DISCONTINUED OPERATIONS

9 Months Ended

Jun. 30, 2012

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

NOTE 3     DISCONTINUED OPERATIONS

On June 21, 2012, the Company determined to exit its global retail business and focus solely on growing its OEM business.  The decision to eliminate the retail division was primarily driven by the longer than estimated path to bring it to profitability and the strong top line growth and cost rationalizations in the OEM business.

Accordingly, the results of operations for the retail division have been recorded as discontinued operations in the accompanying consolidated financial statements for all periods presented. During the three and nine-month period ended June 30, 2012, total discontinued operations include charges of $876,000 to write down inventory to net realizable value, $681,000 related to sales returns and price protection, and $150,000 to write-off forfeited advances made to suppliers.

Summarized operating results and assets and liabilities of discontinued operations are presented in the following tables:

	Three Months Ended June 30,		Nine Months Ended June 30,
	2012	2011	2012	2011
Net sales............................................................	$430,540	$             --	$2,093,718	$             --
Gross loss.......................................................	(1,524,337)	--	(1,084,894)	--
Operating expenses......................................	(1,138,487)	(275,026)	(3,594,979)	(389,939)
Other expense...............................................	(15,251)		(42,343)
Net loss from discontinued operations.......	$(2,678,075)	$(275,026)	$(4,722,216)	$(389,939)

	June 30,	September 30,
	2012	2011
Accounts receivable, net...................................	$1,043,023	$             --
Inventory, net......................................................	1,152,190	31,024
Prepaid assets and other current receivables..	502,398	640,219
Note receivable....................................................	--	1,000,000
Property and equipment, net.............................	3,300	--
Total assets of discontinued operations.........	$2,700,911	$1,671,243
Accounts payable..............................................	$218,468	$160,300
Accrued liabilities...............................................	587,611	164,035
Total liabilities of discontinued operations	$806,079	$324,335

The Company expects to complete its exit of its retail business by September 30, 2012 and does not expect to have any continuing involvement in the retail business after this date. The Company anticipates an additional loss from discontinued operations of approximately $1.3 million, all of which the Company anticipates incurring in the fiscal quarter ending September 30, 2012.