| Large accelerated filer |   |   | Accelerated filer                    |   |
|-------------------------|--------|--------|--------------------------------------|--------|
|                    |   |   |                                 |   |
| Non-accelerated filer   |   |   | Smaller reporting  company | X      |

|   |   | Yes | X | No |   |
|--------|--------|-----|---|----|--------|

----

| INDEX    |
|----------|
|     |   |   | PageNumber |
| PART I.  | FINANCIAL INFORMATION |   |
|     |   |   |   |
|     | Item 1. | Financial Statements  |   |
|     |   | Condensed Consolidated Balance Sheets as of September 30, 2011 (Unaudited) |   |
|     |   |   | and June 30, 2011 | 4 |
|     |   |   |   |
|     |   | Condensed Consolidated Statements of Operations (Unaudited) |   |
|     |   |   | For the three months ended September 30, 2011 and 2010 | 5 |
|     |   |   |   |
|     |   | Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) |   |
|     |   | For the three months ended September 30, 2011 and 2010 | 6 |
|     |   |   |   |
|     |   | Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited) |   |
|     |   |   | For the three months ended September 30, 2011 | 7 |
|     |   |   |   |
|     |   | Condensed Consolidated Statements of Cash Flows (Unaudited) |   |
|     |   |   | For the three months ended September 30, 2011 and 2010 | 8 |
|     |   |   |   |
|     | Notes to Condensed Consolidated Financial Statements (Unaudited) | 10  |
|     |   | Note A – | Basis of Presentation and Recent Accounting Pronouncements |   |
|     |   | Note B – | Stock-Based Compensation and Warrants |   |
|     |   | Note C – | Marketable Securities - Restricted |   |
|     |   | Note D – | Discontinued Operations |   |
|     |   | Note E – | Loss Per Share |   |
|     |   | Note F – | Equity |   |
|     |   | Note G – | Related Party Transactions |   |
|     |   | Note H – | Commitments and Contingencies |   |
|     |   | Note I – | Subsequent Events |   |
|     |   | Note J – | Liquidity |   |
|     |   |   |   |
|     | Item 2. | Management’s Discussion and Analysis of Financial Condition |   |
|     |   |   | and Results of Operations | 18 |
|     |   |   |   |
|     | Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 21 |
|     |   |   |   |
|     | Item 4. | Controls and Procedures | 22 |
|     |   |   |   |
| PART II. | OTHER INFORMATION |   |
|     |   |   |   |
|     | Item 1. | Legal Proceedings | 22 |
|     |   |   |   |
|     | Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 22 |
|     |   |   |   |
|     | Item 4. | Removed and Reserved | 22 |
|     |   |   |   |
|     | Item 6. | Exhibits | 23 |

----

----

| CONDENSED CONSOLIDATED BALANCE SHEETS                                     |
|---------------------------------------------------------------------------|
| AS OF SEPTEMBER 30, 2011 AND JUNE 30, 2011                                |
|                                                                      |   |   |   |   |   |   |
|                                                                      |   |   |   | September 30, 2011 |   | June 30, 2011 |
| ASSETS                                                                    |   |  (unaudited) |   |   |
| CURRENT ASSETS                                                            |   |   |   |   |
|                                                                      | Cash and cash equivalents | $ |                        607,400 | $ |                       783,200 |
|                                                                      | Accounts receivable, net |   |                          48,000 |   |                       149,900 |
|                                                                      | Marketable securities - restricted |   |                     5,407,200 |   |                    6,637,100 |
|                                                                      | Prepaid expenses and other current assets |   |                          50,600 |   |                         39,500 |
|                                                                      |   | Total current assets |   |                     6,113,200 |   |                    7,609,700 |
|                                                                      |   |   |   |   |   |   |
| FURNITURE AND OFFICE EQUIPMENT, NET                                       |   |                            6,000 |   |                           6,700 |
|                                                                      |   |   |   |   |   |   |
| TOTAL ASSETS                                                              | $ |                     6,119,200 | $ |                    7,616,400 |
|                                                                      |   |   |   |   |   |   |
| LIABILITIES AND  SHAREHOLDERS' EQUITY                           |   |   |   |   |
| CURRENT LIABILITIES                                                       |   |   |   |   |
|                                                                      | Accounts payable and accrued expenses | $ |                        436,600 | $ | 553,300 |
|                                                                      | Note payable - related party |   |                          28,000 |   |                         28,000 |
|                                                                      |   | Total current liabilities |   |                        464,600 |   |                       581,300 |
|                                                                      |   |   |   |   |   |   |
| LONG-TERM LIABILITIES                                                     |   |                                  - |   |                                 - |
| TOTAL LIABILITIES                                                         |   |                        464,600 |   |                       581,300 |
|                                                                      |   |   |   |   |   |   |
|                                                                      | Preferred Stock - Series B Convertible - 500,000 shares authorized, |   |   |   |   |
|                                                                      |   | 125,700 and 122,600 issued and outstanding, respectively |   |                     1,243,800 |   |                    1,213,300 |
|                                                                      |   |   |   |   |   |   |
| SHAREHOLDERS' EQUITY                                                      |   |   |   |   |
|                                                                      | Preferred Stock |   |   |   |   |
|                                                                      |   | Preferred Stock - Series D Convertible - 500,000 shares |   |   |   |   |
|                                                                      |   |    authorized, none outstanding |   |                                  - |   |                                 - |
|                                                                      |   | Preferred Stock - Series E Convertible - 750,000 shares |   |   |   |   |
|                                                                      |   |    authorized, none outstanding |   |                                  - |   |                                 - |
|                                                                      | Common Stock |   |   |   |   |
|                                                                      |   | Class A - 75,000,000 no par shares authorized, 4,974,900 |   |   |   |   |
|                                                                      |   |    and 4,874,100 shares issued and outstanding at September 30, |   |   |   |   |
|                                                                      |   |    2011 and June 30, 2011, respectively |   |                 108,851,500 |   |                108,696,500 |
|                                                                      |   | Class B - 25,000,000 no par shares authorized, none |   |   |   |   |
|                                                                      |   |    outstanding |   |                                  - |   |                                 - |
|                                                                      | Accumulated Other Comprehensive Income (Loss) |   |                      (763,400) |   |                       466,500 |
|                                                                      | Accumulated Deficit |   |               (103,677,300) |   |              (103,341,200) |
|                                                                      |   | Total shareholders' equity |   |                     4,410,800 |   |                    5,821,800 |
|                                                                      |   |   |   |   |   |   |
| TOTAL LIABILITIES & SHAREHOLDERS' EQUITY                              | $ |                     6,119,200 | $ |                    7,616,400 |
|                                                                      |   |   |   |   |   |   |
| See accompanying notes to the condensed consolidated financial statements |

----

| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                           |
|---------------------------------------------------------------------------|
| FOR THE THREE MONTHS ENDED SEPTEMBER 30, (unaudited)                      |
|                                                                      |   |   |   |   |   |   |
|                                                                      |   |   |   | 2011 |   | 2010 |
|                                                                      |   |   |   |   |   |   |
| NET SALES                                                                 | $ |              - | $ |              - |
|                                                                      | Cost of goods sold |   |              - |   |              - |
|                                                                      |   |   |   |   |   |   |
| GROSS PROFIT                                                              |   |              - |   |              - |
|                                                                      |   |   |   |   |   |   |
| OPERATING EXPENSES                                                        |   |   |   |   |
|                                                                      | Corporate expenses |   | 297,000 |   | 302,700 |
|                                                                      | Amortization of stock-based compensation |   | 7,800 |   | 189,800 |
|                                                                      | Depreciation and amortization |   | 700 |   | 200 |
|                                                                      |   |   |   | 305,500 |   | 492,700 |
|                                                                      |   |   |   |   |   |   |
| OPERATING LOSS                                                            |   | (305,500) |   | (492,700) |
|                                                                      |   |   |   |   |   |   |
| OTHER INCOME & EXPENSES                                               |   |   |   |   |
|                                                                      | Interest expense, net |   | (100) |   | (167,800) |
|                                                                      | Other income (expense), net |   |                    - |   | (300) |
| LOSS FROM CONTINUING OPERATIONS                                           |   | (305,600) |   | (660,800) |
|                                                                      |   |   |   |   |   |   |
| LOSS FROM DISCONTINUED OPERATIONS                                         |   |              - |   | (622,500) |
|                                                                      |   |   |   |   |   |   |
| NET LOSS                                                                  |   | (305,600) |   | (1,283,300) |
|                                                                      |   |   |   |   |   |   |
|                                                                      | Preferred stock dividends |   | (30,500) |   | (79,700) |
|                                                                      |   |   |   |   |   |   |
|                                                                      |   |   |   |   |   |   |
| NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS                              | $ | (336,100) | $ | (1,363,000) |
|                                                                      |   |   |   |   |   |   |
| NET LOSS PER SHARE - BASIC AND DILUTED                                    |   |   |   |   |
|                                                                      |   | Continuing operations | $ | (0.06) | $ | (0.13) |
|                                                                      |   | Discontinued operations | $ | 0.00 | $ | (0.12) |
|                                                                      |   | Preferred stock dividends | $ | (0.01) | $ | (0.02) |
|                                                                      |   | Net loss per share attributable to common shareholders | $ | (0.07) | $ | (0.27) |
|                                                                      |   |   |   |   |   |   |
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING                                |   | 4,951,900 |   | 5,094,800 |
|                                                                      |   |   |   |   |   |   |
| See accompanying notes to the condensed consolidated financial statements |
|                                                                      |   |   |   |   |   |   |
|                                                                      |   |   |   |   |   |   |

----

| CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)          |
|---------------------------------------------------------------------------|
| FOR THE THREE MONTHS ENDED SEPTEMBER 30, (unaudited)                      |
|                                                                      |   |   |   |   |
|                                                                      |   |   |   | 2011 |   | 2010 |
|                                                                      |   |   |   |   |   |   |
| Net Loss                                                                  |   | $ |         (305,600) | $ |     (1,283,300) |
|                                                                      |   |   |   |   |   |   |
| Gross Unrealized Loss on Marketable Securities, Net of Tax                |   |      (1,229,900) |   |                    - |
|                                                                      |   |   |   |   |   |   |
| Comprehensive Income (Loss)                                               | $ |      (1,535,500) | $ |     (1,283,300) |
|                                                                      |   |   |   |   |   |   |
|                                                                      |   |   |   |   |   |   |
|                                                                      |   |   |   |   |   |   |
| See accompanying notes to the condensed consolidated financial statements |

----

| CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY       |
|---------------------------------------------------------------------------|
| FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2011 (unaudited)                 |
|                                                                      |   |   |   |   |   |   |   |   |   |   |
|                                                                      |   |   |   |   |   | ACCUMULATED |   |   |   |   |
|                                                                      |   |   |   |   |   | OTHER |   |   |   |   |
|                                                                      |   |   | COMMON STOCK | COMPREHENSIVE |   | ACCUMULATED |   |   |
|                                                                      |   | SHARES |   | AMOUNT |   | INCOME (LOSS) |   | DEFICIT |   | TOTAL |
|                                                                      |   |   |   |   |   |   |   |   |   |   |
| Balances, June 30, 2011                                                   |         4,874,100 |  $ |     108,696,500 |  $ |                       466,500 |  $ |           (103,341,200) |  $ |       5,821,800 |
|                                                                      | Value of stock-based compensation |                      - |   |                7,800 |   |                                 - |   |                             - |   |              7,800 |
|                                                                      | Shares isssued for exercise of options |            100,800 |   |            151,200 |   |                                 - |   |                             - |   |          151,200 |
|                                                                      | Series B preferred dividends, paid in kind |                      - |   |                     - |   |                                 - |   |                    (30,500) |   |          (30,500) |
|                                                                      | NASDAQ  listing fees |                      - |   |              (4,000) |   |                                 - |   |                             - |   |            (4,000) |
|                                                                      | Gross unrealized loss on marketable securities |                      - |   |                     - |   |                  (1,229,900) |   |                             - |   |     (1,229,900) |
|                                                                      | Net loss |                      - |   |                     - |   |                                 - |   |                  (305,600) |   |        (305,600) |
| Balances, September 30, 2011                                              |         4,974,900 |  $ |     108,851,500 |  $ |                     (763,400) |  $ |           (103,677,300) |  $ |       4,410,800 |
|                                                                      |   |   |   |   |   |   |   |   |   |   |
| See accompanying notes to the condensed consolidated financial statements |
|                                                                      |   |   |   |   |   |   |   |   |   |   |
|                                                                      |   |   |   |   |   |   |   |   |   |   |
|                                                                      |   |   |   |   |   |   |   |   |   |   |

----

| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                           |
|---------------------------------------------------------------------------|
| FOR THE THREE MONTHS ENDED SEPTEMBER 30, (unaudited)                      |
|                                                                      |   |   |   |   |   |   |
|                                                                      |   |   |   | 2011 |   | 2010 |
| CASH FLOWS FROM OPERATING ACTIVITIES                                      |   |   |   |   |
|                                                                      | Net loss | $ | (305,600) | $ | (1,283,300) |
|                                                                      | Adjustments to reconcile net loss to net |   |   |   |   |
|                                                                      | cash used in operating activities: |   |   |   |   |
|                                                                      |   | Depreciation and amortization |   | 700 |   | 133,600 |
|                                                                      |   | Stock and warrants issued for services |   |                           - |   | 5,300 |
|                                                                      |   | Stock-based compensation |   | 7,800 |   | 340,900 |
|                                                                      | Changes in operating assets and liabilities: |   |   |   |   |
|                                                                      |   | Accounts receivable, net |   | 101,900 |   | 207,600 |
|                                                                      |   | Inventories, net |   |                           - |   | (335,400) |
|                                                                      |   | Prepaid expenses and other current assets |   | (11,100) |   | 56,700 |
|                                                                      |   | Accounts payable and accrued expenses |   | (116,700) |   | 237,000 |
|                                                                      |   | Deferred revenue |   |                           - |   | 54,500 |
|                                                                      |   | Costs and estimated earnings in excess of billings |   |   |   |   |
|                                                                      |   |   on uncompleted contracts |   |                           - |   | 12,700 |
|                                                                      |   | Billings in excess of costs and estimated earnings |   |   |   |   |
|                                                                      |   |    on uncompleted contracts |   |                           - |   |                  7,300 |
|                                                                      |   | Customer advances |   |                           - |   |              (40,100) |
|                                                                      |   | Other assets |   |                           - |   | 5,100 |
|                                                                      | Net cash used in operations |   |               (323,000) |   |            (598,100) |
|                                                                      |   |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                      |   |   |   |   |
|                                                                      | Proceeds from sale of net RFID Technology segment assets |   |                           - |   |           2,000,000 |
|                                                                      | Net cash provided by investing activities | $ |                           - | $ |           2,000,000 |
|                                                                      |   |   |   |   |   |   |
| See accompanying notes to the condensed consolidated financial statements |

----

| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)               |
|---------------------------------------------------------------------------|
| FOR THE THREE MONTHS ENDED SEPTEMBER 30, (continued)                      |
|                                                                      |   |   |   |   |   |   |
|                                                                      |   |   |   | 2011 |   | 2010 |
|                                                                      |   |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                      |   |   |   |   |
|                                                                      | Proceeds from borrowings | $ |                              - | $ |                84,900 |
|                                                                      | Repayment on borrowings |   |                              - |   |         (2,182,800) |
|                                                                      | Repayment on capital leases |   |                              - |   |                (4,100) |
|                                                                      | Proceeds from exercise of stock options |   |                    151,200 |   |                        - |
|                                                                      | Proceeds from sale of equity instruments, net |   |                              - |   |              612,600 |
|                                                                      | Cash dividends paid |   |                              - |   |              (13,200) |
|                                                                      | Payment for listing fees |   |                       (4,000) |   |              (12,500) |
|                                                                      |    Net cash provided by (used in) financing  activities |   |                    147,200 |   |         (1,515,100) |
|                                                                      |   |   |   |   |   |   |
| NET DECREASE IN CASH                                                      |   |                   (175,800) |   |            (113,200) |
|                                                                      |   |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, beginning of period                            |   |                    783,200 |   |              400,500 |
|                                                                      |   |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, end of period                                  | $ |                    607,400 | $ |              287,300 |
|                                                                      |   |   |   |   |   |   |
|                                                                      |   |   |   |   |   |   |
| SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION                            |   |   |   |   |
|                                                                      |   |   |   |   |   |   |
|                                                                      | Net cash paid during the period for interest | $ |                              - | $ |              167,800 |
|                                                                      |   |   |   |   |   |   |
|                                                                      | Non-Cash Activities: |   |   |   |   |
|                                                                      |   | Unrealized loss on marketable securities | $ |                 1,229,900 | $ |                        - |
|                                                                      |   | Value of shares issued in payment of interest and services | $ |                              - | $ |                  5,300 |
|                                                                      |   | Value of stock issued for payment of notes | $ |                              - | $ |                  2,100 |
|                                                                      |   | Series B preferred stock dividend, paid in kind | $ |                      30,500 | $ |                27,700 |
|                                                                      |   | Series D preferred stock dividend, paid in common stock or accrued | $ |                              - | $ |                23,100 |
|                                                                      |   | Series E preferred stock dividend, paid or accrued | $ |                              - | $ |                24,500 |
|                                                                      |   | Series D preferred stock converted to common stock | $ |                              - | $ |              518,900 |
|                                                                      |   |   |   |   |   |   |
|                                                                      |   |   |   |   |   |   |
| See accompanying notes to the condensed consolidated financial statements |

----

| ·   | Expected term is determined under the simplified method using an average of the contractual term and vesting period of the award as appropriate statistical data required to properly estimate the expected term was not available; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Expected volatility of award grants made under the Company’s plans is measured using the historical daily changes in the market price of the Company’s common stock over the expected term of the award; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Risk-free interest rate is the implied yield on zero-coupon U.S. Treasury bonds with a remaining maturity equal to the expected term of the awards; and, |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Forfeitures are based on the history of cancellations of awards granted by the Company and management’s analysis of potential future forfeitures. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                           |                                                                                                                 |      |                                                                                        |   |           |   | Weighted                                          |                                               |                                                                                                    |                                                                                  |                                                                                  |   |   |
|--------------------------------|----------------------------------------------------------------------------------------------------------------------|-----------|---------------------------------------------------------------------------------------------|--------|----------------|--------|---------------------------------------------------|----------------------------------------------------|---------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------|--------|--------|
|                           |                                                                                                                 |      |                                                                                        |   | Weighted       |   | Average                                           |                                               |                                                                                                    |                                                                                  |                                                                                  |   |   |
|                           |                                                                                                                 |      |                                                                                        |   | Average        |   | Remaining                                         |                                               | Aggregate                                                                                               |                                                                                  | Aggregate                                                                             |   |   |
|                           |                                                                                                                 |      |                                                                                        |   | Exercise Price |   | Contractual                                       |                                               | Fair                                                                                                    |                                                                                  | Instrinsic                                                                            |   |   |
|                           |                                                                                                                 |      | Shares                                                                                      |   | Per Share      |   | Term (1)                                          |                                               | Value                                                                                                   |                                                                                  | Value                                                                                 |   |   |
|                           |                                                                                                                 |      |                                                                                        |   |           |   |                                              |                                               |                                                                                                    |                                                                                  |                                                                                  |   |   |
| Outstanding July 1, 2011 (4)   | 661,800                                                                                                              |      | $1.62                                                                                       |   | 1.78           | $      |        394,100 | $                                                  |     210,700                                                                         |                                                                                  |                                                                                  |
|                           | Granted                                                                                                              |      |                - |   | -              |   | -                                                 |                                               |                  - |                                                                                  |               - |   | (2)    |
|                           | Exercised                                                                                                            |      | (100,800)                                                                                   |   | $1.50          |   | -                                                 |                                               |        (60,000)                                                      |                                                                                  |       45,600                                            |   | (3)    |
|                           | Forfeited or expired                                                                                                 | (110,700) |                                                                                        | $1.96  |           | -      |                                              |        (65,900) |                                                                                                    |               - |                                                                                  |   |
| Outstanding September 30, 2011 | 450,300                                                                                                              |      | $1.56                                                                                       |   | 2.01           | $      | 268,200                                           | $                                                  |               -                   |                                                                                  |                                                                                  |
| Exercisable September 30, 2011 | 450,300                                                                                                              |      | $1.56                                                                                       |   | 2.01           | $      | 268,200                                           | $                                                  |               -                   |                                                                                  |                                                                                  |
|                           |                                                                                                                 |      |                                                                                        |   |           |   |                                              |                                               |                                                                                                    |                                                                                  |                                                                                  |   |   |
| (1)                            | Remaining contractual term presented in years.                                                                       |      |                                                                                        |   |           |   |                                              |                                               |                                                                                                    |
| (2)                            | The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying           |      |                                                                                        |
|                           | awards and the closing price of the Company's common stock as of September 30, 2011, for those awards that           |      |                                                                                        |
|                           | have an exercise price below the closing price as of September 30, 2011 of $.76.                                     |      |                                                                                        |   |           |   |                                              |
| (3)                            | This value is calculated as the difference between the exercise price and the market price of the stock on the       |      |                                                                                        |
|                           | date of exercise.  The Company's common stock as of the various exercise dates ranged from $1.77 to $2.02. |      |                                                                                        |
| (4)                            | Includes 23,400 options previously excluded.                                                                         |      |                                                                                        |   |           |   |                                              |                                               |                                                                                                    |                                                                                  |

----

|                                     |             |                                                                                   |                                                                                                                                        |   | Weighted       |
|------------------------------------------|------------------|----------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|
|                                     |             |                                                                                   | Number of                                                                                                                                   |   | Average        |
|                                     |             |                                                                                   | Shares                                                                                                                                      |   | Exercise Price |
| Warrants Outstanding, June 30, 2011      | 201,100          | $                                                                                      | 5.77                                                                                                                                        |
|                                     | Granted          |                                                                                   |                        - |   | -              |
|                                     | Exercised        |                                                                                   |                        - |   | -              |
|                                     | Canceled/Expired |              (35,400) |                                                                                                                                        | 2.51   |
| Warrants Outstanding, September 30, 2011 | 165,700          | $                                                                                      | 6.47                                                                                                                                        |

----

|                                                          |                                                          |                                                                                                    |                                                                                                                |                                                                                                                | Wireless                                                        |                                                                                              |                                                |
|---------------------------------------------------------------|---------------------------------------------------------------|---------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------|---------------------------------------------------------------------------------------------------|-----------------------------------------------------|
|                                                          |                                                          |                                                                                                    | RFID                                                                                                                |                                                                                                                | Asset                                                           |                                                                                              |                                                |
|                                                          |                                                          |                                                                                                    | Technology                                                                                                          |                                                                                                                | Management                                                      |                                                                                              | Total                                               |
| Three Months Ended September 30, 2010                         |                                                          |                                                                                                    |                                                                                                                |                                                                                                                |                                                            |                                                                                              |
| Sales                                                         | $                                                             |            38,700                                | $                                                                                                                   |         3,694,700                                                           | $                                                               |       3,733,400                                                     |
|                                                          | Cost of Goods Sold                                            |                                                                                                    |            25,200                                            |                                                                                                                |         2,491,300       |                                                                                              |       2,516,500       |
| Gross Profit                                                  |                                                          |            13,500                                |                                                                                                                |         1,203,400                                                           |                                                            |       1,216,900                                                     |
|                                                          | Selling, General & Administrative Expenses                |                                                                                                    | 155,700                                                                                                             |                                                                                                                | 1,825,900                                                       |                                                                                              |       1,981,600       |
| Operating Loss                                                | $                                                             |         (142,200)                                               | $                                                                                                                   |          (622,500)                                                     | $                                                               |        (764,700)                                               |
| Less:  Current period loss accrued at June 30, 2010 |          142,200 |                                                                                                    |                    - |                                                                                                                |         142,200         |
|                                                          | Net Loss                                                      |   $                                                                                                |                  -             |   $                                                                                                            |          (622,500) |   $                                                                                          |        (622,500) |
| Gross Margin                                                  |                                                          | 34.9%                                                                                                   |                                                                                                                | 32.6%                                                                                                               |                                                            | 32.6%                                                                                             |
|                                                          |                                                          |                                                                                                    |                                                                                                                |                                                                                                                |                                                            |                                                                                              |                                                |
| Capital Expenditures                                          | $                                                             |                  - | $                                                                                                                   |                    - | $                                                               |                 - |
| Depreciation & Amortization                               | $                                                             |              3,400                     | $                                                                                                                   |            130,000                                           | $                                                               |         133,400                                           |

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|   | 31.1 | Certification of Chief Executive Officer |
|--------|------|------------------------------------------|
|   | 31.2 | Certification of Chief Financial Officer |
|   | 32.1 | Certification of Chief Executive Officer |
|   | 32.2 | Certification of Chief Financial Officer |

| (Registrant)              |
|---------------------------|
| /s/ John A. Carlson       |
| John A. Carlson           |
| Chief Financial Officer   |
| Alanco Technologies, Inc. |

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| /s/ Robert R. Kauffman               |
|--------------------------------------|
| _____________________________        |
| Robert R. Kauffman                   |
| Chairman and Chief Executive Officer |

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| /s/ John A. Carlson                                  |
|------------------------------------------------------|
| ________________________                             |
| John A. Carlson                                      |
| Executive Vice President and Chief Financial Officer |

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| 1.   | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
|----------------|-----------------------------------------------------------------------------------------------------------------------|

| 2.   | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| /s/ Robert R. Kauffman               |
|--------------------------------------|
| _____________________________        |
| Robert R. Kauffman                   |
| Chairman and Chief Executive Officer |
| Alanco Technologies, Inc.            |

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| 1.   | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
|----------------|-----------------------------------------------------------------------------------------------------------------------|

| 2.   | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company for the periods presented. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| /s/ John A. Carlson                                  |
|------------------------------------------------------|
| ________________________                             |
| John A. Carlson                                      |
| Executive Vice President and Chief Financial Officer |
| Alanco Technologies, Inc.                            |