Annual report pursuant to Section 13 and 15(d)

CONSOLIDATED STATEMENTS OF CASH FLOWS

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
 12 Months Ended
Jun. 30, 2015
Jun. 30, 2014
Cash flows from operating activities:    
Net loss $ (2,415,000) $ (4,299,000)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation 32,000 55,000
Amortization of prepaid advisory fees 17,000 1,561,000
Inventory valuation adjustment 0 (29,000)
Change in fair value of warrant liability (548,000) 330,000
Stock-based compensation 237,000 315,000
Stock issuance for services 21,000 152,000
Gain on sale of property and equipment (4,000) 0
Amortization of debt discount 60,000 0
Changes in operating assets and liabilities:    
Accounts receivable 71,000 (127,000)
Inventories (96,000) 104,000
Other current assets (50,000) 42,000
Accounts payable 133,000 (50,000)
Accrued expenses 179,000 (203,000)
Customer deposits from related party 0 (2,000)
Net cash used in operating activities (2,363,000) (2,151,000)
Cash flows from investing activities:    
Purchases of equipment (25,000) (4,000)
Proceeds from the sale of equipment 9,000 3,000
Net cash used in investing activities (16,000) (1,000)
Cash flows from financing activities:    
Proceeds from the sale of common stock and warrants, net of offering costs paid 501,000 1,276,000
Proceeds from stockholders note payable and line of credit 1,815,000 972,000
Net cash provided by financing activities 2,316,000 2,248,000
Net (decrease) increase in cash (63,000) 96,000
Cash, beginning of year 116,000 20,000
Cash, end of year 53,000 116,000
Supplemental disclosures of non-cash investing and financing activities:    
Conversion of debt to equity 0 3,136,000
Conversion of accrued interest into equity $ 0 $ 304,000
Issuance of warrants recorded as deferred financing costs 5,000 0
Debt discount related to warrants and beneficial conversion feature $ 165,000 $ 0