- Post-Effective Amendment to Registration Statement (POS AM)

Share Name	Share Symbol	Market	Type
WeedHire International Inc (CE)	USOTC:WDHR	OTCMarkets	Common Stock

As filed with the Securities and Exchange Commission on September 14, 2012

Registration No. 333-174109

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

POST-EFFECTIVE AMENDMENT NO. 1

TO THE

FORM S-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

AnythingIT, Inc.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation or organization)

7379

(Primary Standard Industrial Classification Code Number)

22-3767312

(I.R.S. Employer Identification Number)

17-09 Zink Place

Unit 1

Fair Lawn, NJ 07410

(877) 766-3050

(Address, including zip code, and telephone number,

including area code, of registrant's principal executive offices)

Ms. Gail L. Babitt

Chief Financial Officer

AnythingIT, Inc.

17-09 Zink Place, Unit 1

Fair Lawn, NJ 07410

(877) 766-3050

(Name, address, including zip code, and telephone number,

including area code, of agent for service)

———————

with a copy to:

James M. Schneider, Esq.

Pearlman Schneider LLP

2200 Corporate Boulevard N.W., Suite 210

Boca Raton, Florida 33431

telephone (561) 362-9595

telecopier (561) 362-9612

As soon as practicable after this registration statement becomes effective

(Approximate date of commencement of proposed sale to the public)

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: þ

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company:

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	þ

EXPLANATORY NOTE

We originally registered the resale by the selling security holders described in the prospectus which is a part of the registration statement 13,099,370 common shares (as adjusted to give effect to the 1:3 reverse stock split of our common stock in June 2012), including common shares underlying warrants, pursuant to a registration statement on Form S-1, SEC File No. 333-174109, which was declared effective by the Securities and Exchange Commission on November 4, 2011. This Post-Effective Amendment No. 1 to Form S-1 is being filed to update the earlier effective registration statement on Form S-1.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

SUBJECT TO COMPLETION, DATED SEPTEMBER 14, 2012

PROSPECTUS

AnythingIT, Inc.

9,148,769 shares of Common Stock

This prospectus relates to periodic offers and sales of 9,148,769 shares of our common stock by the selling security holders, including 2,133,733 shares of our common stock which are presently outstanding or issuable upon the exercise of the placement agent warrants, 2,266,668 issuable as payment of interest and upon the conversion of our 12% convertible promissory notes and 4,748,368 shares of our common stock issuable upon the possible exercise of warrants with exercise prices ranging from $0.45 to $0.75 per share.

We will not receive any proceeds from the sale of the shares by the selling security holders. To the extent the warrants are exercised on a cash basis, we will receive proceeds of the exercise price.

Our common stock is quoted on the OTC Bulletin Board under the symbol “ANYI.” On September 4, 2012 the last reported sale price of our common stock was $0.05 per share.

For a description of the plan of distribution of these shares, please see page 28 of this prospectus.

____________________

Investing in our common stock involves a high degree of risk. See “Risk Factors” beginning on page 3 of this prospectus to read about the risks of investing in our common stock.

____________________

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

____________________

The date of this prospectus is ______, 2012

The original date of this prospectus is November 4, 2011

ABOUT THIS PROSPECTUS

You should only rely on the information contained in this document or to which we have referred you. We have not authorized anyone to provide you with information that is different. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted.

OTHER PERTINENT INFORMATION

We maintain our web site at www.anythingit.com. Information on this web site is not a part of this prospectus.

All share and per share information contained herein gives effect to a 50:1 forward stock split of our outstanding common stock effective in June 2010 and the 1:3 reverse stock split effective in June 2012.

Unless specifically set forth to the contrary, when used in this prospectus the terms “AnythingIT", "we", "us", "our" and similar terms refer to AnythingIT, Inc., a Delaware corporation, “fiscal 2012” refers to the fiscal year ended June 30, 2012, “fiscal 2011” refers to the year ended June 30, 2011 and “fiscal 2013” refers to the year ending June 30, 2013.

PROSPECTUS SUMMARY

About Us

We are a provider of green technology solutions, managing the equipment disposition needs of our government and commercial clients by buying, reselling, or recycling, in an environmentally and regulatory compliant manner, computers and other technology hardware. By delivering cost effective asset management solutions and capitalizing on our knowledge and relationships in the industry, we believe that we are able to maximize the technology dollars of our clients.

Our focus is on executing and managing secure, compliant end-of-life information technology (“IT”) asset management and disposition services. As part of our services, we provide a comprehensive asset management system or integrate with our clients existing asset management systems with the goal of providing clear audit trail of the asset and enabling our clients the ability to assess shipping or disposal status, take inventory and generate settlement reports for every returned asset. Additionally, we are focused on partnering with veterans. Either through providing employment opportunities directly or through our continuing support of Work Vessels For Veterans.

Our principal executive offices are located at 17-09 Zink Place, Unit 1, Fair Lawn, NJ 07410 and our telephone number is (877) 766-3050. Our fiscal year end is June 30.

SUMMARY OF THE OFFERING

This prospectus covers the resale of a total of 9,148,769 shares of our common stock by the selling security holders, including 2,133,733 shares of our common stock which are presently outstanding or issuable upon the exercise of placement agent warrants, 2,266,668 issuable as payment of interest and upon the conversion of our 12% convertible promissory notes and 4,748,368 shares of our common stock issuable upon the possible exercise of warrants with exercise prices ranging from $0.45 to $0.75 per share.

We will not receive any proceeds from the resale of our shares by the selling security holders. To the extent the warrants are exercised on a cash basis, we will receive the exercise price of the warrants. We will pay all of the fees and expenses associated with registration of the shares covered by this prospectus.

Common Stock :

Outstanding Prior to this Offering :	36,190,238 shares of common stock on September 10, 2012.

Common Stock Reserved :	An aggregate of 19,377,544 shares of our common stock, including 2,266,668 shares issuable upon the possible conversion of 12% convertible promissory notes and as interest payments on these notes, 12,000,000 shares reserved for issuance under our 2010 Equity Compensation Plan 4,748,368 shares issuable upon the exercise of warrants with exercise prices ranging from $0.45 to $0.75 per share and 362,508 shares issuable upon the exercise of placement agent warrants. The resale of 7,377,544 shares issuable upon the exercise of the warrants, the placement agent warrant and as interest and upon conversion of the 12% convertible promissory notes are covered by this prospectus.

Common Stock Outstanding After this Offering :	43,567,782 shares of common stock, assuming the issuance of 2,266,668 shares of our common stock upon as interest and upon the conversion of the 12% convertible promissory notes, 4,748,368 shares of our common stock issuable upon the exercise of common stock purchase warrants at exercise prices ranging from $0.45 to $0.75 per share and 362,508 shares issuable upon the exercise of placement agent warrants, the resale of which is covered by this prospectus, but giving no effect to the possible issuance of shares upon the exercise of options under our 2010 Equity Compensation Plan.

SELECTED FINANCIAL DATA

The following summary of our financial information for fiscal 2012 and fiscal 2011 which have been derived from, and should be read in conjunction with, our financial statements included elsewhere in this prospectus .

Income Statement Data:

	Year Ended June 30,
	2012				2011

Net sales		$	6,176,379		$	4,472,195
Gross profit			3,105,240			1,830,289
Total operating expenses			3,418,504			2,149,246
Net (loss)		$	(509,847	)	$	(415,939	)

Balance Sheet Data:

	June 30,		June 30,
	2012		2011

Working capital	$	890,625	$	629,710
Cash	$	1,039,967	$	1,270,721
Total current assets	$	1,927,263	$	2,102,041
Total assets	$	2,127,027	$	2,304,088
Total current liabilities	$	1,036,638	$	1,472,331
Total liabilities	$	1,516,988	$	1,942,133
Total stockholders' equity	$	610,039	$	361,955

RISK FACTORS

An investment in our common stock involves a significant degree of risk. You should not invest in our common stock unless you can afford to lose your entire investment. You should consider carefully the following risk factors and other information in this prospectus before deciding to invest in our common stock.

Risks Related to Our Business

WE HAVE A HISTORY OF LOSSES AND THERE ARE NO ASSURANCES WE WILL EVER REPORT PROFITABLE OPERATIONS.

For fiscal years 2012 and 2011, we reported net losses of $509,847 and $415,939, respectively. At June 30, 2012, we had an accumulated deficit of approximately $7.6 million. While we were able to increase our revenues in fiscal 2012 by 38% over fiscal 2011 and increase our gross profit margin by 9%, our operating expenses increased by 59% to position our company for growth, both operationally and from a personnel standpoint. Until such time as we are able to increase our revenues to a level which supports our operating expenses, of which there are no assurances, we will continue to deplete our cash and report losses.

WE MAY NEED ADDITIONAL FINANCING WHICH WE MAY NOT BE ABLE TO OBTAIN ON ACCEPTABLE TERMS. IF WE CANNOT RAISE ADDITIONAL CAPITAL AS NEEDED, OUR ABILITY TO GROW OUR COMPANY COULD BE IN JEOPARDY.

Capital is needed for the effective expansion of our business. Our future capital requirements, however, depend on a number of factors, including our ability to internally grow our revenues, manage our business and control our expenses. We believe our current working capital will be sufficient to fund our existing operating expenses for approximately the next 12 months, absent a significant growth in our operations. However, in order to fully implement our growth strategy, we will need to raise additional capital. We do not have any firm commitments to provide any additional capital and we anticipate that we will have certain difficulties raising capital given the limited operating history of our company and the illiquid nature of an investment in our company. Accordingly, we cannot assure you that additional working capital will be available to us upon terms acceptable to us. If we are subsequently unable to raise additional funds as needed, our ability to grow our company is in jeopardy.

WE ARE SUBJECT TO RISKS THAT OUR INVENTORY MAY DECLINE IN VALUE BEFORE WE SELL IT OR THAT WE MAY NOT BE ABLE TO SELL THE INVENTORY AT THE PRICES WE ANTICIPATE.

We purchase and warehouse inventory, most of which is excess, used and off-lease, "as-is" and refurbished mainframes and associated peripherals, midrange computers and personal computer (PC) equipment and related IT products. As a result, we assume inventory risks and price erosion risks for these products. These risks are especially significant because computer equipment generally is characterized by rapid technological change and obsolescence. These changes affect the market for refurbished or excess inventory equipment. Generally, our inventory holding period ranged from 30 to 90 days during fiscal 2012 and fiscal 2011. Our success will depend on our ability to purchase inventory at attractive prices relative to its resale value and our ability to turn our inventory rapidly through sales. If we pay too much or hold inventory too long, we may be forced to sell our inventory at a discount or at a loss or write down its value, and our business could be materially adversely affected. In addition, fluctuations in the inventory holding periods and prices of the inventory impact our gross profit margins. For example, our gross profit margin in fiscal 2012 was 50% as compared to 41% in fiscal 2011. The fluctuations in our margins are expected to continue, which will impact our results of operations in future periods.

DECLINING PRICES FOR NEW COMPUTER EQUIPMENT COULD REDUCE DEMAND FOR OUR PRODUCTS.

The cost of new computer equipment, particularly personal computers, has declined dramatically in recent years. As the price of new computer products declines, consumers may be less likely to purchase “as-is” or refurbished computer equipment unless there is a substantial discount to the price of the new equipment. Accordingly, the price at which we sell "as-is" equipment to remarketers can decline. As prices of new products continue to decrease, our revenue, profit margins and earnings could be adversely affected. There can be no assurance that we will be able to maintain a sufficient pricing differential between new products and our "as-is" or refurbished products to avoid adversely affecting our revenues, profit margins and earnings.

WE DEPEND ON FEDERAL GOVERNMENT CONTRACTS AND A LOSS OF SALES FROM THESE CONTRACTS WILL ADVERSELY AFFECT OUR SALES AND GROSS MARGINS, OPERATING RESULTS AND CASH FLOWS IN FUTURE PERIODS.

For fiscal 2012 and fiscal 2011, we derived approximately 2.5% and approximately 11.2%, respectively, of our sales from the Federal government or as subcontractors to prime contractors under Federal government contracts. In the future we may derive material amounts of our sales from work performed under Federal government contracts. Those contracts are conditioned upon the continuing availability of Congressional appropriations. Congress usually appropriates funds on a fiscal year basis even though contract performance may extend over many years. Concerns about increased deficit spending, along with continued economic challenges, continue to place pressure on Federal customer budgets. Shifts in domestic spending and tax policy, the affordability of our services, general economic conditions and developments, and other factors may affect a decision to fund or the level of funding for existing or proposed programs. Changes in Federal government spending policies or budget priorities may also directly affect our financial performance. Among the factors that may materially harm our business are:

●	a significant decline in spending by the Federal government in general or by specific departments or agencies in particular,
●	changes in the structure, composition and/or buying patterns of the Federal government,
●	the adoption of new laws or regulations changing procurement practices, or
●	delays in the payment of our invoices by government payment offices.

These factors may cause Federal government agencies and departments to reduce their purchases under contracts, to exercise their right to terminate contracts, or not to exercise options to renew contracts, any of which would cause us to lose future revenue. If our sales to Federal government agencies or to prime contractors under Federal government contracts should decline in future periods, our results of operations would be materially adversely impacted.

THE INDUSTRY IN WHICH WE COMPETE IN IS HIGHLY COMPETITIVE.

We face intense competition in each area of our business, and many of our competitors have greater resources and a more established market position than we have. Our primary competitors include:

●	privately and publicly owned businesses such as Redemtech, Intechra and Solectron that offer asset management and end-of-life product refurbishment and remarketing services; and
●	major manufacturers of computer equipment such as, Dell Computer Corporation, Hewlett Packard and IBM, each of which offer "as-is", refurbished and new equipment through direct sales personnel, through their websites and direct e-mail broadcast campaigns.

Most of our competitors have longer operating histories, larger customer or user bases, greater brand name recognition and significantly greater financial, marketing and other resources than we do. Many of these competitors already have an established brand name and can devote substantially more resources to increasing brand name recognition and product acquisition than we can. Our competitors may be able to secure products from sources of supply on more favorable terms, fulfill customer orders more efficiently or adopt more aggressive price or inventory availability policies than we can. We also anticipate that competition will intensify if prices for new computers continue to decrease. There are no assurances we will ever effectively compete in our industry.

IF WE ARE UNABLE TO ATTRACT AND RETAIN SUFFICIENT PERSONNEL, OUR ABILITY TO OPERATE AND GROW OUR COMPANY WILL BE IN JEOPARDY.

We believe that there is, and will continue to be, intense competition for qualified personnel in our industry, and there is no assurance that we will be able to attract or retain the personnel necessary for the management and development of our business. Turnover can also create distractions as we search for replacement personnel, which may result in significant recruiting, relocation, training and other costs, and can cause operational inefficiencies as replacement personnel become familiar with our business and operations. The inability to attract or retain employees currently or in the future may have a material adverse effect on our business, financial condition and results of operations.

ANY POTENTIAL FUTURE ACQUISITIONS MAY SUBJECT US TO SIGNIFICANT RISKS, ANY OF WHICH MAY HARM OUR BUSINESS.

Our long-term strategy includes identifying and acquiring companies in our industry with operations that compliment ours. Acquisitions would involve a number of risks and present financial, managerial and operational challenges, including:

●	diversion of management attention from running our existing business,
●	increased expenses including legal, administrative and compensation expenses related to newly hired employees,
●	increased costs to integrate the technology, personnel, customer base and business practices of the acquired company with our own,
●	potential exposure to material liabilities not discovered in the due diligence process,
●	potential adverse effects on our reported operating results due to possible write-down of goodwill and other intangible assets associated with acquisitions, and
●	acquisition financing may not be available on reasonable terms or at all.

Any acquired business, technology, service or product may significantly under-perform relative to our expectations, and we may not achieve the benefits we expect from our acquisitions. For all these reasons, our pursuit of an acquisition may cause our actual results to differ materially from those anticipated.

NEW SYSTEM IMPLEMENTATIONS AND PROCESSES MAY NOT HAVE THE DESIRED AFFECT ON IMPROVING OPERATING EFFICIENCIES AND MAINTAINING GROSS MARGINS.

During fiscal 2012 we invested approximately $90,000 to implement a new fully automated system to enable us to sort, audit, wipe and remarket product more efficiently to enable us to scale the existing operations without continually adding to our labor force or expanding our existing warehouse footprint. If we are not able to successfully launch this new system we will be responsible for the costs incurred in the technology but we may still have to increase operating costs to effectively manage the operations.

Risks Related to Our Common Stock

CERTAIN OF OUR OUTSTANDING WARRANTS CONTAIN CASHLESS EXERCISE PROVISIONS WHICH MEANS WE WILL NOT RECEIVE ANY CASH PROCEEDS UPON THEIR EXERCISE.

At September 10, 2012 we have common stock warrants outstanding to purchase an aggregate of 794,187 shares of our common stock with exercise prices of $0.30 and $0.75 per share which are exercisable on a cashless basis. This means that the holders, rather than paying the exercise price in cash, may surrender a number of warrants equal to the exercise price of the warrants being exercised. It is possible that the warrant holders will utilize the cashless exercise feature which will deprive us of additional capital which might otherwise be obtained if the warrants did not contain a cashless feature.

OUR COMMON STOCK IS CURRENTLY QUOTED ON THE OTC BULLETIN BOARD, BUT TRADING IN THE SECURITIES IS LIMITED .

Currently, our common stock is quoted on the OTC Bulletin Board. The market for these securities is extremely limited and there are no assurances an active market for either security will ever develop.

PROVISIONS OF OUR CERTIFICATE OF INCORPORATION AND BYLAWS MAY DELAY OR PREVENT A TAKE-OVER WHICH MAY NOT BE IN THE BEST INTERESTS OF OUR STOCKHOLDERS.

Provisions of our certificate of incorporation and bylaws may be deemed to have anti-takeover effects, which include when and by whom special meetings of our stockholders may be called, and may delay, defer or prevent a takeover attempt. In addition, certain provisions of the Delaware General Corporation Law also may be deemed to have certain anti-takeover effects which include that control of shares acquired in excess of certain specified thresholds will not possess any voting rights unless these voting rights are approved by a majority of a corporation's disinterested stockholders.

Further, our certificate of incorporation authorizes the issuance of up to 5,000,000 shares of preferred stock with such rights and preferences as may be determined from time to time by our board of directors in their sole discretion. Our board of directors may, without stockholder approval, issue series of preferred stock with dividends, liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of the holders of our common stock.

THE TRADABILITY OF OUR COMMON STOCK IS LIMITED UNDER THE PENNY STOCK REGULATIONS WHICH MAY CAUSE THE HOLDERS OF OUR COMMON STOCK DIFFICULTY SHOULD THEY WISH TO SELL THE SHARES.

Because the quoted price of our common stock is less than $5.00 per share and we do not meet certain other exemptions, our common stock is considered a “penny stock,” and trading in our common stock is subject to the requirements of Rule 15g-9 under the Securities Exchange Act of 1934. Under this rule, broker/dealers who recommend low-priced securities to persons other than established customers and accredited investors must satisfy special sales practice requirements. The broker/dealer must make an individualized written suitability determination for the purchaser and receive the purchaser’s written consent prior to the transaction.

SEC regulations also require additional disclosure in connection with any trades involving a “penny stock,” including the delivery, prior to any penny stock transaction, of a disclosure schedule explaining the penny stock market and its associated risks. These requirements severely limit the liquidity of securities in the secondary market because few broker or dealers are likely to undertake these compliance activities and this limited liquidity will make it more difficult for an investor to sell his shares of our common stock in the secondary market should the investor wish to liquidate the investment. In addition to the applicability of the penny stock rules, other risks associated with trading in penny stocks could also be price fluctuations and the lack of a liquid market.

WE HAVE OUTSTANDING OPTIONS AND WARRANTS TO PURCHASE APPROXIMATELY 24% OF OUR CURRENTLY OUTSTANDING COMMON STOCK.

At September 10, 2012 we had 36,190,238 shares of common stock outstanding together with outstanding options and warrants to purchase an aggregate of 8,610,881 shares of common stock at exercise prices of between $0.15 and $0.75 per share. In the event of the exercise of the warrants and/or options, the number of our outstanding common stock will increase by approximately 24%, which will have a dilutive effect on our existing stockholders.

IF THE SELLING SECURITY HOLDERS ALL ELECT TO SELL THEIR SHARES OF OUR COMMON STOCK AT THE SAME TIME, THE MARKET PRICE OF OUR SHARES MAY DECREASE.

It is possible that the selling security holders will offer all of the shares for sale. Further, because it is possible that a significant number of shares could be sold at the same time hereunder, the sales, or the possibility thereof, may have a depressive effect on the market price of our common stock.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Various statements in this prospectus contain or may contain forward-looking statements that are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements were based on various factors and were -derived from utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to:

●	fluctuations in inventory value,
●	declining prices of new computer equipment,
●	our dependence on sales to the Federal government or to prime contractors for the Federal government,
●	our ability to effectively compete,
●	our dependence on a few significant customers,
●	possible need to raise additional capital,
●	the lack of a liquid market for our common stock,
●	our ability to hire and retain sufficient qualified personnel,
●	possible material weaknesses in our disclosure controls and internal control over financial reporting,
●	our system implementation may not be effective,
●	risks of integrating acquisitions into our company, and
●	the highly competitive nature of our business.

Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements and readers should carefully review this prospectus in its entirety, including the risks described in “Risk Factors.” Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. These forward-looking statements speak only as of the date of this prospectus, and you should not rely on these statements without also considering the risks and uncertainties associated with these statements and our business.

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock has been quoted on the OTC Bulletin Board under the symbol “ANYI” since December 2011. The reported high and low last sale prices for the common stock are shown below for the periods indicated. The quotations reflect inter-dealer prices, without retail mark-up, markdown or commission, and may not represent actual transactions. The historical share prices in this table have been adjusted to give effect to the reverse stock split of our common stock in June 2012.

	High		Low

2012
Second quarter ended December 31, 2011	$	0.450	$	0.330
Third quarter ended March 31, 2012	$	0.750	$	0.072
Fourth quarter ended June 30, 2012	$	0.295	$	0.072

The last sale price of our common stock as reported on the OTC Bulletin Board on September 4, 2012 was $0.05 per share. As of September 10, 2012, there were approximately 36 record owners of our common stock.

Dividend Policy

We have never paid cash dividends on our common stock. Under Delaware law, we may declare and pay dividends on our capital stock either out of our surplus, as defined in the relevant Delaware statutes, or if there is no such surplus, out of our net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. If, however, the capital of our company, computed in accordance with the relevant Delaware statutes, has been diminished by depreciation in the value of our property, or by losses, or otherwise, to an amount less than the aggregate amount of the capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets, we are prohibited from declaring and paying out of such net profits and dividends upon any shares of our capital stock until the deficiency in the amount of capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets shall have been repaired.

Future sales under Rule 144

At September 10, 2012 approximately 27,063,727 of our outstanding shares of common stock are “restricted securities” under Rule 144 of the Securities Act of 1933. We have included 2,133,733 shares of our currently outstanding common stock in the registration statement of which this prospectus is a part. In general, under Rule 144, as currently in effect, a person, or person whose shares are aggregated, who is not our affiliate or has not been an affiliate during the prior three months and owns shares that were purchased from us, or any affiliate, at least six months previously, is entitled to make unlimited public resales of such shares provided there is current public information available at the time of the resales. After a one-year holding period a non-affiliate is entitled to make unlimited public resales of our shares without the requirement that current public information be available at the time of the resales. A person, or persons whose shares are aggregated, who are affiliates of our company and own shares that were purchased from us, or any affiliate, at least six months previously is entitled to sell within any three month period, a number of shares of our common stock that does not exceed the greater of 1% of the then outstanding shares of our common stock, subject to manner of sale provisions, notice requirements and the availability of current public information about us.

Future sales of restricted common stock under Rule 144 or otherwise or of the shares which we are registering under this prospectus could negatively impact the market price of our common stock should a market develop in the future, of which there is no assurance. We are unable to estimate the number of shares that may be sold in the future by our existing stockholders or the effect, if any, that sales of shares by our stockholders will have on the market price of our common stock prevailing from time to time, should a market develop.

CAPITALIZATION

The following table sets forth our capitalization as of June 30, 2012. The table should be read in conjunction with the financial statements and related notes included elsewhere in this prospectus.

	June 30, 2012

Long term liabilities	$	480,350
Preferred stock, $0.01 par value, 5,000,000 shares authorized, 0 shares outstanding		-
Common stock, $0.01 par value, 200,000,000 shares authorized, 36,190,238 shares outstanding		361,902
Additional paid-in capital		7,800,900
Accumulated deficit		( 7,552,763	)
Total stockholders' equity	$	610,039
Total capitalization	$	1,090,389

USE OF PROCEEDS

We will not receive any proceeds upon the sale of shares of common stock by the selling security holders. Any proceeds that we receive from the exercise of the outstanding warrants, if exercised on a cash basis, will be used by us for general working capital. The actual allocation of proceeds realized from the exercise of the warrants will depend upon the amount and timing of such exercises, our operating revenues and cash position at such time and our working capital requirements. There can be no assurances that any of the outstanding warrants will be exercised on a cash basis, if at all.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL STATEMENTS

AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operation s for fiscal 2012 and fiscal 2011 should be read in conjunction with the financial statements and the notes to those statements that are included elsewhere in this prospectus. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the Risk Factors, Cautionary Notice Regarding Forward-Looking Statements and Business sections in this prospectus. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.

Overview

●	fees for inventory management and data destruction services,
●	sales of used equipment to wholesalers providing a second life to IT equipment that may otherwise be discarded, and
●	sales to companies that specialize in removing recyclable or remarketable parts of electronics from equipment that no longer has a usable life.

Our industry is relatively new and our company has grown rapidly during the past few years. We believe that this growth has been driven by both the increasing rate of changes in IT which accelerates the rate at which IT equipment becomes obsolete, the expansion of the remarketing and demanufacturing segments of our industry and a general increased awareness of the “green” aspect of information technology asset disposition, or ITAD.

We expect the growth of our industry, as well as the growth of our company, to continue in the future. Our business strategy is based upon leveraging our experience and building on our existing business model by expanding our relationships and resources and includes:

●	expanding our sources of technology equipment;
●	expanding our resources for environmentally compliant recycling, reuse and data storage and destruction;
●	expanding our geographical footprint;
●	expanding the demanufacturing and recycling services we provide; and
●	further penetrating the large global market for the resale of useful equipment.

We expect to grow our company both organically and through acquisitions of similar or complimentary businesses. To support this expected growth, during fiscal 2011 we leased space which effectively doubled our warehouse space to enable us to store inventory in the local market. In an effort to further accelerate our organic growth, we are investing in our relationships with our existing partners through training sessions and other efforts to increase awareness and educate their organizations of the value of practicing sound asset recovery. In this vein, in October 2011 we were awarded certifications for the Recycling Industry Operating Standard (RIOS) responsible recycling R2 practices as well as ISO 14001:2004 Environmental Management System for responsible electronics recyclers which are administered by the ISRI Services Corporation and the International Organization for Standardization (ISO). Additionally, in June 2012, we were awarded the ISO 9001 Quality Management Certification as well as the e-Stewards Certification from the Basel Action Network. We believe these industry certifications will assist us in building awareness of the benefits of our services.

In fiscal 2013 we expect to expand into geographical areas where we have an existing customer base to expand our footprint and our business presence. We expect to fund those incremental costs from working capital. We also expect to seek to acquire additional companies whose operations are complimentary to ours, including companies with similar business models located in different geographical areas, and companies that offer different services, such as demanufacturers. Based upon our internal analysis of our industry and our competitors, we believe that there are a number of potential target companies, but there are no assurances our beliefs are correct or that we will ever close any acquisitions.

The biggest challenges we are facing in our organic growth efforts are our ability to manage our growth, our access to sufficient qualified employees, ability to implement systems and processes that are repeatable while supporting efficiencies and sufficient capital to support our efforts, all of which are necessary to support the expansion of our business. We have hired additional management personnel and are using a staffing company to provide qualified personnel to fill our technical and labor needs. This approach allows us to control our overhead expenses. While we are located in an area with a good supply of qualified candidates, the process, however, of evaluating the candidates is time intensive for our management and maintaining a sufficiently qualified workforce will continue to be a challenge for us in the near future. We in the process of implementing a new, fully automated, management system to support our operations. During fiscal 2012 we invested approximately $90,000 on this new system. We expect the system to be in production by the end of August 2012. This new system will provide operating and reporting efficiencies to enable us to grow our business while minimizing the need to expand warehouse space and personnel. Although our recent capital raises have provided the funds necessary to support our recent growth, if we are to continue to implement our growth strategy we will need to raise additional capital. We do not have any commitments for additional capital, and there are no assurances we will be successful in raising any needed capital. Our inability to raise capital as necessary could restrict our further growth.

Results of Operations

Sales for fiscal 2012 increased 38% as compared to fiscal 2011. Our sales increased in fiscal 2012 as a result of an increase in products to resell, a full year of a new partner that required an expansion in our warehouse space in New Jersey starting in May 2011 and the strong market for used, non-working IT equipment. Our business is driven by either businesses or the government updating older equipment or partnering with our company to dispose of old or unused equipment. As such, the timing of equipment inflow is not consistent or predictable.

Our gross profit margin depends on various factors, including product mix, pricing strategies, market conditions, personnel levels and other factors, any of which could result in changes in gross margins from period to period. Gross profit increased 70% in fiscal 2012 as compared to fiscal 2011. As a percentage of sales, the gross profit margin was 50% in fiscal 2012 as compared to 41% in fiscal 2011. The increase in the gross profit margin was attributable to demand for product from wholesalers which was partially offset by an increase in warehouse labor of approximately $720,000, or 9% of sales, which was the result of the addition of a second shift that was halted in January 2012, and the increase in personnel associated with the expanded warehouse space to support a new partner during fiscal 2011.

Selling, general and administrative expenses increased 59% in fiscal 2012 as compared to fiscal 2011, while increasing as a percentage of sales to 55% versus 48% in the respective periods. The primary factors that impacted selling, general and administrative expenses were:

●	Compensation and benefits increased approximately $945,000 as a result of approximately $646,000 in amortization of stock based compensation, approximately $206,000 for additional employees, including the addition of a third executive officer and salary increases and approximately $93,000 for benefits related to employees; and
●	Facilities’ costs increased approximately $209,000 as a result of the additional space leased for the partner expansion and an increase in real estate taxes.

We expect that our operating expenses will continue to increase in fiscal 2013 as our business continues to grow, however, we are unable at this time to quantify the amount of this expected increase.

Other expense increased 103% in fiscal 2012 as compared to fiscal 2011. The increase is the result of interest expense associated with convertible note issued in February 2011 together with the amortization of the debt discount for the value of the warrants issued in this note offering, including the warrants issued to the placement agent as a fee.

Net loss in fiscal 2012 was approximately $(510,000) compared to net loss of approximately $(416,000) in fiscal 2011 resulting from an increase in selling, general and administrative expenses and interest expense, significantly offset by an increase in gross profit.

Liquidity and capital resources

Liquidity is the ability of a company to generate sufficient cash to satisfy its needs for operating the business. At June 30, 2012 we had working capital of approximately $890,000 as compared to working capital of approximately $630,000 at June 30, 2011. The increased working capital at June 30, 2012 is primarily attributable to an increase in accounts receivable and a decrease in accounts payable, which is partially offset by decreases in inventories and cash and cash equivalents and an increase in deferred revenues.

Accounts receivable increased 81% at June 30, 2012 from June 30, 2011 which is attributable to timing differences and growth in sales. Our inventories at June 30, 2012 decreased 62% from June 30, 2011. Unlike many companies in other businesses which time inventory purchases to maintain an adequate amount of inventory for its anticipated sales, our inventory levels will fluctuate primarily based upon the decommissioning schedules for legacy IT by our clients which determine when we take possession of the used IT equipment. As a result, our inventory levels have historically fluctuated from period to period and we expect that fluctuation to continue in future periods.

Accounts payable decreased 38% at June 30, 2012 as compared to June 30, 2011 which is also the result of timing differences.

We are currently in the process of implementing a new software solution to manage our warehouse operations. This software should help us improve our controls, processes and automation. We do not have any other commitments for capital expenditures. We believe our available working capital is sufficient for our needs for at least the next 12 months, including this software implementation.

Cash flows

Net cash used for operating activities was approximately $108,000 for fiscal 2012 as compared to net cash used for operating activities of approximately $90,000 for fiscal 2011.

In fiscal 2012 cash was used as follows:

●	Net loss was approximately $510,000, and
●	Decrease in operating net assets of approximately $436,000, partially offset by a
●	Non-cash operating expenses of approximately $838,000.

In fiscal 2011 cash was used as follows:

●	Net loss was approximately $416,000, partially offset by
●	Increase in operating net assets of approximately $211,000, and
●	Non-cash operating expenses of approximately $115,000.

Net cash used in investing activities was approximately $81,000 for fiscal 2012 as compared to approximately $95,000 for fiscal 2011 reflects our purchase of additional equipment in both periods.

Net cash used in financing activities for fiscal 2012 was approximately $42,000 and reflects payments on our notes payable and capital leases. Net cash provided by financing activities for fiscal 2011 was approximately $917,000 and reflects proceeds we received from our 2010 unit offering and 2011 note offering, partially offset by payments to the related party for the balance of amounts owed for the repurchase of shares of our common stock and payments on our notes payable and capital leases.

Recent Accounting Pronouncements

The recent accounting standards that have been issued or proposed by the Financial Accounting Standards Board (FASB) or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

Off Balance Sheet Arrangements

As of the date of this prospectus, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term "off-balance sheet arrangement" generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with us is a party, under which we have any obligation arising under a guarantee contract, derivative instrument or variable interest or a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.

Critical Accounting Policies

Revenue Recognition

For product sales, we recognize revenue at the time products are shipped and title is transferred, which is in accordance with the stated shipping terms. Revenue is recognized in accordance with these shipping terms so long as a purchase order, electronic, written or phone commitment has been received or a contract has been executed, there are no uncertainties regarding customer acceptance, the sales price is fixed and determinable and collectability is deemed probable. If uncertainties exist regarding customer acceptance or collectability, revenue is recognized when those uncertainties have been resolved. We provide a limited as-is warranty on some of our products. We analyze our estimated warranty costs and provide an allowance as necessary, based on experience. At June 30, 2012 and June 30, 2011, a warranty reserve was not considered necessary.

Asset management fees are recognized once the services have been performed and the results reported to the client. In those circumstances where we dispose of the client’s product, or purchases the product from the client for resale, revenue is recognized as a “product sale” described above.

Allowance for Doubtful Accounts

We maintain an allowance for doubtful accounts based on the expected collectability of our accounts receivable. We perform credit evaluations of significant customers and establishes an allowance for doubtful accounts based on the aging of receivables, payment performance factors, historical trends and other information. In general, we reserve 2% of the receivables outstanding 31 to 60 days, 5% of the receivables outstanding 61 to 90 days and 20% of the receivables outstanding more than 90 days. We evaluate and revise the reserve on a quarterly basis based on a review of specific accounts outstanding and our history of uncollectible accounts. As of June 30, 2012 and 2011, we recorded $64,065 and $65,075, respectively of allowance for doubtful accounts.

Share-Based Payments

We recognize share-based compensation expense in connection with our share-based awards, net of an estimated forfeiture rate and therefore only recognize compensation cost for those awards expected to vest over the service period of the award. We account for the grants of stock and warrant awards in accordance with ASC Topic 718, Compensation – Stock Compensation (ASC 718). ASC 718 requires companies to recognize in the statement of operations the grant-date fair value of warrants and stock options and other equity based compensation. We utilize a Black-Scholes option pricing model to estimate the fair value of our stock options. Calculating share-based compensation expense requires the input of highly subjective judgment and assumptions, including estimates of expected life of the award, stock price volatility, forfeiture rates and risk-free interest rates. The assumptions we used in calculating the fair value of share-based awards represent our best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and we use different assumptions, our share-based compensation expense could be materially different in the future.

For the years ending June 30, 2012 and 2011, total stock-based compensation was $646,731 and $0, respectively. We granted 2,893,338 stock options and issued 333,334 restricted shares of common stock in December 2011. In March 2012, we granted 666,667 stock options and in January 2012, we granted 666,667 restricted shares of common stock.

General

The preparation of financial statements requires management to utilize estimates and make judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. These estimates are based on historical experience and on various other assumptions that management believes to be reasonable under the circumstances. The estimates are evaluated by management on an ongoing basis, and the results of these evaluations form a basis for making decisions about the carrying value of assets and liabilities that are not readily apparent from other sources. Although actual results may differ from these estimates under different assumptions or conditions, management believes that the estimates used in the preparation of our financial statements are reasonable.

OUR BUSINESS

Overview

Our focus is on executing and managing secure, compliant end-of-life information technology, or IT, asset management and disposition services. As part of our services, we provide a comprehensive asset management system or integrate with our clients existing asset management systems with the goal of providing clear audit trail of the asset and enabling our clients the ability to assess shipping or disposal status, take inventory and generate settlement reports for every returned asset. Additionally, we are focused on partnering with veterans. Either through providing employment opportunities directly or through our continuing support of Work Vessels For Veterans.

Business strategy

Our business strategy is based upon leveraging our experience and expanding our relationships and resources and includes:

●	expanding our sources of public and private technology equipment;
●	expanding our resources for environmentally compliant recycling and reuse of equipment,
●	expanding our geographical footprint, and
●	further penetrating the large global market for the resale of useful equipment.

We are giving special attention to Federal, state and local government and public sector healthcare agencies as a source of legacy IT product. As a result of our GSA schedule award from the General Services Administration, we are approved to service all agencies of the government, including Federal, state and local government, healthcare, education and Homeland Security. For the overall management of legacy IT equipment, we have a variety of programs including RecycleToday - immediate environmentally compliant downstream disposition- or RecycleTomorrow™- advanced budgeting for the disposal of equipment in conjunction with new product purchases that will eventually become obsolete from one of our partners, either original equipment manufacturers (OEMs) or value-added resellers (VARs).

Growth and acquisition strategy

We expect that our ability to grow our company will be accelerated by expanding geographically, either organically or through acquisition. We believe we can grow through synergistic acquisitions of similar high service companies with positions in various geographic and product markets which we believe may be advantageous to us. Our internal research determined that our industry is primarily populated by small, regional companies, many with strong relationships and reputations but without the critical mass, resources or financial market expertise to maximize on their potential or create an exit strategy for their owners. It is our intent to seek to acquire one or more complementary companies in our space. We believe that there are several potential acquisition targets in the end-of-life IT asset management recycling business which would be synergistic and broaden our overall competiveness. However, as we do not have any agreements or understandings with any third parties regarding the terms and conditions of any future acquisitions or leases for additional warehouse space in other geographies, there are no assurances we will be successful in implementing this growth strategy.

The industry

We believe that the disposal of aging IT assets is becoming increasingly problematic. In 2010 the number of installed PCs worldwide had surpassed 1.4 billion units and was projected to eclipse 2.3 billion units in 2015, according to Gartner, Inc. Gartner, Inc. analysts estimate the worldwide installed base of PCs is growing just over 23% annually for mobile PCs in the home. Each personal computer (PC), server, storage system, printer or IT device retired can pose a data security risk and potential environmental hazard. If not processed properly for disposal, this increasing stream of electronic waste, or E-waste, can have a detrimental impact on the environment. E-waste has been identified by the U.S. Environmental Protection Agency (EPA) as the fastest-growing and potentially most hazardous waste stream in the world. Today, we believe that organizations are looking for solutions to divert this waste from the common waste stream and ensure that the hazardous materials that are resident in electronics do not end up in landfills.

In a recent IDC research report dated June 10, 2010 entitled “ ITAD Trends and Outlook ” analysts indicate that leading service providers in the area of information technology asset disposition, or ITAD, are focusing on data center consolidations. The report also states that globally there has been a 30% increase in European collection and processing of E-waste in 2009 based on the Waste Electrical and Electronic Equipment (WEEE) Directive. These analysts also believe the rise in volumes of legacy IT is made possible by:

●	proliferation of collection points and expanding ITAD sector;
●	growing consumer awareness of recycling issues; and
●	expanding “best” practices into “common” practices made evident by the requirement by more enterprise organizations to perform data destruction services.

The report notes Fortune 1000 companies are increasingly searching for global solution and face very little offerings. Finally, the report noted that one of the biggest challenges that E-waste service providers face is in customer education more than even the competition against each other.

Products and services

Our focus is on executing and managing secure, compliant end-of-life IT asset management and disposition services. As part of our services, our reporting systems provide a clear audit trail of the asset detailing disposal status, remarketing inventory and settlement reports for every remarketable asset.

We offer a full suite of ITAD services. Our products and services revolve around:

●	government mandated IT redeployment Producer Takeback Trade-In and Asset Recovery and Remarketing Programs;
●	regulatory compliant E-waste processing;
●	global logistics management and secure disposal transportation; and
●	secure data erasure and destruction.

We believe that our RecycleTomorrow™ is a cornerstone of our product offerings. The program was created as a means to facilitate the bundling of ITAD services on new devices. This is a stock-keeping unit, or SKU, based service that our clients can resell alongside any new equipment sales to their clients. For many organizations, we believe that this program addresses the various funding and budgetary hurdles of achieving regulatory compliance at a reduced recycling services cost. We believe that one inherent advantage of the RecycleTomorrow program is the capability of essentially capitalizing the expense of disposition requirements into the acquisition cost of the new IT asset.

We also provide a range of services that support our customer’s redeployment/remarketing programs, offering a second life to IT equipment that may otherwise be discarded. We believe that extending a product’s lifecycle not only promotes sustainability while reducing total cost of ownership, but contributes toward the basic tenets of waste reduction: reduce, re-use and recycle. As a means of reducing the total project cost and highest return on investment to our customers for their ITAD initiative, we can remarket these assets. We offer clients a number of remarketing options both domestically and internationally. Our services include conducting a detailed analysis of retired equipment, customized business intelligence-based reporting and recommending a course of action. Based upon our experience, we believe we have the unique ability to quickly remarket technology, utilizing our trading network to quickly access buyers and identify the best remarketing opportunities for equipment.

Logistics and transportation services are a significant part of the IT asset disposition process which we provide to our customers. Our customized solutions include:

●	secure web-based E-waste pickup request tool;
●	onsite packaging and removal;
●	data erasure or destruction;
●	onsite per system software “padlock” to ensure safe transport of customer data;
●	IT asset serial number scanning;
●	dedicated transport with optional global positioning satellite (GPS) tracking; and
●	armored truck transport.

We offer data security services focused on proper data erasure and destruction techniques including:

● Data Erasure . Data erasure is done in accordance with U.S. Department of Defense 5220.22M standards at our certified facilities. We believe that data security is the most important aspect of IT asset disposition. To ensure that hard drives are properly sanitized and erased, we have assembled what we believe to be a technologically advanced data erasure system. Our hard drive erasure process is designed to ensure safety through 100% data eradication. We erase hard drives while they are either still in the system or out of the system, on our commercial erasure stations. Our capabilities range from single to bulk erasure schemes utilizing our multiport test systems. All hard drives are system audited by us for erasure, with random samples removed for stand-alone audits. Additionally, we conduct periodic random sampling to ensure proper hard drive erasure. Once we fully erase a hard drive and it passes our inspection, remarketing may be an option to regain residual value for the system, utilizing our global trading network to provide customers with the highest possible return of their assets. If remarketing is not an option, we will ensure that the drives are properly destroyed through our destruction process.

● Destruction . When erasure of hard drives and data devices is not secure enough or hard drive has an error making data erasure incomplete, we offer data protection by destroying and shredding disk drives in accordance with National Security Agency (NSA) standards. Hard drive shredding usually occurs when optimal data security is a necessity and a company maintains a zero tolerance for risk. Drives designated for destruction are shredded by us into small particles. The shredded material is then properly recycled in an environmentally friendly manner.

● On-Site Destruction. On-site media destruction is an option which we believe provides the ultimate data security. With our on-site media destruction services, a truck-mounted mobile shredder is dispatched directly to a facility so that data storage devices never leave a property, ensuring complete control and protection. We follow the same procedures used with off-site hard drive destruction, including shredding the devices into small particles meeting NSA standards and environmentally friendly recycling of the processed particles.

Our customers

Our mission is to partner with our customers such that they are able to offer “green” initiatives to demonstrate a clear commitment to the community by addressing the environmental, data and even financial impact of the full technology lifecycle. Our customers include:

●	the public sector including Federal, state and local government agencies and healthcare providers;
●	original equipment manufacturers (OEMs);
●	value added resellers (VARs) and system integrators; and
●	Commercial enterprises and end users.

In 2002, we were granted our initial General Services Administration (GSA) Schedule 70 which assists us in selling services to U.S. government agencies. GSA contracts provide government agencies, prime contractors, and state and local governments with an efficient and cost-effective means for buying commercial IT products and services. GSA purchasers may place unlimited orders for products under GSA contracts. In addition, GSA provides access to state and local government agencies to utilize GSA schedules. The terms of these schedules are five years, and our current schedule was renewed in 2012. We do not believe the changes at the GSA will have a negative impact on us. As a result of the services provided to date, since 2002 we have received U.S. Congressional Recommendations for IT asset management, forensic data scrub (Department of Defense 5220.22M certified), trade-in (Exchange/Sale), donation processing, and disposal services solutions. We sometimes act as a subcontractor for a prime contractor that sells new equipment to government agencies. We have also entered into task order contracts with Federal government agencies. Task order contracts specify the period of performance, including the number of option periods, and specify the quantity and scope of products and services the Federal agency will acquire under the contract. After award of the master contract, the Federal agency will issue individual task orders, as needed, to address specific defined requirements. Task orders typically include a statement of work and/or a bill of materials that define the services or products the contractor will be obligated to deliver.

We offer our clients several types of contracts to meet their specific needs, including contracts which are for fixed fee-based services for management and recycling of legacy IT such as inventorying, data wiping, logistics, including removal and shipping from client, but do not guarantee a volume, or contracts that are specific to a particular type of product that will be decommissioned by our client over a period of time which anticipate a specified volume of legacy IT equipment, or a combination of these. Generally, the terms of these contracts are for one year with automatic renewals, but may be cancelled by either party upon notice.

During fiscal 2012 three customers represented approximately 46% of our sales and in fiscal 2011, three customers represented approximately 42% of our sales.

Regulation

Our operations are located in New Jersey. Companies that are strictly refurbishing electronics for resale or donation do not need an approval from the New Jersey Department of Environmental Protection to operate; however, if the company will be storing any unusable electronics, the company is regulated as a universal waste handler. We are subject to regulation by the State of New Jersey as a small quantity handler of consumer electronic waste, including batteries.

In June 2002, the New Jersey Department of Environmental Protection adopted an amendment to the Universal Waste Rule (UWR) including consumer electronics as a universal waste. Consumer electronics includes the components and sub-assemblies that collectively make up the electronic products and may, when individually broken down, include batteries, mercury switches, capacitors containing polychlorinated biphenyl, or PCBs, cadmium plated parts and lead or cadmium containing plastics. Under the UWR, a generator of consumer electronics is regulated as a small or large quantity handler. A small quantity handler of universal waste accumulates less than 5,000 kilograms (11,000 pounds) of universal waste at any given time. This includes all types of universal waste being generated at the site. A large quantity handler of universal waste accumulates greater than 5,000 kilograms of universal waste at any given time. Demanufacturers of consumer electronics are regulated in New Jersey as Class D recycling centers and are required to obtain a Class D Recycling Center Approval. Large quantity universal waste handlers may not demanufacture electronics and small quantity universal waste handlers are allowed to demanufacture electronics without obtaining a Class D Recycling Center Approval; however, processing or treating the components, for example by crushing or shredding, is prohibited. We are not currently subject to the additional regulations applicable to demanufacturers, although, in July 2012 we filed for a Class D permit in New Jersey to enable us to expand our demanufacturing processes. The status of the permit is still pending and in anticipated to be completed in the first calendar quarter of 2013.

Although there is no standard regulation on the Federal level, we have elected to voluntarily pursue the EPA sanctions Recycling Industry Operating Standard (RIOS) responsible recycling R2 practices as well as ISO 14001:2004 Environmental Management System certification for responsible electronics recyclers which are administered by the ISRI Services Corporation and the International Organization for Standardization (ISO), respectively. We have also completed our e-Stewards Certification from the Basel Action Network and ISO 9001 Quality Management Certification. These are defined as best practices for responsible electronics recycling and environmental management that incorporate EPA-supported requirements and the quality, environmental, and health and safety (QEH&S) management system standard for the recycling industry. In this vein, in October 2011 we were awarded certifications for RIOS responsible recycling R2 practices as well as ISO 14001:2004 and in June 2012 we were awarded the e-Stewards and ISO 9001 certifications. We believe these industry certifications will assist us in building awareness of the benefits of our services and differentiate us from many competitors in our industry.

Our employees

As of September 10, 2012, we employed 27 full-time employees, one part time employee and approximately 16 contract personnel. We maintain a satisfactory working relationship with our employees.

In March 2011 we successfully concluded negotiations with the United Electrical, Radio and Machine Workers of America union on a collective bargaining agreement. The agreement applies to only one of our warehouse positions, covering employees who were employed by us at the time of the initial union election, and the terms of the agreement do not apply to the balance of our current, or any of our future employees, in accordance with the terms negotiated.

Our properties

Our principal executive offices are located in approximately 48,000 square feet of commercial and office space. We lease approximately 27,000 square feet of these facilities from an unrelated third party for approximately $192,000 per year base rent plus common area maintenance expenses, insurance and real estate taxes under an agreement expiring in March 2018. In May 2011 we leased an additional approximately 21,000 square feet in adjacent premises from the same unrelated third party for an additional approximately $115,000 per year base rent plus common area maintenance expenses, insurance and real estate taxes under a lease agreement expiring in October 2012. On November 15, 2011 we entered into the Fifth Amendment to Modified Net Lease Agreement with the unaffiliated third party from whom we lease our principal executive offices. Under the terms of this lease agreement, the rent for a portion of these facilities which comprises approximately 20,598 square feet was increased by $0.35 per square foot per month and the term for that portion of the facilities was extended from April 30, 2012 to October 31, 2012.

Our history

Access Direct, Inc., our predecessor company, was formed in September 1992 under the laws of the State of New Jersey. We were formed in October 2000 under the laws of the State of Delaware for the purposes of redomiciling Access Direct to Delaware. In October 2000, we entered into a merger with Access Direct and its stockholders pursuant to which the two entities were merged with our company being the survivor.

MANAGEMENT

Directors and Executive Officers

The following table provides information on our executive officers and directors:

Name	Age	Positions

David Bernstein	43	President, Chief Executive Officer, director
Vlad Stelmak	40	Chief Operating Officer, Secretary, director
Gail L. Babitt	48	Chief Financial Officer, director
Richard Hausig	47	Director

David Bernstein . Mr. Bernstein has served as an executive officer and director of our company and our predecessor since co-founding Access Direct in 1992. Mr. Bernstein established the creation of customized information technology asset management programs for both government and private sector clients that facilitate the disposition/retirement services as a bundled integration solution allowing for complete-end-to-end technology lifecycle services practice. He has created an industry standard utilizing learned best practices in information technology asset management, disposition and disposal services to protect customer data security and environmental liability for both public and private sector marketplaces. Mr. Bernstein was awarded the first General Services Administration Schedule for IT Asset Management/Disposition Services under Schedule 70 - IT Professional Services and has personally received Congressional Recommendations for IT Asset Management, Forensic Data Scrub (Department of Defense 5220.22M certified), Trade-In (Exchange/Sale), Donation processing, and Disposal services solutions. From 2003 until 2006, Mr. Bernstein has served on the board of directors of The Computing Technology Industry Association (CompTIA) comprised of over 20,000 members from the information technology reseller and consulting community. He is a graduate of Rider University with a B.S. in Communications.

Vlad Stelmak. Mr. Stelmak has served as an executive officer and director of our company and our predecessor since co-founding Access Direct in 1992. Mr. Stelmak is responsible for the management of global remarketing of both Federal agency and Fortune 1000 IT assets. He instituted best practices in performing IT asset audits/inventory with necessary data capture to ensure highest return on resale value. He has experience in the oversight of all fair market valuations of IT assets and the development with ongoing support of our proprietary fair market valuation index. Mr. Stelmak is responsible for the day-to-day operations of the Global Remarketing sales staff. He supervises the ongoing development and negotiation of new channels of product remarketing/resale. He is also responsible for locating certified EPA/DEP Recycling partners, both domestic and international, and is in charge of oversight of partner and sub-contractor compliance with our standards as well as continued audits of partner practices. Mr. Stelmak is a graduate of New York University with a B.S. in Marketing and International Business.

Gail L. Babitt . Ms. Babitt has served as our Chief Financial Officer since December 3011 and a member of our board of directors since March 2012. Prior to joining our company, she was a Partner of Advisory Financial Group, an accounting and business consulting firm headquartered in South Florida, in 2011. From 2009 until 2010 she served as the Chief Financial Officer for Inuvo, Inc. (NYSE MKT: INUV), an internet advertising company that leverages data and analytics, where she provided financial and operational leadership to drive organizational change and recapitalize the company. From 2007 to 2008, Ms. Babitt served as Chief Financial Officer of WorldSage, Inc., a global consolidator of post-secondary education institutions, where she helped develop the business model for a start-up business. Previously, from 2006 to 2007 she served as Chief Financial Officer for Pamida Stores, a private equity owned national merchandiser operating over 200 stores in 16 states with annualized revenues in excess of $800 million. She was a Partner with Envision Management Group, Inc., a private consulting firm that provides financial consulting services to various industries (from 2004 to 2006), Chief Financial Officer for Onstream Media Corporation, a NASDAQ-listed digital asset management and streaming media company (from 2000 to 2004), and served as VP of Finance and Corporate Controller for Telecomputing ASA, an Oslo Stock Exchange listed application service provider (from 1999 to 2000). Ms. Babitt began her career with Ernst & Young and Price Waterhouse in the assurance and advisory practice, providing audit services for clients in diversified industries including entertainment, financial services, retail, technology and communication, with most of her clients being publicly-traded companies. From there she became a Manager in the Transaction Services Group of PricewaterhouseCoopers, providing financial due diligence for mergers and acquisitions supporting financial and strategic buyers and sellers. Ms. Babitt received her Bachelor of Science degree in accounting from Nova Southeastern University and her MBA from Boston University. She is a Certified Public Accountant. She is currently on the board of directors for The First Tee of Tampa Bay and Medjo, Inc.

Richard Hausig . Mr. Hausig has been a member of our board of directors since August 2008 and was a co-founder of our company. Since October 2011 he has served as President of Grupo Capital de las Americas, a U.S. company doing business in Columbia that offers business consulting and advisory services, as well as employee outsourcing. From January 2010 until October 2011, he was Chief Operating Officer of Paisa Services, a Columbian outsource services supplier. Paisa Services was integrated into Grupo Capital de las Americas in October 2011. From May 2003 until August 2009, Mr. Hausig was Chief Operating Officer of MDM Worldwide Solutions, an EDGAR filing agent.

There are no family relationships between any of the executive officers and directors. Each director is elected at our annual meeting of stockholders and holds office until the next annual meeting of stockholders, or until his successor is elected and qualified.

Director Qualification

Our board of directors is currently comprised of four individuals, three of whom are co-founders of our company. Each of Messrs. Bernstein and Stelmak, are co-founders and who are also our executive officers, have over 20 years of experience in management of legacy IT and ITAD services. Mr. Hausig, who is currently an independent director, was also a co-founder of our company and has significant institutional knowledge about our company and our industry. Ms. Babitt has significant experience as a chief financial officer of public companies as well as significant experience in with growing technology companies that require strategic and operational leadership. Our Board concluded that as a result of these directors individual experience, qualifications, attributes or skills that such person should be serving as a member of our board of directors as of the date of this prospectus in light of our business and structure. In addition to their individual skills and backgrounds which are focused on our industry as well as financial and managerial experience, we believe that the collective skills and experience of our Board members are well suited to guide us as we continue to grow our company. We expect to expand our board of directors in the future to include additional independent directors. In adding additional members to our Board, we will consider each candidate’s independence, skills and expertise based on a variety of factors, including the person’s experience or background in management, finance, regulatory matters and corporate governance. Further, when identifying nominees to serve as director, we expect that our Board will seek to create a Board that is strong in its collective knowledge and has a diversity of skills and experience with respect to accounting and finance, management and leadership, vision and strategy, business operations, business judgment, industry knowledge and corporate governance.

Director Compensation

We have not established standard compensation arrangements for our directors and the compensation payable to each individual for their service on our Board is determined from time to time by our board of directors based upon the amount of time expended by each of the directors on our behalf. Currently, executive officers of our company who are also members of the board of directors do not receive any compensation specifically for their services as directors. We did not compensate our non-employee director during fiscal 2012 for his services as a director.

Code of Business Conduct and Ethics

We have adopted a Code of Business Conduct and Ethics that applies to our President, Chief Executive Officer, Chief Financial Officer Chief Accounting Officer or Controller and any other persons performing similar functions. This code provides written standards that we believe are reasonably designed to deter wrongdoing and promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships, and full, fair, accurate, timely and understandable disclosure in reports we file with the Securities Exchange Commission. A copy of the Code of Business Conduct and Ethics may be found on our website at www.anythingit.com. Copies of this Code is also available without charge upon written request to our Corporate Secretary.

Committees of our Board of Directors and the Role of our Board in Risk Oversight

Mr. Bernstein serves as both our Chief Executive Officer and as one of the four members of our board of directors. Mr. Hausig is considered an independent director, but we do not have a “lead” independent director. The board of directors oversees our business affairs and monitors the performance of management. In accordance with our corporate governance principles, the board of directors does not involve itself in day-to-day operations. Our independent director keeps himself informed through discussions with our executive officers and by reading the reports and other materials that we send him and by participating in board of directors meetings. At the present stage of our company, our Board believes that in the context of risk oversight, with executive officers making up the majority of the Board, the Board gains valuable perspective that combines operational experience of a member of management with the oversight focus of a member of the Board.

We have not established any committees, including an Audit Committee, a Compensation Committee or a Nominating Committee, any committee performing a similar function. The functions of those committees are being undertaken by board of directors as a whole. Because we only have one independent director, we believe that the establishment of these committees would be more form over substance.

We do not have a policy regarding the consideration of any director candidates which may be recommended by our stockholders, including the minimum qualifications for director candidates, nor has our board of directors established a process for identifying and evaluating director nominees. Further, when identifying nominees to serve as director, while we do not have a policy regarding the consideration of diversity in selecting directors, at such time as we expand our Board, our Board will seek to create a board of directors that is strong in its collective knowledge and has a diversity of skills and experience with respect to accounting and finance, management and leadership, vision and strategy, business operations, business judgment, industry knowledge and corporate governance. We have not adopted a policy regarding the handling of any potential recommendation of director candidates by our stockholders, including the procedures to be followed. Our Board has not considered or adopted any of these policies as we have never received a recommendation from any stockholder for any candidate to serve on our board of directors. Given our relative size, we do not anticipate that any of our stockholders will make such a recommendation in the near future. While there have been no nominations of additional directors proposed, in the event such a proposal is made, all members of our Board will participate in the consideration of director nominees. In considering a director nominee, it is likely that our Board will consider the professional and/or educational background of any nominee with a view towards how this person might bring a different viewpoint or experience to our Board.

Ms. Babitt is considered an “audit committee financial expert” within the meaning of Item 407(d) of Regulation S-K. In general, an “audit committee financial expert” is an individual member of the audit committee or board of directors who:

●	understands generally accepted accounting principles and financial statements,
●	is able to assess the general application of such principles in connection with accounting for estimates, accruals and reserves,
●	has experience preparing, auditing, analyzing or evaluating financial statements comparable to the breadth and complexity to our financial statements,
●	understands internal controls over financial reporting, and
●	understands audit committee functions.

Our securities are not quoted on an exchange that has requirements that a majority of our Board members be independent and we are not currently otherwise subject to any law, rule or regulation requiring that all or any portion of our board of directors include “independent” directors, nor are we required to establish or maintain an Audit Committee or other committee of our board of directors.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE
Name and Principal Position	Year	Salary ($)		Bonus ($)		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)
David Bernstein, Chief Executive Officer (1)	2012		180,000		40,000		0		100,650		0		0		47,402		368,052
	2011		180,000		40,000		0		0		0		0		11,700		231,700

Vlad Stelmak, Chief Operating Officer (2)	2012		180,000		40,000		0		100,650		0		0		47,672		368,322
	2011		180,000		40,000		0		0		0		0		11,100		231,100

Gail L. Babitt (3)	2012		81,667		13,333		60,000		73,457		0		0		9,094		237,551

———————

(1) All other compensation in fiscal 2012 and fiscal 2011 represents the automobile allowance and health and dental insurance premiums paid for Mr. Bernstein, which he is entitled to under the terms of his employment agreement.

(2) All other compensation in fiscal 2012 and fiscal 2011 represents the automobile allowance and health and dental insurance premiums paid for Mr. Stelmak, which he is entitled to under the terms of his employment agreement.

(3) Ms. Babitt joined the company in January 2012. All other compensation in fiscal 2012 represents the automobile allowance and health and dental insurance premiums paid for Ms. Babitt, which she is entitled to under the terms of her employment agreement.

Employment agreements with our executive officers

We are a party to an employment agreement with each of our executive officers. The terms and conditions of these agreements are as follows:

Effective July 1, 2010 we entered into three year employment agreements with each of Messrs. Bernstein and Stelmak which superseded their prior agreements. Under the terms of these agreements, we pay each of them an annual salary of $180,000, and they are entitled to an annual bonus of 1% of our revenues up to a maximum of $40,000. Each of these executive officers is also entitled to a $925 per month automobile allowance and participation in all benefit programs we offer our employees. The agreements, which contain an automatic yearly renewal provision, contain customary confidentially and non-compete provisions. Each employee's employment may be terminated upon his death or disability and with or without cause. In the event we should terminate his employment upon his death or disability, he is entitled to his base salary for a period of one year from the date of termination. In the event we should terminate the agreement for cause or if he should resign, he is entitled to payment of his base salary through the date of termination. At our option we may terminate his employment without cause, in which event he is entitled to payment of his base salary and bonus through the date of termination together with one years’ salary payable over six months from the date of termination.

On December 22, 2011 we entered into a letter agreement with Ms. Babitt at the time we engaged her to serve as our Chief Financial Officer. Under the terms of the letter agreement, we agreed to pay her a base salary of $2,500 per week together with an additional $100 per hour for all hours in excess of 25 per week. We also granted her 333,334 shares of our common stock, vesting in four tranches between December 2011 and October 2012, and incentive options to purchase an additional 550,000 shares of our common stock at an exercise price of $0.36 per share, vesting in one thirds between December 2011 and December 2013. Under the terms of our agreement with Ms. Babitt, she was also entitled to participate in all company benefits including health care, retirement and discretionary bonuses, and we agree to reimburse her for certain pre-approved out of pocket expenses.

Effective March 1, 2012 we entered into a three year executive employment agreement with Ms. Babitt which replaced this letter agreement. Under the terms of the executive employment agreement, we agreed to pay Ms. Babitt an annual salary of $180,000, and she is entitled to an annual bonus of 1% of our revenues, not to exceed $40,000. Ms. Babitt is also entitled to a $925 per month automobile allowance and participation in all benefit programs we offer our employees. As additional compensation under the new employment agreement, we granted Ms. Babitt options to purchase 666,667 shares of our common stock, at an exercise price of $0.15 per share, vesting in arrears annually over four years, which are exercisable at the fair market value of our common stock on the date of grant. The agreement, which contain an automatic yearly renewal provision, contain customary confidentially and non-compete provisions. Ms. Babitt’s employment may be terminated upon her death or disability and with or without cause. In the event we should terminate her employment upon her death or disability, she is entitled to her base salary for a period of one year from the date of termination. In the event we should terminate the agreement for cause or if she should resign, she is entitled to payment of her base salary through the date of termination. At our option we may terminate her employment without cause, in which event she is entitled to payment of her base salary and bonus through the date of termination together with one years’ salary payable over six months from the date of termination.

On July 24, 2012, we entered into amendments to the employment agreements with David Bernstein, Vlad Stelmak and Gail Babitt, our executive officers. The terms of the amendments are identical for each executive officer. Under the terms of these amendments the annual base salary of each executive officer will be $220,000 per year. The executive officers will also receive an annual bonus of 1% of net sales, for all net sales in excess of $4,000,000. Under the terms of the amendment the executive’s automobile allowance will be $1,235 per month. Additionally, we agreed to reimburse the executive up to the maximum out-of-pocket health care expenses, representing the annual deductible, or portion thereof, and co-pays, excluding doctor’s visits and prescriptions, paid by the executive under our new health care insurance plan.

Outstanding equity awards at fiscal year-end

The following table provides information concerning unexercised options, stock that has not vested and equity incentive plan awards for each named executive officer outstanding as of June 30, 2012:

OPTION AWARDS										STOCK AWARDS
Name	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)		Option Exercise Price ($)		Option Expiration Date	Number of Shares or Units of Stock That Have Not Vested (#)		Market Value of Shares or Units of Stock That Have Not Vested ($)		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not Vested (#)		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (#)
David Bernstein		366,667		0		-		0.30	12/20/16		-		-		-		-
		0		283,334		-		0.30	12/20/17		-		-		-		-
		0		283,333		-		0.30	12/20/18		-		-		-		-

Vlad Stelmak		366,667		0		-		0.30	12/20/16		-		-		-		-
		0		283,334		-		0.30	12/20/17		-		-		-		-
		0		283,333		-		0.30	12/20/18		-		-		-		-
						-
Gail Babitt		183,334		0		-		0.36	12/22/16		-		-		-		-
		0		183,333		-		0.36	12/22/17		-		-		-		-
		0		183,333		-		0.36	12/22/18		-		-		-		-
		0		166,667		-		0.15	3/1/17		-		-		-		-
		0		166,667		-		0.15	3/1/18		-		-		-		-
		0		166,667		-		0.15	3/1/19		-		-		-		-
		0		166,666		-		0.15	3/1/20		-		-		-		-
		0		0		-		0	0		166,667		60,000		-		-

Limitation on Liability

Our Certificate of Incorporation and By-laws provide for the indemnification of our directors and officers to the fullest extent permitted by the Delaware General Corporation Law. Section 145 of the Delaware General Corporation Law permits a corporation, under specified circumstances, to indemnify its directors, officers, employees or agents against expenses, including attorney's fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by them in connection with any action, suit or proceeding brought by third parties by reason of the fact that they were or are directors, officers, employees or agents of the corporation, if such directors, officers, employees or agents acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reason to believe their conduct was unlawful. In a derivative action, i.e., one by or in the right of the corporation, indemnification may be made only for expenses actually and reasonably incurred by directors, officers, employees or agents in connection with the defense or settlement of any action or suit, and only with respect to a matter as to which they shall have acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made if such person shall have been adjudged liable to the corporation, unless and only to the extent that the court in which the action or suit was brought shall determine upon application that the defendant directors, officers, employees or agents are fairly and reasonably entitled to indemnity for such expenses despite such adjudication of liability. Our Certificate of Incorporation contains a provision which eliminates, to the fullest extent permitted by the Delaware General Corporation Law, director liability for monetary damages for breaches of the fiduciary duty of care or any other duty as a director.

Insofar as the limitation of, or indemnification for, liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, or persons controlling us pursuant to the foregoing, or otherwise, we have been advised that, in the opinion of the Securities and Exchange Commission, such limitation or indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

We are not a party to any related party transactions with our executive officers, directors or principal stockholders.

Director Independence

Mr. Hausig is considered independent within The NASDAQ Stock Market’s director independence standards pursuant to Marketplace Rule 5605.

PRINCIPAL STOCKHOLDERS

At September 10 2012, we had 36,190,238 shares of our common stock issued and outstanding. The following table sets forth information regarding the beneficial ownership of our common stock as of September 10 2012 by:

●	each person known by us to be the beneficial owner of more than 5% of our common stock;

●	each of our directors;

●	each of our named executive officers; and

●	our named executive officers and directors as a group.

Unless otherwise indicated, the business address of each person listed is in care of 17-09 Zink Place, Unit 1, Fair Lawn, NJ 07410. The percentages in the table have been calculated on the basis of treating as outstanding for a particular person, all shares of our common stock outstanding on that date and all shares of our common stock issuable to that holder in the event of exercise of outstanding options, warrants, rights or conversion privileges owned by that person at that date which are exercisable within 60 days of that date. Except as otherwise indicated, the persons listed below have sole voting and investment power with respect to all shares of our common stock owned by them, except to the extent that power may be shared with a spouse.

Name of Beneficial Owner	Amount and Nature of Beneficial Ownership		% of Class
David Bernstein 1		9,116,667		24.9	%
Vlad Stelmak 2		8,366,667		22.9	%
Gail L. Babitt 3		2,016,668		5.5	%
Richard Hausig 4		2,778	≤1		%
All officers and directors as a group (four persons) 1,2,3 and 4		19,502,780		52.6	%
John Esposito		2,944,234		8.1	%

____________

1 The number of shares beneficially owned by Mr. Bernstein includes options to purchase 366,667 shares of our common stock with an exercise price of $0.30 per share.

2 The number of shares beneficially owned by Mr. Stelmak includes options to purchase 366,667 shares of our common stock with an exercise price of $0.30 per share.

3 The number of shares beneficially owned by Ms. Babitt includes options to purchase 183,334 shares of our common stock with an exercise price of $0.36 per share.

4 The number of shares beneficially owned by Mr. Hausig includes options to purchase 2,778 shares of our common stock with an exercise price of $0.30 per share.

Securities Authorized for Issuance under Equity Compensation Plans

The following table sets forth securities authorized for issuance under any equity compensation plans approved by our stockholders as well as any equity compensation plans not approved by our stockholders as of June 30, 2012.

	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column
Plan category
Plans approved by our stockholders:
2010 Equity Compensation Plan		12,000,000	$	0.29		8,163,227
Plans not approved by stockholders		0	$	0		0

2010 Equity Compensation Plan

On June 28, 2010, our board of directors authorized our 2010 Equity Compensation Plan covering 12,000,000 shares of common stock. The plan was approved by our stockholders on June 28, 2010. The purpose of the plan is to enable us to offer to our employees, officers, directors and consultants, whose past, present and/or potential contributions to our company have been, are or will be important to our success, an opportunity to acquire a proprietary interest in our company. The 2010 Equity Compensation Plan is administered by our board of directors. Plan options may either be:

●

incentive stock options (ISOs),

●

non-qualified options (NSOs),

●

awards of our common stock, or

●

rights to make direct purchases of our common stock which may be subject to certain restrictions.

Any option granted under the 2010 Equity Compensation Plan must provide for an exercise price of not less than 100% of the fair market value of the underlying shares on the date of grant, but the exercise price of any ISO granted to an eligible employee owning more than 10% of our outstanding common stock must not be less than 110% of fair market value on the date of the grant. The plan further provides that with respect to ISOs the aggregate fair market value of the common stock underlying the options which are exercisable by any option holder during any calendar year cannot exceed $100,000. The term of each plan option and the manner in which it may be exercised is determined by the board of directors or the compensation committee, provided that no option may be exercisable more than 10 years after the date of its grant and, in the case of an incentive option granted to an eligible employee owning more than 10% of the common stock, no more than five years after the date of the grant. In the event of any stock split of our outstanding common stock, the board of directors in its discretion may elect to maintain the stated amount of shares reserved under the plan without giving effect to such stock split. Subject to the limitation on the aggregate number of shares issuable under the plan, there is no maximum or minimum number of shares as to which a stock grant or plan option may be granted to any person.

DESCRIPTION OF SECURITIES

Our authorized capital stock consists of 200,000,000 shares of common stock, $0.01 par value per share, and 5,000,000 shares of preferred stock, par value $0.01 per share. As of September 10, 2012, there were 36,190,238 shares of common stock and no shares of preferred stock issued and outstanding.

Common stock

Holders of common stock are entitled to one vote for each share on all matters submitted to a stockholder vote. Holders of common stock do not have cumulative voting rights. Holders of common stock are entitled to share in all dividends that the board of directors, in its discretion, declares from legally available funds. In the event of our liquidation, dissolution or winding up, subject to the preferences of any shares of our preferred stock which may then be outstanding, each outstanding share entitles its holder to participate in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over the common stock.

Holders of common stock have no conversion, preemptive or other subscription rights, and there are no redemption provisions for the common stock. The rights of the holders of common stock are subject to any rights that may be fixed for holders of preferred stock, when and if any preferred stock is authorized and issued. All outstanding shares of common stock are duly authorized, validly issued, fully paid and non-assessable.

Preferred stock

Our board of directors, without further stockholder approval, may issue preferred stock in one or more series from time to time and fix or alter the designations, relative rights, priorities, preferences, qualifications, limitations and restrictions of the shares of each series. The rights, preferences, limitations and restrictions of different series of preferred stock may differ with respect to dividend rates, amounts payable on liquidation, voting rights, conversion rights, redemption provisions, sinking fund provisions and other matters. Our board of directors may authorize the issuance of preferred stock, which ranks senior to our common stock for the payment of dividends and the distribution of assets on liquidation. In addition, our board of directors can fix limitations and restrictions, if any, upon the payment of dividends on our common stock to be effective while any shares of preferred stock are outstanding.

The rights granted to the holders of any series of preferred stock could adversely affect the voting power of the holders of common stock and issuance of preferred stock may delay, defer or prevent a change in our control.

12% Convertible Promissory Notes

In January 2011 and February 2011 we issued and sold $550,000 principal amount 12% convertible promissory notes in a private offering. The notes are unsecured and pay interest at 12% per annum, in arrears, in shares of our common stock valued at $0.30 per share. The notes mature on December 31, 2013, provided, however, that in our sole option we may extend the maturity date until December 31, 2014 if the note is not converted by December 31, 2013. The notes are convertible at any time at the option of the holder into shares of our common stock at a conversion price of $0.30 per share. At any time that the closing price of our common stock on any exchange on which it might be listed or in the over the counter market equals or exceeds $0.60 per share for 20 consecutive trading days, we have the right to convert the notes into shares of our common stock at a conversion price of $0.30 per share. The conversion price of the note is subject to proportional adjustment in the event of stock splits, dividends, recapitalizations and similar corporate events. On December 31, 2011 $60,937 of accrued interest was converted to 203,125 shares of common stock at $0.30. On January 17, 2012, one of the noteholders of the 12% convertible promissory notes converted $50,000 plus accrued interest of $263 into 167,544 shares of common stock. At June 30, 2012, we had $500,000 principal outstanding and $29,753 in accrued interest due under on the notes, which together are convertible into 1,765,848 shares of our common stock.

Common stock purchase warrants

Warrants Included in the 2010 Unit Offering

In October 2010, we closed the sale of 1,750,010 units of our securities which resulted in gross proceeds to us of $525,000. The securities issued in this 2010 unit offering included 1,750,010 shares of our common stock, Series A Warrants to purchase 1,750,010 shares of our common stock and Series B Warrants to purchase 1,750,010 shares of our common stock. Each Series A Warrant is exercisable into one share of common stock for three years from issuance at an exercise price of $0.45 per share. Each Series B Warrant is exercisable into one share of common stock for three years from issuance at an exercise price of $0.75 per share. The Series B Warrant is not exercisable by the holder unless the Series A Warrant has previously been exercised. The exercise price of the warrants and the number of shares of our common stock issuable upon the exercise of the warrants are subject to proportional adjustment in the event of stock splits, dividends, recapitalizations or similar transactions. Upon 30 days’ notice, we have the right to call any series of warrants at $0.01 per warrant at any time that the average 20-day last sale price exceeds 200% of the respective warrant exercise price. Other than the exercise price and call provisions of each series of warrant, and the restriction on the exercisability of the Series B Warrant, all other terms and conditions of the warrants are the same.

As partial compensation for the placement agent services in this offering, we issued to the designees of Forge Financial Group, Inc., a broker-dealer that served as placement agent for us in this offering, five-year warrants (the “2010 Placement Agent Warrants”) to purchase a 10% of the units sold in the 2010 unit offering at a purchase price of $0.30 per Placement Agent Warrant. The 2010 Placement Agent Warrants are exercisable on a cashless basis. The Series A Warrants and Series B Warrants included in the 2010 Placement Agent Warrants are also exercisable on a cashless basis for three years. The exercise price of the 2010 Placement Agent Warrants and the Series A and Series B Warrants included in the 2010 Placement Agent Warrants are subject to proportional adjustment for stock splits, dividends and similar corporate events.

Warrants Included in the 2011 Note Offering

In connection with the 12% convertible promissory notes offering described above, we issued the purchasers Series C Warrants to purchase an aggregate of approximately 733,335 shares of our common stock at an exercise price of $0.45 per share. The exercise price of the Series C warrant is subject to adjustment in the event of stock splits, dividends, recapitalizations and similar corporate events.

Forge Financial Group, Inc. also served as placement agent in the 2011 note offering. As partial compensation for its services to us, we issued its designees a five-year warrant (the “Note Placement Agent Warrants”) to purchase approximately 183,336 shares of our common stock and Series C warrants exercisable at $0.45 per share into approximately 73,335 shares of our common stock at a purchase price of $0.30 per Note Placement Agent Warrant. Both the Note Placement Agent Warrants and the Series C warrants included in the Note Placement Agent Warrants are exercisable on a cashless basis. The exercise price of the Note Placement Agent Warrants is subject to proportional adjustment for stock splits, dividends and similar corporate events.

Warrants Included in 2011 Unit Offering

In March 2011, we closed the sale of approximately 125,000 units of our securities which resulted in gross proceeds to us of $12,500. The securities issued in this 2010 unit offering included approximately 41,667 shares of our common stock, Series D Warrants to purchase approximately 41,667 shares of our common stock and Series E Warrants to purchase approximately 41,667 shares of our common stock. Each Series D Warrant is exercisable into one share of common stock for three years from issuance at an exercise price of $0.45 per share. Each Series E Warrant is exercisable into one share of common stock for three years from issuance at an exercise price of $0.75 per share. The Series E Warrant is not exercisable by the holder unless the Series D Warrant has previously been exercised. The exercise price of the warrants and the number of shares of our common stock issuable upon the exercise of the warrants are subject to proportional adjustment in the event of stock splits, dividends, recapitalizations or similar transactions. Upon 30 days’ notice, we have the right to call any series of warrants at $0.01 per warrant at any time that the average 20-day last sale price exceeds 200% of the respective warrant exercise price. Other than the exercise price and call provisions of each series of warrant, and the restriction on the exercisability of the Series E Warrant, all other terms and conditions of the warrants are the same.

As partial compensation for the placement agent services in this offering, we issued to the designees of Forge Financial Group, Inc., a broker-dealer that served as placement agent for us in this offering, five-year warrants (the “2011 Placement Agent Warrants”) to purchase a 10% of the units sold in the 2011 unit offering at a purchase price of $0.30 per share (the “2011 Placement Agent Warrant. The 2011 Placement Agent Warrants are exercisable on a cashless basis. The Series D Warrants and Series E Warrants included in the 2011 Placement Agent Warrants are also exercisable on a cashless basis for three years. The exercise price of the 2011 Placement Agent Warrants and the Series D and Series E Warrants included in the 2011 Placement Agent Warrants are subject to proportional adjustment for stock splits, dividends and similar corporate events.

Transfer agent

The transfer agent and registrar for our common stock is Pacific Stock Transfer Company, 4045 South Spencer Street, Suite 403, Las Vegas, Nevada 89119.

Stockholder Agreement

Five of our stockholders, including stockholders who purchased shares from us in a private offering in 2001, are subject to the terms of a Stockholder Agreement pursuant to which we have a right of first refusal to purchase these shares should the stockholder wish to sell the securities. This right of first refusal automatically terminates at such time as we undertake an initial public offering resulting in gross proceeds to us of at least $10 million.

SELLING SECURITY HOLDERS

At September 10, 2012 we had 36,190,238 shares of our common stock issued and outstanding. This prospectus relates to periodic offers and sales of up to 9,148,769 shares of our common stock by the selling security holders listed below and their pledgees, donees and other successors in interest, which underlie outstanding warrants held by the selling security holders, including:

●	2,133,733 shares which are presently outstanding;
●	2,266,668 shares issuable as interest payment and upon the possible conversion of the 12% convertible promissory notes, and
●	4,748,368 shares issuable upon the possible exercise of warrants with an exercise price ranging from $0.45 to $0.75 per share.

The following table sets forth:

●	the name of each selling security holder,
●	the number of common shares owned, and
●	the number of common shares being registered for resale by the selling security holder.

Information on beneficial ownership of securities is based upon a record list of our stockholders. We may amend or supplement this prospectus from time to time to update the disclosure set forth in this prospectus. All of the securities owned by the selling security holders may be offered hereby. Because the selling security holders may sell some or all of the securities owned by them, and because there are currently no agreements, arrangements or understandings with respect to the sale of any of the securities, no estimate can be given as to the number of securities that will be held by the selling security holders upon termination of any offering made hereby.

Name of Selling Security Holder	Number of Shares Owned		Shares to be offered		Shares to be owned after offering		Percentage to be owned after offering

David Berger 1		125,001		125,001		0	0
Miriam Booth 2		83,334		83,334		0	0
Joel Brody 2		83,334		83,334		0	0
James E. Buckley 1		125,001		125,001		0	0
Robert DeViron 1		125,001		125,001		0	0
Peter DuBois 1		125,001		125,001		0	0
Sten-Anders Fellman 3		500,002		250,002		250,000	≤1%
Anthony D. Ivankovich 4		2,111,052		1,111,052		1,000,000	2.8%
Frank Jichetti 2		83,334		83,334		0	0
Edward Kaczmarek Trust 5		83,334		83,334		0	0
Alfred J. Krzewina 1		125,001		125,001		0	0
Jeffrey Levine 6		166,668		166,668		0	0
Margaret Lewis 17		250,002		250,002		0	0
Byron Main 2		83,334		83,334		0	0
Jay Marcus 6		166,668		166,668		0	0
Philip Marquis and Francine Marquis, JTWROS 2		83,334		83,334		0	0
Kyia McFadden 2		83,334		83,334		0	0
Philip G. Meng 2		83,334		83,334		0	0
Graham Mitchell 17		250,002		250,002		0	0
Michael Shaevitz and Susan Shaevitz, JTWROS 2		83,334		83,334		0	0
Gerald Sperling and Seena Sperling, JTWROS 7		333,526		333,526		0	0
Lewis W. Tabb, III 1		125,001		125,001		0	0
Orin J. Whatley 2		83,334		83,334		0	0
Donald Wray 8		2,395,071		2,395,071		0	0
Edward Feighan 9		1,031,216		1,031,216		0	0
Ira Krell 2		83,334		83,334		0	0
Jared Schwalb 10		371,652		371,652		0	0
Alan Jacobs and Susan Jacobs, JTWROS 11		136,836		136,836		0	0
Michael Jacobs 11		136,836		136,836		0	0
Andrew Garbarini 12		64,837		64,837		0	0
Robert Beeman 13		86,667		86,667		0	0
Vincent Marra 14		5,001		5,001		0	0
Amy Keebler 15		3,448		3,448		0	0
Howard Mofshin 16		439,270		439,270		0	0
Joseph Conti		116,667		116,667		0	0
Susan Schneider		40,000		40,000		0	0
Steven I. Weinberger		41,667		41,667		0	0
Roxanne K. Beilly		41,667		41,667		0	0
Ella Chesnutt		41,667		41,667		0	0
Sydney Monda		1,667		1,667		0	0
Total				9,148,769

———————

1	The number of shares owned and offered includes 41,667 shares which are presently outstanding and 83,334 shares issuable upon the exercise of warrants.

2	The number of shares owned and offered includes 83,334 shares issuable upon the exercise of warrants.

3	The number of shares owned includes 333,334 shares which are presently outstanding and 166,668 shares issuable upon the exercise of warrants. The number of shares offered includes 83,334 shares which are presently outstanding and 166,668 shares issuable upon the exercise of warrants.

The number of shares owned includes 1,044,384 shares which are presently outstanding, 566,667 issuable as interest and upon conversion of a 12% convertible promissory note and 500,001 shares issuable upon the exercise of warrants. The number of shares offered includes 44,384 shares which are presently outstanding, 566,667 issuable as interest and upon conversion of a 12% convertible promissory note and 500,001 shares issuable upon the exercise of warrants.

5	The number of shares owned and offered includes 83,334 shares issuable upon the exercise of warrants. Mr. Edward Kaczmarek, as trustee, holds voting and dispositive control over securities held of record by the trust.

6	The number of shares owned and offered includes 166,668 shares issuable upon the exercise of warrants.

7	The number of shares owned and offered includes 152,064 shares which are presently outstanding and 181,462 shares issuable upon the exercise of warrants.

The number of shares owned and offered includes 95,069 shares which are presently outstanding, 1,133,334 issuable as interest and upon conversion of a 12% convertible promissory note and 1,166,688 shares issuable upon the exercise of warrants. Certain of these securities are held as joint tenants with his wife, Linda.

9	The number of shares owned and offered includes 231,215 shares which are presently outstanding, 566,667 issuable as interest and upon conversion of a 12% convertible promissory note and 233,334 shares issuable upon the exercise of a warrant.

10	The number of shares owned and offered includes 183,684 shares which are presently outstanding and 187,968 shares issuable upon the exercise of warrants.

11	The number of shares owned and offered includes 60,668 shares which are presently outstanding 76,168 shares issuable upon the exercise of warrants.

12	The number of shares owned and offered includes 25,168 shares which are presently outstanding and 39,669 shares issuable upon the exercise of warrants.

13	The number of shares owned and offered includes 56,667 shares which are presently outstanding and 30,000 shares issuable upon the exercise of warrants.

14	The number of shares owned and offered includes 1,667 shares issuable upon the exercise of placement agent warrants and 3,334 shares issuable upon the exercise of warrants.

15	The number of shares owned and offered includes 1,505 shares which are presently outstanding and 1,943 shares issuable upon the exercise of warrants.

16	The number of shares owned and offered includes 437,635 shares which are presently outstanding and 1,635 shares issuable upon the exercise of warrants.

17	The number of shares owned and offered includes 83,334 shares which are presently outstanding and 166,668 shares issuable upon the exercise of warrants.

None of the selling security holders are broker-dealers or affiliates of broker-dealers, other than Messrs. Alan Jacobs, Michael Jacobs, Conti, Garbarini, Beeman, Schwalb and Marra, and Ms. Keebler who were employees of Forge Financial Group, Inc. Forge Financial Group, Inc. received shares of our common stock as compensation for consulting services and placement agent warrants for its services in the ordinary course of its business as the placement agent for our 2010 unit offering, our 2011 note offering and our 2011 unit offering. Forge Financial Group, Inc. transferred a portion of the warrants it received from us as compensation to Messrs. Alan Jacobs, Michael Jacobs, Conti, Garbarini, Beeman, Schwalb and Marra, and Ms. Keebler as compensation to them in the regular course of their employment with that firm. At the time of the receipt of the warrants, neither Messrs. Alan Jacobs, Michael Jacobs, Conti, Garbarini, Beeman, Schwalb and Marra, nor Ms. Keebler had any agreement or understanding, directly or indirectly, with any person to distribute those securities. None of the selling security holders has, or within the past three years has had, any position, office or other material relationship with us or any of our predecessors or affiliates, other than as described previously in this section.

We have agreed to pay full costs and expenses, incentives to the issuance, offer, sale and delivery of the shares, including all fees and expenses in preparing, filing and printing the registration statement and prospectus and related exhibits, amendments and supplements thereto and mailing of those items. We will not pay selling commissions and expenses associated with any sale by the selling security holders.

PLAN OF DISTRIBUTION

Each selling security holder and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their shares of common stock covered hereby on the OTC Bulletin Board or any other stock exchange, market or trading facility on which the shares are traded or in private transactions. These sales may be at fixed or negotiated prices. A selling security holder may use any one or more of the following methods when selling shares:

●	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
●	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
●	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
●	an exchange distribution in accordance with the rules of the applicable exchange;
●	privately negotiated transactions;
●	settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a part;
●	in transactions through broker-dealers that agree with the selling security holders to sell a specified number of such shares at a stipulated price per share;
●	through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
●	a combination of any such methods of sale; or
●	any other method permitted pursuant to applicable law.

The selling security holders may also sell shares under Rule 144 under the Securities Act of 1933 if available, rather than under this prospectus.

Broker-dealers engaged by the selling security holders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the selling security holders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with FINRA IM-2440.

In connection with the sale of the common stock or interests therein, the selling security holders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the common stock in the course of hedging the positions they assume. The selling security holders may also sell shares of the common stock short and deliver these securities to close out their short positions, or loan or pledge the common stock to broker-dealers that in turn may sell these securities. The selling security holders may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

The selling security holders and any broker-dealers or agents that are involved in selling the shares may be deemed to be “underwriters” within the meaning of the Securities Act of 1933 in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act of 1933. Each selling stockholder has informed us that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the common stock.

We are required to pay certain fees and expenses incurred by us incident to the registration of the shares.

Because selling security holders may be deemed to be “underwriters” within the meaning of the Securities Act of 1933, they will be subject to the prospectus delivery requirements of the Securities Act of 1933 including Rule 172 thereunder. The selling security holders have advised us that there is no underwriter or coordinating broker acting in connection with the proposed sale of the resale shares by the selling security holders.

The resale shares will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale shares of common stock covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

Under applicable rules and regulations under the Securities Exchange Act of 1934, any person engaged in the distribution of the resale shares may not simultaneously engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the selling security holders will be subject to applicable provisions of the Securities Exchange Act of 1934 and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of shares of the common stock by the selling security holders or any other person. We will make copies of this prospectus available to the selling security holders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act of 1933).

LEGAL MATTERS

The validity of the securities offered by this prospectus will be passed upon for us by Pearlman Schneider LLP, 2200 Corporate Boulevard, N.W., Suite 210, Boca Raton, Florida 33431. Members and affiliates of Pearlman Schneider LLP are the owners of 83,334 shares of our common stock which are included in the shares of our common stock offered hereby.

EXPERTS

Our financial statements as of and for the years ended June 30, 2012 and 2011 included in this prospectus have been audited by Sherb & Co. LLP, independent registered public accounting firm, as indicated in their report with respect thereto, and have been so included in reliance upon the report of such firm given on their authority as experts in accounting and auditing.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We have filed with the Securities and Exchange Commission the registration statement on Form S-1 under the Securities Act of 1933 for the common stock offered by this prospectus. This prospectus, which is a part of the registration statement, does not contain all of the information in the registration statement and the exhibits filed with it, portions of which have been omitted as permitted by Securities and Exchange Commission rules and regulations. For further information concerning us and the securities offered by this prospectus, we refer to the registration statement and to the exhibits filed with it. Statements contained in this prospectus as to the content of any contract or other document referred to are not necessarily complete. In each instance, we refer you to the copy of the contracts and/or other documents filed as exhibits to the registration statement.

This registration statement on Form S-1, including exhibits, is available over the Internet at the Securities and Exchange Commission’s web site at http://www.sec.gov. You may also read and copy any document we file with the Securities and Exchange Commission at its public reference facilities:

Public Reference Room Office

100 F Street, N.E.

Room 1580

Washington, D.C. 20549

You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the Securities and Exchange Commission at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Callers in the United States can also call 1-202-551-8090 for further information on the operations of the public reference facilities.

AnythingIT, Inc.

Index to Financial Statements

	Page
	No.


Report of Independent Registered Public Accounting Firm		F-2

Balance Sheets at June 30, 2012 and 2011		F-3

Statements of Operations For the Years Ended June 30, 2012 and 2011		F-4

Statements of Cash Flows For the Years Ended June 30, 2012 and 2011		F-5

Statements of Changes of Stockholders’ Equity at June 30, 2012		F-6

Notes to Financial Statements -		F-7 - F-23

F-1

7900 Glades Road, Suite 540

Boca Raton, Florida 33434

Tel. 561-886-4200

Fax. 561-886-3330

e-mail:info@sherbcpa.com

Offices in New York and Florida

Certified Public Accountants

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors

AnythingIT, Inc.

We have audited the accompanying balance sheets of AnythingIT, Inc. as of June 30, 2012 and 2011 and the related statements of operations, changes in stockholders’ equity and cash flows for the years ended June 30, 2012 and 2011. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used, and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the statements referred to above present fairly, in all material respects, the financial position of AnythingIT, Inc. as of June 30, 2012 and 2011, and the results of their operations and their cash flows for the years ended June 30, 2012 and 2011 in conformity with accounting principles generally accepted in the United States of America.

/s/ Sherb & Co., LLP

Certified Public Accountants

Boca Raton, Florida

August 16, 2012

F-2

AnythingIT, Inc.

Balance Sheets

As of June 30, 2012 and 2011

	2012			2011

ASSETS
Current assets
Cash and cash equivalents	$	1,039,967		$	1,270,721
Accounts receivable, net of allowance for doubtful		674,606			372,031
Inventories		141,087			369,489
Deferred financing costs		27,986			54,045
Prepaid expenses and other current assets		43,617			35,755
Total current assets		1,927,263			2,102,041

Property and equipment, net of accumulated depreciation		189,361			165,591

Deferred financing costs		-			26,053
Security deposits		10,403			10,403
Total assets	$	2,127,027		$	2,304,088

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Accounts payable	$	706,881		$	1,131,343
Accrued expenses		148,952			196,645
Customer deposits		19,020			16,176
Current portion of capital lease payable		18,640			32,541
Deferred revenues		103,114			49,815
Current portion of notes payable		40,031			45,811
Total current liabilities		1,036,638			1,472,331

Capital lease payable		-			18,640

Long term debt:
Note payable bank		28,644			32,245
Convertible notes payable net of debt discount of $48,294 and $131,083, respectively		451,706			418,917
Total long-term debt		480,350			469,802

Total Liabilities		1,516,988			1,942,133

Stockholders' Equity
Preferred stock - $.01 par value
5,000,000 shares authorized; none outstanding		-			-
Common stock - $.01 par value
200,000,000 shares authorized;
36,190,238 and 34,819,546 shares issued and outstanding, respectively		361,902			348,196
Additional paid-in capital		7,800,900			7,056,675
Accumulated deficit		(7,552,763	)		(7,042,916	)
Total stockholders' equity		610,039			361,955
Total liabilities and stockholders' equity	$	2,127,027		$	2,304,088

See accompanying notes to financial statements.

F-3

AnythingIT, Inc.

Statements of Operations

For the Years Ended June 30, 2012 and 2011

	2012			2011


Net sales	$	6,176,379		$	4,472,195
Cost of sales		3,071,139			2,641,906
Gross profit		3,105,240			1,830,289

Operating Expenses
Selling, general and administration		3,418,504			2,149,246

Operating loss		(313,264	)		(318,957	)

Other income (expense) :
Interest expense, net of interest income of
$6,098 and $7,314, respectively		(196,583	)		(96,982	)

Loss before income taxes		(509,847	)		(415,939	)

Provision for income taxes		-			-

Net loss	$	(509,847	)	$	(415,939	)


Net loss per common share:
Basic	$	(0.01	)	$	(0.01	)
Fully diluted	$	(0.01	)	$	(0.01	)

Weighted average common shares outstanding basic		35,476,020			34,251,666
Weighted average common shares outstanding diluted		35,476,020			34,251,666

See accompanying notes to financial statements.

F-4

AnythingIT, Inc.

Statements of Cash Flows

For the Years Ended June 30, 2012 and 2011

	2012			2011

OPERATING ACTIVITIES
Net loss	$	(509,847	)	$	(415,939	)
Adjustments to reconcile net loss from operations to
net cash provided by (used in)operating activities
Depreciation		56,934			47,706
Amortization of debt discount		82,789			34,496
Amortization of deferred financing costs		52,112			24,116
Change in allowance for doubtful accounts		(1,010	)		8,698
Amortization of stock based compensation		646,731			-
Change in operating assets and liabilities
Accounts receivable		(301,565	)		(147,236	)
Inventories		228,402			(315,354	)
Prepaid expenses and other current assets		(7,860	)		(6,166	)
Accounts payable		(424,462	)		635,451
Accrued expenses		13,507			99,040
Customer deposits		2,844			(80,172	)
Deferred revenues		53,299			25,495
Net cash used in operating activities		(108,126	)		(89,865	)

INVESTING ACTIVITIES
Purchases of property and equipment		(80,706	)		(94,923	)
Net cash used in investing activities		(80,706	)		(94,923	)
FINANCING ACTIVITIES
Common stock issued for cash, net of costs		-			481,150
Proceeds from convertible notes payable, net of costs		-			495,000
Payments on capital leases		(32,541	)		(27,947	)
Payments to related party		-			(21,000	)
Payments on notes payable		(9,381	)		(10,336	)
Net cash provided by (used in) financing activities		(41,922	)		916,867

Net (decrease)/increase in cash and cash equivalents		(230,754	)		732,079

Cash and cash equivalents at beginning of year		1,270,721			538,642

Cash and cash equivalents at end of year	$	1,039,967			1,270,721

SUPPLEMENTAL CASH FLOW INFORMATION
Cash payments during the year for :
Interest	$	7,024		$	7,434
Income taxes	$	3,576		$	5,855

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING:
Stock issued to pay interest on notes	$	61,200		$	-

See accompanying notes to financial statements.

F-5

AnythingIT, Inc.

Statements of Changes in Stockholders' Equity

									Additional						Treasury
	Preferred Stock				Common Stock				Paid-in			Accumulated			Stock			Total
	Shares		Amount		Shares		Amount		Capital			Deficit			(at cost)			Equity

Balance at June 30, 2010		-	$	-		33,027,879	$	330,279	$	6,453,325		$	(6,626,977	)	$	(74,676	)	$	81,951
Sale of common stock, net of costs		-		-		1,791,667		17,917		463,233			-			-			481,150
Cancellation of treasury stock		-		-		-		-		(74,676	)		-			74,676			-
Beneficial conversion warrants		-		-		-		-		165,579			-			-			165,579
Placement agent warrants		-		-		-		-		49,214			-			-			49,214
Net loss		-		-		-		-		-			(415,939	)		-			(415,939	)
Balance at June 30, 2011		-	$	-		34,819,546	$	348,196	$	7,056,675		$	(7,042,916	)		-		$	361,955
Conversion of convertible notes		-		-		167,544		1,675		48,588			-			-			50,263
Issuance of common stock for interest		-		-		203,125		2,031		58,906			-			-			60,937
Issuance of common stock for compensation		-		-		1,000,001		10,000		310,000			-			-			320,000
Additional shares from reverse stock split		-		-		22		-		-			-						-
Grant of stock options		-		-		-		-		326,731			-			-			326,731
Net loss													(509,847	)					(509,847	)
Balance at June 30, 2012		-	$	-		36,190,238	$	361,902	$	7,800,900		$	(7,552,763	)	$	-		$	610,039

See accompanying notes to financial statements.

F-6

ANYTHINGIT, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 1. – DESCRIPTION OF OUR BUSINESS.

AnythingIT, Inc. (the “Company”) is a provider of green technology solutions, managing the equipment disposition needs of our government and commercial clients by buying, reselling, or recycling, in an environmentally and regulatory compliant manner, computers and other technology hardware. By delivering cost effective asset management solutions and capitalizing on our knowledge and relationships in the industry, we believe that we are able to maximize the technology dollars of our clients.

Additionally, we are focused on partnering with veterans either through providing employment opportunities directly or through our continuing support of Work Vessels For Veterans.

The Company maintains its principal office in Fair Lawn, New Jersey.

NOTE 2. – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.

Basis of Presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

All share and per share information contained in this report gives retroactive effect to a 50 for 1 (50:1) forward stock split of our outstanding common stock effective June 23, 2010 and a 1 for 3 (1:3) reverse stock split of our outstanding common stock effective June 12, 2012.

Certain amounts in the prior period financial statements have been reclassified to conform to current year presentation.

Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with US GAAP 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.

Significant estimates for the periods reported include the allowance for doubtful accounts which is based on an evaluation of our outstanding accounts receivable including the age of amounts due, the financial condition of our specific customers, knowledge of our industry segment and historical bad debt experience. This evaluation methodology has proved to provide a reasonable estimate of bad debt expense in the past and the Company intends to continue to employ this approach in our analysis of collectability.

Assumptions and estimates employed in these areas are material to our reported financial conditions and results of operations. Actual results could differ from these estimates.

F-7

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The credit risk associated with cash equivalents is considered low due to the credit quality of the issuers of the financial instruments.

Concentration of Credit Risk

The Company maintains cash in financial institutions insured by the Federal Deposit Insurance Corporation (“FDIC”), including non-interest bearing transaction account deposits protected in full by the Dodd-Frank Wall Street and Consumer Protection Act (the “Dodd-Frank Act”). As of June 30, 2012 and June 30, 2011, the Company had approximately $400,000 and $705,000 that exceeds the protected limits under FDIC and the Dodd-Frank Act. The Company had not experienced any losses in such accounts.

Significant Customers

During the year ended June 30, 2012 sales to three customers represented $2,845,620 (46%) of the Company’s revenue. During the year ended June 30, 2011 sales to three customers represented $2,042,428 (42%) of the Company’s revenue. As of June 30, 2012 and 2011, the Company had two customers representing approximately 37% of gross accounts receivable at that date.

Allowance for Doubtful Accounts

The Company maintains an allowance for doubtful accounts based on the expected collectability of its accounts receivable. The Company performs credit evaluations of significant customers and establishes an allowance for doubtful accounts based on the aging of receivables, payment performance factors, historical trends and other information. In general, the Company reserves 2% of the receivables outstanding 31 to 60 days, 5% of the receivables outstanding 61 to 90 days and 20% of the receivables outstanding more than 90 days. The Company evaluates and revises the reserve on a quarterly basis based on a review of specific accounts outstanding and our history of uncollectible accounts. As of June 30, 2012 and 2011, the Company recorded $64,065 and $65,075, respectively of allowance for doubtful accounts.

Inventories

Inventories, consisting of used computer equipment, is stated at the lower of cost or market. Cost is determined by the amount the Company pays for each specific unit in inventory. The Company reviews inventory for excess or obsolete inventory and writes-down obsolete or otherwise unmarketable inventory to its estimated net realizable value. No allowance is necessary at June 30, 2012 and 2011.

Unprocessed inventory is shipped to the Company’s facilities and is considered to be end-of-life. The Company does not place a valuation on unprocessed inventory until it is received into the processing queue whereby it is tested and inventoried. Only after this process occurs can the Company provide final valuation in the form of purchase orders for equipment acquisitions and issue a Certificate of Indemnification confirming transfer of ownership and liability. This process can take between 30 to 60 days from the time of receipt to the Company’s warehouse.

F-8

Property and equipment

The Company records property, equipment and leasehold improvements at historical cost. Expenditures for maintenance and repairs are recorded to expense; additions and improvements are capitalized. The Company generally provides for depreciation using the straight-line method at rates that approximate the estimated useful lives of the assets. Leasehold improvements are amortized on a straight-line basis over remaining term of the lease of twelve years.

Asset Classification	Estimated Useful Life (years)
Computers and software		3
Equipment		5
Furniture and fixtures	5 to 7

	June 30, 2012			June 30, 2011
Software	$	185,081		$	119,959
Furniture and Fixtures		89,779			84,459
Equipment		85,365			85,365
Capital Leased Equipment		139,737			139,737
Leasehold improvements		79,251			68,989
Less: Accumulated depreciation		(389,852	)		(332,918	)
Propert and Equipment, net	$	189,361		$	165,591

Depreciation for the years ended June 30, 2012 and 2011 was $56,934 and $47,706, respectively.

Revenue Recognition

For product sales, the Company recognizes revenue at the time products are shipped and title is transferred, which is in accordance with the stated shipping terms. Revenue is recognized in accordance with these shipping terms so long as a purchase order, electronic, written or phone commitment has been received or a contract has been executed, there are no uncertainties regarding customer acceptance, the sales price is fixed and determinable and collectability is deemed probable. If uncertainties exist regarding customer acceptance or collectability, revenue is recognized when those uncertainties have been resolved. The Company provides a limited as-is warranty on some of its products. The Company analyzes its estimated warranty costs and provides an allowance as necessary, based on experience. At June 30, 2012 and June 30, 2011, a warranty reserve was not considered necessary.

The Company is party to brokered transactions whereby an upstream customer provides product to the Company if the parameters of the transactions can be satisfied. Based upon the upstream customer parameters and the nature of the risk and control of the transaction by the Company these sales may be recorded on a gross or net basis.

Asset management fees are recognized once the services have been performed and the results reported to the upstream customer. In those circumstances where the Company disposes of the upstream customer’s product, or purchases the product from the upstream customer for resale, revenue is recognized as a “product sale” described above.

F-9

Shipping and Handling Costs

Shipping costs are included in cost of sales, offset by amounts charged to customers for shipping.

Cost of Sales

Cost of sales includes cost of equipment, testing, freight, warehouse salaries, and technicians.

Earnings Per Share

The Company adopted FASB ASC 260 , Earnings Per Share . Basic earnings (loss) per share is based on the weighted effect of all common shares issued and outstanding and is calculated by dividing net income (loss) available to common stockholders by the weighted average shares outstanding during the period. Diluted earnings per share is calculated by dividing net income available to common stockholders by the weighted average number of common shares used in the basic earnings per share calculation plus the number of common shares, if any, that would be issued assuming conversion of all potentially dilutive securities outstanding

Shares potentially issuable were as follows:

	June 30, 2012		June 30, 2011

Stock Options		3,503,339		-
Warrants		5,110,876		5,110,876
Convertible Notes		1,765,848		1,925,553
		10,380,063		7,036,429

For the years ended June 30, 2012 and 2011 the Company had a net loss. The impact of additional shares would be anti-dilutive, and, as such, the basic and diluted shares are the same for those periods.

Income Taxes

Under the asset and liability method prescribed under ASC 740, Income Taxes , The Company uses the liability method of accounting for income taxes. The liability method measures deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts on the financial statements. The resulting deferred tax assets or liabilities are adjusted to reflect changes in tax laws as they occur. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized.

The Company recognizes the financial statement benefit of an uncertain tax position only after considering the probability that a tax authority would sustain the position in an examination. For tax positions meeting a "more-likely-than-not" threshold, the amount recognized in the financial statements is the benefit expected to be realized upon settlement with the tax authority. For tax positions not meeting the threshold, no financial statement benefit is recognized. As of June 30, 2012 and 2011, the Company has had no uncertain tax positions. The Company recognizes interest and penalties, if any, related to uncertain tax positions as general and administrative expenses. The Company currently has no federal or state tax examinations nor has it had any federal or state examinations since its inception. All of the Company's tax years are subject to federal and state tax examination.

F-10

Share-Based Payments

The Company recognizes share-based compensation expense in connection with our share-based awards, net of an estimated forfeiture rate and therefore only recognizes compensation cost for those awards expected to vest over the service period of the award. The Company accounts for the grant of stock and warrants awards in accordance with ASC Topic 718, Compensation – Stock Compensation (ASC 718). ASC 718 requires companies to recognize in the statement of operations the grant-date fair value of warrants and stock options and other equity based compensation. The Company utilizes a Black-Scholes option pricing model to estimate the fair value of our stock options. Calculating share-based compensation expense requires the input of highly subjective judgment and assumptions, including estimates of expected life of the award, stock price volatility, forfeiture rates and risk-free interest rates. The assumptions used in calculating the fair value of share-based awards represent our best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and the Company uses different assumptions, our share-based compensation expense could be materially different in the future.

For the years ending June 30, 2012 and 2011, total stock-based compensation was $646,731 and $0, respectively. The Company granted 2,893,338 stock options and issued 333,334 restricted shares of common stock in December 2011. In March 2012, the Company granted 666,667 stock options and in January 2012, the Company granted 666,667 restricted shares of common stock.

Financial Instruments

The Company adopted FASB ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for fair value to be applied to existing US GAAP that require the use of fair value measurements which establishes a framework for measuring fair value and expands disclosure about such fair value measurements.

ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized below:

Level 1:	Observable inputs such as quoted market prices in active markets for identical assets or liabilities
Level 2:	Observable market-based inputs or unobservable inputs that are corroborated by market data
Level 3:	Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions.

The carrying amounts reported in the balance sheet for accounts receivable, prepaid expenses and other current assets, accounts and notes payable, accrued interest and expenses, and customer deposits approximates fair market value based on the short-term maturity of these instruments.

In addition, FASB ASC 825-10-25 “Fair Value Option” was effective January 1, 2008. ASC 825-10-25 expands opportunities to use fair value measurements in financial reporting and –permits entities to choose to measure many financial instruments and certain other items at fair value..

Advertising

Advertising costs are charged to operations when incurred. During the years ended June 30, 2012 and 2011, the Company incurred $10,801 and $109, respectively in advertising expense.

Reclassifications

Certain prior period balances have been reclassified to conform to the current year’s presentation. These reclassifications had no impact on previously reported results of operations or stockholders’ equity. In addition to standard balance sheet and income statement reclassifications, the Company had reclassifications to capital leases of equipment leased previously categorized as operating leases, with consistent application in all periods. Additionally, the Company has determined a few of its sales contracts should be treated as agency sales and as such reported on a net revenue versus gross revenues basis, consistently applied. The Company did not deem any of these reclassifications to be material.

F-11

New Accounting Standards

The Company has adopted all recently issued accounting pronouncements. The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.

In May 2011, FASB issued Accounting Standards Update (“ASU”) No. 2011-04, “Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS” (“ASU No. 2011-04”). ASU No. 2011-04 provides guidance which is expected to result in common fair value measurement and disclosure requirements between U.S. GAAP and IFRS. It changes the wording used to describe many of the requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. It is not intended for this update to result in a change in the application of the requirements in Topic 820. The amendments in ASU No. 2011-04 are to be applied prospectively. ASU No. 2011-04 is effective for public company for interim and annual periods beginning after December 15, 2011. Early application is not permitted. This update does not have a material impact on the Company’s consolidated financial statements.

In June 2011, the FASB issued ASU No. 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income” (“ASU No. 2011-05”). In ASU No. 2011-05, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. The amendments in ASU No. 2011-05 do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. They also do not change the presentation of related tax effects, before related tax effects, or the portrayal or calculation of earnings per share. The amendments in ASU No. 2011-05 should be applied retrospectively. The amendment is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted, because compliance with the amendments is already permitted. The amendments do not require any transition disclosures. This update does not have a material impact on the Company’s consolidated financial statements.

In September 2011, the FASB issued ASU No. 2011-08, “Intangibles — Goodwill and Other (Topic 350)” (“ASU No. 2011-08”). In ASU No. 2011-08, an entity is permitted to make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step goodwill impairment test. If an entity concludes that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it would not be required to perform the two-step impairment test for that reporting unit. The ASU’s objective is to simplify how an entity tests goodwill for impairment. The amendments in ASU No. 2011-08 are effective for annual and interim goodwill and impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011, if an entity’s financial statements for the most recent annual or interim period have not yet been issued. The Company is evaluating the requirements of ASU No. 2011-08 and has not yet determined whether a revised approach to evaluation of goodwill impairment will be used in future assessments. This update does not have a material impact on the Company’s consolidated financial statements.

On December 31, 2011, the FASB issued ASU No. 2011-11, “Disclosures about Offsetting Assets and Liabilities”, which requires new disclosures about balance sheet offsetting and related arrangements. For derivatives and financial assets and liabilities, the ASU requires disclosure of gross asset and liability amounts, amounts offset on the balance sheet, and amounts subject to the offsetting requirements but not offset on the balance sheet. The ASU is effective for annual reporting periods beginning on or after January 1, 2013. The Company is currently evaluating the impact, if any, that these updates will have on its financial condition, results of operations and cash flows. This update is not expected to have a material impact on the Company’s financial statements.

Other accounting standards that have been issued or proposed by the FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption.

F-12

NOTE 3. - ACCOUNTS RECEIVABLE.

Accounts receivable consisted of the following at June 30, 2012 and 2011:

	June 30, 2012			June 30, 2011

Accounts receivable	$	738,671		$	437,106
Less: allowance for doubtful accounts		(64,065	)		(65,075	)
Accounts receivable, net	$	674,606		$	372,031

NOTE 4. - INVENTORIES.

Inventories consisted of finished goods at June 30, 2012 and 2011. At June 30, 2012 and 2011, the balance is $141,087 and $369,489, respectively.

NOTE 5. – CAPITAL LEASE OBLIGATIONS.

The Company has entered into several capital lease obligations to purchase equipment for operations. The Company has the option to purchase the equipment at the end of the lease agreement for one dollar. The underlying assets and related depreciation were included in the appropriate fixed asset category and related depreciation account.

Property and equipment includes the following amounts for leases that have been capitalized as of June 30, 2012 and 2011:

	Useful Life (Years)		June 30, 2012			June 30, 2011

Equipment		5	$	60,523		$	60,523
Software		5		79,214			79,214
				139,737			139,737
Acumulated Depreciation				(125,058	)		(97,110	)
			$	14,679		$	42,627

F-13

Future minimum payments required under capital leases at June 30, 2012, are as follows:

	June 30, 2012

FY 2013	$	19,397
Thereafter		-

Total future payments		19,397
Less: Amount representing interest		757

Present value of future minimum payments		18,640
Less: Current portion		18,640

Long term portion	$	-

NOTE 6. – RELATED PARTY TRANSACTIONS.

Amounts outstanding under a loan and credit line from a bank (Note 8) are personally guaranteed by officers of the Company.

In February 2010 the Company entered into a Stock Purchase Agreement with a founder and member of our Board of Directors. Under the terms of the agreement, the Company repurchased 5,000,000 shares of our common stock owned by him for $45,000, of which $10,000 was paid on the date of the agreement and the balance was paid in 10 equal monthly installments of $3,500 through December 2010. The balance at June 30, 2012 and 2011 was $0. The shares which were repurchased included his original holdings in our Company together with 833,334 shares issued to him in August 2008 as compensation for services as a member of our Board of Directors. The 5,000,000 shares have been cancelled and returned to the status of authorized but unissued shares of our common stock.

NOTE 7. – ACCRUED EXPENSES.

Accrued expenses represent obligations that apply to the reported period and have not been billed by the provider or paid by the Company.

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

	June 30, 2012		June 30, 2011
Accrued interest	$	29,753	$	30,197
Wages and vacation		66,915		46,752
Commission		11,945		55,941
Professional fees		40,000		61,903
Other		339		1,852
	$	148,952	$	196,645

F-14

NOTE 8. – LONG TERM DEBT.

Loan Payable – TD Banknorth

On July 2, 2001 the Company entered into a loan agreement for the principal amount of $100,000, maturing in October 2028 payable with varying monthly installments including interest at approximately 5.25% per annum, secured by all assets of the Company. At June 30, 2012 and 2011, the balance is $33,498 and $37,036, respectively.

Line of Credit Payable – American Express

The Company obtained a Business Capital line from American Express in the amount of $63,200. The line is payable in varying monthly installments including interest at approximately 9.49% per annum. The line is secured by all assets of the Company. At June 30, 2012 and 2011, the balance is $35,177 and $41,020, respectively.

12% Convertible Promissory Notes

In January and February 2011 the Company issued and sold $550,000 principal amount 12% convertible promissory notes in a private offering resulting in net proceeds of $495,000. The notes are unsecured and pay interest at 12% per annum, in arrears, in shares of our common stock valued at $0.30 per share. The notes mature on December 31, 2013, provided, however , that in our sole option we may extend the maturity date until December 31, 2014 if the note is not converted by December 31, 2013. The notes are convertible at any time at the option of the holder into shares of our common stock at a conversion price of $0.30 per share. At any time that the closing price of our common stock on any exchange on which it might be listed or in the over the counter market equals or exceeds $0.60 per share for 20 consecutive trading days, we have the right to convert the notes into shares of our common stock at a conversion price of $0.30 per share. The conversion price of the note is subject to proportional adjustment in the event of stock splits, dividends, recapitalizations and similar corporate events. As such, the conversion prices reflect the adjustment for our 1 for 3 reverse stock split that was effective June 12, 2012. Presently, these notes are convertible into an aggregate of 1,666,668 shares of our common stock. At June 30, 2012 and 2011, the Company had $29,753 and $27,666, respectively in accrued interest on the notes. On December 31, 2011 $60,937 of accrued interest was converted to 203,125 shares of common stock at $0.30. On January 17, 2012, one of the noteholders of the 12% convertible promissory notes converted $50,000 plus accrued interest of $263 into 167,544 shares of common stock.

Debt Discount

In accordance with ASC 470, the Company has analyzed the beneficial nature of the conversion terms and determined that a beneficial conversion feature (BCF) existed as of February 10, 2011. The Company calculated the value of the BCF using the intrinsic method as stipulated in ASC 470. Based on the stock price on the day of commitment, the discount as agreed to in the note, and the number of convertible shares, and the value of the warrants included in the units, the BCF was valued at $165,579.

The Company used the Black-Scholes option pricing model to value the warrants included in the convertible units. Included in the assumptions of this calculation, the Company used a risk-free rate of 0.85% (based on the US Treasury note yield), three year maturity, volatility of 84.0% (based on the daily historical performance of a comparable Company’s stock over two years from the commitment date), and a strike price of $0.45.

In accordance with ASC 470, the Company is amortizing the BCF over the two year term of the note. The notes have a prepayment option for the Company, after January 1, 2013, with a 20 day notice to the holders. As such, we are amortizing the BCF over the two year period. For the years ended June 30, 2012 and 2011 the Company recognized $82,789 and $34,496, respectively of amortization expense. As of June 30, 2012 and 2011 the BCF had a carrying value of $48,294 and $131,083, respectively.

F-15

NOTE 8. – LONG TERM DEBT (continued).

	June 30, 2012		June 30, 2011

Loan payable to TD Banknorth maturing in October 2028 payable with varing monthly installments including interest at approximately 5.25% per annum, secured by all assets of the Company	$	33,498	$	37,036

Line payable to American Express payable with varying monthly installments including interest at approximately 9.49% per annum, secured by all assets of the Company		35,177		41,020

12% Convertible Promisory note $500,000 principal net of debt discount of $48,294 at June 30, 2012 and $550,000 principal net of debt discount of $131,083 at June 30, 2011		451,706		418,917
		520,381		496,973
Less : Current portion		40,031		45,811
	$	480,350	$	451,162

F-16

NOTE 9. – INCOME TAXES.

The Company’s income tax expense at June 30, 2012 and 2011was $0 as follows:

	June 30, 2012			June 30, 2011

Income tax benefit consists of:
Current	$	-		$	-
Deferred		-			-
Provision (benefit) for income taxes	$	-		$	-

Reconciliation of the Federal statutory income tax rate to the Company's effective tax rate is as follows:
	June 30, 2012			June 30, 2011

Taxes computed at federal rate (35%)	$	(173,000	)	$	(129,000	)
State taxes, net of federal income tax benefit		(21,000	)		(15,000	)
Noncash Compensation		101,000			-
Other permanent differences		44,000			10,000
Increase (decrease) in deferred tax asset valuation allowance		49,000			134,000
Provision (benefit) for income taxes	$	-		$	-

	June 30, 2012			June 30, 2011
Deferred tax assets:
Net operating loss carryforward	$	205,000		$	293,000
Stock options		124,000			-
Bad debt		37,000			24,000
Less: Valuation allowance		(366,000	)		(317,000	)
Net deferred taxes	$	-		$	-

The Company has increased its deferred tax asset and valuation allowance accounts by approximately $49,000 at June 30, 2012.This change has no effect on the Company’s net tax provision. The Company files its returns on a calendar basis, and as of December 3, 2011 and 2010, the Company has an unused net operating loss carry forward of approximately $1,039,000 and $510,000 available to offset future taxable income. Management has determined that a full valuation allowance is appropriate since it is more “likely than not” that the deferred tax assets will be realized. Pursuant to IRS Section 382 the Company’s net operating losses may be limited in the event of certain changes in ownership.

The Company has recorded a valuation allowance that fully offsets deferred tax assets arising from net operating loss carryforwards because the likelihood of the realization of the benefit cannot be established. The Internal Revenue Code contains provisions that may limit the net operating loss carryforwards available if significant changes in stockholder ownership of the Company occur.

NOTE 10. – STOCKHOLDERS’ EQUITY.

Our authorized capital stock consists of 200,000,000 shares of common stock, $0.01 par value per share, and 5,000,000 shares of preferred stock, par value $0.01 per share. As of June 30, 2012 and 2011, there are 36,190,238 and 34,819,545 shares of common stock issued and outstanding. There are no shares of preferred stock issued and outstanding.

F-17

Common stock

Holders of common stock are entitled to one vote for each share on all matters submitted to a stockholder vote. Holders of common stock do not have cumulative voting rights. Holders of common stock are entitled to share in all dividends that the Board of Directors, in its discretion, declares from legally available funds. In the event of our liquidation, dissolution or winding up, subject to the preferences of any shares of our preferred stock which may then be outstanding, each outstanding share entitles its holder to participate in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over the common stock.

In February 2010 the Company entered into a Stock Purchase Agreement with a founder and member of our Board of Directors. Under the terms of the agreement, the Company repurchased 5,000,000 shares of our common stock owned by him for $45,000, of which $10,000 was paid on the date of the agreement and the balance was paid in 10 equal monthly installments of $3,500 through December 2010. The shares which the Company repurchased included his original holdings in our company together with 833,334 shares issued to him in August 2008 as compensation for services as a member of our Board of Directors. The 5,000,000 shares have been cancelled and returned to the status of authorized but unissued shares of our common stock.

In October 2010, we closed the sale of 5,250,000 units of our securities to accredited investors in a private placement which resulted in gross proceeds to us of $525,000. The securities included 1,750,010 shares of our common stock and Series A Warrants and Series B Warrants. Forge Financial Group, Inc. (“Forge”), a broker-dealer and member of FINRA, acted as placement agent for us in this offering. As compensation for its services, we paid Forge a cash commission of $52,500 and issued its designees of Forge five-year warrants to purchase 175,003 shares of our common stock with an exercise price of $0.30 per share, which are exercisable on a cashless basis. We are using the net proceeds for general working capital.

In January 2011 and February 2011 the Company sold $550,000 principal amount 12% convertible promissory notes to accredited investors in a private placement and issued those investors Series C Warrants. The12% convertible promissory notes can convert into shares of our common stock at $0.30 per share, resulting in a potential issuance of 1,833,335 shares of our common stock upon conversion of the entire principal. Forge acted as placement agent for us in this offering. As compensation for its services, we paid Forge a cash commission of $55,000 and issued its designees five-year warrants to purchase 183,336 shares of our common stock with an exercise price of $0.30 per share, which are exercisable on a cashless basis. We are using the net proceeds for general working capital.

In March 2011 the Company sold 125,000 units of our securities to an accredited investor in a private placement which resulted in gross proceeds to us of $12,500. The securities included 41,667 shares of our common stock and Series D Warrants and Series E Warrants. Forge acted as placement agent for us in this offering. As compensation for its services, we paid Forge a cash commission of $1,250 and issued its designees five year warrants to purchase 4,169 shares of our common stock with an exercise price of $0.30 share, which are exercisable on a cashless basis. We are using the net proceeds for general working capital.

On December 22, 2011, the Company entered into an employment agreement with its Chief Financial Officer. As part of the agreement the Company issued 333,334 shares of the Company’s restricted common stock (“Compensation Shares”), granted under the 2010 Equity Compensation Plan. The Compensation Shares were valued at $120,000, the fair market value at the date of grant for the Company’s common stock as reported on the OTC Bulletin Board. As of June 30, 2012, 166,667 of the Compensation Shares vested and the Company recognized $60,000 in compensation expense related to these shares during the period.

On December 31, 2011, the Company issued 203,125 shares of our common stock to satisfy accrued interest of $60,937 to the three noteholders of the 12% convertible promissory notes (Note 7).

On January 3, 2012 the Company entered into a consulting agreement with Wall Street Grand, LLC (“WSG”) to provide financial marketing consulting services for a period of three months starting January 15, 2012. The Company paid WSG $50,000 and issued 666,667 shares of our common stock valued at $260,000, the fair market value on the date of issuance.

On January 17, 2012, one of the noteholders of the 12% convertible promissory notes converted $50,000 plus accrued interest of $263 into 167,544 shares of common stock (Note 7).

F-18

Preferred stock

Our Board of Directors, without further stockholder approval, may issue preferred stock in one or more series from time to time and fix or alter the designations, relative rights, priorities, preferences, qualifications, limitations and restrictions of the shares of each series. The rights, preferences, limitations and restrictions of different series of preferred stock may differ with respect to dividend rates, amounts payable on liquidation, voting rights, conversion rights, redemption provisions, sinking fund provisions and other matters. Our Board of Directors may authorize the issuance of preferred stock, which ranks senior to our common stock for the payment of dividends and the distribution of assets on liquidation. In addition, our Board of Directors can fix limitations and restrictions, if any, upon the payment of dividends on our common stock to be effective while any shares of preferred stock are outstanding. The rights granted to the holders of any series of preferred stock could adversely affect the voting power of the holders of common stock and issuance of preferred stock may delay, defer or prevent a change in our control.

Common Stock Purchase Warrants

Warrants Included in the 2010 Unit Offering

In October 2010, we closed the sale of 5,250,000 units of our securities which resulted in gross proceeds to us of $525,000. The securities issued in this 2010 unit offering included Series A Warrants to purchase 1,750,010 shares of our common stock and Series B Warrants to purchase 1,750,010 shares of our common stock. Each Series A Warrant is exercisable into one share of common stock for three years from issuance at an exercise price of $0.45 per share. Each Series B Warrant is exercisable into one share of common stock for three years from issuance at an exercise price of $0.75 per share. The Series B Warrant is not exercisable by the holder unless the Series A Warrant has previously been exercised. Upon 30 days’ notice, we have the right to call any series of warrants at $0.03 per warrant at any time that the average 20-day last sale price exceeds 200% of the respective warrant exercise price. Other than the exercise price and call provisions of each series of warrant, and the restriction on the exercisability of the Series B Warrant, all other terms and conditions of the warrants are the same. As partial compensation for the placement agent services in this offering, we issued to the designees of Forge 175,003 Series A Warrants and 175,003 Series B Warrants to purchase shares of our common stock at an exercise price of $0.45 and $0.75 per share, respectively, exercisable on a cashless basis. The exercise price of the warrants and the number of shares of our common stock issuable upon the exercise of the warrants, sold to investor or provided to designees of Forge, are subject to proportional adjustment for stock splits, dividends and similar corporate events.

Warrants Included in the 2011 Note Offering

In connection with the 12% convertible promissory notes offering, we issued the purchasers Series C Warrants to purchase an aggregate of 733,335 shares of our common stock at an exercise price of $0.45 per share for three years from the date of issuance. The exercise price of the Series C warrant is subject to adjustment in the event of stock splits, dividends, recapitalizations and similar corporate events. As partial compensation for the placement agent services, we issued its designees of Forge Series C warrants exercisable at $0.45 per share into 73,335 shares of our common stock, exercisable on a cashless basis. The exercise price of the warrants and the number of shares of our common stock issuable upon the exercise of the warrants, sold to investor or provided to designees of Forge, are subject to proportional adjustment for stock splits, dividends and similar corporate events.

The Company used the Black-Scholes option pricing model to value the warrants included in the note offering. Included in the assumptions of this calculation, the Company used a risk-free rate of 0.85% (based on the US Treasury note yield), five year maturity, volatility of 84.0% (based on the daily historical performance of a comparable Company’s stock over two years from the commitment date), and a strike price of $0.30 and $0.45, respectively.

F-19

Warrants Included in 2011 Unit Offering

In March 2011, we closed the sale of 125,000 units of our securities which resulted in gross proceeds to us of $12,500. The securities issued in this 2011 unit offering included Series D Warrants to purchase 41,667 shares of our common stock and Series E Warrants to purchase 41,667 shares of our common stock. Each Series D Warrant is exercisable into one share of common stock for three years from issuance at an exercise price of $0.45 per share. Each Series E Warrant is exercisable into one share of common stock for three years from issuance at an exercise price of $0.75 per share. The Series E Warrant is not exercisable by the holder unless the Series D Warrant has previously been exercised. Upon 30 days’ notice, we have the right to call any series of warrants at $0.03 per warrant at any time that the average 20-day last sale price exceeds 200% of the respective warrant exercise price. Other than the exercise price and call provisions of each series of warrant, and the restriction on the exercisability of the Series E Warrant, all other terms and conditions of the warrants are the same. As partial compensation for the placement agent services in this offering, we issued to the designees of Forge 4,169 Series D Warrants with an exercise price of $0.45 per share and 4,169 Series E Warrants with an exercise price of $0.75 per share, which are exercisable on a cashless basis. The exercise price of the warrants and the number of shares of our common stock issuable upon the exercise of the warrants, sold to investor or provided to designees of Forge, are subject to proportional adjustment for stock splits, dividends and similar corporate events.

The Company currently has 5,110,876 warrants that can be exercised for shares of our common stock outstanding.

			Range of		Weighted Average
	Warrants		Exercise Price		Exercise Price
Outstanding at June 30, 2011		5,110,876	$	.30 to $.75	$	0.56
Granted		-
Expired		-
Outstanding at June 30, 2012		5,110,876	$	.30 to $.75	$	0.56

In accordance with ASC 470, the Company is amortizing the deferred financing costs over the two year term of the note. As of June 30, 2012 and 2011, the Company had recognized $52,112 and $10,253 of interest expense, respectively, resulting in a carrying value of $27,986 and $80,098 at June 30, 2012 and 2011, respectively.

NOTE 11. STOCK OPTIONS AND WARRANTS.

Stock Option Plans

2010 Equity Compensation Plan

On June 28, 2010, our Board of Directors authorized our 2010 Equity Compensation Plan covering 12,000,000 shares of common stock (the “Plan”). The plan was approved by our stockholders on June 28, 2010. The purpose of the plan is to enable us to offer to our employees, officers, directors and consultants whose past, present and/or potential contributions to our company have been or will be important to our success, an opportunity to acquire a proprietary interest in our company. The 2010 Equity Compensation Plan is administered by our Board of Directors. Plan options may either be (i) incentive stock options (ISOs), (ii) non-qualified options (NSOs), (iii) awards of our common stock or (iv) rights to make direct purchases of our common stock which may be subject to certain restrictions. Any option granted under the 2010 Equity Compensation Plan must provide for an exercise price of not less than 100% of the fair market value of the underlying shares on the date of grant, but the exercise price of any ISO granted to an eligible employee owning more than 10% of our outstanding common stock must not be less than 110% of fair market value on the date of the grant. The plan further provides that with respect to ISOs the aggregate fair market value of the common stock underlying the options which are exercisable by any option holder during any calendar year cannot exceed $100,000. The term of each plan option and the manner in which it may be exercised is determined by the Board of Directors or the compensation committee, provided that no option may be exercisable more than 10 years after the date of its grant and, in the case of an incentive option granted to an eligible employee owning more than 10% of the common stock, no more than five years after the date of the grant. In the event of any stock split of our outstanding common stock, the Board of Directors in its discretion may elect to maintain the stated amount of shares reserved under the plan without giving effect to such stock split. On June 12, 2012, the Company affected a 1 for 3 reverse stock split. The Board of Directors did not adjust the shares eligible under the Plan. Subject to the limitation on the aggregate number of shares issuable under the plan, there is no maximum or minimum number of shares as to which a stock grant or plan option may be granted.

F-20

On December 20, 2011, the Company issued 1,941,670 non-qualified five year options, and 401,668 five year incentive stock options under the 2010 equity compensation plan. The options were issued at $0.30 the fair market value at the date of grant. The Company used the Black-Scholes option pricing model to value the stock options. Included in the assumptions of this calculation, the Company used a risk-free rate of 0.88% (based on the US Treasury note yield), five year maturity, volatility of 84.0% (based on the daily historical performance of a comparable Company’s stock), and a strike price of $0.30.

On December 22, 2011, the Company hired its Chief Financial Officer. As part of the agreement the Company granted to her under its 2010 Equity Compensation Plan incentive stock options to purchase an aggregate of 550,000 shares of the Company’s common stock at an exercise price of $0.36 , vesting as follows: options to purchase 183,334 shares vested on December 22, 2011, options to purchase an additional 183,333 shares vest on December 22, 2012; and options to purchase the remaining 183,333 shares vest on December 22, 2013. The Company used the Black-Scholes option pricing model to value the stock options. Included in the assumptions of this calculation, the Company used a risk-free rate of 0.91%, (based on the US Treasury note yield), five year maturity, volatility of 84.0% (based on the daily historical performance of a comparable Company’s stock), and a strike price of $0.36.

On March 7, 2012, the Company entered into an employment agreement with its Chief Financial Officer. As part of the agreement the Company granted to her under its 2010 Equity Compensation Plan incentive stock options to purchase an aggregate of 666,667 shares of the Company’s common stock at an exercise price of $0.15 , vesting as follows: options to purchase 166,667 shares vested on March 7, 2013, options to purchase an additional 166,667 shares vest on March 7, 2014; options to purchase an additional 166,667 shares vest on March 7, 2015; and options to purchase the remaining 166,666 shares vest on March 7, 2016.

				Weighted Average
	Options			Exercise Price		Fair Value
Outstanding at June 30, 2011		-		$	-	$	-
Granted		3,560,005			0.29		0.20
Expired		(56,666	)		0.30		0.20
Outstanding at June 30, 2012		3,503,339		$	0.29	$	0.19
Outstanding and exerciseable at June 30, 2012		1,058,900		$	0.31	$	0.20

The Company used the Black-Scholes option pricing model to value the stock options. Included in the assumptions of this calculation were the following:

	For the Year Ended June 30,
	2012			2011
Expected volatility		84.0	%		-
Risk-free interest rate		.85-.91	%		-
Expected life in years		5.0			-
Assumed dividend yield		0	%		-

F-21

The following information applies to options outstanding at June 30, 2012:

				Weighted
		Number of		Average
		Shares		Ramaining
Exercise		Underlying		Contractual		Number
Price		Options		Life		Exercisable
	0.15		666,667		1.96		-
	0.30		2,286,672		0.88		875,566
	0.36		550,000		0.88		183,334

As of June 30, 2012, there were 12,000,000 shares of our common stock authorized to be issued under the 2010 Equity Compensation Plan, of which 8,163,327 shares of our common stock remain available for future grants.

The total intrinsic value of stock options granted for the years ending June 30, 2012 and 2011 was $0. The total intrinsic value of stock options outstanding and exercisable as of June 30, 2012 and 2011 was $0.For the years ending June 30, 2012 and 2011, total stock-based compensation was 646,731 and $0, respectively, of which $326,731 and $0, respectively, represented the fair value of vested stock options. The value of stock based compensation expense not yet recognized pertaining to unvested options and stock grants was approximately $358,000 and $60,000, respectively, which will be recognized primarily over the next 1.5 and 0.5 years in the future, respectively.

NOTE 12. – LEASE COMMITMENTS.

Lease

The Company has leases for software, machinery and equipment utilized in its operations. The Company entered into three leases in 2007 and 2008. All three of these leases have a bargain purchase option of $1.00 at the end of the lease term, and, as such, are treated as capital leases. The leases are paid off in 2012 and 2013. The monthly lease payments range from approximately $380 to approximately $1,360. Additionally, in 2010, the Company entered into an operating lease for a copier with monthly lease payments of approximately $350. The copier is leased through July 2014.

In May, 2012, the Company entered into a car lease. The lease is a 36 month lease, with monthly payments of $180.

Rent expense for the years ended June 30, 2012 and 2011 were approximately $282,000 and $165,000, respectively.

F-22

Future lease payments under the aforementioned lease are as follows:

2013	$	256,280
2014		199,191
2015		194,783
2016		192,807
2017		192,807
Thereafter		144,605
	$	1,180,473

NOTE 13. – DEFINED CONTRIBUTION 401 (k) PLAN.

The Company implemented a 401(k) plan in September, 2007. Eligible employees contribute to the 401(k) plan. Employees become eligible after attaining age 19 and after one year of employment with the Company. The employee may become a participant of the 401(k) plan on the first day of the month following the completion of the eligibility requirements. Effective September, 2007, the Company implemented an elective contribution to the plan of 25% of the employee’s contribution up to 6% of the employee’s contribution (the “Contribution”). The Contributions are subject to a vesting schedule and become fully vested after one year of service, retirement, death or disability, whichever occurs first. The Company made contributions of approximately $14,000 and approximately $13,000 for the years ended June 30, 2012 and 2011.

NOTE 14. – SUBSEQUENT EVENTS.

On July 24, 2012, the Company entered into amendments to the employment agreements with David Bernstein, Vlad Stelmak and Gail Babitt, our executive officers. The terms of the amendments are identical for each executive officer. Under the terms of these amendments the annual base salary of each executive officer will be $220,000 per year. The executive officers will also receive an annual bonus of 1% of net sales, for all net sales in excess of $4,000,000. Under the terms of the amendment the executive’s automobile allowance will be $1,235 per month. Additionally, the Company has agreed to reimburse the executive up to the maximum out-of-pocket health care expenses, representing the annual deductible, or portion thereof, and co-pays, excluding doctor’s visits and prescriptions, paid by the executive under our new health care insurance plan.

F-23

No dealer, sales representative or any other person has been authorized to give any information or to make any representations other than those contained in this prospectus and, if given or made, such information or representation must not be relied upon as having been authorized by the company or any of the underwriters. This prospectus does not constitute an offer of any securities other than those to which it relates or an offer to sell, or a solicitation of any offer to buy, to any person in any jurisdiction where such an offer or solicitation would be unlawful. Neither the delivery of this prospectus nor any sale made hereunder shall, under any circumstances, create an implication that the information set forth herein is correct as of any time subsequent to the date hereof.

TABLE OF CONTENTS
	Page
About this Prospectus	4	——————— PROSPECTUS ——————— ________________, 2012 9,148,769 Shares of Common Stock
Other Pertinent Information	4
Prospectus Summary	4
Summary of the Offering	4
Selected Financial Data	5
Risk Factors	6
Cautionary Statement Regarding Forward Looking Information	10
Market for Common Equity and Related Stockholder Matters	10
Capitalization	11
Use of Proceeds	12
Management’s Discussion and Analysis of Financial Statements and Results of Operations	12
Our Business	17
Management	22
Executive Compensation	25
Certain Relationships and Related Transactions	27
Principal Stockholders	27
Description of Securities	30
Selling Security Holders	32
Plan of Distribution	35
Legal Matters	36
Experts	36
Where You Can Find Additional Information	37
Index to Financial Statements	F-1

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The estimated expenses payable by us in connection with the distribution of the securities being registered are as follows:

SEC Registration and Filing Fee	$	608
Legal Fees and Expenses*		20,000
Accounting Fees and Expenses*		7,500
Financial Printing*		5,000
Transfer Agent Fees*		1,500
Blue Sky Fees and Expenses*		200
Miscellaneous*		193
TOTAL	$	35,001

_________

* Estimated

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling our company pursuant to the foregoing provisions, we have been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the act and is therefore unenforceable.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

Following are all issuances of securities by the registrant during the past three years which were not registered under the Securities Act of 1933, as amended (the “Securities Act”). In each of these issuances the recipient represented that he was acquiring the shares for investment purposes only, and not with a view towards distribution or resale except in compliance with applicable securities laws and had access to information concerning our company. No general solicitation or advertising was used in connection with any transaction, and the certificate evidencing the securities that were issued contained a legend restricting their transferability absent registration under the Securities Act or the availability of an applicable exemption therefrom. Unless specifically set forth below, no underwriter participated in the transaction and no commissions were paid in connection with the transactions.

II-1

In May 2010 we entered into a financial advisory agreement with Forge Financial Group, Inc., a broker-dealer and member of FINRA, to provide financial advisory services to us. As compensation for those services, we issued the designees of Forge Financial Group, Inc. 1,666,670 shares of our common stock valued at $15,000 as compensation under the agreement. The recipients were accredited investors and the issuances were exempt from registration under the Securities Act in reliance on exemptions provided by Section 4(2) of that act.

In May 2010 we sold an aggregate of 1,666,668 shares of our common stock to four accredited and sophisticated investors in a private transaction exempt from registration under the Securities Act in reliance on an exemption provided by Section 4(2) of that act. We received gross proceeds of $5,000. We did not pay any commissions or finder’s fees in this transaction. We used the proceeds for general working capital.

In May 2010 we issued a law firm 166,668 shares of our common stock valued at $1,500 as additional compensation for legal services rendered to us. The recipient was an accredited and sophisticated investor and the issuance was exempt from registration under the Securities Act in reliance on an exemption provided by Section 4(2) of that act.

In October 2010, we sold 1,750,010 units of our securities to accredited investors in a private placement which resulted in gross proceeds to us of $525,000. The securities included 1,750,010 shares of our common stock and Series A Warrants and Series B Warrants. Each unit consisted of one share of our common stock, one Series A Warrant and one Series B Warrant at a purchase price of $0.30 per unit. Forge Financial Group, Inc., then a broker-dealer and member of FINRA, acted as placement agent for us in this offering. As compensation for its services, we paid Forge Financial Group, Inc. a cash commission of $52,500 and issued its designees five year warrants exercisable at $0.30 per Unit that are exercisable on a cashless basis to purchase approximately 10% of the units sold in this offering. The issuances were exempt from registration under the Securities Act in reliance on exemptions provided by Rule 506 under Regulation D of that act. We also reimbursed the placement agent $15,000 for its expenses in connection with this offering. We are using the net proceeds for general working capital.

In January 2011 and February 2011 we sold $550,000 principal amount 12% convertible promissory notes to accredited investors in a private placement and issued those investors Series C Warrants to purchase 733,335 shares of our common stock exercisable at $0.45 per share. Forge Financial Group, Inc. also acted as placement agent for us in this offering. As compensation for its services, we paid Forge Financial Group, Inc. a cash commission of $55,000 and issued its designees five-year warrants to purchase a number of shares of our common stock equal to approximately 10% of the number of shares issuable upon conversion of the notes sold in this offering and approximately 10% of the number of shares of our common stock issuable upon exercise of the Series C warrants sold in this offering, both of which are exercisable on a cashless basis. The issuances were exempt from registration under the Securities Act in reliance on exemptions provided by Rule 506 under Regulation D of that act. We are using the net proceeds for general working capital.

In March 2011, we sold 41,667 units of our securities to an accredited investor in a private placement which resulted in gross proceeds to us of $12,500. Each unit consisted of one share of our common stock, one Series D Warrant and one Series E Warrant at a purchase price of $0.30 per unit. Forge Financial Group, Inc. also acted as placement agent for us in this offering. As compensation for its services, we paid Forge Financial Group, Inc. a cash commission of $1,250 and issued its designees five year warrants exercisable at $0.30 per Unit that are exercisable on a cashless basis to purchase approximately 10% of the units sold in this offering. The issuances were exempt from registration under the Securities Act in reliance on exemptions provided by Rule 506 under Regulation D of that act. We are using the net proceeds for general working capital.

In December 2011, we entered into an employment agreement with our Chief Financial Officer. As partial compensation under the agreement we issued 333,334 shares of our common stock valued at $120,000. The recipient was an accredited investor and the issuance was exempt from registration under the Securities Act in reliance on an exemption provided by Section 4(2) of that act.

In January 2012, we entered into a consulting agreement with a firm to provide financial marketing consulting services for a period of three months. As partial compensation we issued the firm 666,667 shares of our common stock valued at $260,000. The recipient was an accredited or otherwise sophisticated investor and the issuance was exempt from registration under the Securities Act in reliance on an exemption provided by Section 4(2) of that act.

II-2

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

No.		Description
2.1		Certificate of Ownership and Merger of Access Direct, Inc. and AnythingIT Inc. **
3.1		Certificate of Incorporation of AnythingIT Inc. **
3.2		Certificate of Correction of AnythingIT Inc. **
3.3		Certificate of Amendment to the Certificate of Incorporation of AnythingIT Inc. **
3.4		Bylaws of AnythingIT Inc. **
3.5		Certificate of Amendment to the Certificate of Incorporation (Incorporated by reference to the Current Report on Form 8-K filed on June 11, 2012).
4.1		Form of Series A and Series B Warrant **
4.2		Form of Series C Warrant **
4.3		Form of Series D and Series E Warrant **
4.4		Form of 12% convertible promissory note **
4.5		Form of Placement Agent Warrant for 2010 unit offering **
4.6		Form of Placement Agent Warrant for 2011 note offering **
4.7		Form of Placement Agent Warrant for 2011 unit offering **
5.1		Opinion of Pearlman Schneider LLP *
10.1		Executive Employment Agreement with David Bernstein **
10.2		Executive Employment Agreement with Vlad Stelmak **
10.3		Form of Shareholders Agreement dated July 31, 2001**
10.4		Stock Purchase Agreement dated February 1, 2010 between Richard Hausig and AnythingIT Inc. **
10.5		Financial Advisory Agreement dated May 4, 2010 with Forge Financial Group, Inc. **
10.6		Independent Consulting and Advisory Agreement dated June 21, 2010 with Forge Financial Group, Inc. **
10.7		Placement agent letter agreement dated May 11, 2010 with Forge Financial Group, Inc. **
10.8		Placement agent letter agreement dated December 28, 2010 with Forge Financial Group, Inc. **
10.9		Placement agent letter agreement dated January 24, 2011 with Forge Financial Group, Inc. **
10.10		2010 Equity Compensation Plan **
10.11		Lease for principal executive offices**
10.12		Lease for principal executive office expiring April 2012**
10.13		Form of Termination Agreement with Forge Financial Group, Inc. **
10.14		Form of Financial and Management Advisory Agreement with Mediterranean Securities Group, LLC **
10.15		Fifth Amendment to Modified Net Lease Agreement dated November 15, 2011 (Incorporated by reference to the Quarterly Report on Form 10-Q for the period ended September 30, 2011).
10.16		Form of Letter Agreement dated December 16, 2011 with Gail L. Babitt (Incorporated by reference to the Current Repot on Form 8-K as filed on December 29, 2011).
10.17		Financial Marketing Consulting Services Agreement by and between Wall Street Grand, LLC and Jonathan Lebed and AnythingIT Inc. (Incorporated by reference to the Current Report on Form 8-K as filed on January 17, 2012).
10.18		Executive Employment Agreement with Gail L. Babitt (Incorporated by reference to the Current Report on Form 8-K as filed on March 12, 2012).
10.19		Amendment to Executive Employment Agreement dated July 24, 2012 by and between AnythingIT, Inc. and David Bernstein (Incorporated by reference to the Current Report on Form 8-K as filed on July 27, 2012)
10.20		Amendment to Executive Employment Agreement dated July 24, 2012 by and between AnythingIT, Inc. and Vlad Stelmak (Incorporated by reference to the Current Report on Form 8-K as filed on July 27, 2012)
10.21		Amendment to Executive Employment Agreement dated July 24, 2012 by and between AnythingIT, Inc. and Gail L. Babitt (Incorporated by reference to the Current Report on Form 8-K as filed on July 27, 2012)
14.1		Code of Business Conduct and Ethics **
23.1		Consent of Sherb & Co., LP *
23.2		Consent of Pearlman Schneider LLP (included in Exhibit 5.1)*
101		Attached as Exhibits 101 to this registration statement are the following financial statements from our Annual Report on Form 10-K for the year ended June 30, 2012, formatted in XBRL: (i) Balance Sheets, (ii) Statements of Operations, (iii) the Statements of Shareholders’ Equity, (iv) Statements of Cash Flows, and (vi) related notes to these financial statements. In accordance with Regulation S-T, the XBRL-formatted interactive data files that comprise Exhibit 101 in this registration statement shall be deemed furnished and not filed.

____________

**	previously filed
*	filed herewith

II-3

ITEM 17. UNDERTAKINGS.

The undersigned registrant hereby undertakes:

To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

ii.

To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement.

iii.

To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

ii.

If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

Insofar as indemnification for liabilities arising under the Securities Act of 1933, may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

II-4

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Fair Lawn, State of New Jersey on September 13, 2012.

	AnythingIT Inc.

	By:	/s/ David Bernstein
		David Bernstein
		Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date

/s/ David Bernstein	President, Chief Executive Officer, director, principal executive officer, principal financial and accounting officer	September 13, 2012
David Bernstein

/s/ Vlad Stelmak	Chief Operating Officer, Secretary, director	September 13, 2012
Vlad Stelmak

/s/ Gail L. Babitt	Chief Financial Officer, director, principal financial and accounting officer	September 13, 2012
Gail L. Babitt

/s/ Richard Hausig	Director	September 13, 2012
Richard Hausig

II-5

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