Warranty Liability

3 Months Ended

Sep. 30, 2013

Note 4.

Warranty Liability

The Company provides a lifetime warranty on its products to the prescribed patient for sales within the United States and a three-year warranty for all institutional sales and sales to individuals outside the United States. The Company estimates the costs that may be incurred under its warranty and records a liability in the amount of such costs at the time the product is shipped. Factors that affect the Company's warranty liability include the number of units shipped, historical and anticipated rates of warranty claims, and cost per claim. The Company periodically assesses the adequacy of its recorded warranty liability and adjusts the amounts as necessary.

Changes in the Company's warranty liability were approximately as follows:


	Three Months Ended September 30, 2013			Year Ended June 30, 2013
Balance warranty reserve	$	680,000		$	610,000
Accrual for products sold		43,000			232,000
Expenditures and costs incurred for warranty claims		(43,000	)		(162,000	)
Ending warranty reserve	$	680,000		$	680,000