UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

~~[X]~~x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~December~~March 31, ~~2014~~2015

~~[_]~~o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

COMMISSION FILE NO. 0-10581

TRIMEDYNE, INC.

Exact Name of Registrant as Specified in its Charter)

NEVADA	36-3094439
(STATE OR OTHER JURISDICTION OF INCORPORATION)	(I.R.S. EMPLOYER IDENTIFICATION NO.)
5 HOLLAND # 223 IRVINE, CALIFORNIA	92618
5 Holland #223 IRVINE, CALIFORNIA	92618
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)	(ZIP CODE)

Registrant's Telephone Number, Including Area Code:

(949) 951-3800

Securities Registered Pursuant to Section 12(b) of the Act:

NONE

Securities Registered Pursuant to Section 12(g) of the Act:

Common Stock, $.01 Par Value per Share

(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements ~~for~~ for the past 90 days. ~~Yes~~ ~~[X]~~ Yes x No ~~[_]~~ o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (ss. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ~~Yes~~ ~~[X]~~ Yes x No ~~[_]~~ o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ~~[_]~~o Accelerated filer ~~[_]~~o Non-accelerated filer ~~[_]~~o Smaller reporting company ~~[X]~~x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act of 1934). Yes ~~[_]~~ o No ~~[X]~~ x

As of ~~February~~May 2015, 2015, there were outstanding 18,395,960 shares of registrant's Common Stock.

TRIMEDYNE, INC.

		Page
PART I.	Financial Information	3
ITEM 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	6
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	12
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk - N/A	1516
ITEM 4.	Controls and Procedures	1516
PART II.	Other Information	1617
ITEM 1.	Legal Proceedings	1617
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	16
ITEM 1A.	Risk Factors - N/A	17
ITEM 3.	Defaults Upon Senior Securities	16
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	17
ITEM 4.	Mine Safety Disclosures	16
ITEM 3.	Defaults Upon Senior Securities	17
ITEM 5.	Other Information	16
ITEM 4.	Mine Safety Disclosures	17
ITEM 6.	Exhibits	16
ITEM 5.	Other Information	17
SIGNATURES		17
ITEM 6.	Exhibits	17
SIGNATURES		18

~~TRIMEDYNE,~~PART ~~INC.~~I - FINANCIAL STATEMENT

~~CONDENSED~~ITEM ~~CONSOLIDATED~~1. ~~BALANCE~~FINANCIAL ~~SHEETS~~STATEMENTS

~~(UNAUDITED)~~TRIMEDYNE, INC.

	December 31, 2014			September 30, 2014
ASSETS
Current assets:
Cash and cash equivalents	$	751,000		$	1,292,000
Trade accounts receivable, net of allowance for doubtful accounts of $11,000 at December 31, 2014 and September 30, 2014, respectively		522,000			463,000
Inventories		1,806,000			1,581,000
Other current assets		116,000			123,000
Total current assets		3,195,000			3,459,000
Property and equipment, net		608,000			635,000
Other		74,000			73,000
Goodwill		544,000			544,000
Total Assets	$	4,421,000		$	4,711,000
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	201,000		$	278,000
Accrued expenses		550,000			628,000
Deferred revenue		88,000			50,000
Accrued warranty		30,000			27,000
Current portion of note payable and capital leases		71,000			70,000
Total current liabilities		940,000			1,053,000
Deferred rent		4,000			6,000
Long-term debt		36,000			43,000
Total liabilities		980,000			1,102,000
Commitments and contingencies
Stockholders' equity:
Preferred stock - $0.01 par value, 1,000,000 shares authorized, none issued and outstanding		–			–
Common stock - $0.01 par value, 30,000,000 shares authorized, 18,497,569 shares issued, 18,395,960 shares outstanding at December 31, 2014 and September 30, 2014, respectively		186,000			186,000
Additional paid-in capital		51,312,000			51,311,000
Accumulated deficit		(47,344,000	)		(47,175,000	)
		4,154,000			4,322,000
Treasury stock, at cost (101,609 shares)		(713,000	)		(713,000	)
Total stockholders' equity		3,441,000			3,609,000
Total liabilities and stockholder's equity	$	4,421,000		$	4,711,000

CONDENSED CONSOLIDATED BALANCE SHEET

~~See accompanying notes to condensed consolidated financial statements~~(UNAUDITED)

	March 31, 2015			September 30, 2014
ASSETS

Current assets:
Cash and cash equivalents	$	578,000		$	1,292,000
Trade accounts receivable, net of allowance for doubtful accounts of $11,000 at March 31, 2015 and September 30, 2014		378,000			463,000
Inventories		1,805,000			1,581,000
Other current assets		82,000			123,000
Total current assets		2,843,000			3,459,000

Property and equipment, net		568,000			635,000
Other		75,000			73,000
Goodwill		544,000			544,000

Total Assets	$	4,030,000		$	4,711,000

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable	$	162,000		$	278,000
Accrued expenses		446,000			628,000
Deferred revenue		65,000			50,000
Accrued warranty		28,000			27,000
Income tax payable		4,000			–
Current portion of note payable and capital leases		55,000			70,000
Total current liabilities		760,000			1,053,000

Deferred rent		2,000			6,000
Capital lease		26,000			43,000

Total liabilities		788,000			1,102,000

Commitments and contingencies

Stockholders' equity:
Preferred stock - $0.01 par value, 1,000,000 shares authorized, none issued and outstanding		–			–
Common stock - $0.01 par value, 30,000,000 shares authorized, 18,497,569 shares issued, 18,395,960 shares outstanding at March 31, 2015 and September 30, 2014		186,000			186,000
Additional paid-in capital		51,313,000			51,311,000
Accumulated deficit		(47,544,000	)		(47,175,000	)
		3,955,000			4,322,000
Treasury stock, at cost (101,609 shares)		(713,000	)		(713,000	)

Total stockholders' equity		3,242,000			3,609,000

Total liabilities and stockholders’ equity	$	4,030,000		$	4,711,000

~~TRIMEDYNE,~~See ~~INC~~accompanying notes to condensed consolidated financial statements.

~~CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS~~3

~~(UNAUDITED)~~TRIMEDYNE, INC.

	For the Three Months Ended December 31,
	2014			2013
Net revenues	$	1,352,000		$	1,399,000
Cost of revenues		912,000			1,023,000
Gross profit		440,000			376,000
Operating expenses:
Selling, general and administrative		478,000			549,000
Research and development		128,000			124,000
Total operating expenses		606,000			673,000
(Loss) from operations		(166,000	)		(297,000	)
Other expense, net		(1,000	)		38,000
(Loss) before income taxes		(167,000	)		(259,000	)
Provision for income taxes		2,000			–
Net (loss)	$	(169,000	)	$	(259,000	)
Net (loss) per share:
Basic	$	(0.01	)	$	(0.01	)
Diluted	$	(0.01	)	$	(0.01	)
Weighted average number of shares outstanding:
Basic		18,395,960			18,395,960
Diluted		18,395,960			18,395,960

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

~~See accompanying notes to condensed consolidated financial statements~~(UNAUDITED)

	Three Months Ended March 31,						Six Months Ended March 31,
	2015			2014			2015			2014
Net revenues	$	1,193,000		$	1,382,000		$	2,545,000		$	2,781,000
Cost of sales		810,000			831,000			1,722,000			1,854,000
Gross profit		383,000			551,000			823,000			927,000

Operating expenses:
Selling, general and administrative		459,000			472,000			937,000			1,021,000
Research and development		122,000			112,000			250,000			236,000
Total operating expenses		581,000			584,000			1,187,000			1,257,000

Loss from operations		(198,000	)		(33,000	)		(364,000	)		(330,000	)

Other income, net		1,000			25,000			2,000			63,000

(Loss) before provision for income taxes		(197,000	)		(8,000	)		(362,000	)		(267,000	)

Provision for income taxes		5,000			3,000			7,000			3,000

Net (loss)	$	(202,000	)	$	(11,000	)	$	(369,000	)	$	(270,000	)

Net (loss) per share:
Basic	$	(0.01	)	$	(0.00	)	$	(0.02	)	$	(0.01	)
Diluted	$	(0.01	)	$	(0.00	)	$	(0.02	)	$	(0.01	)

Weighted average number of shares outstanding:
Basic		18,395,960			18,395,960			18,395,960			18,395,960
Diluted		18,395,960			18,395,960			18,395,960			18,395,960

~~TRIMEDYNE,~~See ~~INC~~accompanying notes to condensed consolidated financial statements.

~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~4

~~(UNAUDITED)~~TRIMEDYNE, INC.

	Three Months Ended December 31,
	2014			2013
Cash flows from operating activities:
Net loss	$	(169,000	)		(259,000	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Stock-based compensation		1,000			1,000
Depreciation and amortization		53,000			57,000
Changes in operating assets and liabilities:
Trade accounts receivable		(59,000	)		(43,000	)
Inventories		(225,000	)		161,000
Other assets		27,000			13,000
Accounts payable		(77,000	)		55,000
Accrued expenses		(78,000	)		38,000
Deferred revenue		38,000			37,000
Accrued warranty		3,000			9,000
Deferred rent		(2,000	)		(1,000	)
Net cash (used in) provided by operating activities		(488,000	)		68,000
Cash flows from investing activities:
Purchase of property and equipment		(26,000	)		(4,000	)
Net cash used in investing activities		(26,000	)		(4,000	)
Cash flows from financing activities:
Principal payments on notes payable and capital leases		(27,000	)		(37,000	)
Net cash used in financing activities		(27,000	)		(37,000	)
Net (decrease) increase in cash and cash equivalents		(541,000	)		27,000
Cash and cash equivalents at beginning of period		1,292,000			1,572,000
Cash and cash equivalents at end of period	$	751,000		$	1,599,000
Supplemental disclosure of cash flow information:
No cash was paid for income taxes during the three months ended December 31, 2014 and 2013. Cash paid for interest during the three months ended December 31, 2014 and 2013 was approximately $1,000 and $3,000, respectively.
During November of the prior year quarter, the Company financed the upgrading of its IT infrastructure with a lease agreement for $119,000.
During December of the current year quarter, the Company financed an additional insurance policy for $21,607.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

~~See accompanying notes to condensed consolidated financial statements~~(UNAUDITED)

	Six Months Ended March 31,
	2015			2014
Cash flows from operating activities:
Net loss	$	(369,000	)		(270,000	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		2,000			2,000
Depreciation and amortization		101,000			115,000
Changes in operating assets and liabilities:
Trade accounts receivable		85,000			43,000
Inventories		(224,000	)		24,000
Other assets		63,000			42,000
Accounts payable		(116,000	)		(49,000	)
Accrued expenses		(182,000	)		(38,000	)
Income tax payable		4,000			3,000
Deferred revenue		15,000			10,000
Accrued warranty		1,000			4,000
Deferred rent		(4,000	)		(2,000	)
Net cash used in operating activities		(624,000	)		(116,000	)

Cash flows from investing activities:
Purchase of property and equipment		(34,000	)		(6,000	)
Net cash used in investing activities		(34,000	)		(6,000	)

Cash flows from financing activities:
Principal payments on notes payable and capital leases		(56,000	)		(76,000	)
Net cash used in financing activities		(56,000	)		(76,000	)

Net decrease in cash and cash equivalents		(714,000	)		(198,000	)
Cash and cash equivalents at beginning of period		1,292,000			1,572,000
Cash and cash equivalents at end of period	$	578,000		$	1,374,000

~~TRIMEDYNE,~~Supplemental ~~INC.~~disclosure of cash flow information:

~~NOTES~~No TOcash ~~CONDENSED~~paid ~~CONSOLIDATED~~for ~~FINANCIAL~~income taxes for the six-month periods ended March ~~STATEMENTS~~31, 2015 and March 31, 2014, respectively.

~~DECEMBER~~Cash paid for interest during the six months ended March 31, 2015 and 2014 was approximately $3,000 and $4,000, respectively.

~~(UNAUDITED)~~During December 2015 and November 2013, the Company financed an additional insurance policy for $24,000 and $21,000, respectively.

~~NOTE~~During 1November -2013, ~~Summary~~the ofCompany ~~Significant~~financed ~~Accounting~~the upgrading of its ~~Policies~~IT infrastructure with a lease agreement for $119,000.

~~Principles~~See ofaccompanying ~~Consolidation~~notes to condensed consolidated financial statements.

The accompanying condensed consolidated financial statements include the accounts of Trimedyne, Inc., a Nevada corporation, its wholly owned subsidiary, Mobile Surgical Technologies, Inc. ("MST"), a Texas corporation, and its 90% owned inactive subsidiary, Cardiodyne, Inc. ("Cardiodyne"), a Nevada corporation, (collectively, the "Company"). All intercompany accounts and transactions have been eliminated in consolidation.5

~~Going~~TRIMEDYNE, ~~Concern~~INC.

AtNOTES ~~December~~TO ~~31,~~CONDENSED ~~2014,~~CONSOLIDATED ~~the~~FINANCIAL Company had working capital of $2,255,000 compared to $2,406,000 at the end of the fiscal year ended September 30, 2014. Cash decreased by $541,000 to $751,000 from $1,292,000 at September 30, 2014. We intend to fund operations with cash on hand and from operations, however, additional working capital in the next 12 months will be required based upon our current expenditure rate. These factors raise substantial doubt about the Company’s ability to continue as a going concern.STATEMENTS

WeMARCH plan to supply our Holmium Lasers and patented Side Firing Fibers to one or more separate companies being organized in which we will own a 30% equity interest at nominal cost. Since we cannot afford to fund large31, randomized, controlled clinical trials to prove the safety and efficacy of our new Lasers and Side Firing Fibers in the treatment of multiple medical conditions in various fields of medicine, helping these separate companies may become an outlet for our Lasers and Side Firing Fibers. However, the success of their efforts to raise capital cannot be assured and, if they were able to raise capital, there is no assurance that the clinical trials of any of these separate companies will be successful.2015

The first of these companies, Gastromedix, Inc., has been incorporated and is attempting to raise at least $10 million of capital to finance three or more, 25 patient “pilot” clinical trials and, if the “pilot” clinical trials are successful, which cannot be assured, one to three, 300 patient, randomized, controlled clinical trials of our Lasers and patented Side Firing Fibers in the treatment of Type II Diabetes, Obesity and GERD, often called “heartburn”, on which two U.S. Patent Applications are pending, in the gastroenterology field of medicine. These conditions affect millions of people in the U.S. and elsewhere and, if these larger clinical trials are successful, and this company receives FDA approval or clearance to market these products in the U.S., the CE Mark to market these products in the European Union and Medicare, other third-party payers in the U.S. and foreign governmental healthcare reimbursement, none of which can be assured, it could generate substantial sales of our Lasers and Side Firing Fibers.(UNAUDITED)

IfNOTE ~~necessary,~~1 we- ~~will~~Summary ~~also attempt to raise additional debt and/or equity capital, sell some~~ of ~~our~~Significant ~~assets, reduce our costs by eliminating certain personnel positions and~~Accounting ~~continue to reduce certain overhead costs in order to reduce our consumption levels.~~Policies

~~The~~Principles Company is currently pursuing market development efforts in Asia, Latin America and Eastern Europe. We believe that by expanding healthcare infrastructure in these markets, we may be able to create a sustained demand for Holmium Lasers and Fibers in the fields of Laser Spinal Endoscopy, Laser Lithotripsy in the laser treatment of other conditions. Additionally, we expect the global trend toward single-use, disposable laser delivery devices will improve sales and profit margins as more hospitals convert from multi-use devices, due to concerns for sterility and handling costs incurred in product sterilization, and we hope to develop more single-use medical devices.Consolidation

6The accompanying condensed consolidated financial statements include the accounts of Trimedyne, Inc., a Nevada corporation, its wholly owned subsidiary, Mobile Surgical Technologies, Inc. ("MST"), a Texas corporation, and its 90% owned inactive subsidiary, Cardiodyne, Inc. ("Cardiodyne"), a Nevada corporation, (collectively, the "Company"). All intercompany accounts and transactions have been eliminated in consolidation.

~~Unaudited~~Going ~~Interim Financial Information~~Concern

~~The~~At ~~accompanying~~March ~~unaudited~~31, ~~condensed~~2015, ~~consolidated financial statements have been prepared by~~ the Company ~~in accordance with accounting principles generally accepted in the United~~had ~~States~~working capital of ~~America for interim financial information~~$2,083,000 ~~and~~compared ~~pursuant~~ to ~~the instructions to Form 10-Q promulgated by the Securities and Exchange Commission ("SEC"). Accordingly~~$2, ~~they do not include all information and disclosures required by generally accepted accounting principles for complete financial statement presentation. In the opinion of management~~406,000 ~~the~~at ~~accompanying condensed consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly~~ the ~~Company's~~end ~~consolidated financial position as~~ of ~~December 31, 2014 and~~ the ~~results~~fiscal ofyear ~~its operations and its cash flows for the three months~~ ended ~~December~~September 3130, 2014 ~~and 2013~~. ~~Results~~Cash ~~for~~decreased ~~the three months ended December 31~~by $714,000 ~~2014 are not necessarily indicative of the results~~ to be$578,000 ~~expected~~from ~~for~~$1,292,000 ~~the~~at ~~year ending~~ September 30, ~~2015~~2014.

~~Use~~As of ~~Estimates~~March 31, 2015 we had cash on hand of $578,000. We intend to fund operations with cash on hand and from operations, however, additional working capital in the next 12 months will be required based upon our current expenditure rate. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The ~~preparation~~Company ofhas ~~financial~~been ~~statements~~pursuing inmarket ~~conformity~~development ~~with~~efforts ~~accounting principles generally accepted~~ in ~~the~~Asia ~~United States requires management to make certain estimates~~ and ~~assumptions~~we ~~that~~have ~~affect~~had ~~the~~positive ~~reported~~feedback ~~amounts~~from ofour ~~assets~~efforts. ~~and~~If ~~liabilities~~successful, ~~and~~we ~~disclosure~~could ofhave ~~contingent~~a ~~assets and liabilities~~significant atincrease ~~the~~in ~~date~~sales ofvolume ~~the financial statements and the reported amounts of revenues and expenses~~ during the ~~reporting~~next ~~period.~~two ~~Actual~~successive ~~results could~~quarters ~~differ~~in ~~from~~this ~~those~~market ~~estimates.~~area ~~Significant~~which ~~estimates~~may ~~and~~improve ~~assumptions~~our ~~include~~financial ~~inventory valuation, allowances for doubtful accounts~~condition and ~~deferred~~cash ~~income tax assets, recoverability of goodwill and long-lived assets and certain accrued liabilities~~reserves.

~~While~~The ~~management~~Company ~~believes~~is ~~that the disclosures~~currently ~~presented~~pursuing ~~are~~market ~~adequate~~development toefforts ~~make~~in ~~the~~Latin ~~information~~America ~~not~~and ~~misleading,~~Eastern itEurope. isWe ~~suggested~~believe that by expanding healthcare infrastructure in these ~~condensed~~markets, ~~consolidated~~we ~~financial~~may ~~statements~~ be ~~read~~able into ~~conjunction~~create ~~with~~sustained ~~the~~demand ~~condensed~~for ~~consolidated~~our ~~financial~~Holmium ~~statements~~Lasers and Fibers in the ~~notes~~fields ~~included~~of Laser Spinal Endoscopy, Laser Lithotripsy and in the ~~Company's~~laser ~~2014~~treatment ~~annual~~of other conditions. Additionally, we expect the global trend toward single-use, disposable ~~report~~laser ondelivery ~~Form~~devices 10may improve sales and profit margins as more hospitals convert from multi-Kuse devices, due to concerns for sterility ~~the~~and ~~year~~handling ~~ended~~costs ~~September~~incurred 30in product sterilization, ~~2014~~and we plan to develop more single-use optical fiber devices.

~~Stock-Based~~If ~~Compensation~~necessary, we will also attempt to raise additional debt and/or equity capital, sell some of our assets, reduce our costs by eliminating certain personnel positions and continue our efforts to reduce certain overhead costs in order to reduce our cash consumption levels.

~~Stock-based~~Unaudited ~~compensation~~Interim ~~was~~Financial $1,000 during the quarters ended December 31, 2014 and 2013. As of December 31, 2014, there was approximately $1,970 of total unrecognized compensation cost, net of estimated expected forfeitures, related to employee and director stock option compensation arrangements. This unrecognized cost is expected to be recognized on a straight-line basis over the next nine reporting periods.Information

~~Per~~The ~~Share~~accompanying ~~Information~~unaudited condensed consolidated financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial information, and pursuant to the instructions to Form 10-Q promulgated by the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all information and disclosures required by generally accepted accounting principles for complete financial statement presentation. In the opinion of management, the accompanying condensed consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the Company's consolidated financial position as of March 31, 2015 and the results of their operations and their cash flows for the six months ended March 31, 2015 and 2014. Results for the six months ended March 31, 2015 are not necessarily indicative of the results to be expected for the year ending September 30, 2015.

Basic per share information is computed based upon the weighted average number of common shares outstanding during the period. Diluted per share information consists of the weighted average number of common shares outstanding, plus the dilutive effects of options and warrants calculated using the treasury stock method. In loss periods, dilutive common equivalent shares are excluded as the effect would be anti-dilutive. During the three months ended December 31, 2014 and 2013, outstanding options of 801,900 and 818,900, respectively, were excluded from the diluted net loss per share as the effects would have been anti-dilutive. In addition, the exercise prices of these options were in excess of the average closing price of the Company’s common stock for the quarter ended December 31, 2014 and 2013.6

7Use of Estimates

~~NOTE~~The 2preparation -of ~~Composition~~financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions that affect the reported amounts of ~~Certain~~assets ~~Balance~~and ~~Sheet~~liabilities ~~Captions~~and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and assumptions include inventory valuation, allowances for doubtful accounts and deferred income tax assets, recoverability of goodwill and long-lived assets, losses for contingencies and certain accrued liabilities, as well as the valuation of equity compensation.

~~Inventories,~~While ~~net~~management ofbelieves ~~reserves~~that the disclosures presented are adequate to make the information not misleading, ~~consist~~it ofis suggested that these condensed consolidated financial statements be read in conjunction with the ~~following:~~condensed consolidated financial statements and the notes included in the Company's 2014 annual report on Form 10-K.

	December 31, 2014		September 30, 2014
Raw materials	$	698,000	$	549,000
Work-in-process		276,000		298,000
Finished goods		832,000		734,000
	$	1,806,000	$	1,581,000

Stock-Based Compensation

~~For~~We account for equity based compensation under the ~~three~~provisions ~~months~~of ~~ended~~Accounting ~~December~~Standards 31Codification (“ASC”) No. 718, "Compensation, Stock Compensation" ("ASC ~~2014~~718"). ~~and~~ASC ~~2013,~~718 requires the ~~aggregate~~recognition ~~net~~of ~~realizable~~the fair value of ~~demonstration~~equity-based ~~and~~compensation ~~evaluation~~in ~~lasers~~operations. ~~did~~The ~~not~~fair ~~comprise~~value of our stock option awards are estimated using a ~~material~~Black-Scholes ~~amount~~option invaluation model. This model requires the input of highly subjective ~~inventories~~assumptions and elections including expected stock price volatility and the estimated life of each award. In addition, the calculation of equity-based compensation costs requires that we estimate the number of awards that will be forfeited during the vesting period. The fair value of equity-based awards is amortized over the vesting period of the award.

~~Other~~The ~~current~~Company ~~assets~~measures ~~consist~~compensation expense for its non-employee stock-based compensation under ASC 505 “Equity”. The fair value of the ~~following:~~option issued or committed to be issued is used to measure the transaction, as this is more reliable than the fair value of the services received. The fair value is measured at the date the commitment for performance by the counterparty has been reached or the counterparty’s performance is complete. The fair value of the equity instrument is charged directly to stock-based compensation expense and credited to additional paid-in capital.

	December 31, 2014		September 30, 2014
Prepaid insurance		54,000		55,000
Prepaid income tax		10,000		11,000
Prepaid rent		13,000		13,000
Short-term deposits		8,000		8,000
Other		31,000		36,000
Total other current assets	$	116,000	$	123,000

During the quarter ended March 31, 2015, the Company granted 60,000 options to purchase common stock at $0.07 per share, vesting over three years, to a consultant.

~~Property~~Stock-based compensation was $2,000 and ~~equipment~~$2,000 during ~~consist~~the six months ended March 31, 2015 and 2014, respectively. As of March 31, 2015, there was approximately $5,224 of total unrecognized compensation cost, net of estimated expected forfeitures, related to employee and director stock option compensation arrangements. This unrecognized cost is expected to be recognized on a straight-line basis over the ~~following:~~next eleven reporting periods.

	December 31, 2014			September 30, 2014
Furniture and equipment	$	3,474,000		$	3,474,000
Leasehold improvements		57,000			57,000
Other		342,000			316,000
		3,873,000			3,847,000
Less accumulated depreciation and amortization		(3,265,000	)		(3,212,000	)
Total property and equipment	$	608,000		$	635,000

Per Share Information

~~Accrued~~Basic ~~expenses~~per ~~consist~~share information is computed based upon the weighted average number of common shares outstanding during the ~~following:~~period. Diluted per share information consists of the weighted average number of common shares outstanding, plus the dilutive effects of options and warrants calculated using the treasury stock method. In loss periods, dilutive common equivalent shares are excluded as the effect would be anti-dilutive. During the three and six months ended March 31, 2015 and 2014, outstanding options of 854,900 and 818,900, respectively, were excluded from the diluted net loss per share as the effects would have been anti-dilutive. In addition, the exercise prices of these options, with the exception of 110,000 options, were in excess of the average closing price of the Company’s common stock for the periods ended March 31, 2015 and 2014.

	December 31, 2014		September 30, 2014
Accrued vacation	$	190,000	$	181,000
Accrued salaries and wages		127,000		60,000
Accrued bonus		4,000		17,000
Medical device tax		89,000		83,000
Sales and use tax		52,000		58,000
Customer deposits		5,000		190,000
Property tax		17,000		–
Commissions		27,000		19,000
Other		39,000		20,000
Total accrued expenses	$	550,000	$	628,000

Cash and Cash Equivalents

8The Company considers all highly liquid investments with insignificant interest rate risk and original maturities of three months or less from the date of purchase to be cash equivalents. The carrying amounts of cash and cash equivalents approximate their fair values.

~~NOTE~~At ~~3. Note~~March ~~Payable~~31, ~~and~~2015, ~~Capital~~the ~~Lease~~Company had cash balances in excess of federally insured limits of $250,000 in the amount of $399,000.

~~Note payable and capital leases consist of the following:~~7

	December 31, 2014			September 30, 2014
Capital lease agreement in connection with the update of our IT infrastructure bearing an effective interest rate of 8.41% per annum. The lease requires monthly payments of $3,766 through October 2016	$	77,000		$	83,000
Finance agreement issued in connection with the purchasing of an insurance policy. The note bears interest at 4.75% per annum and requires monthly payments principal and interest payments of $2,011 through November 2015.		19,000			–
Finance agreement issued in connection with the purchasing of insurance policies. The note bears interest at 3.35% per annum and require monthly principal and interest payments of $5,693 through March 2015.		11,000			30,000
	$	107,000		$	113,000
Less: current portion		(71,000	)		(70,000	)
	$	36,000		$	43,000

NOTE 2 - Composition of Certain Balance Sheet Captions

~~NOTE 4~~Inventories, -net ~~Commitments~~of ~~and~~reserves, ~~Contingencies~~consist of the following:

Litigation

	March 31, 2015		September 30, 2014
Raw materials	$	465,000	$	549,000
Work-in-process		288,000		298,000
Finished goods		1,052,000		734,000
	$	1,805,000	$	1,581,000

WeAs ~~are~~of ~~subject~~March to31, ~~various~~2015 ~~claims~~ and ~~actions that~~September ~~arise~~30, in 2014, the ~~ordinary~~aggregate ~~course~~net ofrealizable ~~business.~~value ~~The~~of ~~litigation~~demonstration ~~process is inherently uncertain,~~ and itevaluation islasers ~~possible~~did ~~that~~not ~~the~~comprise ~~resolution of~~a ~~any~~material ~~future~~amount ~~litigation~~in ~~may adversely affect us~~inventories.

~~Guarantees~~Other ~~and~~current ~~Indemnities~~assets consist of the following:

The Company has made certain indemnities and guarantees, under which it may be required to make payments to a guaranteed or indemnified party. The Company indemnifies its directors, officers, employees and agents to the maximum extent permitted under the laws of the State of California. In connection with its facility leases, the Company has indemnified its users of lasers for certain claims arising from the use of the lasers. The duration of the guarantees and indemnities varies, and in many cases is indefinite. These guarantees and indemnities do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated to make any payments for these obligations and no liabilities have been recorded for these indemnities and guarantees in the accompanying condensed consolidated balance sheet.

	March 31, 2015		September 30, 2014
Prepaid rent		13,000		13,000
Prepaid insurance		16,000		55,000
Short-term deposits		7,000		8,000
Prepaid income tax		8,000		11,000
Other		38,000		36,000
Total other current assets	$	82,000	$	123,000

~~Risks~~Property and ~~Uncertainties~~equipment consist of the following:

The Centers for Medicare and Medicaid Services (CMS), the agency of the U.S. Government that administers the Medicare Program, does not reimburse for thermal intradiscal procedures to treat spinal discs including the use of the Company's pulsed Holmium Lasers. Since most people suffering from a herniated or ruptured spinal disc are below Medicare age, we do not believe CMS's decision will have an adverse impact on our business.

	March 31, 2015			September 30, 2014
Furniture and equipment	$	3,478,000		$	3,474,000
Leasehold improvements		60,000			57,000
Other		325,000			316,000
		3,863,000			3,847,000
Less accumulated depreciation and amortization		(3,295,000	)		(3,212,000	)
Total property and equipment	$	568,000		$	635,000

9Accrued expenses consist of the following:

NOTE 5 - Segment Information

	March 31, 2015		September 30, 2014
Accrued vacation	$	196,000	$	181,000
Accrued salaries and wages		58,000		60,000
Sales and use tax		53,000		58,000
Accrued bonus		7,000		17,000
Customer deposits		2,000		190,000
Commissions		20,000		19,000
Medical device tax		89,000		83,000
Other		21,000		20,000
Total accrued expenses	$	446,000	$	628,000

The Company's segments consist of individual companies managed separately with each manager reporting to the Principal Executive Officer. Revenues, and operating or segment profit, are reflected net of inter-segment sales and profits. Segment profit is comprised of net sales less operating expenses. Other income and expense and income taxes are not allocated and reported by segment since they are excluded from the measure of segment performance reviewed by management.8

~~Data~~NOTE ~~with~~3 ~~respect~~- toNote ~~these~~Payable ~~operating activities for the three months ended December 31, 2014~~ and ~~2013~~Capital ~~are as follows:~~Leases

	For the Three Months Ended December 31, 2014								For the Three Months Ended December 31, 2013
	Products			Service and Rental		Total			Products			Service and Rental			Total
Revenue	$	669,000		$	683,000	$	1,352,000		$	760,000		$	639,000		$	1,399,000
Cost of sales		414,000			498,000		912,000			527,000			496,000			1,023,000
Gross profit		255,000			185,000		440,000			233,000			143,000			376,000
Expenses:
Selling, general and administrative		320,000			158,000		478,000			391,000			158,000			549,000
Research and development		128,000			–		128,000			124,000			–			124,000
Income (loss) from operations	$	(193,000	)	$	27,000		(166,000	)	$	(282,000	)	$	(15,000	)		(297,000	)
Other:
Interest expense							(1,000	)								(3,000	)
Royalty income							–									30,000
Other income							–									11,000
Provision for income tax							2,000									–
Net loss						$	(169,000	)							$	(259,000	)

Note payable and capital leases consist of the following:

Sales and gross profit to customers by similar products and services for the three months ended December 31, 2014 and 2013 were as follows:

	March 31, 2015			September 30, 2014
Capital lease agreement in connection with the update of our IT infrastructure bearing an effective interest rate of 8.41% per annum. The lease requires monthly payments of $3,766 through October 2016.	$	67,000		$	83,000

Finance agreement issued in connection with the purchasing of an insurance policy. The note bears interest at 4.75% per annum and requires monthly payments principal and interest payments of $2,011 through November 2015.		14,000			–

Finance agreement issued in connection with the purchasing of insurance policies. The note bears interest at 3.35% per annum and require monthly principal and interest payments of $5,693 through March 2015.		–			30,000
	$	81,000		$	113,000

Less: current portion		(55,000	)		(70,000	)
	$	26,000		$	43,000

	For the Three Months Ended December 31,
	2014		2013
By similar products and services:
Revenues:
Laser equipment and accessories	$	247,000	$	283,000
Delivery and disposable devices		422,000		477,000
Service and rental		683,000		639,000
Total	$	1,352,000	$	1,399,000
Gross profit
Laser equipment and accessories	$	27,000	$	56,000
Delivery and disposable devices		228,000		177,000
Service and rental		185,000		143,000
Total	$	440,000	$	376,000

NOTE 4 - Commitments and Contingencies

10Litigation

~~Sales~~We inare ~~foreign~~subject ~~countries~~to ~~for~~various ~~the~~claims ~~three~~and actions ~~months~~that ~~ended~~arise ~~December~~in ~~31,~~the ~~2014~~ordinary ~~and~~course ~~2013~~of ~~accounted~~business. ~~for~~The ~~approximately~~litigation ~~26.1%~~process ~~and~~is ~~13.7%,~~inherently ~~respectively~~uncertain, ofand it is possible that the ~~Company's~~resolution of ~~total~~any ~~sales~~future litigation may adversely affect us. ~~The~~ ~~breakdown~~We byare ~~geographic~~not ~~region~~presently isinvolved asin ~~follows:~~any litigation.

	Three Months Ended December 31,
	2014		2013
Asia	$	254,000	$	167,000
Europe		11,000		5,000
Latin America		88,000		10,000
Australia		–		9,000
	$	353,000	$	191,000

Guarantees and Indemnities

~~Total~~The ~~segment~~Company ~~assets~~has atmade ~~December~~certain ~~31,~~indemnities ~~2014~~ and guarantees, ~~2013~~under ~~for~~which ~~the~~it ~~Products~~may ~~segment~~be ~~were~~required $2to make payments to a guaranteed or indemnified party. The Company indemnifies its directors,~~846~~ officers,~~000~~ employees and ~~$2,992,000,~~agents ~~respectively~~to the maximum extent permitted under the laws of the State of California. In connection with its facility leases, ~~and~~the Company has indemnified its users of lasers for certain claims arising from the ~~Service~~use ~~and~~of ~~Rental~~the ~~segment~~lasers. ~~were~~The ~~$1,553,000~~duration of the guarantees and $1indemnities varies,~~665,000,~~ ~~respectively.~~and ~~Total~~in ~~segment~~many ~~assets~~cases ~~differ~~is ~~from~~indefinite. ~~total~~These ~~assets~~guarantees onand aindemnities ~~consolidated~~do ~~basis~~not asprovide afor any ~~result~~limitation of ~~unallocated~~the maximum potential future payments the Company could be obligated to make. Historically, the Company has not ~~corporate~~been ~~assets~~obligated ~~primarily~~to ~~comprised~~make ofany ~~immaterial~~payments ~~amounts~~for ofthese ~~property~~obligations and ~~equipment,~~no ~~etc~~liabilities have been recorded for these indemnities and guarantees in the accompanying condensed consolidated balance sheet.

~~NOTE~~Risks 6and ~~– Subsequent Events~~Uncertainties

OnThe ~~January~~Centers ~~30,~~for ~~2015,~~Medicare ~~Marvin~~and P.Medicaid ~~Loeb, Sc.D.,~~Services ~~per his request~~(CMS), ~~was relieved from~~ the ~~offices~~agency of ~~Chairman of~~ the ~~Board~~U.S. ~~and~~Government ~~CEO~~that ofadministers the ~~Company,~~Medicare ~~due to his age~~ and aMedicaid ~~recent~~Programs, ~~injury temporarily~~does ~~limiting his mobility. This resignation was~~ not areimburse ~~result~~for ofthermal ~~any~~intradiscal procedures ~~disagreement~~to ~~with~~treat ~~the~~spinal ~~Company,~~discs ~~its~~including ~~management,~~ the ~~Company’s~~ ~~Board~~use orof ~~any matter relating to~~ the Company’'s ~~operations,~~pulsed ~~policies~~Holmium ~~or practices~~Lasers. InSince ~~addition,~~most ~~Dr.~~people ~~Loeb~~suffering ~~was elected~~from toa ~~the~~herniated or ~~office~~ruptured ofspinal ~~Chief~~disc ~~Scientific~~are ~~Officer~~below ofMedicare ~~the~~age, ~~Company~~we atdo ~~his~~not ~~current~~believe ~~cash~~CMS's ~~compensation,~~decision ~~and~~will ~~remains~~have aan ~~member~~adverse ofimpact ~~the Board~~on ofour ~~Directors of the Company~~business.

Further, Glenn D. Yeik, current President, COO and Director of the Company, was elected to the additional office of Chairman of the Board, effective immediately and is the acting Principal Executive Officer of the Company.9

~~Additionally,~~NOTE ~~Alan~~5 E.- ~~Loeb,~~Segment age 50, was appointed to the Company’s Board of Directors effective immediately. He is the sole Trustee of the four Trusts established by Dr. Loeb, which together constitute the Company’s principal stockholder.Information

11The Company's segments consist of individual companies managed separately with each manager reporting to the Principal Executive Officer. Revenues, and operating or segment profit, are reflected net of inter-segment sales and profits. Segment profit is comprised of net sales less operating expenses. Other income and expense and income taxes are not allocated and reported by segment since they are excluded from the measure of segment performance reviewed by management.

~~ITEM~~Data ~~2. MANAGEMENT'S~~with ~~DISCUSSION~~respect ~~AND~~to ~~ANALYSIS~~these OFoperating ~~FINANCIAL~~activities ~~CONDITION~~for ~~AND~~the ~~RESULTS~~three OFand ~~OPERATIONS~~six months ended March 31, 2015 and 2014 are as follows:

FORWARD-LOOKING STATEMENTS

	For the Three Months Ended March 31, 2015								For the Three Months Ended March 31, 2014
	Products			Service and Rental		Total			Products			Service and Rental		Total
Revenue	$	584,000		$	609,000	$	1,193,000		$	804,000		$	578,000	$	1,382,000
Cost of sales		368,000			442,000		810,000			449,000			382,000		831,000

Gross profit		216,000			167,000		383,000			355,000			196,000		551,000

Expenses:
Selling, general and administrative		309,000			150,000		459,000			320,000			152,000		472,000
Research and development		122,000			–		122,000			112,000			–		112,000

Income (loss) from operations	$	(215,000	)	$	17,000		(198,000	)	$	(77,000	)	$	44,000		(33,000	)

Other:
Interest expense							(2,000	)							(1,000	)
Royalty income							–								24,000
Other income							3,000								2,000
Income taxes							(5,000	)							(3,000	)
Net loss						$	(202,000	)						$	(11,000	)

This information should be read in conjunction with the condensed consolidated financial statements and notes thereto included in Item 1 of Part I of this Quarterly Report and the audited consolidated financial statements and notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations for the year ended September 30, 2014, contained in our 2014 Annual Report on Form 10-K.

	For the Six Months Ended March 31, 2015								For the Six Months Ended March 31, 2014
	Products			Service and Rental		Total			Products			Service and Rental		Total
Revenue	$	1,253,000		$	1,292,000	$	2,545,000		$	1,564,000		$	1,217,000	$	2,781,000
Cost of sales		782,000			940,000		1,722,000			976,000			878,000		1,854,000

Gross profit		471,000			352,000		823,000			588,000			339,000		927,000

Expenses:
Selling, general and administrative		629,000			308,000		937,000			711,000			310,000		1,021,000
Research and development		250,000			–		250,000			236,000			–		236,000

Income (loss) from operations	$	(408,000	)	$	44,000		(364,000	)	$	(359,000	)	$	29,000		(330,000	)

Other:
Interest expense							(3,000	)							(4,000	)
Royalty income							–								54,000
Other income							5,000								13,000
Income taxes							(7,000	)							(3,000	)
Net loss						$	(369,000	)						$	(270,000	)

~~The statements contained in this Quarterly Report on Form~~ 10-Q that are not historical facts may contain forward-looking statements that involve a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those discussed or anticipated by management. Potential risks and uncertainties include, among other factors, general business conditions, government regulations governing medical device approvals and manufacturing practices, competitive market conditions, success of the Company's business strategy, delay of orders, changes in the mix of products sold, availability of suppliers, concentration of sales in markets and to certain customers, changes in manufacturing efficiencies, development and introduction of new products, fluctuations in margins, timing of significant orders, and other risks and uncertainties currently unknown to management. We do not undertake any duty to update forward-looking statements after the date they are made or to conform them to actual results or to changes in circumstances or expectations.

~~OVERVIEW~~Sales and gross profit to customers by similar products and services for the three and six months ended March 31, 2015 and 2014 were as follows:

Trimedyne, Inc. (the "Company", "we", "our" or "us") is engaged in the development, manufacturing and marketing of 80 and 30 watt Holmium "cold" pulsed lasers ("Lasers") and a variety of disposable and reusable, fiber optic laser energy delivery devices ("Fibers", "Needles" and "Tips") for use in a broad array of medical applications.

	For the Three Months Ended March 31,					For the Six Months Ended March 31,
	2015		2014			2015		2014
By similar products and services:
Revenues:
Products:
Laser equipment and accessories	$	159,000	$	84,000		$	406,000	$	366,000
Delivery and disposable devices		425,000		720,000			847,000		1,198,000
Service and rental		609,000		578,000			1,292,000		1,217,000
Total	$	1,193,000	$	1,382,000		$	2,545,000	$	2,781,000

Gross profit
Products:
Laser equipment and accessories	$	8,000	$	(2,000	)	$	35,000	$	52,000
Delivery and disposable devices		208,000		357,000			436,000		536,000
Service and rental		167,000		196,000			352,000		339,000
Total	$	383,000	$	551,000		$	823,000	$	927,000

~~Our~~Sales ~~Lasers,~~in ~~Fibers,~~foreign ~~Needles~~countries ~~and Tips have been cleared~~ for ~~sale~~the bythree ~~the~~months ended ~~U.S.~~March ~~Food~~31, 2015 and ~~Drug~~2014, ~~Administration~~accounted for ~~use~~approximately in22% ~~orthopedics,~~and ~~urology~~26%, ~~ear~~respectively, ~~nose~~of ~~and~~the ~~throat~~Company's ~~surgery,~~total ~~gynecology,~~sales. Sales in foreign ~~gastrointestinal~~countries ~~surgery,~~for ~~general~~the ~~surgery~~six ~~and~~months ~~other~~ended ~~medical~~March ~~specialties.~~31, ~~Many~~2015 ofand ~~the~~2014 ~~medical~~accounted ~~procedures~~for inapproximately ~~which~~25% ~~our~~and ~~Lasers~~20%, ~~Fibers~~respectively, ~~Needles~~ ~~and~~of ~~Tips~~the ~~are~~Company's total ~~used~~sales. ~~are~~The ~~being~~breakdown ~~reimbursed~~ by ~~Medicare~~geographic ~~and~~region ~~many~~is ~~insurance~~as ~~companies and health plans.~~follows:

Our 100% owned subsidiary, Mobile Surgical Technologies, Inc. ("MST"), is engaged in the rental of lasers, along with the services of a trained operator and, if requested, the provision of applicable Fibers, Needles or Tips, on a "fee per case" basis to hospitals, surgery centers, group practices and individual physicians in Texas and nearby areas.

	Three Months Ended March 31, 2015		Three Months Ended March 31, 2014		Six Months Ended March 31, 2015		Six Months Ended March 31, 2014
Asia	$	182,000	$	288,000	$	481,000	$	455,000
Europe		69,000		18,000		52,000		23,000
Latin America		–		40,000		88,000		50,000
Middle East		2,000		1,000		2,000		1,000
Australia		9,000		14,000		13,000		23,000
	$	262,000	$	361,000	$	636,000	$	552,000

~~The~~During ~~principal~~the ~~market~~three ~~for our Lasers~~ and ~~Side~~ ~~Firing~~six ~~Needles~~months isended ~~presently in orthopedics to treat herniated (bulging) and ruptured lumbar, thoracic and cervical discs in~~March ~~the spine~~31, ~~two~~2015 ~~of the four major causes of lower back, neck~~ and ~~leg pain~~2014, ~~typically~~one onLaser anwas ~~outpatient~~located ~~basis. Our Lasers and Tips are also used~~ in ~~orthopedics to treat damage in joints~~Canada, ~~such as the knee, shoulder, elbow, hip, ankle and wrist, in outpatient, arthroscopic procedures~~respectively.

~~The~~Total ~~Company's~~segment ~~Lasers~~assets ~~and~~at ~~Fibers~~March ~~are~~31, ~~also~~2015 and ~~used~~2014 infor ~~Urology~~the toProducts ~~fragment~~segment ~~stones~~were in$2,464,000 ~~the~~and ~~Kidney~~$2,803,000, ~~ureter~~respectively, orand ~~bladder.~~for ~~The~~the ~~Company's~~Service ~~VaporMAX(R)~~and ~~Side~~Rental ~~Firing~~segment ~~Optical~~were ~~Fiber device~~$1,544,000 isand ~~also~~$1,600,000, ~~used~~respectively. toTotal ~~vaporize~~segment aassets ~~portion~~differ offrom ~~the~~total ~~male~~assets ~~prostate~~on ~~which~~a isconsolidated ~~used~~basis ~~with~~as ~~the~~a ~~Company’s~~result ~~Lasers in the treatment~~ of ~~benign~~unallocated ~~prostate~~corporate ~~hyperplasia~~assets orprimarily ~~"BPH",~~comprised ~~commonly~~of ~~referred~~immaterial toamounts asof anproperty ~~"enlarged~~and ~~prostate~~equipment."

~~CRITICAL~~NOTE ~~ACCOUNTING~~6 ~~POLICIES~~- SUBSEQUENT EVENTS

WeOn ~~prepare~~April ~~our~~1, ~~consolidated~~2015 ~~financial~~the ~~statements in~~Company ~~accordance~~entered ~~with~~into ~~accounting~~a finance ~~principles~~agreement ~~generally~~to ~~accepted~~purchase incertain ~~the~~insurance ~~United~~policies ~~States~~for ~~of America~~$64,000. The ~~preparation~~note ofbears ~~these~~interest ~~consolidated financial statements require the use of estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities~~ at ~~the date of the consolidated financial statements and the reported amount of revenues and expenses during the reporting period~~3.35% ~~Our~~per ~~management~~annum ~~periodically evaluates the estimates~~ and ~~judgments~~requires ~~made. Management~~monthly ~~bases~~principal ~~its estimates~~ and ~~judgments~~interest onpayments ~~historical experience and on various factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates as a result~~ of ~~different~~$5,890 ~~assumptions~~through orMarch ~~conditions~~2016.

12On April 21, 2015 the Company granted various individuals 940,000 stock options to purchase common stock at $0.07 per share, of which 640,000 were granted fully vested to various officers and directors and 300,000 were granted, vesting over a period of three years, to certain employees. In addition, the Company elected Edward D. Spriegel as a director and appointed him as Chairman of the Audit and Compensation Committees.

The methods, estimates, and judgment we use in applying our most critical accounting policies have a significant impact on the results we report in our consolidated financial statements. The SEC has defined "critical accounting policies" as those accounting policies that are most important to the portrayal of our financial condition and results, and require us to make our most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain based upon this definition. We also have other key accounting estimates and policies, but we believe that these other policies either do not generally require us to make estimates and judgments that are as difficult or as subjective, or it is less likely that they would have a material impact on our reported results of operations for a given period. For additional information see Note 1, "Summary of Significant Accounting Policies" in the notes to our reviewed consolidated financial statements appearing elsewhere in this quarterly report and our annual audited consolidated financial statements appearing on Form 10-K. Although we believe that our estimates and assumptions are reasonable, they are based upon information presently available, and actual results may differ significantly from these estimates.11

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~Method~~FORWARD-LOOKING ~~of Presentation~~STATEMENTS

~~The~~This ~~unaudited~~information should be read in conjunction with the condensed consolidated financial statements ~~include~~and ~~the~~notes ~~accounts~~thereto included in Item 1 of ~~Trimedyne,~~Part ~~Inc.,~~I ~~its~~of ~~wholly~~this ~~owned~~Quarterly ~~subsidiary~~Report ~~Mobile~~and the ~~Surgical~~audited ~~Technologies,~~consolidated ~~Inc.~~financial ~~("MST")~~statements and notes thereto and Management's Discussion and Analysis of Financial Condition and ~~its~~Results ~~90%~~of ~~owned~~Operations ~~subsidiary~~for the year ended September 30, ~~Cardiodyne~~2014, contained in our 2014 Annual Report on Form 10-K.

~~Quarter~~The ~~Ended~~statements ~~December~~contained 31in this Quarterly Report on Form 10-Q that are not historical facts may contain forward-looking statements that involve a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those discussed or anticipated by management. Potential risks and uncertainties include, ~~2014~~among ~~Compared~~other factors, general business conditions, government regulations governing medical device approvals and manufacturing practices, competitive market conditions, success of the Company's business strategy, delay of orders, changes in the mix of products sold, availability of suppliers, concentration of sales in markets and to ~~Quarter~~certain ~~Ended~~customers, changes ~~December~~in manufacturing efficiencies, development and introduction of new products, fluctuations in margins, timing of significant 31orders, ~~2013~~and other risks and uncertainties currently unknown to management. We do not undertake any duty to update forward-looking statements after the date they are made or to conform them to actual results or to changes in circumstances or expectations.

During the quarter ended December 31, 2014, net revenues were $1,352,000 as compared to $1,399,000 for the same period of the previous year, a $47,000 or 3.4% decrease. Net sales from Lasers and accessories decreased by $36,000 or 12.7% to $247,000 during the three months ended December 31, 2014 from $283,000 in the same period of the prior year. Net sales from Fibers, Needles and Tips decreased $55,000, or 11.6% to $422,000 during the current period ended December 31, 2014 as compared to $477,000 in the same period of the prior year. The decrease in sales from Fibers, Needles and Tips was primarily due to the delaying of shipments resulting from the impact on manufacturing due to the relocation of our facility in California. Net sales from service and rental increased by $44,000, or 7.0%, to $683,000 from $639,000 for the same quarters. The increase was primarily due to an increase in sales of service parts from our facility in California.OVERVIEW

~~Cost of sales during the quarter ended December 31~~Trimedyne, ~~2014 was 67% of net revenue as compared to 73% of net revenues for the prior year quarter~~Inc. ~~The higher gross profit in~~ (the ~~current quarter as compared to the prior year quarter was the result of many factors~~"Company", ~~including the~~"we", ~~updated~~"our" ~~application~~or of"us") ~~overhead~~is ~~rates~~engaged toin ~~reflect~~ the ~~Company’s current cost structure~~development, ~~the~~manufacturing ~~amount of inventory that was scrapped,~~ and ~~labor~~marketing ~~requirements in each unique period which also effects overhead application. Gross profit from the sale~~ of ~~Lasers~~ 80 and ~~accessories~~30 ~~was~~watt ~~11%~~Holmium ~~as compared to 20% for the prior year three-month period. The decrease in gross profit from~~"cold" ~~the~~pulsed ~~sale~~lasers of ("Lasers") inand ~~the~~a ~~current~~variety ~~period as compared to the prior period was primarily due to incentive discounts afforded to an international distributor to facilitate the opening~~ of adisposable ~~new~~and ~~market. Gross profit from the Fibers~~reusable, ~~Needles~~fiber ~~and~~optic ~~Tips~~laser ~~was~~energy ~~54%~~delivery ~~for the~~devices ~~quarter as compared to 37% for the same period of the prior fiscal year. The higher gross profit from the sale of~~ ("Fibers", "Needles" and "Tips") was primarily a result of the updated overhead application rates which reduces monthly manufacturing variances. Gross profit from revenue received from service and rentals was 27% in the current quarter, as compared to 22% for ~~the~~use ~~prior three-month period. The increase~~ in ~~gross profit as~~ a ~~percentage~~broad ofarray ~~sales from service and revenue as compared to the prior year period was primarily due to the increase in the sales~~ of ~~service~~medical ~~parts from our California facility, which carry a higher margin~~applications.

~~Selling~~Our Lasers, ~~general~~Fibers, Needles and ~~administrative~~Tips ~~expenses~~have been ~~decreased~~cleared infor ~~the~~sale ~~current~~by ~~quarter~~the toU.S. ~~$478,000~~Food ~~from~~and ~~$549,000~~Drug inAdministration ~~the~~for ~~prior~~use ~~year~~in ~~quarter~~orthopedics, aurology, ~~decrease of $71~~ear,~~000~~ ornose ~~13%.~~and ~~The~~throat ~~decrease~~surgery, gynecology, ingastrointestinal ~~selling~~surgery, general surgery and ~~administrative~~other ~~expenses~~medical ~~was~~specialties. ~~primarily~~Many ~~the result~~ of ~~decreases~~the ofmedical ~~$13,000~~procedures in ~~payroll~~which ~~related~~our ~~expense~~Lasers, ~~$12~~Fibers,~~000~~ inNeedles ~~commission~~and ~~expense,~~Tips ~~$13,000~~are inused ~~audit~~are ~~fees,~~being ~~$23,000~~reimbursed ~~legal~~by ~~expense~~Medicare and ~~$11,000~~many in insurance ~~expense.~~companies ~~The~~and ~~overall~~health ~~decrease during the current period was the result of the Company’s continuing efforts to reduce its overhead expenses~~plans.

~~Research~~Our ~~and~~100% ~~development~~owned ~~expenditures~~subsidiary, ~~increased~~Mobile Surgical toTechnologies, ~~$128~~Inc. ("MST"),~~000~~ oris 3%engaged ~~for~~in the ~~quarter~~rental ~~ended~~of ~~December 31~~lasers, ~~2014,~~along aswith ~~compared~~the ~~$124,000~~services ~~for~~of ~~the~~a ~~quarter~~trained ~~ended~~operator ~~December 31~~and, ~~2013. During~~if requested, the ~~current~~provision ~~quarter~~of ~~ended~~applicable ~~December 31~~Fibers, ~~2014,~~Needles ~~R&D~~or ~~activities~~Tips, ~~consisted~~on ofa ~~updating~~"fee ~~documentation~~per ~~for~~case" ~~existing~~basis ~~products due~~ to ~~design~~ ~~changes~~hospitals, ~~renewal~~surgery ~~of foreign approvals~~centers, group ~~supplier~~practices and ~~third~~individual ~~party~~physicians ~~audits, and updating risk management files~~ in ~~compliance with~~Texas ~~current~~and ~~international~~nearby ~~standards~~areas.

13The principal market for our Lasers and Side Firing Needles is presently in orthopedics to treat herniated (bulging) and ruptured lumbar, thoracic and cervical discs in the spine, two of the four major causes of lower back, neck and leg pain, typically on an outpatient basis. Our Lasers and Tips are also used in orthopedics to treat damage in joints, such as the knee, shoulder, elbow, hip, ankle and wrist, in outpatient, arthroscopic procedures.

~~Other~~The ~~income~~Company's Lasers and ~~expense,~~Fibers ~~decreased~~are byalso used ~~$39,000~~in orUrology ~~103%~~ to afragment ~~net~~stones ~~expense~~in ofthe $1kidney,~~000~~ ~~during~~ureter ~~the~~or ~~current~~bladder. ~~quarter~~The ~~ended~~Company's ~~December~~VaporMAX(R) ~~31,~~Side ~~2014~~Firing ~~from~~Optical ~~$38,000~~Fiber ofdevice ~~income~~is ~~in the first~~also ~~quarter~~used ofto ~~the~~vaporize ~~prior~~a ~~year.~~portion ~~Other~~of ~~income during~~ the ~~prior~~male ~~year~~prostate ~~quarter~~which ~~ended~~is ~~December~~used ~~31,~~with ~~2013~~the ~~primarily~~Company’s ~~consisted~~Lasers ofin ~~$30,000 of royalty income from Lumenis, Ltd. During~~ the ~~current~~treatment ~~quarter~~of ~~ended~~benign ~~December~~prostate hyperplasia ~~31,~~or ~~2014~~"BPH", nocommonly ~~royalties~~referred ~~were received from Lumenis, Ltd., due~~ to ~~the~~as ~~expiration~~an of"enlarged ~~the royalty agreement in August, 2014~~prostate."

For the current quarter, the Company had a net loss of $169,000, or $0.01 per share, as compared to net loss of $259,000, or $0.01 per share during the same period of the prior year, based on 18,395,960 basic weighted average number of common shares outstanding. The reduction in loss for the current quarter was primarily the result more favorable margins from sale of Fibers, Needles and Tips and a 13% reduction of selling, general and administrative expenses.12

~~Liquidity~~CRITICAL ~~and~~ACCOUNTING ~~Capital~~POLICIES

AtWe ~~December~~prepare ~~31,~~our ~~2014,~~consolidated financial statements in accordance with accounting principles generally accepted in the ~~Company~~United ~~had~~States ~~working~~of America. The preparation of these financial ~~capital~~statements require the use of ~~$2,255,000~~estimates ~~compared~~and toassumptions ~~$2,406,000~~that ataffect the ~~end~~reported amounts of assets and liabilities and the ~~fiscal~~disclosure of ~~year~~contingent ~~ended~~assets ~~September~~and ~~30,~~liabilities ~~2014.~~at ~~Cash~~the ~~decreased~~date byof ~~$541,000 to~~the ~~$751,000~~financial ~~from~~statements ~~$1,292,000~~and atthe ~~September~~reported ~~30,~~amount ~~2014.~~of ~~Cash~~revenues ~~used~~and inexpenses ~~financing~~during the ~~activities~~reporting ~~was~~period. ~~$27,000~~Our ~~which~~management ~~was~~periodically evaluates the ~~result~~estimates ofand ~~payment~~judgments made. Management bases its estimates and judgments on ~~notes~~historical ~~payable~~experience and aon ~~lease.~~various ~~During~~factors ~~the~~that ~~quarter~~are ~~ended~~believed ~~December~~to ~~31,~~be ~~2014,~~reasonable under the ~~Company~~circumstances. ~~financed~~Actual anresults may ~~additional~~differ ~~insurance~~from ~~policy~~these ~~for $22,000~~estimates as a result of different assumptions or conditions.

AsThe ~~of December 31~~methods, ~~2014~~estimates, and judgment we ~~had~~use in ~~cash~~applying our most critical accounting policies have a significant impact on the results we report in our financial statements. ~~hand~~The SEC has defined "critical accounting policies" as those accounting policies that are most important to the portrayal of ~~$751~~our financial condition and results,~~000~~ and require us to make our most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based upon this definition, our most critical estimates assumptions include inventory valuation, allowances for doubtful accounts and deferred income tax assets, recoverability of goodwill and long-lived assets, losses for contingencies and certain accrued liabilities, as well as the valuation of equity compensation. We ~~intend~~also have other key accounting estimates and policies, but we believe that these other policies either do not generally require us to make ~~fund~~estimates ~~operations~~and ~~with~~judgments ~~cash~~that are as difficult or as subjective, or it is less likely that they would have a material impact on ~~hand~~our ~~and~~reported ~~from~~results of operations, ~~however,~~for a given period. For additional ~~working~~information ~~capital~~see Note 1, "Summary of Significant Accounting Policies" in the ~~next~~ 12notes ~~months~~to ~~will~~our bereviewed ~~required~~financial ~~based~~statements ~~upon~~appearing elsewhere in this quarterly report and Note 2 to our annual ~~current~~audited ~~expenditure~~financial ~~rate~~statements appearing on Form 10-K. ~~These~~Although ~~factors~~we ~~raise~~believe ~~substantial~~that ~~doubt~~our ~~about~~estimates ~~the~~and ~~Company’s~~assumptions are reasonable, ~~ability~~they toare ~~continue~~based asupon ainformation ~~going~~presently ~~concern~~available, and actual results may differ significantly from these estimates.

WeRESULTS ~~plan~~OF to supply our Holmium Lasers and patented Side Firing Fibers to one or more separate companies being organized in which we will own a 30% equity interest at nominal cost. Since we cannot afford to fund large, randomized, controlled clinical trials to prove the safety and efficacy of our new Lasers and Side Firing Fibers in the treatment of multiple medical conditions in various fields of medicine, helping these separate companies may become an outlet for our Lasers and Side Firing Fibers. However, the success of their efforts to raise capital cannot be assured and, if they were able to raise capital, there is no assurance that the clinical trials of any of these separate companies will be successful.OPERATIONS

~~The~~Method ~~first~~ of these companies, Gastromedix, Inc., has been incorporated and is attempting to raise at least $10 million of capital to finance three or more, 25 patient “pilot” clinical trials and, if the “pilot” clinical trials are successful, which cannot be assured, one to three, 300 patient, randomized, controlled clinical trials of our Lasers and patented Side Firing Fibers in the treatment of Type II Diabetes, Obesity and GERD, often called “heartburn”, on which two U.S. Patent Applications are pending, in the gastroenterology field of medicine. These conditions affect millions of people in the U.S. and elsewhere and, if these larger clinical trials are successful, and this company receives FDA approval or clearance to market these products in the U.S., the CE Mark to market these products in the European Union and Medicare, other third-party payers in the U.S. and foreign governmental healthcare reimbursement, none of which can be assured, it could generate substantial sales of our Lasers and Side Firing Fibers.Presentation

IfThe ~~necessary,~~unaudited wecondensed ~~will~~consolidated ~~also attempt to raise~~financial ~~additional~~statements ~~debt~~include ~~and/or~~the ~~equity~~accounts ~~capital, sell some~~ of ~~our~~Trimedyne, ~~assets~~Inc., ~~reduce~~its ~~our~~wholly ~~costs~~owned bysubsidiary ~~eliminating~~Mobile ~~certain~~Surgical ~~personnel~~Technologies, ~~positions~~Inc. ~~and~~("MST") ~~continue~~and toits ~~reduce~~90% ~~certain~~owned ~~overhead~~subsidiary, ~~costs in order to reduce our consumption levels~~Cardiodyne.

~~The~~Three ~~Company~~months isended ~~currently~~March ~~pursuing market development efforts in Asia~~31, ~~Latin~~2015 ~~America and Eastern Europe. We believe that by expanding healthcare infrastructure in these~~compared ~~markets, we may be able~~ to ~~create~~three amonths ~~sustained~~ended ~~demand~~March ~~for Holmium Lasers and Fibers in the fields of Laser Spinal Endoscopy~~31, Laser Lithotripsy in the laser treatment of other conditions. Additionally, we expect the global trend toward single-use, disposable laser delivery devices will improve sales and profit margins as more hospitals convert from multi-use devices, due to concerns for sterility and handling costs incurred in product sterilization, and we hope to develop more single-use medical devices.2014

During the quarter ended March 31, 2015, net revenues were $1,193,000 as compared to $1,382,000 for the same period of the previous year, a decrease of $189,000 or 14%. Net sales from lasers and accessories increased by $75,000 or 89% to $159,000 during the quarter ended March 31, 2015 from $84,000 in the same period of the previous year. Lasers carry a high selling price and are subject to a longer, less predictable closing period which, as a result, can create larger variances between periods. Net sales from delivery and disposable devices decreased by $295,000 or 41% to $425,000 in the quarter ended March 31, 2015 from $720,000 in the same period of the previous year. The higher sales during the quarter ended March 31, 2014, was primarily the result of shipments to fulfill backorders created by the delaying of shipments resulting from the impact on manufacturing due to the relocation of our facility in California during the fiscal year ended September 30, 2013. During the quarter ended March 31, 2015, net sales from service and rental increased by $31,000 or 5% to $609,000 from $578,000 for the same quarter of the prior year. The increase in service and rental revenue was primarily due to an increase in fee-per-case revenue from MST for certain procedures. Revenue from export sales decreased by $99,000 or 27% to $262,000 during the quarter ended March 31, 2015 from $361,000 during the same quarter of the previous year, primarily due to a decrease in sales of Fibers, Needles and Tips during the current three-month period.

~~OFF BALANCE SHEET ARRANGEMENTS~~13

~~None~~Cost of sales during the quarter ended March 31, 2015 was $810,000 or 68% of net revenues as compared to $831,000 or 60% the same period of the previous year. Gross profit as a percentage of sales for Lasers and accessories was 5% as compared to a gross loss of (2%) for the same quarter of the previous year. The lower gross profit for lasers and accessories during the prior year quarter was the result of a volumizing difference due to an 89% decrease in Laser sales during the prior year quarter as compared to the current year quarter. The gross profit as a percentage of sales from the sale of Fibers, Needles and Tips was 49% and 50% for the quarter ended March 31, 2015 and 2014, respectively. Gross profit from revenue received from service and rentals as a percentage of revenues was 27% and 34% during the quarters ended March 31, 2015 and 2014, respectively. The lower gross profit was primarily due to an increase in the cost of service parts for the service department at our California facility resulting from our revaluation of inventory performed during the last quarter of the prior year along with a correction to the allocation of property tax expense for MST’s equipment during the current year quarter.

~~ITEM~~Selling, general and administrative expenses decreased in the quarter ended March 31, 2015 to $459,000 from $472,000 in the same period of the previous year, a decrease of $13,000 or 3%. ~~QUANTITATIVE~~The ~~AND~~decreases ~~QUALITATIVE~~in ~~DISCLOSURES~~selling, ~~ABOUT~~general ~~MARKET~~and administrative expenses during the quarter ended March 31, 2015 compared to ~~RISK.~~the ~~N/A~~same period of the previous year were primarily the result of decreases in outside administrative services of $17,000, payroll related expense of $14,000, insurance expense of $11,000 and legal expense of $4,000, offset by increases in professional services for audit and tax of $17,000, bad debt expense of $9,000, certifications and licenses expense of $5,000 and commissions expense of $2,000.

~~ITEM~~Research 4and development expenditures for the quarter ended March 31, 2015, increased $10,000 or 9% to $122,000 as compared to $112,000 in the same period of the previous year. The ~~CONTROLS~~increase ~~AND~~was ~~PROCEDURES~~primarily due the addition of full time staff during the current year quarter replacing temporary outside services utilized during the prior year quarter. During the period ended March 31, 2015, R&D activities consisted of expanding our line of single use and reusable Tapertips™ and bare fibers, researching and procuring components to enhance laser output for proposed laser systems, optimizing label content and inspection for existing products, and updating technical and risk management files in compliance with current international standards.

~~Disclosure~~Other ~~Controls~~income, ~~and~~net, ~~Procedures.~~decreased ~~Our management~~by ~~has evaluated~~$24,000 ~~under~~or 96% ~~the~~to ~~supervision~~$1,000 ~~and~~in ~~with~~ the ~~participation~~quarter ofended ~~our~~March ~~principal~~31, ~~executive~~2015 ~~officer~~from ~~and principal financial officer~~$25,000 ~~the~~in ~~effectiveness of our disclosure controls and procedures as of~~ the ~~end~~same ~~of the~~ period ~~covered by this report pursuant to Rule 13a-15(b) under the Securities Exchange Act~~ of ~~1934 (~~the ~~"Exchange~~previous ~~Act")~~year. ~~Based~~This ondecrease ~~that~~was ~~evaluation, our principal~~primarily ~~executive~~the ~~officer~~result ~~and principal financial officer have concluded that, as~~ of the ~~end~~receipt of ~~the period covered by this report~~$24,000 ~~our disclosure controls and procedures are effective~~ in ~~ensuring~~royalty ~~that~~income ~~information~~received ~~required~~from toLumenis beduring ~~disclosed~~the inprior ~~our~~year ~~Exchange~~quarter ~~Act~~which ~~reports is~~has ~~(1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management,~~subsequently ~~including~~ceased ~~our~~due ~~principal executive officer and principal financial officer, as appropriate~~ to ~~allow~~the ~~timely~~expiration ~~decisions~~of ~~regarding~~the ~~required disclosure~~license agreement.

~~Changes~~For inthe ~~Internal~~quarters ~~Control~~ended ~~Over~~March ~~Financial~~31, 2015 and 2014, ~~Reporting.~~the ~~There~~Company ~~have~~had ~~been~~a nonet ~~changes~~loss inof ~~our~~$202,000 ~~internal~~or ~~control~~$0.01 ~~over~~per ~~financial~~share, ~~reporting~~as ~~that~~compared ~~occurred~~to ~~during~~a ~~the~~net ~~period~~loss ~~covered by~~of ~~this~~$11,000 ~~report~~or ~~that~~$0.00 ~~have~~per ~~materially~~share, ~~affected~~respectively, based oron ~~are~~18,395,960 ~~reasonably~~basic ~~likely~~weighted toaverage ~~materially~~number ~~affect~~of common shares outstanding, ~~our~~resulting ~~internal~~from ~~control~~the ~~over~~above ~~financial reporting~~mentioned factors.

15Six months ended March 31, 2015 compared to six months ended March 31, 2014

~~PART~~During ~~II Other~~the ~~Information~~six months ended March 31, 2015, net revenues decreased to $2,545,000 as compared to $2,781,000 for the same period of the previous year, a $236,000 or 8% decrease. Net sales from Lasers and accessories increased by $40,000 or 11% to $406,000 during the six months ended March 31, 2015 from $366,000 in the same period of the previous year. Lasers carry a high selling price and are subject to a longer, less predictable closing period, which as a result, can create larger variances between periods. Net revenues from Fibers, Needles and Tips decreased by $351,000 or 29% to $847,000 during the six months ended March 31, 2015 from $1,198,000 for the same period of the previous year. The higher sales during the six-month ended March 31, 2014, was primarily the result of shipments to fulfill backorders created by the delaying of shipments resulting from the impact on manufacturing due to the relocation of our facility in California during the fiscal year ended September 30, 2013.Net revenues from service and rental increased by $75,000, or 6%, to $1,292,000 from $1,217,000 for the same six-month period of the previous year. The increase in service and rental revenue was primarily due to an increase in billable service revenue during the current six-month period as compared to the same period of the previous year. Revenue from export sales increased by $84,000 to $636,000 during the six-month period ended March 31, 2015 from $552,000 during the same period of the previous year, primarily due to an increase in Laser sales in during the current six-month period.

~~Item 1. Legal Proceedings~~14

~~None~~Cost of sales during the six months ended March 31, 2015 were $1,722,000 or 68% of net revenues as compared to $1,854,000 or 67% for the same period of the previous year. Gross profit as a percentage of sales from the sale of Lasers and accessories was 9% as compared to 14% for the same six-month period of the previous year, primarily due to discounted lasers sales to facilitate the opening of new markets in Asia. Gross profit as a percentage of sales from the sale of Fibers, Needles and Tips was 51% as compared to 45% for the same six-month period of the previous year. Gross profit from revenue received from service and rentals was 27% as compared to 28% for the same six-month period of the previous year. The lower gross profit was primarily due to an increase in the cost of service parts for the service department at our California facility resulting from our revaluation of inventory performed during the last quarter of the prior year along with a correction to the allocation of property tax expense for MST’s equipment during the current year.

~~Item~~For 2the six months ended March 31, 2015, selling, general and administrative expenses decreased $84,000 or 8% to $937,000 as compared to $1,021,000 for the same period of the previous year. ~~Unregistered~~ ~~Sales~~The decrease in selling, general and administrative expenses during the six-month period ended March 31, 2015 was primarily the result of ~~Equity~~decreases ~~Securities~~in payroll related expense of $37,000, legal expense of $27,000, insurance expense of $22,000, outside administrative service of $21,000, bank service fees of $12,000, and commission expense of $8,000 offset by increases in bad debt ~~Use~~expense of ~~Proceeds~~$9,000 and certification expense of $5,000.

~~None~~During the six months ended March 31, 2015, research and development expenses increased to $250,000 from $236,000 in the same six-month period of the previous year, an increase of $14,000 or 6%. The increase was primarily due the addition of full time staff during the current year six-month period replacing temporary outside services utilized during the prior year six-month period. During the period ended March 31, 2015, R&D activities consisted of expanding our line of single use and reusable Tapertips™ and bare fibers, researching and procuring components to enhance laser output for proposed laser systems, optimizing label content and inspection for existing products, and updating technical and risk management files in compliance with current international standards.

~~Item~~Other 3income decreased by $61,000 or 97% to $2,000 in the six-month period ended March 31, 2015 from $63,000 in the same six-month period of the previous year. ~~Defaults~~ ~~Upon~~This ~~Senior~~decrease was ~~Securities~~primarily the result of the cessation of royalty payments received during the current year due to the expiration of a license agreement during the last quarter of the prior year, of which $54,000 was received during the prior year six-month period.

~~None~~For the six months ended March 31, 2015 and 2014, the Company had a net loss of $369,000 or $0.02 per share, as compared to a net loss of $270,000 or $0.01 per share, respectively, based on 18,395,960 basic weighted average number of common shares outstanding, resulting from the above mentioned factors.

~~Item~~Liquidity ~~4. [Removed~~ and ~~Reserved]~~Capital

~~Item~~At 5March 31, 2015, the Company had working capital of $2,083,000 compared to $2,406,000 at the end of the fiscal year ended September 30, 2014. ~~Other~~ ~~Information~~Cash decreased by $714,000 to $578,000 from $1,292,000 at September 30, 2014. Cash used in investing activities was $34,000 for the purchase of fixed assets. Cash used in financing activities was $56,000 which was the result of payments on notes payable and a lease.

~~None~~As of March 31, 2015, we had cash on hand of $578,000. We intend to fund operations with cash on hand and from operations; however, additional working capital in the next 12 months will be required based upon our current expenditure rate. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

~~Item~~The 6Company has been pursuing market development efforts in Asia and we have had positive feedback from our efforts. ~~Exhibits~~ If successful, we could have a significant increase in sales volume during the next two successive quarters in this market area which may improve our financial condition and cash reserves.

~~(a) Exhibits~~15

31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Glenn D. Yeik
31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Jeffrey S. Rudner
32.1	Principal Executive Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Principal Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance document
101.SCH	XBRL Schema
101.CAL	XBRL Calculation Linkbase
101.DEF	XBRL Definition Linkbase
101.LAB	XBRL Label Linkbase
101.PRE	XBRL Presentation Linkbase

The Company is currently pursuing market development efforts in Latin America and Eastern Europe. We believe that by expanding healthcare infrastructure in these markets, we may be able to create sustained demand for our Holmium Lasers and Fibers in the fields of Laser Spinal Endoscopy, Laser Lithotripsy and in the laser treatment of other conditions. Additionally, we expect the global trend toward single-use, disposable laser delivery devices may improve sales and profit margins as more hospitals convert from multi-use devices, due to concerns for sterility and handling costs incurred in product sterilization, and we plan to develop more single-use optical fiber devices.

16We plan to supply our Holmium Lasers and patented Side Firing Fibers to one or more separate companies being organized in which we will own a 30% equity interest at nominal cost. Since we cannot afford to fund large, randomized, controlled clinical trials to prove the safety and efficacy of our new Lasers and Side Firing Fibers in the treatment of multiple medical conditions in various fields of medicine, helping these separate companies may become an outlet for our Lasers and Side Firing Fibers. However, the success of their efforts to raise capital cannot be assured and, if they were able to raise capital, there is no assurance that the clinical trials of any of these separate companies will be successful.

~~SIGNATURE~~The ~~PAGE~~first of these companies, Gastromedix, Inc. (“Gastromedix”), has been incorporated and is attempting to raise at least $10 million of capital to finance three or more, 25 patient “pilot” clinical trials and, if the “pilot” clinical trials are successful, which cannot be assured, one to three, 300 patient, randomized, controlled clinical trials of our Lasers and patented Side Firing Fibers in the treatment of Type II Diabetes, Obesity and GERD, often called “heartburn”, in the gastroenterology field of medicine, on which two U.S. Patent Applications were filed in September, 2012.

~~Pursuant~~These conditions affect millions of people in the U.S. and elsewhere and, if these larger clinical trials are successful, and Gastromedix receives FDA approval or clearance to market these products in the ~~requirements~~U.S., ofthe CE Mark to market these products in the ~~Securities~~European Union and ~~Exchange~~Medicare, ~~Act~~other ofthird-party ~~1934,~~payers in the ~~Registrant~~U.S. ~~has~~and ~~duly~~foreign ~~caused~~governmental ~~this~~healthcare ~~Report~~reimbursement, tonone of which can be ~~signed~~assured, it oncould ~~its~~generate ~~behalf~~substantial bysales ~~the~~of ~~undersigned~~our ~~hereunto~~Lasers ~~duly~~and ~~authorized~~Side Firing Fibers.

	TRIMEDYNE, INC.
Date: February 23, 2015	By:	s/ Glenn D. Yeik
		Glenn D. Yeik
		Chairman and Principal Executive Officer

Gastromedix is currently talking with leading hospitals outside the U.S. on conducting its “pilot” clinical trials, as clinical trials outside the U.S. cost much less than in the U.S., one of which has indicated it has significant interest in doing so. However, no contract to do so has yet been signed with this hospital.

	TRIMEDYNE, INC.
Date: February 23, 2015	By:	s/ Jeffrey S. Rudner
		Jeffrey S. Rudner
		Principal Financial Officer

In the interim, if necessary, we will also attempt to raise additional debt and/or equity capital, sell some of our assets, reduce our costs by eliminating certain personnel positions and continue our efforts to reduce certain overhead costs in order to reduce our cash consumption levels.

17OFF BALANCE SHEET ARRANGEMENTS

None.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures. Our management has evaluated, under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (the "Exchange Act"). Based on that evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting. There have been no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - Other Information

Item 1. Legal Proceedings

None

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults Upon Senior Securities

None

Item 4. [Removed and Reserved]

Item 5. Other Information

None

Item 6. Exhibits

(a) Exhibits

31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Glenn D. Yeik
31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Jeffrey S. Rudner
32.1	Principal Executive Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Principal Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance document
101.SCH	XBRL Schema
101.CAL	XBRL Calculation Linkbase
101.DEF	XBRL Definition Linkbase
101.LAB	XBRL Label Linkbase
101.PRE	XBRL Presentation Linkbase

SIGNATURE PAGE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

	TRIMEDYNE, INC.

Date: May 19, 2015	By:	/s/ Glenn D. Yeik
		Glenn D. Yeik
		Principal Executive Officer

	TRIMEDYNE, INC.

Date: May 19, 2015	By:	/s/ Jeffrey S. Rudner
		Jeffrey S. Rudner
		Principal Financial Officer

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