LIQUIDITY AND CAPITAL RESOURCES
For the year ended
June 30, 2013, net cash provided by operating activities was $6,038,952as a result of net income of $854,123, non-cash charges of $4,944,338and net cash provided by the change in operating assets and liabilities of $240,491. Of the $4,944,338of non-cash charges, the most significant during fiscal year 2013 were depreciation and amortization of assets, and charges for the vesting and issuance of common stock for employee and director compensation offset by the decrease in fair value of warrant liabilities. The cash provided by the $240,491change in the Company's operating assets and liabilities was the result of decreases in inventory and prepaid and other assets as well as an increase in accounts payable, offset by a decrease in accrued expenses and increased accounts and finance receivables.
During the year ended
The Company obtained net cash of
$2,696,240through financing activities, $3,000,000of which are net proceeds from the Line of Credit and cash proceeds of $432,229from warrant exercises, offset by $614,937related to repayment of debt and $121,052related to cancellation of common stock by our executive officers to satisfy income tax liability due in connection with common stock awards. We experienced losses from inception through June 30, 2012, with net income for the year ended June 30, 2013. Our accumulated deficit through June 30, 2013is composed of cumulative losses amounting to approximately $198,300,000, preferred dividends converted to common stock of approximately $2,690,000, and charges incurred for the open-market purchases of preferred stock of approximately $150,000. 40 As a result of the continued growth in connections to our ePort Connect service that has fueled the strong growth in recurring revenue from license and transaction fees and the substantial improvement in GP dollars, the operating activities of the business are now providing cash to fund operations of the Company. Adjusted EBITDA for the year ended June 30, 2013was a positive $5,796,406compared to an Adjusted EBITDA loss of $2,777,338for the prior fiscal year. The Company reports Adjusted EBITDA to reflect the liquidity of operations and a measure of operational cash flow. Adjusted EBITDA excludes significant non-cash charges such as depreciation, amortization of intangibles, fair value warrant liability changes and stock-based compensation from net income (loss). We believe that, provided there are no unusual or unanticipated material non-operational expenses, achieving positive Adjusted EBITDA is sustainable, and will continue to increase, as our connection base increases. For the year ended June 30, 2013, cash provided by operating activities was $6,038,952. The Company believes it will continue to generate positive cash flow from operations during the 2014 fiscal year, as the Company adds connections to existing base of connections, provided there are no material unanticipated or unusual non-operational events. The largest use of cash is for ePorts purchased for use in the Company's JumpStart Program. For the year ended June 30, 2013, the Company used cash of $9,092,394in its JumpStart Program.