0000948830-15-000081.txt : 20151110 0000948830-15-000081.hdr.sgml : 20151110 20151109131126 ACCESSION NUMBER: 0000948830-15-000081 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 20150930 FILED AS OF DATE: 20151109 DATE AS OF CHANGE: 20151109 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BION ENVIRONMENTAL TECHNOLOGIES INC CENTRAL INDEX KEY: 0000875729 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE CHEMICALS [2870] IRS NUMBER: 841176672 STATE OF INCORPORATION: CO FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-19333 FILM NUMBER: 151214923 BUSINESS ADDRESS: STREET 1: C/O BOX 566 STREET 2: 1774 SUMMITVIEW WAY CITY: CRESTONE STATE: CO ZIP: 81131 BUSINESS PHONE: (212) 758-6622 MAIL ADDRESS: STREET 1: C/O BOX 566 STREET 2: 1774 SUMMITVIEW WAY CITY: CRESTONE STATE: CO ZIP: 81131 FORMER COMPANY: FORMER CONFORMED NAME: RSTS CORP DATE OF NAME CHANGE: 19930328 10-Q 1 bion093015.htm BION ENVIRONMENTAL TECH 9-30-15 10-Q Converted by EDGARwiz

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q


x   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended September 30, 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. 000-19333


Bion Environmental Technologies, Inc.

(Name of registrant in its charter)


Colorado

84-1176672

(State or other jurisdiction of incorporation or formation)

   

(I.R.S. employer identification number)


Box 566 / 1774 Summitview Way

Crestone, Colorado  81131

(Address of principal executive offices)

 

  (212) 758-6622

(Registrants telephone number, including area code) 


Not Applicable

(Former name, former address and former fiscal year, if changed since last report)


Indicate by check mark whether the registrant (1) has filed all reports required 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 the past 90 days.     x   Yes  o   No


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 (§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).       x  Yes  o  No


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 the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.




Large accelerated filer   o


Accelerated filer  o




Non-accelerated filer    o

(Do not check if a smaller reporting company)


Smaller reporting company x 



SEC 1296 (03-10) Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.


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






1



APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.   Not applicable.


APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.  On November 6, 2015, there were 22,624,013 Common Shares issued and 21,919,704 Common Shares outstanding.




2



BION ENVIRONMENTAL TECHNOLOGIES, INC.


FORM 10-Q


TABLE OF CONTENTS



PART I.  FINANCIAL INFORMATION


Page





Item 1.

Financial Statements



5


Consolidated financial statements (unaudited):




  Balance sheets


5


  Statements of operations


6


  Statement of changes in equity (deficit)


7


  Statements of cash flows


8


  Notes to unaudited consolidated financial statements


9-22





Item 2.

Management's Discussion and Analysis of Financial Condition

and Results of Operations


23





Item 3.

Quantitative and Qualitative Disclosures about Market Risk


36





Item 4.

Controls and Procedures


36





PART II.  OTHER INFORMATION







Item 1.

Legal Proceedings


37





Item 1A.

Risk Factors


37





Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds


37





Item 3.

Defaults Upon Senior Securities


37





Item 4.

Mine Safety Disclosures


37





Item 5.

Other Information


37





Item 6.

Exhibits


38






Signatures


39









3



FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements, within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that involve substantial risks and uncertainties.  Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "will," "expect," "intend," "estimate," "anticipate," "project," "predict," "plan," "believe" or "continue" or the negative thereof or variations thereon or similar terminology.  The expectations reflected in forward-looking statements may prove to be incorrect.






4



PART I FINANCIAL INFORMATION


BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS







September 30,



June 30,






2015



2015






(Unaudited)




ASSETS















Current assets:







Cash

$

180,346 


$

339,286 


Promissory note receivable (Note 4)


105,828 




Prepaid expenses


22,417 



18,503 


Subscription receivable (Note 9)




13,125 


Deposits and other receivables


7,108 



7,108 



Total current assets



315,699 



378,022 










Property and equipment, net (Note 3)


1,904,600 



1,977,219 



Total assets


$

2,220,299 


$

2,355,241 










LIABILITIES AND EQUITY (DEFICIT)















Current liabilities:







Accounts payable and accrued expenses

$

1,436,972 


$

1,353,168 


Series B Redeemable Convertible Preferred stock, $0.01 par value,







   50,000 shares authorized; 200 shares issued and outstanding,







   liquidation preference of $28,500 and $28,000, respectively


25,900 



25,400 


Notes payable affiliates, net of discount (Note 5)




472,230 


Deferred compensation (Note 6)


900,524 



839,288 


Loan payable (Note 7)


7,754,000 



7,754,000 



Total current liabilities



10,117,396 



10,444,086 











Convertible notes payable affiliates, net of current portion (Note 8)



3,187,307 



2,654,708 



Total liabilities



13,304,703 



13,098,794 










Deficit:








 

Bion's stockholders' equity (deficit):







Series A Preferred stock, $0.01 par value, 10,000 shares authorized,







   no shares issued and outstanding





Series C Convertible Preferred stock, $0.01 par value,







   60,000 shares authorized; no shares issued and outstanding






Common stock, no par value, 100,000,000 shares authorized, 22,606,852






   and 22,089,650 shares issued, respectively; 21,902,543 and







   21,385,341 shares outstanding, respectively





Additional paid-in capital


101,380,805 



100,889,127 


Accumulated deficit


(112,527,294)



(111,696,060)



Total Bions stockholders deficit



(11,146,489)



(10,806,933)


Noncontrolling interest


62,085 



63,380 



Total deficit



(11,084,404)



(10,743,553)



Total liabilities and deficit


$

2,220,299 


$

2,355,241 


See notes to consolidated financial statements.







5



BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

(UNAUDITED)









2015



2014























Revenue





$


$












Operating expenses:










General and administrative (including stock-based









compensation  (Note 9))



507,905 



357,341 


Depreciation



75,879 



184,884 


Research and development (including stock-based









compensation (Note 9))



134,489 



66,586 













Total operating expenses




718,273 



608,811 












Loss from operations




(718,273)



(608,811)












Other expense:









Interest expense, net



114,256 



96,947 



















114,256 



96,947 












Net loss






(832,529)



(705,758)












Net loss attributable to the noncontrolling interest



1,295 



1,071 












Net loss attributable to Bion




(831,234)



(704,687)












Dividends on preferred stock




(500)



(500)












Net loss applicable to Bion's common stockholders


$

(831,734)


$

(705,187)












Net loss applicable to Bion's common stockholders








per basic and diluted common share


$

(0.04)


$

(0.04)












Weighted-average number of common shares outstanding:








Basic and diluted




22,289,077 



19,817,076 


See notes to consolidated financial statements.








6



BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)

THREE MONTHS ENDED SEPTEMBER 30, 2015

(UNAUDITED)





























Bion's Shareholders'



Non-







Series C Preferred Stock

Common Stock



Additional


Accumulated



controlling


Total




Shares


Amount


Shares


Amount


paid-in capital


deficit



interest


equity/(deficit)

























Balances, July 1, 2015


$


22,089,650


$


$

100,889,127 


$

(111,696,060)


$

63,380 


$

(10,743,553)


Issuance of common stock for services




29,934





25,952 







25,952 


Vesting of options for services

 - 








15,320 







15,320 


Warrants exercised for common stock




278,394 





279,189 







279,189 


Dividend on Series B preferred stock








(500)







(500)


Conversion of debt




208,874 





171,717 







171,717 


Net loss







(831,234)


(1,295)


(832,529)

Balances, September 30, 2015


$


22,606,852


$


$

101,380,805 


$

(112,527,294)


$

62,085 


$

(11,084,404)




See notes to consolidated financial statements.

 

7








 

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

(UNAUDITED)







2015


2014

CASH FLOWS FROM OPERATING ACTIVITIES







Net loss


$

(832,529)


$

(705,758)


Adjustments to reconcile net loss to net cash used in operating activities:








Depreciation expense


75,879 



184,884 



Accrued interest on deferred compensation and other


114,469 



93,577 



Stock-based compensation


41,272 



7,947 



Increase in prepaid expenses


(3,914)



(1,686)



Increase in accounts payable and accrued expenses


34,429 



111,257 



Increase in deferred compensation and convertible notes


227,400 



156,000 




Net cash used in operating activities


(342,994)



(153,779)











CASH FLOWS FROM INVESTING ACTIVITIES







Purchase of property and equipment


(3,260)






Net cash used in investing activities


(3,260)













CASH FLOWS FROM FINANCING ACTIVITIES







Decrease in subscription receivable


13,125 



30,000 


Proceeds from sale of common stock




26,250 


Proceeds from exercise of warrants


174,189 






Net cash provided by financing activities


187,314 



56,250 











Net decrease in cash


(158,940)



(97,529)











Cash at beginning of period


339,286 



186,148 











Cash at end of period

$

180,346 


$

88,619 











Supplemental disclosure of cash flow information:







Cash paid for interest

$


$











Non-cash investing and financing transactions:







Series B preferred stock dividends accrued

$

500 


$

500 


Issuance of common stock to satisfy deferred compensation

$

171,717 


$


Exercise of warrants for promissory note receivable

$

105,000 


$


See notes to consolidated financial statements.







8


 

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 2015


1.

ORGANIZATION, NATURE OF BUSINESS, GOING CONCERN AND MANAGEMENTS PLANS:

Organization and nature of business:

Bion Environmental Technologies, Inc. (Bion or We or the "Company") was incorporated in 1987 in the State of Colorado and has developed and continues to develop patented and proprietary technology and business models that provide comprehensive environmental solutions to a significant source of pollution in United States agriculture, large scale livestock facilities known as Confined Animal Feeding Operations ("CAFO's"). Bion's technologies (and applications related thereto) produce substantial reductions of nutrient releases (primarily nitrogen and phosphorus) to both water and air (including ammonia, which is subsequently re-deposited to the ground) from livestock waste streams based upon our operations and research to date (and third party peer review thereof). We are continually involved in research and development to upgrade and improve our technology and technology applications, including integration with third party technology.  Bion provides comprehensive and cost-effective treatment of livestock waste onsite, while it is still concentrated and before it contaminates air, soil, groundwater aquifers and/or downstream waters, and, in certain configurations, recovers nutrients for potential use as fertilizer and feed additives.

During the 2014 fiscal year the Company increased its research and development activities with focus on creating variations of its technology platform that provide additional flexibility, increase recovery of nutrient by-products (in organic and non-organic forms) and potential related revenue streams, and to review potential add-ons and applications for use in different regulatory environments.  These research and development activities continued through the 2015 fiscal year, and we believe such activities will continue at least through the 2016 fiscal year, subject to availability of adequate financing for the Companys operations, of which there is no assurance.

Bion is  actively pursuing business opportunities in three broad areas 1) installation of Bion systems to retrofit and environmentally remediate existing CAFOs to reduce nutrient (primarily nitrogen and phosphorus) releases, gaseous emissions (ammonia, greenhouse gases, volatile organic compounds, etc.), and pathogens, hormones and other compounds in order to clean the air and water in the surrounding areas (as described below) to ensure compliance with existing (and future) regulations and to permit herd expansion; 2) development of Integrated Projects opportunities within the United States and internationally; and 3) licensing and/or joint venturing of Bions technology and applications outside North America. The opportunities described at 1) and 2) above (and below) each require substantial political and regulatory (federal, state and local) efforts on the part of the Company and a substantial part of Bions efforts are focused on such political and regulatory matters.  The most intense focus is currently on the requirements for the clean-up of the Chesapeake Bay faced by the Commonwealth of Pennsylvania and the potential use of Bions technology and technology platform on CAFOs as an alternative to what the Company believes is far more expensive nutrient removal downstream in storm water projects.

Management believes that Bion's technology platform (including utilization of various third party technologies to supplement the Companys proprietary technologies), in addition to utilization for remediation of the waste streams of existing CAFOs, can enable the integration of large-scale CAFO's and their end-product users, renewable energy production from the CAFO waste stream, on site utilization of the renewable energy generated and biofuel/ethanol production in an environmentally and economically sustainable manner while reducing the aggregate capital expense and operating costs for the entire integrated complex ("Integrated Projects" or "Projects"). In the context of Integrated Projects, Bion's waste treatment process, in addition to mitigating polluting releases, enables generation of renewable energy from cellulosic portions of the CAFO waste stream, which renewable energy can be utilized by integrated facilities including ethanol plants, CAFO end-product processors (including cheese, ice cream and/or bottling plants in the case of dairy CAFOs and/or slaughter and/or processing facilities in the context of beef CAFOs) and/or other users as a fossil fuel replacement. The nutrients (primarily nitrogen and phosphorus) can be harvested from the solids and liquid streams recovered from the livestock waste stream and can be utilized as either high value fertilizer and/or the basis for high protein animal feed and the nutrient rich effluent can potentially be utilized in integrated hydroponic agriculture and/or field applied as fertilizer.  Bion believes that its Integrated Projects will produce high quality, traceable animal protein which can




9


 

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 2015


address consumer food safety/security concerns at a lower cost than current industry practices while also maintaining  a far lower net environmental footprint per unit of protein produced due to water recycling (possible due to the removal of nutrients, etc. from the water by Bions technology applications), production of renewable energy from the waste stream (reducing the use of fossil fuels), and multiple levels of economies of scale, co-location and integration savings in transportation and other logistics. Some projects may involve only partial integration which will limit the benefits described herein.

On September 27, 2008, the Company executed an agreement with Kreider Farms (and its affiliated entities) (collectively "Kreider") to design, construct and operate (through its wholly-owned subsidiaries, Bion Services Group, Inc. (Bion Services) and Bion PA-1 LLC (PA-1) a Bion system to treat the waste of 1,200 milking dairy cows (milkers, dry cows and heifers) at the Kreider Dairy, located in Manheim, Pennsylvania. In addition, the agreement (as amended and supplemented) provides for a second phase which will treat the wastes from the rest of Kreiders herd and includes renewable energy production from the cellulosic solid wastes from the Phase 1 system (referred to as Kreider 1) together with the waste stream from Kreiders poultry facilities for use at the facilities and/or for market sales. The Kreider projects are owned and operated by Bion through subsidiaries, in which Kreider has the option to purchase a noncontrolling interest. Substantial capital (equity and/or debt) has been and will continue to be expended on these projects.  Additional funds will be required for continuing operations of Kreider 1 until sufficient revenues can be generated, of which there is no assurance. The Company anticipates that such projects will generate revenue primarily from the sale of nutrient reduction (and/or other) environmental credits related to Kreider 1 and the Kreider Phase 2 poultry waste treatment system (not yet constructed), and secondarily through sales of byproducts (feed additives and/or fertilizer, (organic and non-organic)) and renewable energy generated by the Kreider Phase 2 system. To date the market for long-term nutrient reduction credits in Pennsylvania has been very slow to develop and the Companys activities have been negatively affected by the lack of such development.  A portion of Bions research and development activities is currently taking place at the Kreider 1 facility.

The Companys subsidiary PA-1 financed Kreider 1 through a $7.8 million loan (Pennvest Loan) from Pennsylvania Infrastructure Investment Authority (Pennvest) secured by Kreider 1 (and its revenue streams, if any) plus advances from the Company. The economics (potential revenues and profitability) of Kreider 1 are based largely on the long-term sale of nutrient reduction credits (nitrogen and/or phosphorus) to meet the requirements of the Chesapeake Bay environmental clean-up.  The Pennsylvania Department of Environmental Protection (PADEP) issued final permits for Kreider 1 (including the credit verification plan) on August 1, 2012 on which date the Company deemed that Kreider 1 was placed in service.  However, liquidity in the Pennsylvania nutrient credit market has been slow to develop significant breadth and depth and has prevented Bion from monetizing the nutrient reduction credits created by PA-1s Kreider 1 project and Bions other proposed projects. These challenges and difficulties raise significant questions as to when PA-1 will be able to generate such revenues from Kreider 1.  PA-1 has elected not to make interest or principal payments on the Pennvest Loan since January 2013 and, therefore, the Company has classified the Pennvest Loan as a current liability as of September 30, 2015.  The Company recorded a $1,750,000 impairment of the Kreider 1 assets for the year ended June 30, 2015 (following a $2,000,000 impairment during the year ended June 30, 2014).

On September 25, 2014, Pennvest exercised its right to declare the Pennvest Loan in default and has accelerated the Pennvest Loan and demanded that PA-1 pay $8,137,117 (principal, interest plus late charges) on or before October 24, 2014. PA-1 did not make the payment and does not have the resources to make the payment demanded by Pennvest.  PA-1 has commenced discussions and negotiations with Pennvest concerning this matter but Pennvest has rejected PA-1s proposal made during the fall of 2014.  Neither party has any formal proposal on the table as of the date of this report but discussions and negotiations remain in process. It is not possible at this date to predict the outcome of such negotiations, but the Company believes it is possible that an agreement may yet be reached that will provide a loan modification. Subject to the results of the negotiations with Pennvest and pending development of a more robust market for nutrient reductions in Pennsylvania, PA-1 and Bion will continue to evaluate various options with regard to Kreider 1 over the next 30-180 days.




10


 

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 2015


During August 2012, the Company provided Pennvest (and the PADEP) with data demonstrating that the Kreider 1 system met the technology guaranty standards which were incorporated in the Pennvest financing documents and, as a result, the Pennvest Loan is now solely an obligation of PA-1.

Development work and technology evaluation, including amended credit certification and discussions with potential joint venture partners, continues related to the details of the second phase of the Kreider project which primarily relates to treatment of the wastes from Kreiders poultry operations. Assuming there are positive developments related to the market for nutrient reduction in Pennsylvania, the Company intends to pursue development, design and construction of the Kreider 2 poultry waste/renewable energy project with a goal of achieving operational status during calendar year 2016. However, as discussed above, this project faces challenges related to the current limits of the existing nutrient reduction market and funding of technology-based, verifiable agricultural nutrient reductions.

A significant portion of Bions activities concern efforts with private and public stakeholders (at local and state level) in Pennsylvania (and other Chesapeake Bay and Midwest and Great Lakes states) and  at the federal level (the Environmental Protection Agency (EPA) and the Department of Agriculture (USDA) (and other executive departments) and Congress) to establish appropriate public policies which will create regulations and funding mechanisms that foster installation of the low cost environmental solutions that Bion (and others) can provide through clean-up of agricultural waste streams.  The Company anticipates that such efforts will continue in Pennsylvania throughout the next 12 months and in various additional states thereafter.  

Going concern and managements plans:

The consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has not generated significant revenues and has incurred net losses (including significant non-cash expenses) of approximately $5,640,000 and $5,762,000 during the years ended June 30, 2015 and 2014, respectively and a net loss of approximately $833,000 during the three months ended September 30, 2015.  At September 30, 2015, the Company has a working capital deficit and a stockholders deficit of approximately $9,802,000 and $11,146,000, respectively. These factors raise substantial doubt about the Company's ability to continue as a going concern.  The accompanying consolidated financial statements do not include any adjustments relating to the recoverability or classification of assets or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.  The following paragraphs describe managements plans with regard to these conditions.  

The Company continues to explore sources of additional financing to satisfy its current operating requirements as it is not currently generating any significant revenues.

During the years ended June 30, 2015 and 2014, the Company received total proceeds of $1,000,940 and $944,400, respectively, from the sale of its equity securities. Proceeds during the 2015 and 2014 fiscal years have been lower than in earlier years and accordingly has negatively impacted the Companys business development efforts.  

During the three months ended September 30, 2015, the Company entered into subscription agreements to exercise certain warrants with expiry dates on or before December 31, 2015, into restricted shares of the Companys common stock at a reduced exercise price of $1.05, for the period from June 30, 2015 through July 15, 2015.   Pursuant to the offering, 265,894 warrants were exercised and 265,894 shares of the Companys restricted common stock were issued during the three months ended September 30, 2015, resulting in cash proceeds of $174,189 and receipt of a $105,000 interest bearing, collateralized promissory note.  

During fiscal years 2015 and 2014 and through the three months ended September 30, 2015, the Company experienced greater difficulty in raising equity funding than in the prior years.  As a result, the Company faced, and continues to face, significant cash flow management challenges due to working capital constraints. To partially mitigate these working capital constraints, the Companys core senior management and several key employees and consultants have been deferring (and




11


 

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 2015


continue to defer) all or part of their cash compensation and/or are accepting compensation in the form of securities of the Company (Notes 6 and 8) and members of the Companys senior management have made loans to the Company.  Additionally, the Company made reductions in its personnel during the year ended June 30, 2014.  The constraint on available resources has had, and continues to have, negative effects on the pace and scope of the Companys efforts to develop its business. The Company has had to delay payment of trade obligations and has had to economize in many ways that have potentially negative consequences. If the Company does not have greater success in its efforts to raise needed funds during the balance of the 2016 fiscal year (and subsequent periods), management will need to consider deeper cuts (including additional personnel cuts) and curtailment of operations (including possibly Kreider 1 operations) and/or research and development activities.

The Company will need to obtain additional capital to fund its operations and technology development, to satisfy existing creditors, to develop Integrated Projects and CAFO waste remediation systems (including the Kreider 2 facility) and to continue to operate the Kreider 1 facility. The Company anticipates that it will seek to raise from $2,500,000 to $50,000,000 or more debt and/or equity through joint ventures and/or sale of its equity securities  (common, preferred and/or hybrid) and/or debt (including convertible) securities, and/or through use of rights and/or warrants (new and/or existing)  during the next twelve months.  However, as discussed above, there is no assurance, especially in light of the difficulties the Company has experienced in recent periods and the extremely unsettled capital markets that presently exist (especially for small companies), that the Company will be able to obtain the funds that it needs to stay in business, complete its technology development or to successfully develop its business and projects.

There is no realistic likelihood that funds required during the next twelve months or in the periods immediately thereafter for the Companys basic operations and/or proposed projects will be generated from operations.  Therefore, the Company will need to raise sufficient funds from external sources such as debt or equity financings or other potential sources. The lack of sufficient additional capital resulting from the inability to generate cash flow from operations and/or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business. Further, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significantly dilutive effect on the Company's existing shareholders.  All of these factors have been exacerbated by the extremely unsettled credit and capital markets presently existing for small companies like Bion.

2.

SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation:

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Bion Integrated Projects Group, Inc. (Projects Group), Bion Technologies, Inc., BionSoil, Inc., Bion Services,  PA-1, and Bion PA 2 LLC; and its 58.9% owned subsidiary, Centerpoint Corporation (Centerpoint).  All significant intercompany accounts and transactions have been eliminated in consolidation.

The accompanying consolidated financial statements have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission (SEC).  The consolidated financial statements reflect all adjustments (consisting of only normal recurring entries) that, in the opinion of management, are necessary to present fairly the financial position at September 30, 2015, and the results of operations and cash flows of the Company for the three months ended September 30, 2015 and 2014.  Operating results for the three months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending June 30, 2016.




12


 

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 2015


Property and equipment:

Property and equipment are stated at cost and are depreciated, when placed into service, using the straight-line method over the estimated useful lives of the related assets, generally three to twenty years.  The Company capitalizes all direct costs and all indirect incrementally identifiable costs related to the design and construction of its Integrated Projects.  The Company reviews its property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  An impairment loss would be recognized based on the amount by which the carrying value of the assets or asset group exceeds its estimated fair value, and is recognized as a loss from operations.

Fair value measurements:

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market.  The Company uses a fair value hierarchy that has three levels of inputs, both observable and unobservable, with use of the lowest possible level of input to determine fair value.

Level 1 quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and

Level 3 assets and liabilities whose significant value drivers are unobservable.

Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Companys market assumptions.  Unobservable inputs require significant management judgment or estimation.  In some cases, the inputs used to measure an asset or liability may fall into different levels of the fair value hierarchy.  In those instances, the fair value measurement is required to be classified using the lowest level of input that is significant to the fair value measurement.  Such determination requires significant management judgment.  

The fair value of cash, promissory note receivable and accounts payable approximates their carrying amounts due to their short-term maturities.  The fair value of the loan payable approximates its carrying amount as it bears interest at rates commensurate with market rates.  The fair value of the redeemable preferred stock approximates its carrying value due to the dividends accrued on the preferred stock which are reflected as part of the redemption value.  The fair value of deferred compensation and convertible notes payable - affiliates are not practicable to estimate due to the related party nature of the underlying transactions.

Revenue Recognition:

Revenues are generated from the sale of nutrient reduction credits.  The Company recognizes revenue from the sale of nutrient credits when there is persuasive evidence that an arrangement exists, when title has passed, the price is fixed or determinable, and collection is reasonably assured.

The Company expects that technology license fees will be generated from the licensing of Bions integrated system.  The Company anticipates that it will charge its customers a non-refundable up-front technology license fee, which will be recognized over the estimated life of the customer relationship.  In addition, any on-going technology license fees will be recognized as earned based upon the performance requirements of the agreement.  Annual waste treatment fees will be recognized upon receipt.  Revenues, if any, from the Companys interest in Integrated Projects will be recognized when the entity in which the Integrated Project has been developed recognizes such revenue.




13


 

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 2015


Loss per share:

Basic loss per share amounts are calculated using the weighted average number of shares of common stock outstanding during the period.  Diluted loss per share assumes the conversion, exercise or issuance of all potential common stock instruments, such as options or warrants, unless the effect is to reduce the loss per share.  During the three months ended September 30, 2015 and 2014, the basic and diluted loss per share was the same, as the impact of potential dilutive common shares was anti-dilutive.

The following table represents the warrants, options and convertible securities excluded from the calculation of diluted loss per share:




September 30,

2015


September 30,

2014

Warrants

8,295,989


7,656,403

Options

4,413,870


4,258,870

Convertible debt

7,119,524


3,153,936

Convertible preferred stock

    14,250


    13,250


The following is a reconciliation of the denominators of the basic loss per share computations for the three months ended September 30, 2015 and 2014:





Three

months

ended

September

30,

2015


Three

months

ended

September

30,

2014

Shares issued beginning of period


22,089,650


19,579,619

Shares held by subsidiaries (Note 9)


    (704,309)


    (704,309)

Shares outstanding beginning of period


21,385,341


18,872,310

Weighted average shares for fully vested stock bonuses

   (Note 10)


     600,000


     840,000

Weighted average shares issued during the period


     303,736


     104,766

Basic weighted average shares end of period


22,289,077


19,817,076


Recent Accounting Pronouncements:

The Company continually assesses any new accounting pronouncements to determine their applicability.  When it is determined that a new accounting pronouncement affects the Companys financial reporting, the Company undertakes a study to determine the consequences of the change to its financial statements and assures that there are proper controls in place to ascertain that the Companys financial statements properly reflect the change.  

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09 Revenue from Contracts from Customers,  which supersedes the revenue recognition requirements in Revenue Recognition (Topic 605), and requires entities to recognize revenue in a way that depicts the transfer of potential goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to the exchange for those goods or services.  ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 and early adoption is not permitted.  The Company is currently evaluating the new standard and assessing the potential impact on its operations and financial statements.  




14


 

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 2015


In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements Going Concern: Disclosures of Uncertainties about an Entitys Ability to Continue as a Going Concern.  The new standard requires management to perform interim and annual assessments of an entitys ability to continue as a going concern within one year of the date the financial statements are issued.  An entity must provide certain disclosures if conditions or events raise substantial doubt about the entitys ability to continue as a going concern.  The guidance is effective for annual periods ending after December 15, 2016, and interim periods thereafter, early application is permitted.  The Company believes that the adoption of ASU No. 2014-15 will not have a material impact on its financial statements.

3.

PROPERTY AND EQUIPMENT:

Property and equipment consists of the following:



September 30,

2015


June 30,

2015

Machinery and equipment


$2,923,577


$2,923,577

Buildings and structures


 1,385,125


 1,385,125

Computers and office equipment


    176,940


    175,248



 4,485,642


 4,483,950

Less accumulated depreciation


 (2,581,042)


 (2,506,731)



$1,904,600


$1,977,219

Management reviewed property and equipment for impairment as of June 30, 2015 and determined that the carrying amount of property and equipment related to the Kreider 1 project exceeded its estimated future undiscounted cash flows based on certain assumptions regarding timing, level and probability of revenues from sales of nutrient reduction credits.  Kreider 1 was measured at estimated fair value on a non-recurring basis using level 3 inputs, which resulted in an impairment of $1,750,000 of the property and equipment for the year ended June 30, 2015.  As of September 30, 2015, management believes that no additional impairment exists.

Depreciation expense was $75,879 and $184,884 for the three months ended September 30, 2015 and 2014, respectively.

4.

PROMISSORY NOTE RECEIVABLE:

During the months ended September 30, 2015, the Company received an interest bearing promissory note for $105,000.  The promissory note bears interest at 4% per annum, is collateralized, and is payable on January 31, 2016.  The promissory note receivable was issued as consideration for an unaffiliated investors subscription agreement to exercise warrants into 100,000 restricted common shares of the Companys common stock at $1.05 per share.  The Company recorded interest income of $828 for the three months ended September 30, 2015.

5.

NOTES PAYABLE - AFFILIATES:

During the year ended June 30, 2015, the Company entered into promissory notes (FY2015 Promissory Notes), with effective dates of January 1, 2015, for initial principal amounts of $395,277, $15,956 and $80,764, with Dominic Bassani (Bassani), the Companys Chief Executive Officer (CEO), Edward Schafer (Schafer), the Companys Vice Chairman, and a major shareholder, (Shareholder), respectively.  The FY2015 Promissory Notes accrued interest at 4% per annum and were payable on December 31, 2015.  Effective September 8, 2015, the Company entered into new convertible promissory notes (September 2015 Convertible Notes) with Bassani, Shafer and Shareholder which replaced the FY2015 Promissory Notes. The initial principal balances of the September 2015 Convertible Notes were $405,831, $16,382 and $82,921, respectively. The new convertible promissory notes bear interest at 4% per annum, have maturity dates of December 31, 2017 and may be converted at the sole election of the noteholders into restricted common shares of the Company at a conversion price of $0.60 per share (Note 8).




15


 

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 2015


6.

DEFERRED COMPENSATION:

The Company owes deferred compensation to various employees, former employees and consultants totaling $900,524 as of September 30, 2015.  Included in the deferred compensation balances as of September 30, 2015, are $282,727, $451 and $136,803 owed Bassani, Smith and Schafer, respectively, pursuant to extension agreements effective January 1, 2015, whereby unpaid compensation earned after January 1, 2015, would accrue interest at 4% per annum and could be converted into shares of the Companys common stock at the election of the employee during the first five calendar days of any month.  The conversion price shall be the average closing price of the Companys common stock for the last 10 trading days of the immediately preceding month.  During the three months ended September 30, 2015, Smith converted $82,861 of deferred compensation into 99,159 shares of the Companys common stock at conversion prices between $0.76 and $0.96 per share.  Also included are sums the Company owes various consultants, pursuant to various agreements, for deferred compensation of $239,059 as of September 30, 2015 with similar conversion terms as those described above for Bassani, Smith and Schafer, with the exception that the interest accrues at 3% per annum.  The Company also owes a former employee and a current employee deferred compensation of $168,000 and $984, respectively, which is convertible into 226,168 and 1,025 shares, respectively, of the Companys common stock as of September 30, 2015 and, the Company owes a former employee $72,500, which is not convertible and is non-interest bearing.

7.

LOAN PAYABLE:

As of September 30, 2015, PA-1, the Companys wholly-owned subsidiary, owes $7,754,000 under the terms of the Pennvest Loan related to the construction of the Kreider 1 System.  The terms of the Pennvest Loan provide for funding of up to $7,754,000 which is to be repaid by interest-only payments for three years, followed by an additional ten-year amortization of principal.  The Pennvest Loan accrues interest at 2.547% for years 1 through 5 and 3.184% for years 6 through maturity.  The Pennvest Loan requires minimum annual principal payments of approximately $574,000 in fiscal year 2013, $704,000 in fiscal year 2014, $723,000 in fiscal year 2015, $741,000 in fiscal year 2016, $760,000 in fiscal year 2017 and $4,252,000 thereafter.  The Pennvest Loan is collateralized by the Kreider 1 System and by a pledge of all revenues generated from Kreider 1 including, but not limited to, revenues generated from nutrient reduction credit sales and by-product sales. In addition, in consideration for the excess credit risk associated with the project, Pennvest is entitled to participate in the profits from Kreider 1 calculated on a net cash flow basis, as defined.  The Company has incurred interest expense related to the Pennvest Loan of $49,374 for both of the three months ended September 30, 2015 and 2014, respectively.  As of September 30, 2015, the accrued interest and late charges related to the Pennvest Loan total $635,166.  Based on the limited development of the depth and breadth of the Pennsylvania nutrient reduction credit market to date, PA-1 has commenced negotiations with Pennvest related to forbearance and/or re-structuring the obligations under the Pennvest Loan. In the context of such negotiations, PA-1 has elected not to make interest payments to Pennvest on the Pennvest Loan since January 2013.  Additionally, the Company has not made any principal payments, which were to begin in fiscal 2013, and, therefore, the Company has classified the Pennvest Loan as a current liability as of September 30, 2015.  

On September 25, 2014, Pennvest exercised its right to declare the Pennvest Loan in default and has accelerated the Pennvest Loan and demanded that PA-1 pay $8,137,117 (principal, interest plus late charges) on or before October 24, 2014. PA-1 did not make the payment and does not have the resources to make the payment demanded by Pennvest.  PA-1 has commenced discussions and negotiations with Pennvest concerning this matter but Pennvest has rejected PA-1s proposal made during the fall of 2014. Neither party has any formal proposal as of the date of this report. Subsequent discussions/negotiations have not led to any resolution of the outstanding matters as of this date.  It is not possible at this date to predict the outcome of such negotiations, but the Company believes that a loan modification agreement may be reached that will allow PA-1 and Pennvest time for the development of a more robust market for nutrient reductions in Pennsylvania, of which there is no assurance.  PA-1 and Bion will continue to evaluate various options with regard to Kreider 1 over the next 30-180 days.




16


 

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 2015


In connection with the Pennvest Loan financing documents, the Company provided a technology guaranty regarding nutrient reduction performance of Kreider 1 which was structured to expire when Kreider 1s nutrient reduction performance had been demonstrated. During August 2012 the Company provided Pennvest (and the PADEP) with data demonstrating that the Kreider 1 System had surpassed the requisite performance criteria and that the Companys technology guaranty was met.  As a result, the Pennvest Loan is solely an obligation of PA-1.

8.

CONVERTIBLE NOTES PAYABLE - AFFILIATES:

January 2015 Convertible Notes

The January 2015 Convertible Notes accrue interest at 4% per annum and are due and payable on December 31, 2017.  The January 2015 Convertible Notes (including accrued interest, plus all future deferred compensation), are convertible, at the sole election of the noteholder, into Units consisting of one share of the Companys common stock and one quarter warrant to purchase a share of the Companys common stock, at a price of $0.50 per Unit until December 31, 2020.  The warrant contained in the Unit shall be exercisable at $1.00 per share until December 31, 2020.  The original conversion price of $0.50 per Unit approximated the fair value of the Units at the date of the agreements; therefore no beneficial conversion feature exists.  Management evaluated the terms and conditions of the embedded conversion features based on the guidance of ASC 815-15 Embedded Derivatives to determine if there was an embedded derivative requiring bifurcation. An embedded derivative instrument (such as a conversion option embedded in the deferred compensation) must be bifurcated from its host instruments and accounted for separately as a derivative instrument only if the risks and rewards of the embedded derivative instrument are not clearly and closely related to the risks and rewards of the host instrument in which it is embedded.  Management concluded that the embedded conversion feature of the deferred compensation was not required to be bifurcated because the conversion feature is clearly and closely related to the host instrument, and because of the Companys limited trading volume that indicates the feature is not readily convertible to cash in accordance with ASC 815-10, Derivatives and Hedging.  

As of September 30, 2015, the January 2015 Convertible Note balances, including accrued interest, owed Bassani, Smith and Schafer were $1,508,202, $783,188 and $389,566, respectively.   During the three months ended September 30, 2015, the Company recorded interest expense of $26,248 related to the January 2015 Convertible Notes.

September 2015 Convertible Notes

During the three months ended September 30, 2015, the Company entered into September 2015 Convertible Notes with Bassani, Shafer and Shareholder which replaced the previously issued FY2015 Promissory Notes. The initial principal balances of the September 2015 Convertible Notes were $405,831, $16,382 and $82,921, respectively. The September 2015 Convertible Notes bear interest at 4% per annum, have maturity dates of December 31, 2017 and may be converted at the sole election of the noteholders into restricted common shares of the Company at a conversion price of $0.60 per share.  As the conversion price of $0.60 approximated the fair value of the common shares at the date of the September 2015 Convertible Notes, no beneficial conversion feature exists.  The Company recorded interest expense related to the 2015 Convertible Notes of $1,218 for the three months ended September 30, 2015.

9.

STOCKHOLDERS' EQUITY:

Series B Preferred stock:

At July 1, 2014, the Company had 200 shares of Series B redeemable convertible Preferred stock outstanding with a par value of $0.01 per share, convertible at the option of the holder at $2.00 per share, with dividends accrued and payable at 2.5% per quarter.  The Series B Preferred stock is mandatorily redeemable at $2.00 per share by the Company three years after issuance and accordingly was classified outside of shareholders equity. The 200 shares have reached their maturity date, but due to the cash constraints of the Company have not been redeemed.




17


 

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 2015


During the years ended June 30, 2015 and 2014, the Company declared dividends of $2,000 and $2,000 respectively.  During the three months ended September 30, 2015, the Company declared dividends of $500.  At September 30, 2015, accrued dividends payable are $8,500.

Common stock:

Holders of common stock are entitled to one vote per share on all matters to be voted on by common stockholders.  In the event of liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share in all assets remaining after liabilities have been paid in full or set aside and the rights of any outstanding preferred stock have been satisfied. Common stock has no preemptive, redemption or conversion rights.  The rights of holders of common stock are subject to, and may be adversely affected by, the rights of the holders of any outstanding series of preferred stock or any series of preferred stock the Company may designate in the future.  

Centerpoint holds 704,309 shares of the Companys common stock.  These shares of the Companys common stock held by Centerpoint are for the benefit of its shareholders without any beneficial interest.  The Company accounts for these shares similar to treasury stock.

During the three months ended September 30, 2015, the Company issued 29,934 shares of the Companys common stock at prices ranging from $0.76 to $1.15 per share for services valued at $25,952, in the aggregate, to consultants and an employee.  

During the three months ended September 30, 2015, the Company issued 12,500 shares of the Companys restricted common stock upon receipt of its subscription receivable of $13,125 for the exercise of 12,500 warrants.

During the three months ended September 30, 2015, the Company entered into subscription agreements to exercise certain warrants with expiry dates on or before December 31, 2015, into restricted shares of the Companys common stock at a reduced exercise price of $1.05, for the period from June 30, 2015 through July 15, 2015.   Pursuant to the offering, 265,894 warrants were exercised and 265,894 shares of the Companys restricted common stock were issued resulting in cash proceeds of $174,189 and receipt of a $105,000 interest bearing, collateralized promissory note.  

During the three months ended September 30, 2015, Smith and various consultants elected to convert $82,861 and $88,856 of deferred compensation, respectively, into 99,159 and 109,715 shares, respectively, of the Companys common stock at conversion rates ranging from $0.76 to $1.15 per share.  

Warrants:

As of September 30, 2015, the Company had approximately 8.3 million warrants outstanding, with exercise prices from $0.75 to $3.00 and expiring on various dates through December 31, 2020.

The weighted-average exercise price for the outstanding warrants is $1.24, and the weighted-average remaining contractual life as of September 30, 2015 is 4.5 years.

During the three months ended September 30, 2015, warrants to purchase 957,806 shares of common stock of the Company at prices between $2.25 and $3.10 per share expired.

During the three months ended September 30, 2015, the Company entered into subscription agreements to exercise certain warrants with expiry dates on or before December 31, 2015, into restricted shares of the Companys common stock at a reduced exercise price of $1.05, for the period from July 1, 2015 through July 15, 2015.  As a result of the offering, 265,894 warrants were exercised and 265,894 shares of the Companys restricted common stock were issued resulting in cash proceeds of $174,189 and receipt of a collateralized promissory note receivable for $105,000, for the three months ended September 30, 2015.




18


 

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 2015


Stock options:

The Companys 2006 Consolidated Incentive Plan, as amended (the 2006 Plan), provides for the issuance of options to purchase up to 22,000,000 shares of the Companys common stock. Terms of exercise and expiration of options granted under the 2006 Plan may be established at the discretion of the Board of Directors, but no option may be exercisable for more than ten years.

The Company recorded compensation expense related to employee stock options of $15,320 and nil for the three months ended September 30, 2015 and 2014, respectively.  The Company granted no options during the three months ended September 30, 2015 and 2014, respectively.  

A summary of option activity under the 2006 Plan for the three months ended September 30, 2015 is as follows:











Options



Weighted-

Average

Exercise

Price

Weighted-

Average

Remaining

Contractual

Life




Aggregate

Intrinsic

Value

Outstanding at July 1, 2015

4,413,870


 $1.88

4.1


-

   Granted

-


-




   Exercised

-


-




   Forfeited

-


-




   Expired

-


-




Outstanding at September 30, 2015

4,413,870


$1.88

4.1


$253,000

Exercisable at September 30, 2015

4,313,870


$1.91

4.0


$213,000


The following table presents information relating to nonvested stock options as of September 30, 2015:





Options


Weighted Average

Grant-Date Fair

Value

Nonvested at July 1, 2015

100,000


$  0.76 

   Granted

-


  -

   Vested

-


  -

Nonvested at September 30, 2015

100,000


$ 0.76


The total fair value of stock options that vested during the three months ended September 30, 2015 and 2014 was nil for both periods, respectively.  As of September 30, 2015, the Company had $35,146 of unrecognized compensation cost related to stock options.


Stock-based employee compensation charges in operating expenses in the Companys financial statements for the three months ended September 30, 2015 and 2014 are as follows:  

 

19


 

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 2015



Three months

ended

September 30,

2015


Three months

ended

September 30,

2014

General and administrative:




  Fair value of stock options expensed

$ 1,838


$            -

          Total

$ 1,838


$           -





Research and development:




  Fair value of stock options expensed

$13,482


$            -

          Total

$13,482


$            -


10.

COMMITMENTS AND CONTINGENCIES:

Employment and consulting agreements:

Smith has held the positions of Director, President and General Counsel of Company and its subsidiaries under various agreements and terms since March 2003.   During September 2014, Smith agreed to continue his employment agreement through April 15, 2015 and also agreed to continue to defer his temporarily reduced salary of $14,000 per month until such date.   On February 10, 2015, the Company executed an Extension Agreement with Smith pursuant to which Smith extended his employment with the Company to December 31, 2015 (with the Company having an option to extend his employment an additional six months).  As part of the Extension Agreement, the balance of Smiths existing convertible note payable as of December 31, 2014, adjusted for conversions subsequent to that date, was replaced with a new convertible note with an initial principal amount of $760,520 with terms that i) materially reduce the interest rate by 50% (from 8% to 4%), ii) increases the conversion price by 11% (from $0.45 to $0.50), iii) sets the conversion price at a fixed price so there can be no further reductions, iv) reduces the number of warrants received on conversion by 75% (from 1 warrant per unit to 1/4 per unit) and v) extends the maturity date to December 31, 2017. Additionally, pursuant to the Extension Agreement, Smith: i) will continue to defer his cash compensation ($18,000 per month) until the Board of Directors re-instates cash payments to all employees and consultants who are deferring their compensation,  ii) cancelled  150,000 contingent stock bonuses previously granted to him by the Company, iii) has been granted 150,000 new options which vested immediately and iv) outstanding options and warrants owned by Smith (and his donees) have been extended and had the exercise prices reduced to $1.50 (if the exercise price exceeded $1.50).

Since March 31, 2005, the Company has had various agreements with Brightcap and/or Bassani, through which the services of Bassani are provided.  The Board appointed Bassani as the Company's CEO effective May 13, 2011.  During the fiscal years 2012 and 2013, Bassani entered into extension agreements whereby he was awarded fully vested stock grants totaling 600,000 shares, 500,000 shares of which are to be issued January 15, 2016 and 100,000 shares are to be issued January 15, 2017.  The stock grants were expensed in the years they were awarded as they are fully vested.  On February 10, 2015, the Company executed an Extension Agreement with Bassani pursuant to which Bassani extended the term of his service to the Company to December 31, 2017, (with the Company having an option to extend the term an additional six months.)  As part of the agreement, the Companys then existing loan payable, deferred compensation and convertible note payable to Bassani, were restructured into two promissory notes as follows: a) The sum of the cash loaned by Bassani to the Company of $279,000 together with $116,277 of unreimbursed expenses through December 31, 2014, were placed into a new promissory note with initial principal of $395,277 which was due and payable on December 31, 2015 and now has been replaced with a September 2015 Convertible Note (Note 8).  In connection with these sums and the new promissory note, Bassani was issued warrants to purchase 592,916 shares of the Companys common stock at a price of $1.00 until December 31, 2020; and b) the remaining balances of the Companys accrued obligations to Bassani




20


 

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 2015


($1,464,545) were replaced with a new convertible promissory note with terms that compared with the largest prior convertible note obligation to Bassani:  i) materially reduce the interest rate by 50% (from 8% to 4%), ii) increase the conversion price by 11% (from $0.45 to $0.50), iii) sets the conversion price at a fixed price so there can be no further reductions, iv) reduces the number of warrants received on conversion by 75% (from 1 warrant per unit to 1/4 per unit) and v) extends the maturity date to December 31, 2017 (Note 8).  Additionally,  pursuant to the Extension Agreement, Bassani i) will continue to defer his cash compensation ($31,000 per month) until the Board of Directors re-instates cash payments to all employees and consultants who are deferring their compensation, ii) cancelled 250,000 contingent stock bonuses previously granted to him by the Company, iii) has been granted 450,000 new options which vested immediately and iv) outstanding options and warrants owned by Bassani (and his donees) have been extended and had the exercise prices reduced to $1.50 (if the exercise price exceeded $1.50).

On February 10, 2015, the Company entered into an agreement with Schafer pursuant to which Schafer will continue to provide services to the Company through December 31, 2015.    Additionally, pursuant to the  agreement, i) the exercise period of outstanding options and warrants owned by Schafer have been extended, and ii) 25,000 contingent stock bonuses previously granted to Schafer have been cancelled by the Company.

Contingent stock bonuses:

The Company has declared contingent deferred stock bonuses to its key employees and consultants at various times throughout the years.  The stock bonuses are contingent upon the Companys stock price exceeding a certain target price per share, and the grantees still being employed by or providing services to the Company at the time the target prices are reached.  

The Companys outstanding contingent stock bonuses as of September 30, 2015 are as follows:

Target Price per share


$5.00


$10.00

$20.00

Number of shares


50,000

40,000

27,500

Execution/exercise bonuses:

As part of agreements the Company entered into with  Bassani and  Smith effective May 15, 2013, they were each granted the following: a) a 50% execution/exercise bonus which shall be applied upon the effective date of the notice of intent to exercise (for options and warrants) or issuance event, as applicable, of any currently outstanding and/or subsequently acquired  options, warrants and/or  contingent stock bonuses owned by each (and/or their donees) as follows: i) in the case of exercise by payment of cash, the bonus shall take the form of reduction of the exercise price; ii) in the case of cashless exercise, the bonus shall be applied to reduce the exercise price prior to the cashless exercise calculations; and iii) with regard to contingent stock bonuses, issuance shall be triggered upon the Companys common stock reaching a closing price equal to 50% of currently specified price; and b) the right to extend the exercise period of all or part of the applicable options and warrants for up to five years (one year at a time) by annual payments of $.05 per option or warrant to the Company on or before a date during the three months prior to expiration of the exercise period at least three business days before the end of the expiration period.  

During the year ended June 30, 2014, the Company extended execution/exercise bonuses with the same terms as described above to Schafer and to Jon Northrop, the Companys other board member.

As of September 30, 2015, the execution/exercise bonus was applicable to 2,945,000 of the Companys outstanding options and 6,759,500 of the Companys outstanding warrants.  




21


 

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

THREE MONTHS ENDED SEPTEMBER 30, 2015


Litigation:

On September 25, 2014, Pennvest exercised its right to declare the Pennvest Loan in default and has accelerated the Pennvest Loan and has demanded that PA-1 pay $8,137,117 (principal, interest plus late charges) on or before October 24, 2014.  PA-1 did not make the payment and does not have the resources to make the payment demanded by Pennvest.  During August 2012, the Company provided Pennvest (and the PADEP) with data demonstrating that the Kreider 1 system met the technology guaranty standards which were incorporated in the Pennvest financing documents and, as a result, the Pennvest Loan is now solely an obligation of PA-1.  No litigation has commenced related to this matter but such litigation is likely if negotiations do not produce a resolution (Note 1 and Note 7).

The Company currently is not involved in any other material litigation.

11.

SUBSEQUENT EVENTS:

The Company has evaluated events that occurred subsequent to September 30, 2015 for recognition and disclosure in the financial statements and notes to the financial statements.

From October 1, 2015 through November 9, 2015 the Company has issued 3,161 shares of the Companys common shares to an employee and a consultant valued at approximately $3,000.

From October 1, 2015 through November 9, 2015, a warrant holder elected to exercise 14,000 warrants into 14,000 shares of the Companys common stock at an exercise price of $0.75 per share.

The Company entered into an extension agreement with Smith on October 27, 2015 whereby Smith agreed to provide his services to the Company through June 30, 2016 for $19,000 per month commencing January 1, 2016.  Pursuant to the agreement, the Company also granted Smith options to purchase common stock of the Company at $0.92 per share until December 31, 2020 and granted Smith 75,000 bonus shares of the Companys common stock which vested immediately but shall be issued on January 5, 2016. The Company has the option to extend Smiths services for an additional six months through December 31, 2016 on similar terms.









22



PART I FINANCIAL INFORMATION

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

Statements made in this Form 10-Q that are not historical or current facts, which represent the Company's expectations or beliefs including, but not limited to, statements concerning the Company's operations, performance, financial condition, business strategies, and other information, involve substantial risks and uncertainties.  The Company's actual results of operations, most of which are beyond the Company's control, could differ materially.  These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," anticipate," "estimate," or "continue" or the negative thereof.  We wish to caution readers not to place undue reliance on any such forward looking statements, which speak only as of the date made.  Any forward looking statements represent management's best judgment as to what may occur in the future.  However, forward looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected.

These factors include adverse economic conditions, entry of new and stronger competitors, inadequate capital, unexpected costs, failure (or delay)  to gain product or regulatory approvals in the United States (or particular states) or foreign countries and failure to capitalize upon access to new markets.  Additional risks and uncertainties that may affect forward looking statements about Bion's business and prospects include the possibility that markets for nutrient reduction credits (discussed below) and/or other ways to monetize nutrient reductions will be slow to develop (or not develop at all), the existing default by PA-1 on its loan secured by the Kreider #1 system, the possibility that a competitor will develop a more comprehensive or less expensive environmental solution, delays in market awareness of Bion and our Systems, uncertainties and costs related to research and development efforts to update and improve Bions technologies and applications thereof, and/or  delays in Bion's development of Projects and failure of marketing strategies, each of which could have both immediate and long term material adverse effects by placing us behind our competitors and requiring expenditures of our limited resources. Bion disclaims any obligation subsequently to revise any forward looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.  See our Form 10-K (period ended June 30, 2015) for more details regarding these risk factors.

The following discussion and analysis should be read in conjunction with the unaudited Consolidated Financial Statements and Notes to Consolidated Financial Statements filed herein with the Companys Form 10-K for the year ended June 30, 2015.

BUSINESS OVERVIEW

During the 2004-2008 calendar years, the Company focused on completion of the development of the second generation of its technology which provides comprehensive environmental solutions to a significant source of pollution in U.S. agriculture, large scale livestock facilities known as Confined Animal Feeding Operations ("CAFO"). That re-development process was substantially completed five years ago and the initial commercial system, based on that updated technology, was constructed and placed in full commercial operation. Bion continues to focus on refining, testing and/or developing technologies which can supplement and/or upgrade our technologies and or be utilized with our technology platform. During the 2014 and 2015 fiscal years, the Company increased its research and development activities with focus on creating variations of its technology platform that enable additional flexibility, increase recovery of nutrient by-products (including nitrogen/ammonium compounds in organic and non-organic forms, renewable energy and related credits and/or carbon credits) and increase potential related revenue streams from by-product streams, and to review potential add-ons and applications for use in different regulatory environments.  The Company believes these research and development activities will continue through the 2016 fiscal year.




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Operational results from the initial commercial system have confirmed the ability of Bions technologies to meet its nutrient reduction goals at commercial scale for an extended period of operation. Bions current generation technology platform (and the new variations under development) center on its patented biological-based processes that separate and aggregate the various assets in the CAFO waste stream so they become benign, stable and/or transportable. Bion systems can: a) remove up to 95% of the nutrients (primarily nitrogen and phosphorus) in the effluent, b) reduce greenhouse gases by 90% (or more) including elimination of virtually all ammonia emissions, c) while materially reducing pathogens, antibiotics and hormones in the livestock waste stream. In addition to capturing valuable nutrients for reuse (in organic and/or non-organic forms), Bions technology platform also recovers cellulosic biomass which can be used to generate renewable energy from the waste stream in a process more efficient than other technologies that seek to exploit this CAFO waste stream. Our core technology and its primary CAFO applications are now proven in commercial operations. It has been accepted by the Environmental Protection Agency (EPA) and other regulatory agencies and it is protected by Bions portfolio of U.S. and international patents (both issued and applied for). Research and development activities are underway to improve, update and move toward the next generation of Bion systems to meet the needs of CAFOs in various geographic and climate areas with nutrient release constraints and to increase the recovery and generation of valuable by-products.

Currently, Bion is focused on using applications of its patented and proprietary waste management technologies and technology platform to pursue three main business opportunities: 1) installation of Bion systems to retrofit and environmentally remediate existing CAFOs in selected markets where: a) government policy supports such efforts (such as the Chesapeake Bay watershed,  Great Lakes Basin states,  and/or other states and watersheds facing EPA total maximum daily load (TMDL) issues, and/or b) where CAFOs need our technology to obtain permits to expand or develop without negative environmental consequences; 2) development of Integrated Projects which will include large CAFOs, such as large dairies, beef cattle feed lots and hog farms, with Bion waste treatment system modules processing the aggregate CAFO waste stream from the equivalent of 40,000 or more beef and/or dairy cows (or the waste stream equivalent of other species) while recovering cellulosic biomass (to be utilized for renewable energy production) and nutrient rich solids (that can potentially to be marketed as feed and/or fertilizer), integrated with an ethanol plant capable of producing 40 million gallons (or more) of ethanol per year and/or with CAFO end product processors, and 3) licensing and/or joint venturing of Bions technology and applications (primarily) outside North America. The opportunities described at 1) and 2) above each require substantial political and regulatory (federal, state and local) efforts on the part of the Company and a substantial part of Bions efforts are focused on such political and regulatory matters. Bion is currently pursuing the international opportunities primarily through the use of consultants with existing relationships in target countries.

During 2008 the Company commenced actively pursuing the opportunity presented by environmental retrofit and remediation of the waste streams of existing CAFOs which effort has met with very limited success to date. The first commercial activity in this area is represented by our agreements with Kreider Farms ("KF") in Pennsylvania pursuant to which a Bion system to treat KF's dairy and poultry waste streams to reduce nutrient releases to the environment while generating marketable nutrient credits and renewable energy was designed, constructed and has been in full-scale operation since 2011. (No other Bion system has been contracted for and/or constructed to date.) On January 26, 2009 the Board of the Pennsylvania Infrastructure Investment Authority (Pennvest) approved a $7.75 million loan to Bion PA 1, LLC (PA-1), a wholly-owned subsidiary of the Company, for the initial stage of Bion's Kreider Farms project (Phase 1 Kreider System or Kreider 1 System). After substantial unanticipated delays, on August 12, 2010 the PA-1 received a permit for construction of the Phase 1 Kreider system. Construction activities commenced during November 2010.  The closing/settlement of the Pennvest Loan took place on November 3, 2010.  PA-1 finished the construction of the Phase 1 Kreider System and entered a period of system operational shakedown during May 2011.  The Phase 1 Kreider System reached full, stabilized operation by the end of the 2012 fiscal year.  During 2011 the Pennsylvania Department of Environmental Protection (PADEP) re-certified the nutrient credits for this project.  The economics (potential revenues and profitability) of the Phase 1 Kreider System are based largely on the long term sale of nutrient (nitrogen and/or phosphorus) reduction credits to meet the requirements of the Chesapeake Bay environmental clean-up, which sales have not yet materialized.  The PADEP issued final permits for the Kreider 1 System (including the credit verification plan) on August 1, 2012 on which date the Company deemed that the Kreider 1 System was placed in service.  As a result, PA-1 commenced generating and verifying nutrient reduction credits for potential




24



sale while continuing to utilize the system to test improvements and add-ons. Operating results of the Phase 1 Kreider System have documented the efficacy of Bions nutrient reduction technology and vetted potential add-ons for future installations. During August 2012 the Company provided Pennvest (and the PADEP) with data demonstrating that the Kreider 1 System met the technology guaranty standards which were incorporated in the Pennvest financing documents and, as a result, the Pennvest Loan is now solely an obligation of PA-1.  As a result of this extended period of operations, Bion is confident that future systems can be constructed with even higher operational efficiencies at lower capital expense and with lower operational costs. To date liquidity in the Pennsylvania nutrient credit market has been slow to develop significant breadth and depth  which limited liquidity has negatively impacted Bions business plans and has prevented Bion from monetizing the nutrient reductions created by PA-1s existing Kreider 1 project and Bions other proposed projects. These challenges and difficulties (which continue to this date) have prevented PA-1 from generating any material revenues from the Kreider 1 project to date (PA-1s Kreider 1 operating expenses have been funded by loans from Bion) and raise significant questions as to when, if ever, PA-1 will be able to generate such material revenues from the Kreider 1 system.  PA-1 has been engaged in on-and-off negotiations with Pennvest related to forbearance and/or re-structuring its obligations pursuant to the Pennvest Loan for over 36 months. In the context of such negotiations, PA-1 has elected not to make interest payments to Pennvest on the Pennvest Loan since January 2013.  Additionally, PA-1 has not made any principal payments, which were to begin in fiscal 2013, and, therefore, the Company has classified the Pennvest Loan as a current liability as of September 30, 2015.  Due to the slow development of the nutrient reduction credit market, the Company determined that the carrying amount of the property and equipment related to the Kreider 1 System and project exceeded its estimated future undiscounted cash flows based on certain assumptions regarding timing, level and probability of revenues from sales of nutrient reduction credits and, therefore, recorded a $2,000,000 impairment of the Kreider 1 during the year ended of June 30, 2014.  An additional impairment of $1,750,000 was recorded for the year ended June 30, 2015.  

On September 25, 2014, Pennvest exercised its right to declare the Pennvest Loan in default and has accelerated the Pennvest Loan and demanded that PA-1 pay $8,137,117 (principal, interest plus late charges) on or before October 24, 2014. PA-1 did not make the payment and does not have the resources to make the payment demanded by Pennvest. PA-1 has commenced discussions and negotiations with Pennvest concerning this matter but Pennvest has rejected PA-1s proposal made during the fall of 2014.  Neither party has any formal proposal on the table as of the date of this report, but communication continues regarding the matters involved.  It is not possible at this date to predict the outcome of such negotiations, but the Company believes it is possible that a loan modification agreement may be reached that will allow PA-1 and Pennvest time for the development of a more robust market for nutrient reductions in Pennsylvania, of which there is no assurance.  PA-1 and Bion will continue to evaluate various options with regard to Kreider 1 over the next 30-180 days.

During August 2012, the Company provided Pennvest (and the PADEP) with data demonstrating that the Kreider 1 system met the technology guaranty standards which were incorporated in the Pennvest financing documents and, as a result, the Pennvest Loan is now solely an obligation of PA-1.  

The Company is currently conducting a portion of its research and development activities at the Kreider 1 system while PA1 is maintaining the Kreider 1 System.

The Company continues its development work related to the second phase of the Kreider project (Phase 2 Kreider Project) which involves production of renewable energy from the waste of KFs poultry operations (and potentially other poultry operations and/or other waste streams) and the cellulosic solids recovered by the Kreider 1 system. During May 2011 the PADEP certified the Phase 2 Kreider Project for 559,457 nutrient credits under the old EPAs Chesapeake Bay model.  The Company anticipates that the Phase 2 Kreider Project will be re-certified for between 1.5-2 million nutrient reduction credits pursuant to the amended EPA Chesapeake Bay model which was published subsequent to the original certification. Recent announcements related to negotiations between the EPA and PADEP regarding Pennsylvanias Chesapeake Bay nutrient reduction non-compliance suggest that a resolution of certain matters is likely during the balance of this calendar year which may allow the Phase 2 Kreider Project  to move forward with re-certification and proceed toward design, permitting , construction and eventual operation during the 2016 calendar year. Assuming there are also positive developments related to the market for nutrient




25



reductions in Pennsylvania, of which there is no assurance, the Company intends to pursue development, design and construction of the Kreider poultry waste/renewable energy project with a goal of achieving operational status during the 2017 fiscal year. While the Company believes that substantial revenues may be generated from the sale of by-products (organic and inorganic fertilizer, renewable energy and/or renewable energy credits) of its operation, the economics (potential revenues and profitability) of the Phase 2 Kreider Project are based, in large part, on the long term sale of nutrient (nitrogen and/or phosphorus) reduction credits to meet the requirements of the Chesapeake Bay environmental clean-up.  However, liquidity in the Pennsylvania nutrient reduction market has been slow to develop significant breadth and depth which lack of liquidity to date has negatively impacted Bions business plans and has resulted in challenges to monetizing the nutrient reduction credits created by PA-1s existing Kreider 1 project and will delay the Companys Phase 2 Kreider Project and other proposed projects in Pennsylvania.

A significant portion of Bions current activities concern efforts with private and public stakeholders (at local and state level) in Pennsylvania, (and other Chesapeake Bay, Midwest and Great Lakes states) and at the federal level (EPA and other executive departments and Congress) to establish appropriate public policies which will create regulations and funding mechanisms that foster installation of the low cost, technology-based  environmental solutions that Bion (and others) can provide through clean-up of agricultural waste streams. In January 2013, the Pennsylvania Legislative Budget and Finance Committee issued a report stating that targeting upstream livestock would save Pennsylvanias taxpayers up to 80% of previously estimated costs (potential savings for Pennsylvania in excess of a billion dollars per year over the next 20 years) which would be available for other needs (notably aging drinking water and sewer infrastructure) while creating large local benefits of an upstream treatment strategy including reduced freshwater compliance costs, future cost avoidance of treating drinking water from contaminated local aquifers and increased economic activity for agriculture, tourism and recreation.  The Coalition for an Affordable Bay Solution (Coalition) was formed to support the creation of a competitively-bid nitrogen trading program in Pennsylvania that will enable Pennsylvania to capture the economic benefits outlined in the legislative study. The Coalition supports legislation to establish a competitively-bid RFP program for nitrogen reductions, where bids will also be scored to reflect the value of the benefits to Pennsylvanias interior waterways and communities.  Founding members of the Coalition represent both Chesapeake Bay and national industry participants, and include Bion, JBS, SA, Kreider Farms, and Fair Oaks Farms. The head of the Coalition is Ed Schafer, Bions Vice Chairman. The Company believes that: i)  the April 2015 release of a report from the Pennsylvania Auditor General titled Special Report on the Importance of Meeting Pennsylvanias Chesapeake Bay Nutrient Reduction Targets which highlighted the economic consequences of EPA-imposed sanctions if the state fails to meet the 2017 TMDL targets, as well as the need to support using low-cost solutions and technologies as alternatives to higher-cost public infrastructure projects, where possible, and ii)  the April 2015 introduction of Senate Bill 724 (successor to prior SB 924) The Watershed Improvement Act, which, if adopted, will establish a program that will allow the Pennsylvanias tax- and rate-payers to meet their EPA-mandated Chesapeake Bay pollution reductions at significantly lower cost by purchasing verified reductions (by competitive bidding) from all sources, including those that Bion can produce through livestock waste treatment, represent visible evidence of progress being made on these matters in Pennsylvania. This legislation, if passed and signed into law, will potentially enable Bion (and others) to compete for public funding on an equal basis with subsidized agricultural best management practices and public works and storm water authorities. Bions activity related to such legislation has recently intensified with increased stakeholder support (and increasing attacks on the Company by those opposed to the legislation) and Bion believes such primary provisions of such legislation may be passed (in some version) by the Pennsylvania Legislature during 2015, but cannot predict the exact final content of such legislation or guarantee such passage. Note, however, that there has been vocal opposition to SB 724 from threatened stakeholders committed to the existing status quo approaches--- a significant portion of which has been focused on attacking (in often inaccurate and/or vilifying ways) Bion in/through social media and internet articles, blogs, press releases, twitter posts and re-tweets, rather than engaging the substantive issues. The Company has responded in a press release and postings on its website. As a result, Bion is now exploring the use of social media including Facebook, twitter and other approaches to accurately communicate about the Companys business and positions and expending funds for that purpose. If SB 724 is passed and implemented (in something close to its current form), Bion expects that the policies and strategies being developed in Pennsylvania will not only benefit the Companys existing and proposed Pennsylvania projects, but will also subsequently provide the basis for a larger Chesapeake




26



Bay watershed strategy and, thereafter, a national clean water strategy.  Legislation in Wisconsin, which became effective during April 2014, represents a significant step forward towards opening business opportunities in that state.

The Company believes that Pennsylvania (and the entire Chesapeake Bay watershed), to be followed by the Great Lakes Basin and Midwest/Mississippi Watershed/Gulf of Mexico states, represent ground zero in the long-standing clean water battle between agriculture and the further regulation of agriculture relative to nutrient impacts. The ability of Bion and other technology providers to achieve verified reductions from agricultural non-point sources can resolve the current stalemate and enable implementation of constructive solutions that benefit all stakeholders, providing a mechanism that ensures that taxpayer funds will be used to achieve the most beneficial result at the lowest cost, regardless of source. All sources, point and non-point, rural and urban, will be able to compete for tax payer-funded nutrient (primarily nitrogen and phosphorus) reductions in a fair and transparent process; and since payment from the tax and rate payers will now be performance-based, these providers will be held financially accountable.

We believe that the overwhelming environmental, economic, quality of life and public health benefits to all stakeholders in the watersheds, both within and outside of Pennsylvania/Chesapeake Bay watershed, make the case for adoption of the strategies outlined in the Pennsylvania legislative study less an issue of if, but of when and how. The adoption of a competitive procurement program will have significant positive impact on technology providers that can deliver verified nitrogen and phosphorus reductions such as Bion, by allocating existing tax- and rate-payer clean water funding to low cost solutions based upon a voluntary and transparent procurement process. The Company believes that implementation of a competitively-bid nutrient reduction program to achieve the goals for the Chesapeake Bay watershed  and/or the phosphorus reduction needs of Wisconsin can also provide a working policy models and platforms for other states to adopt that will enhance their efforts to comply with both current and future requirements for local and federal estuarine watersheds, including the Mississippi River/Gulf of Mexico, the Great Lakes Basin and other nutrient-impaired watersheds.

Additionally, we believe that Bion's technology platform (including utilization of various third party technologies to supplement the Companys proprietary technologies) will allow the integration of large-scale CAFOs and their end-product users, renewable energy production from the CAFO waste stream, and on site utilization of the renewable energy generated and biofuel/ethanol production in an environmentally and economically sustainable manner while reducing the aggregate capital expense and operating costs and increasing revenue and profitability for the entire integrated complex ("Integrated Projects" or "Projects"). In the context of Integrated Projects, Bion's waste treatment processes, in addition to mitigating polluting releases, will generate renewable energy from cellulosic portions of the CAFO waste stream which renewable energy can be utilized by integrated facilities including ethanol plants, CAFO end-product processors (including cheese, ice cream and/or bottling plants in the case of dairy CAFOs, and/or slaughter and/or processing facilities in the context of beef CAFOs) and/or other users as a  replacement for fossil fuel usage. In addition an integrated ethanol plant's main by-product, called distillers grain, can be added to the feed of the animals in wet form, thereby lowering the capital expenditures, operating, marketing and shipping costs and energy usage of the ethanol production process. In such cases, the ethanol plant would act as a feed mill for the integrated CAFO, thereby reducing the CAFO's feeding costs as well as generating revenue to the ethanol plant, and would also provide a market for the renewable energy that Bion's System produces from the CAFO waste stream. And, in some cases the nutrient rich liquid effluent from the Bion system modules may be directly utilized for greenhouse and/or hydroponic agriculture. Accordingly, such Bion Integrated Projects can be denominated "closed loop". Bion anticipates that many projects may initially include only partial integration.  Based on the degree of integration in a Project, greater or lesser amounts of benefits will be realized.  Bion, as developer of, and participant in, Integrated Projects, anticipates that it will share in the cost savings and the revenues generated from these activities.

Bion is currently working with local, state and federal officials with regard to regulatory and legislative initiatives, and with such parties and potential industry participants to evaluate projects and/or sites in multiple states. The Company believes that its initial Integrated Project will most likely be located and developed (probably in stages) in Pennsylvania.  Note, however, that locations and/or projects in other states are also under review and the initial Integrated Project could be developed elsewhere. It is possible that the Company will develop one or more Integrated Projects as joint ventures specifically targeted to




27



meet the growing animal protein demand outside of the United States (including without limitation Asia, Europe and/or the Middle East).  Bion intends to choose sites for additional Projects during the calendar years 2017-2019 to create a pipeline of Projects. Management has a 5-year development target (through calendar year 2023) of approximately 10-24 Integrated Projects.  At the end of that period, Bion projects that 5 or more of these Integrated Projects will be in full operation in 3-5 states (or other locations), and the balance would be in various stages ranging from partial operation to early permitting stage. No Integrated Project has been developed to date.

The Companys audited financial statements for the years ended June 30, 2015 and 2014 have been prepared assuming the Company will continue as a going concern.  The Company has incurred net losses of approximately $5,640,000 and $5,762,000 during the years ended June 30, 2015 and 2014, respectively. The Report of the Independent Registered Public Accounting Firm on the Company's consolidated financial statements as of and for the year ended June 30, 2015 includes a "going concern" explanatory paragraph which means that the accounting firm has expressed substantial doubt about the Company's ability to continue as a going concern.  The Company has incurred net losses of approximately $833,000 and $706,000 for the three months ended September 30, 2015 and 2014, respectively.   At September 30, 2015, the Company had a working capital deficit and a stockholders deficit of approximately $9,802,000 and $11,146,000, respectively. Management's plans with respect to these matters are described in this section and in our consolidated financial statements (and notes thereto), and this material does not include any adjustments that might result from the outcome of this uncertainty.  However, there is no guarantee that we will be able to raise sufficient funds or further capital for the operations planned in the near future.  

CRITICAL ACCOUNTING POLICIES

Management has identified the following policies below as critical to our business and results of operations.  Our reported results are impacted by the application of the following accounting policies, certain of which require management to make subjective or complex judgments.  These judgments involve making estimates about the effect of matters that are inherently uncertain and may significantly impact quarterly or annual results of operations.  For all of these policies, management cautions that future events rarely develop exactly as expected, and the best estimates routinely require adjustment.  Specific risks associated with these critical accounting policies are described in the paragraphs below.

Revenue Recognition

While the Company has not recognized any significant operating revenues for the past two fiscal years, the Company has commenced generation of revenues during the year ended June 30, 2013.  Revenues are generated from the sale of nutrient reduction credits, product sales, technology license fees, annual waste treatment fees and/or direct ownership interests in Integrated Projects.  The Company recognizes revenue from the sale of nutrient credits and products when there is persuasive evidence that an arrangement exists, when title has passed, the price is fixed or determinable, and collection is reasonably assured.  The Company expects that technology license fees will be generated from the licensing of Bion's systems.  The Company anticipates that it will charge its customers a non-refundable up-front technology license fee, which will be recognized over the estimated life of the customer relationship.  In addition, any on-going technology license fees will be recognized as earned based upon the performance requirements of the agreement. Annual waste treatment fees will be recognized upon receipt. Revenues, if any, from the Company's interest in Projects will be recognized when the entity in which the Project has been developed recognizes such revenue.

Stock-based compensation

The Company follows the provisions of Accounting Standards Codification (ASC) 718, which generally requires that share-based compensation transactions be accounted and recognized in the statement of income based upon their grant date fair values.  




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Derivative Financial Instruments:

Pursuant to ASC Topic 815 Derivatives and Hedging (Topic 815), the Company reviews all financial instruments for the existence of features which may require  fair value accounting and a related mark-to-market adjustment at each reporting period end. Once determined, the Company assesses these instruments as derivative liabilities.  The fair value of these instruments is adjusted to reflect the fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives.  

Warrants:

The Company has issued warrants to purchase common shares of the Company.  Warrants are valued using a fair value based method, whereby the fair value of the warrant is determined at the warrant issue date using a market-based option valuation model based on factors including an evaluation of the Companys value as of the date of the issuance, consideration of the Companys limited liquid resources and business prospects, the market price of the Companys stock in its mostly inactive public market and the historical valuations and purchases of the Companys warrants.  When warrants are issued in combination with debt or equity securities, the warrants are valued and accounted for based on the relative fair value of the warrants in relation to the total value assigned to the debt or equity securities and warrants combined.

Property and equipment:

Property and equipment are stated at cost and are depreciated, when placed into service, using the straight-line method over the estimated useful lives of the related assets, generally three to twenty years.  The Company capitalizes all direct costs and all indirect incrementally identifiable costs related to the design and construction of its Integrated Projects.  The Company reviews its property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  An impairment loss would be recognized based on the amount by which the carrying value of the assets or asset group exceeds its estimated fair value, and is recognized as a loss from operations.

Recent Accounting Pronouncements:

In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers, which supersedes the revenue recognition in Revenue Recognition (Topic 605), and requires entities to recognize revenue in a way that depicts the transfer of potential goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services.  ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and is to be applied retrospectively, with early adoption not permitted.  The Company is currently evaluation this new standard and the potential impact this standard may have upon adoption.

In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements Going Concern: Disclosures of Uncertainties about an Entitys Ability to Continue as a Going Concern.  The new standard requires management to perform interim and annual assessments of an entitys ability to continue as a going concern within one year of the date the financial statements are issued.  An entity must provide certain disclosures if conditions or events raise substantial doubt about the entitys ability to continue as a going concern.  The guidance is effective for annual periods ending after December 15, 2016, and interim periods thereafter, early application is permitted.  The Company believes the adoption of ASU No. 2014-15 will not have a material impact on its financial statements.

THREE MONTHS ENDED SEPTEMBER 30, 2015 COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30, 2014

Revenue

Total revenues were nil for both the three months ended September 30, 2015 and 2014, respectively.




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General and Administrative

Total general and administrative expenses were $508,000 and $357,000 for the three months ended September 30, 2015 and 2014, respectively.

General and administrative expenses, excluding stock-based compensation charges of $2,000 and nil, were $506,000 and $357,000 for the three months ended September 30, 2015 and 2014, respectively, representing a $149,000 increase.  Salaries and related payroll tax expenses decreased to $78,000 for the three months ended September 30, 2015 from $93,000 for the three months ended September 30, 2014, primarily due to the fact that during the three months ended September 30, 2015 one employee became a consultant on an as-needed consulting basis receiving compensation in the Companys securities and/or deferring their compensation which reduced recurring salary and payroll tax costs. Consulting costs were $241,000 and $114,000 for the three months ended September 30, 2015 and 2014, respectively, representing a $127,000 increase primarily due to increases in the costs of services provided by Schafer and Bassani effective January 1, 2015 and other consultants providing services for Kreider Farms related projects.    Investor relation costs increased from $7,000 for the three months ended September 30, 2014 to $24,000 for the three months ended September 30, 2015 due to the Companys presence at an investor conference and the hiring of an investor relations development firm during the three months ended September 30, 2015.

General and administrative stock-based employee compensation for the three months ended September 30, 2015 and 2014 consists of the following:



Three Months

ended

September 30,

2015


Three Months

ended

September 30,

2014

General and administrative:




  Fair value of stock options expensed under ASC 718

$  2,000


$       -

      Total

$  2,000


$       -


Stock-based compensation charges were $2,000 and nil for the three months ended September 30, 2015 and 2014, respectively.  

Depreciation

Total depreciation expense was $76,000 and $185,000 for the three months ended September 30, 2015 and 2014, respectively.  Depreciation expense is lower for the three months ended September 30, 2015 due to the fiscal year 2015 $1,750,000 impairment of the Kreider 1 assets which reduced the depreciation base.

Research and Development

Total research and development expenses were $134,000 and $67,000 for the three months ended September 30, 2015 and 2014, respectively.

Research and development expenses, excluding stock-based compensation expenses of $13,000 and nil were $121,000 and $67,000 for the three months ended September 30, 2015 and 2014, respectively. The primary reason for the increase is due to consulting costs and expenses related to the pilot program testing to enhance the Companys technology.  

Research and development stock-based employee compensation for the three months ended September 30, 2015 and 2014 consists of the following:

 

30




Three Months ended

September 30, 2015


Three Months ended

September 30, 2014

Research and development:




  Fair value of stock options expensed under ASC 718

$ 13,000


$   -

      Total

$ 13,000


$   -

Stock-based compensation expenses were $13,000 and nil for the three months ended September 30, 2015 and 2014, respectively.  The increase resulted from the vesting of options to an employee performing research and development during the three months ended September 30, 2015.

Loss from Operations

As a result of the factors described above, the loss from operations was $718,000 and $609,000 for the three months ended September 30, 2015 and 2014, respectively.

Other Expense (Income)

Other expense was $114,000 and $97,000 for the three months ended September 30, 2015 and 2014, respectively.  Interest expense increased from $97,000 for the three months ended September 30, 2014 to $115,000 for the three months ended September 30, 2015.  Interest increased due to higher interest bearing deferred compensation and convertible notes payable balances as of September 30, 2015 compared to September 30, 2014.  Interest expense related to the Pennvest loan was $49,000 for both periods.  

Net Loss Attributable to the Noncontrolling Interest

The net loss attributable to the noncontrolling interest was $1,000 for both the three months ended September 30, 2015 and 2014, respectively.  

Net Loss Attributable to Bions Common Stockholders

As a result of the factors described above, the net loss attributable to Bions stockholders was $832,000 and $705,000 for the three months ended September 30, 2015 and 2014, respectively, and the net loss per basic and diluted common share was $0.04 for both periods.    

LIQUIDITY AND CAPITAL RESOURCES

The Company's consolidated financial statements for the three months ended September 30, 2015 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.  The Report of our Independent Registered Public Accounting Firm on the Company's consolidated financial statements as of and for the year ended June 30, 2015 includes a "going concern" explanatory paragraph which means that the auditors stated that conditions exist that raise substantial doubt about the Company's ability to continue as a going concern.

Operating Activities

As of September 30, 2015, the Company had cash of approximately $180,000. During the three months ended September 30, 2015, net cash used in operating activities was $343,000, primarily consisting of cash operating expenses related to salaries and benefits, and other general and administrative costs such as insurance and legal and accounting expenses. As previously noted, the Company is currently not generating significant revenue and accordingly has not generated cash flows from operations. The Company does not anticipate generating sufficient revenues to offset operating and capital costs for a minimum of two to five years.  While there are no assurances that the Company will be successful in its efforts to develop and construct its Projects and market its Systems, it is certain that the Company will require substantial funding from external sources. Given the unsettled state of the current credit and capital markets for companies such as Bion, there is no assurance the Company will be able to raise the funds it needs on reasonable terms.




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Investing Activities

During the three months ended September 30, 2015, the Company invested $3,000 for the purchase of new property and equipment.

Financing Activities

During the three months ended September 30, 2015, the Company received cash proceeds of $13,000 due to the receipt of a subscription receivable for the exercise of 12,500 warrants.  The Company also received cash proceeds of $174,000 due to the exercise of 165,894 warrants pursuant to subscription agreements which reduced the exercise price to $1.05 per warrant for certain warrants with expiry dates before December 31, 2015.

As of September 30, 2015 the Company has debt obligations consisting of: a) deferred compensation of $901,000, b) convertible notes payable affiliates of $3,187,000, and, c) a loan payable of $7,754,000 (owed by PA-1) (plus accrued interest of $635,000).  

Plan of Operations and Outlook

As of September 30, 2015, the Company had cash of approximately $180,000.

The Company continues to explore sources of additional financing to satisfy its current operating requirements as it is not currently generating any significant revenues. During fiscal years 2014 and 2015 the Company experienced greater difficulty in raising equity and debt funding than in the prior years. During the years ended June 30, 2014 and 2015, the Company had the greatest difficulty raising funds to date. As a result, the Company faced, and continues to face, significant cash flow management challenges due to material working capital constraints. To partially mitigate these working capital constraints, the Companys core senior management and some key employees and consultants have been deferring all or part of their cash compensation and/or are accepting compensation in the form of securities of the Company (Notes 6 and 8 to Financial Statements) and members of the Companys senior management have made loans to the Company which have been converted into convertible promissory notes.  As of September 30, 2015 such deferrals totaled approximately $4,088,000 (including accrued interest and deferred compensation converted into promissory notes). The extended constraints on available resources have had, and continue to have, negative effects on the pace and scope of the Companys effort to develop its business. The Company made reductions in its personnel during the year ended June 30, 2014.  The Company has had to delay payments of trade obligations and economize in many ways that have potentially negative consequences. If the Company does not have greater success in its efforts to raise needed funds during the current year (and subsequent periods), we will need to consider deeper cuts (including additional personnel cuts) and curtailments of operations (including possibly Kreider 1 operations). The Company will need to obtain additional capital to fund its operations and technology development, to satisfy existing creditors, to develop Integrated Projects and CAFO waste remediation systems (including the Kreider 2 facility) and to continue to operate the Kreider 1 facility (subject to agreements being reached with Pennvest as discussed above). The Company anticipates that it will seek to raise from $2,500,000 to $50,000,000 or more (debt and equity) during the next twelve months.  However, as discussed above, there is no guarantee that we will be able to raise sufficient funds or further capital for the operations planned in the near future.

The Company is not currently generating any significant revenues. Further, the Companys anticipated revenues, if any, from existing projects and proposed projects will not be sufficient to meet the Companys anticipated operational and capital expenditure needs for many years.  During the year ended June 30, 2015 the Company raised proceeds of approximately $926,000 through the sale of its securities and an additional $75,000 through the exercise of warrants (Note 9 to Financial Statements) and anticipates raising additional funds from such sales.  However, there is no guarantee that we will be able to raise sufficient funds or further capital for the operations planned in the near future.  

Because the Company is not currently generating significant revenues, the Company will need to obtain additional capital to fund its operations and technology development, to satisfy existing creditors, to develop Projects and to sustain operations at the KF 1 facility.




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On January 26, 2009, the Board of the Pennsylvania Infrastructure Investment Authority (Pennvest) approved a $7.75 million loan to Bion PA 1, LLC (PA-1), a wholly-owned subsidiary of the Company, for the initial stage of Bion's Kreider Farms project (Phase 1 Kreider System). After substantial unanticipated delays, on August 12, 2010 the PA-1 received a permit for construction of the Phase 1 Kreider system.  Construction activities commenced during November 2010.  The closing/settlement of the Pennvest Loan took place on November 3, 2010.  PA-1 finished the construction of the Phase 1 Kreider System and entered a period of system operational shakedown during May 2011.  The Phase 1 Kreider System reached full, stabilized operation by the end of the 2012 fiscal year.  During 2011 the Pennsylvania Department of Environmental Protection (PADEP) re-certified the nutrient credits for this project.  The economics (potential revenues and profitability) of the Kreider 1 System are based largely on the long term sale of nutrient (nitrogen and/or phosphorus) reduction credits to meet the requirements of the Chesapeake Bay environmental clean-up.  The PADEP issued final permits for the Kreider System (including the credit verification plan) on August 1, 2012 on which date the Company deemed that the Kreider System was placed in service. As a result, PA-1 commenced generating nutrient reduction credits for potential sale while continuing to utilize the system to test improvements and add-ons. Operating results of the Phase 1 Kreider system have documented the efficacy of Bions nutrient reduction technology and vetted potential add-ons for future installations. During August 2012 the Company provided Pennvest (and the PADEP) with data demonstrating that the Kreider 1 system met the technology guaranty standards which were incorporated in the Pennvest financing documents and, as a result, the Pennvest Loan is now solely an obligation of PA-1.  As a result of this extended period of operations, Bion is confident that future systems can be constructed with even higher operational efficiencies at lower capital expense and with lower operational costs. To date liquidity in the Pennsylvania nutrient credit market has been slow to develop significant breadth and depth  which limited liquidity has negatively impacted Bions business plans and has prevented Bion from monetizing the nutrient reductions created by PA-1s existing Kreider 1 project and Bions other proposed projects. These challenges and difficulties (which continue to this date) have prevented PA-1 from generating any material revenues from the Kreider 1 project to date (PA-1s Kreider 1 operating expenses have been funded by loans from Bion) and raise significant questions as to when, if ever, PA-1 will be able to generate material revenues from the Kreider 1 system.  Additionally, PA-1 has not made any interest or principal payments, which were to begin in fiscal 2013, and, therefore, the Company has classified the Pennvest Loan as a current liability as of September 30, 2015.  Due to the slow development of the nutrient reduction credit market, the Company determined that the carrying amount of the property and equipment related to the Kreider 1 project exceeded its estimated future undiscounted cash flows based on certain assumptions regarding timing, level and probability of revenues from sales of nutrient reduction credits and, therefore, recorded a $2,000,000 impairment of the Kreider 1 assets during the year ended June 30, 2014.  An additional impairment of $1,750,000 was recorded for the year ended June 30, 2015.  

On September 25, 2014, Pennvest exercised its right to declare the Pennvest Loan in default and has accelerated the Pennvest Loan and demanded that PA-1 pay $8,137,117 (principal, interest plus late charges) on or before October 24, 2014. PA-1 did not make the payment and does not have the resources to make the payment demanded by Pennvest. PA-1 has commenced discussions and negotiations with Pennvest concerning this matter but Pennvest has rejected PA-1s proposal made during the fall of 2014, but communication continues regarding the matters involved.  Neither party has any formal proposal on the table as of the date of this report.  It is not possible at this date to predict the outcome of such negotiations, but the Company believes it is possible that a loan modification agreement may be reached that will allow PA-1 and Pennvest time for the development of a more robust market for nutrient reductions in Pennsylvania, of which there is no assurance.  PA-1 and Bion will continue to evaluate various options with regard to Kreider 1 over the next 30-180 days.

During August 2012, the Company provided Pennvest (and the PADEP) with data demonstrating that the Kreider 1 system met the technology guaranty standards which were incorporated in the Pennvest financing documents and, as a result, the Pennvest Loan is now solely an obligation of PA-1.  

The Company is currently conducting a portion of its research and development activities at Kreider 1 while continuing commercial operations.




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As indicated above, the Company anticipates that it will seek to raise from $2,500,000 to $50,000,000 or more (debt and equity) during the next twelve months, some of which may be in the context of joint ventures for the development of one or more Integrated Projects.  We reiterate that there is no assurance, especially in the extremely unsettled capital markets that presently exist for companies such as Bion, that the Company will be able to obtain the funds that it needs to stay in business, finance its Projects and other activities, continue its technology development and/or to successfully develop its business.

There is extremely limited likelihood that funds required during the next twelve months or in the periods immediately thereafter will be generated from operations and there is no assurance that those funds will be available from external sources such as debt or equity financings or other potential sources. The lack of additional capital resulting from the inability to generate cash flow from operations and/or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business. Further, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significantly dilutive effect on the Company's existing shareholders.  All of these factors have been exacerbated by the extremely unsettled credit and capital markets presently existing for companies such as Bion.  

Currently, Bion is focused on using applications of its patented waste management technology and its technology platform to pursue three main business opportunities: 1) development of Integrated Projects which will include large CAFOs, such as large dairies, beef cattle feed lots and hog farms, with Bion waste treatment System modules processing the aggregate CAFO waste stream from the equivalent of 40,000 or more beef and/or dairy cows (or the waste stream equivalent of other species) while producing solids to be utilized for renewable energy production (and potentially to be marketed as feed and/or fertilizer), integrated with an ethanol plant capable of producing 40 million gallons (or more) of ethanol per year, and/or integrated with CAFO end product processors,  2) installation of Bion systems to retrofit and environmentally remediate existing CAFOs in selected markets where: a) government policy supports such efforts (such as the Chesapeake Bay watershed and Wisconsin or, potentially, other areas seeking to meet EPA TMDL requirements) and/or b) where CAFOs need our technology to obtain permits to expand or develop without negative environmental consequences, and 3) licensing and/or joint venturing its technology for use outside of North America.

The Company has commenced activities related to marketing and potential use of its technology in relation to expansion and/or development of CAFOs in the Northeast and Midwest (and elsewhere).  Bion considers this to be a large potential market for the Companys growth over the next 36 months (and thereafter). Assuming that the Company can be successful in raising necessary funding and the development of a more robust market for nutrient reductions in Pennsylvania (and elsewhere), neither of which are assured at this date, it is anticipated at such activities will accelerate based on the operating results achieved by the Kreider 1 system.

The Company continues its development work related to the second phase of the Kreider project (Phase 2 Kreider Project) which involves production of renewable energy from the waste of KFs poultry operations and the cellulosic solids recovered by the Kreider 1 system. During May 2011 the PADEP certified the Phase 2 Kreider Project for 559,457 nutrient credits under the old EPAs Chesapeake Bay model.  The Company anticipates that the Phase 2 Kreider Project will be re-certified for between 1.5-2 million nutrient reduction credits pursuant to the amended EPA Chesapeake Bay model which was published subsequent to the original certification. Recent announcements related to negotiations between the EPA and PADEP regarding Pennsylvanias Chesapeake Bay nutrient reduction non-compliance suggest that a resolution of certain matters is likely during the balance of this calendar year which may allow the Phase 2 Kreider Project  to move forward with re-certification and proceed toward design, permitting , construction and eventual operation during the 2017 fiscal year. Assuming there are also positive developments related to the market for nutrient reductions in Pennsylvania, the Company intends to pursue development, design and construction of the Kreider poultry waste/renewable energy project with a goal of achieving operational status during the 2016 calendar year. While the Company believes that substantial revenues may be generated from the sale of by-products (organic and inorganic fertilizer, renewable energy and/or renewable energy credits) of its operation, the economics (potential revenues and profitability) of the Phase 2 Kreider Project are based, in large part, on the long term sale of nutrient (nitrogen and/or phosphorus) reduction credits to meet the requirements of the




34



Chesapeake Bay environmental clean-up.  However, liquidity in the Pennsylvania nutrient reduction market has been slow to develop significant breadth and depth which lack of liquidity to date has negatively impacted Bions business plans and has resulted in challenges to monetizing the nutrient reduction credits created by PA-1s existing Kreider 1 project and will delay the Companys Phase 2 Kreider Project and other proposed projects in Pennsylvania.

Bion is currently working with local, state and federal officials with regard to regulatory and legislative initiatives, and with such parties and potential industry participants to evaluate sites in multiple states. The Company believes that its initial Integrated Project will most likely be located and developed (possibly in stages) in Pennsylvania.  Note that locations in other states are also under review and the initial Integrated Project could be developed elsewhere. It is possible that the Company will develop one or more Integrated Projects as joint ventures specifically targeted to meet the growing animal protein demand outside of the United States (including without limitation Asia, Europe and/or the Middle East). Bion intends to choose sites for additional Projects during the calendar years 2017-2019 to create a pipeline of Projects. Management has a 5-year development target (through calendar year 2023) of approximately 10-24 Integrated Projects.  At the end of that period, Bion projects that 5 or more of these Integrated Projects will be in full operation in 3-5 states (or other locations), and the balance would be in various stages ranging from partial operation to early permitting stage. No Integrated Project has been developed to date.

CONTRACTUAL OBLIGATIONS

We have the following material contractual obligations (in addition to employment and consulting agreements with management and employees):

On September 27, 2008, the Company executed an agreement with Kreider Farms (and its affiliated entities) (collectively "Kreider") to design, construct and operate, through its wholly-owned subsidiary PA-1, a Bion system to treat the waste of the dairy cows (milkers, dry cows and heifers) at the Kreider Dairy, located in Mannheim, Pennsylvania. In addition, this agreement (as amended and extended) provides for a second phase which will include treatment of the cellulosic solid wastes from the Kreider 1 together with the waste stream from Kreider's poultry facilities to produce renewable energy for Bion's waste treatment facility and/or for market sales. The Kreider 1 system is owned and operated by PA-1, in which Kreider has the option to purchase a minority interest. Funds were expended over the last year to complete the construction of the Kreider 1 System and substantial capital and operating funds (equity and/or debt) has been and will continue to be expended.  The Company anticipates that PA-1 will receive revenue from the sale of nutrient (and other) environmental credits related to the Kreider 1 system, and through sales of renewable energy generated in connection with the second phase (largely poultry manure) of the Kreider project. The $7.75 million loan from the Pennsylvania Infrastructure Investment Authority to PA-1 (Pennvest Loan), together with funds provided by the Company, has provided the funds for construction of the Kreider 1 system. The Pennvest loan is to be repaid by interest only payments for the first three years, followed by an additional ten-year amortization of principal, and matures in November 2023.  The Kreider 1 system reached full, stabilized operation by the end of the 2012 fiscal year and received final permits during August 2012.  The Pennsylvania Department of Environmental Protection re-certified the nutrient credits for this project. As a result, PA-1 can now commence generating and verifying nutrient reduction credits for sale while continuing to utilize the system to test improvements and add-ons. Operating results of the Phase 1 Kreider system have documented the efficacy of Bions nutrient reduction technology and vetted potential add-ons for future installations. As a result of this extended period of operations, Bion is confident that future systems can be constructed with even higher operational efficiencies at lower capital expense and with lower operational costs. To date liquidity in the Pennsylvania nutrient credit market has been slow to develop significant breadth and depth  which limited liquidity has negatively impacted Bions business plans and has prevented Bion from monetizing the nutrient reductions created by PA-1s existing Kreider 1 project and Bions other proposed projects. These challenges and difficulties (which continue to this date) have prevented PA-1 from generating any material revenues from the Kreider 1 project to date (PA-1s Kreider 1 operating expenses have been funded by loans from Bion) and raise significant questions as to when, if ever, PA-1 will be able to generate material revenues from the Kreider 1 system.  PA-1 has been engaged in on-and-off negotiations with Pennvest related to forbearance and/or re-structuring its obligations pursuant to the Pennvest Loan for over 36 months. In the context of such negotiations, PA-1 has elected not to make interest payments to Pennvest on the




35



Pennvest Loan since January 2013.  Additionally, PA-1 has not made any principal payments, which were to begin in fiscal 2013, and, therefore, the Company has classified the Pennvest Loan as a current liability as of September 30, 2015.  Due to the slow development of the nutrient reduction credit market, the Company determined that the carrying amount of the property and equipment related to the Kreider 1 project exceeded its estimated future undiscounted cash flows based on certain assumptions regarding timing, level and probability of revenues from sales of nutrient reduction credits and, therefore, recorded a $2,000,000 impairment of the Kreider 1 assets which reduced the value of the Kreider 1 System during the year ended June 30, 2014.  An additional impairment of $1,750,000 was recorded for the year ended June 30, 2015  

On September 25, 2014, Pennvest exercised its right to declare the Pennvest Loan in default and has accelerated the Pennvest Loan and demanded that PA-1 pay $8,137,117 (principal, interest plus late charges) on or before October 24, 2014. PA-1 did not make the payment and does not have the resources to make the payment demanded by Pennvest. PA-1 has commenced discussions and negotiations with Pennvest concerning this matter but Pennvest has rejected PA-1s proposal made during the fall of 2014, but communication continues regarding the matters involved.  Neither party has any formal proposal on the table as of the date of this report.  It is not possible at this date to predict the outcome of such negotiations, but the Company believes it is possible that a loan modification agreement may be reached that will allow PA-1 and Pennvest time for the development of a more robust market for nutrient reductions in Pennsylvania, of which there is no assurance.  PA-1 and Bion will continue to evaluate various options with regard to Kreider 1 over the next 30-180 days.

During August 2012, the Company provided Pennvest (and the PADEP) with data demonstrating that the Kreider 1 system met the technology guaranty standards which were incorporated in the Pennvest financing documents and, as a result, the Pennvest Loan is now solely an obligation of PA-1.  

The Company is currently conducting a portion of its research and development activities at Kreider 1 while PA1 maintains the Kreider 1 System.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements (as that term is defined in Item 303 of Regulation SK) that are reasonably likely to have a current or future material effect on our financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4.  Controls and Procedures.

(a)  Evaluation of Disclosure Controls and Procedures.

The term "disclosure controls and procedures" is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). This term refers to the controls and procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized, and reported within the required time periods. Our Chief Executive Officer and Principal Financial Officer has evaluated the effectiveness of the design and operations of our disclosure controls and procedures as of the end of the period covered by this quarterly report, and has concluded that, as of that date, our disclosure controls and procedures were not effective at ensuring that required information will be disclosed on a timely basis in our reports filed under the Exchange Act, as a result of the material weakness in internal control over financial reporting discussed in Item 9(A) of our Form 10-K for the year ended June 30, 2015.

(b)  Changes in Internal Control over Financial Reporting.

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.




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PART II OTHER INFORMATION

Item 1.  Legal Proceedings.

On September 25, 2014, Pennvest exercised its right to declare the Pennvest Loan in default and has accelerated the Pennvest Loan and has demanded that our wholly-owned subsidiary Bion PA-1 LLC (PA-1) pay $8,137,117 (principal, interest plus late charges) on or before October 24, 2014. The Company anticipates that discussions and negotiations will take place between PA-1 and Pennvest concerning this matter over the next 90 days.  PA-1 has made a proposal to  resolve this matter but has not received a response from Pennvest as of the date of this report.  It is not possible at this date to predict the outcome of such negotiations, but the Company believes that an interim, short-term agreement will be reached that will allow PA-1 and Pennvest a further period of time for further negotiations and evaluation of possible long-term resolutions. Subject to the results of the negotiations with Pennvest and pending development of a more robust market for nutrient reductions in Pennsylvania, PA-1 and Bion anticipate that it will be necessary for the Company to evaluate various options with regard to Kreider 1 over the coming months.  Litigation has not commenced in this matter but has been threatened by Pennvest.

The Company currently is not involved in any other material litigation.

Item 1A.  Risk Factors.

Not applicable.

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

During the quarter ended September 30, 2015, the Company sold the following restricted securities: a) 29,934 shares issued pursuant to our 2006 Consolidated Incentive Plan (Plan), valued at $25,952, in aggregate, to an employee and consultants for services, and b) 208,874 shares were issued for conversion of debt totaling $171,717.  Additionally, warrant holders exercised 265,894 warrants at a reduced price of $1.05 per warrant and received 265,894 shares of the Companys common stock and the Company received cash proceeds of $174,189 and a collateralized promissory note receivable of $105,000. In all of these transactions the Company relied on the exemptions in Section 4(2) of the Securities Act of 1933, as amended, and/or under Rule 506 of Regulation D under the Securities Act of 1933, as amended. See Notes to Financial Statements (included herein) for additional details.

The proceeds were utilized for general corporate purposes.

Item 3.  Defaults Upon Senior Securities.

Not applicable.

Item 4.  Mine Safety Disclosures.

Not applicable.

Item 5.  Other Information.

Not applicable.




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Item 6.  Exhibits.

(a)  Exhibits required by Item 601 of Regulation S-K.


Exhibit


Description


10.1


Mark A. Smith Extension Agreement (October 27, 2015) - Filed herewith electronically




31.1

 

Certification of CEO pursuant to Rule 13a-14(a) or Rule 15d-14(a) - Filed herewith electronically




31.2


Certification of Executive Chairman, President and CFO pursuant to Rule 13a-14(a) or Rule 15d-14(a) - Filed herewith electronically

32.1

Certification of CEO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Filed herewith electronically




32.2


Certification of Executive Chairman, President and CFO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Filed herewith electronically




101


XBRL Exhibits





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SIGNATURES

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 thereunto duly authorized.




BION ENVIRONMENTAL TECHNOLOGIES, INC.







Date:  November 9, 2015

By:

/s/ Mark A. Smith



Mark A. Smith, President and Chief Financial

Officer (Principal Financial and Accounting

Officer)










Date:  November 9, 2015

By:

/s/ Dominic Bassani



Dominic Bassani, Chief Executive Officer













39

EX-10 2 f2ex101.htm EX 10.1 EXHIBIT 10

EXHIBIT 10.1

EXTENSION AGREEMENT

THIS EXTENSION AGREEMENT (Extension Agreement’ or ‘Agreement’) is agreed this 27th day of October, 2015 by, between and among Bion Environmental Technologies, Inc. (‘Bion’) (collectively Bion, together with the other subsidiaries of Bion, are sometimes referred to as the ‘Bion Companies’) and Mark A. Smith (‘MAS’).

WHEREAS MAS has provided the services to the Bion Companies continually since 2003 (and for most periods since 1992) and most recently pursuant to the agreement of February 3, 2015 which runs through December 31, 2015 and contains an option for Bion to extend the term for an additional six (6) months through June 30, 2015 (collectively, ‘Existing Agreement’);

AND WHEREAS Bion wishes to have MAS continue to provide services to the Bion Companies after December 31, 2015 and MAS is willing to continue to provide such services upon the terms and conditions set forth in this Agreement:

NOW THEREFORE, in consideration of the mutual covenants and conditions and performances hereinafter set forth, the Bion Companies and MAS do hereby agree as set forth below upon the terms and conditions set forth in the following paragraphs:

1)

Pursuant to the terms of the Existing Agreement and this Extension Agreement, MAS shall continue to hold the positions of Director, Executive Chairman, President and General Counsel of Bion and each of its subsidiaries through a date no later than June 30, 2016 (‘Term’), with the proviso that Bion will seek to hire personnel to replace MAS on or before April 30, 2016  (with MAS then becoming a consultant to the Bion Companies following a transition period after such hiring(s) for the balance of the Term).

2)

Bion shall compensate MAS as follows:

a)

Monthly cash compensation of $19,000 per month commencing January 2016 shall be paid to MAS in cash, if available,  which cash compensation shall continue to be deferred until the  the Board of Directors of Bion elects to resume cash payments;

b)

MAS shall be reimbursed on a monthly basis for his expenses;   

c)

Until Bion resumes cash payment of MAS's compensation, such sums shall be, accrued and treated as set forth at Attachment A hereto;

d)

Bion hereby issues/grants to MAS options to purchase 100,000 shares of Bion's common stock at a price of $.92 per share until December 31, 2020 pursuant to the Company’s 2006 Consolidated Incentive Plan (‘Plan’), as amended ('Options');

e)

Bion hereby grants MAS (pursuant to the Plan)  75,000 shares of common stock as an extension bonus, which bonus shares shall be immediately vested and shall be issued on January 5, 2016;

f)

Bion shall periodically (but not less than annually) evaluate MAS' performance for bonus purposes with a goal of declaring cash bonuses of 1/3 (or more) plus other items.


3)

Bion shall have the option to extend MAS’s services for up to six (6) months (through December 31, 2016) by written notice prior to May 15, 2016 with MAS’s compensation (cash/accruals/option grants/etc.) for such additional extension period to be the same as for the six (6) month extension period through June 30, 2016 as set forth at paragraph 2 above except that the new stock bonus shares shall be issued and delivered on January 5, 2017.

4)

The terms of this Extension Agreement control all matters covered hereby; provided, however, Bion acknowledges that any terms of the Existing Agreement not inconsistent with the items set forth matters set forth herein shall inure to the benefit of MAS and remain in full force and effect as if repeated in full herein. However,

5)

Miscellaneous:

a)

This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns and any person acquiring, whether by Merger, consolidation, liquidation, purchase of assets or otherwise, all or  substantially all of a party's equity or assets and business.

b)

It is the intention of the parties hereto that this Agreement and the performance hereunder and all suits and special proceeding connected herewith be construed in accordance with and pursuant to the laws of the State of Colorado and that in any action, special proceeding or other proceeding that may be brought arising out of, in connection with, or by reason of this Agreement, the laws of the State of Colorado shall be applicable and shall govern to the exclusion of the law of any other forum, without regard to the jurisdiction in which any action or special proceeding may be instituted.

c)

Any claim or controversy, which arises out of or relates to this Agreement, or breach of it, shall be settled by arbitration.

d)

Should any party hereto waive breach of any provision of this Agreement, that waiver shall not operate or be construed as a waiver of any further breach of this Agreement.

e)

In the event that any one or more of the provisions of this Agreement or any portions there under is determined to be invalid, illegal, or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby.

f)

This Agreement shall constitute the entire agreement between the parties hereto oral modifications of the Agreement shall have no effect.  This Agreement may be altered only by a written agreement signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought.

Bion Environmental Technologies, Inc.


By: /s/ Dominic Bassani

      Dominic Bassani, CEO


/s/ Mark A. Smith

Mark A. Smith, Individually




ATTACHMENT “A”


TERMS OF COMPENSATION


1 - MAS’s monthly compensation of $19,000.00 (‘Monthly Comp’) shall accrue and be treated as set forth below.


2 - To the extent that an accrued/deferred balance of Monthly Comp exists which  has not been converted or paid as set forth below (‘Deferred Comp’),  interest will accrue at a simple rate of 4%.


3 - MAS shall have the right  to convert Monthly Comp and/or Deferred Comp into the common stock of Bion ( issued under and pursuant to the terms of Bion’s 2006 Consolidated Incentive Plan, as amended (‘Plan’) and Bion’s currently effective Form S-8 registration statement (‘Registration Statement’)) at one time a sum no greater than  Monthly Comp plus, subject to written approval and/or waiver of the volume limitation by Bion,  the higherer of:  i) 30% of Deferred Comp or ii) three  times Monthly Comp, on the following terms and conditions:


a)

Notification of election to convert shall be delivered to Bion by MAS during the first five calendar days of month to convert Monthly Comp for the  proceeding month plus any additional amount elected by MAS (subject to the limitations set forth above);


b)

Conversion formula: the price of conversion shall be the average closing price for Bion’s common stock for the last 10 trading days of the immediately preceeding month (in the event that there was no trade on a given day, the closing bid price shall be treated as the closing price on that day);


c)

Conversion may only be made on a date when Bion has made all of its    required periodic reports to the US Securities & Exchange Commision (‘SEC Reports’) and the Registration Statement is effective; but further provided, that if the Registration Statement has not been effective for a period of time, no conversion may be made without Bion’s written consent until the Registration Statement has been effective for at least 60 calendar days.


4 - Bion cash payment option:


a)

Bion may at any time elect to pay all or part of the Monthly Comp and/or Deferred Comp by notification to MAS by e-mail of its intent to pay in cash within 30 days;


b)

Upon receipt of such notification, MAS’ right to elect conversion terminates as to the sum set forth in the notification from Bion.



EX-31 3 f3ex311.htm EX 31.1 Exhibit 31

Exhibit 31.1


SECTION 302 CERTIFICATION


I, Dominic Bassani, certify that:


1.   I have reviewed this quarterly report on Form 10-Q of Bion Environmental Technologies, Inc.;


2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.   Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the of the registrant as of, and for, the periods presented in this report;


4.   The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


(a)  Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)  Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)  Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and


5.   The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):


(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and


(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date:  November 9, 2015



/s/ Dominic Bassani

Dominic Bassani

Chief Executive Officer




EX-31 4 f4ex312.htm EX 31.2 Exhibit 31

Exhibit 31.2


SECTION 302 CERTIFICATION


I, Mark A. Smith, certify that:


1.   I have reviewed this quarterly report on Form 10-Q of Bion Environmental Technologies, Inc.;


2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.   Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the of the registrant as of, and for, the periods presented in this report;


4.   The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


(a)  Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)  Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)  Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and


5.   The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):


(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and


(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


Date:  November 9, 2015




/s/ Mark A. Smith

Mark A. Smith

Executive Chairman, President and

Interim Chief Financial Officer




EX-32 5 f5ex321.htm EX 32.1 Exhibit 32

Exhibit 32.1


CERTIFICATION OF CEO PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Form 10-Q of Bion Environmental Technologies, Inc., a company duly formed under the laws of Colorado (the "Company"), for the period ended September 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Dominic Bassani, Chief Executive Officer of the Company, hereby certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of his knowledge, that:


(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.




November 9, 2015

/s/ Dominic Bassani

Dominic Bassani

Chief Executive Officer



This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.


A signed original of this written statement required by Section 906 has been provided to Bion Environmental Technologies, Inc. and will be retained by Bion Environmental Technologies, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.



EX-32 6 f6ex322.htm EX 32.2 Exhibit 32

Exhibit 32.2


CERTIFICATION OF CFO PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Form 10-Q of Bion Environmental Technologies, Inc., a company duly formed under the laws of Colorado (the "Company"), for the period ended September 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Mark A. Smith, President (Executive Chairman) and Interim Chief Financial Officer (Principal Financial and  Accounting Officer) of the Company, hereby certifies, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of his knowledge, that:


(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.




November 9, 2015

/s/ Mark A. Smith

Mark A. Smith

President, Executive Chairman and

Interim Chief Financial Officer

(Principal Financial Officer)



This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.


A signed original of this written statement required by Section 906 has been provided to Bion Environmental Technologies, Inc. and will be retained by Bion Environmental Technologies, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.



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style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>1.&nbsp;ORGANIZATION, NATURE OF BUSINESS, GOING CONCERN AND MANAGEMENT&#x2019;S PLANS:</b></font></p><br/><p id="PARA1177" style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>Organization and nature of business:</b></font></p><br/><p id="PARA1180" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Bion Environmental Technologies, Inc. (&#x201c;Bion&#x201d; or &#x201c;We&#x201d; or the "Company") was incorporated in 1987 in the State of Colorado and has developed and continues to develop patented and proprietary technology and business models that provide comprehensive environmental solutions to a significant source of pollution in United States agriculture, large scale livestock facilities known as Confined Animal Feeding Operations ("CAFO's"). Bion's technologies (and applications related thereto) produce substantial reductions of nutrient releases (primarily nitrogen and phosphorus) to both water and air (including ammonia, which is subsequently re-deposited to the ground) from livestock waste streams based upon our operations and research to date (and third party peer review thereof). We are continually involved in research and development to upgrade and improve our technology and technology applications, including integration with third party technology. Bion provides comprehensive and cost-effective treatment of livestock waste onsite, while it is still concentrated and before it contaminates air, soil, groundwater aquifers and/or downstream waters, and, in certain configurations, recovers nutrients for potential use as fertilizer and feed additives.</font></p><br/><p id="PARA1182" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">During the 2014 fiscal year the Company increased its research and development activities with focus on creating variations of its technology platform that provide additional flexibility, increase recovery of nutrient by-products (in organic and non-organic forms) and potential related revenue streams, and to review potential &#x201c;add-ons&#x201d; and applications for use in different regulatory environments. These research and development activities continued through the 2015 fiscal year, and we believe such activities will continue at least through the 2016 fiscal year, subject to availability of adequate financing for the Company&#x2019;s operations, of which there is no assurance.</font></p><br/><p id="PARA1184" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Bion is actively pursuing business opportunities in three broad areas 1) installation of Bion systems to retrofit and environmentally remediate existing CAFO&#x2019;s to reduce nutrient (primarily nitrogen and phosphorus) releases, gaseous emissions (ammonia, greenhouse gases, volatile organic compounds, etc.), and pathogens, hormones and other compounds in order to clean the air and water in the surrounding areas (as described below) to ensure compliance with existing (and future) regulations and to permit herd expansion; 2) development of Integrated Projects opportunities within the United States and internationally; and 3) licensing and/or joint venturing of Bion&#x2019;s technology and applications outside North America. The opportunities described at 1) and 2) above (and below) each require substantial political and regulatory (federal, state and local) efforts on the part of the Company and a substantial part of Bion&#x2019;s efforts are focused on such political and regulatory matters. The most intense focus is currently on the requirements for the clean-up of the Chesapeake Bay faced by the Commonwealth of Pennsylvania and the potential use of Bion&#x2019;s technology and technology platform on CAFOs as an alternative to what the Company believes is far more expensive nutrient removal downstream in storm water projects.</font></p><br/><p id="PARA1186" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Management believes that Bion's technology platform (including utilization of various third party technologies to supplement the Company&#x2019;s proprietary technologies), in addition to utilization for remediation of the waste streams of existing CAFOs, can enable the integration of large-scale CAFO's and their end-product users, renewable energy production from the CAFO waste stream, on site utilization of the renewable energy generated and biofuel/ethanol production in an environmentally and economically sustainable manner while reducing the aggregate capital expense and operating costs for the entire integrated complex ("Integrated Projects" or "Projects"). In the context of Integrated Projects, Bion's waste treatment process, in addition to mitigating polluting releases, enables generation of renewable energy from cellulosic portions of the CAFO waste stream, which renewable energy can be utilized by integrated facilities including ethanol plants, CAFO end-product processors (including cheese, ice cream and/or bottling plants in the case of dairy CAFO&#x2019;s and/or slaughter and/or processing facilities in the context of beef CAFO&#x2019;s) and/or other users as a fossil fuel replacement. The nutrients (primarily nitrogen and phosphorus) can be harvested from the solids and liquid streams recovered from the livestock waste stream and can be utilized as either high value fertilizer and/or the basis for high protein animal feed and the nutrient rich effluent can potentially be utilized in integrated hydroponic agriculture and/or field applied as fertilizer. Bion believes that its Integrated Projects will produce high quality, traceable animal protein which can address consumer food safety/security concerns at a lower cost than current industry practices while also maintaining a far lower net environmental footprint per unit of protein produced due to water recycling (possible due to the removal of nutrients, etc. from the water by Bion&#x2019;s technology applications), production of renewable energy from the waste stream (reducing the use of fossil fuels), and multiple levels of economies of scale, co-location and integration savings in transportation and other logistics. Some projects may involve only partial integration which will limit the benefits described herein.</font></p><br/><p id="PARA1188" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">On September 27, 2008, the Company executed an agreement with Kreider Farms (and its affiliated entities) (collectively "Kreider") to design, construct and operate (through its wholly-owned subsidiaries, Bion Services Group, Inc. (&#x201c;Bion Services&#x201d;) and Bion PA-1 LLC (&#x201c;PA-1&#x201d;) a Bion system to treat the waste of 1,200 milking dairy cows (milkers, dry cows and heifers) at the Kreider Dairy, located in Manheim, Pennsylvania. In addition, the agreement (as amended and supplemented) provides for a second phase which will treat the wastes from the rest of Kreider&#x2019;s herd and includes renewable energy production from the cellulosic solid wastes from the Phase 1 system (referred to as &#x201c;Kreider 1&#x201d;) together with the waste stream from Kreider&#x2019;s poultry facilities for use at the facilities and/or for market sales. The Kreider projects are owned and operated by Bion through subsidiaries, in which Kreider has the option to purchase a noncontrolling interest. S</font><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">ubstantial capital (equity and/or debt) has been and will continue to be expended on these projects. Additional funds will be required for continuing operations of Kreider 1 until sufficient revenues can be generated, of which there is no assurance. The Company anticipates that such projects will generate revenue primarily from the sale of nutrient reduction (and/or other) environmental credits related to Kreider 1 and the Kreider Phase 2 poultry waste treatment system (not yet constructed), and secondarily through sales of byproducts (feed additives and/or fertilizer, (organic and non-organic)) and renewable energy generated by the Kreider Phase 2 system. To date the market for long-term nutrient reduction credits in Pennsylvania has been very slow to develop and the Company&#x2019;s activities have been negatively affected by the lack of such development. A portion of Bion&#x2019;s research and development activities is currently taking place at the Kreider 1 facility.</font></p><br/><p id="PARA1190" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The Company&#x2019;s subsidiary PA-1 financed Kreider 1 through a $7.8 million loan (&#x201c;Pennvest Loan&#x201d;) from Pennsylvania Infrastructure Investment Authority (&#x201c;Pennvest&#x201d;) secured by Kreider 1 (and its revenue streams, if any) plus advances from the Company. The economics (potential revenues and profitability) of Kreider 1 are based largely on the long-term sale of nutrient reduction credits (nitrogen and/or phosphorus) to meet the requirements of the Chesapeake Bay environmental clean-up. The Pennsylvania Department of Environmental Protection (&#x201c;PADEP&#x201d;) issued final permits for Kreider 1 (including the credit verification plan) on August 1, 2012 on which date the Company deemed that Kreider 1 was &#x2018;placed in service&#x2019;. However, liquidity in the Pennsylvania nutrient credit market has been slow to develop significant breadth and depth and has prevented Bion from monetizing the nutrient reduction credits created by PA-1&#x2019;s Kreider 1 project and Bion&#x2019;s other proposed projects. These challenges and difficulties raise significant questions as to when PA-1 will be able to generate such revenues from Kreider 1. PA-1 has elected not to make interest or principal payments on the Pennvest Loan since January 2013 and, therefore, the Company has classified the Pennvest Loan as a current liability as of September 30, 2015. The Company recorded a $1,750,000 impairment of the Kreider 1 assets for the year ended June 30, 2015 (following a $2,000,000 impairment during the year ended June 30, 2014).</font></p><br/><p id="PARA1192" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">On September 25, 2014, Pennvest exercised its right to declare the Pennvest Loan in default and has accelerated the Pennvest Loan and demanded that PA-1 pay $8,137,117 (principal, interest plus late charges) on or before October 24, 2014. PA-1 did not make the payment and does not have the resources to make the payment demanded by Pennvest. PA-1 has commenced discussions and negotiations with Pennvest concerning this matter but Pennvest has rejected PA-1&#x2019;s proposal made during the fall of 2014. Neither party has any formal proposal on the table as of the date of this report but discussions and negotiations remain in process. It is not possible at this date to predict the outcome of such negotiations, but the Company believes it is possible that an agreement may yet be reached that will provide a loan modification. Subject to the results of the negotiations with Pennvest and pending development of a more robust market for nutrient reductions in Pennsylvania, PA-1 and Bion will continue to evaluate various options with regard to Kreider 1 over the next 30-180 days. </font></p><br/><p id="PARA1194" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">During August 2012, the Company provided Pennvest (and the PADEP) with data demonstrating that the Kreider 1 system met the &#x2018;technology guaranty&#x2019; standards which were incorporated in the Pennvest financing documents and, as a result, the Pennvest Loan is now solely an obligation of PA-1.</font></p><br/><p id="PARA1196" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Development work and technology evaluation, including amended credit certification and discussions with potential joint venture partners, continues related to the details of the second phase of the Kreider project which primarily relates to treatment of the wastes from Kreider&#x2019;s poultry operations. Assuming there are positive developments related to the market for nutrient reduction in Pennsylvania, the Company intends to pursue development, design and construction of the Kreider 2 poultry waste/renewable energy project with a goal of achieving operational status during calendar year 2016. However, as discussed above, this project faces challenges related to the current limits of the existing nutrient reduction market and funding of technology-based, verifiable agricultural nutrient reductions. </font></p><br/><p id="PARA1198" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">A significant portion of Bion&#x2019;s activities concern efforts with private and public stakeholders (at local and state level) in Pennsylvania (and other Chesapeake Bay and Midwest and Great Lakes states) and at the federal level (the Environmental Protection Agency (&#x201c;EPA&#x201d;) and the Department of Agriculture (&#x201c;USDA&#x201d;) (and other executive departments) and Congress) to establish appropriate public policies which will create regulations and funding mechanisms that foster installation of the low cost environmental solutions that Bion (and others) can provide through clean-up of agricultural waste streams. The Company anticipates that such efforts will continue in Pennsylvania throughout the next 12 months and in various additional states thereafter. </font></p><br/><p id="PARA1200" style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>Going concern and management&#x2019;s plans:</b></font></p><br/><p id="PARA1202" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has not generated significant revenues and has incurred net losses (including significant non-cash expenses) of approximately $5,640,000 and $5,762,000 during the years ended June 30, 2015 and 2014, respectively and a net loss of approximately $833,000 during the three months ended September 30, 2015. At September 30, 2015, the Company has a working capital deficit and a stockholders&#x2019; deficit of approximately $9,802,000 and $11,146,000, respectively. These factors raise substantial doubt about the Company's ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability or classification of assets or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern. The following paragraphs describe management&#x2019;s plans with regard to these conditions. </font></p><br/><p id="PARA1204" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The Company continues to explore sources of additional financing to satisfy its current operating requirements as it is not currently generating any significant revenues. </font></p><br/><p id="PARA1206" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">During the years ended June 30, 2015 and 2014, the Company received total proceeds of $1,000,940 and $944,400, respectively, from the sale of its equity securities. Proceeds during the 2015 and 2014 fiscal years have been lower than in earlier years and accordingly has negatively impacted the Company&#x2019;s business development efforts. </font></p><br/><p id="PARA1208" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">During the three months ended September 30, 2015, the Company entered into subscription agreements to exercise certain warrants with expiry dates on or before December 31, 2015, into restricted shares of the Company&#x2019;s common stock at a reduced exercise price of $1.05, for the period from June 30, 2015 through July 15, 2015. Pursuant to the offering, 265,894 warrants were exercised and 265,894 shares of the Company&#x2019;s restricted common stock were issued during the three months ended September 30, 2015, resulting in cash proceeds of $174,189 and receipt of a $105,000 interest bearing, collateralized promissory note. </font></p><br/><p id="PARA1210" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">During fiscal years 2015 and 2014 and through the three months ended September 30, 2015, the Company experienced greater difficulty in raising equity funding than in the prior years. As a result, the Company faced, and continues to face, significant cash flow management challenges due to working capital constraints. To partially mitigate these working capital constraints, the Company&#x2019;s core senior management and several key employees and consultants have been deferring (and continue to defer) all or part of their cash compensation and/or are accepting compensation in the form of securities of the Company (Notes 6 and 8) and members of the Company&#x2019;s senior management have made loans to the Company. Additionally, the Company made reductions in its personnel during the year ended June 30, 2014. The constraint on available resources has had, and continues to have, negative effects on the pace and scope of the Company&#x2019;s efforts to develop its business. The Company has had to delay payment of trade obligations and has had to economize in many ways that have potentially negative consequences. If the Company does not have greater success in its efforts to raise needed funds during the balance of the 2016 fiscal year (and subsequent periods), management will need to consider deeper cuts (including additional personnel cuts) and curtailment of operations (including possibly Kreider 1 operations) and/or research and development activities.</font></p><br/><p id="PARA1212" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The Company will need to obtain additional capital to fund its operations and technology development, to satisfy existing creditors, to develop Integrated Projects and CAFO waste remediation systems (including the Kreider 2 facility) and to continue to operate the Kreider 1 facility. The Company anticipates that it will seek to raise from $2,500,000 to $50,000,000 or more debt and/or equity through joint ventures and/or sale of its equity securities (common, preferred and/or hybrid) and/or debt (including convertible) securities, and/or through use of &#x2018;rights&#x2019; and/or warrants (new and/or existing) during the next twelve months. However, as discussed above, there is no assurance, especially in light of the difficulties the Company has experienced in recent periods and the extremely unsettled capital markets that presently exist (especially for small companies), that the Company will be able to obtain the funds that it needs to stay in business, complete its technology development or to successfully develop its business and projects. </font></p><br/><p id="PARA1214" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">There is no realistic likelihood that funds required during the next twelve months or in the periods immediately thereafter for the Company&#x2019;s basic operations and/or proposed projects will be generated from operations. Therefore, the Company will need to raise sufficient funds from external sources such as debt or equity financings or other potential sources. The lack of sufficient additional capital resulting from the inability to generate cash flow from operations and/or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business. Further, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significantly dilutive effect on the Company's existing shareholders. All of these factors have been exacerbated by the extremely unsettled credit and capital markets presently existing for small companies like Bion.</font></p><br/> 7800000 1750000 2000000 8137117 -5640000 -5762000 -9802000 1000940 944400 1.05 265894 265894 174189 105000 2500000 50000000 <p id="PARA1216" style="TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SIGNIFICANT ACCOUNTING POLICIES</b></font></p><br/><p id="PARA1218" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>Principles of consolidation:</b></font></p><br/><p id="PARA1220" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Bion Integrated Projects Group, Inc. (&#x201c;Projects Group&#x201d;), Bion Technologies, Inc., BionSoil, Inc., Bion Services, PA-1, and Bion PA 2 LLC; and its 58.9% owned subsidiary, Centerpoint Corporation (&#x201c;Centerpoint&#x201d;). All significant intercompany accounts and transactions have been eliminated in consolidation.</font></p><br/><p id="PARA1222" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The accompanying consolidated financial statements have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission (&#x201c;SEC&#x201d;). The consolidated financial statements reflect all adjustments (consisting of only normal recurring entries) that, in the opinion of management, are necessary to present fairly the financial position at September 30, 2015, and the results of operations and cash flows of the Company for the three months ended September 30, 2015 and 2014. Operating results for the three months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending June 30, 2016.</font></p><br/><p id="PARA1223" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>Property and equipment:</b></font></p><br/><p id="PARA1226" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Property and equipment are stated at cost and are depreciated, when placed into service, using the straight-line method over the estimated useful lives of the related assets, generally three to twenty years. The Company capitalizes all direct costs and all indirect incrementally identifiable costs related to the design and construction of its Integrated Projects. The Company reviews its property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized based on the amount by which the carrying value of the assets or asset group exceeds its estimated fair value, and is recognized as a loss from operations.</font></p><br/><p id="PARA1228" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>Fair value measurements:</b></font></p><br/><p id="PARA1230" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market. The Company uses a fair value hierarchy that has three levels of inputs, both observable and unobservable, with use of the lowest possible level of input to determine fair value. </font></p><br/><p id="PARA1232" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Level 1 &#x2013; quoted prices (unadjusted) in active markets for identical assets or liabilities;</font></p><br/><p id="PARA1234" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Level 2 &#x2013; observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and</font></p><br/><p id="PARA1236" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Level 3 &#x2013; assets and liabilities whose significant value drivers are unobservable.</font></p><br/><p id="PARA1238" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company&#x2019;s market assumptions. Unobservable inputs require significant management judgment or estimation. In some cases, the inputs used to measure an asset or liability may fall into different levels of the fair value hierarchy. In those instances, the fair value measurement is required to be classified using the lowest level of input that is significant to the fair value measurement. Such determination requires significant management judgment. </font></p><br/><p id="PARA1240" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The fair value of cash, promissory note receivable and accounts payable approximates their carrying amounts due to their short-term maturities. The fair value of the loan payable approximates its carrying amount as it bears interest at rates commensurate with market rates. The fair value of the redeemable preferred stock approximates its carrying value due to the dividends accrued on the preferred stock which are reflected as part of the redemption value. The fair value of deferred compensation and convertible notes payable - affiliates are not practicable to estimate due to the related party nature of the underlying transactions.</font></p><br/><p id="PARA1242" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>Revenue Recognition:</b></font></p><br/><p id="PARA1244" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Revenues are generated from the sale of nutrient reduction credits. The Company recognizes revenue from the sale of nutrient credits when there is persuasive evidence that an arrangement exists, when title has passed, the price is fixed or determinable, and collection is reasonably assured.&nbsp;</font></p><br/><p id="PARA1246" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The Company expects that technology license fees will be generated from the licensing of Bion&#x2019;s integrated system. The Company anticipates that it will charge its customers a non-refundable up-front technology license fee, which will be recognized over the estimated life of the customer relationship. In addition, any on-going technology license fees will be recognized as earned based upon the performance requirements of the agreement. Annual waste treatment fees will be recognized upon receipt. Revenues, if any, from the Company&#x2019;s interest in Integrated Projects will be recognized when the entity in which the Integrated Project has been developed recognizes such revenue.</font></p><br/><p id="PARA1248" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>Loss per share:</b></font></p><br/><p id="PARA1250" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Basic loss per share amounts are calculated using the weighted average number of shares of common stock outstanding during the period. Diluted loss per share assumes the conversion, exercise or issuance of all potential common stock instruments, such as options or warrants, unless the effect is to reduce the loss per share. During the three months ended September 30, 2015 and 2014, the basic and diluted loss per share was the same, as the impact of potential dilutive common shares was anti-dilutive.</font></p><br/><p id="PARA1252" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The following table represents the warrants, options and convertible securities excluded from the calculation of diluted loss per share:</font></p><br/><table id="TBL1271" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 80%; MARGIN-LEFT: 10%; MARGIN-RIGHT: 10%; TEXT-INDENT: 0px" cellspacing="0" cellpadding="0" border="0"> <tr id="TBL1271.finRow.1"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top">&nbsp;</td> <td id="TBL1271.finRow.1.lead.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top">&nbsp;</td> <td id="TBL1271.finRow.1.amt.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colspan="2"> <p id="PARA1255" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">September 30,</font></p> <p id="PARA1256" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">2015</font></p></td> <td id="TBL1271.finRow.1.trail.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px">&nbsp;</td> <td id="TBL1271.finRow.1.lead.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top">&nbsp;</td> <td id="TBL1271.finRow.1.amt.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colspan="2"> <p id="PARA1257" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">September 30,</font></p> <p id="PARA1258" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">2014</font></p></td> <td id="TBL1271.finRow.1.trail.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px">&nbsp;</td> </tr> <tr id="TBL1271.finRow.2" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 62%; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff"> <p id="PARA1259" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Warrants</font></p></td> <td id="TBL1271.finRow.2.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1271.finRow.2.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1271.finRow.2.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">8,295,989</td> <td id="TBL1271.finRow.2.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1271.finRow.2.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1271.finRow.2.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1271.finRow.2.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">7,656,403</td> <td id="TBL1271.finRow.2.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1271.finRow.3" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff"> <p id="PARA1262" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Options</font></p></td> <td id="TBL1271.finRow.3.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1271.finRow.3.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1271.finRow.3.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">4,413,870</td> <td id="TBL1271.finRow.3.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1271.finRow.3.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1271.finRow.3.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1271.finRow.3.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">4,258,870</td> <td id="TBL1271.finRow.3.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1271.finRow.4" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff"> <p id="PARA1265" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Convertible debt</font></p></td> <td id="TBL1271.finRow.4.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1271.finRow.4.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1271.finRow.4.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">7,119,524</td> <td id="TBL1271.finRow.4.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1271.finRow.4.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1271.finRow.4.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1271.finRow.4.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">3,153,936</td> <td id="TBL1271.finRow.4.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1271.finRow.5" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff"> <p id="PARA1268" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Convertible preferred stock</font></p></td> <td id="TBL1271.finRow.5.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1271.finRow.5.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1271.finRow.5.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">14,250</td> <td id="TBL1271.finRow.5.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1271.finRow.5.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1271.finRow.5.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1271.finRow.5.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">13,250</td> <td id="TBL1271.finRow.5.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> </table><br/><p id="PARA1273" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The following is a reconciliation of the denominators of the basic loss per share computations for the three months ended September 30, 2015 and 2014: </font></p><br/><table id="TBL1302" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 95%; MARGIN-LEFT: 2.5%; MARGIN-RIGHT: 2.5%; TEXT-INDENT: 0px" cellspacing="0" cellpadding="0" border="0"> <tr id="TBL1302.finRow.1"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1302.finRow.1.lead.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1302.finRow.1.amt.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 18pt" colspan="2"> <p id="PARA1276" style="TEXT-ALIGN: center; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Three months ended</font></p> <p id="PARA1277" style="TEXT-ALIGN: center; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">September 30,</font></p> <p id="PARA1278" style="TEXT-ALIGN: center; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">2015</font></p></td> <td id="TBL1302.finRow.1.trail.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px">&nbsp;</td> <td id="TBL1302.finRow.1.lead.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1302.finRow.1.amt.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 18pt" colspan="2"> <p id="PARA1279" style="TEXT-ALIGN: center; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Three</font> <font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Months</font> <font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Ended</font></p> <p id="PARA1282" style="TEXT-ALIGN: center; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">September 30,</font></p> <p id="PARA1283" style="TEXT-ALIGN: center; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">2014</font></p></td> <td id="TBL1302.finRow.1.trail.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px">&nbsp;</td> </tr> <tr id="TBL1302.finRow.2" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 68%; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff"> <p id="PARA1284" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Shares issued &#x2013; beginning of period</font></p></td> <td id="TBL1302.finRow.2.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.2.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.2.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #cceeff">22,089,650</td> <td id="TBL1302.finRow.2.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1302.finRow.2.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.2.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.2.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #cceeff">19,579,619</td> <td id="TBL1302.finRow.2.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1302.finRow.3" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff"> <p id="PARA1287" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Shares held by subsidiaries (Note 9)</font></p></td> <td id="TBL1302.finRow.3.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.3.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.3.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #ffffff">(704,309</td> <td id="TBL1302.finRow.3.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">)</td> <td id="TBL1302.finRow.3.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.3.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.3.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #ffffff">(704,309</td> <td id="TBL1302.finRow.3.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">)</td> </tr> <tr id="TBL1302.finRow.4" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff"> <p id="PARA1290" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Shares outstanding &#x2013; beginning of period</font></p></td> <td id="TBL1302.finRow.4.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.4.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.4.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #cceeff">21,385,341</td> <td id="TBL1302.finRow.4.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1302.finRow.4.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.4.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.4.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #cceeff">18,872,310</td> <td id="TBL1302.finRow.4.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1302.finRow.5" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff"> <p id="PARA1293" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Weighted average shares for fully vested stock bonuses (Note 10)</font></p></td> <td id="TBL1302.finRow.5.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.5.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.5.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #ffffff">600,000</td> <td id="TBL1302.finRow.5.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1302.finRow.5.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.5.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.5.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #ffffff">840,000</td> <td id="TBL1302.finRow.5.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1302.finRow.6" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff"> <p id="PARA1296" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Weighted average shares issued during the period</font></p></td> <td id="TBL1302.finRow.6.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.6.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.6.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #cceeff">303,736</td> <td id="TBL1302.finRow.6.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1302.finRow.6.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.6.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.6.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #cceeff">104,766</td> <td id="TBL1302.finRow.6.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1302.finRow.7" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff"> <p id="PARA1299" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Basic weighted average shares &#x2013; end of period</font></p></td> <td id="TBL1302.finRow.7.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.7.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.7.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #ffffff">22,289,077</td> <td id="TBL1302.finRow.7.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1302.finRow.7.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.7.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.7.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #ffffff">19,817,076</td> <td id="TBL1302.finRow.7.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> </table><br/><p id="PARA1304" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>Recent Accounting Pronouncements:</b></font></p><br/><p id="PARA1307" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company&#x2019;s financial reporting, the Company undertakes a study to determine the consequences of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company&#x2019;s financial statements properly reflect the change. </font></p><br/><p id="PARA1309" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">In May 2014, the Financial Accounting Standards Board (&#x201c;FASB&#x201d;) issued Accounting Standards Update (&#x201c;ASU&#x201d;) No. 2014-09 &#x201c;Revenue from Contracts from Customers,&#x201d; which supersedes the revenue recognition requirements in &#x201c;Revenue Recognition (Topic 605),&#x201d; and requires entities to recognize revenue in a way that depicts the transfer of potential goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to the exchange for those goods or services. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 and early adoption is not permitted. The Company is currently evaluating the new standard and assessing the potential impact on its operations and financial statements. </font></p><br/><p id="PARA1311" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">In August 2014, the FASB issued ASU No. 2014-15, &#x201c;Presentation of Financial Statements &#x2013; Going Concern: Disclosures of Uncertainties about an Entity&#x2019;s Ability to Continue as a Going Concern.&#x201d; The new standard requires management to perform interim and annual assessments of an entity&#x2019;s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity&#x2019;s ability to continue as a going concern. The guidance is effective for annual periods ending after December 15, 2016, and interim periods thereafter, early application is permitted. The Company believes that the adoption of ASU No. 2014-15 will not have a material impact on its financial statements.</font></p><br/> <p id="PARA1218" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>Principles of consolidation:</b></font></p><br/><p id="PARA1220" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Bion Integrated Projects Group, Inc. (&#x201c;Projects Group&#x201d;), Bion Technologies, Inc., BionSoil, Inc., Bion Services, PA-1, and Bion PA 2 LLC; and its 58.9% owned subsidiary, Centerpoint Corporation (&#x201c;Centerpoint&#x201d;). All significant intercompany accounts and transactions have been eliminated in consolidation.</font></p><br/><p id="PARA1222" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The accompanying consolidated financial statements have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission (&#x201c;SEC&#x201d;). The consolidated financial statements reflect all adjustments (consisting of only normal recurring entries) that, in the opinion of management, are necessary to present fairly the financial position at September 30, 2015, and the results of operations and cash flows of the Company for the three months ended September 30, 2015 and 2014. Operating results for the three months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending June 30, 2016</font></p> 0.589 <p id="PARA1223" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>Property and equipment:</b></font></p><br/><p id="PARA1226" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Property and equipment are stated at cost and are depreciated, when placed into service, using the straight-line method over the estimated useful lives of the related assets, generally three to twenty years. The Company capitalizes all direct costs and all indirect incrementally identifiable costs related to the design and construction of its Integrated Projects. The Company reviews its property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized based on the amount by which the carrying value of the assets or asset group exceeds its estimated fair value, and is recognized as a loss from operations.</font></p> P3Y P20Y <p id="PARA1228" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>Fair value measurements:</b></font></p><br/><p id="PARA1230" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market. The Company uses a fair value hierarchy that has three levels of inputs, both observable and unobservable, with use of the lowest possible level of input to determine fair value. </font></p><br/><p id="PARA1232" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Level 1 &#x2013; quoted prices (unadjusted) in active markets for identical assets or liabilities;</font></p><br/><p id="PARA1234" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Level 2 &#x2013; observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and</font></p><br/><p id="PARA1236" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Level 3 &#x2013; assets and liabilities whose significant value drivers are unobservable.</font></p><br/><p id="PARA1238" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company&#x2019;s market assumptions. Unobservable inputs require significant management judgment or estimation. In some cases, the inputs used to measure an asset or liability may fall into different levels of the fair value hierarchy. In those instances, the fair value measurement is required to be classified using the lowest level of input that is significant to the fair value measurement. Such determination requires significant management judgment. </font></p><br/><p id="PARA1240" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The fair value of cash, promissory note receivable and accounts payable approximates their carrying amounts due to their short-term maturities. The fair value of the loan payable approximates its carrying amount as it bears interest at rates commensurate with market rates. The fair value of the redeemable preferred stock approximates its carrying value due to the dividends accrued on the preferred stock which are reflected as part of the redemption value. The fair value of deferred compensation and convertible notes payable - affiliates are not practicable to estimate due to the related party nature of the underlying transactions.</font></p> <p id="PARA1242" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>Revenue Recognition:</b></font></p><br/><p id="PARA1244" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Revenues are generated from the sale of nutrient reduction credits. The Company recognizes revenue from the sale of nutrient credits when there is persuasive evidence that an arrangement exists, when title has passed, the price is fixed or determinable, and collection is reasonably assured.&nbsp;</font></p><br/><p id="PARA1246" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The Company expects that technology license fees will be generated from the licensing of Bion&#x2019;s integrated system. The Company anticipates that it will charge its customers a non-refundable up-front technology license fee, which will be recognized over the estimated life of the customer relationship. In addition, any on-going technology license fees will be recognized as earned based upon the performance requirements of the agreement. Annual waste treatment fees will be recognized upon receipt. Revenues, if any, from the Company&#x2019;s interest in Integrated Projects will be recognized when the entity in which the Integrated Project has been developed recognizes such revenue.</font></p> <p id="PARA1248" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>Loss per share:</b></font></p><br/><p id="PARA1250" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Basic loss per share amounts are calculated using the weighted average number of shares of common stock outstanding during the period. Diluted loss per share assumes the conversion, exercise or issuance of all potential common stock instruments, such as options or warrants, unless the effect is to reduce the loss per share. During the three months ended September 30, 2015 and 2014, the basic and diluted loss per share was the same, as the impact of potential dilutive common shares was anti-dilutive.</font></p><br/><p id="PARA1252" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The following table represents the warrants, options and convertible securities excluded from the calculation of diluted loss per share:</font></p><br/><table id="TBL1271" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 80%; MARGIN-LEFT: 10%; MARGIN-RIGHT: 10%; TEXT-INDENT: 0px" cellspacing="0" cellpadding="0" border="0"> <tr id="TBL1271.finRow.1"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top">&nbsp;</td> <td id="TBL1271.finRow.1.lead.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top">&nbsp;</td> <td id="TBL1271.finRow.1.amt.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colspan="2"> <p id="PARA1255" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">September 30,</font></p> <p id="PARA1256" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">2015</font></p></td> <td id="TBL1271.finRow.1.trail.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px">&nbsp;</td> <td id="TBL1271.finRow.1.lead.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top">&nbsp;</td> <td id="TBL1271.finRow.1.amt.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colspan="2"> <p id="PARA1257" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">September 30,</font></p> <p id="PARA1258" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">2014</font></p></td> <td id="TBL1271.finRow.1.trail.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px">&nbsp;</td> </tr> <tr id="TBL1271.finRow.2" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 62%; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff"> <p id="PARA1259" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Warrants</font></p></td> <td id="TBL1271.finRow.2.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1271.finRow.2.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1271.finRow.2.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">8,295,989</td> <td id="TBL1271.finRow.2.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1271.finRow.2.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1271.finRow.2.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1271.finRow.2.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">7,656,403</td> <td id="TBL1271.finRow.2.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1271.finRow.3" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff"> <p id="PARA1262" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Options</font></p></td> <td id="TBL1271.finRow.3.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1271.finRow.3.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1271.finRow.3.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">4,413,870</td> <td id="TBL1271.finRow.3.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1271.finRow.3.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1271.finRow.3.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1271.finRow.3.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">4,258,870</td> <td id="TBL1271.finRow.3.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1271.finRow.4" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff"> <p id="PARA1265" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Convertible debt</font></p></td> <td id="TBL1271.finRow.4.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1271.finRow.4.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1271.finRow.4.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">7,119,524</td> <td id="TBL1271.finRow.4.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1271.finRow.4.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1271.finRow.4.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1271.finRow.4.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">3,153,936</td> <td id="TBL1271.finRow.4.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1271.finRow.5" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff"> <p id="PARA1268" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Convertible preferred stock</font></p></td> <td id="TBL1271.finRow.5.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1271.finRow.5.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1271.finRow.5.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">14,250</td> <td id="TBL1271.finRow.5.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1271.finRow.5.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1271.finRow.5.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1271.finRow.5.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">13,250</td> <td id="TBL1271.finRow.5.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> </table><br/><p id="PARA1273" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The following is a reconciliation of the denominators of the basic loss per share computations for the three months ended September 30, 2015 and 2014: </font></p><br/><table id="TBL1302" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 95%; MARGIN-LEFT: 2.5%; MARGIN-RIGHT: 2.5%; TEXT-INDENT: 0px" cellspacing="0" cellpadding="0" border="0"> <tr id="TBL1302.finRow.1"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1302.finRow.1.lead.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1302.finRow.1.amt.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 18pt" colspan="2"> <p id="PARA1276" style="TEXT-ALIGN: center; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Three months ended</font></p> <p id="PARA1277" style="TEXT-ALIGN: center; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">September 30,</font></p> <p id="PARA1278" style="TEXT-ALIGN: center; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">2015</font></p></td> <td id="TBL1302.finRow.1.trail.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px">&nbsp;</td> <td id="TBL1302.finRow.1.lead.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1302.finRow.1.amt.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 18pt" colspan="2"> <p id="PARA1279" style="TEXT-ALIGN: center; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Three</font> <font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Months</font> <font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Ended</font></p> <p id="PARA1282" style="TEXT-ALIGN: center; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">September 30,</font></p> <p id="PARA1283" style="TEXT-ALIGN: center; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">2014</font></p></td> <td id="TBL1302.finRow.1.trail.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px">&nbsp;</td> </tr> <tr id="TBL1302.finRow.2" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 68%; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff"> <p id="PARA1284" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Shares issued &#x2013; beginning of period</font></p></td> <td id="TBL1302.finRow.2.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.2.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.2.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #cceeff">22,089,650</td> <td id="TBL1302.finRow.2.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1302.finRow.2.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.2.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.2.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #cceeff">19,579,619</td> <td id="TBL1302.finRow.2.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1302.finRow.3" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff"> <p id="PARA1287" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Shares held by subsidiaries (Note 9)</font></p></td> <td id="TBL1302.finRow.3.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.3.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.3.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #ffffff">(704,309</td> <td id="TBL1302.finRow.3.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">)</td> <td id="TBL1302.finRow.3.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.3.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.3.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #ffffff">(704,309</td> <td id="TBL1302.finRow.3.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">)</td> </tr> <tr id="TBL1302.finRow.4" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff"> <p id="PARA1290" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Shares outstanding &#x2013; beginning of period</font></p></td> <td id="TBL1302.finRow.4.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.4.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.4.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #cceeff">21,385,341</td> <td id="TBL1302.finRow.4.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1302.finRow.4.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.4.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.4.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #cceeff">18,872,310</td> <td id="TBL1302.finRow.4.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1302.finRow.5" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff"> <p id="PARA1293" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Weighted average shares for fully vested stock bonuses (Note 10)</font></p></td> <td id="TBL1302.finRow.5.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.5.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.5.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #ffffff">600,000</td> <td id="TBL1302.finRow.5.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1302.finRow.5.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.5.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.5.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #ffffff">840,000</td> <td id="TBL1302.finRow.5.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1302.finRow.6" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff"> <p id="PARA1296" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Weighted average shares issued during the period</font></p></td> <td id="TBL1302.finRow.6.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.6.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.6.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #cceeff">303,736</td> <td id="TBL1302.finRow.6.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1302.finRow.6.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.6.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.6.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #cceeff">104,766</td> <td id="TBL1302.finRow.6.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1302.finRow.7" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff"> <p id="PARA1299" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Basic weighted average shares &#x2013; end of period</font></p></td> <td id="TBL1302.finRow.7.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.7.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.7.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #ffffff">22,289,077</td> <td id="TBL1302.finRow.7.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1302.finRow.7.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.7.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.7.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #ffffff">19,817,076</td> <td id="TBL1302.finRow.7.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> </table> <p id="PARA1304" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>Recent Accounting Pronouncements:</b></font></p><br/><p id="PARA1307" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company&#x2019;s financial reporting, the Company undertakes a study to determine the consequences of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company&#x2019;s financial statements properly reflect the change. </font></p><br/><p id="PARA1309" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">In May 2014, the Financial Accounting Standards Board (&#x201c;FASB&#x201d;) issued Accounting Standards Update (&#x201c;ASU&#x201d;) No. 2014-09 &#x201c;Revenue from Contracts from Customers,&#x201d; which supersedes the revenue recognition requirements in &#x201c;Revenue Recognition (Topic 605),&#x201d; and requires entities to recognize revenue in a way that depicts the transfer of potential goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to the exchange for those goods or services. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 and early adoption is not permitted. The Company is currently evaluating the new standard and assessing the potential impact on its operations and financial statements. </font></p><br/><p id="PARA1311" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">In August 2014, the FASB issued ASU No. 2014-15, &#x201c;Presentation of Financial Statements &#x2013; Going Concern: Disclosures of Uncertainties about an Entity&#x2019;s Ability to Continue as a Going Concern.&#x201d; The new standard requires management to perform interim and annual assessments of an entity&#x2019;s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity&#x2019;s ability to continue as a going concern. The guidance is effective for annual periods ending after December 15, 2016, and interim periods thereafter, early application is permitted. The Company believes that the adoption of ASU No. 2014-15 will not have a material impact on its financial statements.</font></p> <table id="TBL1271" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 80%; MARGIN-LEFT: 10%; MARGIN-RIGHT: 10%; TEXT-INDENT: 0px" cellspacing="0" cellpadding="0" border="0"> <tr id="TBL1271.finRow.1"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top">&nbsp;</td> <td id="TBL1271.finRow.1.lead.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top">&nbsp;</td> <td id="TBL1271.finRow.1.amt.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colspan="2"> <p id="PARA1255" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">September 30,</font></p> <p id="PARA1256" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">2015</font></p></td> <td id="TBL1271.finRow.1.trail.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px">&nbsp;</td> <td id="TBL1271.finRow.1.lead.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top">&nbsp;</td> <td id="TBL1271.finRow.1.amt.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colspan="2"> <p id="PARA1257" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">September 30,</font></p> <p id="PARA1258" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">2014</font></p></td> <td id="TBL1271.finRow.1.trail.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px">&nbsp;</td> </tr> <tr id="TBL1271.finRow.2" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 62%; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff"> <p id="PARA1259" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Warrants</font></p></td> <td id="TBL1271.finRow.2.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1271.finRow.2.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1271.finRow.2.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">8,295,989</td> <td id="TBL1271.finRow.2.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1271.finRow.2.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1271.finRow.2.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1271.finRow.2.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">7,656,403</td> <td id="TBL1271.finRow.2.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1271.finRow.3" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff"> <p id="PARA1262" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Options</font></p></td> <td id="TBL1271.finRow.3.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1271.finRow.3.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1271.finRow.3.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">4,413,870</td> <td id="TBL1271.finRow.3.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1271.finRow.3.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1271.finRow.3.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1271.finRow.3.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">4,258,870</td> <td id="TBL1271.finRow.3.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1271.finRow.4" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff"> <p id="PARA1265" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Convertible debt</font></p></td> <td id="TBL1271.finRow.4.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1271.finRow.4.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1271.finRow.4.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">7,119,524</td> <td id="TBL1271.finRow.4.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1271.finRow.4.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1271.finRow.4.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1271.finRow.4.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">3,153,936</td> <td id="TBL1271.finRow.4.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1271.finRow.5" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff"> <p id="PARA1268" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Convertible preferred stock</font></p></td> <td id="TBL1271.finRow.5.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1271.finRow.5.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1271.finRow.5.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">14,250</td> <td id="TBL1271.finRow.5.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1271.finRow.5.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1271.finRow.5.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1271.finRow.5.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">13,250</td> <td id="TBL1271.finRow.5.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> </table> 8295989 7656403 4413870 4258870 7119524 3153936 14250 13250 <table id="TBL1302" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 95%; MARGIN-LEFT: 2.5%; MARGIN-RIGHT: 2.5%; TEXT-INDENT: 0px" cellspacing="0" cellpadding="0" border="0"> <tr id="TBL1302.finRow.1"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1302.finRow.1.lead.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1302.finRow.1.amt.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 18pt" colspan="2"> <p id="PARA1276" style="TEXT-ALIGN: center; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Three months ended</font></p> <p id="PARA1277" style="TEXT-ALIGN: center; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">September 30,</font></p> <p id="PARA1278" style="TEXT-ALIGN: center; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">2015</font></p></td> <td id="TBL1302.finRow.1.trail.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px">&nbsp;</td> <td id="TBL1302.finRow.1.lead.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1302.finRow.1.amt.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 18pt" colspan="2"> <p id="PARA1279" style="TEXT-ALIGN: center; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Three</font> <font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Months</font> <font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Ended</font></p> <p id="PARA1282" style="TEXT-ALIGN: center; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">September 30,</font></p> <p id="PARA1283" style="TEXT-ALIGN: center; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25; TEXT-INDENT: -18pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">2014</font></p></td> <td id="TBL1302.finRow.1.trail.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px">&nbsp;</td> </tr> <tr id="TBL1302.finRow.2" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 68%; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff"> <p id="PARA1284" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Shares issued &#x2013; beginning of period</font></p></td> <td id="TBL1302.finRow.2.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.2.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.2.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #cceeff">22,089,650</td> <td id="TBL1302.finRow.2.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1302.finRow.2.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.2.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.2.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #cceeff">19,579,619</td> <td id="TBL1302.finRow.2.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1302.finRow.3" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff"> <p id="PARA1287" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Shares held by subsidiaries (Note 9)</font></p></td> <td id="TBL1302.finRow.3.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.3.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.3.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #ffffff">(704,309</td> <td id="TBL1302.finRow.3.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">)</td> <td id="TBL1302.finRow.3.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.3.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.3.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #ffffff">(704,309</td> <td id="TBL1302.finRow.3.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">)</td> </tr> <tr id="TBL1302.finRow.4" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff"> <p id="PARA1290" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Shares outstanding &#x2013; beginning of period</font></p></td> <td id="TBL1302.finRow.4.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.4.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.4.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #cceeff">21,385,341</td> <td id="TBL1302.finRow.4.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1302.finRow.4.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.4.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.4.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #cceeff">18,872,310</td> <td id="TBL1302.finRow.4.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1302.finRow.5" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff"> <p id="PARA1293" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Weighted average shares for fully vested stock bonuses (Note 10)</font></p></td> <td id="TBL1302.finRow.5.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.5.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.5.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #ffffff">600,000</td> <td id="TBL1302.finRow.5.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1302.finRow.5.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.5.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.5.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #ffffff">840,000</td> <td id="TBL1302.finRow.5.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1302.finRow.6" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff"> <p id="PARA1296" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Weighted average shares issued during the period</font></p></td> <td id="TBL1302.finRow.6.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.6.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.6.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #cceeff">303,736</td> <td id="TBL1302.finRow.6.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1302.finRow.6.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.6.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1302.finRow.6.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #cceeff">104,766</td> <td id="TBL1302.finRow.6.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1302.finRow.7" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff"> <p id="PARA1299" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Basic weighted average shares &#x2013; end of period</font></p></td> <td id="TBL1302.finRow.7.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.7.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.7.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #ffffff">22,289,077</td> <td id="TBL1302.finRow.7.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1302.finRow.7.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.7.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1302.finRow.7.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 13%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 18pt; BACKGROUND-COLOR: #ffffff">19,817,076</td> <td id="TBL1302.finRow.7.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> </table> 19579619 704309 704309 18872310 600000 840000 303736 104766 22289077 19817076 <p id="PARA1313" style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PROPERTY AND EQUIPMENT:</b></font></p><br/><p id="PARA1315" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Property and equipment consists of the following:</font></p><br/><table id="TBL1337" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 80%; MARGIN-LEFT: 10%; MARGIN-RIGHT: 10%; TEXT-INDENT: 0px" cellspacing="0" cellpadding="0" border="0"> <tr id="TBL1337.finRow.1"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1337.finRow.1.lead.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1337.finRow.1.amt.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colspan="2"> <p id="PARA1317" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">September 30,</font></p> <p id="PARA1318" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">2015</font></p></td> <td id="TBL1337.finRow.1.trail.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px">&nbsp;</td> <td id="TBL1337.finRow.1.lead.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1337.finRow.1.amt.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colspan="2"> <p id="PARA1319" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">June 30,</font></p> <p id="PARA1320" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">2015</font></p></td> <td id="TBL1337.finRow.1.trail.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px">&nbsp;</td> </tr> <tr id="TBL1337.finRow.2" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 62%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff"> <p id="PARA1321" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Machinery and equipment</font></p></td> <td id="TBL1337.finRow.2.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1337.finRow.2.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">$</td> <td id="TBL1337.finRow.2.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">2,923,577</td> <td id="TBL1337.finRow.2.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1337.finRow.2.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1337.finRow.2.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">$</td> <td id="TBL1337.finRow.2.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">2,923,577</td> <td id="TBL1337.finRow.2.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1337.finRow.3" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff"> <p id="PARA1324" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Buildings and structures</font></p></td> <td id="TBL1337.finRow.3.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1337.finRow.3.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1337.finRow.3.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">1,385,125</td> <td id="TBL1337.finRow.3.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1337.finRow.3.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1337.finRow.3.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1337.finRow.3.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">1,385,125</td> <td id="TBL1337.finRow.3.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1337.finRow.4" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff"> <p id="PARA1327" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Computers and office equipment</font></p></td> <td id="TBL1337.finRow.4.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1337.finRow.4.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1337.finRow.4.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">176,940</td> <td id="TBL1337.finRow.4.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1337.finRow.4.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1337.finRow.4.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1337.finRow.4.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">175,248</td> <td id="TBL1337.finRow.4.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1337.finRow.5" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1337.finRow.5.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1337.finRow.5.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1337.finRow.5.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">4,485,642</td> <td id="TBL1337.finRow.5.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1337.finRow.5.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1337.finRow.5.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1337.finRow.5.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">4,483,950</td> <td id="TBL1337.finRow.5.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1337.finRow.6" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff"> <p id="PARA1332" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Less accumulated depreciation</font></p></td> <td id="TBL1337.finRow.6.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1337.finRow.6.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1337.finRow.6.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">(2,581,042</td> <td id="TBL1337.finRow.6.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">)</td> <td id="TBL1337.finRow.6.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1337.finRow.6.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1337.finRow.6.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">(2,506,731</td> <td id="TBL1337.finRow.6.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">)</td> </tr> <tr id="TBL1337.finRow.7" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1337.finRow.7.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1337.finRow.7.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">$</td> <td id="TBL1337.finRow.7.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">1,904,600</td> <td id="TBL1337.finRow.7.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1337.finRow.7.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1337.finRow.7.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">$</td> <td id="TBL1337.finRow.7.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">1,977,219</td> <td id="TBL1337.finRow.7.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> </table><br/><p id="PARA1338" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Management reviewed property and equipment for impairment as of June 30, 2015 and determined that the carrying amount of property and equipment related to the Kreider 1 project exceeded its estimated future undiscounted cash flows based on certain assumptions regarding timing, level and probability of revenues from sales of nutrient reduction credits. Kreider 1 was measured at estimated fair value on a non-recurring basis using level 3 inputs, which resulted in an impairment of $1,750,000 of the property and equipment for the year ended June 30, 2015. As of September 30, 2015, management believes that no additional impairment exists.</font></p><br/><p id="PARA1341" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Depreciation expense was $75,879 and $184,884 for the three months ended September 30, 2015 and 2014, respectively. </font></p><br/> 1750000 0 <table id="TBL1337" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 80%; MARGIN-LEFT: 10%; MARGIN-RIGHT: 10%; TEXT-INDENT: 0px" cellspacing="0" cellpadding="0" border="0"> <tr id="TBL1337.finRow.1"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1337.finRow.1.lead.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1337.finRow.1.amt.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colspan="2"> <p id="PARA1317" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">September 30,</font></p> <p id="PARA1318" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">2015</font></p></td> <td id="TBL1337.finRow.1.trail.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px">&nbsp;</td> <td id="TBL1337.finRow.1.lead.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1337.finRow.1.amt.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colspan="2"> <p id="PARA1319" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">June 30,</font></p> <p id="PARA1320" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">2015</font></p></td> <td id="TBL1337.finRow.1.trail.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px">&nbsp;</td> </tr> <tr id="TBL1337.finRow.2" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 62%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff"> <p id="PARA1321" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Machinery and equipment</font></p></td> <td id="TBL1337.finRow.2.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1337.finRow.2.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">$</td> <td id="TBL1337.finRow.2.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">2,923,577</td> <td id="TBL1337.finRow.2.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1337.finRow.2.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1337.finRow.2.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">$</td> <td id="TBL1337.finRow.2.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">2,923,577</td> <td id="TBL1337.finRow.2.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1337.finRow.3" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff"> <p id="PARA1324" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Buildings and structures</font></p></td> <td id="TBL1337.finRow.3.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1337.finRow.3.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1337.finRow.3.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">1,385,125</td> <td id="TBL1337.finRow.3.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1337.finRow.3.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1337.finRow.3.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1337.finRow.3.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">1,385,125</td> <td id="TBL1337.finRow.3.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1337.finRow.4" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff"> <p id="PARA1327" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Computers and office equipment</font></p></td> <td id="TBL1337.finRow.4.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1337.finRow.4.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1337.finRow.4.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">176,940</td> <td id="TBL1337.finRow.4.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1337.finRow.4.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1337.finRow.4.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1337.finRow.4.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">175,248</td> <td id="TBL1337.finRow.4.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1337.finRow.5" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1337.finRow.5.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1337.finRow.5.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1337.finRow.5.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">4,485,642</td> <td id="TBL1337.finRow.5.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1337.finRow.5.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1337.finRow.5.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1337.finRow.5.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">4,483,950</td> <td id="TBL1337.finRow.5.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1337.finRow.6" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff"> <p id="PARA1332" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Less accumulated depreciation</font></p></td> <td id="TBL1337.finRow.6.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1337.finRow.6.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1337.finRow.6.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">(2,581,042</td> <td id="TBL1337.finRow.6.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">)</td> <td id="TBL1337.finRow.6.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1337.finRow.6.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1337.finRow.6.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">(2,506,731</td> <td id="TBL1337.finRow.6.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">)</td> </tr> <tr id="TBL1337.finRow.7" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1337.finRow.7.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1337.finRow.7.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">$</td> <td id="TBL1337.finRow.7.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">1,904,600</td> <td id="TBL1337.finRow.7.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1337.finRow.7.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1337.finRow.7.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">$</td> <td id="TBL1337.finRow.7.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">1,977,219</td> <td id="TBL1337.finRow.7.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> </table> 2923577 2923577 1385125 1385125 176940 175248 4485642 4483950 2581042 2506731 <p id="PARA1343" style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</b><b>PROMISSORY NOTE RECEIVABLE</b><b>:</b></font></p><br/><p id="PARA1345" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">During the months ended September 30, 2015, the Company received an interest bearing promissory note for $105,000. The promissory note bears interest at 4% per annum, is collateralized, and is payable on January 31, 2016. The promissory note receivable was issued as consideration for an unaffiliated investor&#x2019;s subscription agreement to exercise warrants into 100,000 restricted common shares of the Company&#x2019;s common stock at $1.05 per share. The Company recorded interest income of $828 for the three months ended September 30, 2015.</font></p><br/> 105000 0.04 100000 1.05 828 <p id="PARA1361" style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</b><b>NOTES PAYABLE - AFFILIATES</b><b>:</b></font></p><br/><p id="PARA1363" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">During the year ended June 30, 2015, the Company entered into promissory notes (&#x201c;FY2015 Promissory Notes&#x201d;), with effective dates of January 1, 2015, for initial principal amounts of $395,277, $15,956 and $80,764, with Dominic Bassani (&#x201c;Bassani&#x201d;), the Company&#x2019;s Chief Executive Officer (&#x201c;CEO&#x201d;), Edward Schafer (&#x201c;Schafer&#x201d;), the Company&#x2019;s Vice Chairman, and a major shareholder, (&#x201c;Shareholder&#x201d;), respectively. The FY2015 Promissory Notes accrued interest at 4% per annum and were payable on December 31, 2015. Effective September 8, 2015, the Company entered into new convertible promissory notes (&#x201c;September 2015 Convertible Notes&#x201d;) with Bassani, Shafer and Shareholder which replaced the FY2015 Promissory Notes. The initial principal balances of the September 2015 Convertible Notes were $405,831, $16,382 and $82,921, respectively. The new convertible promissory notes bear interest at 4% per annum, have maturity dates of December 31, 2017 and may be converted at the sole election of the noteholders into restricted common shares of the Company at a conversion price of $0.60 per share (Note 8). </font></p><br/> 395277 15956 80764 0.04 405831 16382 82921 0.04 0.60 <p id="PARA1365" style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>6</b><b>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DEFERRED COMPENSATION:</b></font></p><br/><p id="PARA1367" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The Company owes deferred compensation to various employees, former employees and consultants totaling $900,524 as of September 30, 2015. Included in the deferred compensation balances as of September 30, 2015, are $282,727, $451 and $136,803 owed Bassani, Smith and Schafer, respectively, pursuant to extension agreements effective January 1, 2015, whereby unpaid compensation earned after January 1, 2015, would accrue interest at 4% per annum and could be converted into shares of the Company&#x2019;s common stock at the election of the employee during the first five calendar days of any month. The conversion price shall be the average closing price of the Company&#x2019;s common stock for the last 10 trading days of the immediately preceding month. During the three months ended September 30, 2015, Smith converted $82,861 of deferred compensation into 99,159 shares of the Company&#x2019;s common stock at conversion prices between $0.76 and $0.96 per share. Also included are sums the Company owes various consultants, pursuant to various agreements, for deferred compensation of $239,059 as of September 30, 2015 with similar conversion terms as those described above for Bassani, Smith and Schafer, with the exception that the interest accrues at 3% per annum. The Company also owes a former employee and a current employee deferred compensation of $168,000 and $984, respectively, which is convertible into 226,168 and 1,025 shares, respectively, of the Company&#x2019;s common stock as of September 30, 2015 and, the Company owes a former employee $72,500, which is not convertible and is non-interest bearing.</font></p><br/> 282727 451 136803 0.04 P5D P10D 82861 99159 0.76 0.96 239059 0.03 168000 984 226168 1025 72500 <p id="PARA1369" style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>7</b><b>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LOAN PAYABLE:</b></font></p><br/><p id="PARA1371" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">As of September 30, 2015, PA-1, the Company&#x2019;s wholly-owned subsidiary, owes $7,754,000 under the terms of the Pennvest Loan related to the construction of the Kreider 1 System. The terms of the Pennvest Loan provide for funding of up to $7,754,000 which is to be repaid by interest-only payments for three years, followed by an additional ten-year amortization of principal. The Pennvest Loan accrues interest at 2.547% for years 1 through 5 and 3.184% for years 6 through maturity. The Pennvest Loan requires minimum annual principal payments of approximately $574,000 in fiscal year 2013, $704,000 in fiscal year 2014, $723,000 in fiscal year 2015, $741,000 in fiscal year 2016, $760,000 in fiscal year 2017 and $4,252,000 thereafter. The Pennvest Loan is collateralized by the Kreider 1 System and by a pledge of all revenues generated from Kreider 1 including, but not limited to, revenues generated from nutrient reduction credit sales and by-product sales. In addition, in consideration for the excess credit risk associated with the project, Pennvest is entitled to participate in the profits from Kreider 1 calculated on a net cash flow basis, as defined. The Company has incurred interest expense related to the Pennvest Loan of $49,374 for both of the three months ended September 30, 2015 and 2014, respectively. As of September 30, 2015, the accrued interest and late charges related to the Pennvest Loan total $635,166. Based on the limited development of the depth and breadth of the Pennsylvania nutrient reduction credit market to date, PA-1 has commenced negotiations with Pennvest related to forbearance and/or re-structuring the obligations under the Pennvest Loan. In the context of such negotiations, PA-1 has elected not to make interest payments to Pennvest on the Pennvest Loan since January 2013. Additionally, the Company has not made any principal payments, which were to begin in fiscal 2013, and, therefore, the Company has classified the Pennvest Loan as a current liability as of September 30, 2015. </font></p><br/><p id="PARA1373" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">On September 25, 2014, Pennvest exercised its right to declare the Pennvest Loan in default and has accelerated the Pennvest Loan and demanded that PA-1 pay $8,137,117 (principal, interest plus late charges) on or before October 24, 2014. PA-1 did not make the payment and does not have the resources to make the payment demanded by Pennvest. PA-1 has commenced discussions and negotiations with Pennvest concerning this matter but Pennvest has rejected PA-1&#x2019;s proposal made during the fall of 2014. Neither party has any formal proposal as of the date of this report. Subsequent discussions/negotiations have not led to any resolution of the outstanding matters as of this date. It is not possible at this date to predict the outcome of such negotiations, but the Company believes that a loan modification agreement may be reached that will allow PA-1 and Pennvest time for the development of a more robust market for nutrient reductions in Pennsylvania, of which there is no assurance. PA-1 and Bion will continue to evaluate various options with regard to Kreider 1 over the next 30-180 days. </font></p><br/><p id="PARA1375" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">In connection with the Pennvest Loan financing documents, the Company provided a &#x2018;technology guaranty&#x2019; regarding nutrient reduction performance of Kreider 1 which was structured to expire when Kreider 1&#x2019;s nutrient reduction performance had been demonstrated. During August 2012 the Company provided Pennvest (and the PADEP) with data demonstrating that the Kreider 1 System had surpassed the requisite performance criteria and that the Company&#x2019;s &#x2018;technology guaranty&#x2019; was met. As a result, the Pennvest Loan is solely an obligation of PA-1.</font></p><br/> 7754000 7754000 P3Y 0.02547 0.03184 574000 704000 723000 741000 760000 4252000 49374 49374 635166 <p id="PARA1377" style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>8</b><b>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CONVERTIBLE NOTES PAYABLE - AFFILIATES:</b></font></p><br/><p id="PARA1379" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>January </b><b>2015 Convertible Notes</b></font></p><br/><p id="PARA1381" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The January 2015 Convertible Notes accrue interest at 4% per annum and are due and payable on December 31, 2017. The January 2015 Convertible Notes (including accrued interest, plus all future deferred compensation), are convertible, at the sole election of the noteholder, into Units consisting of one share of the Company&#x2019;s common stock and one quarter warrant to purchase a share of the Company&#x2019;s common stock, at a price of $0.50 per Unit until December 31, 2020. The warrant contained in the Unit shall be exercisable at $1.00 per share until December 31, 2020. The original conversion price of $0.50 per Unit approximated the fair value of the Units at the date of the agreements; therefore no beneficial conversion feature exists. Management evaluated the terms and conditions of the embedded conversion features based on the guidance of ASC 815-15 &#x201c;Embedded Derivatives&#x201d; to determine if there was an embedded derivative requiring bifurcation. An embedded derivative instrument (such as a conversion option embedded in the deferred compensation) must be bifurcated from its host instruments and accounted for separately as a derivative instrument only if the &#x201c;risks and rewards&#x201d; of the embedded derivative instrument are not &#x201c;clearly and closely related&#x201d; to the risks and rewards of the host instrument in which it is embedded. Management concluded that the embedded conversion feature of the deferred compensation was not required to be bifurcated because the conversion feature is clearly and closely related to the host instrument, and because of the Company&#x2019;s limited trading volume that indicates the feature is not readily convertible to cash in accordance with ASC 815-10, &#x201c;Derivatives and Hedging&#x201d;. </font></p><br/><p id="PARA1383" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">As of September 30, 2015, the January 2015 Convertible Note balances, including accrued interest, owed Bassani, Smith and Schafer were $1,508,202, $783,188 and $389,566, respectively. During the three months ended September 30, 2015, the Company recorded interest expense of $26,248 related to the January 2015 Convertible Notes.</font></p><br/><p id="PARA1393" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>September </b><b>2015 Convertible Notes</b></font></p><br/><p id="PARA1395" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">During the three months ended September 30, 2015, the Company entered into September 2015 Convertible Notes with Bassani, Shafer and Shareholder which replaced the previously issued FY2015 Promissory Notes. The initial principal balances of the September 2015 Convertible Notes were $405,831, $16,382 and $82,921, respectively. The September 2015 Convertible Notes bear interest at 4% per annum, have maturity dates of December 31, 2017 and may be converted at the sole election of the noteholders into restricted common shares of the Company at a conversion price of $0.60 per share. As the conversion price of $0.60 approximated the fair value of the common shares at the date of the September 2015 Convertible Notes, no beneficial conversion feature exists. The Company recorded interest expense related to the 2015 Convertible Notes of $1,218 for the three months ended September 30, 2015.</font></p><br/> 0.04 1 1 0.50 1.00 1508202 783188 389566 26248 405831 16382 82921 0.04 0.60 1218 <p id="PARA1397" style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>9</b><b>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;STOCKHOLDERS' EQUITY:</b></font></p><br/><p id="PARA1398" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>Series B Preferred stock:</b></font></p><br/><p id="PARA1401" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">At July 1, 2014, the Company had 200 shares of Series B redeemable convertible Preferred stock outstanding with a par value of $0.01 per share, convertible at the option of the holder at $2.00 per share, with dividends accrued and payable at 2.5% per quarter. The Series B Preferred stock is mandatorily redeemable at $2.00 per share by the Company three years after issuance and accordingly was classified outside of shareholders&#x2019; equity. The 200 shares have reached their maturity date, but due to the cash constraints of the Company have not been redeemed. </font></p><br/><p id="PARA1403" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">During the years ended June 30, 2015 and 2014, the Company declared dividends of $2,000 and $2,000 respectively. During the three months ended September 30, 2015, the Company declared dividends of $500. At September 30, 2015, accrued dividends payable are $8,500.</font></p><br/><p id="PARA1405" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>Common stock:</b></font></p><br/><p id="PARA1407" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Holders of common stock are entitled to one vote per share on all matters to be voted on by common stockholders. In the event of liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share in all assets remaining after liabilities have been paid in full or set aside and the rights of any outstanding preferred stock have been satisfied. Common stock has no preemptive, redemption or conversion rights. The rights of holders of common stock are subject to, and may be adversely affected by, the rights of the holders of any outstanding series of preferred stock or any series of preferred stock the Company may designate in the future. </font></p><br/><p id="PARA1409" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Centerpoint holds 704,309 shares of the Company&#x2019;s common stock. These shares of the Company&#x2019;s common stock held by Centerpoint are for the benefit of its shareholders without any beneficial interest. The Company accounts for these shares similar to treasury stock.</font></p><br/><p id="PARA1411" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">During the three months ended September 30, 2015, the Company issued 29,934 shares of the Company&#x2019;s common stock at prices ranging from $0.76 to $1.15 per share for services valued at $25,952, in the aggregate, to consultants and an employee. </font></p><br/><p id="PARA1413" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">During the three months ended September 30, 2015, the Company issued 12,500 shares of the Company&#x2019;s restricted common stock upon receipt of its subscription receivable of $13,125 for the exercise of 12,500 warrants.</font></p><br/><p id="PARA1415" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">During the three months ended September 30, 2015, the Company entered into subscription agreements to exercise certain warrants with expiry dates on or before December 31, 2015, into restricted shares of the Company&#x2019;s common stock at a reduced exercise price of $1.05, for the period from June 30, 2015 through July 15, 2015. Pursuant to the offering, 265,894 warrants were exercised and 265,894 shares of the Company&#x2019;s restricted common stock were issued resulting in cash proceeds of $174,189 and receipt of a $105,000 interest bearing, collateralized promissory note. </font></p><br/><p id="PARA1417" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">During the three months ended September 30, 2015, Smith and various consultants elected to convert $82,861 and $88,856 of deferred compensation, respectively, into 99,159 and 109,715 shares, respectively, of the Company&#x2019;s common stock at conversion rates ranging from $0.76 to $1.15 per share. </font></p><br/><p id="PARA1419" style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>Warrants:</b></font></p><br/><p id="PARA1421" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">As of September 30, 2015, the Company had approximately 8.3 million warrants outstanding, with exercise prices from $0.75 to $3.00 and expiring on various dates through December 31, 2020. </font></p><br/><p id="PARA1423" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The weighted-average exercise price for the outstanding warrants is $1.24, and the weighted-average remaining contractual life as of September 30, 2015 is 4.5 years.</font></p><br/><p id="PARA1425" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">During the three months ended September 30, 2015, warrants to purchase 957,806 shares of common stock of the Company at prices between $2.25 and $3.10 per share expired.</font></p><br/><p id="PARA1427" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">During the three months ended September 30, 2015, the Company entered into subscription agreements to exercise certain warrants with expiry dates on or before December 31, 2015, into restricted shares of the Company&#x2019;s common stock at a reduced exercise price of $1.05, for the period from July 1, 2015 through July 15, 2015. As a result of the offering, 265,894 warrants were exercised and 265,894 shares of the Company&#x2019;s restricted common stock were issued resulting in cash proceeds of $174,189 and receipt of a collateralized promissory note receivable for $105,000, for the three months ended September 30, 2015.</font></p><br/><p id="PARA1429" style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>Stock options: </b></font></p><br/><p id="PARA1431" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The Company&#x2019;s 2006 Consolidated Incentive Plan, as amended (the &#x201c;2006 Plan&#x201d;), provides for the issuance of options to purchase up to 22,000,000 shares of the Company&#x2019;s common stock. Terms of exercise and expiration of options granted under the 2006 Plan may be established at the discretion of the Board of Directors, but no option may be exercisable for more than ten years.</font></p><br/><p id="PARA1433" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The Company recorded compensation expense related to employee stock options of $15,320 and nil for the three months ended September 30, 2015 and 2014, respectively. The Company granted no options during the three months ended September 30, 2015 and 2014, respectively. </font></p><br/><p id="PARA1435" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">A summary of option activity under the 2006 Plan for the three months ended September 30, 2015 is as follows:</font></p><br/><table id="TBL1489" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 95%; MARGIN-LEFT: 2.5%; MARGIN-RIGHT: 2.5%; TEXT-INDENT: 0px" cellspacing="0" cellpadding="0" border="0"> <tr id="TBL1489.finRow.1"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1489.finRow.1.lead.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1489.finRow.1.amt.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colspan="2"> <p id="PARA1442" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></font></p> <p id="PARA1443" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></font></p> <p id="PARA1444" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></font></p> <p id="PARA1445" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></font></p> <p id="PARA1446" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Options</font></p></td> <td id="TBL1489.finRow.1.trail.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; PADDING-BOTTOM: 1px">&nbsp;</td> <td id="TBL1489.finRow.1.lead.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid">&nbsp;</td> <td id="TBL1489.finRow.1.amt.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colspan="2"> <p id="PARA1447" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></font></p> <p id="PARA1448" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Weighted-</font></p> <p id="PARA1449" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Average</font></p> <p id="PARA1450" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Exercise</font></p> <p id="PARA1451" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Price</font></p></td> <td id="TBL1489.finRow.1.trail.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; PADDING-BOTTOM: 1px">&nbsp;</td> <td id="TBL1489.finRow.1.lead.D4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid">&nbsp;</td> <td id="TBL1489.finRow.1.amt.D4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colspan="2"> <p id="PARA1452" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Weighted-</font></p> <p id="PARA1453" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Average</font></p> <p id="PARA1454" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Remaining</font></p> <p id="PARA1455" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Contractual</font></p> <p id="PARA1456" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Life</font></p></td> <td id="TBL1489.finRow.1.trail.D4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; PADDING-BOTTOM: 1px">&nbsp;</td> <td id="TBL1489.finRow.1.lead.D5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid">&nbsp;</td> <td id="TBL1489.finRow.1.amt.D5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colspan="2"> <p id="PARA1457" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></font></p> <p id="PARA1458" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></font></p> <p id="PARA1459" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Aggregate</font></p> <p id="PARA1460" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Intrinsic</font></p> <p id="PARA1461" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Value</font></p></td> <td id="TBL1489.finRow.1.trail.D5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px">&nbsp;</td> </tr> <tr id="TBL1489.finRow.2" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 48%; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff"> <p id="PARA1462" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Outstanding at July 1, 2015</font></p></td> <td id="TBL1489.finRow.2.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.2.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.2.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">4,413,870</td> <td id="TBL1489.finRow.2.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.2.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.2.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">$</td> <td id="TBL1489.finRow.2.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">1.88</td> <td id="TBL1489.finRow.2.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.2.lead.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.2.symb.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.2.amt.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">4.1</td> <td id="TBL1489.finRow.2.trail.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.2.lead.5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.2.symb.5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.2.amt.5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">-</td> <td id="TBL1489.finRow.2.trail.5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1489.finRow.3" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; PADDING-LEFT: 9pt; BACKGROUND-COLOR: #ffffff"> <p id="PARA1467" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Granted</font></p></td> <td id="TBL1489.finRow.3.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.3.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.3.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">-</td> <td id="TBL1489.finRow.3.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.3.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.3.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.3.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">-</td> <td id="TBL1489.finRow.3.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.3.lead.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.3.symb.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.3.amt.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; TEXT-ALIGN: center; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.3.trail.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.3.lead.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.3.symb.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.3.amt.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; TEXT-ALIGN: center; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.3.trail.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff">&nbsp;</td> </tr> <tr id="TBL1489.finRow.4" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; PADDING-LEFT: 9pt; BACKGROUND-COLOR: #cceeff"> <p id="PARA1470" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Exercised</font></p></td> <td id="TBL1489.finRow.4.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.4.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.4.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">-</td> <td id="TBL1489.finRow.4.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.4.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.4.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.4.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">-</td> <td id="TBL1489.finRow.4.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.4.lead.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.4.symb.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.4.amt.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; TEXT-ALIGN: center; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.4.trail.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.4.lead.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.4.symb.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.4.amt.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; TEXT-ALIGN: center; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.4.trail.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff">&nbsp;</td> </tr> <tr id="TBL1489.finRow.5" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; PADDING-LEFT: 9pt; BACKGROUND-COLOR: #ffffff"> <p id="PARA1473" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Forfeited</font></p></td> <td id="TBL1489.finRow.5.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.5.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.5.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">-</td> <td id="TBL1489.finRow.5.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.5.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.5.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.5.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">-</td> <td id="TBL1489.finRow.5.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.5.lead.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.5.symb.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.5.amt.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; TEXT-ALIGN: center; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.5.trail.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.5.lead.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.5.symb.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.5.amt.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; TEXT-ALIGN: center; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.5.trail.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff">&nbsp;</td> </tr> <tr id="TBL1489.finRow.6" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; PADDING-LEFT: 9pt; BACKGROUND-COLOR: #cceeff"> <p id="PARA1476" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Expired</font></p></td> <td id="TBL1489.finRow.6.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.6.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.6.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">-</td> <td id="TBL1489.finRow.6.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.6.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.6.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.6.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">-</td> <td id="TBL1489.finRow.6.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.6.lead.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.6.symb.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.6.amt.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.6.trail.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; PADDING-BOTTOM: 1px; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.6.lead.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.6.symb.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.6.amt.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.6.trail.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; BACKGROUND-COLOR: #cceeff">&nbsp;</td> </tr> <tr id="TBL1489.finRow.7" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff"> <p id="PARA1479" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Outstanding at September 30, 2015</font></p></td> <td id="TBL1489.finRow.7.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.7.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.7.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">4,413,870</td> <td id="TBL1489.finRow.7.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.7.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.7.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">$</td> <td id="TBL1489.finRow.7.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">1.88</td> <td id="TBL1489.finRow.7.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.7.lead.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.7.symb.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.7.amt.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">4.1</td> <td id="TBL1489.finRow.7.trail.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.7.lead.5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.7.symb.5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">$</td> <td id="TBL1489.finRow.7.amt.5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">253,000</td> <td id="TBL1489.finRow.7.trail.5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1489.finRow.8" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff"> <p id="PARA1484" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Exercisable at September 30, 2015</font></p></td> <td id="TBL1489.finRow.8.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.8.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.8.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">4,313,870</td> <td id="TBL1489.finRow.8.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.8.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.8.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">$</td> <td id="TBL1489.finRow.8.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">1.91</td> <td id="TBL1489.finRow.8.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.8.lead.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.8.symb.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.8.amt.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">4.0</td> <td id="TBL1489.finRow.8.trail.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.8.lead.5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.8.symb.5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">$</td> <td id="TBL1489.finRow.8.amt.5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">213,000</td> <td id="TBL1489.finRow.8.trail.5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> </table><br/><p id="PARA1491" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The following table presents information relating to nonvested stock options as of September 30, 2015:</font></p><br/><table id="TBL1511" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 80%; MARGIN-LEFT: 10%; MARGIN-RIGHT: 10%; TEXT-INDENT: 0px" cellspacing="0" cellpadding="0" border="0"> <tr id="TBL1511.finRow.1"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1511.finRow.1.lead.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1511.finRow.1.amt.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colspan="2"> <p id="PARA1493" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></font></p> <p id="PARA1494" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></font></p> <p id="PARA1495" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Options</font></p></td> <td id="TBL1511.finRow.1.trail.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px">&nbsp;</td> <td id="TBL1511.finRow.1.lead.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1511.finRow.1.amt.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colspan="2"> <p id="PARA1496" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Weighted Average</font></p> <p id="PARA1497" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Grant-Date Fair</font></p> <p id="PARA1498" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Value</font></p></td> <td id="TBL1511.finRow.1.trail.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px">&nbsp;</td> </tr> <tr id="TBL1511.finRow.2" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 62%; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff"> <p id="PARA1499" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Nonvested at July 1, 2015</font></p></td> <td id="TBL1511.finRow.2.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1511.finRow.2.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1511.finRow.2.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">100,000</td> <td id="TBL1511.finRow.2.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1511.finRow.2.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1511.finRow.2.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">$</td> <td id="TBL1511.finRow.2.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">0.76</td> <td id="TBL1511.finRow.2.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1511.finRow.3" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; PADDING-LEFT: 9pt; BACKGROUND-COLOR: #ffffff"> <p id="PARA1502" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Granted</font></p></td> <td id="TBL1511.finRow.3.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1511.finRow.3.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1511.finRow.3.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">-</td> <td id="TBL1511.finRow.3.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1511.finRow.3.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1511.finRow.3.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1511.finRow.3.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">-</td> <td id="TBL1511.finRow.3.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1511.finRow.4" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; PADDING-LEFT: 9pt; BACKGROUND-COLOR: #cceeff"> <p id="PARA1505" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Vested</font></p></td> <td id="TBL1511.finRow.4.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1511.finRow.4.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1511.finRow.4.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">-</td> <td id="TBL1511.finRow.4.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1511.finRow.4.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1511.finRow.4.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1511.finRow.4.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">-</td> <td id="TBL1511.finRow.4.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1511.finRow.5" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff"> <p id="PARA1508" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Nonvested at September 30, 2015</font></p></td> <td id="TBL1511.finRow.5.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1511.finRow.5.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1511.finRow.5.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">100,000</td> <td id="TBL1511.finRow.5.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1511.finRow.5.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1511.finRow.5.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">$</td> <td id="TBL1511.finRow.5.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">0.76</td> <td id="TBL1511.finRow.5.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> </table><br/><p id="PARA1513" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The total fair value of stock options that vested during the three months ended September 30, 2015 and 2014 was nil for both periods, respectively. As of September 30, 2015, the Company had $35,146 of unrecognized compensation cost related to stock options.</font></p><br/><p id="PARA1515" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Stock-based employee compensation charges in operating expenses in the Company&#x2019;s financial statements for the three months ended September 30, 2015 and 2014 are as follows: </font></p><br/><table id="TBL1537" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 90%; MARGIN-LEFT: 5%; MARGIN-RIGHT: 5%; TEXT-INDENT: 0px" cellspacing="0" cellpadding="0" border="0"> <tr id="TBL1537.finRow.1"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1537.finRow.1.lead.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1537.finRow.1.amt.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colspan="2"> <p id="PARA1517" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Three months ended</font></p> <p id="PARA1518" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">September 30, </font></p> <p id="PARA1519" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">2015</font></p></td> <td id="TBL1537.finRow.1.trail.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px">&nbsp;</td> <td id="TBL1537.finRow.1.lead.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1537.finRow.1.amt.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colspan="2"> <p id="PARA1520" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Three months ended</font></p> <p id="PARA1521" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">September 30, </font></p> <p id="PARA1522" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">2014</font></p></td> <td id="TBL1537.finRow.1.trail.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px">&nbsp;</td> </tr> <tr id="TBL1537.finRow.2" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 66%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff"> <p id="PARA1523" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">General and administrative:</font></p></td> <td id="TBL1537.finRow.2.lead.B2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.2.symb.B2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.2.amt.B2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.2.trail.B2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.2.lead.B3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.2.symb.B3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.2.amt.B3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.2.trail.B3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> </tr> <tr id="TBL1537.finRow.3" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; PADDING-LEFT: 9pt; BACKGROUND-COLOR: #ffffff"> <p id="PARA1524" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Fair value of stock options expensed</font></p></td> <td id="TBL1537.finRow.3.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1537.finRow.3.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">$</td> <td id="TBL1537.finRow.3.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 14%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">1,838</td> <td id="TBL1537.finRow.3.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1537.finRow.3.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1537.finRow.3.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">$</td> <td id="TBL1537.finRow.3.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 14%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">-</td> <td id="TBL1537.finRow.3.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1537.finRow.4" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; PADDING-LEFT: 18pt; BACKGROUND-COLOR: #cceeff"> <p id="PARA1527" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Total </font></p></td> <td id="TBL1537.finRow.4.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.4.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">$</td> <td id="TBL1537.finRow.4.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 14%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">1,838</td> <td id="TBL1537.finRow.4.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1537.finRow.4.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.4.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">$</td> <td id="TBL1537.finRow.4.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 14%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">-</td> <td id="TBL1537.finRow.4.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1537.finRow.5" style="BACKGROUND-COLOR: #ffffff"> <td style="BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1537.finRow.5.lead.B2" style="BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1537.finRow.5.symb.B2" style="BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1537.finRow.5.amt.B2" style="BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1537.finRow.5.trail.B2" style="BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1537.finRow.5.lead.B3" style="BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1537.finRow.5.symb.B3" style="BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1537.finRow.5.amt.B3" style="BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1537.finRow.5.trail.B3" style="BACKGROUND-COLOR: #ffffff">&nbsp;</td> </tr> <tr id="TBL1537.finRow.6" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff"> <p id="PARA1530" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Research and development:</font></p></td> <td id="TBL1537.finRow.6.lead.B2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.6.symb.B2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.6.amt.B2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.6.trail.B2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.6.lead.B3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.6.symb.B3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.6.amt.B3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.6.trail.B3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> </tr> <tr id="TBL1537.finRow.7" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; PADDING-LEFT: 9pt; BACKGROUND-COLOR: #ffffff"> <p id="PARA1531" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Fair value of stock options expensed</font></p></td> <td id="TBL1537.finRow.7.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1537.finRow.7.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">$</td> <td id="TBL1537.finRow.7.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 14%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">13,482</td> <td id="TBL1537.finRow.7.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1537.finRow.7.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1537.finRow.7.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">$</td> <td id="TBL1537.finRow.7.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 14%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">-</td> <td id="TBL1537.finRow.7.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1537.finRow.8" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; PADDING-LEFT: 18pt; BACKGROUND-COLOR: #cceeff"> <p id="PARA1534" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Total </font></p></td> <td id="TBL1537.finRow.8.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.8.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">$</td> <td id="TBL1537.finRow.8.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 14%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">13,482</td> <td id="TBL1537.finRow.8.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1537.finRow.8.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.8.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">$</td> <td id="TBL1537.finRow.8.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 14%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">- </td> <td id="TBL1537.finRow.8.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> </table><br/> 200 0.01 2.00 0.025 P3Y 2000 2000 8500 1 704309 29934 0.76 1.15 25952 12500 13125 12500 1.05 265894 265894 174189 105000 82861 88856 99159 109715 0.76 1.15 8300000 0.75 3.00 1.24 P4Y6M 957806 2.25 3.10 22000000 P10Y 15320 15320 0 0 35146 <table id="TBL1489" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 95%; MARGIN-LEFT: 2.5%; MARGIN-RIGHT: 2.5%; TEXT-INDENT: 0px" cellspacing="0" cellpadding="0" border="0"> <tr id="TBL1489.finRow.1"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1489.finRow.1.lead.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1489.finRow.1.amt.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colspan="2"> <p id="PARA1442" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></font></p> <p id="PARA1443" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></font></p> <p id="PARA1444" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></font></p> <p id="PARA1445" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></font></p> <p id="PARA1446" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Options</font></p></td> <td id="TBL1489.finRow.1.trail.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; PADDING-BOTTOM: 1px">&nbsp;</td> <td id="TBL1489.finRow.1.lead.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid">&nbsp;</td> <td id="TBL1489.finRow.1.amt.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colspan="2"> <p id="PARA1447" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></font></p> <p id="PARA1448" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Weighted-</font></p> <p id="PARA1449" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Average</font></p> <p id="PARA1450" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Exercise</font></p> <p id="PARA1451" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Price</font></p></td> <td id="TBL1489.finRow.1.trail.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; PADDING-BOTTOM: 1px">&nbsp;</td> <td id="TBL1489.finRow.1.lead.D4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid">&nbsp;</td> <td id="TBL1489.finRow.1.amt.D4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colspan="2"> <p id="PARA1452" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Weighted-</font></p> <p id="PARA1453" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Average</font></p> <p id="PARA1454" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Remaining</font></p> <p id="PARA1455" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Contractual</font></p> <p id="PARA1456" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Life</font></p></td> <td id="TBL1489.finRow.1.trail.D4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; PADDING-BOTTOM: 1px">&nbsp;</td> <td id="TBL1489.finRow.1.lead.D5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid">&nbsp;</td> <td id="TBL1489.finRow.1.amt.D5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colspan="2"> <p id="PARA1457" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></font></p> <p id="PARA1458" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></font></p> <p id="PARA1459" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Aggregate</font></p> <p id="PARA1460" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Intrinsic</font></p> <p id="PARA1461" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Value</font></p></td> <td id="TBL1489.finRow.1.trail.D5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px">&nbsp;</td> </tr> <tr id="TBL1489.finRow.2" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 48%; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff"> <p id="PARA1462" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Outstanding at July 1, 2015</font></p></td> <td id="TBL1489.finRow.2.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.2.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.2.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">4,413,870</td> <td id="TBL1489.finRow.2.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.2.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.2.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">$</td> <td id="TBL1489.finRow.2.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">1.88</td> <td id="TBL1489.finRow.2.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.2.lead.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.2.symb.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.2.amt.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">4.1</td> <td id="TBL1489.finRow.2.trail.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.2.lead.5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.2.symb.5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.2.amt.5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">-</td> <td id="TBL1489.finRow.2.trail.5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1489.finRow.3" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; PADDING-LEFT: 9pt; BACKGROUND-COLOR: #ffffff"> <p id="PARA1467" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Granted</font></p></td> <td id="TBL1489.finRow.3.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.3.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.3.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">-</td> <td id="TBL1489.finRow.3.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.3.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.3.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.3.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">-</td> <td id="TBL1489.finRow.3.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.3.lead.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.3.symb.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.3.amt.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; TEXT-ALIGN: center; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.3.trail.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.3.lead.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.3.symb.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.3.amt.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; TEXT-ALIGN: center; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.3.trail.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff">&nbsp;</td> </tr> <tr id="TBL1489.finRow.4" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; PADDING-LEFT: 9pt; BACKGROUND-COLOR: #cceeff"> <p id="PARA1470" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Exercised</font></p></td> <td id="TBL1489.finRow.4.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.4.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.4.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">-</td> <td id="TBL1489.finRow.4.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.4.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.4.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.4.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">-</td> <td id="TBL1489.finRow.4.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.4.lead.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.4.symb.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.4.amt.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; TEXT-ALIGN: center; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.4.trail.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.4.lead.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.4.symb.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.4.amt.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; TEXT-ALIGN: center; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.4.trail.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff">&nbsp;</td> </tr> <tr id="TBL1489.finRow.5" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; PADDING-LEFT: 9pt; BACKGROUND-COLOR: #ffffff"> <p id="PARA1473" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Forfeited</font></p></td> <td id="TBL1489.finRow.5.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.5.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.5.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">-</td> <td id="TBL1489.finRow.5.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.5.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.5.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.5.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">-</td> <td id="TBL1489.finRow.5.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.5.lead.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.5.symb.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.5.amt.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; TEXT-ALIGN: center; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.5.trail.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.5.lead.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.5.symb.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.5.amt.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; TEXT-ALIGN: center; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.5.trail.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff">&nbsp;</td> </tr> <tr id="TBL1489.finRow.6" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; PADDING-LEFT: 9pt; BACKGROUND-COLOR: #cceeff"> <p id="PARA1476" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Expired</font></p></td> <td id="TBL1489.finRow.6.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.6.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.6.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">-</td> <td id="TBL1489.finRow.6.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.6.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.6.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.6.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">-</td> <td id="TBL1489.finRow.6.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.6.lead.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.6.symb.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.6.amt.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.6.trail.B4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; PADDING-BOTTOM: 1px; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.6.lead.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.6.symb.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.6.amt.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.6.trail.B5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; BACKGROUND-COLOR: #cceeff">&nbsp;</td> </tr> <tr id="TBL1489.finRow.7" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff"> <p id="PARA1479" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Outstanding at September 30, 2015</font></p></td> <td id="TBL1489.finRow.7.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.7.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.7.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">4,413,870</td> <td id="TBL1489.finRow.7.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.7.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.7.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">$</td> <td id="TBL1489.finRow.7.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">1.88</td> <td id="TBL1489.finRow.7.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.7.lead.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.7.symb.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.7.amt.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">4.1</td> <td id="TBL1489.finRow.7.trail.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.7.lead.5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1489.finRow.7.symb.5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">$</td> <td id="TBL1489.finRow.7.amt.5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">253,000</td> <td id="TBL1489.finRow.7.trail.5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1489.finRow.8" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff"> <p id="PARA1484" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Exercisable at September 30, 2015</font></p></td> <td id="TBL1489.finRow.8.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.8.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.8.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">4,313,870</td> <td id="TBL1489.finRow.8.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.8.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.8.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">$</td> <td id="TBL1489.finRow.8.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">1.91</td> <td id="TBL1489.finRow.8.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.8.lead.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.8.symb.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.8.amt.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">4.0</td> <td id="TBL1489.finRow.8.trail.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1489.finRow.8.lead.5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1489.finRow.8.symb.5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">$</td> <td id="TBL1489.finRow.8.amt.5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 10%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">213,000</td> <td id="TBL1489.finRow.8.trail.5" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> </table> 4413870 1.88 P4Y36D 4413870 1.88 P4Y36D 253000 4313870 1.91 P4Y 213000 <table id="TBL1511" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 80%; MARGIN-LEFT: 10%; MARGIN-RIGHT: 10%; TEXT-INDENT: 0px" cellspacing="0" cellpadding="0" border="0"> <tr id="TBL1511.finRow.1"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1511.finRow.1.lead.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1511.finRow.1.amt.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colspan="2"> <p id="PARA1493" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></font></p> <p id="PARA1494" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></font></p> <p id="PARA1495" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Options</font></p></td> <td id="TBL1511.finRow.1.trail.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px">&nbsp;</td> <td id="TBL1511.finRow.1.lead.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1511.finRow.1.amt.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colspan="2"> <p id="PARA1496" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Weighted Average</font></p> <p id="PARA1497" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Grant-Date Fair</font></p> <p id="PARA1498" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Value</font></p></td> <td id="TBL1511.finRow.1.trail.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px">&nbsp;</td> </tr> <tr id="TBL1511.finRow.2" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 62%; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #cceeff"> <p id="PARA1499" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Nonvested at July 1, 2015</font></p></td> <td id="TBL1511.finRow.2.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1511.finRow.2.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1511.finRow.2.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">100,000</td> <td id="TBL1511.finRow.2.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1511.finRow.2.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1511.finRow.2.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">$</td> <td id="TBL1511.finRow.2.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">0.76</td> <td id="TBL1511.finRow.2.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1511.finRow.3" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; PADDING-LEFT: 9pt; BACKGROUND-COLOR: #ffffff"> <p id="PARA1502" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Granted</font></p></td> <td id="TBL1511.finRow.3.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1511.finRow.3.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1511.finRow.3.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">-</td> <td id="TBL1511.finRow.3.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1511.finRow.3.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1511.finRow.3.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1511.finRow.3.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">-</td> <td id="TBL1511.finRow.3.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1511.finRow.4" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; PADDING-LEFT: 9pt; BACKGROUND-COLOR: #cceeff"> <p id="PARA1505" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Vested</font></p></td> <td id="TBL1511.finRow.4.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1511.finRow.4.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1511.finRow.4.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">-</td> <td id="TBL1511.finRow.4.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1511.finRow.4.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1511.finRow.4.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1511.finRow.4.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">-</td> <td id="TBL1511.finRow.4.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1511.finRow.5" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BACKGROUND-COLOR: #ffffff"> <p id="PARA1508" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Nonvested at September 30, 2015</font></p></td> <td id="TBL1511.finRow.5.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1511.finRow.5.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1511.finRow.5.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">100,000</td> <td id="TBL1511.finRow.5.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1511.finRow.5.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1511.finRow.5.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">$</td> <td id="TBL1511.finRow.5.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">0.76</td> <td id="TBL1511.finRow.5.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> </table> 100000 0.76 100000 0.76 <table id="TBL1537" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 90%; MARGIN-LEFT: 5%; MARGIN-RIGHT: 5%; TEXT-INDENT: 0px" cellspacing="0" cellpadding="0" border="0"> <tr id="TBL1537.finRow.1"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1537.finRow.1.lead.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1537.finRow.1.amt.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colspan="2"> <p id="PARA1517" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Three months ended</font></p> <p id="PARA1518" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">September 30, </font></p> <p id="PARA1519" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">2015</font></p></td> <td id="TBL1537.finRow.1.trail.D2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px">&nbsp;</td> <td id="TBL1537.finRow.1.lead.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom">&nbsp;</td> <td id="TBL1537.finRow.1.amt.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colspan="2"> <p id="PARA1520" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Three months ended</font></p> <p id="PARA1521" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">September 30, </font></p> <p id="PARA1522" style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">2014</font></p></td> <td id="TBL1537.finRow.1.trail.D3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px">&nbsp;</td> </tr> <tr id="TBL1537.finRow.2" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 66%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff"> <p id="PARA1523" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">General and administrative:</font></p></td> <td id="TBL1537.finRow.2.lead.B2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.2.symb.B2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.2.amt.B2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.2.trail.B2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.2.lead.B3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.2.symb.B3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.2.amt.B3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.2.trail.B3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> </tr> <tr id="TBL1537.finRow.3" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; PADDING-LEFT: 9pt; BACKGROUND-COLOR: #ffffff"> <p id="PARA1524" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Fair value of stock options expensed</font></p></td> <td id="TBL1537.finRow.3.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1537.finRow.3.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">$</td> <td id="TBL1537.finRow.3.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 14%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">1,838</td> <td id="TBL1537.finRow.3.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1537.finRow.3.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1537.finRow.3.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">$</td> <td id="TBL1537.finRow.3.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 14%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">-</td> <td id="TBL1537.finRow.3.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1537.finRow.4" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; PADDING-LEFT: 18pt; BACKGROUND-COLOR: #cceeff"> <p id="PARA1527" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Total </font></p></td> <td id="TBL1537.finRow.4.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.4.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">$</td> <td id="TBL1537.finRow.4.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 14%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">1,838</td> <td id="TBL1537.finRow.4.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1537.finRow.4.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.4.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">$</td> <td id="TBL1537.finRow.4.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 14%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">-</td> <td id="TBL1537.finRow.4.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1537.finRow.5" style="BACKGROUND-COLOR: #ffffff"> <td style="BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1537.finRow.5.lead.B2" style="BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1537.finRow.5.symb.B2" style="BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1537.finRow.5.amt.B2" style="BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1537.finRow.5.trail.B2" style="BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1537.finRow.5.lead.B3" style="BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1537.finRow.5.symb.B3" style="BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1537.finRow.5.amt.B3" style="BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1537.finRow.5.trail.B3" style="BACKGROUND-COLOR: #ffffff">&nbsp;</td> </tr> <tr id="TBL1537.finRow.6" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff"> <p id="PARA1530" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Research and development:</font></p></td> <td id="TBL1537.finRow.6.lead.B2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.6.symb.B2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.6.amt.B2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.6.trail.B2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.6.lead.B3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.6.symb.B3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.6.amt.B3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.6.trail.B3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> </tr> <tr id="TBL1537.finRow.7" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; PADDING-LEFT: 9pt; BACKGROUND-COLOR: #ffffff"> <p id="PARA1531" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Fair value of stock options expensed</font></p></td> <td id="TBL1537.finRow.7.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1537.finRow.7.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">$</td> <td id="TBL1537.finRow.7.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 14%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">13,482</td> <td id="TBL1537.finRow.7.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1537.finRow.7.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1537.finRow.7.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">$</td> <td id="TBL1537.finRow.7.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 14%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">-</td> <td id="TBL1537.finRow.7.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1537.finRow.8" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; PADDING-LEFT: 18pt; BACKGROUND-COLOR: #cceeff"> <p id="PARA1534" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Total </font></p></td> <td id="TBL1537.finRow.8.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.8.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">$</td> <td id="TBL1537.finRow.8.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 14%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">13,482</td> <td id="TBL1537.finRow.8.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1537.finRow.8.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1537.finRow.8.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">$</td> <td id="TBL1537.finRow.8.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 14%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 3px double; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">- </td> <td id="TBL1537.finRow.8.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 3px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> </table> 1838 13482 <p id="PARA1539" style="TEXT-ALIGN: justify; MARGIN: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>1</b><b>0</b><b>.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;COMMITMENTS AND CONTINGENCIES:</b></font></p><br/><p id="PARA1542" style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>Employment and consulting agreements:</b><b>&nbsp;</b></font></p><br/><p id="PARA1544" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Smith has held the positions of Director, President and General Counsel of Company and its subsidiaries under various agreements and terms since March 2003. During September 2014, Smith agreed to continue his employment agreement through April 15, 2015 and also agreed to continue to defer his temporarily reduced salary of $14,000 per month until such date. On February 10, 2015, the Company executed an Extension Agreement with Smith pursuant to which Smith extended his employment with the Company to December 31, 2015 (with the Company having an option to extend his employment an additional six months). As part of the Extension Agreement, the balance of Smith&#x2019;s existing convertible note payable as of December 31, 2014, adjusted for conversions subsequent to that date, was replaced with a new convertible note with an initial principal amount of $760,520 with terms that i) materially reduce the interest rate by 50% (from 8% to 4%), ii) increases the conversion price by 11% (from $0.45 to $0.50), iii) sets the conversion price at a fixed price so there can be no further reductions, iv) reduces the number of warrants received on conversion by 75% (from 1 warrant per unit to 1/4 per unit) and v) extends the maturity date to December 31, 2017. Additionally, pursuant to the Extension Agreement, Smith: i) will continue to defer his cash compensation ($18,000 per month) until the Board of Directors re-instates cash payments to all employees and consultants who are deferring their compensation, ii) cancelled 150,000 contingent stock bonuses previously granted to him by the Company, iii) has been granted 150,000 new options which vested immediately and iv) outstanding options and warrants owned by Smith (and his donees) have been extended and had the exercise prices reduced to $1.50 (if the exercise price exceeded $1.50).</font></p><br/><p id="PARA1546" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Since March 31, 2005, the Company has had various agreements with Brightcap and/or Bassani, through which the services of Bassani are provided. The Board appointed Bassani as the Company's CEO effective May 13, 2011. During the fiscal years 2012 and 2013, Bassani entered into extension agreements whereby he was awarded fully vested stock grants totaling 600,000 shares, 500,000 shares of which are to be issued January 15, 2016 and 100,000 shares are to be issued January 15, 2017. The stock grants were expensed in the years they were awarded as they are fully vested. On February 10, 2015, the Company executed an Extension Agreement with Bassani pursuant to which Bassani extended the term of his service to the Company to December 31, 2017, (with the Company having an option to extend the term an additional six months.) As part of the agreement, the Company&#x2019;s then existing loan payable, deferred compensation and convertible note payable to Bassani, were restructured into two promissory notes as follows: a) The sum of the cash loaned by Bassani to the Company of $279,000 together with $116,277 of unreimbursed expenses through December 31, 2014, were placed into a new promissory note with initial principal of $395,277 which was due and payable on December 31, 2015 and now has been replaced with a September 2015 Convertible Note (Note 8). In connection with these sums and the new promissory note, Bassani was issued warrants to purchase 592,916 shares of the Company&#x2019;s common stock at a price of $1.00 until December 31, 2020; and b) the remaining balances of the Company&#x2019;s accrued obligations to Bassani ($1,464,545) were replaced with a new convertible promissory note with terms that compared with the largest prior convertible note obligation to Bassani: i) materially reduce the interest rate by 50% (from 8% to 4%), ii) increase the conversion price by 11% (from $0.45 to $0.50), iii) sets the conversion price at a fixed price so there can be no further reductions, iv) reduces the number of warrants received on conversion by 75% (from 1 warrant per unit to 1/4 per unit) and v) extends the maturity date to December 31, 2017 (Note 8). Additionally, pursuant to the Extension Agreement, Bassani i) will continue to defer his cash compensation ($31,000 per month) until the Board of Directors re-instates cash payments to all employees and consultants who are deferring their compensation, ii) cancelled 250,000 contingent stock bonuses previously granted to him by the Company, iii) has been granted 450,000 new options which vested immediately and iv) outstanding options and warrants owned by Bassani (and his donees) have been extended and had the exercise prices reduced to $1.50 (if the exercise price exceeded $1.50).</font></p><br/><p id="PARA1548" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">On February 10, 2015, the Company entered into an agreement with Schafer pursuant to which Schafer will continue to provide services to the Company through December 31, 2015. Additionally, pursuant to the agreement, i) the exercise period of outstanding options and warrants owned by Schafer have been extended, and ii) 25,000 contingent stock bonuses previously granted to Schafer have been cancelled by the Company.</font></p><br/><p id="PARA1550" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>Contingent stock bonuses:</b></font></p><br/><p id="PARA1552" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The Company has declared contingent deferred stock bonuses to its key employees and consultants at various times throughout the years. The stock bonuses are contingent upon the Company&#x2019;s stock price exceeding a certain target price per share, and the grantees still being employed by or providing services to the Company at the time the target prices are reached. </font><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></font></p><br/><p id="PARA1556" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The Company&#x2019;s outstanding contingent stock bonuses as of September 30, 2015 are as follows:</font></p><br/><table id="TBL1567" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 80%; MARGIN-LEFT: 10%; MARGIN-RIGHT: 10%; TEXT-INDENT: 0px" cellspacing="0" cellpadding="0" border="0"> <tr id="TBL1567.finRow.1" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 43%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff"> <p id="PARA1558" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Target Price per share</font></p></td> <td id="TBL1567.finRow.1.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1567.finRow.1.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">$</td> <td id="TBL1567.finRow.1.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">5.00</td> <td id="TBL1567.finRow.1.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1567.finRow.1.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1567.finRow.1.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">$</td> <td id="TBL1567.finRow.1.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">10.00</td> <td id="TBL1567.finRow.1.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1567.finRow.1.lead.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1567.finRow.1.symb.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">$</td> <td id="TBL1567.finRow.1.amt.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">20.00</td> <td id="TBL1567.finRow.1.trail.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1567.finRow.2" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff"> <p id="PARA1563" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Number of shares</font></p></td> <td id="TBL1567.finRow.2.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1567.finRow.2.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1567.finRow.2.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">50,000</td> <td id="TBL1567.finRow.2.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1567.finRow.2.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1567.finRow.2.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1567.finRow.2.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">40,000</td> <td id="TBL1567.finRow.2.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1567.finRow.2.lead.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1567.finRow.2.symb.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1567.finRow.2.amt.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">27,500</td> <td id="TBL1567.finRow.2.trail.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> </table><br/><p id="PARA1568" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>Execution/exercise bonuses:</b></font></p><br/><p id="PARA1571" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">As part of agreements the Company entered into with Bassani and Smith effective May 15, 2013, they were each granted the following: a) a 50% execution/exercise bonus which shall be applied upon the effective date of the notice of intent to exercise (for options and warrants) or issuance event, as applicable, of any currently outstanding and/or subsequently acquired&nbsp; options, warrants and/or&nbsp; contingent stock bonuses owned by each (and/or their donees) as follows: i) in the case of exercise by payment of cash, the bonus shall take the form of reduction of the exercise price; ii) in the case of cashless exercise, the bonus shall be applied to reduce the exercise price prior to the cashless exercise calculations; and iii) with regard to contingent stock bonuses, issuance shall be triggered upon the Company&#x2019;s common stock reaching a closing price equal to 50% of currently specified price; and b) the right to extend the exercise period of all or part of the applicable options and warrants for up to five years (one year at a time) by annual payments of $.05 per option or warrant to the Company on or before a date during the three months prior to expiration of the exercise period at least three business days before the end of the expiration period. </font></p><br/><p id="PARA1573" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">During the year ended June 30, 2014, the Company extended execution/exercise bonuses with the same terms as described above to Schafer and to Jon Northrop, the Company&#x2019;s other board member.</font></p><br/><p id="PARA1575" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">As of September 30, 2015, the execution/exercise bonus was applicable to 2,945,000 of the Company&#x2019;s outstanding options and 6,759,500 of the Company&#x2019;s outstanding warrants. </font></p><br/><p id="PARA1577" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>Litigation:</b></font></p><br/><p id="PARA1579" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">On September 25, 2014, Pennvest exercised its right to declare the Pennvest Loan in default and has accelerated the Pennvest Loan and has demanded that PA-1 pay $8,137,117 (principal, interest plus late charges) on or before October 24, 2014. PA-1 did not make the payment and does not have the resources to make the payment demanded by Pennvest. During August 2012, the Company provided Pennvest (and the PADEP) with data demonstrating that the Kreider 1 system met the &#x2018;technology guaranty&#x2019; standards which were incorporated in the Pennvest financing documents and, as a result, the Pennvest Loan is now solely an obligation of PA-1. No litigation has commenced related to this matter but such litigation is likely if negotiations do not produce a resolution (Note 1 and Note 7).</font></p><br/><p id="PARA1581" style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The Company currently is not involved in any other material litigation.</font></p><br/> 14000 760520 0.50 0.08 0.04 0.11 0.45 0.50 0.75 1 18000 150000 150000 1.50 600000 500000 100000 279000 116277 395277 592916 1.00 1464545 0.50 0.08 0.04 0.11 0.45 0.50 0.75 1 4 31000 250000 450000 1.50 25000 0.50 0.50 P5Y 0.05 2945000 6759500 8137117 <table id="TBL1567" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 80%; MARGIN-LEFT: 10%; MARGIN-RIGHT: 10%; TEXT-INDENT: 0px" cellspacing="0" cellpadding="0" border="0"> <tr id="TBL1567.finRow.1" style="BACKGROUND-COLOR: #cceeff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 43%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff"> <p id="PARA1558" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Target Price per share</font></p></td> <td id="TBL1567.finRow.1.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1567.finRow.1.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">$</td> <td id="TBL1567.finRow.1.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">5.00</td> <td id="TBL1567.finRow.1.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1567.finRow.1.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1567.finRow.1.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">$</td> <td id="TBL1567.finRow.1.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">10.00</td> <td id="TBL1567.finRow.1.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> <td id="TBL1567.finRow.1.lead.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #cceeff">&nbsp;</td> <td id="TBL1567.finRow.1.symb.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">$</td> <td id="TBL1567.finRow.1.amt.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff">20.00</td> <td id="TBL1567.finRow.1.trail.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 1px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #cceeff" nowrap="nowrap">&nbsp;</td> </tr> <tr id="TBL1567.finRow.2" style="BACKGROUND-COLOR: #ffffff"> <td style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff"> <p id="PARA1563" style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Number of shares</font></p></td> <td id="TBL1567.finRow.2.lead.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1567.finRow.2.symb.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1567.finRow.2.amt.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">50,000</td> <td id="TBL1567.finRow.2.trail.2" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1567.finRow.2.lead.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1567.finRow.2.symb.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1567.finRow.2.amt.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">40,000</td> <td id="TBL1567.finRow.2.trail.3" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> <td id="TBL1567.finRow.2.lead.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1567.finRow.2.symb.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</td> <td id="TBL1567.finRow.2.amt.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 16%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">27,500</td> <td id="TBL1567.finRow.2.trail.4" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" nowrap="nowrap">&nbsp;</td> </tr> </table> 5.00 10.00 20.00 50000 40000 27500 <table id="MTAB1584" style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 100%; TEXT-INDENT: 0px" cellspacing="0" cellpadding="0" border="0"> <tr> <td style="WIDTH: 18pt; VERTICAL-ALIGN: top"> <p id="PARA1585" style="MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b>1</b><b>1</b><b>.</b></font></p></td> <td style="VERTICAL-ALIGN: top"> <p id="PARA1586" style="MARGIN-BOTTOM: 0pt; TEXT-ALIGN: justify; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><b></b><b></b><b>SUBSEQUENT EVENTS:</b></font></p></td> </tr> </table><br/><p id="PARA1588" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The Company has evaluated events that occurred subsequent to September 30, 2015 for recognition and disclosure in the financial statements and notes to the financial statements.</font></p><br/><p id="PARA1590" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">From October 1, 2015 through November 9, 2015 the Company has issued 3,161 shares of the Company&#x2019;s common shares to an employee and a consultant valued at approximately $3,000.</font></p><br/><p id="PARA1592" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">From October 1, 2015 through November 9, 2015, a warrant holder elected to exercise 14,000 warrants into 14,000 shares of the Company&#x2019;s common stock at an exercise price of $0.75 per share.</font></p><br/><p id="PARA1594" style="TEXT-ALIGN: justify; MARGIN: 0pt 0pt 0pt 18pt; LINE-HEIGHT: 1.25"><font style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The Company entered into an extension agreement with Smith on October 27, 2015 whereby Smith agreed to provide his services to the Company through June 30, 2016 for $19,000 per month commencing January 1, 2016. Pursuant to the agreement, the Company also granted Smith options to purchase common stock of the Company at $0.92 per share until December 31, 2020 and granted Smith 75,000 bonus shares of the Company&#x2019;s common stock which vested immediately but shall be issued on January 5, 2016. The Company has the option to extend Smith&#x2019;s services for an additional six months through December 31, 2016 on similar terms. </font></p><br/> 3161 3000 14000 14000 0.75 19000 0.92 75000 P6M EX-101.SCH 8 bnet-20150930.xsd 001 - Statement - Consolidated Balance Sheets (Current Period Unaudited) link:presentationLink link:definitionLink link:calculationLink 002 - Statement - Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) link:presentationLink link:definitionLink link:calculationLink 003 - Statement - Consolidated Statements of Operations (Unaudited) link:presentationLink link:definitionLink link:calculationLink 004 - Statement - Consolidated Statements of Changes in Equity (Deficit) (Unaudited) link:presentationLink link:definitionLink link:calculationLink 005 - Statement - Consolidated Statements of Cash Flows (Unaudited) link:presentationLink link:definitionLink link:calculationLink 006 - Disclosure - Note 1 - Organization, Nature of Business, Going Concern and Management's Plans link:presentationLink link:definitionLink link:calculationLink 007 - 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Note 10 - Commitments and Contingencies (Details) - Summary of Outstanding Contingent Stock Bonuses - $ / shares
Sep. 30, 2015
Jun. 30, 2015
Note 10 - Commitments and Contingencies (Details) - Summary of Outstanding Contingent Stock Bonuses [Line Items]    
Number of shares 4,413,870 4,413,870
Stock Bonus [Member] | Stock Bonus Payable Upon Stock Price of $5.00 per Share [Member]    
Note 10 - Commitments and Contingencies (Details) - Summary of Outstanding Contingent Stock Bonuses [Line Items]    
Target Price per share   $ 5.00
Number of shares   50,000
Stock Bonus [Member] | Stock Bonus Payable Upon Stock Price of $10.00 per Share [Member]    
Note 10 - Commitments and Contingencies (Details) - Summary of Outstanding Contingent Stock Bonuses [Line Items]    
Target Price per share   $ 10.00
Number of shares   40,000
Stock Bonus [Member] | Stock Bonus Payable Upon Stock Price of $20.00 per Share [Member]    
Note 10 - Commitments and Contingencies (Details) - Summary of Outstanding Contingent Stock Bonuses [Line Items]    
Target Price per share   $ 20.00
Number of shares   27,500
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Note 8 - Convertible Notes Payable - Affiliates (Details) - USD ($)
3 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Jun. 30, 2015
Note 8 - Convertible Notes Payable - Affiliates (Details) [Line Items]      
Convertible Notes Payable, Noncurrent $ 3,187,307   $ 2,654,708
Interest Expense $ 114,256 $ 96,947  
January 2015 Convertible Notes [Member] | Convertible Notes Payable [Member]      
Note 8 - Convertible Notes Payable - Affiliates (Details) [Line Items]      
Debt Instrument, Interest Rate, Stated Percentage 4.00%    
Interest Payable $ 26,248    
January 2015 Convertible Notes [Member] | Convertible Debt [Member]      
Note 8 - Convertible Notes Payable - Affiliates (Details) [Line Items]      
Number of Shares Per Unit 1    
Number of Warrants Per Unit 1    
Conversion Price Per Unit (in Dollars per share) $ 0.50    
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) $ 1.00    
September 2015 Convertible Notes [Member] | Convertible Debt [Member]      
Note 8 - Convertible Notes Payable - Affiliates (Details) [Line Items]      
Debt Instrument, Interest Rate, Stated Percentage 4.00%    
Conversion Price Per Unit (in Dollars per share) $ 0.60    
Interest Expense $ 1,218    
Chief Executive Officer [Member]      
Note 8 - Convertible Notes Payable - Affiliates (Details) [Line Items]      
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) $ 1.50    
Chief Executive Officer [Member] | January 2015 Convertible Notes [Member] | Convertible Notes Payable [Member]      
Note 8 - Convertible Notes Payable - Affiliates (Details) [Line Items]      
Convertible Notes Payable, Noncurrent $ 1,508,202    
Chief Executive Officer [Member] | September 2015 Convertible Notes [Member] | Convertible Debt [Member]      
Note 8 - Convertible Notes Payable - Affiliates (Details) [Line Items]      
Convertible Notes Payable, Noncurrent 405,831    
Chief Financial Officer [Member] | January 2015 Convertible Notes [Member] | Convertible Notes Payable [Member]      
Note 8 - Convertible Notes Payable - Affiliates (Details) [Line Items]      
Convertible Notes Payable, Noncurrent 783,188    
Chief Financial Officer [Member] | September 2015 Convertible Notes [Member] | Convertible Debt [Member]      
Note 8 - Convertible Notes Payable - Affiliates (Details) [Line Items]      
Convertible Notes Payable, Noncurrent 16,382    
Executive Vice President [Member] | January 2015 Convertible Notes [Member] | Convertible Notes Payable [Member]      
Note 8 - Convertible Notes Payable - Affiliates (Details) [Line Items]      
Convertible Notes Payable, Noncurrent 389,566    
Executive Vice President [Member] | September 2015 Convertible Notes [Member] | Convertible Debt [Member]      
Note 8 - Convertible Notes Payable - Affiliates (Details) [Line Items]      
Convertible Notes Payable, Noncurrent $ 82,921    
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Note 2 - Significant Accounting Policies (Details) - Antidilutive Securities - shares
3 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Warrant [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Antidilutive Securities 8,295,989 7,656,403
Equity Option [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Antidilutive Securities 4,413,870 4,258,870
Convertible Debt Securities [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Antidilutive Securities 7,119,524 3,153,936
Convertible Preferred Stock, Antidilutive Securities [Member]    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Antidilutive Securities 14,250 13,250
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Note 9 - Stockholders' Equity (Details) - Allocation of Recognized Period Costs - Employee Stock Option [Member] - USD ($)
3 Months Ended
Sep. 30, 2015
Sep. 30, 2014
General and administrative:    
Stock-based employee compensation expense $ 15,320 $ 15,320
General and Administrative Expense [Member]    
General and administrative:    
Stock-based employee compensation expense 1,838  
Research and Development Expense [Member]    
General and administrative:    
Stock-based employee compensation expense $ 13,482  
XML 19 R9.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 3 - Property and Equipment
3 Months Ended
Sep. 30, 2015
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment Disclosure [Text Block]

3.     PROPERTY AND EQUIPMENT:


Property and equipment consists of the following:


   

September 30,

2015

   

June 30,

2015

 

Machinery and equipment

  $ 2,923,577     $ 2,923,577  

Buildings and structures

    1,385,125       1,385,125  

Computers and office equipment

    176,940       175,248  
      4,485,642       4,483,950  

Less accumulated depreciation

    (2,581,042 )     (2,506,731 )
    $ 1,904,600     $ 1,977,219  

Management reviewed property and equipment for impairment as of June 30, 2015 and determined that the carrying amount of property and equipment related to the Kreider 1 project exceeded its estimated future undiscounted cash flows based on certain assumptions regarding timing, level and probability of revenues from sales of nutrient reduction credits. Kreider 1 was measured at estimated fair value on a non-recurring basis using level 3 inputs, which resulted in an impairment of $1,750,000 of the property and equipment for the year ended June 30, 2015. As of September 30, 2015, management believes that no additional impairment exists.


Depreciation expense was $75,879 and $184,884 for the three months ended September 30, 2015 and 2014, respectively.


XML 20 R29.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 4 - Promissory Note Receivable (Details) - USD ($)
3 Months Ended
Jul. 15, 2015
Sep. 30, 2015
Note 4 - Promissory Note Receivable (Details) [Line Items]    
Financing Receivable, Note, Interest Rate   4.00%
Investment Income, Interest   $ 828
Note Receivable as Consideration for Warrants Exercise [Member]    
Note 4 - Promissory Note Receivable (Details) [Line Items]    
Other Significant Noncash Transaction, Value of Consideration Received   $ 105,000
Certain Warrants with Expiry Dates On or Before December 31, 2015 [Member]    
Note 4 - Promissory Note Receivable (Details) [Line Items]    
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares)   100,000
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) $ 1.05 $ 1.05
Certain Warrants with Expiry Dates On or Before December 31, 2015 [Member] | Note Receivable as Consideration for Warrants Exercise [Member]    
Note 4 - Promissory Note Receivable (Details) [Line Items]    
Other Significant Noncash Transaction, Value of Consideration Received $ 105,000 $ 105,000
XML 21 R28.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 3 - Property and Equipment (Details) - Property and Equipment - USD ($)
Sep. 30, 2015
Jun. 30, 2015
Property and Equipment [Abstract]    
Machinery and equipment $ 2,923,577 $ 2,923,577
Buildings and structures 1,385,125 1,385,125
Computers and office equipment 176,940 175,248
4,485,642 4,483,950
Less accumulated depreciation (2,581,042) (2,506,731)
$ 1,904,600 $ 1,977,219
XML 22 R30.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 5 - Notes Payable - Affiliates (Details)
12 Months Ended
Jun. 30, 2015
USD ($)
$ / shares
shares
2015 Promissory Notes [Member]  
Note 5 - Notes Payable - Affiliates (Details) [Line Items]  
Related Party Transaction, Rate 4.00%
2015 Promissory Notes [Member] | Chief Executive Officer [Member]  
Note 5 - Notes Payable - Affiliates (Details) [Line Items]  
Notes Payable, Related Parties | $ $ 395,277
Class of Warrant or Right, Issued During Period, Per Dollar of Principal 405,831
2015 Promissory Notes [Member] | Executive Vice Chairman [Member]  
Note 5 - Notes Payable - Affiliates (Details) [Line Items]  
Notes Payable, Related Parties | $ $ 15,956
Class of Warrant or Right, Issued During Period, Per Dollar of Principal 16,382
2015 Promissory Notes [Member] | Investor [Member]  
Note 5 - Notes Payable - Affiliates (Details) [Line Items]  
Notes Payable, Related Parties | $ $ 80,764
Class of Warrant or Right, Issued During Period, Per Dollar of Principal 82,921
September 2015 Convertible Notes [Member]  
Note 5 - Notes Payable - Affiliates (Details) [Line Items]  
Related Party Transaction, Rate 4.00%
Debt Instrument, Convertible, Conversion Price | $ / shares $ 0.60
XML 23 R31.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 6 - Deferred Compensation (Details) - USD ($)
3 Months Ended
Sep. 30, 2015
Jun. 30, 2015
Note 6 - Deferred Compensation (Details) [Line Items]    
Deferred Compensation Liability, Current $ 900,524 $ 839,288
Interest Rate on Deferred Compensation 4.00%  
Deferred Compensation, Conversion Days 5 days  
Deferred Compensation, Consecutive Trading Days 10 days  
Chief Executive Officer [Member]    
Note 6 - Deferred Compensation (Details) [Line Items]    
Deferred Compensation Liability, Current $ 282,727  
Chief Financial Officer [Member]    
Note 6 - Deferred Compensation (Details) [Line Items]    
Deferred Compensation Liability, Current 451  
Deferred Compensation Converted to Common Stock, Amount $ 82,861  
Deferred Compensation, Shares Issued upon Conversion (in Shares) 99,159  
Executive Vice Chairman [Member]    
Note 6 - Deferred Compensation (Details) [Line Items]    
Deferred Compensation Liability, Current $ 136,803  
Consultants [Member]    
Note 6 - Deferred Compensation (Details) [Line Items]    
Deferred Compensation Liability, Current $ 239,059  
Interest Rate on Deferred Compensation 3.00%  
Former Employee 1 [Member]    
Note 6 - Deferred Compensation (Details) [Line Items]    
Deferred Compensation Liability, Current $ 168,000  
Deferred Compensation, Shares Issued upon Conversion (in Shares) 226,168  
Individual Employee [Member]    
Note 6 - Deferred Compensation (Details) [Line Items]    
Deferred Compensation Liability, Current $ 984  
Deferred Compensation, Shares Issued upon Conversion (in Shares) 1,025  
Former Employee [Member]    
Note 6 - Deferred Compensation (Details) [Line Items]    
Deferred Compensation Liability, Current $ 72,500  
Minimum [Member] | Chief Financial Officer [Member]    
Note 6 - Deferred Compensation (Details) [Line Items]    
Deferred Compensation, Conversion Price (in Dollars per share) $ 0.76  
Maximum [Member] | Chief Financial Officer [Member]    
Note 6 - Deferred Compensation (Details) [Line Items]    
Deferred Compensation, Conversion Price (in Dollars per share) $ 0.96  
XML 24 R8.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 2 - Significant Accounting Policies
3 Months Ended
Sep. 30, 2015
Accounting Policies [Abstract]  
Significant Accounting Policies [Text Block]

2.     SIGNIFICANT ACCOUNTING POLICIES


Principles of consolidation:


The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Bion Integrated Projects Group, Inc. (“Projects Group”), Bion Technologies, Inc., BionSoil, Inc., Bion Services, PA-1, and Bion PA 2 LLC; and its 58.9% owned subsidiary, Centerpoint Corporation (“Centerpoint”). All significant intercompany accounts and transactions have been eliminated in consolidation.


The accompanying consolidated financial statements have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements reflect all adjustments (consisting of only normal recurring entries) that, in the opinion of management, are necessary to present fairly the financial position at September 30, 2015, and the results of operations and cash flows of the Company for the three months ended September 30, 2015 and 2014. Operating results for the three months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending June 30, 2016.


Property and equipment:


Property and equipment are stated at cost and are depreciated, when placed into service, using the straight-line method over the estimated useful lives of the related assets, generally three to twenty years. The Company capitalizes all direct costs and all indirect incrementally identifiable costs related to the design and construction of its Integrated Projects. The Company reviews its property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized based on the amount by which the carrying value of the assets or asset group exceeds its estimated fair value, and is recognized as a loss from operations.


Fair value measurements:


Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market. The Company uses a fair value hierarchy that has three levels of inputs, both observable and unobservable, with use of the lowest possible level of input to determine fair value.


Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;


Level 2 – observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and


Level 3 – assets and liabilities whose significant value drivers are unobservable.


Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company’s market assumptions. Unobservable inputs require significant management judgment or estimation. In some cases, the inputs used to measure an asset or liability may fall into different levels of the fair value hierarchy. In those instances, the fair value measurement is required to be classified using the lowest level of input that is significant to the fair value measurement. Such determination requires significant management judgment.


The fair value of cash, promissory note receivable and accounts payable approximates their carrying amounts due to their short-term maturities. The fair value of the loan payable approximates its carrying amount as it bears interest at rates commensurate with market rates. The fair value of the redeemable preferred stock approximates its carrying value due to the dividends accrued on the preferred stock which are reflected as part of the redemption value. The fair value of deferred compensation and convertible notes payable - affiliates are not practicable to estimate due to the related party nature of the underlying transactions.


Revenue Recognition:


Revenues are generated from the sale of nutrient reduction credits. The Company recognizes revenue from the sale of nutrient credits when there is persuasive evidence that an arrangement exists, when title has passed, the price is fixed or determinable, and collection is reasonably assured. 


The Company expects that technology license fees will be generated from the licensing of Bion’s integrated system. The Company anticipates that it will charge its customers a non-refundable up-front technology license fee, which will be recognized over the estimated life of the customer relationship. In addition, any on-going technology license fees will be recognized as earned based upon the performance requirements of the agreement. Annual waste treatment fees will be recognized upon receipt. Revenues, if any, from the Company’s interest in Integrated Projects will be recognized when the entity in which the Integrated Project has been developed recognizes such revenue.


Loss per share:


Basic loss per share amounts are calculated using the weighted average number of shares of common stock outstanding during the period. Diluted loss per share assumes the conversion, exercise or issuance of all potential common stock instruments, such as options or warrants, unless the effect is to reduce the loss per share. During the three months ended September 30, 2015 and 2014, the basic and diluted loss per share was the same, as the impact of potential dilutive common shares was anti-dilutive.


The following table represents the warrants, options and convertible securities excluded from the calculation of diluted loss per share:


   

September 30,

2015

   

September 30,

2014

 

Warrants

    8,295,989       7,656,403  

Options

    4,413,870       4,258,870  

Convertible debt

    7,119,524       3,153,936  

Convertible preferred stock

    14,250       13,250  

The following is a reconciliation of the denominators of the basic loss per share computations for the three months ended September 30, 2015 and 2014:


   

Three months ended

September 30,

2015

   

Three Months Ended

September 30,

2014

 

Shares issued – beginning of period

    22,089,650       19,579,619  

Shares held by subsidiaries (Note 9)

    (704,309 )     (704,309 )

Shares outstanding – beginning of period

    21,385,341       18,872,310  

Weighted average shares for fully vested stock bonuses (Note 10)

    600,000       840,000  

Weighted average shares issued during the period

    303,736       104,766  

Basic weighted average shares – end of period

    22,289,077       19,817,076  

Recent Accounting Pronouncements:


The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequences of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s financial statements properly reflect the change.


In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 “Revenue from Contracts from Customers,” which supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605),” and requires entities to recognize revenue in a way that depicts the transfer of potential goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to the exchange for those goods or services. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 and early adoption is not permitted. The Company is currently evaluating the new standard and assessing the potential impact on its operations and financial statements.


In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements – Going Concern: Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The guidance is effective for annual periods ending after December 15, 2016, and interim periods thereafter, early application is permitted. The Company believes that the adoption of ASU No. 2014-15 will not have a material impact on its financial statements.


XML 25 R32.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 7 - Loan Payable (Details) - USD ($)
3 Months Ended 12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Jun. 30, 2015
Jun. 30, 2014
Jun. 30, 2013
Sep. 25, 2014
Note 7 - Loan Payable (Details) [Line Items]            
Construction Loan $ 7,800,000          
PA-1 [Member]            
Note 7 - Loan Payable (Details) [Line Items]            
Debt Instrument, Debt Default, Amount           $ 8,137,117
Pennvest Loan [Member]            
Note 7 - Loan Payable (Details) [Line Items]            
Construction Loan 7,754,000          
Line of Credit Facility, Maximum Borrowing Capacity 7,754,000          
Repayments of Long-term Debt     $ 723,000 $ 704,000 $ 574,000  
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months     741,000      
Long-term Debt, Maturities, Repayments of Principal in Year Two     760,000      
Long-term Debt, Maturities, Repayments of Principal in Year Three     $ 4,252,000      
Interest Expense, Debt 49,374 $ 49,374        
Debt Instrument, Accrued Interest and Late Charges $ 635,166          
Pennvest Loan [Member] | Interest Only Payments, Number of Years [Member]            
Note 7 - Loan Payable (Details) [Line Items]            
Term Loan Payment Term 3 years          
Pennvest Loan [Member] | Years 1 through 5 [Member]            
Note 7 - Loan Payable (Details) [Line Items]            
Debt Instrument, Interest Rate During Period 2.547%          
Pennvest Loan [Member] | Years 6 through Maturity [Member]            
Note 7 - Loan Payable (Details) [Line Items]            
Debt Instrument, Interest Rate During Period 3.184%          
XML 26 R40.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 11 - Subsequent Events (Details) - USD ($)
1 Months Ended 3 Months Ended
Oct. 27, 2015
Nov. 09, 2015
Sep. 30, 2015
Note 11 - Subsequent Events (Details) [Line Items]      
Stock Issued During Period, Shares, Issued for Services     29,934
Stock Issued During Period, Value, Issued for Services (in Dollars)     $ 25,952
Subsequent Event [Member]      
Note 11 - Subsequent Events (Details) [Line Items]      
Class of Warrant or Right, Exercised During Period   14,000  
Stock Issued During Period, Shares, Warrants Exercised   14,000  
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)   $ 0.75  
Subsequent Event [Member] | Employees and Consultants [Member]      
Note 11 - Subsequent Events (Details) [Line Items]      
Stock Issued During Period, Shares, Issued for Services   3,161  
Stock Issued During Period, Value, Issued for Services (in Dollars)   $ 3,000  
Subsequent Event [Member] | Chairman and President [Member]      
Note 11 - Subsequent Events (Details) [Line Items]      
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share) $ 0.92    
Stock Issued During Period, Shares, New Issues 75,000    
Employment Agreement, Optional Renewal Term 6 months    
Subsequent Event [Member] | January 1, 2016 to June 30, 2016 [Member] | Chairman and President [Member]      
Note 11 - Subsequent Events (Details) [Line Items]      
Executive Salary, Monthly (in Dollars) $ 19,000    
XML 27 R2.htm IDEA: XBRL DOCUMENT v3.3.0.814
Consolidated Balance Sheets (Current Period Unaudited) - USD ($)
Sep. 30, 2015
Jun. 30, 2015
Current assets:    
Cash $ 180,346 $ 339,286
Promissory note receivable (Note 4) 105,828  
Prepaid expenses 22,417 18,503
Subscription receivable (Note 9)   13,125
Deposits and other receivables 7,108 7,108
Total current assets 315,699 378,022
Property and equipment, net (Note 3) 1,904,600 1,977,219
Total assets 2,220,299 2,355,241
Current liabilities:    
Accounts payable and accrued expenses 1,436,972 1,353,168
Notes payable - affiliates, net of discount (Note 5)   472,230
Deferred compensation (Note 6) 900,524 839,288
Loan payable (Note 7) 7,754,000 7,754,000
Total current liabilities 10,117,396 10,444,086
Convertible notes payable - affiliates, net of current portion (Note 8) 3,187,307 2,654,708
Total Liabilities 13,304,703 13,098,794
Bion's stockholders' equity (deficit):    
Common stock, no par value, 100,000,000 shares authorized, 22,606,852 and 22,089,650 shares issued, respectively; 21,902,543 and 21,385,341 shares outstanding, respectively 0 0
Additional paid-in capital 101,380,805 100,889,127
Accumulated deficit (112,527,294) (111,696,060)
Total Bion's stockholders' deficit (11,146,489) (10,806,933)
Noncontrolling interest 62,085 63,380
Total deficit (11,084,404) (10,743,553)
Total liabilities and deficit 2,220,299 2,355,241
Series B Preferred Stock [Member]    
Current liabilities:    
Series B Redeemable Convertible Preferred stock, $0.01 par value, 50,000 shares authorized; 200 shares issued and outstanding, liquidation preference of $28,500 and $28,000, respecitvely 25,900 25,400
Series A Preferred Stock [Member]    
Bion's stockholders' equity (deficit):    
Preferred stock 0 0
Series C Preferred Stock [Member]    
Bion's stockholders' equity (deficit):    
Preferred stock $ 0 $ 0
XML 28 R6.htm IDEA: XBRL DOCUMENT v3.3.0.814
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
3 Months Ended
Sep. 30, 2015
Sep. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES    
Net loss $ (832,529) $ (705,758)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation expense 75,879 184,884
Accrued interest on deferred compensation and other 114,469 93,577
Stock-based compensation 41,272 7,947
Increase in prepaid expenses (3,914) (1,686)
Increase in accounts payable and accrued expenses 34,429 111,257
Increase in deferred compensation and convertible notes 227,400 156,000
Net cash used in operating activities (342,994) (153,779)
CASH FLOWS FROM INVESTING ACTIVITIES    
Purchase of property and equipment (3,260)  
Net cash used by investing activities (3,260)  
CASH FLOWS FROM FINANCING ACTIVITIES    
Decrease in subscription receivable 13,125 30,000
Proceeds from sale of common stock   26,250
Proceeds from exercise of warrants 174,189  
Net cash provided by financing activities 187,314 56,250
Net decrease in cash (158,940) (97,529)
Cash at beginning of period 339,286 186,148
Cash at end of period 180,346 88,619
Non-cash investing and financing transactions:    
Issuance of common stock to satisfy deferred compensation 171,717  
Exercise of warrants for promissory note receivable 105,000  
Series B Preferred Stock [Member]    
Non-cash investing and financing transactions:    
Series B preferred stock dividends accrued $ 500 $ 500
XML 29 R35.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 9 - Stockholders' Equity (Details) - Stock Options Activity - USD ($)
3 Months Ended 12 Months Ended
Sep. 30, 2015
Jun. 30, 2015
Stock Options Activity [Abstract]    
Options Outstanding 4,413,870 4,413,870
Options Outstanding, Weighted-Average Exercise Price $ 1.88 $ 1.88
Options Outstanding, Weighted-Average Remaining Contractual Life 4 years 36 days 4 years 36 days
Options Outstanding, Aggregate Intrinsic Aggregate $ 253,000  
Exercisable at September 30, 2015 4,313,870  
Exercisable at September 30, 2015 $ 1.91  
Exercisable at September 30, 2015 4 years  
Exercisable at September 30, 2015 $ 213,000  
XML 30 R22.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 10 - Commitments and Contingencies (Tables)
3 Months Ended
Sep. 30, 2015
Commitments and Contingencies Disclosure [Abstract]  
Shares Outstanding under Contingent Stock Bonuses Plan, by Target Price Per Share [Table Text Block]

Target Price per share

  $ 5.00     $ 10.00     $ 20.00  

Number of shares

    50,000       40,000       27,500  
XML 31 R36.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 9 - Stockholders' Equity (Details) - Nonvested Share Activity
Sep. 30, 2015
$ / shares
shares
Nonvested Share Activity [Abstract]  
Nonvested at July 1, 2015 100,000
Nonvested at July 1, 2015 | $ / shares $ 0.76
Nonvested at September 30, 2015 100,000
Nonvested at September 30, 2015 | $ / shares $ 0.76
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Note 2 - Significant Accounting Policies (Details)
3 Months Ended
Sep. 30, 2015
Centerpoint [Member]  
Note 2 - Significant Accounting Policies (Details) [Line Items]  
Equity Method Investment, Ownership Percentage 58.90%
Minimum [Member]  
Note 2 - Significant Accounting Policies (Details) [Line Items]  
Property, Plant and Equipment, Useful Life 3 years
Maximum [Member]  
Note 2 - Significant Accounting Policies (Details) [Line Items]  
Property, Plant and Equipment, Useful Life 20 years

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Note 1 - Organization, Nature of Business, Going Concern and Management's Plans
3 Months Ended
Sep. 30, 2015
Disclosure Text Block [Abstract]  
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1. ORGANIZATION, NATURE OF BUSINESS, GOING CONCERN AND MANAGEMENT’S PLANS:


Organization and nature of business:


Bion Environmental Technologies, Inc. (“Bion” or “We” or the "Company") was incorporated in 1987 in the State of Colorado and has developed and continues to develop patented and proprietary technology and business models that provide comprehensive environmental solutions to a significant source of pollution in United States agriculture, large scale livestock facilities known as Confined Animal Feeding Operations ("CAFO's"). Bion's technologies (and applications related thereto) produce substantial reductions of nutrient releases (primarily nitrogen and phosphorus) to both water and air (including ammonia, which is subsequently re-deposited to the ground) from livestock waste streams based upon our operations and research to date (and third party peer review thereof). We are continually involved in research and development to upgrade and improve our technology and technology applications, including integration with third party technology. Bion provides comprehensive and cost-effective treatment of livestock waste onsite, while it is still concentrated and before it contaminates air, soil, groundwater aquifers and/or downstream waters, and, in certain configurations, recovers nutrients for potential use as fertilizer and feed additives.


During the 2014 fiscal year the Company increased its research and development activities with focus on creating variations of its technology platform that provide additional flexibility, increase recovery of nutrient by-products (in organic and non-organic forms) and potential related revenue streams, and to review potential “add-ons” and applications for use in different regulatory environments. These research and development activities continued through the 2015 fiscal year, and we believe such activities will continue at least through the 2016 fiscal year, subject to availability of adequate financing for the Company’s operations, of which there is no assurance.


Bion is actively pursuing business opportunities in three broad areas 1) installation of Bion systems to retrofit and environmentally remediate existing CAFO’s to reduce nutrient (primarily nitrogen and phosphorus) releases, gaseous emissions (ammonia, greenhouse gases, volatile organic compounds, etc.), and pathogens, hormones and other compounds in order to clean the air and water in the surrounding areas (as described below) to ensure compliance with existing (and future) regulations and to permit herd expansion; 2) development of Integrated Projects opportunities within the United States and internationally; and 3) licensing and/or joint venturing of Bion’s technology and applications outside North America. The opportunities described at 1) and 2) above (and below) each require substantial political and regulatory (federal, state and local) efforts on the part of the Company and a substantial part of Bion’s efforts are focused on such political and regulatory matters. The most intense focus is currently on the requirements for the clean-up of the Chesapeake Bay faced by the Commonwealth of Pennsylvania and the potential use of Bion’s technology and technology platform on CAFOs as an alternative to what the Company believes is far more expensive nutrient removal downstream in storm water projects.


Management believes that Bion's technology platform (including utilization of various third party technologies to supplement the Company’s proprietary technologies), in addition to utilization for remediation of the waste streams of existing CAFOs, can enable the integration of large-scale CAFO's and their end-product users, renewable energy production from the CAFO waste stream, on site utilization of the renewable energy generated and biofuel/ethanol production in an environmentally and economically sustainable manner while reducing the aggregate capital expense and operating costs for the entire integrated complex ("Integrated Projects" or "Projects"). In the context of Integrated Projects, Bion's waste treatment process, in addition to mitigating polluting releases, enables generation of renewable energy from cellulosic portions of the CAFO waste stream, which renewable energy can be utilized by integrated facilities including ethanol plants, CAFO end-product processors (including cheese, ice cream and/or bottling plants in the case of dairy CAFO’s and/or slaughter and/or processing facilities in the context of beef CAFO’s) and/or other users as a fossil fuel replacement. The nutrients (primarily nitrogen and phosphorus) can be harvested from the solids and liquid streams recovered from the livestock waste stream and can be utilized as either high value fertilizer and/or the basis for high protein animal feed and the nutrient rich effluent can potentially be utilized in integrated hydroponic agriculture and/or field applied as fertilizer. Bion believes that its Integrated Projects will produce high quality, traceable animal protein which can address consumer food safety/security concerns at a lower cost than current industry practices while also maintaining a far lower net environmental footprint per unit of protein produced due to water recycling (possible due to the removal of nutrients, etc. from the water by Bion’s technology applications), production of renewable energy from the waste stream (reducing the use of fossil fuels), and multiple levels of economies of scale, co-location and integration savings in transportation and other logistics. Some projects may involve only partial integration which will limit the benefits described herein.


On September 27, 2008, the Company executed an agreement with Kreider Farms (and its affiliated entities) (collectively "Kreider") to design, construct and operate (through its wholly-owned subsidiaries, Bion Services Group, Inc. (“Bion Services”) and Bion PA-1 LLC (“PA-1”) a Bion system to treat the waste of 1,200 milking dairy cows (milkers, dry cows and heifers) at the Kreider Dairy, located in Manheim, Pennsylvania. In addition, the agreement (as amended and supplemented) provides for a second phase which will treat the wastes from the rest of Kreider’s herd and includes renewable energy production from the cellulosic solid wastes from the Phase 1 system (referred to as “Kreider 1”) together with the waste stream from Kreider’s poultry facilities for use at the facilities and/or for market sales. The Kreider projects are owned and operated by Bion through subsidiaries, in which Kreider has the option to purchase a noncontrolling interest. Substantial capital (equity and/or debt) has been and will continue to be expended on these projects. Additional funds will be required for continuing operations of Kreider 1 until sufficient revenues can be generated, of which there is no assurance. The Company anticipates that such projects will generate revenue primarily from the sale of nutrient reduction (and/or other) environmental credits related to Kreider 1 and the Kreider Phase 2 poultry waste treatment system (not yet constructed), and secondarily through sales of byproducts (feed additives and/or fertilizer, (organic and non-organic)) and renewable energy generated by the Kreider Phase 2 system. To date the market for long-term nutrient reduction credits in Pennsylvania has been very slow to develop and the Company’s activities have been negatively affected by the lack of such development. A portion of Bion’s research and development activities is currently taking place at the Kreider 1 facility.


The Company’s subsidiary PA-1 financed Kreider 1 through a $7.8 million loan (“Pennvest Loan”) from Pennsylvania Infrastructure Investment Authority (“Pennvest”) secured by Kreider 1 (and its revenue streams, if any) plus advances from the Company. The economics (potential revenues and profitability) of Kreider 1 are based largely on the long-term sale of nutrient reduction credits (nitrogen and/or phosphorus) to meet the requirements of the Chesapeake Bay environmental clean-up. The Pennsylvania Department of Environmental Protection (“PADEP”) issued final permits for Kreider 1 (including the credit verification plan) on August 1, 2012 on which date the Company deemed that Kreider 1 was ‘placed in service’. However, liquidity in the Pennsylvania nutrient credit market has been slow to develop significant breadth and depth and has prevented Bion from monetizing the nutrient reduction credits created by PA-1’s Kreider 1 project and Bion’s other proposed projects. These challenges and difficulties raise significant questions as to when PA-1 will be able to generate such revenues from Kreider 1. PA-1 has elected not to make interest or principal payments on the Pennvest Loan since January 2013 and, therefore, the Company has classified the Pennvest Loan as a current liability as of September 30, 2015. The Company recorded a $1,750,000 impairment of the Kreider 1 assets for the year ended June 30, 2015 (following a $2,000,000 impairment during the year ended June 30, 2014).


On September 25, 2014, Pennvest exercised its right to declare the Pennvest Loan in default and has accelerated the Pennvest Loan and demanded that PA-1 pay $8,137,117 (principal, interest plus late charges) on or before October 24, 2014. PA-1 did not make the payment and does not have the resources to make the payment demanded by Pennvest. PA-1 has commenced discussions and negotiations with Pennvest concerning this matter but Pennvest has rejected PA-1’s proposal made during the fall of 2014. Neither party has any formal proposal on the table as of the date of this report but discussions and negotiations remain in process. It is not possible at this date to predict the outcome of such negotiations, but the Company believes it is possible that an agreement may yet be reached that will provide a loan modification. Subject to the results of the negotiations with Pennvest and pending development of a more robust market for nutrient reductions in Pennsylvania, PA-1 and Bion will continue to evaluate various options with regard to Kreider 1 over the next 30-180 days.


During August 2012, the Company provided Pennvest (and the PADEP) with data demonstrating that the Kreider 1 system met the ‘technology guaranty’ standards which were incorporated in the Pennvest financing documents and, as a result, the Pennvest Loan is now solely an obligation of PA-1.


Development work and technology evaluation, including amended credit certification and discussions with potential joint venture partners, continues related to the details of the second phase of the Kreider project which primarily relates to treatment of the wastes from Kreider’s poultry operations. Assuming there are positive developments related to the market for nutrient reduction in Pennsylvania, the Company intends to pursue development, design and construction of the Kreider 2 poultry waste/renewable energy project with a goal of achieving operational status during calendar year 2016. However, as discussed above, this project faces challenges related to the current limits of the existing nutrient reduction market and funding of technology-based, verifiable agricultural nutrient reductions.


A significant portion of Bion’s activities concern efforts with private and public stakeholders (at local and state level) in Pennsylvania (and other Chesapeake Bay and Midwest and Great Lakes states) and at the federal level (the Environmental Protection Agency (“EPA”) and the Department of Agriculture (“USDA”) (and other executive departments) and Congress) to establish appropriate public policies which will create regulations and funding mechanisms that foster installation of the low cost environmental solutions that Bion (and others) can provide through clean-up of agricultural waste streams. The Company anticipates that such efforts will continue in Pennsylvania throughout the next 12 months and in various additional states thereafter.


Going concern and management’s plans:


The consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has not generated significant revenues and has incurred net losses (including significant non-cash expenses) of approximately $5,640,000 and $5,762,000 during the years ended June 30, 2015 and 2014, respectively and a net loss of approximately $833,000 during the three months ended September 30, 2015. At September 30, 2015, the Company has a working capital deficit and a stockholders’ deficit of approximately $9,802,000 and $11,146,000, respectively. These factors raise substantial doubt about the Company's ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability or classification of assets or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern. The following paragraphs describe management’s plans with regard to these conditions.


The Company continues to explore sources of additional financing to satisfy its current operating requirements as it is not currently generating any significant revenues.


During the years ended June 30, 2015 and 2014, the Company received total proceeds of $1,000,940 and $944,400, respectively, from the sale of its equity securities. Proceeds during the 2015 and 2014 fiscal years have been lower than in earlier years and accordingly has negatively impacted the Company’s business development efforts.


During the three months ended September 30, 2015, the Company entered into subscription agreements to exercise certain warrants with expiry dates on or before December 31, 2015, into restricted shares of the Company’s common stock at a reduced exercise price of $1.05, for the period from June 30, 2015 through July 15, 2015. Pursuant to the offering, 265,894 warrants were exercised and 265,894 shares of the Company’s restricted common stock were issued during the three months ended September 30, 2015, resulting in cash proceeds of $174,189 and receipt of a $105,000 interest bearing, collateralized promissory note.


During fiscal years 2015 and 2014 and through the three months ended September 30, 2015, the Company experienced greater difficulty in raising equity funding than in the prior years. As a result, the Company faced, and continues to face, significant cash flow management challenges due to working capital constraints. To partially mitigate these working capital constraints, the Company’s core senior management and several key employees and consultants have been deferring (and continue to defer) all or part of their cash compensation and/or are accepting compensation in the form of securities of the Company (Notes 6 and 8) and members of the Company’s senior management have made loans to the Company. Additionally, the Company made reductions in its personnel during the year ended June 30, 2014. The constraint on available resources has had, and continues to have, negative effects on the pace and scope of the Company’s efforts to develop its business. The Company has had to delay payment of trade obligations and has had to economize in many ways that have potentially negative consequences. If the Company does not have greater success in its efforts to raise needed funds during the balance of the 2016 fiscal year (and subsequent periods), management will need to consider deeper cuts (including additional personnel cuts) and curtailment of operations (including possibly Kreider 1 operations) and/or research and development activities.


The Company will need to obtain additional capital to fund its operations and technology development, to satisfy existing creditors, to develop Integrated Projects and CAFO waste remediation systems (including the Kreider 2 facility) and to continue to operate the Kreider 1 facility. The Company anticipates that it will seek to raise from $2,500,000 to $50,000,000 or more debt and/or equity through joint ventures and/or sale of its equity securities (common, preferred and/or hybrid) and/or debt (including convertible) securities, and/or through use of ‘rights’ and/or warrants (new and/or existing) during the next twelve months. However, as discussed above, there is no assurance, especially in light of the difficulties the Company has experienced in recent periods and the extremely unsettled capital markets that presently exist (especially for small companies), that the Company will be able to obtain the funds that it needs to stay in business, complete its technology development or to successfully develop its business and projects.


There is no realistic likelihood that funds required during the next twelve months or in the periods immediately thereafter for the Company’s basic operations and/or proposed projects will be generated from operations. Therefore, the Company will need to raise sufficient funds from external sources such as debt or equity financings or other potential sources. The lack of sufficient additional capital resulting from the inability to generate cash flow from operations and/or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business. Further, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significantly dilutive effect on the Company's existing shareholders. All of these factors have been exacerbated by the extremely unsettled credit and capital markets presently existing for small companies like Bion.


XML 36 R3.htm IDEA: XBRL DOCUMENT v3.3.0.814
Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares
Sep. 30, 2015
Jun. 30, 2015
Common stock, shares authorized 100,000,000 100,000,000
Common stock, shares issued 22,606,852 22,089,650
Common stock, shares outstanding 21,902,543 21,385,341
Common stock, par value (in Dollars per share) $ 0 $ 0
Series B Preferred Stock [Member]    
Par value (in Dollars per share) $ 0.01 $ 0.01
Shares authorized 50,000 50,000
Shares issued 200 200
Shares outstanding 200 200
Liquidation preference (in Dollars per share) $ 28,500 $ 28,000
Series A Preferred Stock [Member]    
Par value (in Dollars per share) $ 0.01 $ 0.01
Shares authorized 10,000 10,000
Shares issued 0 0
Shares outstanding 0 0
Series C Preferred Stock [Member]    
Par value (in Dollars per share) $ 0.01 $ 0.01
Shares authorized 60,000 60,000
Shares issued 0 0
Shares outstanding 0 0
XML 37 R17.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 11 - Subsequent Events
3 Months Ended
Sep. 30, 2015
Subsequent Events [Abstract]  
Subsequent Events [Text Block]

11.

SUBSEQUENT EVENTS:


The Company has evaluated events that occurred subsequent to September 30, 2015 for recognition and disclosure in the financial statements and notes to the financial statements.


From October 1, 2015 through November 9, 2015 the Company has issued 3,161 shares of the Company’s common shares to an employee and a consultant valued at approximately $3,000.


From October 1, 2015 through November 9, 2015, a warrant holder elected to exercise 14,000 warrants into 14,000 shares of the Company’s common stock at an exercise price of $0.75 per share.


The Company entered into an extension agreement with Smith on October 27, 2015 whereby Smith agreed to provide his services to the Company through June 30, 2016 for $19,000 per month commencing January 1, 2016. Pursuant to the agreement, the Company also granted Smith options to purchase common stock of the Company at $0.92 per share until December 31, 2020 and granted Smith 75,000 bonus shares of the Company’s common stock which vested immediately but shall be issued on January 5, 2016. The Company has the option to extend Smith’s services for an additional six months through December 31, 2016 on similar terms.


XML 38 R1.htm IDEA: XBRL DOCUMENT v3.3.0.814
Document And Entity Information - shares
3 Months Ended
Sep. 30, 2015
Nov. 06, 2015
Document and Entity Information [Abstract]    
Entity Registrant Name BION ENVIRONMENTAL TECHNOLOGIES INC  
Trading Symbol bnet  
Document Type 10-Q  
Current Fiscal Year End Date --06-30  
Entity Common Stock, Shares Outstanding   21,919,704
Amendment Flag false  
Entity Central Index Key 0000875729  
Entity Current Reporting Status Yes  
Entity Voluntary Filers No  
Entity Filer Category Smaller Reporting Company  
Entity Well-known Seasoned Issuer No  
Document Period End Date Sep. 30, 2015  
Document Fiscal Year Focus 2016  
Document Fiscal Period Focus Q1  
XML 39 R18.htm IDEA: XBRL DOCUMENT v3.3.0.814
Accounting Policies, by Policy (Policies)
3 Months Ended
Sep. 30, 2015
Accounting Policies [Abstract]  
Consolidation, Policy [Policy Text Block]

Principles of consolidation:


The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Bion Integrated Projects Group, Inc. (“Projects Group”), Bion Technologies, Inc., BionSoil, Inc., Bion Services, PA-1, and Bion PA 2 LLC; and its 58.9% owned subsidiary, Centerpoint Corporation (“Centerpoint”). All significant intercompany accounts and transactions have been eliminated in consolidation.


The accompanying consolidated financial statements have been prepared without audit pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements reflect all adjustments (consisting of only normal recurring entries) that, in the opinion of management, are necessary to present fairly the financial position at September 30, 2015, and the results of operations and cash flows of the Company for the three months ended September 30, 2015 and 2014. Operating results for the three months ended September 30, 2015 are not necessarily indicative of the results that may be expected for the year ending June 30, 2016

Property, Plant and Equipment, Policy [Policy Text Block]

Property and equipment:


Property and equipment are stated at cost and are depreciated, when placed into service, using the straight-line method over the estimated useful lives of the related assets, generally three to twenty years. The Company capitalizes all direct costs and all indirect incrementally identifiable costs related to the design and construction of its Integrated Projects. The Company reviews its property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized based on the amount by which the carrying value of the assets or asset group exceeds its estimated fair value, and is recognized as a loss from operations.

Fair Value Measurement, Policy [Policy Text Block]

Fair value measurements:


Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market. The Company uses a fair value hierarchy that has three levels of inputs, both observable and unobservable, with use of the lowest possible level of input to determine fair value.


Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;


Level 2 – observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and


Level 3 – assets and liabilities whose significant value drivers are unobservable.


Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company’s market assumptions. Unobservable inputs require significant management judgment or estimation. In some cases, the inputs used to measure an asset or liability may fall into different levels of the fair value hierarchy. In those instances, the fair value measurement is required to be classified using the lowest level of input that is significant to the fair value measurement. Such determination requires significant management judgment.


The fair value of cash, promissory note receivable and accounts payable approximates their carrying amounts due to their short-term maturities. The fair value of the loan payable approximates its carrying amount as it bears interest at rates commensurate with market rates. The fair value of the redeemable preferred stock approximates its carrying value due to the dividends accrued on the preferred stock which are reflected as part of the redemption value. The fair value of deferred compensation and convertible notes payable - affiliates are not practicable to estimate due to the related party nature of the underlying transactions.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition:


Revenues are generated from the sale of nutrient reduction credits. The Company recognizes revenue from the sale of nutrient credits when there is persuasive evidence that an arrangement exists, when title has passed, the price is fixed or determinable, and collection is reasonably assured. 


The Company expects that technology license fees will be generated from the licensing of Bion’s integrated system. The Company anticipates that it will charge its customers a non-refundable up-front technology license fee, which will be recognized over the estimated life of the customer relationship. In addition, any on-going technology license fees will be recognized as earned based upon the performance requirements of the agreement. Annual waste treatment fees will be recognized upon receipt. Revenues, if any, from the Company’s interest in Integrated Projects will be recognized when the entity in which the Integrated Project has been developed recognizes such revenue.

Earnings Per Share, Policy [Policy Text Block]

Loss per share:


Basic loss per share amounts are calculated using the weighted average number of shares of common stock outstanding during the period. Diluted loss per share assumes the conversion, exercise or issuance of all potential common stock instruments, such as options or warrants, unless the effect is to reduce the loss per share. During the three months ended September 30, 2015 and 2014, the basic and diluted loss per share was the same, as the impact of potential dilutive common shares was anti-dilutive.


The following table represents the warrants, options and convertible securities excluded from the calculation of diluted loss per share:


   

September 30,

2015

   

September 30,

2014

 

Warrants

    8,295,989       7,656,403  

Options

    4,413,870       4,258,870  

Convertible debt

    7,119,524       3,153,936  

Convertible preferred stock

    14,250       13,250  

The following is a reconciliation of the denominators of the basic loss per share computations for the three months ended September 30, 2015 and 2014:


   

Three months ended

September 30,

2015

   

Three Months Ended

September 30,

2014

 

Shares issued – beginning of period

    22,089,650       19,579,619  

Shares held by subsidiaries (Note 9)

    (704,309 )     (704,309 )

Shares outstanding – beginning of period

    21,385,341       18,872,310  

Weighted average shares for fully vested stock bonuses (Note 10)

    600,000       840,000  

Weighted average shares issued during the period

    303,736       104,766  

Basic weighted average shares – end of period

    22,289,077       19,817,076  
New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements:


The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequences of the change to its financial statements and assures that there are proper controls in place to ascertain that the Company’s financial statements properly reflect the change.


In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09 “Revenue from Contracts from Customers,” which supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605),” and requires entities to recognize revenue in a way that depicts the transfer of potential goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to the exchange for those goods or services. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 and early adoption is not permitted. The Company is currently evaluating the new standard and assessing the potential impact on its operations and financial statements.


In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements – Going Concern: Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern. The guidance is effective for annual periods ending after December 15, 2016, and interim periods thereafter, early application is permitted. The Company believes that the adoption of ASU No. 2014-15 will not have a material impact on its financial statements.

XML 40 R4.htm IDEA: XBRL DOCUMENT v3.3.0.814
Consolidated Statements of Operations (Unaudited) - USD ($)
3 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Operating expenses:    
General and administrative (including stock-based compensation (Note 9)) $ 507,905 $ 357,341
Depreciation 75,879 184,884
Research and development (including stock-based compensation (Note 9)) 134,489 66,586
Total operating expenses 718,273 608,811
Loss from operations (718,273) (608,811)
Other expense:    
Interest expense, net 114,256 96,947
114,256 96,947
Net loss (832,529) (705,758)
Net loss attributable to the noncontrolling interest 1,295 1,071
Net loss attributable to Bion (831,234) (704,687)
Dividends on preferred stock (500) (500)
Net loss applicable to Bion's common stockholders $ (831,734) $ (705,187)
Net loss applicable to Bion's common stockholders per basic and diluted common share (in Dollars per share) $ (0.04) $ (0.04)
Weighted-average number of common shares outstanding:    
Basic and diluted (in Shares) 22,289,077 19,817,076
XML 41 R12.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 6 - Deferred Compensation
3 Months Ended
Sep. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

6.     DEFERRED COMPENSATION:


The Company owes deferred compensation to various employees, former employees and consultants totaling $900,524 as of September 30, 2015. Included in the deferred compensation balances as of September 30, 2015, are $282,727, $451 and $136,803 owed Bassani, Smith and Schafer, respectively, pursuant to extension agreements effective January 1, 2015, whereby unpaid compensation earned after January 1, 2015, would accrue interest at 4% per annum and could be converted into shares of the Company’s common stock at the election of the employee during the first five calendar days of any month. The conversion price shall be the average closing price of the Company’s common stock for the last 10 trading days of the immediately preceding month. During the three months ended September 30, 2015, Smith converted $82,861 of deferred compensation into 99,159 shares of the Company’s common stock at conversion prices between $0.76 and $0.96 per share. Also included are sums the Company owes various consultants, pursuant to various agreements, for deferred compensation of $239,059 as of September 30, 2015 with similar conversion terms as those described above for Bassani, Smith and Schafer, with the exception that the interest accrues at 3% per annum. The Company also owes a former employee and a current employee deferred compensation of $168,000 and $984, respectively, which is convertible into 226,168 and 1,025 shares, respectively, of the Company’s common stock as of September 30, 2015 and, the Company owes a former employee $72,500, which is not convertible and is non-interest bearing.


XML 42 R11.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 5 - Notes Payable - Affiliates
3 Months Ended
Sep. 30, 2015
Notes Payable - Affiliates [Member]  
Note 5 - Notes Payable - Affiliates [Line Items]  
Related Party Transactions Disclosure [Text Block]

5.     NOTES PAYABLE - AFFILIATES:


During the year ended June 30, 2015, the Company entered into promissory notes (“FY2015 Promissory Notes”), with effective dates of January 1, 2015, for initial principal amounts of $395,277, $15,956 and $80,764, with Dominic Bassani (“Bassani”), the Company’s Chief Executive Officer (“CEO”), Edward Schafer (“Schafer”), the Company’s Vice Chairman, and a major shareholder, (“Shareholder”), respectively. The FY2015 Promissory Notes accrued interest at 4% per annum and were payable on December 31, 2015. Effective September 8, 2015, the Company entered into new convertible promissory notes (“September 2015 Convertible Notes”) with Bassani, Shafer and Shareholder which replaced the FY2015 Promissory Notes. The initial principal balances of the September 2015 Convertible Notes were $405,831, $16,382 and $82,921, respectively. The new convertible promissory notes bear interest at 4% per annum, have maturity dates of December 31, 2017 and may be converted at the sole election of the noteholders into restricted common shares of the Company at a conversion price of $0.60 per share (Note 8).


XML 43 R23.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 1 - Organization, Nature of Business, Going Concern and Management's Plans (Details) - USD ($)
3 Months Ended 12 Months Ended
Jul. 15, 2015
Sep. 30, 2015
Sep. 30, 2014
Jun. 30, 2015
Jun. 30, 2014
Sep. 25, 2014
Note 1 - Organization, Nature of Business, Going Concern and Management's Plans (Details) [Line Items]            
Construction Loan   $ 7,800,000        
Impairment of Long-Lived Assets Held-for-use   0   $ 1,750,000    
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest   (832,529) $ (705,758) (5,640,000) $ (5,762,000)  
Working Capital   (9,802,000)        
Stockholders' Equity Attributable to Parent   (11,146,489)   (10,806,933)    
Proceeds from Issuance or Sale of Equity       1,000,940 944,400  
Proceeds from Warrant Exercises   174,189        
Note Receivable as Consideration for Warrants Exercise [Member]            
Note 1 - Organization, Nature of Business, Going Concern and Management's Plans (Details) [Line Items]            
Other Significant Noncash Transaction, Value of Consideration Received   $ 105,000        
Property, Plant And Equipment of PA-1 [Member]            
Note 1 - Organization, Nature of Business, Going Concern and Management's Plans (Details) [Line Items]            
Impairment of Long-Lived Assets Held-for-use       $ 1,750,000 $ 2,000,000  
PA-1 [Member]            
Note 1 - Organization, Nature of Business, Going Concern and Management's Plans (Details) [Line Items]            
Debt Instrument, Debt Default, Amount           $ 8,137,117
Certain Warrants with Expiry Dates On or Before December 31, 2015 [Member]            
Note 1 - Organization, Nature of Business, Going Concern and Management's Plans (Details) [Line Items]            
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) $ 1.05 $ 1.05        
Class of Warrant or Right, Exercised During Period (in Shares) 265,894          
Stock Issued During Period, Shares, Warrants Exercised (in Shares) 265,894          
Proceeds from Warrant Exercises $ 174,189          
Certain Warrants with Expiry Dates On or Before December 31, 2015 [Member] | Note Receivable as Consideration for Warrants Exercise [Member]            
Note 1 - Organization, Nature of Business, Going Concern and Management's Plans (Details) [Line Items]            
Other Significant Noncash Transaction, Value of Consideration Received $ 105,000 $ 105,000        
Minimum [Member]            
Note 1 - Organization, Nature of Business, Going Concern and Management's Plans (Details) [Line Items]            
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)   $ 0.75        
Minimum [Member] | Scenario, Forecast [Member]            
Note 1 - Organization, Nature of Business, Going Concern and Management's Plans (Details) [Line Items]            
Capital Required for Capital Adequacy   $ 2,500,000        
Maximum [Member]            
Note 1 - Organization, Nature of Business, Going Concern and Management's Plans (Details) [Line Items]            
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)   $ 3.00        
Maximum [Member] | Scenario, Forecast [Member]            
Note 1 - Organization, Nature of Business, Going Concern and Management's Plans (Details) [Line Items]            
Capital Required for Capital Adequacy   $ 50,000,000        
XML 44 R19.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 2 - Significant Accounting Policies (Tables)
3 Months Ended
Sep. 30, 2015
Accounting Policies [Abstract]  
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]
   

September 30,

2015

   

September 30,

2014

 

Warrants

    8,295,989       7,656,403  

Options

    4,413,870       4,258,870  

Convertible debt

    7,119,524       3,153,936  

Convertible preferred stock

    14,250       13,250  
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]
   

Three months ended

September 30,

2015

   

Three Months Ended

September 30,

2014

 

Shares issued – beginning of period

    22,089,650       19,579,619  

Shares held by subsidiaries (Note 9)

    (704,309 )     (704,309 )

Shares outstanding – beginning of period

    21,385,341       18,872,310  

Weighted average shares for fully vested stock bonuses (Note 10)

    600,000       840,000  

Weighted average shares issued during the period

    303,736       104,766  

Basic weighted average shares – end of period

    22,289,077       19,817,076  
XML 45 R15.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 9 - Stockholders' Equity
3 Months Ended
Sep. 30, 2015
Stockholders' Equity Note [Abstract]  
Stockholders' Equity Note Disclosure [Text Block]

9.     STOCKHOLDERS' EQUITY:


Series B Preferred stock:


At July 1, 2014, the Company had 200 shares of Series B redeemable convertible Preferred stock outstanding with a par value of $0.01 per share, convertible at the option of the holder at $2.00 per share, with dividends accrued and payable at 2.5% per quarter. The Series B Preferred stock is mandatorily redeemable at $2.00 per share by the Company three years after issuance and accordingly was classified outside of shareholders’ equity. The 200 shares have reached their maturity date, but due to the cash constraints of the Company have not been redeemed.


During the years ended June 30, 2015 and 2014, the Company declared dividends of $2,000 and $2,000 respectively. During the three months ended September 30, 2015, the Company declared dividends of $500. At September 30, 2015, accrued dividends payable are $8,500.


Common stock:


Holders of common stock are entitled to one vote per share on all matters to be voted on by common stockholders. In the event of liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share in all assets remaining after liabilities have been paid in full or set aside and the rights of any outstanding preferred stock have been satisfied. Common stock has no preemptive, redemption or conversion rights. The rights of holders of common stock are subject to, and may be adversely affected by, the rights of the holders of any outstanding series of preferred stock or any series of preferred stock the Company may designate in the future.


Centerpoint holds 704,309 shares of the Company’s common stock. These shares of the Company’s common stock held by Centerpoint are for the benefit of its shareholders without any beneficial interest. The Company accounts for these shares similar to treasury stock.


During the three months ended September 30, 2015, the Company issued 29,934 shares of the Company’s common stock at prices ranging from $0.76 to $1.15 per share for services valued at $25,952, in the aggregate, to consultants and an employee.


During the three months ended September 30, 2015, the Company issued 12,500 shares of the Company’s restricted common stock upon receipt of its subscription receivable of $13,125 for the exercise of 12,500 warrants.


During the three months ended September 30, 2015, the Company entered into subscription agreements to exercise certain warrants with expiry dates on or before December 31, 2015, into restricted shares of the Company’s common stock at a reduced exercise price of $1.05, for the period from June 30, 2015 through July 15, 2015. Pursuant to the offering, 265,894 warrants were exercised and 265,894 shares of the Company’s restricted common stock were issued resulting in cash proceeds of $174,189 and receipt of a $105,000 interest bearing, collateralized promissory note.


During the three months ended September 30, 2015, Smith and various consultants elected to convert $82,861 and $88,856 of deferred compensation, respectively, into 99,159 and 109,715 shares, respectively, of the Company’s common stock at conversion rates ranging from $0.76 to $1.15 per share.


Warrants:


As of September 30, 2015, the Company had approximately 8.3 million warrants outstanding, with exercise prices from $0.75 to $3.00 and expiring on various dates through December 31, 2020.


The weighted-average exercise price for the outstanding warrants is $1.24, and the weighted-average remaining contractual life as of September 30, 2015 is 4.5 years.


During the three months ended September 30, 2015, warrants to purchase 957,806 shares of common stock of the Company at prices between $2.25 and $3.10 per share expired.


During the three months ended September 30, 2015, the Company entered into subscription agreements to exercise certain warrants with expiry dates on or before December 31, 2015, into restricted shares of the Company’s common stock at a reduced exercise price of $1.05, for the period from July 1, 2015 through July 15, 2015. As a result of the offering, 265,894 warrants were exercised and 265,894 shares of the Company’s restricted common stock were issued resulting in cash proceeds of $174,189 and receipt of a collateralized promissory note receivable for $105,000, for the three months ended September 30, 2015.


Stock options:


The Company’s 2006 Consolidated Incentive Plan, as amended (the “2006 Plan”), provides for the issuance of options to purchase up to 22,000,000 shares of the Company’s common stock. Terms of exercise and expiration of options granted under the 2006 Plan may be established at the discretion of the Board of Directors, but no option may be exercisable for more than ten years.


The Company recorded compensation expense related to employee stock options of $15,320 and nil for the three months ended September 30, 2015 and 2014, respectively. The Company granted no options during the three months ended September 30, 2015 and 2014, respectively.


A summary of option activity under the 2006 Plan for the three months ended September 30, 2015 is as follows:


   

Options

   

Weighted-

Average

Exercise

Price

   

Weighted-

Average

Remaining

Contractual

Life

   

Aggregate

Intrinsic

Value

 

Outstanding at July 1, 2015

    4,413,870     $ 1.88       4.1       -  

Granted

    -       -                  

Exercised

    -       -                  

Forfeited

    -       -                  

Expired

    -       -                  

Outstanding at September 30, 2015

    4,413,870     $ 1.88       4.1     $ 253,000  

Exercisable at September 30, 2015

    4,313,870     $ 1.91       4.0     $ 213,000  

The following table presents information relating to nonvested stock options as of September 30, 2015:


   

Options

   

Weighted Average

Grant-Date Fair

Value

 

Nonvested at July 1, 2015

    100,000     $ 0.76  

Granted

    -       -  

Vested

    -       -  

Nonvested at September 30, 2015

    100,000     $ 0.76  

The total fair value of stock options that vested during the three months ended September 30, 2015 and 2014 was nil for both periods, respectively. As of September 30, 2015, the Company had $35,146 of unrecognized compensation cost related to stock options.


Stock-based employee compensation charges in operating expenses in the Company’s financial statements for the three months ended September 30, 2015 and 2014 are as follows:


   

Three months ended

September 30,

2015

   

Three months ended

September 30,

2014

 

General and administrative:

               

Fair value of stock options expensed

  $ 1,838     $ -  

Total

  $ 1,838     $ -  
                 

Research and development:

               

Fair value of stock options expensed

  $ 13,482     $ -  

Total

  $ 13,482     $ -  

XML 46 R13.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 7 - Loan Payable
3 Months Ended
Sep. 30, 2015
Debt Disclosure [Abstract]  
Debt Disclosure [Text Block]

7.     LOAN PAYABLE:


As of September 30, 2015, PA-1, the Company’s wholly-owned subsidiary, owes $7,754,000 under the terms of the Pennvest Loan related to the construction of the Kreider 1 System. The terms of the Pennvest Loan provide for funding of up to $7,754,000 which is to be repaid by interest-only payments for three years, followed by an additional ten-year amortization of principal. The Pennvest Loan accrues interest at 2.547% for years 1 through 5 and 3.184% for years 6 through maturity. The Pennvest Loan requires minimum annual principal payments of approximately $574,000 in fiscal year 2013, $704,000 in fiscal year 2014, $723,000 in fiscal year 2015, $741,000 in fiscal year 2016, $760,000 in fiscal year 2017 and $4,252,000 thereafter. The Pennvest Loan is collateralized by the Kreider 1 System and by a pledge of all revenues generated from Kreider 1 including, but not limited to, revenues generated from nutrient reduction credit sales and by-product sales. In addition, in consideration for the excess credit risk associated with the project, Pennvest is entitled to participate in the profits from Kreider 1 calculated on a net cash flow basis, as defined. The Company has incurred interest expense related to the Pennvest Loan of $49,374 for both of the three months ended September 30, 2015 and 2014, respectively. As of September 30, 2015, the accrued interest and late charges related to the Pennvest Loan total $635,166. Based on the limited development of the depth and breadth of the Pennsylvania nutrient reduction credit market to date, PA-1 has commenced negotiations with Pennvest related to forbearance and/or re-structuring the obligations under the Pennvest Loan. In the context of such negotiations, PA-1 has elected not to make interest payments to Pennvest on the Pennvest Loan since January 2013. Additionally, the Company has not made any principal payments, which were to begin in fiscal 2013, and, therefore, the Company has classified the Pennvest Loan as a current liability as of September 30, 2015.


On September 25, 2014, Pennvest exercised its right to declare the Pennvest Loan in default and has accelerated the Pennvest Loan and demanded that PA-1 pay $8,137,117 (principal, interest plus late charges) on or before October 24, 2014. PA-1 did not make the payment and does not have the resources to make the payment demanded by Pennvest. PA-1 has commenced discussions and negotiations with Pennvest concerning this matter but Pennvest has rejected PA-1’s proposal made during the fall of 2014. Neither party has any formal proposal as of the date of this report. Subsequent discussions/negotiations have not led to any resolution of the outstanding matters as of this date. It is not possible at this date to predict the outcome of such negotiations, but the Company believes that a loan modification agreement may be reached that will allow PA-1 and Pennvest time for the development of a more robust market for nutrient reductions in Pennsylvania, of which there is no assurance. PA-1 and Bion will continue to evaluate various options with regard to Kreider 1 over the next 30-180 days.


In connection with the Pennvest Loan financing documents, the Company provided a ‘technology guaranty’ regarding nutrient reduction performance of Kreider 1 which was structured to expire when Kreider 1’s nutrient reduction performance had been demonstrated. During August 2012 the Company provided Pennvest (and the PADEP) with data demonstrating that the Kreider 1 System had surpassed the requisite performance criteria and that the Company’s ‘technology guaranty’ was met. As a result, the Pennvest Loan is solely an obligation of PA-1.


XML 47 R14.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 8 - Convertible Notes Payable - Affiliates
3 Months Ended
Sep. 30, 2015
Convertible Debt [Abstract]  
Convertible Debt [Text Block]

8.     CONVERTIBLE NOTES PAYABLE - AFFILIATES:


January 2015 Convertible Notes


The January 2015 Convertible Notes accrue interest at 4% per annum and are due and payable on December 31, 2017. The January 2015 Convertible Notes (including accrued interest, plus all future deferred compensation), are convertible, at the sole election of the noteholder, into Units consisting of one share of the Company’s common stock and one quarter warrant to purchase a share of the Company’s common stock, at a price of $0.50 per Unit until December 31, 2020. The warrant contained in the Unit shall be exercisable at $1.00 per share until December 31, 2020. The original conversion price of $0.50 per Unit approximated the fair value of the Units at the date of the agreements; therefore no beneficial conversion feature exists. Management evaluated the terms and conditions of the embedded conversion features based on the guidance of ASC 815-15 “Embedded Derivatives” to determine if there was an embedded derivative requiring bifurcation. An embedded derivative instrument (such as a conversion option embedded in the deferred compensation) must be bifurcated from its host instruments and accounted for separately as a derivative instrument only if the “risks and rewards” of the embedded derivative instrument are not “clearly and closely related” to the risks and rewards of the host instrument in which it is embedded. Management concluded that the embedded conversion feature of the deferred compensation was not required to be bifurcated because the conversion feature is clearly and closely related to the host instrument, and because of the Company’s limited trading volume that indicates the feature is not readily convertible to cash in accordance with ASC 815-10, “Derivatives and Hedging”.


As of September 30, 2015, the January 2015 Convertible Note balances, including accrued interest, owed Bassani, Smith and Schafer were $1,508,202, $783,188 and $389,566, respectively. During the three months ended September 30, 2015, the Company recorded interest expense of $26,248 related to the January 2015 Convertible Notes.


September 2015 Convertible Notes


During the three months ended September 30, 2015, the Company entered into September 2015 Convertible Notes with Bassani, Shafer and Shareholder which replaced the previously issued FY2015 Promissory Notes. The initial principal balances of the September 2015 Convertible Notes were $405,831, $16,382 and $82,921, respectively. The September 2015 Convertible Notes bear interest at 4% per annum, have maturity dates of December 31, 2017 and may be converted at the sole election of the noteholders into restricted common shares of the Company at a conversion price of $0.60 per share. As the conversion price of $0.60 approximated the fair value of the common shares at the date of the September 2015 Convertible Notes, no beneficial conversion feature exists. The Company recorded interest expense related to the 2015 Convertible Notes of $1,218 for the three months ended September 30, 2015.


XML 48 R16.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 10 - Commitments and Contingencies
3 Months Ended
Sep. 30, 2015
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Disclosure [Text Block]

10.     COMMITMENTS AND CONTINGENCIES:


Employment and consulting agreements: 


Smith has held the positions of Director, President and General Counsel of Company and its subsidiaries under various agreements and terms since March 2003. During September 2014, Smith agreed to continue his employment agreement through April 15, 2015 and also agreed to continue to defer his temporarily reduced salary of $14,000 per month until such date. On February 10, 2015, the Company executed an Extension Agreement with Smith pursuant to which Smith extended his employment with the Company to December 31, 2015 (with the Company having an option to extend his employment an additional six months). As part of the Extension Agreement, the balance of Smith’s existing convertible note payable as of December 31, 2014, adjusted for conversions subsequent to that date, was replaced with a new convertible note with an initial principal amount of $760,520 with terms that i) materially reduce the interest rate by 50% (from 8% to 4%), ii) increases the conversion price by 11% (from $0.45 to $0.50), iii) sets the conversion price at a fixed price so there can be no further reductions, iv) reduces the number of warrants received on conversion by 75% (from 1 warrant per unit to 1/4 per unit) and v) extends the maturity date to December 31, 2017. Additionally, pursuant to the Extension Agreement, Smith: i) will continue to defer his cash compensation ($18,000 per month) until the Board of Directors re-instates cash payments to all employees and consultants who are deferring their compensation, ii) cancelled 150,000 contingent stock bonuses previously granted to him by the Company, iii) has been granted 150,000 new options which vested immediately and iv) outstanding options and warrants owned by Smith (and his donees) have been extended and had the exercise prices reduced to $1.50 (if the exercise price exceeded $1.50).


Since March 31, 2005, the Company has had various agreements with Brightcap and/or Bassani, through which the services of Bassani are provided. The Board appointed Bassani as the Company's CEO effective May 13, 2011. During the fiscal years 2012 and 2013, Bassani entered into extension agreements whereby he was awarded fully vested stock grants totaling 600,000 shares, 500,000 shares of which are to be issued January 15, 2016 and 100,000 shares are to be issued January 15, 2017. The stock grants were expensed in the years they were awarded as they are fully vested. On February 10, 2015, the Company executed an Extension Agreement with Bassani pursuant to which Bassani extended the term of his service to the Company to December 31, 2017, (with the Company having an option to extend the term an additional six months.) As part of the agreement, the Company’s then existing loan payable, deferred compensation and convertible note payable to Bassani, were restructured into two promissory notes as follows: a) The sum of the cash loaned by Bassani to the Company of $279,000 together with $116,277 of unreimbursed expenses through December 31, 2014, were placed into a new promissory note with initial principal of $395,277 which was due and payable on December 31, 2015 and now has been replaced with a September 2015 Convertible Note (Note 8). In connection with these sums and the new promissory note, Bassani was issued warrants to purchase 592,916 shares of the Company’s common stock at a price of $1.00 until December 31, 2020; and b) the remaining balances of the Company’s accrued obligations to Bassani ($1,464,545) were replaced with a new convertible promissory note with terms that compared with the largest prior convertible note obligation to Bassani: i) materially reduce the interest rate by 50% (from 8% to 4%), ii) increase the conversion price by 11% (from $0.45 to $0.50), iii) sets the conversion price at a fixed price so there can be no further reductions, iv) reduces the number of warrants received on conversion by 75% (from 1 warrant per unit to 1/4 per unit) and v) extends the maturity date to December 31, 2017 (Note 8). Additionally, pursuant to the Extension Agreement, Bassani i) will continue to defer his cash compensation ($31,000 per month) until the Board of Directors re-instates cash payments to all employees and consultants who are deferring their compensation, ii) cancelled 250,000 contingent stock bonuses previously granted to him by the Company, iii) has been granted 450,000 new options which vested immediately and iv) outstanding options and warrants owned by Bassani (and his donees) have been extended and had the exercise prices reduced to $1.50 (if the exercise price exceeded $1.50).


On February 10, 2015, the Company entered into an agreement with Schafer pursuant to which Schafer will continue to provide services to the Company through December 31, 2015. Additionally, pursuant to the agreement, i) the exercise period of outstanding options and warrants owned by Schafer have been extended, and ii) 25,000 contingent stock bonuses previously granted to Schafer have been cancelled by the Company.


Contingent stock bonuses:


The Company has declared contingent deferred stock bonuses to its key employees and consultants at various times throughout the years. The stock bonuses are contingent upon the Company’s stock price exceeding a certain target price per share, and the grantees still being employed by or providing services to the Company at the time the target prices are reached.


The Company’s outstanding contingent stock bonuses as of September 30, 2015 are as follows:


Target Price per share

  $ 5.00     $ 10.00     $ 20.00  

Number of shares

    50,000       40,000       27,500  

Execution/exercise bonuses:


As part of agreements the Company entered into with Bassani and Smith effective May 15, 2013, they were each granted the following: a) a 50% execution/exercise bonus which shall be applied upon the effective date of the notice of intent to exercise (for options and warrants) or issuance event, as applicable, of any currently outstanding and/or subsequently acquired  options, warrants and/or  contingent stock bonuses owned by each (and/or their donees) as follows: i) in the case of exercise by payment of cash, the bonus shall take the form of reduction of the exercise price; ii) in the case of cashless exercise, the bonus shall be applied to reduce the exercise price prior to the cashless exercise calculations; and iii) with regard to contingent stock bonuses, issuance shall be triggered upon the Company’s common stock reaching a closing price equal to 50% of currently specified price; and b) the right to extend the exercise period of all or part of the applicable options and warrants for up to five years (one year at a time) by annual payments of $.05 per option or warrant to the Company on or before a date during the three months prior to expiration of the exercise period at least three business days before the end of the expiration period.


During the year ended June 30, 2014, the Company extended execution/exercise bonuses with the same terms as described above to Schafer and to Jon Northrop, the Company’s other board member.


As of September 30, 2015, the execution/exercise bonus was applicable to 2,945,000 of the Company’s outstanding options and 6,759,500 of the Company’s outstanding warrants.


Litigation:


On September 25, 2014, Pennvest exercised its right to declare the Pennvest Loan in default and has accelerated the Pennvest Loan and has demanded that PA-1 pay $8,137,117 (principal, interest plus late charges) on or before October 24, 2014. PA-1 did not make the payment and does not have the resources to make the payment demanded by Pennvest. During August 2012, the Company provided Pennvest (and the PADEP) with data demonstrating that the Kreider 1 system met the ‘technology guaranty’ standards which were incorporated in the Pennvest financing documents and, as a result, the Pennvest Loan is now solely an obligation of PA-1. No litigation has commenced related to this matter but such litigation is likely if negotiations do not produce a resolution (Note 1 and Note 7).


The Company currently is not involved in any other material litigation.


XML 49 R34.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 9 - Stockholders' Equity (Details)
3 Months Ended 12 Months Ended
Jul. 15, 2015
USD ($)
$ / shares
shares
Jul. 01, 2014
$ / shares
shares
Sep. 30, 2015
USD ($)
$ / shares
shares
Sep. 30, 2014
USD ($)
shares
Jun. 30, 2015
USD ($)
$ / shares
shares
Jun. 30, 2014
USD ($)
Note 9 - Stockholders' Equity (Details) [Line Items]            
Common Stock Voting Rights Votes Per Share     1      
Treasury Stock, Number of Shares Held     704,309      
Stock Issued During Period, Shares, Issued for Services     29,934      
Stock Issued During Period, Value, Issued for Services (in Dollars) | $     $ 25,952      
Proceeds from Warrant Exercises (in Dollars) | $     $ 174,189      
Class of Warrant or Right, Outstanding     8,300,000      
Weighted Average Exercise Price for Outstanding Warrants (in Dollars per share) | $ / shares     $ 1.24      
Weighted Average Remaining Contractual Life for Outstanding Warrants     4 years 6 months      
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross     0 0    
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options (in Dollars) | $     $ 35,146      
Note Receivable as Consideration for Warrants Exercise [Member]            
Note 9 - Stockholders' Equity (Details) [Line Items]            
Other Significant Noncash Transaction, Value of Consideration Received (in Dollars) | $     $ 105,000      
Series B Preferred Stock [Member]            
Note 9 - Stockholders' Equity (Details) [Line Items]            
Preferred Stock, Shares Outstanding   200 200   200  
Preferred Stock, Par or Stated Value Per Share (in Dollars per share) | $ / shares   $ 0.01 $ 0.01   $ 0.01  
Preferred Stock, Redemption Price Per Share (in Dollars per share) | $ / shares   $ 2.00        
Preferred Stock, Dividend Rate, Percentage   2.50%        
Convertible Preferred Stock, Redemption, Period   3 years        
Dividends, Preferred Stock (in Dollars) | $     $ 500   $ 2,000 $ 2,000
Dividends Payable (in Dollars) | $     $ 8,500      
Expired [Member]            
Note 9 - Stockholders' Equity (Details) [Line Items]            
Class of Warrant or Right, Number of Securities Called by Warrants or Rights     957,806      
Employee Stock Option [Member]            
Note 9 - Stockholders' Equity (Details) [Line Items]            
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized     22,000,000      
Allocated Share-based Compensation Expense (in Dollars) | $     $ 15,320 $ 15,320    
Employees and Consultants [Member]            
Note 9 - Stockholders' Equity (Details) [Line Items]            
Stock Issued During Period, Value, Issued for Services (in Dollars) | $     $ 25,952      
President [Member]            
Note 9 - Stockholders' Equity (Details) [Line Items]            
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ / shares     $ 1.50      
Deferred Compensation Converted to Common Stock, Amount (in Dollars) | $     $ 82,861      
Deferred Compensation Converted to Common Stock, Shares     99,159      
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross     150,000      
Consultants [Member]            
Note 9 - Stockholders' Equity (Details) [Line Items]            
Deferred Compensation Converted to Common Stock, Amount (in Dollars) | $     $ 88,856      
Deferred Compensation Converted to Common Stock, Shares     109,715      
Subscriptions Receivable [Member]            
Note 9 - Stockholders' Equity (Details) [Line Items]            
Class of Warrant or Right, Exercised During Period     12,500      
Subscriptions Receivable [Member] | Restricted Stock [Member]            
Note 9 - Stockholders' Equity (Details) [Line Items]            
Stock Issued During Period, Shares, New Issues     12,500      
Stock Issued During Period, Value, New Issues (in Dollars) | $     $ 13,125      
Certain Warrants with Expiry Dates On or Before December 31, 2015 [Member]            
Note 9 - Stockholders' Equity (Details) [Line Items]            
Class of Warrant or Right, Exercised During Period 265,894          
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ / shares $ 1.05   $ 1.05      
Proceeds from Warrant Exercises (in Dollars) | $ $ 174,189          
Class of Warrant or Right, Number of Securities Called by Warrants or Rights     100,000      
Certain Warrants with Expiry Dates On or Before December 31, 2015 [Member] | Note Receivable as Consideration for Warrants Exercise [Member]            
Note 9 - Stockholders' Equity (Details) [Line Items]            
Other Significant Noncash Transaction, Value of Consideration Received (in Dollars) | $ $ 105,000   $ 105,000      
Certain Warrants with Expiry Dates On or Before December 31, 2015 [Member] | For the Period from June 30, 2015 Through July 15, 2015 [Member] | Subscription Agreement [Member]            
Note 9 - Stockholders' Equity (Details) [Line Items]            
Class of Warrant or Right, Exercised During Period     265,894      
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ / shares     $ 1.05      
Common Stock, Shares Issued upon Exercise of Warrants     265,894      
Proceeds from Warrant Exercises (in Dollars) | $     $ 174,189      
Minimum [Member]            
Note 9 - Stockholders' Equity (Details) [Line Items]            
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ / shares     $ 0.75      
Minimum [Member] | Expired [Member]            
Note 9 - Stockholders' Equity (Details) [Line Items]            
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ / shares     2.25      
Minimum [Member] | Employees and Consultants [Member]            
Note 9 - Stockholders' Equity (Details) [Line Items]            
Share Price (in Dollars per share) | $ / shares     0.76      
Minimum [Member] | President and Various Consultants [Member]            
Note 9 - Stockholders' Equity (Details) [Line Items]            
Deferred Compensation Converted to Common Stock, Conversion Rate (in Dollars per share) | $ / shares     0.76      
Maximum [Member]            
Note 9 - Stockholders' Equity (Details) [Line Items]            
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ / shares     3.00      
Maximum [Member] | Expired [Member]            
Note 9 - Stockholders' Equity (Details) [Line Items]            
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share) | $ / shares     $ 3.10      
Maximum [Member] | Employee Stock Option [Member]            
Note 9 - Stockholders' Equity (Details) [Line Items]            
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period     10 years      
Maximum [Member] | Employees and Consultants [Member]            
Note 9 - Stockholders' Equity (Details) [Line Items]            
Share Price (in Dollars per share) | $ / shares     $ 1.15      
Maximum [Member] | President and Various Consultants [Member]            
Note 9 - Stockholders' Equity (Details) [Line Items]            
Deferred Compensation Converted to Common Stock, Conversion Rate (in Dollars per share) | $ / shares     $ 1.15      
XML 50 R21.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 9 - Stockholders' Equity (Tables)
3 Months Ended
Sep. 30, 2015
Stockholders' Equity Note [Abstract]  
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]
   

Options

   

Weighted-

Average

Exercise

Price

   

Weighted-

Average

Remaining

Contractual

Life

   

Aggregate

Intrinsic

Value

 

Outstanding at July 1, 2015

    4,413,870     $ 1.88       4.1       -  

Granted

    -       -                  

Exercised

    -       -                  

Forfeited

    -       -                  

Expired

    -       -                  

Outstanding at September 30, 2015

    4,413,870     $ 1.88       4.1     $ 253,000  

Exercisable at September 30, 2015

    4,313,870     $ 1.91       4.0     $ 213,000  
Schedule of Nonvested Share Activity [Table Text Block]
   

Options

   

Weighted Average

Grant-Date Fair

Value

 

Nonvested at July 1, 2015

    100,000     $ 0.76  

Granted

    -       -  

Vested

    -       -  

Nonvested at September 30, 2015

    100,000     $ 0.76  
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]
   

Three months ended

September 30,

2015

   

Three months ended

September 30,

2014

 

General and administrative:

               

Fair value of stock options expensed

  $ 1,838     $ -  

Total

  $ 1,838     $ -  
                 

Research and development:

               

Fair value of stock options expensed

  $ 13,482     $ -  

Total

  $ 13,482     $ -  
XML 51 R26.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 2 - Significant Accounting Policies (Details) - Earnings Per Share, Basic and Diluted - shares
3 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Jun. 30, 2015
Earnings Per Share, Basic and Diluted [Abstract]      
Shares issued – beginning of period 22,606,852 19,579,619 22,089,650
Shares held by subsidiaries (Note 9) (704,309) (704,309)  
Shares outstanding – beginning of period 21,902,543 18,872,310 21,385,341
Weighted average shares for fully vested stock bonuses (Note 10) 600,000 840,000  
Weighted average shares issued during the period 303,736 104,766  
Basic weighted average shares – end of period 22,289,077 19,817,076  
XML 52 R5.htm IDEA: XBRL DOCUMENT v3.3.0.814
Consolidated Statements of Changes in Equity (Deficit) (Unaudited) - 3 months ended Sep. 30, 2015 - USD ($)
Series B Preferred Stock [Member]
Additional Paid-in Capital [Member]
Series B Preferred Stock [Member]
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Noncontrolling Interest [Member]
Total
Balances, amount at Jun. 30, 2015       $ 100,889,127 $ (111,696,060) $ 63,380 $ (10,743,553)
Balances, shares (in Shares) at Jun. 30, 2015     22,089,650        
Issuance of common stock for services       25,952     $ 25,952
Issuance of common stock for services (in Shares)     29,934       29,934
Vesting of options for services       15,320     $ 15,320
Warrants exercised for common stock       279,189     279,189
Warrants exercised for common stock (in Shares)     278,394        
Dividend on Series B preferred stock $ (500) $ (500)          
Conversion of debt       171,717     171,717
Conversion of debt (in Shares)     208,874        
Net loss         (831,234) (1,295) (832,529)
Balances, amount at Sep. 30, 2015       $ 101,380,805 $ (112,527,294) $ 62,085 $ (11,084,404)
Balances, shares (in Shares) at Sep. 30, 2015     22,606,852        
XML 53 R10.htm IDEA: XBRL DOCUMENT v3.3.0.814
Note 4 - Promissory Note Receivable
3 Months Ended
Sep. 30, 2015
Receivables [Abstract]  
Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

4.     PROMISSORY NOTE RECEIVABLE:


During the months ended September 30, 2015, the Company received an interest bearing promissory note for $105,000. The promissory note bears interest at 4% per annum, is collateralized, and is payable on January 31, 2016. The promissory note receivable was issued as consideration for an unaffiliated investor’s subscription agreement to exercise warrants into 100,000 restricted common shares of the Company’s common stock at $1.05 per share. The Company recorded interest income of $828 for the three months ended September 30, 2015.


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Note 3 - Property and Equipment (Details) - USD ($)
3 Months Ended 12 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Jun. 30, 2015
Property, Plant and Equipment [Abstract]      
Impairment of Long-Lived Assets Held-for-use $ 0   $ 1,750,000
Depreciation $ 75,879 $ 184,884  
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Note 10 - Commitments and Contingencies (Details) - USD ($)
3 Months Ended 24 Months Ended
Sep. 25, 2014
Sep. 30, 2015
Sep. 30, 2014
Dec. 31, 2013
Jun. 30, 2015
Dec. 31, 2014
Dec. 13, 2014
Note 10 - Commitments and Contingencies (Details) [Line Items]              
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares)   0 0        
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number (in Shares)   4,413,870     4,413,870    
Class of Warrant or Right, Outstanding (in Shares)   8,300,000          
Exercise Bonus [Member]              
Note 10 - Commitments and Contingencies (Details) [Line Items]              
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number (in Shares)   2,945,000          
Class of Warrant or Right, Outstanding (in Shares)   6,759,500          
Exercise Bonus [Member] | CEO and President [Member]              
Note 10 - Commitments and Contingencies (Details) [Line Items]              
Execution Bonus as a Percentage of Exercised Options and Warrants   50.00%          
Contingent Stock Bonus, Percentage Threshold for Issuance   50.00%          
Extension of Exercise Period, Annual Payment per Option or Warrant (in Dollars per share)   $ 0.05          
President [Member]              
Note 10 - Commitments and Contingencies (Details) [Line Items]              
Monthly Officers' Cash Compensation (in Dollars)   $ 18,000          
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares)   150,000          
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)   $ 1.50          
President [Member] | Stock Bonus [Member]              
Note 10 - Commitments and Contingencies (Details) [Line Items]              
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period (in Shares)   150,000          
Chief Executive Officer [Member]              
Note 10 - Commitments and Contingencies (Details) [Line Items]              
Monthly Officers' Cash Compensation (in Dollars)   $ 31,000          
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares)   450,000          
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)   $ 1.50          
Due to Related Parties, Current (in Dollars)           $ 279,000  
Unreimbursed Expense (in Dollars)           $ 116,277  
Chief Executive Officer [Member] | Stock Bonus [Member]              
Note 10 - Commitments and Contingencies (Details) [Line Items]              
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period (in Shares)   250,000          
Executive Vice Chairman [Member] | Stock Bonus [Member]              
Note 10 - Commitments and Contingencies (Details) [Line Items]              
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period (in Shares)   25,000          
Extension Agreement One [Member] | President [Member]              
Note 10 - Commitments and Contingencies (Details) [Line Items]              
Monthly Officers' Compensation (in Dollars)   $ 14,000          
Extension Agreement One [Member] | Chief Executive Officer [Member]              
Note 10 - Commitments and Contingencies (Details) [Line Items]              
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares)       600,000      
Extension Agreement One [Member] | Issuing Date, January 15, 2016 [Member] | Chief Executive Officer [Member]              
Note 10 - Commitments and Contingencies (Details) [Line Items]              
Common Stock, Capital Shares Reserved for Future Issuance (in Shares)       500,000      
Extension Agreement One [Member] | Issuing Date, January 15, 2017 [Member] | Chief Executive Officer [Member]              
Note 10 - Commitments and Contingencies (Details) [Line Items]              
Common Stock, Capital Shares Reserved for Future Issuance (in Shares)       100,000      
Pennvest Loan [Member]              
Note 10 - Commitments and Contingencies (Details) [Line Items]              
Loss Contingency, Damages Sought, Value (in Dollars) $ 8,137,117            
New Smith Note [Member] | President [Member]              
Note 10 - Commitments and Contingencies (Details) [Line Items]              
Convertible Notes Payable (in Dollars)   $ 760,520          
New Smith Note [Member] | Convertible Debt [Member] | President [Member]              
Note 10 - Commitments and Contingencies (Details) [Line Items]              
Debt Instrument, Interest Rate Reduction, Percentage   50.00%          
Debt Instrument, Interest Rate, Stated Percentage   4.00%       8.00%  
Debt Instrument, Convertible Conversion Price, Incease, Percentage   11.00%          
Debt Instrument, Convertible, Conversion Price (in Dollars per share)   $ 0.50       $ 0.45  
Accrued Interest on Deferred Compensation (in Dollars)   $ 0.75          
Number of Warrants Per Unit           1  
Cash Note [Member] | Chief Executive Officer [Member]              
Note 10 - Commitments and Contingencies (Details) [Line Items]              
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)   $ 1.00          
Debt Instrument, Face Amount (in Dollars)   $ 395,277          
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares)   592,916          
Mr. Bassani [Member]              
Note 10 - Commitments and Contingencies (Details) [Line Items]              
Convertible Notes Payable (in Dollars)   $ 1,464,545          
Mr. Bassani [Member] | Convertible Debt [Member] | Chief Executive Officer [Member]              
Note 10 - Commitments and Contingencies (Details) [Line Items]              
Debt Instrument, Interest Rate Reduction, Percentage   50.00%          
Debt Instrument, Interest Rate, Stated Percentage   4.00%         8.00%
Debt Instrument, Convertible Conversion Price, Incease, Percentage   11.00%          
Debt Instrument, Convertible, Conversion Price (in Dollars per share)   $ 0.50       $ 0.45  
Number of Warrants Per Unit           1  
Number of Warrants Per Unit, Reduction, Percentage   75.00%          
Number of Units Per Warrant   4          
Maximum [Member]              
Note 10 - Commitments and Contingencies (Details) [Line Items]              
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)   $ 3.00          
Maximum [Member] | Exercise Bonus [Member] | CEO and President [Member]              
Note 10 - Commitments and Contingencies (Details) [Line Items]              
Extension of Exercise Period   5 years          
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Note 3 - Property and Equipment (Tables)
3 Months Ended
Sep. 30, 2015
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment [Table Text Block]
   

September 30,

2015

   

June 30,

2015

 

Machinery and equipment

  $ 2,923,577     $ 2,923,577  

Buildings and structures

    1,385,125       1,385,125  

Computers and office equipment

    176,940       175,248  
      4,485,642       4,483,950  

Less accumulated depreciation

    (2,581,042 )     (2,506,731 )
    $ 1,904,600     $ 1,977,219