AUTRIS

During the six months ended December 31, 2014, the Company repaid outstanding loans from an officer of the Company totaling $42,808 and received advancements of $66,000. In addition, the same officer paid $14,000 of expenses on brhalf of the company. There was a total of $93,208 due to related parties as of December 31, 2014. The loans are non-interest bearing, due on demand and as such are included in current liabilities. The Company also has $140,000 due to a Company officer for compensation as of December 31, 2014. 

Subsequent to December 31, 2014, we issued 1,600,000 shares of common stock to an officer of the Company for the $80,000 of accrued compensation.

Subsequent to December 31, 2014, the Company entered into a $6,000 convertible note with an exercise price of 80% of the 10-day average closing price of the Company’s stock leading up to conversion. The note bears interest at 12% per annum and is due January 19, 2017.  As additional consideration to this note, the Company issued a warrant to the lender. The warrant gives the lender the ability to purchase 60,000 shares of the Company’s common stock at an exercise price of $.10. The warrant expires January 2016.

For the six months ended December 31, 2014, operating expenses were $342,041 as compared to $329,395 for the six months ended December 31, 2013. The increase in operating expenses for the six month periods were primarily attributable to an increase in general and administrative expenses increased   primarily due to increases in wage expense, which is partially offset by decreases in professional fees and travel.

For the six months ended December 31, 2014, net cash flows used in operating activities was $49,319 and was primarily attributable to our net loss of $162,119 adjusted for the add back of depreciation of $3,326 and $14,000 of expenses paid on behalf of the Company by a related party.  This is offset by net changes in operating assets and liabilities of $95,474 due to an increase in accounts receivable of $520, a decrease in inventory of $43,398 an increase of $80,000 of  wage expense to a Company officer, an increase in accounts payable and accrued expenses of $57,904 and increase in accrued imputed interest - related party of $2,647. For the six months ended December 31, 2013, net cash used by operating activities was $38,023 and was primarily attributable to our net loss of $107,707 adjusted for the add back by depreciation of $3,212 and offset by net changes in operating assets and liabilities of $24,603 due to an  increase in accounts receivable of $72,815 and an increase inventory $38,9 and a decrease in accounts payable and accrued expenses of $85,522.