics, Inc.:

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:  October 26, 2012

Kenneth W, Brimmer

Chief Executive Officer

and Principal Financial Officer

EX-32

Exhibit 32.1

CERTIFICATION

The undersigned, Kenneth W. Brimmer, Chief Executive Officer of the Company, certifies pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The accompanying Annual Report on Form 10-K/A for the period ended June 30, 2012, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the accompanying Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  October 26, 2012

/s/ Kenneth W. Brimmer

Chief Executive Officer and Principal Financial Officer

XML

Note 1. Organization and Significant Accounting Policies: Net Income (loss) Per Share (Policies)

12 Months Ended

Jun. 30, 2012

Policies

Net Income (loss) Per Share

Net Income (Loss) Per Share

Basic net income (loss) per share is computed using the weighted average number of common shares outstanding during each period.  Diluted net income (loss) per share includes the dilutive effect of common shares potentially issuable upon the exercise of stock options, warrants, or the conversion of preferred stock. 

XML

Note 15. Earnings (Loss) Per Share: Schedule of Earnings Per Share, Basic and Diluted (Tables)

12 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Earnings Per Share, Basic and Diluted

Earnings per share
		Fiscal year ended June 30, 2012	Fiscal year ended June 30, 2011
Basic earnings (loss) per share calculation:
Net income (loss) from continuing operations to common shareholders		$(1,472,331)	$(355,076)
Net income (loss) from discontinued operations  to common shareholders		209,084	761,388
Net income (loss) to common shareholders		$(1,263,247)	$406,312
Weighted average of common shares outstanding		46,817,291	42,646,016
Basic net earnings (loss) from continuing operations		$(0.03)	$(0.01)
Basic net earnings (loss) from discontinued operations		$ 0.00	$ 0.02
Basic net earnings (loss) per share		$(0.03)	$0.01
Diluted earnings (loss) per share calculation:
Net income (loss) from continuing operations to common shareholders		$(1,472,331)	$(355,076)
Net income (loss) from discontinued operations  to common shareholders		209,084	761,388
Weighted average of common shares outstanding		$(1,263,247)	$406,312
Weighted average of common shares outstanding		46,817,291	42,646,016
Series A Convertible Preferred Stock	[1]	7,336,680	7,336,680
Stock Options	[2]	-	-
Warrants	[3]	-	-
Diluted weighted average common shares outstanding		54,153,971	49,982,696
Diluted net earnings (loss) from continuing operations		$(0.03)	$(0.01)
Diluted net earnings (loss) from discontinued operations		$0.00	$0.02
Diluted net earnings (loss) per share		$(0.03)	$0.01

XML

Note 11. Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Tables)

12 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Components of Income Tax Expense (Benefit)

	2012	2011
Current tax provision	$             -	$               -
Deferred tax (provision) benefit	(575,000)	(148,000)
Valuation allowance	575,000	148,000
Total income tax provision	$             -	$               -

XML

Note 9. Note Payable - Subordinated Debt: Schedule of Subordinated Debt (Details) (USD $)	12 Months Ended
	Jun. 30, 2012
Proceeds from issuance of subordinated notes	$ 833,600
Increase in debt discounts on subordinated notes by issuing stock warrants	252,393
Amortization of Debt Discount (Premium)	25,240
Long-term Debt, Percentage Bearing Fixed Interest, Amount	4,168
Notes payable-subordinated debt, net of discount	$ 610,615

XML

Note 16. Commitments: Schedule of Future Minimum Rental Payments for Operating Leases (Tables)

12 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Future Minimum Rental Payments for Operating Leases

Year ending June 30:
2012………………………………………………………………………………..	$72,186
2013………………………………………………………………………………..	$73,506
2014………………………………………………………………………………..	$74,873
2015………………………………………………………………………………..	$25,112

XML

Note 14. Other Related Party Transactions (Details) (USD $)	12 Months Ended
	Jun. 30, 2012
Operating Lease, Rent Expense	$ 242,074
Operating Leases, Rent Expense, Net	4,500
Related Party Transaction, Amounts of Transaction	$ 8,492

XML

Note 9. Note Payable - Subordinated Debt: Schedule of Long-term Debt Redemption Price (Tables)

12 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Long-term Debt Redemption Price

Loan Year	Redemption Price
1	125%
2	120%
3	115%
4	110%
Maturity	105%

XML

Note 1. Organization and Significant Accounting Policies: Fair Value of Financial Instruments (Policies)

12 Months Ended

Jun. 30, 2012

Policies

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company’s financial instruments are recorded on its balance sheet.  The carrying amounts for cash, accounts receivable, note receivable, accounts payable, and accrued expenses approximate fair value due to the immediate or short-term maturity of these financial instruments. The lease obligation and subordinated debt approximates fair value since this debt was recently obtained.

XML

Note 15. Earnings (Loss) Per Share: Schedule of Earnings Per Share, Basic and Diluted (Details) (USD $)	0 Months Ended	12 Months Ended
	Jun. 30, 2012	Jun. 30, 2012	Jun. 30, 2011
Net loss before income taxes		$ (1,472,331)	$ (355,076)
Net income (loss) from discontinued operations		209,084	761,388
Net income (loss)		$ (1,263,247)	$ 406,312
Weighted Average Common Shares Outstanding Basic		46,817,291	42,646,016
Basic income (loss) from continuing operations per share		$ (0.03)	$ (0.01)
Basic income (loss) from discontinued operations per share		$ 0.00	$ 0.02
Basic income (loss) per common share		$ (0.03)	$ 0.01
Incremental Common Shares Attributable to Conversion of Preferred Stock	7,336,680	7,336,680	7,336,680
Weighted Average Common Shares Outstanding Diluted		54,153,971	49,982,696
Diluted income (loss) from continuing operations per share		$ (0.03)	$ (0.01)
Diluted income (loss) from discontinued operations per share		$ 0.00	$ 0.02
Diluted income (loss) per common share		$ (0.03)	$ 0.01

XML

Note 11. Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details)	0 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate	(34.00%)	(34.00%)
Effective Income Tax Rate Reconciliation, State and Local Income Taxes	(3.00%)	(2.40%)
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance	40.00%	36.40%

XML

Note 1. Organization and Significant Accounting Policies (Details)	12 Months Ended
	Jun. 30, 2012
Comprehensive Income (loss)	Comprehensive Income (Loss) Comprehensive income (loss) includes net income (loss) and items defined as other comprehensive income (loss). Items defined as other comprehensive income (loss) include items such as foreign currency translation adjustments and unrealized gains and losses on certain marketable securities. For the years ended June 30, 2012 and 2011, there were no adjustments to net income (loss) to arrive at comprehensive income (loss).
Recent Accounting Pronouncements	Recent Accounting Pronouncements There were no new accounting standards issued or effective during the year ended June 30, 2012 that had, or are expected to have a material impact on the Company’s results of operations, financial condition or cash flows.

XML

Note 12. Shareholders' Equity (Details) (USD $)	12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Convertible Preferred Stock, Shares Issued	4,177,275
Convertible Preferred Stock, Shares Authorized	5,000,000
Preferred Stock, Common Shares if Converted	12	12
Convertible Preferred Stock, Liquidation Preference	$8,841,117
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	9,062,907
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	three year period
Allocated Share-based Compensation Expense	$ 215,697
Share-based Compensation Arrangement by Share-based Payment Award, Discount from Market Price	15.00%

XML

Note 16. Commitments (Details) (USD $)	12 Months Ended
	Jun. 30, 2012
Lease Expiration Date	2014-10-31
Oil and Gas Property, Lease Operating Expense	$ 72,186
Proceeds from Collection of Lease Receivables	60,302
Payments for Rent	33,650
Repayments of Debt and Capital Lease Obligations	2,154,000
Accrued Rent	139,493
Operating Lease, Rent Expense	$ 242,074

XML

Note 13. Stock Options: Schedule of Stock Options, Activity (Details) (USD $)				12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2012 N1995OptionPlanMember	Jun. 30, 2011 N1995OptionPlanMember	Jun. 30, 2012 N1998StockOptionsMember	Jun. 30, 2011 N1998StockOptionsMember	Jun. 30, 2012 N2003StockOptionsMember	Jun. 30, 2011 N2003StockOptionsMember	Jun. 30, 2012 N2005StockOptionMember	Jun. 30, 2011 N2005StockOptionMember
Shares Outstanding	4,303,105	8,352,914	42,627,313	88,920	260,000	217,786	669,572	1,971,399	3,843,342	2,025,000	3,580,000
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Exercise Price, Beginning Balance					$ 0.17		$ 0.33		$ 0.17		$ 0.13
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant									141,658		2,420,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures											1,350,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Forfeited							(114,000)		(50,000)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Exercise Price				$ 0.17		$ 2.35	$ 4.63	$ 0.18	$ 0.15	$ 0.12
Share-based Compensation Arrangement by Share-based Payment Award, Options, Other Increases (Decreases) in Period								1,871,943	50,000	1,555,000	(1,350,000)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term				2.46		1.35		3.64		5.76
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period				(171,080)		(451,786)		(1,871,943)		(1,555,000)
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price				$ 0.17		$ 0.18		$ 0.16		$ 0.14

XML

Note 10. Deferred Compensation Liability (Details) (USD $)	12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Stock Issued During Period, Shares, Employee Benefit Plan	225,000
Non current portion of deferred compensation-discontinued operations	$ 262,500
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	9,062,907
Stock Price Beginning of Period	$ 0.05
Stock Price End of Period	$ 0.02
Deferred Compensation Arrangement with Individual, Compensation Expense	$ 693,750	$ (693,750)

XML

Note 19. Subsequent Events

12 Months Ended

Jun. 30, 2012

Notes

Note 19. Subsequent Events

Note 19. Subsequent Events

Subsequent to year-end, in August 2012, the Company is initiating a second private placement of Subordinated Notes due October 31, 2014 (Series II Subordinated Notes) with terms otherwise similar to the offering in December 2011. Terms for the Series II Subordinated Notes also include the issuance of five-year warrants to purchase shares of the Company’s common stock with an exercise price of $.035 per share. As of September 21, 2012, the company issued $180,000 in Series II Subordinated Notes.

On September 6, 2012, the Company entered into a six month lease for approximately 10,000 square feet of warehouse space in the City of Taylor, TX for $3,000 per month.

XML

Note 11. Income Taxes: Schedule of Deferred Tax Assets (Tables)

12 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Deferred Tax Assets

	June 30, 2012	June 30, 2011
Loss carryforwards	$     8,100,000	$     8,020,000
Inventory reserve	-	76,000
Deferred compensation	90,000	234,000
Accrued vacation	7,000	2,000
Less valuation allowance	(8,197,000)	(8,332,000)
Net deferred tax asset	$                 -	$                   -

XML

Note 3. Discontinued Operations: Income from Discontinued Operations (Tables)

12 Months Ended

Jun. 30, 2012

Tables/Schedules

Income from Discontinued Operations

	Year Ended June 30, 2012	Year Ended June 30, 2011
Income from Discontinued Operations
Revenue, net	$   248,923	$ 1,389,181
Cost of Goods Sold	10,557	275,848
Gross Profit	238,366	1,113,333
Operating Expenses	265,580	1,045,695
Deferred Compensation expense (benefit)(1)	(360,000)	(693,750)
Income (loss) from discontinued operations	332,786	761,388
Loss on sale of selected assets to CPC	(123,702)	-
Net income (loss) from discontinued operations	$   209,084	$    761,388

XML

Note 11. Income Taxes: Schedule of Deferred Tax Assets (Details) (USD $)	0 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Deferred Tax Assets, Capital Loss Carryforwards	$ 8,100,000	$ 8,020,000
Deferred Tax Assets, Other Tax Carryforwards		76,000
Income Tax Credits and Adjustments	90,000	234,000
Deferred Tax Assets, Other Loss Carryforwards	7,000	2,000
Income Tax Reconciliation, Change in Deferred Tax Assets Valuation Allowance	$ (8,197,000)	$ (8,332,000)

XML

Note 1. Organization and Significant Accounting Policies: Research and Development Costs (Policies)

12 Months Ended

Jun. 30, 2012

Policies

Research and Development Costs

Research and Development Costs

All research and development costs are charged to expense as incurred.  The Company incurred $0 and $5,646 in research and development costs for the fiscal years ended June 30, 2012, and 2011, respectively.

XML

Note 13. Stock Options: Schedule of Stock Options, Activity (Tables)

12 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Stock Options, Activity

Stock Options
	1995 Stock Option Plan	1998 Stock Option Plan	2003 Stock Option Plan	2005 Stock Option Plan
Stock Option Shares Outstanding
July 1, 2010 to June 30, 2011
Outstanding Options, beginning	260,000	783,572	3,893,342	2,230,000
Weighted Average Price, beginning	0.17	0.95	0.17	0.15
Shares Available for Grant, beginning	--	--	91,658	3,770,000
Options Granted	--	--	--	1,350,000
Options Exercised	--	--	--	--
Options Forfeited or Expired	--	(114,000)	(50,000)	--
Weighted Average Price of options granted or forfeited	--	4.63	0.15	--
Increase Decrease in Shares Available for Granting	--	--	50,000	(1,350,000)
Outstanding Options, ending	260,000	669,572	3,843,342	3,580,000
Weighted Average Price, ending	0.17	0.33	0.17	0.13
Shares Available for Grant, ending	--	--	141,658	2,420,000
Remaining Contractual Life	--	--	--	--
July 1, 2011 to June 30, 2012
Options Granted	--	--	--	--
Options Exercised	--	--	--	--
Options   Forfeited or Expired	(171,080)	(451,786)	(1,871,943)	(1,555,000)
Weighted Average Price of options granted or forfeited	0.17	2.35	0.18	0.12
Increase Decrease in Shares Available for Granting	--	--	1,871,943	1,555,000
Shares, Ending Balance	88,920	217,786	1,971,399	2,025,000
Weighted Average Price, ending	0.17	0.18	0.16	0.14
Shares Available for Grant, ending	--	--	2,013,601	3,975,000
Remaining Contractual Life	2.46	1.35	3.64	5.76

XML

Note 8. Sale-Leaseback Obligation (Details) (USD $)	12 Months Ended
	Jun. 30, 2012
Sale Leaseback Transaction, Date	March 2012
Sale Leaseback Transaction, Historical Cost	$ 121,272
Proceeds from sale-leaseback of equipment	121,272
Sale Leaseback Transaction, Monthly Rental Payments	4,248
Sale Leaseback Transaction, Accumulated Depreciation	$ 12,004

XML

Note 3. Discontinued Operations: Income from Discontinued Operations (Details) (USD $)	12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Disposal Group, Including Discontinued Operation, Revenue	$ 248,923	$ 1,389,181
Disposal Group, Including Discontinued Operation, Costs of Goods Sold	10,557	275,848
Disposal Group, Including Discontinued Operation, Gross Profit (Loss)	238,366	1,113,333
Disposal Group, Including Discontinued Operation, Operating Expense	265,580	1,045,695
Deferred Compensation Arrangement with Individual, Compensation Expense	693,750	(693,750)
Income (Loss) from discontinued operations	332,786	761,388
Loss on sale of discontinued operations	(123,702)
Net income (loss) from discontinued operations	$ 209,084	$ 761,388

XML

Note 9. Note Payable - Subordinated Debt: Schedule of Subordinated Debt (Tables)

12 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Subordinated Debt

	June 30, 2012
Subordinated Debt
Gross proceeds received	$                 833,600
Less value assigned to warrants	(252,393)
	581,207
Add: amortization of debt discount	25,240
Interest accreted to redemption price	4,168
Total	$                 610,615

XML

Note 3. Discontinued Operations

12 Months Ended

Jun. 30, 2012

Notes

Note 3. Discontinued Operations

Note 3.   Discontinued Operations

On August 26, 2011, (the “Effective Date”), the Company entered into and closed a definitive Asset Purchase Agreement (the “Agreement”) providing for the sale of selected assets of  our medical device business to Cohn Prevention Center, LLC, a Minnesota limited liability company (“CPC”), controlled by Jay Cohn, a director and stockholder of HDI as of the Effective Date. The terms of the Agreement provided for the sale of selected operating assets of the Company’s medical device business (including inventory but excluding cash, accounts receivable, and intellectual property).  The Agreement does not limit the ability of CPC to sell the purchased inventory to any customer or in any market where they can be legally sold.  Additionally, CPC assumed all warranty and on-going product support required by regulatory agencies related to such inventory.

In connection with the Agreement, CPC paid the Company on the Effective Date a cash payment of $125,000 and issued a secured promissory note (non-interest bearing) to the Company in the amount of either $150,000 due in 12 months or $200,000 due in 18 months at the discretion of CPC (See Note 5). We received a letter on July 27, 2012 from CPC indicating they will be paying $200,000 due February 26, 2013. Nearly all of the proceeds received on the Effective Date were allocated to cover severance and other costs related to the transactions contemplated by the Agreement. Severance costs included an agreement by the Company to pay to Greg Guettler, its former Chief Operating Officer, nine months’ salary and health benefits. The Company paid Mr. Guettler $119,463 to fulfill the agreement on March 1, 2012. Pursuant to the Agreement, CPC agreed to pay to the Company a cash payment of $1,200 upon the sale of each of the first 50 units of inventory sold by CPC within 30 days of receipt of cash from such sale. The Company has agreed to pay Mr. Guettler 10% of the royalty proceeds received by the Company less applicable transaction expenses related to such sales.  The Company has earned royalty income of $20,400 less 10% due to Greg Guettler for year ended June 30, 2012. The Company has paid $1,440 and accrued an additional $600 in connection with the amount due Greg Guettler for the year ended June 30, 2012. We have also accrued $15,000 payable to Mr. Guettler for 10% of the proceeds from the promissory note issued to CPC.

The Company and CPC also entered into a Sublicense Agreement on the Effective Date (the “Sublicense Agreement”), pursuant to which the Company granted to CPC a limited license to use the Company’s intellectual property, technology, and technical know-how related to the Company’s arterial elasticity measurement technology exclusively in CPC clinics and research related exclusively to CPC clinics.  All other applications of the Company’s intellectual property, technology and technical know-how will be retained by the Company for the benefit of the Company.  The Sublicense Agreement also provides that any development of a next generation arterial measurement device, however, would be limited exclusively to use and sale within the CPC network of clinics and to research exclusively related to CPC clinics.

CPC and the Company also entered into a Sublease Agreement as of the Effective Date, which permits CPC to lease the Waters II Suite 108, Eagan, Minnesota facility of the Company during the remaining term of the Company’s lease, which expires October 31, 2014, on the same economic terms as the underlying lease with HDI which remains as an obligation of the Company.

Upon the closing of this transaction, the Company had limited remaining operations related to its medical device business and currently is seeking additional opportunities to license its proprietary technology, intellectual property, technical know-how and other core assets, although there is no assurance these efforts will be successful.

In connection with the sale transaction, the Company recorded the following loss which is reported as “Loss on sale of discontinued operations” in the Consolidated Statements of Operations for the year ended June 30, 2012:

	August 26, 2011
Schedule of Loss on Sale of Discontinued Operations
Cash received upon sale	$  125,000
Note receivable (present value)	127,500
Total  sales price	252,500
Net assets and liabilities sold:
Inventories, net	370,984
Property and equipment, net	16,059
Accrued royalties over accrued as of June 30, 2011	(10,841)
Net assets sold	376,202
Loss on sale of discontinued operation, before income tax benefit	(123,702)
Income tax benefit	-
Loss on sale of discontinued operations, net of tax	($123,702)

The Company has not included the results of operations of the former medical device business in the results from continuing operations.  We expect to receive continuing royalties from our licensed technology and from continuing efforts to license and market our intellectual property. Revenue and expenses related to the ongoing licensing activities are reflected as continuing operations. The income (loss) from discontinued operations for the years ended June 30, 2012, and 2011 consists of the following:

	Year Ended June 30, 2012	Year Ended June 30, 2011
Income from Discontinued Operations
Revenue, net	$   248,923	$ 1,389,181
Cost of Goods Sold	10,557	275,848
Gross Profit	238,366	1,113,333
Operating Expenses	265,580	1,045,695
Deferred Compensation expense (benefit)(1)	(360,000)	(693,750)
Income (loss) from discontinued operations	332,786	761,388
Loss on sale of selected assets to CPC	(123,702)	-
Net income (loss) from discontinued operations	$   209,084	$    761,388

(1)      Deferred compensation valuation change relating to the former CEO (Mark Schwartz), who resigned after the medical device assets were sold.

The major classes of assets and liabilities of discontinued operations as of June 30, 2012 and 2011 are as follows:

	June 30, 2012	June 30, 2011
Assets and Liabilities of Discontinued Operations
Accounts receivable	$                            -	$                   4,305
Inventory, net	-	364,952
Prepaid expenses	-	4,873
Current assets of discontinued operations	$                            -	$              374,130
Accrued payroll, vacation, and payroll taxes	$                18,143	$                 51,253
Deferred Compensation (former CEO)	262,500	622,500
Deferred revenue	-	88,819
Accrued commissions	-	46,500
Accrued royalties	-	17,770
Other accrued expenses	-	36,633
Total liabilities of discontinued operations	$              280,643	$              863,475

XML

Note 3. Discontinued Operations: Assets and Liabilities of Discontinued Operations (Details) (USD $)	Jun. 30, 2012	Jun. 30, 2011
Disposal Group, Including Discontinued Operation, Accounts, Notes and Loans Receivable, Net		$ 4,305
Disposal Group, Including Discontinued Operation, Inventory		364,952
Disposal Group, Including Discontinued Operation, Other Assets		4,873
Current assets of discontinued operations		374,130
Disposal Group, Including Discontinued Operation, Accrued Liabilities	18,143	51,253
Disposal Group, Including Discontinued Operation, Other Liabilities	262,500	622,500
Disposal Group, Including Discontinued Operation, Other Noncurrent Liabilities		88,819
Liabilities of Disposal Group, Including Discontinued Operation	$ 280,643	$ 863,475

XML

Note 3. Discontinued Operations: Assets and Liabilities of Discontinued Operations (Tables)

12 Months Ended

Jun. 30, 2012

Tables/Schedules

Assets and Liabilities of Discontinued Operations

	June 30, 2012	June 30, 2011
Assets and Liabilities of Discontinued Operations
Accounts receivable	$                            -	$                   4,305
Inventory, net	-	364,952
Prepaid expenses	-	4,873
Current assets of discontinued operations	$                            -	$              374,130
Accrued payroll, vacation, and payroll taxes	$                18,143	$                 51,253
Deferred Compensation (former CEO)	262,500	622,500
Deferred revenue	-	88,819
Accrued commissions	-	46,500
Accrued royalties	-	17,770
Other accrued expenses	-	36,633
Total liabilities of discontinued operations	$              280,643	$              863,475

XML

Note 1. Organization and Significant Accounting Policies: Cash Equivalents (Policies)

12 Months Ended

Jun. 30, 2012

Policies

Cash Equivalents

Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents.  The Company maintains cash in financial institutions.  The balances, at times, may exceed federally insured limits.

XML

Note 1. Organization and Significant Accounting Policies: Principles of Consolidation (Policies)

12 Months Ended

Jun. 30, 2012

Policies

Principles of Consolidation

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary (HDI Plastics, Inc.), after elimination of all intercompany accounts, transactions, and profits.

XML

Note 16. Commitments: Schedule of Future Minimum Lease Payments for Capital Leases-Texas (Tables)

12 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Future Minimum Lease Payments for Capital Leases-Texas

Year ending June 30:
2013………………………………………………………………………………..	$409,488
2014………………………………………………………………………………..	$409,488
2015………………………………………………………………………………..	$422,003
2016………………………………………………………………………………..	$440,776
2017………………………………………………………………………………..	$260,769

XML

Note 4. Inventory: Schedule of Inventory (Tables)

12 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Inventory

	June 30, 2012	June 30, 2011
Raw materials	$      96,142	$               -
Processed finished goods	76,081	-
Total Inventory	$    172,223	$               -

XML

Note 1. Organization and Significant Accounting Policies: Accounts Receivable (Policies)

12 Months Ended

Jun. 30, 2012

Policies

Accounts Receivable

Accounts Receivable

The Company reviews customers’ credit history before extending unsecured credit.  Accounts receivable are reviewed to determine the need for an allowance for amounts that may become uncollectible in the future.  The necessity of an allowance is based on management’s review of accounts receivable balances and historic write-offs.  Invoice terms can vary from at date of shipment to net 30 days.  The Company does not accrue interest on past due accounts receivable.  The Company writes off receivables when they are deemed uncollectible after all collection attempts have failed.  The Company has determined that an allowance for doubtful accounts is not necessary as of June 30, 2012 and 2011.

XML

Note 1. Organization and Significant Accounting Policies: Inventory (Policies)

12 Months Ended

Jun. 30, 2012

Policies

Inventory

XML

Note 2. Going Concern

12 Months Ended

Jun. 30, 2012

Notes

Note 2. Going Concern

Note 2. Going Concern

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. For the year ended June 30, 2012, we incurred losses from continuing operations of  $1,472,331. At June 30, 2012, we had an accumulated deficit of $29,281,301 and negative working capital of $78,389. Our ability to continue as a going concern is dependent on our ability to raise the required additional capital or debt financing to meet short-term needs to relocate our plastics processing facility to a new site and then restart the facility which would include hiring production works. Subsequent to June 30, 2012,  the Company is currently seeking to raise an additional $750,000 through an issuance of 14.5% Series II Subordinated Notes in order to meet the cash flow needs to restart our plastics business. As of this filing, we have raised $180,000 related to these notes.  If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our current shareholders could be reduced, and such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to adequately restart our plastics business, which could significantly and materially restrict our operations.

XML

Note 1. Organization and Significant Accounting Policies: Property and Equipment (Policies)

12 Months Ended

Jun. 30, 2012

Policies

Property and Equipment

Property and Equipment

Property and equipment are stated at cost.  Improvements are capitalized, while repair and maintenance costs are charged to operations when incurred.  Depreciation is computed principally using the straight-line method.  Estimated useful lives for leasehold improvements are the shorter of the lease term or estimated useful life and 3 to 5 years for furniture and processing equipment, and computer equipment.

XML

Note 16. Commitments: Schedule of Future Minimum Lease Payments for Capital Leases-Texas (Details) (USD $)	Jun. 30, 2012
Capital Leases, Future Minimum Payments Due, Current	$ 409,488
Capital Leases, Future Minimum Payments Due in Two Years	409,488
Capital Leases, Future Minimum Payments Due in Three Years	422,003
Capital Leases, Future Minimum Payments Due in Four Years	440,776
Capital Leases, Future Minimum Payments Due in Five Years	$ 260,769

XML

Note 1. Organization and Significant Accounting Policies: Stock-Based Compensation (Policies)

12 Months Ended

Jun. 30, 2012

Policies

Stock-Based Compensation

Stock-Based Compensation

The Company regularly grants options to individuals under various plans.  The Company measures and recognizes compensation expense for all stock-based payment awards made to employees and directors on a straight-line basis over the respective vesting period of the awards.  The compensation expense for the Company's stock-based payments is based on estimated fair values determined at the time of the grant of the portion of stock-based payment awards that are ultimately expected to vest.

The Company estimates the fair value of stock-based payment awards on the date of grant using the Black-Scholes option pricing model. This option pricing model involves a number of assumptions, including the expected  term of the stock options, the volatility of the public market price for the Company's common stock and interest rates.

XML

Note 13. Stock Options: Schedule of Share-based Compensation, Nonemployee Director Stock Award Plan, Activity (Tables)

12 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Share-based Compensation, Nonemployee Director Stock Award Plan, Activity

Fiscal Year Ended	Risk-Free Interest Rate	Expected Dividend Yield	Expected Life	Expected Volatility
June 30, 2011	3.18%	None	10 years	250.86%

XML

Note 11. Income Taxes: Schedule of Components of Income Tax Expense (Benefit) (Details) (USD $)	Jun. 30, 2012	Jun. 30, 2011
Deferred Tax Assets, Gross	$ (575,000)	$ (148,000)
Deferred Tax Assets, Valuation Allowance	$ 575,000	$ 148,000

XML

Consolidated Balance Sheet (USD $)	Jun. 30, 2012	Jun. 30, 2011
Current Assets:
Cash and cash equivalents	$ 75,043	$ 753,881
Accounts receivable, net	149,156
Prepaids and other current assets	31,304	9,632
Inventory, net	172,223
Note receivable-related party-CPC	146,319
Note receivable-related party-Minot 123		125,000
Accrued royalties receivable from CPC	2,400
Current assets of discontinued operations		374,130
Total Current Assets	576,445	1,262,643
Property and Equipment:
Leasehold improvements	93,235
Furniture and office equipment	7,923
Automobiles	11,984
Equipment	672,383
Total Property and Equipment	785,525
Less accumulated depreciation and amortization	107,194
Property and Equipment, net	678,331
Debt issuance costs, net	7,380
Non-current assets of discontinued operations		16,835
Other Assets	43,657	6,530
Total Assets	1,305,813	1,286,008
Current Liabilities:
Accounts payable	170,832
Sale-leaseback obligation-current portion	35,383
Accrued vacation, payroll and payroll taxes	29,236
Payable for equipment	155,000
Other accrued expenses	246,240	3,170
Current liabilities of discontinued operations	18,143	240,975
Current portion of deferred compensation-discontinued operations		622,500
Total Current Liabilities	654,834	866,645
Long Term Liabilities:
Notes payable-subordinated debt, net of discount	610,615
Sale-leaseback obligation, less current portion	66,533
Non current portion of deferred compensation-discontinued operations	262,500
Total Long-Term Liabilities	939,648
Total Liabilities	1,594,482	866,645
Shareholders' Equity (Deficit)
Series A Convertible Preferred Stock, $.01 par value:	6,114	6,114
Common Stock, $.01 par value:	523,887	433,258
Additional paid-in capital	28,462,631	27,998,045
Accumulated deficit	(29,281,301)	(28,018,054)
Total Shareholders' Equity (Deficit)	(288,669)	419,363
Total Liabilities and Shareholders' Equity (Deficit)	$ 1,305,813	$ 1,286,008

XML

Note 8. Sale-Leaseback Obligation: Schedule of Sale Leaseback Transactions (Tables)

12 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Sale Leaseback Transactions

Years ending June 30,
2013	$50,974
2014	50,974
2014	25,485
Total minimum lease payments	127,433
Less amount representing interest	(25,517)
Present value of minimum lease payments	101,916
Less current maturities	35,383
Long-term portion	$66,533

XML

Consolidated Statement of Cash Flows (USD $)	12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Operating Activities:
Net income (loss)	$ (1,263,247)	$ 406,312
Income (Loss) from discontinued operations	332,786	761,388
Loss on sale of discontinued operations	(123,702)
Net loss from continuing operations	(1,472,331)	(355,076)
Depreciation	107,194
Stock option expense	87,125	129,869
Amortization of debt issuance costs	820
Stock compensation expense	215,697
Amortization of debt discount and accreted interest	29,408
Accreted interest on note receivable	(18,819)
Change in operating assets and liabilities:
Increase in accounts receivable	(149,156)
Increase in inventory	(172,223)
Increase in prepaid and other current assets	(21,672)
Increase in other assets	(37,127)	(8,084)
Incease in accrued royalties receivable	(2,400)
Increase in accounts payable	170,832
Increase in accrued vacation, payroll and payroll taxes	29,236
Increase in other accrued expenses	243,070
Net cash used in operating activities	(990,346)	(233,291)
Investing Activities:
Purchases of property and equipment	(630,525)
Payment and proceeds from note receivable-related party-Minot	125,000	(125,000)
Net cash used in investing activities	(505,525)	(125,000)
Financing Activities:
Proceeds from sale-leaseback of equipment	121,272
Payments on sale-leaseback obligation	(19,356)
Debt issuance costs	(8,200)
Proceeds from issuance of subordinated notes	833,600
Proceeds from exercise of warrants		30,000
Net cash provided by financing activities	927,316	30,000
Net cash used in continuing operations	(568,555)	(328,291)
Discontinued Operations:
Net cash provided by (used in) operating activities of discontinued operations	(235,283)	28,524
Net cash provided by investing activities of discontinued operations	125,000
Net increase(decrease) in cash and cash equivalents	(678,838)	(299,767)
Cash and cash equivalents at beginning of period	753,881	1,053,648
Cash and cash equivalents at end of period	75,043	753,881
Supplemental disclosure of cash flow information:
Cash paid for interest	104,084
Supplemental non-cash investing and financing activities:
Payable for equipment	155,000
Note receivable-related party from sale of discontinued operations	127,500
Increase in debt discounts on subordinated notes by issuing stock warrants	$ 252,393

XML

Note 3. Discontinued Operations (Details) (USD $)	12 Months Ended
	Jun. 30, 2012
Notes, Loans and Financing Receivable, Gross	$ 150,000
Notes, Loans and Financing Receivable, Gross, Current	200,000
Severance Costs	119,463
Future Expected Royalties per Unit From Discontinued Operations	1,200
Proceeds from Royalties Received	20,400
Accrued Liabilities	$ 15,000

XML

Note 1. Organization and Significant Accounting Policies: Revenue Recognition (Policies)

12 Months Ended

Jun. 30, 2012

Policies

Revenue Recognition

Revenue Recognition

Plastics - Beginning October 2011, HDI Plastics began selling finished goods to manufacturers in the form of pelletized resin and clean shredded and ground plastics material. These sales are recorded as revenue at the time the product is shipped and invoiced to the customer. The Company also engages in “toll” processing of customer-owned material for a service fee. These service fees are recorded as plastic processing revenue at the time the product is shipped back to the customer.  In addition, the Company engages in brokerage transactions of plastic material where goods are delivered to a customer without HDIP taking physical possession of the product at its processing facility, although HDIP assumes ownership of the material. The net profit from “brokerage” transactions is recorded as revenue at the time it is shipped to the customer and invoiced. Brokered sales are recorded as revenue net of the cost of the brokered material.

Royalties – After the sale of the medical device business in August 2011, the Company is receiving a minor amount of royalty income in connection with the license agreement. This income is being recorded as revenue when a sale is made by CPC to a 3^rd party purchaser.

XML

Note 6. Acquisition of Assets (Details) (USD $)	12 Months Ended
	Jun. 30, 2012
Payments to Acquire Productive Assets	$ 250,000
Payments to Acquire Other Property, Plant, and Equipment	25,000
Payments to Acquire Other Productive Assets	130,000
Payable for equipment	$ 155,000

XML

Note 16. Commitments

12 Months Ended

Jun. 30, 2012

Notes

Note 16. Commitments

Note 16. Commitments

Minnesota lease – former medical device business

The Company entered into a non-cancelable operating lease agreement for approximately 6,900 square feet of office/warehouse space.  Effective September 8, 2010, the term of this operating lease was extended for forty-eight (48) months from November 1, 2010 to October 31, 2014.  Rent expense was $72,186 and $73,702 in fiscal years 2012 and 2011, respectively. The Company has a sub-lease agreement with CPC, where CPC pays the Company the amount of the rent payable for this space. The Company received $60,302 in fiscal year 2012 from CPC to offset our costs of this lease. The following is a schedule of future minimum lease payments due as of June 30, 2012:

Year ending June 30:
2012………………………………………………………………………………..	$72,186
2013………………………………………………………………………………..	$73,506
2014………………………………………………………………………………..	$74,873
2015………………………………………………………………………………..	$25,112

Texas lease – plastics business

On September 22, 2011, HDIP entered into a lease agreement with Flemtex Properties Corp., a Delaware corporation, for space totaling 104,291 square feet at Suite 100, 5330 Fleming Court, Austin, Texas (the “Lease”). The leased space includes 89,452 square feet of warehouse/manufacturing space and 14,839 square feet of office space. Under the terms of the Lease, HDIP pays rent and CAM charges of approximately $33,650 per month. The lease payments over the 64 months of the initial term of the Lease total $2,154,000. The lease payments are guaranteed by HDI. As of May 31, 2012, Flemtex terminated the lease for failure to pay base rent and reimbursable costs for April and May while the Company was unable to continue operations due to the shut-down by the City of Austin due to city code violations. The Company has accrued as of June 30, 2012, the utility and rents payments due for April and May 2012 totaling $139,493. Total rent expense for this lease for the year ended June 30, 2012 is $242,074. Based on the Company’s verbal understanding with the landlord, no other rent payments will be due under this lease; however, there can be no assurances that this verbal agreement will be honored. See further information at Note 18. Therefore, the full scheduled lease payments due under this lease are as follows:

Year ending June 30:
2013………………………………………………………………………………..	$409,488
2014………………………………………………………………………………..	$409,488
2015………………………………………………………………………………..	$422,003
2016………………………………………………………………………………..	$440,776
2017………………………………………………………………………………..	$260,769

XML

Note 1. Organization and Significant Accounting Policies: Shipping and Handling Costs (Policies)

12 Months Ended

Jun. 30, 2012

Policies

Shipping and Handling Costs

Shipping and Handling Costs

The Company records all amounts billed to customers in a sales transaction related to shipping and handling as sales.  The Company records costs related to shipping and handling in cost of sales.

XML

Note 18. Litigation and Contingencies

12 Months Ended

Jun. 30, 2012

Notes

Note 18. Litigation and Contingencies

Note 18. Litigation and Contingencies                                                                                                                                                                                 

The Company is involved in various legal actions in the ordinary course of its business. 

On March 28, 2012, HDIP received a Notice of Violation related to its sole processing facility located at 5330 Fleming Court, Austin, Texas, from the City of Austin Code Compliance Department.  The Notice of Violation alleges violations of Austin’s City Code and failures to obtain required permits and a Certificate of Occupancy based upon the current use of the processing facility. The violation primarily relates to the electrical design and capacity of the building. The Notice of Violation required HDIP to vacate the processing facility until such alleged violations are cured.  HDIP unsuccessfully attempted to negotiate temporary permits allowing it to continue operations while it addresses the alleged violations identified in the Notice of Violation.  On March 29, 2012, HDIP ceased processing operations at the processing facility.  On April 2, 2012, HDIP notified approximately 70 of its employees working at the facility of their termination and they were paid their outstanding vacation pay, however, no severance was paid. As of June 30, 2012, the violations have not been satisfied and all of the Company’s property was still at the location. At this time, the Company has not been assessed any fines or penalties by the City of Austin, but no assurances can be made that they will not do so in the future. At the time of this filing, the Company is not operating a processing facility.

Because the City of Austin required HDIP to vacate the property at 5330 Fleming Court, the landlord, Flemtex Properties denied access to the premises; therefore, the Company did not pay rent and utilities for April and May 2012. On May 30, 2012, the Company received a Notice of Termination of Lease from Flemtex, for failure to pay rent and reimbursable costs. The letter stated that the Lease was terminated effective May 31, 2012, and that HDI was to quit and surrender the Leased Premises to the Landlord in accordance with the requirements of the Lease on May 31, 2012, and to remove all of the Tenant’s personal property from the Leased Premises. The Company is in the process of negotiating a final Termination Agreement related to its Austin lease. The landlord is withholding a final release of any obligation of the Company until the discharge water is removed from the property. As of this filing, the Company is in the process of removing the waste water as required by the landlord. The Company has accrued as of June 30, 2012, the utility and rents payments due for April and May 2012 totaling $139,493. Based on the Company’s verbal understanding with the landlord, no other rent payments will be due under this lease, but no assurances can be made that they will not seek damages due to the termination of this lease.  

XML

Note 8. Sale-Leaseback Obligation: Schedule of Sale Leaseback Transactions (Details) (USD $)	Jun. 30, 2012
Future Minimum Sublease Rentals, Sale Leaseback Transactions, within One Year	$ 50,974
Future Minimum Sublease Rentals, Sale Leaseback Transactions, within Two Years	50,974
Future Minimum Sublease Rentals, Sale Leaseback Transactions, within Three Years	25,485
Future Minimum Sublease Rentals, Sale Leaseback Transactions	127,433
Interest Portion of Minimum Lease Payments, Sale Leaseback Transactions	25,517
Present Value of Future Minimum Lease Payments, Sale Leaseback Transactions	101,916
Current maturities of SaleLeaseback Transactions	35,383
Noncurrent maturities of SaleLeaseback Transactions	$ 66,533

XML

Note 1. Organization and Significant Accounting Policies

12 Months Ended

Jun. 30, 2012

Notes

Note 1. Organization and Significant Accounting Policies

Note 1. Organization and Significant Accounting Policies

Description of Business

We were incorporated under the laws of the state of Minnesota on July 19, 1988.  We were previously engaged in the design, development, manufacture and marketing of proprietary medical devices. As of June 30, 2011, HDI had accumulated net tax operating loss carryforwards of approximately $20,831,000. In mid-2011, HDI’s board of directors determined to pursue a change in strategic direction. In August 2011, we sold our medical device inventory, subleased our office and manufacturing facility, and entered into a limited license agreement with a company owned by Jay Cohn, a founder and a director of the Company. In September 2011, we formed HDI Plastics Inc. (“HDIP”), a wholly owned-subsidiary, entered into a new lease agreement, purchased selected manufacturing assets from Compass Bank and Cycled Plastics and began engaging in the business of plastics reprocessing in Austin, TX. Demand for reprocessed plastic is growing, and HDIP has the systems and infrastructure for collecting and processing post-consumer and post-industrial plastic waste into pellets to be resold to domestic manufacturing companies.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary (HDI Plastics, Inc.), after elimination of all intercompany accounts, transactions, and profits.

Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents.  The Company maintains cash in financial institutions.  The balances, at times, may exceed federally insured limits.

Accounts Receivable

The Company reviews customers’ credit history before extending unsecured credit.  Accounts receivable are reviewed to determine the need for an allowance for amounts that may become uncollectible in the future.  The necessity of an allowance is based on management’s review of accounts receivable balances and historic write-offs.  Invoice terms can vary from at date of shipment to net 30 days.  The Company does not accrue interest on past due accounts receivable.  The Company writes off receivables when they are deemed uncollectible after all collection attempts have failed.  The Company has determined that an allowance for doubtful accounts is not necessary as of June 30, 2012 and 2011.

Inventory

Inventories are valued at the lower of cost or market with cost based upon the average cost of raw material purchased which includes an allocation of manufacturing overhead if further processing has been done. Typically, the Company holds material for less than 45 days. The nature of the Company’s inventory does not result in obsolescence of either processed or unprocessed material. Inventory on hand at the end of the period is reviewed to determine the need for a reserve for or write-off and dispose of any material which is not useable.  The need for a reserve is based on management’s review of inventories on hand compared to estimated future usage and sales.  As of June 30, 2012, there was no reserve for obsolete inventory.

Property and Equipment

Property and equipment are stated at cost.  Improvements are capitalized, while repair and maintenance costs are charged to operations when incurred.  Depreciation is computed principally using the straight-line method.  Estimated useful lives for leasehold improvements are the shorter of the lease term or estimated useful life and 3 to 5 years for furniture and processing equipment, and computer equipment.

Fair Value of Financial Instruments

The Company’s financial instruments are recorded on its balance sheet.  The carrying amounts for cash, accounts receivable, note receivable, accounts payable, and accrued expenses approximate fair value due to the immediate or short-term maturity of these financial instruments. The lease obligation and subordinated debt approximates fair value since this debt was recently obtained.

Impairment of Long-Lived Assets

The Company will record impairment losses on long-lived assets used in operations when indicators of impairment are present and the undiscounted future cash flows estimated to be generated by those assets are less than the assets’ carrying amount.  To date, no such losses have been recognized.

Revenue Recognition

Plastics - Beginning October 2011, HDI Plastics began selling finished goods to manufacturers in the form of pelletized resin and clean shredded and ground plastics material. These sales are recorded as revenue at the time the product is shipped and invoiced to the customer. The Company also engages in “toll” processing of customer-owned material for a service fee. These service fees are recorded as plastic processing revenue at the time the product is shipped back to the customer.  In addition, the Company engages in brokerage transactions of plastic material where goods are delivered to a customer without HDIP taking physical possession of the product at its processing facility, although HDIP assumes ownership of the material. The net profit from “brokerage” transactions is recorded as revenue at the time it is shipped to the customer and invoiced. Brokered sales are recorded as revenue net of the cost of the brokered material.

Royalties – After the sale of the medical device business in August 2011, the Company is receiving a minor amount of royalty income in connection with the license agreement. This income is being recorded as revenue when a sale is made by CPC to a 3^rd party purchaser.

Shipping and Handling Costs

The Company records all amounts billed to customers in a sales transaction related to shipping and handling as sales.  The Company records costs related to shipping and handling in cost of sales.

Research and Development Costs

All research and development costs are charged to expense as incurred.  The Company incurred $0 and $5,646 in research and development costs for the fiscal years ended June 30, 2012, and 2011, respectively.

Income Taxes

The Company accounts for income taxes by following an asset and liability approach to financial accounting and reporting for income taxes. Accordingly, deferred tax assets and liabilities arise from the difference between the tax basis of an asset or liability and its reported amount in the financial statements. Deferred tax amounts are determined using the tax rates expected to be in effect when the taxes will actually be paid or refunds received, as provided under currently enacted tax law. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense or benefit is the tax payable or refundable, respectively, for the period plus or minus the change in deferred tax assets and liabilities during the period.  In accordance with the guidance, the Company has adopted a policy under which, if required to be recognized in the future, interest related to the underpayment of income taxes will be classified as a component of interest expense and any related penalties will be classified in operating expenses in the consolidated statement of operations. 

The Company recognizes a financial statement benefit of a tax position only after determining that the relevant tax authority would more-likely-than-not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

Net Income (Loss) Per Share

Basic net income (loss) per share is computed using the weighted average number of common shares outstanding during each period.  Diluted net income (loss) per share includes the dilutive effect of common shares potentially issuable upon the exercise of stock options, warrants, or the conversion of preferred stock. 

Stock-Based Compensation

The Company regularly grants options to individuals under various plans.  The Company measures and recognizes compensation expense for all stock-based payment awards made to employees and directors on a straight-line basis over the respective vesting period of the awards.  The compensation expense for the Company's stock-based payments is based on estimated fair values determined at the time of the grant of the portion of stock-based payment awards that are ultimately expected to vest.

The Company estimates the fair value of stock-based payment awards on the date of grant using the Black-Scholes option pricing model. This option pricing model involves a number of assumptions, including the expected  term of the stock options, the volatility of the public market price for the Company's common stock and interest rates.

Comprehensive Income (Loss)

Comprehensive income (loss) includes net income (loss) and items defined as other comprehensive income (loss).  Items defined as other comprehensive income (loss) include items such as foreign currency translation adjustments and unrealized gains and losses on certain marketable securities.  For the years ended June 30, 2012 and 2011, there were no adjustments to net income (loss) to arrive at comprehensive income (loss).

Recent Accounting Pronouncements

There were no new accounting standards issued or effective during the year ended June 30, 2012 that had, or are expected to have a material impact on the Company’s results of operations, financial condition or cash flows.

XML

Balance Sheet-Parentheticals (USD $)	Jun. 30, 2012	Jun. 30, 2011
Series A Convertible Preferred Stock
Preferred Stock, Par Value	$ 0.01	$ 0.01
Preferred Stock, Shares Authorized	5,000,000	5,000,000
Preferred Stock, Shares Issued	611,390	611,390
Preferred Stock, Shares Outstanding	611,390	611,390
Preferred Stock, Common Shares if Converted	12	12
Preferred Stock, Aggregate Liquidation Preference	$ 10,145,478	$ 8,841,117
Common Stock
Common Stock, Par Value	$ 0.01	$ 0.01
Common Stock, Shares Authorized	150,000,000	150,000,000
Common Stock, Shares Issued	52,388,750	43,325,843
Common Stock, Shares Outstanding	52,388,750	43,325,843

XML

Note 11. Income Taxes

12 Months Ended

Jun. 30, 2012

Notes

Note 11. Income Taxes

Note 11. Income Taxes

The income tax provision consists of the following for the years ended June 30:

	2012	2011
Current tax provision	$             -	$               -
Deferred tax (provision) benefit	(575,000)	(148,000)
Valuation allowance	575,000	148,000
Total income tax provision	$             -	$               -

Reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:

	2012	2011
Federal tax at statutory rate	(34.0)%	(34.0)%
State income taxes	(3.0)	(2.4)
Change in valuation allowance	40.0	36.4
Effective income tax rate	— %	— %

At June 30, 2012, the Company has estimated net operating loss carryforwards totaling approximately $22,040,000 for federal income tax purposes and approximately $15,000,000 for state income tax purposes.  Loss carryforwards have begun toexpire.

No benefit has been recorded for such carryforwards due to continued operating losses, and utilization in future years may be limited under Section 382 of the Internal Revenue Code if significant ownership changes have occurred.

Components of deferred tax assets are as follows:

	June 30, 2012	June 30, 2011
Loss carryforwards	$     8,100,000	$     8,020,000
Inventory reserve	-	76,000
Deferred compensation	90,000	234,000
Accrued vacation	7,000	2,000
Less valuation allowance	(8,197,000)	(8,332,000)
Net deferred tax asset	$                 -	$                   -

At June 30, 2012, the Company has no uncertain tax positions or associated interest and penalties. The Company does not expect any significant increases or decreases to its unrecognized tax positions within twelve months of this reporting date.

The Company is subject to U.S. Federal and Minnesota state income tax.  However, to the extent allowed by law, the tax authorities may have the right to examine prior periods where net operating losses or tax credits were generated and carried forward, and make adjustments up to the amount of the net operating loss or credit carryforward amount.

XML

Document and Entity Information (USD $)	12 Months Ended
	Jun. 30, 2012	Dec. 31, 2012
Document and Entity Information:
Entity Registrant Name	Hypertension Diagnostics Inc /MN
Document Type	10-K
Document Period End Date	Jun. 30, 2012
Amendment Flag	true
Amendment Description	Amendment 2 to 10-K to attach XBRL detail tagging exhibits
Entity Central Index Key	0001058828
Current Fiscal Year End Date	--06-30
Entity Common Stock, Shares Outstanding	52,388,750
Entity Public Float		$ 2,382,921
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY

XML

Note 12. Shareholders' Equity

12 Months Ended

Jun. 30, 2012

Notes

Note 12. Shareholders' Equity

Note 12. Shareholders’ Equity

Description of Series A Preferred Stock

On August 28, 2003, the Company designated 4,177,275 shares of the Company’s 5,000,000 authorized shares of preferred stock as Series A Convertible Preferred Stock (the “Series A Preferred Stock”) pursuant to a Certificate of Designation, Preferences and Rights with respect to the Series A Preferred Stock (the “Certificate of Designation”).  Each share of the Series A Preferred Stock is initially convertible into twelve (12) shares of the Company’s common stock, subject to adjustment as provided in the Certificate of Designation for customary anti-dilution adjustments and issuances below the conversion price in effect, initially ranging from $0.14 to $0.22 per share from three issuances ranging from an original purchase price of  $1.68 to $2.64 .  The Series A Preferred Stock is convertible into shares of the Company’s common stock at any time.  Further, the Series A Preferred Stock will automatically be converted into the Company’s common stock upon sale of all or substantially all of the Company’s assets, a consolidation or merger.  Each share of the Series A Preferred Stock shall entitle its holder to vote on all matters voted on by holders of the Company’s common stock on an as-if converted basis.  With each share of preferred stock issued in each of the three tranches, the holder was granted a warrant, exercisable into Series A Preferred Stock at $2.04, $2.64, and $3.60 per share, respectively.

In addition, so long as any shares of the Series A Preferred Stock are outstanding, the Company may not, without the approval of the majority of the holders of the Series A Preferred Stock then outstanding, take certain corporate actions, as described in the Certificate of Designation.  Upon any liquidation, the holders of the Series A Preferred Stock are entitled to receive out of the Company’s assets a liquidation preference equal to an internal rate

of return on the adjusted stated value of the Series A Preferred Stock (currently $1.68 per share) equal to 20%.  Any assets remaining after this initial distribution shall be distributed to the holders of the Company’s common stock and the Series A Preferred Stock on an as-if converted basis.  As of June 30, 2012 and 2011, the value of this liquidation preference was $10,145,478 and $8,841,117, respectively.

Conversion of Preferred Stock into Common Stock

During the fiscal year ended 2011, certain holders of the Company’s Series A Convertible Preferred Stock elected to convert their shares into shares of the Company’s common stock at a conversion rate of twelve (12) shares of common stock for each share of Series A Convertible Preferred Stock.  An aggregate of 107,283 shares of Series A Convertible Preferred Stock were converted into an aggregate of 1,287,396 shares of common stock for the fiscal year ended June 30, 2011. There were no Series A Preferred Stock conversions in fiscal year 2012.

Common Stock Issuance to CEO

Effective February 10, 2012, the Company agreed to issue 9,062,907 common shares to Kenneth W. Brimmer its CEO and director.  The shares were issued for services rendered in connection with the initial acquisition of the plant and equipment, lease negotiations, and employee recruitment related to development of HDIP. The shares are restricted from sale for a three year period following issuance. The fair value of the shares totaling $215,697 (calculated by taking the Company’s common stock trading price on February 9, 2012 of $0.028, less a marketability discount of 15%) was recorded as compensation expense during the quarter ended March 31, 2012.

Series A Preferred Stock and Common Stock Warrants

The following is a summary of the outstanding stock purchase warrants that were issued in connection with our private placements of Series A Preferred and Common Stock in August 2003 and February 2004 as of June 30, 2012:

	Warrant A		Warrant B		Warrant C
	Preferred	Common	Preferred	Common	Preferred	Common
	$2.04	$.17	$2.64 (1)	$.22 (2)	$3.60	$.30
August 2003 Placement
Outstanding Balance, June 30, 2010	-	-	70,610	1,122,855	410,198	6,523,233
Exercised during fiscal 2011	-	-	(7,680)	(122,127)	-	-
Expired during fiscal 2011	-	-	-	-	-	-
Outstanding Balance, June 30, 2011	-	-	62,930	1,000,728	410,198	6,523,233
Exercised during fiscal 2012	-	-	-	-	-	-
Expired during fiscal 2012	-	-	-	-	-	-
Outstanding Balance, June 30, 2012	-	-	62,930	1,000,728	410,198	6,523,233
Expiration Date	-	-	09/30/12	09/30/12	09/30/12	09/30/12
February 2004 Placement
Outstanding Balance, June 30, 2010	-	-	94,496	1,502,702	82,686	1,314,868
Exercised during fiscal 2011			-	-	-	-
Expired during fiscal 2011	-	-	-	-	-	-
Outstanding Balance, June 30, 2011	-	-	94,496	1,502,702	82,686	1,314,868
Exercised during fiscal 2012			-	-	-	-
Expired during fiscal 2012	-	-	-	-	-	-
Outstanding Balance, June 30, 2012	-	-	94,496	1,502,702	82,686	1,314,868
Expiration Date	-	-	09/30/12	09/30/12	09/30/12	09/30/12

(1)In February, 2010, the Company temporarily modified the exercise price on all of the Preferred Stock Warrant B from $2.64 to $1.68 to encourage the exercise of the warrants; at this time, the temporary price reduction is still in effect.

(2)In February, 2010, the Company temporarily modified the exercise price on all of the Common Stock Warrant B from $0.22 to $0.14 to encourage the exercise of the warrants; at this time, the temporary price reduction is still in effect.

In July 2011, the Company extended the above warrants through September 30, 2012 to encourage exercising of these warrants in order for the Company to receive additional funding.  The effect of this modification was immaterial to the financial statements and was not recorded.

Other Stock Warrant Activity

During the year ended June 30, 2012, the Company issued 11,908,572 common stock warrants with an exercise price of $.07 and a term of 5 years in connection with the subordinated debt offering.

During the year ended June 30, 2011, the Company received $30,000 in cash proceeds for the exercise of common and preferred stock warrants of 7,680 and 122,127, respectively. There were no warrants exercised during the year ended June 30, 2012.

XML

Note 15. Earnings (Loss) Per Share (Details)	0 Months Ended	12 Months Ended
	Jun. 30, 2012	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2010
Preferred Stock, Shares Outstanding	611,390	611,390	611,390
Incremental Common Shares Attributable to Conversion of Preferred Stock	7,336,680	7,336,680	7,336,680
Shares Outstanding	4,303,105	4,303,105	8,352,914	42,627,313
Class of Warrant or Right, Outstanding	30,407,208	30,407,208	18,498,636

XML

Statement of Consolidated Operations (USD $)	12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Net Revenues:
Plastics	$ 3,139,267
Royalties - former medical device business	18,480
Total revenues	3,157,747
Cost of Sales-Plastics	(3,269,601)
Gross Profit	(111,854)
Operating Expenses:
Selling, general and administrative	1,248,508	365,641
Total Expenses	1,248,508	365,641
Operating loss	(1,360,362)	(365,641)
Other Income and (Expense):
Interest income	24,266	8,033
Miscellaneous income	7,330	2,532
Interest expense	(143,565)
Total Other Income and (Expense)	(111,969)	10,565
Net loss before income taxes	(1,472,331)	(355,076)
Net loss from continuing operations	(1,472,331)	(355,076)
Income (Loss) from discontinued operations	332,786	761,388
Loss on sale of discontinued operations	(123,702)
Net income (loss) from discontinued operations	209,084	761,388
Net income (loss)	$ (1,263,247)	$ 406,312
Earnings per share: Net Income (loss) per common share:
Basic income (loss) from continuing operations per share	$ (0.03)	$ (0.01)
Diluted income (loss) from continuing operations per share	$ (0.03)	$ (0.01)
Basic income (loss) from discontinued operations per share	$ 0.00	$ 0.02
Diluted income (loss) from discontinued operations per share	$ 0.00	$ 0.02
Basic income (loss) per common share	$ (0.03)	$ 0.01
Diluted income (loss) per common share	$ (0.03)	$ 0.01
Weighted Average Common Shares Outstanding Basic	46,817,291	42,646,016
Weighted Average Common Shares Outstanding Diluted	54,153,971	49,982,696

XML

Note 6. Acquisition of Assets

12 Months Ended

Jun. 30, 2012

Notes

Note 6. Acquisition of Assets

Note 6.  Acquisition of Assets

Purchase of Assets for HDI Plastics, Inc.

On September 26, 2011, the Company entered into a definitive Tri-Party Sales Agreement (“Agreement”) providing for the purchase of selected manufacturing equipment from Compass Bank (the “Bank”), and the purchase of certain manufacturing assets and inventory from Cycled Plastics, LTD., a limited partnership (“CP”). In connection with the purchase of the assets, HDI agreed to pay the Bank a cash payment of $250,000. Additionally, HDI agreed to pay $25,000 at closing to CP and to make future payments of $130,000 to CP for other additional equipment. The total purchase price of the selected assets was $405,000. In September 2011, the Company paid CP approximately $29,000 for some initial inventory. The $250,000 was paid to Compass Bank on October 7, 2011. No payments have been made nor are they currently due on the $155,000 due CP as of June 30, 2012.

XML

Note 5. Notes Receivable - Related Parties

12 Months Ended

Jun. 30, 2012

Notes

Note 5. Notes Receivable - Related Parties

Note 5.   Notes Receivable – related parties

On May 3, 2011, the Company entered into a promissory note agreement with Minot 123, LLC, a North Dakota limited liability company (“Minot”), pursuant to which HDI loaned Minot $125,000 toward the purchase of an office building (“M Building”) located in Minot, North Dakota.  At the time the agreement was entered into, Kenneth W. Brimmer, a director of the Company, was one of the three principals of Minot. On July 13, 2011, the Company exercised its option to receive repayment of the Note and subsequently, in accordance with the repayment terms of the Note, Minot paid to the Company $20,000. The remaining balance on the Note became payable in six monthly payments of $12,500 beginning on August 15, 2011, with the final payment due and payable February 15, 2012. The final payment was received in February 2012 which included $4,900 in accrued interest, and reimbursement of the Company’s legal fees expended in connection with the agreement in the amount of $6,500 which was recorded as other income.

In connection with the Asset Purchase Agreement between HDI and Cohn Prevention Centers, LLC (See Note 3), Cohn paid HDI on the Effective Date a cash payment of $125,000 and issued a non-interest bearing secured promissory note due to HDI in the amount of either $150,000 in 12 months or $200,000 in 18 months, at the discretion of CPC. The promissory note is reflected at an imputed discount rate of 15% based upon the amount due 12 months following the Effective Date, and was originally recorded as a net note receivable of $127,500.  The balance of the Note at June 30, 2012 is $146,319 after including $18,819 of accreted accrued interest. Subsequent to year end, the Company received a letter from CPC on July 26, 2012 indicating CPC’s intent to pay the $200,000 due February 26, 2013.

XML

Note 17. Significant Customers and Credit Risk

12 Months Ended

Jun. 30, 2012

Notes

Note 17. Significant Customers and Credit Risk

Note 17. Significant Customers and Credit Risk

Revenue from the Company’s products is concentrated among specific customers. There were four customers that accounted for more than 10% of total revenue each in the year ended June 30, 2012 and five customers accounted for 74% of revenue in 2012.

XML

Note 13. Stock Options

12 Months Ended

Jun. 30, 2012

Notes

Note 13. Stock Options

Note  13.   Stock Options

During 1995, the Company adopted the Hypertension Diagnostics, Inc. 1995 Long-Term Incentive and Stock Option Plan (the “1995 Option Plan”) that includes both incentive stock options and nonqualified stock options to be granted to employees, directors, officers, consultants and advisors of the Company.  The maximum number of shares reserved under the Plan is 400,000 shares.  The Board of Directors establishes the terms and conditions of all stock option grants, subject to the 1995 Option Plan and applicable provisions of the Internal Revenue Code.  Incentive stock options must be granted at an exercise price not less than the fair market value of the common stock on the grant date.  The options granted to participants owning more than 10% of the Company’s outstanding voting common stock must be granted at an exercise price not less than 110% of fair market value of the common stock on the grant date.  The options expire on the date determined by the Board of Directors but may not extend more than ten years from the grant date while incentive stock options granted to participants owning more than 10% of the Company’s outstanding voting stock expire five years from the grant date.  At September 22, 2005, the 1995 Option Plan terminated. The outstanding options have a weighted average remaining contractual life of 2.46 years. 

On May 1, 1998, the Board of Directors approved the 1998 Stock Option Plan (the “1998 Option Plan”), under which stock options may be granted to employees, consultants and independent directors of the Company,  up to a maximum of 750,000 shares.  Stock options may be either qualified or nonqualified for income tax purposes.  On December 10, 2001, shareholders of the Company approved an amendment to the Company’s 1998 Option Plan to increase the number of shares reserved under the 1998 Option Plan from 750,000 to 1,250,000.  Terms of the 1998 Option Plan are similar to the 1995 Option Plan above.  The 1998 Option Plan expired in May 2008. At June 30, 2012, there were 217,786 options outstanding having exercise prices between $0.165 and $.43 that had been granted under the 1998 Option Plan.  The outstanding options have a weighted average remaining contractual life of 1.35 years.

               On October 31, 2003, the Board of Directors approved the 2003 Stock Plan (the “2003 Option Plan”), under which stock options, stock appreciation rights, restricted stock and deferred stock may be granted to employees, consultants and independent directors of the Company.  On November 10, 2005, the Board of Directors approved the following amendments to the 2003 Option Plan: 1) changed the definition of the term “Stock” to exclude Series A Convertible Preferred Stock; 2) changed the Shares Reserved for Issuance to exclude six million (6,000,000) shares of Series A Convertible Preferred Stock; and 3) eliminated the annual automatic grant of stock options to non-employee directors.  Stock options granted may be either qualified or nonqualified for income tax purposes.  Up to a maximum of 4,000,000 shares of common stock may be issued under the 2003 Option Plan. Terms of the 2003 Option Plan are similar to the 1995 Option Plan above.  At June 30, 2012, there were 1,971,399 options outstanding having exercise prices between $0.11 and $0.20 that had been granted under the 2003 Option Plan.  The outstanding options have a weighted average remaining contractual life of 3.64 years. 

             On November 10, 2005, the Board of Directors approved the 2005 Stock Plan (the “2005 Option Plan”), under which stock options, stock appreciation rights, restricted stock and deferred stock may be granted to employees, consultants and independent directors of the Company.  Stock options granted will be nonqualified for income tax purposes.  Up to a maximum of 6,000,000 shares of common stock may be issued under the 2005 Option Plan.  The options granted to participants owning more than 10% of the Company’s outstanding voting stock must be granted at an exercise price not less than 110% of the fair market value of the common stock on the grant date.  The options expire on the date determined by the Board of Directors but may not extend more than ten years from the grant date.  At June 30, 2012, there were 2,025,000 options outstanding having exercise prices between $0.09 and $0.16 that had been granted under the 2005 Option Plan.  The outstanding options have a weighted average remaining contractual life of 5.76 years.

A summary of the outstanding options under all the stock option plans is as follows:

Stock Options
	1995 Stock Option Plan	1998 Stock Option Plan	2003 Stock Option Plan	2005 Stock Option Plan
Stock Option Shares Outstanding
July 1, 2010 to June 30, 2011
Outstanding Options, beginning	260,000	783,572	3,893,342	2,230,000
Weighted Average Price, beginning	0.17	0.95	0.17	0.15
Shares Available for Grant, beginning	--	--	91,658	3,770,000
Options Granted	--	--	--	1,350,000
Options Exercised	--	--	--	--
Options Forfeited or Expired	--	(114,000)	(50,000)	--
Weighted Average Price of options granted or forfeited	--	4.63	0.15	--
Increase Decrease in Shares Available for Granting	--	--	50,000	(1,350,000)
Outstanding Options, ending	260,000	669,572	3,843,342	3,580,000
Weighted Average Price, ending	0.17	0.33	0.17	0.13
Shares Available for Grant, ending	--	--	141,658	2,420,000
Remaining Contractual Life	--	--	--	--
July 1, 2011 to June 30, 2012
Options Granted	--	--	--	--
Options Exercised	--	--	--	--
Options   Forfeited or Expired	(171,080)	(451,786)	(1,871,943)	(1,555,000)
Weighted Average Price of options granted or forfeited	0.17	2.35	0.18	0.12
Increase Decrease in Shares Available for Granting	--	--	1,871,943	1,555,000
Shares, Ending Balance	88,920	217,786	1,971,399	2,025,000
Weighted Average Price, ending	0.17	0.18	0.16	0.14
Shares Available for Grant, ending	--	--	2,013,601	3,975,000
Remaining Contractual Life	2.46	1.35	3.64	5.76

The fair value of options granted during fiscal year 2011 were estimated using the Black-Scholes option

pricing model. There were no options granted in fiscal year 2012.

Fiscal Year Ended	Risk-Free Interest Rate	Expected Dividend Yield	Expected Life	Expected Volatility
June 30, 2011	3.18%	None	10 years	250.86%

                                  Dividend yield and expected volatility are estimated using historical amounts that are anticipated to be consistent with current values.  Expected life of option is based on the life of the option agreements.  Risk-free interest rate is determined using the U.S. treasury rate.

For the year ended June 30, 2012, the Company recognized $87,125.  For the year ended June 30, 2011, the Company recognized $129,869 of stock option expense.   As of June 30, 2012, there was $0 of unrecognized compensation expense related to the outstanding stock options.

XML

Note 18. Litigation and Contingencies (Details) (USD $)	Jun. 30, 2012
Accrued Rent	$ 139,493

XML

Note 9. Note Payable - Subordinated Debt

12 Months Ended

Jun. 30, 2012

Notes

Note 9. Note Payable - Subordinated Debt

Note 9.   Note Payable - Subordinated Debt

In December 2011, the Company commenced a private placement offering of 14.5% Five Year Subordinated Notes with Warrants to its existing preferred shareholders, directors of the Company and certain other accredited investors. The notes are issued by HDIP and are guaranteed by the Company.  Interest is payable monthly in cash. The offering was completed February 10, 2012 and resulted in the issuance of $833,600 in notes and five-year warrants to purchase an aggregate of 11,908,572 shares of the Company’s common stock with an exercise price of ClassOfWarrantOrRightExercisePriceOfWarrantsOrRights|Label=*»$.07 per share. The notes are due five years from the closing date at 105% of face value. The total estimated value of the warrants using the Black-Scholes Option Pricing Model, with a volatility rate of 153%, had an estimated fair value of $0.03 per warrant. After calculating the relative fair value of the debt and warrants, $252,393 and was recorded as a debt discount to the notes for the warrants. The discount is being amortized over the term of the debt using the effective interest method.

The Notes may be prepaid by the Company in accordance with the following schedule below at the redemption prices (expressed in percentages of principal amount to be repaid), plus unpaid accrued interest to the date of payment:

Loan Year	Redemption Price
1	125%
2	120%
3	115%
4	110%
Maturity	105%

The following table summarizes the subordinated debt balance at June 30, 2012:

	June 30, 2012
Subordinated Debt
Gross proceeds received	$                 833,600
Less value assigned to warrants	(252,393)
	581,207
Add: amortization of debt discount	25,240
Interest accreted to redemption price	4,168
Total	$                 610,615

XML

Note 3. Discontinued Operations: Schedule of Loss on Sale of Discontinued Operations (Details) (USD $)	12 Months Ended
	Jun. 30, 2012
Fair Value, Option, Disclosures Related to Election, Items Existing at Effective Date, Notes Receivable	$ 127,500
Disposal Group, Including Discontinued Operation, Assets of Disposal Group	Net assets sold
Loss on sale of discontinued operations	$ (123,702)

XML

Note 7. Factoring Line of Credit

12 Months Ended

Jun. 30, 2012

Notes

Note 7. Factoring Line of Credit

 Note 7.  Factoring Line of Credit

On October 10, 2011, HDI Plastics, Inc. entered into an Accounts Receivable Discount line facility with Charter Capital Holdings, L.P.  (“Charter”). Under the terms of the full-recourse financing agreement, which is guaranteed by HDI, Charter advances to HDIP and amount equal to 80% of eligible pledged receivables up to a total advance of $1 million. Charter retains a priority and perfected security interest in all accounts receivable and inventory of HDI Plastics, Inc.  The financing cost under the agreement is 0.59% for each 10-day period or an approximate annualized interest cost of approximately 21.25%. The Company began borrowing under this facility in November 2011.  The outstanding balance as of June 30, 2012 is $0.

XML

Note 8. Sale-Leaseback Obligation

12 Months Ended

Jun. 30, 2012

Notes

Note 8. Sale-Leaseback Obligation

Note 8. Sale-Leaseback Obligation

In March 2012, the Company entered into a sale-leaseback arrangement relating to some of its equipment. Under the terms of the arrangement, the Company’s trailers, forklifts, scale, truck, and elimination system which had a carrying amount of $121,272 were sold to KLC Financial, Inc. (“KLC”) for $121,272 in cash. The Company then leased the equipment back under a 3-year capital lease that required a down payment equal to two monthly lease payments and 34 additional monthly payments in the amount of $4,248. The property continues to be reported on the Company’s balance sheet, and depreciation expense is continued to be recognized. The lease agreement is recorded as a sale-leaseback obligation on the balance sheet. At June 30, 2012, the leased equipment had a cost of $121,272 and accumulated depreciation of $12,004. Depreciation of assets leased under capital leases is included in depreciation expense.

The following is a schedule by years of future minimum lease payments required under the lease together with their present value as of June 30, 2012:

Years ending June 30,
2013	$50,974
2014	50,974
2014	25,485
Total minimum lease payments	127,433
Less amount representing interest	(25,517)
Present value of minimum lease payments	101,916
Less current maturities	35,383
Long-term portion	$66,533

XML

Note 10. Deferred Compensation Liability

12 Months Ended

Jun. 30, 2012

Notes

Note 10. Deferred Compensation Liability

Note 10. Deferred Compensation Liability

The Company is a party to a Deferred Equity Compensation Agreement with its former CEO, Mark N. Schwartz (the “Agreement”), whereby the Company granted 225,000 phantom shares of its common stock to Mr. Schwartz for every month of employment for the period January 1, 2010 through September 30, 2011. Mr. Schwartz resigned as the Company’s CEO effective September 22, 2011 and as a result, agreed as of October 1, 2011 that no additional phantom shares will be granted him under the Agreement. Under the Agreement, a cash payment will be made equal to the price per share of the Company’s common stock times the number of phantom shares accrued at the earliest of certain events to occur.

The Company has accrued a total deferred compensation liability of $262,500 at June 30, 2012, which is the fair market value of 13,125,000 phantom shares outstanding as of June 30, 2012.  Due to the decrease in the price of the Company’s common stock from the beginning of the year to the end of the year (decrease from $0.05 to $ 0.02), the Company recorded a net compensation benefit of $360,000 for the year ended June 30, 2012. For the year ended June 30, 2011, the Company recorded a net compensation benefit of $693,750.  An increase in the Company’s common stock price would cause an increase in the deferred compensation, while a decrease in the Company’s stock price would cause a decrease in the deferred compensation liability. Expenses related to the Deferred Compensation arrangement with its former CEO are accounted for as part of Discontinued Operations.

Under the terms of Mr. Schwartz’s deferred equity compensation agreement, payment of the deferred compensation benefit would occur upon one of the following events: i) execution of a definitive agreement resulting in a change of control of the Company’s common stock; ii) termination of employment; iii) death of the CEO; or iv) no later than January 1, 2012. Upon one of these events, a cash payment over 24 months was to be made to the CEO equal to the trading price per share of the Company’s common stock times the number of phantom stock shares accrued to date.  Mr. Schwartz and the Company modified the original Agreement on December 31, 2011, whereby Mr. Schwartz agreed to eliminate the requirement for a cash payment as of a date certain pursuant to the Agreement. This deferred compensation is classified as a long-term liability with no definitive payout date specified. The Company and Mr. Schwartz are negotiating a permanent settlement to satisfy both parties.

XML

Note 5. Notes Receivable - Related Parties (Details) (USD $)	12 Months Ended
	Jun. 30, 2012
Payments for (Proceeds from) Loans and Leases	$ 125,000
Proceeds from Short-term Debt	20,000
Proceeds from (Repayments of) Related Party Debt	12,500
Proceeds from Interest Received	4,900
Reimbursement Revenue	6,500
Proceeds from Sale of Other Productive Assets	125,000
Notes, Loans and Financing Receivable, Gross	150,000
Notes, Loans and Financing Receivable, Gross, Current	200,000
Receivable with Imputed Interest, Effective Yield (Interest Rate)	15.00%
Fair Value, Option, Disclosures Related to Election, Items Existing at Effective Date, Notes Receivable	127,500
Note receivable-related party-CPC	146,319
Interest Receivable, Current	$ 18,819

XML

Note 19. Subsequent Events (Details) (USD $)	3 Months Ended	12 Months Ended
	Sep. 30, 2012	Jun. 30, 2012
Exercise Price Class of Warrants		$ 0.035
Subsequent Event, Date		Sep. 21, 2012
Subsequent Event, Amount	$ 180,000
Operating Leases of Lessee Disclosure		On September 6, 2012, the Company entered into a six month lease for approximately 10,000 square feet of warehouse space in the City of Taylor, TX for $3,000 per month.

XML

Note 7. Factoring Line of Credit (Details) (USD $)	12 Months Ended
	Jun. 30, 2012
Line of Credit Facility, Initiation Date	2011-10-10
Line of Credit Facility, Maximum Borrowing Capacity	$ 1,000,000
Line of Credit Facility, Interest Rate During Period	21.25%
Line of Credit, Current	$ 0

XML

Note 4. Inventory: Schedule of Inventory (Details) (USD $)	Jun. 30, 2012
Inventory, Raw Materials	$ 96,142
Inventory, Finished Goods	76,081
Inventory, net	$ 172,223

XML

Note 1. Organization and Significant Accounting Policies: Impairment of Long-lived Assets (Policies)

12 Months Ended

Jun. 30, 2012

Policies

Impairment of Long-lived Assets

Impairment of Long-Lived Assets

XML

Note 12. Shareholders' Equity: Schedule of Outstanding Stock Warrants (Tables)

12 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Outstanding Stock Warrants

	Warrant A		Warrant B		Warrant C
	Preferred	Common	Preferred	Common	Preferred	Common
	$2.04	$.17	$2.64 (1)	$.22 (2)	$3.60	$.30
August 2003 Placement
Outstanding Balance, June 30, 2010	-	-	70,610	1,122,855	410,198	6,523,233
Exercised during fiscal 2011	-	-	(7,680)	(122,127)	-	-
Expired during fiscal 2011	-	-	-	-	-	-
Outstanding Balance, June 30, 2011	-	-	62,930	1,000,728	410,198	6,523,233
Exercised during fiscal 2012	-	-	-	-	-	-
Expired during fiscal 2012	-	-	-	-	-	-
Outstanding Balance, June 30, 2012	-	-	62,930	1,000,728	410,198	6,523,233
Expiration Date	-	-	09/30/12	09/30/12	09/30/12	09/30/12
February 2004 Placement
Outstanding Balance, June 30, 2010	-	-	94,496	1,502,702	82,686	1,314,868
Exercised during fiscal 2011			-	-	-	-
Expired during fiscal 2011	-	-	-	-	-	-
Outstanding Balance, June 30, 2011	-	-	94,496	1,502,702	82,686	1,314,868
Exercised during fiscal 2012			-	-	-	-
Expired during fiscal 2012	-	-	-	-	-	-
Outstanding Balance, June 30, 2012	-	-	94,496	1,502,702	82,686	1,314,868
Expiration Date	-	-	09/30/12	09/30/12	09/30/12	09/30/12

XML

Note 15. Earnings (Loss) Per Share

12 Months Ended

Jun. 30, 2012

Notes

Note 15. Earnings (Loss) Per Share

Note 15. Earnings (Loss) Per Share

The following table provides a reconciliation of the numerators and denominators used in calculating basic and diluted earnings per share for the years ended June 30, 2012 and 2011:

Earnings per share
		Fiscal year ended June 30, 2012	Fiscal year ended June 30, 2011
Basic earnings (loss) per share calculation:
Net income (loss) from continuing operations to common shareholders		$(1,472,331)	$(355,076)
Net income (loss) from discontinued operations  to common shareholders		209,084	761,388
Net income (loss) to common shareholders		$(1,263,247)	$406,312
Weighted average of common shares outstanding		46,817,291	42,646,016
Basic net earnings (loss) from continuing operations		$(0.03)	$(0.01)
Basic net earnings (loss) from discontinued operations		$ 0.00	$ 0.02
Basic net earnings (loss) per share		$(0.03)	$0.01
Diluted earnings (loss) per share calculation:
Net income (loss) from continuing operations to common shareholders		$(1,472,331)	$(355,076)
Net income (loss) from discontinued operations  to common shareholders		209,084	761,388
Weighted average of common shares outstanding		$(1,263,247)	$406,312
Weighted average of common shares outstanding		46,817,291	42,646,016
Series A Convertible Preferred Stock	[1]	7,336,680	7,336,680
Stock Options	[2]	-	-
Warrants	[3]	-	-
Diluted weighted average common shares outstanding		54,153,971	49,982,696
Diluted net earnings (loss) from continuing operations		$(0.03)	$(0.01)
Diluted net earnings (loss) from discontinued operations		$0.00	$0.02
Diluted net earnings (loss) per share		$(0.03)	$0.01

[1] At year ending June 30, 2012 and June 30, 2011, there were 611,390 shares of Series A Convertible Preferred Stock outstanding. Using the preferred stock conversion ratio of 12:1, the common stock equivalents attributable to these preferred shares at June 30, 2012 and June 30, 2011 are 7,336,680.

[2] At year ending June 30, 2012, there were outstanding stock options of 4,303,105. At year ending June 30, 2011, there were 8,352,914 outstanding stock options. All of the remaining stock options at June 30, 2012 and 2011 would not be common stock equivalents under the treasury stock method.

[3]At June 30, 2012 and June 30, 2011, there were outstanding stock warrants of 30,407,208 and 18,498,636, respectively. The warrants would not be common stock equivalents at June 30, 2012 and 2011 using the treasury stock method.

XML

Note 1. Organization and Significant Accounting Policies: Description of Business (Policies)

12 Months Ended

Jun. 30, 2012

Policies

Description of Business

Description of Business

We were incorporated under the laws of the state of Minnesota on July 19, 1988.  We were previously engaged in the design, development, manufacture and marketing of proprietary medical devices. As of June 30, 2011, HDI had accumulated net tax operating loss carryforwards of approximately $20,831,000. In mid-2011, HDI’s board of directors determined to pursue a change in strategic direction. In August 2011, we sold our medical device inventory, subleased our office and manufacturing facility, and entered into a limited license agreement with a company owned by Jay Cohn, a founder and a director of the Company. In September 2011, we formed HDI Plastics Inc. (“HDIP”), a wholly owned-subsidiary, entered into a new lease agreement, purchased selected manufacturing assets from Compass Bank and Cycled Plastics and began engaging in the business of plastics reprocessing in Austin, TX. Demand for reprocessed plastic is growing, and HDIP has the systems and infrastructure for collecting and processing post-consumer and post-industrial plastic waste into pellets to be resold to domestic manufacturing companies.

XML

Note 11. Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Tables)

12 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Effective Income Tax Rate Reconciliation

	2012	2011
Federal tax at statutory rate	(34.0)%	(34.0)%
State income taxes	(3.0)	(2.4)
Change in valuation allowance	40.0	36.4
Effective income tax rate	— %	— %

XML

Note 3. Discontinued Operations: Schedule of Loss on Sale of Discontinued Operations (Tables)

12 Months Ended

Jun. 30, 2012

Tables/Schedules

Schedule of Loss on Sale of Discontinued Operations

	August 26, 2011
Schedule of Loss on Sale of Discontinued Operations
Cash received upon sale	$  125,000
Note receivable (present value)	127,500
Total  sales price	252,500
Net assets and liabilities sold:
Inventories, net	370,984
Property and equipment, net	16,059
Accrued royalties over accrued as of June 30, 2011	(10,841)
Net assets sold	376,202
Loss on sale of discontinued operation, before income tax benefit	(123,702)
Income tax benefit	-
Loss on sale of discontinued operations, net of tax	($123,702)

XML

Statement of Shareholders' Equity and Other Comprehensive Income (USD $)	Common Stock	Preferred Stock	Additional Paid-in Capital	Retained Earnings	Total
Stockholders' Equity, at Jun. 30, 2010	$ 419,163	$ 7,110	$ 27,851,275	$ (28,424,366)	$ (146,818)
Shares, Outstanding at Jun. 30, 2010	41,916,320	710,993			42,627,313
Stock Issued During Period, Conversion of Preferred Stock into Common Stock, Value,	12,874	(1,073)	(11,801)
Stock Issued During Period, Conversion of Preferred Stock into Common Stock, Shares,	1,287,396	(107,283)
Stock Issued During Period, Warrants Exercised, Value,	1,221	77	28,702		30,000
Stock Issued During Period, Warrants Exercised, Shares,	122,127	7,680			129,807
Stock option expense			129,869		129,869
Net income (loss)				406,312	406,312
Stockholders' Equity, Ending Balance at Jun. 30, 2011	433,258	6,114	27,998,045	(28,018,054)	419,363
Shares, Ending Balance at Jun. 30, 2011	43,325,843	611,390			43,937,233
Shares, Outstanding at Jun. 30, 2011					8,352,914
Stock option expense			87,125		87,125
Stock Issued During Period, Shares, Subordinated Debt Offering			252,393		252,393
Stock Issued During Period, Value, Stock Issued to CEO	90,629		125,068		215,697
Stock Issued During Period, Shares, Stock Issued to CEO	9,062,907				9,062,907
Net income (loss)				(1,263,247)	(1,263,247)
Stockholders' Equity, Ending Balance at Jun. 30, 2012	$ 523,887	$ 6,114	$ 28,462,631	$ (29,281,301)	$ (288,669)
Shares, Ending Balance at Jun. 30, 2012	52,388,750	611,390			53,000,140

XML

Note 4. Inventory

12 Months Ended

Jun. 30, 2012

Notes

Note 4. Inventory

Note 4.     Inventory

Raw materials consist of the plastics that arrive at the processing facility that are sorted and staged in the warehouse as bales or in bins. The value of raw material is based on weight and volume and the average cost of purchasing. Finished goods are processed into pellet or regrind form and stored in gaylords. The inventory value of finished goods is based on weight and the cost to convert using a standard labor and overhead rate.

At June 30, 2012 and 2011 inventory consisted of the following:

	June 30, 2012	June 30, 2011
Raw materials	$      96,142	$               -
Processed finished goods	76,081	-
Total Inventory	$    172,223	$               -

XML

Note 2. Going Concern (Details) (USD $)	3 Months Ended	12 Months Ended
	Sep. 30, 2012	Jun. 30, 2012	Jun. 30, 2011
Net loss from continuing operations		$ 1,472,331	$ 355,076
Accumulated deficit		29,281,301	28,018,054
Subsequent Event, Amount, Higher Range	750,000
Subsequent Event, Amount	$ 180,000

XML

Note 16. Commitments: Schedule of Future Minimum Rental Payments for Operating Leases (Details) (USD $)	Jun. 30, 2012
Operating Leases, Future Minimum Payments Due, Current	$ 72,186
Operating Leases, Future Minimum Payments, Due in Two Years	73,506
Operating Leases, Future Minimum Payments, Due in Three Years	74,873
Operating Leases, Future Minimum Payments, Due in Four Years	$ 25,112

XML

Note 9. Note Payable - Subordinated Debt (Details) (USD $)	12 Months Ended
	Jun. 30, 2012
Debt Instrument, Convertible, Effective Interest Rate	14.50%
Proceeds from issuance of subordinated notes	$ 833,600
Debt Instrument, Convertible, Number of Equity Instruments	11,908,572
Debt Instrument, Fair Value, Basis for Measurement	Black-Scholes Option Pricing Mode
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 0.03
Increase in debt discounts on subordinated notes by issuing stock warrants	$ 252,393

XML

Note 1. Organization and Significant Accounting Policies: Use of Estimates (Policies)

12 Months Ended

Jun. 30, 2012

Policies

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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.

XML

Note 11. Income Taxes (Details) (USD $)	Jun. 30, 2012
Operating Loss Carryforwards	$ 22,040,000
Other Tax Carryforward, Deferred Tax Asset	$ 15,000,000

XML

Note 1. Organization and Significant Accounting Policies: Income Taxes (Policies)

12 Months Ended

Jun. 30, 2012

Policies

Income Taxes

Income Taxes

The Company accounts for income taxes by following an asset and liability approach to financial accounting and reporting for income taxes. Accordingly, deferred tax assets and liabilities arise from the difference between the tax basis of an asset or liability and its reported amount in the financial statements. Deferred tax amounts are determined using the tax rates expected to be in effect when the taxes will actually be paid or refunds received, as provided under currently enacted tax law. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense or benefit is the tax payable or refundable, respectively, for the period plus or minus the change in deferred tax assets and liabilities during the period.  In accordance with the guidance, the Company has adopted a policy under which, if required to be recognized in the future, interest related to the underpayment of income taxes will be classified as a component of interest expense and any related penalties will be classified in operating expenses in the consolidated statement of operations. 

The Company recognizes a financial statement benefit of a tax position only after determining that the relevant tax authority would more-likely-than-not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

XML

Note 14. Other Related Party Transactions

12 Months Ended

Jun. 30, 2012

Notes

Note 14. Other Related Party Transactions

Note 14.    Other Related Party Transactions

In 2012, the HDI Corporate office sub-leased space from STEN Corporation for $500 per month. Kenneth Brimmer, the Company’s Chief Executive Officer and a director of the Company, is the Chief Executive Officer of STEN Corporation. STEN Corporation’s lease ends in April 2014. For the year ended June 30, 2012, a total of $4,500 was paid to STEN Corporation for rent.

HDIP sells processed recycled materials in the form of pelletized resin to various manufacturing companies. In December 2011, HDIP sold 16,300 pounds of processed polymer to Stencor Company, LLC, a contract molding manufacturing company 85% owned by Kenneth Brimmer, for a purchase price of $8,492. The purchase price for the resin represented a price similar to sales of similar material to unrelated parties. HDIP expects to continue sales to Stencor from time-to-time.

In January 2012, HDIP purchased a 2004 Dodge pick-up truck from Halvorsen Motors; a used retail car business owned 50% by Kenneth Brimmer, for a purchase price of $11,984. The truck is used by the Company for sales and deliveries. The Company does not anticipate purchasing any additional vehicles in the near future.