Trimedyne, Inc. ("Trimedyne") and
its subsidiaries (collectively "the Company") are engaged primarily in the manufacture and sale of lasers, and disposable
and reusable fiber-optic laser devices in the medical field. The Company's operations include the provision of services and rental
of lasers and other medical equipment to hospitals and surgery centers on a "fee-per-case" basis in the Southwestern
United States, through its wholly owned subsidiary Mobile Surgical Technologies, Inc. ("MST"), located in Dallas, Texas.
The Company's operations are primarily located in Southern California with distribution of its products worldwide (see Note 10).
At September 30, 2012, we had working capital
of $2,325,000 compared to $2,904,000 at the end of the previous fiscal year ended September 30, 2011. Cash decreased by $679,000
to $472,000 at September 30, 2012 from $1,151,000 at the fiscal year ended September 30, 2011.
During the first quarter of the fiscal year
ended September 30, 2012, we received 19 purchase orders for future delivery of Lasers, of which nine of these Lasers were shipped.
We expect to ship more of these Lasers during the next 12 months.
The Company has incurred recurring losses from
operations and has used cash in operating activities. These factors raise substantial doubt about the Companys ability to
continue as a going concern. Additional working capital in the next 12 months will be required.
We will attempt to raise additional debt and/or equity capital, sell some of our assets, reduce our costs by eliminating certain
personnel positions and continue to reduce certain overhead costs in order to fund operations. There is no assurance that our efforts
in securing capital necessary to sustain existing operations and exploit new technologies will be successful.
The Company is currently pursuing market development
efforts in growth markets in Pacific Rim countries, Latin America and Eastern Europe. We believe that by expanding healthcare
infrastructure in these markets we will create a sustained demand for Holmium Lasers applied to Spinal Endoscopy, Laser Lithotripsy
and Laser prostate ablation. Additionally, we expect the global trend toward single-use disposable laser delivery products will
improve sales and profit margins as more hospitals convert from multi-use products, due to concerns for sterility and interests
to reduce handling costs incurred in product sterilization and we are developing more single-use products.