DEBT	6 Months Ended
Dec. 31, 2011
Debt Disclosure [Abstract]
DEBT	NOTE 8- DEBT RELATED PARTY NOTES Arthur Liu Notes Notes payable to related parties at June 30, 2011 and June 30, 2010 equaled $0 and $1,264,791, respectively, and consisted of notes to Inseat Solutions, LLC, an entity owned by our former Chief Executive Officer, Arthur Liu. These notes were of various dates and all bore interest at 8% per annum, with principle and interest due on demand. Interest expense for the fiscal years ended June 30, 2011 and June 30, 2010 amounted to $0 and $101,162, respectively. As of June 30, 2011 and June 30, 2010, the accrued interest on the notes payable related to these notes amounted to $0 and $227,814, respectively. Debt Conversion Agreement On July 10, 2010, AuraSound entered into and consummated an Agreement to Convert Debt (the “Debt Conversion Agreement”) with Inseat Solutions, LLC (“Inseat”), a California limited liability company controlled by Arthur Liu, AuraSound’s former Chief Executive Officer and Chief Financial Officer. Pursuant to the Debt Conversion Agreement, AuraSound issued 326,173 shares of unregistered Common Stock and a three (3) year warrant to purchase 2,243,724 shares of Common Stock at an exercise price of $0.50 per share (the “Inseat Warrant”), in consideration of the cancellation of $1,904,305 of indebtedness owed by AuraSound to Inseat. The Inseat Warrant is exercisable for cash only. The aggregate fair value of the aforementioned common stock and common stock purchase warrant was determined to be $456,402 as determined by a third party valuation. As a result of this transaction the Company recognized a gain on debt extinguishment of $1,447,907, which was treated as contributed capital. GGEC Notes On October 8, 2008, GuoGuang Electric Company, Ltd. (“GGEC”) entered into a non-binding letter of intent directed at a possible transaction whereby GGEC would acquire a 55% interest in AuraSound, Inc. During the evaluation period, GGEC agreed to fund up to $150,000 per month for current operating costs until the transaction was either consummated or terminated. As of June 30, 2010, GGEC had advanced $1,253,558. Under the terms of that agreement, interest was accrued at 8% and the notes were collateralized by all of the Company’s present and future tangible and intangible assets. Interest expense of $75,213 was related to these notes for the year ended June 30, 2010. Interest accrued on the notes totaled $116,301 as of June 30, 2010. GGEC Notes - Securities Purchase Agreement On July 10, 2010, the Company entered into a securities purchase agreement (the “SPA”) with GGEC America, Inc., a California corporation (“GGEC America”), and its parent, GGEC, a manufacturer of our products. Pursuant to the SPA, the Company issued to GGEC America: (i) 6,000,000 shares of unregistered Common Stock, (ii) a five (5) year warrant to purchase 6,000,000 shares of Common Stock at an exercise price of $1.00 per share, and (iii) a three (3) year warrant to purchase 2,317,265 shares of Common Stock at an exercise price of $0.75 per share, for an aggregate purchase price of $3,000,000 (the “GGEC Transaction”). Concurrently therewith, the Company entered into a debt extinguishment agreement, whereby GGEC America agreed to cancel $3,000,000 of notes payable and other liabilities. The aggregate fair value of the aforementioned Common Stock and warrant was determined to be $2,900,981 as determined by a third party valuation. As a result of this transaction the company recorded gain on debt extinguishment of $99,019 in fiscal year 2011. BANK DEBT On February 24, 2011, the Company opened a Line of Credit with Bank SinoPac (“SinoPac”) with up to $5,000,000 in borrowing availability (the “Line of Credit”). Under the Line of Credit, the Company assigns invoices to SinoPac for a borrowing base and can borrow a percentage of the receivable (60% – 75% of the invoice value depending on historical dilution, which is primarily the dollar value of credits for returns against the original invoice value) to use for working capital purposes. There is a factoring fee of 0.2% for each invoice assigned. Payments from the customer go directly to SinoPac, and SinoPac receives and applies the payment for the factored invoice to reduce the loan balance. The remaining funds, if any, are available for the Company’s use. The Line of Credit’s terms require monthly interest payments based on borrowed amounts at a floating interest rate, calculated as the prime rate of interest (3.25% at December 31, 2011) plus 1.75%. As of December 31, 2011, there was $4,287,097 outstanding, and $712,903 available, under the Line of Credit. As of June 30, 2011, there was $4,950,000 outstanding, and $963,713 available, under the Line of Credit, partially offset by a cash deposit of $913,713, resulting in a net balance of $4,036,287. The cash deposit is the result of the timing of the difference when the funds are received and when they are applied to pay down the loan at December 31, 2011 and June 30, 2011 respectively. The Line of Credit is secured by certain of the Company’s assets. As of December 31, 2011, the Company had pledged $5,918,137 as security for the Line of Credit. As of June 30, 2011, the Company had pledged $8,798,414 as security for the Line of Credit. The Line of Credit contains standard financial covenants that require the Company to comply with minimum quarterly liquidity and profitability thresholds and standard non-financial covenants that include quarterly and annual reporting requirements and certain operational restrictions. The Company was entering into a new revolving credit line with SinoPac with upto $10,000,000 in borrowing availability (the “New Line of Credit”), however as of December 31, 2011 and June 30, 2011, the Company was not in compliance with its financial covenants under the Line of Credit and the New Line of Credit was never entered into. In addition the Line of Credit matured on January 31, 2012. The Company has received a preliminary approval on the Line of Credit to extend the maturity date to March 30, 2012 in order for SinoPac to complete its waiver process. The Company is also in the process of obtaining from SinoPac a waiver of the Company’s non-compliance with the financial covenants under the Line of Credit as of June 30, 2011 and December 31, 2011. During the waiver process, the Company continues to be able to borrow $5,000,000 under the terms of the Line of Credit.

DEBT

6 Months Ended

Dec. 31, 2011

NOTE 8- DEBT

RELATED PARTY NOTES

Arthur Liu Notes

Notes payable to related parties at June 30, 2011 and June 30, 2010 equaled $0 and $1,264,791, respectively, and consisted of notes to Inseat Solutions, LLC, an entity owned by our former Chief Executive Officer, Arthur Liu. These notes were of various dates and all bore interest at 8% per annum, with principle and interest due on demand. Interest expense for the fiscal years ended June 30, 2011 and June 30, 2010 amounted to $0 and $101,162, respectively. As of June 30, 2011 and June 30, 2010, the accrued interest on the notes payable related to these notes amounted to $0 and $227,814, respectively.

Debt Conversion Agreement

On July 10, 2010, AuraSound entered into and consummated an Agreement to Convert Debt (the “Debt Conversion Agreement”) with Inseat Solutions, LLC (“Inseat”), a California limited liability company controlled by Arthur Liu, AuraSound’s former Chief Executive Officer and Chief Financial Officer. Pursuant to the Debt Conversion Agreement, AuraSound issued 326,173 shares of unregistered Common Stock and a three (3) year warrant to purchase 2,243,724 shares of Common Stock at an exercise price of $0.50 per share (the “Inseat Warrant”), in consideration of the cancellation of $1,904,305 of indebtedness owed by AuraSound to Inseat. The Inseat Warrant is exercisable for cash only. The aggregate fair value of the aforementioned common stock and common stock purchase warrant was determined to be $456,402 as determined by a third party valuation. As a result of this transaction the Company recognized a gain on debt extinguishment of $1,447,907, which was treated as contributed capital.

GGEC Notes

On October 8, 2008, GuoGuang Electric Company, Ltd. (“GGEC”) entered into a non-binding letter of intent directed at a possible transaction whereby GGEC would acquire a 55% interest in AuraSound, Inc. During the evaluation period, GGEC agreed to fund up to $150,000 per month for current operating costs until the transaction was either consummated or terminated. As of June 30, 2010, GGEC had advanced $1,253,558. Under the terms of that agreement, interest was accrued at 8% and the notes were collateralized by all of the Company’s present and future tangible and intangible assets. Interest expense of $75,213 was related to these notes for the year ended June 30, 2010. Interest accrued on the notes totaled $116,301 as of June 30, 2010.

GGEC Notes - Securities Purchase Agreement

On July 10, 2010, the Company entered into a securities purchase agreement (the “SPA”) with GGEC America, Inc., a California corporation (“GGEC America”), and its parent, GGEC, a manufacturer of our products. Pursuant to the SPA, the Company issued to GGEC America: (i) 6,000,000 shares of unregistered Common Stock, (ii) a five (5) year warrant to purchase 6,000,000 shares of Common Stock at an exercise price of $1.00 per share, and (iii) a three (3) year warrant to purchase 2,317,265 shares of Common Stock at an exercise price of $0.75 per share, for an aggregate purchase price of $3,000,000 (the “GGEC Transaction”). Concurrently therewith, the Company entered into a debt extinguishment agreement, whereby GGEC America agreed to cancel $3,000,000 of notes payable and other liabilities. The aggregate fair value of the aforementioned Common Stock and warrant was determined to be $2,900,981 as determined by a third party valuation. As a result of this transaction the company recorded gain on debt extinguishment of $99,019 in fiscal year 2011.

BANK DEBT

On February 24, 2011, the Company opened a Line of Credit with Bank SinoPac (“SinoPac”) with up to $5,000,000 in borrowing availability (the “Line of Credit”). Under the Line of Credit, the Company assigns invoices to SinoPac for a borrowing base and can borrow a percentage of the receivable (60% – 75% of the invoice value depending on historical dilution, which is primarily the dollar value of credits for returns against the original invoice value) to use for working capital purposes. There is a factoring fee of 0.2% for each invoice assigned. Payments from the customer go directly to SinoPac, and SinoPac receives and applies the payment for the factored invoice to reduce the loan balance. The remaining funds, if any, are available for the Company’s use. The Line of Credit’s terms require monthly interest payments based on borrowed amounts at a floating interest rate, calculated as the prime rate of interest (3.25% at December 31, 2011) plus 1.75%.

As of December 31, 2011, there was $4,287,097 outstanding, and $712,903 available, under the Line of Credit. As of June 30, 2011, there was $4,950,000 outstanding, and $963,713 available, under the Line of Credit, partially offset by a cash deposit of $913,713, resulting in a net balance of $4,036,287. The cash deposit is the result of the timing of the difference when the funds are received and when they are applied to pay down the loan at December 31, 2011 and June 30, 2011 respectively.

The Line of Credit is secured by certain of the Company’s assets. As of December 31, 2011, the Company had pledged $5,918,137 as security for the Line of Credit. As of June 30, 2011, the Company had pledged $8,798,414 as security for the Line of Credit. The Line of Credit contains standard financial covenants that require the Company to comply with minimum quarterly liquidity and profitability thresholds and standard non-financial covenants that include quarterly and annual reporting requirements and certain operational restrictions.

The Company was entering into a new revolving credit line with SinoPac with upto $10,000,000 in borrowing availability (the “New Line of Credit”), however as of December 31, 2011 and June 30, 2011, the Company was not in compliance with its financial covenants under the Line of Credit and the New Line of Credit was never entered into. In addition the Line of Credit matured on January 31, 2012. The Company has received a preliminary approval on the Line of Credit to extend the maturity date to March 30, 2012 in order for SinoPac to complete its waiver process. The Company is also in the process of obtaining from SinoPac a waiver of the Company’s non-compliance with the financial covenants under the Line of Credit as of June 30, 2011 and December 31, 2011. During the waiver process, the Company continues to be able to borrow $5,000,000 under the terms of the Line of Credit.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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