3 Going Concern	12 Months Ended
Jun. 30, 2015
Notes
3 Going Concern	3 GOING CONCERN Currently and historically, the Company has managed to operate its business with negative net working capital. The Company’s negative working capital is primarily due to our accumulated deficit, which we funded by an increase in short-term bank loans, and the sale of common stock of the Company. The Company is able to operate with a negative net working capital because of loans from unrelated and related parties. The Company believes operating cash flows staying positive in the near-term, continued support from related parties, and the ability to continue to roll over short-term debt, taken together, provide adequate resources to fund ongoing operations in the foreseeable future. The Company is also planning to seek equity financing to replace both short-term and long-term debts. The Company believes that the increased market demand for its main product in the near term and sales from several new products in future years will produce substantial positive cash flow. If the Company’s short-term cash flows decrease significantly and the Company is unable to pay its short-term liabilities, the Company’s business, financial condition and results of operations could be materially affected. We had an accumulated deficit of $58.4 58,354,968million as of June 30, 2015. In addition, we had negative working capital of $20.1 20,100,000million as of June 30, 2015. Our history of operating losses and lack of binding financing commitments raise substantial doubt as to our ability to continue as a going concern. Despite the large accumulated deficit, we have generated net profit and positive operating cash flow during the fiscal year 2015. Our management anticipates sufficient cash flows to fund our operations for the next twelve months by increasing revenues of our core product sales. Similarly, continued support from our lenders to rollover debt when due will be helpful to cash flow as well. However, if future sales do not meet our forecasts, we might need to fund operations by raising additional capital or seeking other external financing. As such, our ability to achieve our business plan is primarily dependent upon our ability to achieve our planned level of operations and/or obtain sufficient additional capital at an acceptable cost. With respect to these objectives, we cannot provide any assurance of success, as events or circumstances may occur which will prevent us from meeting our operating plan. We might be required to significantly curtail or cease operations if we could not secure additional financing. Management of the Company believes that the Company's large negative working capital will improve gradually during fiscal year 2016. Management expects the improvement to come from improved operating results, by extending short term into longer term loans, and by selling equity and converting debt to equity. Management anticipates that these improvements will enable the Company to reduce current high interest expenses and fund on-going operations. The management of the Company has taken a number of actions and will continue to address this situation in order to restore the Company to a sound financial position with an appropriate business strategy going forward. During the fiscal year 2015, the Company completed the sale of 6,740,747 shares of its common stock to investors, each of whom is either an officer, an employee or a consultant. The average purchase price for the shares was $0.36 per share. The Company also completed the sale of 12,863,690 shares of its common stock to creditors in satisfaction of $5.6 million in debt. The shares were valued at the average price of $0.43 per share. Most recently, the Company completed a registered direct sale of securities to a U.S. institutional investor for $3.0 million. Revenue for the year ended June 30, 2015 was significantly higher than revenue during the prior year, an improvement that was primarily attributable to the changes in our marketing program. Management believes the net profit and positive operating cash flows generated in this year will continue in the coming years due to the increased market demand for its main product. Management also believes that the Company will have continued support from related parties, and will have the ability to continue to roll over short-term debt. Lastly, the Company also started the process of securing additional funds through long term debt financing.

3 Going Concern

12 Months Ended

Jun. 30, 2015

3 GOING CONCERN

Currently and historically, the Company has managed to operate its business with negative net working capital. The Company’s negative working capital is primarily due to our accumulated deficit, which we funded by an increase in short-term bank loans, and the sale of common stock of the Company.

The Company is able to operate with a negative net working capital because of loans from unrelated and related parties. The Company believes operating cash flows staying positive in the near-term, continued support from related parties, and the ability to continue to roll over short-term debt, taken together, provide adequate resources to fund ongoing operations in the foreseeable future. The Company is also planning to seek equity financing to replace both short-term and long-term debts. The Company believes that the increased market demand for its main product in the near term and sales from several new products in future years will produce substantial positive cash flow. If the Company’s short-term cash flows decrease significantly and the Company is unable to pay its short-term liabilities, the Company’s business, financial condition and results of operations could be materially affected.

We had an accumulated deficit of $58.4 58,354,968million as of June 30, 2015. In addition, we had negative working capital of $20.1 20,100,000million as of June 30, 2015. Our history of operating losses and lack of binding financing commitments raise substantial doubt as to our ability to continue as a going concern. Despite the large accumulated deficit, we have generated net profit and positive operating cash flow during the fiscal year 2015. Our management anticipates sufficient cash flows to fund our operations for the next twelve months by increasing revenues of our core product sales. Similarly, continued support from our lenders to rollover debt when due will be helpful to cash flow as well. However, if future sales do not meet our forecasts, we might need to fund operations by raising additional capital or seeking other external financing. As such, our ability to achieve our business plan is primarily dependent upon our ability to achieve our planned level of operations and/or obtain sufficient additional capital at an acceptable cost. With respect to these objectives, we cannot provide any assurance of success, as events or circumstances may occur which will prevent us from meeting our operating plan. We might be required to significantly curtail or cease operations if we could not secure additional financing.

Management of the Company believes that the Company's large negative working capital will improve gradually during fiscal year 2016. Management expects the improvement to come from improved operating results, by extending short term into longer term loans, and by selling equity and converting debt to equity. Management anticipates that these improvements will enable the Company to reduce current high interest expenses and fund on-going operations.

The management of the Company has taken a number of actions and will continue to address this situation in order to restore the Company to a sound financial position with an appropriate business strategy going forward. During the fiscal year 2015, the Company completed the sale of 6,740,747 shares of its common stock to investors, each of whom is either an officer, an employee or a consultant. The average purchase price for the shares was $0.36 per share. The Company also completed the sale of 12,863,690 shares of its common stock to creditors in satisfaction of $5.6 million in debt. The shares were valued at the average price of $0.43 per share. Most recently, the Company completed a registered direct sale of securities to a U.S. institutional investor for $3.0 million.

Revenue for the year ended June 30, 2015 was significantly higher than revenue during the prior year, an improvement that was primarily attributable to the changes in our marketing program. Management believes the net profit and positive operating cash flows generated in this year will continue in the coming years due to the increased market demand for its main product. Management also believes that the Company will have continued support from related parties, and will have the ability to continue to roll over short-term debt. Lastly, the Company also started the process of securing additional funds through long term debt financing.