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Smaller Reporting Company
Q3
2016
EnSync, Inc.
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Description
of Business</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">EnSync,
Inc. and its subsidiaries ("EnSync," "we," "us," "our," or the "Company") develop,
license, and manufacture innovative energy management systems solutions serving the commercial and industrial ("C&I")
building, utility, and off-grid markets.  Incorporated in 1998, EnSync is headquartered in Menomonee Falls, Wisconsin, USA
with offices in Madison, Wisconsin, Petaluma, California, Honolulu, Hawaii, and Shanghai, China.  In August 2015, we changed
our corporate name from ZBB Energy Corporation to EnSync, Inc., and we regularly use the name EnSync Energy Systems for marketing
and branding purposes.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">EnSync
develops and commercializes application solutions for advanced energy management systems critical to the transition from a "coal-centric
economy" to one reliant on renewable energy sources.  EnSync synchronizes conventional utility, distributed generation
and storage assets to seamlessly ensure the least expensive and most reliable electricity available, thus enabling the future of
energy networks.  These advanced systems directly connect wind and solar equipment to the grid and other systems that can
form various levels of micro-grids as well as power quality regulation solutions.  EnSync brings vital power control and energy
storage solutions to problems caused by incorporation of increasingly pervasive renewable energy generating assets that are part
of the grid power transmission and distribution network used in commercial, industrial, and multi-tenant buildings.  The Company
also develops and commercializes energy management systems for off-grid applications such as island or remote power.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">We
recently began addressing our target markets through power purchase agreements ("PPAs") under which we agree to provide,
and the customer agrees to purchase, electricity from us at a fixed rate for a 20-year period.  Under this structure we develop
and supply a system that uses our and other companies' products and the customer receives the benefit of a low and fixed price
for electricity without any upfront costs.  Because this business model requires significant capital outlays, our monetization strategy is we either sell the PPAs outright
or enter into sale-leaseback transactions.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
condensed consolidated financial statements include the accounts of the Company and those of its wholly-owned subsidiaries ZBB
Energy Pty Ltd. (formerly known as ZBB Technologies, Ltd.), Century West PNL LLC, Kona CE, LLC, various other PPA subsidiaries,
its eighty-five percent owned subsidiary Holu Energy LLC, and its sixty percent owned subsidiary ZBB PowerSav Holdings Limited
located in Hong Kong, which was formed in connection with the Company's investment in a China joint venture.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Interim
Financial Data</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles
generally accepted in the United States ("US GAAP") for interim financial data and with the instructions to Form 10-Q
and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and notes required by US GAAP for
complete financial statements.  In the opinion of management, all adjustments (consisting only of adjustments of a normal
and recurring nature) considered necessary for fair presentation of the results of operations have been included.  Operating
results for the three and nine month periods ended March 31, 2016 are not necessarily indicative of the results that might be expected
for the year ending June 30, 2016.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
condensed consolidated balance sheet at June 30, 2015 has been derived from audited financial statements at that date, but does
not include all of the information and disclosures required by US GAAP.  For a more complete discussion of accounting policies
and certain other information, refer to the Company's annual report filed on Form 10-K for the fiscal year ended June 30, 2015
filed with the Securities and Exchange Commission on September 28, 2015.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Basis
of Presentation</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
accompanying condensed consolidated financial statements include the accounts of the Company and its wholly and majority-owned
subsidiaries and have been prepared in accordance with US GAAP.  All significant intercompany accounts and transactions have
been eliminated in consolidation.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Use
of Estimates</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions.  These
estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amount of revenues and expenses during the reporting period.  It
is reasonably possible that the estimates we have made may change in the near future.  Significant estimates underlying the
accompanying condensed consolidated financial statements include those related to:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 8pt Times New Roman, Times, Serif">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="width: 18pt; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; width: 18pt; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">the timing of revenue recognition;</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">allocation of purchase price in the business combination;</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">the allowance for doubtful accounts;</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">provisions for excess and obsolete inventory;</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">the lives and recoverability of property, plant and equipment and other long-lived assets, including goodwill;</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">contract costs, losses, and reserves;</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">warranty obligations;</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">income tax valuation allowances;</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">discount rates for finance and operating lease liabilities;</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">asset retirement obligations;</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">stock-based compensation; and</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">valuation of equity instruments and warrants.</font></td></tr>
</table>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Fair
Value of Financial Instruments</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company's financial instruments consist of cash and cash equivalents, restricted cash on deposit, accounts receivable, a note receivable,
accounts payable, bank loans, notes payable, equipment financing, lease obligations, asset retirement obligations, equity instruments,
and warrants.  The carrying amounts of the Company's financial instruments approximate their respective fair values due to
the relatively short-term nature of these instruments, except for the bank loans, notes payable, equipment financing, asset retirement
obligations, equity instruments, and warrants.  The carrying amounts of the bank loans and notes payable approximates fair
value due to the interest rate and terms approximating those available to us for similar obligations.  The interest rate on
the equipment financing obligation was imputed based on the requirements described in FASB ASC Topic 842-40-30-6. The asset
retirement obligation is calculated as the present value of the estimated fair value of the future obligation using the Company's
credit-adjusted risk-free rate. The fair value of the nonconvertible attribute and conversion option of the Series C Preferred
Stock and related Warrant was determined using the Option-Pricing Method ("OPM") as described in the AICPA Accounting
and Valuation Guide entitled Valuation of Privately-Held-Company Equity Securities Issued as Compensation and a "with"
and "without" methodology to bifurcate the Series C Preferred conversion feature.  The OPM model treats the various
equity securities as call options on the total equity value contingent upon each security's strike price or participation rights. 
The Black-Scholes inputs utilized for the OPM model were: (i) an aggregate equity value estimated based on the back-solve methodology
to reconcile the closing common stock price as of the valuation date; (ii) a term in alignment with the terms of the Supply Agreement;
(iii) a risk free rate from the Federal Reserve Board's H.15 release as of the transaction date; (iv) the volatility of the Company's
publicly traded stock price; and (v) the performance vesting requirements of the equity instruments that were expected to be met.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company accounts for the fair value of financial instruments in accordance with Financial Accounting Standards Board ("FASB")
Accounting Standards Codification ("ASC") Topic 820, "Fair Value Measurements and Disclosures."  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.  The degree of judgment utilized in measuring the fair value of assets
and liabilities generally correlates to the level or pricing observability.  FASB ASC Topic 820 describes a fair value hierarchy
based on the following three levels of inputs, of which the first two are considered observable and the last unobservable, that
may be used to measure fair value:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Level
1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access
at the measurement date.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Level
2 inputs are inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly, for
similar assets or liabilities in active markets.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Level
3 inputs are unobservable inputs for the asset or liability.  As such, the prices or valuation techniques require inputs that
are both significant to the fair value measurement and are unobservable.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Cash
and Cash Equivalents</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company considers all highly liquid investments with maturities of three months or less to be cash equivalents.  The Company
maintains its cash deposits at financial institutions predominately in the United States, Australia, Hong Kong, and China. 
The Company has not experienced any losses in such accounts.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Restricted
Cash on Deposit</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company had no restricted cash and $60,193 in restricted cash on deposit as of March 31, 2016 and June 30, 2015, respectively,
as collateral for certain credit arrangements.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0"><font style="font-style: normal"><b>Accounts
Receivable</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Credit
is extended based on an evaluation of a customer's financial condition.  Accounts receivable are stated at the amount the
Company expects to collect from outstanding balances.  The Company records allowances for doubtful accounts based on customer-specific
analysis and general matters such as current assessments of past due balances and economic conditions.  The Company writes
off accounts receivable against the allowance when they become uncollectible.  Accounts receivable are stated net of an allowance
for doubtful accounts of $10,878 as of March 31, 2016 and $11,074 as of June 30, 2015.  The composition of accounts receivable
by aging category is as follows as of:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" nowrap="nowrap" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">March 31, 2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" nowrap="nowrap" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">June 30, 2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 74%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Current</font></td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 10%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">11,226</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 10%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">4,291</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">30-60 days</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">101</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">60-90 days</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">24,713</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">3,555</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Over 90 days</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">1,486</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">105,248</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Total</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">37,526</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">113,093</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Inventories</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Inventories
are stated at the lower of cost or market.  Cost is computed using standard cost, which approximates actual cost, on a first-in,
first-out basis.  The Company provides inventory write-downs based on excess and obsolete inventories based on historical
usage.  The write-down is measured as the difference between the cost of the inventory and market based upon assumptions about usage
and charged to the provision for inventory, which is a component of cost of sales.  At the point of the loss recognition,
a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the
restoration or increase in that newly established cost basis.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Customer
Intangible Asset</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Customer
intangible assets are reviewed quarterly for impairment due to the expected short-term nature of the asset.  The customer
intangible asset is amortized as revenue from the acquired contracts is recognized in our condensed consolidated statements of
operations.  To date, there have been no write-offs recorded for impairments.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">As
of March 31, 2016, the gross carrying value of the customer intangible asset is $169,321 and the accumulated amortization is $46,206,
resulting in a net customer intangible asset of $123,115.  Amortization expense recognized during the three and nine months
ended March, 31, 2016 was $31,759 and $46,206, respectively.  There was no amortization expense recognized during the three
or nine months ended March 31, 2015.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Note
Receivable</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company has one note receivable from an unrelated party.  On December 18, 2015, the Company and the unrelated party amended
the terms of the note receivable.  The note matures on the earlier of (a) the date on which the unrelated party has secured
a total of $500,000 or more in additional financing from any source or (b) June 30, 2016 and is classified as "Note receivable"
in the financial statements.  We regularly evaluate the financial condition of the borrower to determine if any reserve for
an uncollectible amount should be established.  To date, no such reserve is required.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Deferred
PPA Project Costs</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Deferred
PPA project costs represents the costs that the Company capitalizes as project assets for arrangements that we accounted for as
real estate transactions after we have entered into a definitive sales arrangement, but before the sale is completed or before
we have met all criteria to recognize the sale as revenue.  We classify deferred PPA project costs as current if the completion
of the sale and the meeting of all revenue recognition criteria are expected within the next 12 months.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">If
a project is completed and begins commercial operation prior to entering into or the closing of a sales agreement, the completed
project will remain in project assets or deferred PPA project costs until the sale of such project closes.  Any income generated
by such project while it remains within project assets or deferred PPA project costs is accounted for as a reduction in our basis
in the project, which at the time of sale and meeting all revenue recognition criteria will be recorded within cost of sales.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Deferred
Customer Project Costs</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Deferred
customer project costs consist primarily of the costs of products delivered and services performed that are subject to additional
performance obligations or customer acceptance.  These deferred customer project costs are expensed at the time the related
revenue is recognized.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Project
Assets</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Project
assets consist primarily of capitalized costs which are incurred by the Company prior to the sale of the photovoltaic, storage
or energy management systems and power purchase agreement to a third-party.  These costs are typically for the construction,
installation and development of these projects.  Construction and installation costs include primarily material and labor
costs.  Development fees can include legal, consulting, permitting, and other similar costs.  Once we enter into a definitive
sales agreement, we reclassify project assets to deferred PPA project costs on our condensed consolidated balance sheet until the
sale is completed and we have met all of the criteria to recognize the sale as revenue, which is typically subject to real estate
revenue recognition requirements.  We expense project assets to cost of sales after each respective project asset is sold
to a customer and all revenue recognition criteria have been met (matching the expensing of costs to the underlying revenue recognition
method).  We classify project assets as current as the time required to develop, construct, and sell the projects is expected
within the next 12 months.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">We
review project assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. 
We consider a project commercially viable or recoverable if it is anticipated to be sold for a profit once it is either fully developed
or fully constructed.  We consider a partially developed or partially constructed project commercially viable or recoverable
if the anticipated selling price is higher than the carrying value of the related project assets.  We examine a number of
factors to determine if the project will be recoverable, the most notable of which include whether there are any changes in environmental,
ecological, permitting, market pricing, or regulatory conditions that impact the project.  Such changes could cause the costs
of the project to increase or the selling price of the project to decrease.  If a project is not considered recoverable, we
impair the respective project assets and adjust the carrying value to the estimated recoverable amount, with the resulting impairment
recorded within operating expenses.  The Company did not record any impairment charges during the three or nine months ended
March 31, 2016.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Property,
Plant and Equipment</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Land,
building, equipment, computers, furniture and fixtures are recorded at cost.  Maintenance, repairs and betterments are charged
to expense as incurred.  Depreciation is provided for all plant and equipment on a straight-line basis over the estimated
useful lives of the assets.  The estimated useful lives used for each class of depreciable asset are:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top; font: 8pt Times New Roman, Times, Serif">
<td style="width: 81%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="width: 19%; text-decoration: underline; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">Estimated
Useful Lives</font></td></tr>
<tr style="vertical-align: top; background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Manufacturing equipment</font></td>
<td style="text-align: center; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">3 - 7 years</font></td></tr>
<tr style="vertical-align: top; background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Office equipment</font></td>
<td style="text-align: center; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">3 - 7 years</font></td></tr>
<tr style="vertical-align: top; background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Building and improvements</font></td>
<td style="text-align: center; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">7 - 40 years</font></td></tr>
</table>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company completed a review of the estimated useful lives of specific assets for the nine months ended March 31, 2016 and determined
that there were no changes in the estimated useful lives of assets.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Impairment
of Long-Lived Assets</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
accordance with FASB ASC Topic 360, "Impairment or Disposal of Long-Lived Assets," the Company assesses potential impairments
to its long-lived assets including property, plant, equipment and intangible assets when there is evidence that events or changes
in circumstances indicate that the carrying value may not be recoverable.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">If
such an indication exists, the recoverable amount of the asset is compared to the asset's carrying value.  Any excess of the
asset's carrying value over its recoverable amount is expensed in the statement of operations.  In assessing value in use,
the estimated future cash flows are discounted to their present value using a pre-tax discount rate.  Management has determined
that there were no long-lived assets impaired as of March 31, 2016 and June 30, 2015.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Investment
in Investee Company</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Investee
companies that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity
method of accounting.  Whether or not the Company exercises significant influence with respect to an investee depends on an
evaluation of several factors including, among others, representation on the investee company's board of directors and ownership
level, which is generally a 20% to 50% interest in the voting securities of the investee company.  Under the equity method
of accounting, an investee company's accounts are not reported in the Company's condensed consolidated balance sheets and statements
of operations; however, the Company's share of the earnings or losses of the investee company is reflected in the caption ''Equity
in loss of investee company" in the condensed consolidated statements of operations.  The Company's carrying value in
an equity method investee company is reported in the caption ''Investment in investee company'' in the Company's condensed consolidated
balance sheets.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">When
the Company's carrying value in an equity method investee company is reduced to zero, no further losses are recorded in the Company's
condensed consolidated financial statements unless the Company guaranteed obligations of the investee company or has committed
additional funding.  When the investee company subsequently reports income, the Company will not record its share of such
income until it equals or exceeds the amount of its share of losses not previously recognized.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Goodwill</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Goodwill
is recognized as the excess cost of an acquired entity over the net amount assigned to assets acquired and liabilities assumed. 
Goodwill is not amortized but reviewed for impairment annually as of June 30 or more frequently if events or changes in circumstances
indicate that its carrying value may be impaired.  These conditions could include a significant change in the business climate,
legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
first step of the impairment test requires the comparing of a reporting unit's fair value to its carrying value.  If the carrying
value is less than the fair value, no impairment exists and the second step is not performed.  If the carrying value is higher
than the fair value, there is an indication that impairment may exist and the second step must be performed to compute the amount
of the impairment.  In the second step, the impairment is computed by estimating the fair values of all recognized and unrecognized
assets and liabilities of the reporting unit and comparing the implied fair value of reporting unit goodwill with the carrying
amount of that unit's goodwill.  The Company determined fair value as evidenced by market capitalization, and concluded that
there was no need for an impairment charge as of March 31, 2016 and June 30, 2015.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Accrued
Expenses</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Accrued
expenses consist of the Company's present obligations related to various expenses incurred during the period and includes a reserve
for estimated contract losses, other accrued expenses, and warranty obligations.  Included in accrued expenses as of June
30, 2015 was a reserve of approximately $685,000, for a product upgrade initiative established in the fourth quarter of fiscal
2014.  The product upgrade initiative was completed during the quarter ended March 31, 2016 and the unused reserve of $186,000
was reversed during the period.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Subsequent
to commercialization, installation and commissioning of units in the field, the Company garnered meaningful insights that resulted
in system design modifications and other general upgrades, which improved the performance, efficiency, and reliability of its systems. 
In the interest of enhancing customer satisfaction, the Company launched the product upgrade initiative to implement these improvements
at certain locations of its installed base through fiscal year 2016.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Warranty
Obligations</b></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company typically warrants its products for the shorter of twelve months after installation or eighteen months after date of shipment. 
Warranty costs are provided for estimated claims and charged to cost of product sales as revenue is recognized.  Warranty
obligations are also evaluated quarterly to determine a reasonable estimate for the replacement of potentially defective materials
of all energy storage systems that have been shipped to customers within the warranty period.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">While
the Company actively engages in monitoring and improving its evolving battery and production technologies, there is only a limited
product history and relatively short time frame available to test and evaluate the rate of product failure.  Should actual
product failure rates differ from the Company's estimates, revisions are made to the estimated rate of product failures and resulting
changes to the liability for warranty obligations.  In addition, from time to time, specific warranty accruals may be made
if unforeseen technical problems arise.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">As
of March 31, 2016 and June 30, 2015, included in the Company's accrued expenses were $106,738 and $176,967, respectively, related
to warranty obligations.  The following is a summary of accrued warranty activity as of:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" nowrap="nowrap" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">March 31, 2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" nowrap="nowrap" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">June 30, 2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 74%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Beginning balance</font></td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 10%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">176,967</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 10%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">731,910</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Accruals for warranties during the period</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">39,415</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">167,901</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Settlements during the period</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(316,903</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(480,683</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"><font style="font-size: 8pt; font-style: normal">Adjustments relating to preexisting warranties</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">207,259</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">(242,161</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"><font style="font-size: 8pt; font-style: normal">)</font></td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Ending balance</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">106,738</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">176,967</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Asset
Retirement Obligations</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
asset retirement obligation represents the estimated present value of amounts expected to be incurred to remove a solar power system,
repair the property to which it is affixed, pack and ship the equipment offsite at the end of the lease term.  The asset retirement
obligation is recognized in accordance with FASB ASC Topic 410, "Asset Retirement and Environmental Obligations." 
FASB ASC Topic 410 requires that the fair value of an asset's retirement obligation be recorded as a liability in the period in
which it is incurred and the corresponding cost capitalized by increasing the carrying amount of the related long-lived asset. 
Periodic accretion of the discount of the estimated liability is treated as accretion expense and included in depreciation and
amortization in the condensed consolidated statement of operations.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Revenue
Recognition</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Revenues
are recognized when persuasive evidence of a contractual arrangement exists, delivery has occurred or services have been rendered,
the seller's price to buyer is fixed and determinable, and collectability is reasonably assured.  The portion of revenue related
to installation and final acceptance, is deferred until such installation and final customer acceptance are completed.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">From
time to time, the Company may enter into separate agreements at or near the same time with the same customer.  The Company
evaluates such agreements to determine whether they should be accounted for individually as distinct arrangements or whether the
separate agreements are, in substance, a single multiple element arrangement.  The Company evaluates whether the negotiations
are conducted jointly as part of a single negotiation, whether the deliverables are interrelated or interdependent, whether the
fees in one arrangement are tied to performance in another arrangement, and whether elements in one arrangement are essential to
another arrangement.  The Company's evaluation involves significant judgment to determine whether a group of agreements might
be so closely related that they are, in effect, part of a single arrangement.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Our
collaboration agreements typically involve multiple elements or deliverables, including upfront fees, contract research and development,
milestone payments, technology licenses or options to obtain technology licenses, and royalties.  For these arrangements,
revenues are recognized in accordance with FASB ASC Topic 605-25,</font> <font style="font-style: normal">"Revenue Recognition
– Multiple Element Arrangements."  The Company's revenues associated with multiple element contracts is based on
the selling price hierarchy, which utilizes vendor-specific objective evidence ("VSOE") when available, third-party evidence
("TPE") if VSOE is not available, and if neither is available then the best estimate of the selling price is used. 
The Company utilizes best estimate for its multiple deliverable transactions as VSOE and TPE do not exist.  To be considered
a separate element, the product or service in question must represent a separate unit under SEC Staff Accounting Bulletin 104,
and fulfill the following criteria: the delivered item(s) has value to the customer on a standalone basis; there is objective and
reliable evidence of the fair value of the undelivered item(s); and if the arrangement includes a general right of return relative
to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in our control.
For arrangements containing multiple elements, revenue from time and materials based service arrangements is recognized as the
service is performed.  Revenue relating to undelivered elements is deferred at the estimated fair value until delivery of
the deferred elements.  If the arrangement does not meet all criteria above, the entire amount of the transaction is deferred
until all elements are delivered.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
portion of revenue related to engineering and development is recognized ratably upon delivery of the goods or services pertaining
to the underlying contractual arrangement, or revenue is recognized as certain activities are performed by the Company over the
estimated performance period.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company recognizes revenue for the sales of PPA systems following the guidance in FASB ASC Topic 360, "Accounting for Sales
of Real Estate."  We record the sale as revenue after the initial and continuing investment requirements have been met
and whether collectability from the buyer is reasonably assured.  We may align our revenue recognition and release our project
assets or deferred PPA project costs to cost of sales with the receipt of payment from the buyer if the sale has been consummated
and we have transferred the usual risks and rewards of ownership to the buyer.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company charges shipping and handling fees when products are shipped or delivered to a customer, and includes such amounts in product
revenues and shipping costs in cost of sales.  The Company reports its revenues net of estimated returns and allowances.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Total
revenues of $160,138 and $815,375 were recognized for the three and nine months ended March 31, 2016, respectively.  Revenues
for the three months ended March 31, 2016 were comprised of two significant customers (95% of revenues) and revenues for the nine
months ended March 31, 2016 were comprised of three significant customers (85% of revenues).  Total revenues of $584,817 and
$1,450,332 were recognized for the three and nine months ended March 31, 2015, respectively.  Revenues for the three months
ended March 31, 2015 were comprised of two significant customers (88% of revenue) and revenues for the nine months ended March
31, 2015 were comprised of two significant customers (79% of revenue).  The Company had one significant customer with an outstanding
receivable balance of $23,000 (62% of accounts receivable, net) as of March 31, 2016.  The Company had two significant customers
with outstanding receivable balances of $77,000 and $31,000 (68% and 28% of accounts receivable, net) as of June 30, 2015.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0"><font style="font-style: normal"><b>Engineering,
Development, and License Revenues</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">We
assess whether a substantive milestone exists at the inception of our agreements.  In evaluating if a milestone is substantive
we consider whether:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 8pt Times New Roman, Times, Serif">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="width: 18pt; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; width: 18pt; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">Substantive uncertainty exists as to the achievement of the milestone event at the inception of the arrangement;</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; text-align: justify; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">The achievement of the milestone involves substantive effort and can only be achieved based in whole or in part on our performance or the occurrence of a specific outcome resulting from our performance;</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; text-align: justify; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">The amount of the milestone payment appears reasonable either in relation to the effort expended or the enhancement of the value of the delivered item(s);</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; text-align: justify; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">There is no future performance required to earn the milestone; and</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; text-align: justify; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">The consideration is reasonable relative to all deliverables and payment terms in the arrangement.</font></td></tr>
</table>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">If
any of these conditions are not met, we do not consider the milestone to be substantive and we defer recognition of the milestone
payment and recognize it as revenue over the estimated period of performance, if any.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">On
April 8, 2011, the Company entered into a Collaboration Agreement (the "Collaboration Agreement") with Honam Petrochemical
Corporation, now known as Lotte Chemical Corporation ("Lotte"), pursuant to which the Company and Lotte collaborated
on the technical development of the Company's third generation zinc bromide flow battery module (the "Version 3 Battery Module")
and Lotte received a fully paid-up, exclusive and royalty-free license to sell and manufacture the Version 3 Battery Module in
South Korea and a non-exclusive royalty-bearing license to sell the Version 3 Battery Module in Japan, Thailand, Taiwan, Malaysia,
Vietnam and Singapore.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">On
December 16, 2013, the Company and Lotte entered into a Research and Development Agreement (the "R&D Agreement")
pursuant to which the Company has agreed to develop and provide to Lotte a 500kWh zinc bromide flow battery system, including a
zinc bromide chemical flow battery module and related software (the "Product"), on the terms and conditions set forth
in the R&D Agreement (the "Lotte Project"). Subject to the satisfaction of certain specified milestones, Lotte is
required to make payments to the Company under the R&D Agreement totaling $3,000,000 over the term of the Lotte Project. 
We recognize revenue based upon a Performance Based Method pursuant to the model described in FASB ASC Subtopic 980-605-25, where
revenue is recognized based on the lesser of the amount of nonrefundable cash received or the amounts due based on the proportional
amount of the total effort expected to be expended on the contract that has been provided to date as there does not exist substantial
doubt that the milestones will be achieved.  The Company recognized $95,382 and $264,389 of revenue under this agreement for
the three and nine months ended March 31, 2016, respectively.  The Company recognized $297,173 and $483,650 of revenue under
the R&D Agreement for the three and nine months ended March 31, 2015, respectively.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Additionally,
on December 16, 2013, we entered into an Amended License Agreement with Lotte (the "Amended License Agreement"). 
Pursuant to the Amended License Agreement, we granted to Lotte, (1) an exclusive and royalty-free limited license in South Korea
to use the Company's zinc bromide flow battery module, zinc bromide flow battery stack and the technical information and know how
related to the intellectual property arising from the Lotte Project (collectively, the "Technology") to manufacture or
sell a zinc bromide flow battery (the "Lotte Product") in South Korea and (2) a non-exclusive (a) royalty-free limited
license for Lotte and its affiliates to use the Technology internally in all locations other than China and South Korea to manufacture
the Lotte Product and (b) royalty-bearing limited license to sell the Lotte Product in all locations other than China, the United
States and South Korea. Lotte is required to pay us a total license fee of $3,000,000 under the Amended License Agreement plus
up to an additional $1,000,000 if certain specific milestones are successfully achieved.  In addition, Lotte is required to
make ongoing royalty payments to the Company equal to a single digit percentage of Lotte's net sales of the Lotte Product outside
of South Korea until December 31, 2019.  The original license fees were subject to a 16.5% non-refundable Korea withholding
tax.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Overall
since December 16, 2013 through March 31, 2016 there were $5,250,000 of payments received and $5,049,836 of revenue recognized
under the Lotte R&D and Amended License Agreements.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Engineering
and development costs related to the R&D Agreement totaled $221,628 and $357,795 for the three and nine months ended March
31, 2016, respectively.  Engineering and development costs related to the R&D Agreement totaled $33,078 and $202,223 for
the three and nine months ended March 31, 2015, respectively.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">As
of March 31, 2016 and June 30, 2015, the Company had no unbilled amounts from engineering and development contracts in process. 
The Company had received $105,000 and $370,000, which is included in "Customer deposits" in the condensed consolidated
balance sheets, of customer payments for engineering and development contracts, representing deposits in advance of performance
of the contracted work as of March 31, 2016 and June 30, 2015, respectively.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Advanced
Engineering and Development Expenses</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
accordance with FASB ASC Topic 730, "Research and Development," the Company expenses advanced engineering and development
costs as incurred.  These costs consist primarily of materials, labor, and allocable indirect costs incurred to design, build,
and test prototype units, as well as the development of manufacturing processes for these units.  Advanced engineering and
development costs also include consulting fees and other costs.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">To
the extent these costs are separately identifiable, incurred and funded by advanced engineering and development type agreements
with outside parties, they are shown separately on the condensed consolidated statements of operations as a "Cost of engineering
and development."</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Stock-Based
Compensation</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company measures all "Share-Based Payments," including grants of stock options, restricted shares and restricted stock
units in its condensed consolidated statement of operations based on their fair values on the grant date, which is consistent with
FASB ASC Topic 718, "Stock Compensation," guidelines.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Accordingly,
the Company measures share-based compensation cost for all share-based awards at the fair value on the grant date and recognizes
share-based compensation over the service period for awards that are expected to vest.  The fair value of stock options is
determined based on the number of shares granted and the price of the shares at grant, and calculated based on the Black-Scholes
valuation model.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company compensates its outside directors with restricted stock units ("RSUs") and cash.  The grant date fair value
of the RSU awards is determined using the closing stock price of the Company's common stock on the day prior to the date of the
grant, with the compensation expense amortized over the vesting period of RSU awards, net of estimated forfeitures.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company only recognizes expense for those options or shares that are expected ultimately to vest, using two attribution methods
to record expense, the straight-line method for grants with only service-based vesting or the graded-vesting method, which considers
each performance period, for all other awards.  See further discussion of stock-based compensation in Note 11.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Advertising
Expense</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Advertising
costs of $4,103 and $14,362 were incurred for the three and nine months ended March 31, 2016, respectively.  Advertising costs
of $3,284 and $16,245 were incurred for the three and nine months ended March 31, 2015, respectively.  These costs were charged
to selling, general, and administrative expenses as incurred.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Income
Taxes</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company records deferred income taxes in accordance with FASB ASC Topic 740, "Accounting for Income Taxes."  FASB
ASC Topic 740 requires recognition of deferred income tax assets and liabilities for temporary differences between the tax basis
of assets and liabilities and the amounts at which they are carried in the financial statements, based upon the enacted tax rates
in effect for the year in which the differences are expected to reverse.  The Company establishes a valuation allowance when
necessary to reduce deferred income tax assets to the amount expected to be realized.  There were no net deferred income tax
assets recorded as of March 31, 2016 and June 30, 2015.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company applies a more-likely-than-not recognition threshold for all tax uncertainties as required under FASB ASC Topic 740, which
only allows the recognition of those tax benefits that have a greater than fifty percent likelihood of being sustained upon examination
by the taxing authorities.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company's U.S. Federal income tax returns for the years ended June 30, 2012 through June 30, 2015 and the Company's Wisconsin and
Australian income tax returns for the years ended June 30, 2011 through June 30, 2015 are subject to examination by taxing authorities. 
As of March 31, 2016, there were no examinations in progress.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Foreign
Currency</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company uses the United States dollar as its functional and reporting currency, while the Australian dollar and Hong Kong dollar
are the functional currencies of its foreign subsidiaries.  Assets and liabilities of the Company's foreign subsidiaries are
translated into United States dollars at exchange rates that are in effect at the balance sheet date while equity accounts are
translated at historical exchange rates.  Income and expense items are translated at average exchange rates which were applicable
during the reporting period.  Translation adjustments are recorded in accumulated other comprehensive loss as a separate component
of equity in the condensed consolidated balance sheets.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Loss
per Share</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company follows the FASB ASC Topic 260, "Earnings per Share," provisions which require the reporting of both basic and
diluted earnings (loss) per share.  Basic earnings (loss) per share is computed by dividing net income (loss) available to
common stockholders by the weighted average number of common shares outstanding for the period.  Diluted earnings (net loss)
per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised
or converted into common stock.  In accordance with the FASB ASC Topic 260, any anti-dilutive effects on net income (loss)
per share are excluded.  As of March 31, 2016 and March 31, 2015 there were 14,000,034 and 9,809,404 shares of common stock
underlying convertible preferred stock, options, restricted stock units and warrants that are excluded, respectively.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Concentrations
of Credit Risk</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Financial
instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company maintains significant cash deposits primarily with one financial institution.  The Company has not previously experienced
any losses on such deposits.  Additionally, the Company performs periodic evaluations of the relative credit rating of the
institution as part of its banking strategy.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Concentrations
of credit risk with respect to accounts receivable are limited due to accelerated payment terms in current customer contracts and
creditworthiness of the current customer base.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Reclassifications</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Certain
amounts previously reported have been reclassified to conform to the current presentation.  The reclassifications did not
impact prior period results of operations, cash flows, total assets, total liabilities, or total equity.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Segment
Information</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company has determined that it operates as one reportable segment.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b>Recent
Accounting Pronouncements</b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"><b> </b></font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">From
time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company
as of the specified effective date.  Unless otherwise discussed, the Company believes that the impact of recently issued standards
that are not yet effective and not included below will not have a material impact on our financial position or results of operations
upon adoption.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
March 2016, the FASB issued Accounting Standards Update ("ASU") 2016-09 – Compensation – Stock Compensation
(Topic 780): Improvements to Employee Share-Based Payment Accounting.  ASU 2016-09 modifies US GAAP by requiring the following,
among others: (1) all excess tax benefits and tax deficiencies are to be recognized as income tax expense or benefit on the income
statement (excess tax benefits are recognized regardless of whether the benefit reduces taxes payable in the current period); (2)
excess tax benefits are to be classified along with other income tax cash flows as an operating activity in the statement of cash
flows; (3) in the area of forfeitures, an entity can still follow the current US GAAP practice of making an entity-wide accounting
policy election to estimate the number of awards that are expected to vest or may instead account for forfeitures when they occur;
and (4) classification as a financing activity in the statement of cash flows of cash paid by an employer to the taxing authorities
when directly withholding shares for tax withholding purposes.  ASU 2016-09 is effective for annual periods beginning after
January 1, 2017, including interim periods.  Early adoption is permitted.  The Company is currently assessing the impact
the adoption of ASU 2016-09 will have on its consolidated financial statements.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
March 2016, the FASB issued ASU 2016-07 – Investments – Equity Method and Joint Ventures (Topic 323): Simplifying the
Transition to the Equity Method of Accounting, which simplifies the accounting for equity method investments by removing the requirements
that an entity retroactively adopt the equity method of accounting if an investment qualifies for use of the equity method as a
result of an increase in the level of ownership or degree of influence.  The amendments require that the equity method investor
add the cost of acquiring the additional interest in the investee to the current basis of the investor's previously held interest
and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting.  ASU
2016-07 is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, and must apply
a prospective adoption approach.  Early adoption is permitted.  The Company does not expect adoption of this guidance
to have a significant impact on its consolidated financial statements.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
March 2016, the FASB issued ASU 2016-06 – Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments
(a consensus of the Emerging Issues Task Force), which requires that embedded derivatives be separate from the host contract and
accounted for separately as derivatives if certain criteria are met, including the "clearly and closely related" criterion. 
The amendments in this update clarify the requirements for assessing whether contingent call (put) options that can accelerate
the payment of principal on debt instruments are clearly and closely related to their debt hosts.  An entity performing the
assessment under the amendments is required to assess the embedded call (put) options solely in accordance with the four-step decision
sequence.  The amendments apply to all entities that are issuers or investors in debt instruments (or hybrid financial instruments
that are determined to have a debt host) with embedded call (put) options.  ASU 2016-06 is effective for fiscal years beginning
after December 15, 2016 and interim periods within those years, and must apply a modified retrospective transition approach. 
Early adoption is permitted.  The Company does not expect adoption of this guidance to have a significant impact on its consolidated
financial statements.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
March 2016, the FASB issued ASU 2016-05 – Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on
Existing Hedge Accounting Relationships (a consensus of the Emerging Issues Task Force), which provides guidance clarifying that
the novation of a derivative contract (i.e. a change in counterparty) in a hedge accounting relationship does not, in and of itself,
require dedesignation of that hedge accounting relationship.  This ASU amends ASC 815 to clarify that such a change does not,
in and of itself, represent a termination or the original derivative instrument or a change in the critical terms of the hedge
relationship.  ASU 2016-05 allows the hedging relationship to continue uninterrupted if all of the other hedge accounting
criteria are met, including the expectation that the hedge will be highly effective when the creditworthiness of the new counterpart
to the derivative contract is considered.  The amendments of this ASU are effective for reporting periods beginning after
December 15, 2016.  Early adoption is permitted.  Entities may adopt the guidance prospectively or use a modified retrospective
approach.  The Company does not expect adoption of this guidance to have a significant impact on its consolidated financial
statements.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
February 2016, the FASB issued ASU 2016-02 – Leases (Topic 842): Amendments to the FASB Accounting Standards Codifications,
to increase transparency and comparability among entities by recognizing lease assets and lease liabilities on the balance sheet
and disclosing key information about leasing arrangements.  ASU 2016-02 is effective for reporting periods beginning after
December 15, 2018, including interim periods within those fiscal years.  Early adoption is permitted.  Companies must
apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest
comparative period presented.  Lessees and lessors may not apply a full retrospective transition approach.  The Company
has early adopted ASU 2016-02 effective January 1, 2016.  With the adoption of ASU 2016-02, the Company has elected to apply
the package of practical expedients and use of hindsight detailed in ASC 842.  Additionally, the Company elects the practical
expedient in ASC Subtopic 842-10 to not separate nonlease components from lease components and instead account for each separate
lease component and nonlease components associated with that lease component as a single lease component by class of the underlying
asset.  The Company also elected not to recognize right of use assets and lease liabilities for short term leases, which has
a lease term of 12 months or less and does not include an option to purchase the underlying asset that the Company is reasonably
certain to exercise.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
January 2016, the FASB issued ASU 2016-01 – Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement
of Financial Assets and Financial Liabilities.  This guidance makes specific improvements to existing US GAAP for financial
instruments, including requiring equity investments (except those accounted for under the equity method of accounting, or those
that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income;
requiring entities to use the exit price notion when measuring fair value of financial instruments for disclosure purposes; requiring
separate presentation of financial assets and financial liabilities by measurement category and form of financial asset and requiring
entities to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting
from a change in the instrument-specific credit risk (also referred to as "own credit") when the organization has elected
to measure the liability at fair value in accordance with the fair value option.  The guidance is effective for public business
entities for fiscal years beginning after December 15, 2017.  Early adoption of the own credit provision is permitted. 
The Company does not expect adoption of this guidance to have a significant impact on its consolidated financial statements.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
September 2015, the FASB issued ASU 2015-16 – Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period
Adjustments.  The amendments in this update eliminate the requirement for entities to retrospectively account for adjustments
made to provisional amounts recognized in a business combination.  For public business entities, the amendments are effective
for fiscal years beginning after December 15, 2015, including interim reporting periods within those fiscal years.  The amendments
should be applied prospectively to adjustments to provisional amounts that occur after the effective date.  The Company does
not expect adoption of this guidance to have a significant impact on its consolidated financial statements.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
August 2015, the FASB issued ASU 2015-14 – Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. 
The amendment defers the effective date of ASU 2014-09 for all entities by one year.  Public business entities should apply
the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods
within that reporting period.  Earlier application is permitted only as of annual reporting periods beginning after December
15, 2016, including interim reporting periods within that reporting period.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
July 2015, the FASB issued ASU 2015-11 – Inventory (Topic 330): Simplifying the Measurement of Inventory.  The amendment
was issued to modify the process in which entities measure inventory.  The amendment does not apply to inventory measured
using last-in, first-out ("LIFO") or the retail inventory method.  This amendment requires entities to measure inventory
at the lower of cost and net realizable value.  Net realizable value is the estimated selling prices in the ordinary course
of business, less reasonably predictable costs of completion, disposal, and transportation.  Subsequent measurement is unchanged
for inventory measured using LIFO or the retail inventory method.  The amendments are effective for fiscal years beginning
after December 31, 2016, including interim periods within those fiscal years on a prospective basis with earlier application permitted
as of the beginning of an interim or annual reporting period.  The Company does not expect adoption of this guidance to have
a significant impact on its consolidated financial statements.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
February 2015, the FASB issued ASU 2015-02 – Consolidation (Topic 810): Amendments to the Consolidation Analysis.  The
amendment is intended to improve certain areas of consolidation guidance for legal entities such as limited partnerships, limited
liability corporations, and securitization structures.  The amendment simplifies reporting requirements by placing more emphasis
on risk of loss when determining a controlling financial interest, reducing the frequency of application of related-party guidance
when determining a controlling financial interest in a variable interest entity ("VIE"), and changing consolidation conclusions
for public companies in several industries that typically make use of limited partnerships or VIEs.  The amendment is effective
for fiscal years beginning after December 31, 2015.  Early adoption is permitted.  The Company does not expect adoption
of this guidance to have a significant impact on its consolidated financial statements.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
January 2015, the FASB issued ASU 2015-01 – Income Statement – Extraordinary and Unusual Items (Subtopic 225-20): Simplifying
Income Statement Presentation by Eliminating the Concept of Extraordinary Items.  The amendment was issued to reduce complexity
in the accounting standards by eliminating the concept of extraordinary items from US GAAP.  The amendment is effective for
annual periods ending after December 15, 2015.  The change may be applied prospectively or retrospectively to all prior periods
presented in the financial statements.  Early adoption is permitted.  The Company does not expect adoption of this guidance
to have a significant impact on its consolidated financial statements.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
August 2014, the FASB issued ASU 2014-15 – Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern
(Subtopic 205-40).  The update requires management to perform a going concern assessment if there is substantial doubt about
an entity's ability to continue as a going concern within one year of the financial statement issuance date.  Under the new
standard, the definition of substantial doubt incorporates a likeliness threshold of "probable" that is consistent with
the current use of the term defined in US GAAP for loss contingencies (Topic 450 – Contingencies).  Management will
need to consider conditions that are known and reasonably knowable at the financial statement issuance date and determine whether
the entity will be able to meet its obligations within the one-year period.  Additional disclosures are required if it is
probable that the entity will be unable to meet its current obligations.  The amendments in this ASU will be effective for
annual periods ending after December 15, 2016.  Early adoption is permitted.  The Company does not expect the adoption
of ASU 2014-15 to have a material effect on our financial position, results of operations or cash flows.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
June 2014, the FASB issued ASU 2014-12 - Compensation – Stock Compensation (Topic 718).  The amendment requires that
entities treat performance targets that can be met after the requisite service period of a share-based payment award as performance
conditions that affect vesting and, accordingly, the performance target should not be reflected in estimating the grant-date fair
value of the award.  Compensation expense should be recognized in the period in which it becomes probable that the performance
target will be achieved.  ASU 2014-12 is effective for annual periods and interim periods within those annual periods beginning
after December 15, 2015<b>.  </b>The Company is required to adopt this standard beginning July 1, 2016.  ASU 2014-12
does not contain any new disclosure requirements.  The Company does not expect the adoption of ASU 2014-12 to have a material
effect on our financial position, results of operations or cash flows.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
May 2014, the FASB issued ASU 2014-09 – Revenue from Contracts with Customers (Topic 606).  The amendment outlines a
single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most
current revenue recognition guidance, including industry-specific guidance.  The core principle of the revenue model is that
an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration
to which the entity expects to be entitled in exchange for those goods or services.  In applying the revenue model to contracts
within its scope, an entity identifies the contract(s) with a customer, identifies the performance obligations in the contract,
determines the transaction price, allocates the transaction price to the performance obligations in the contract and recognizes
revenue when the entity satisfies a performance obligation.  ASU 2014-09 also includes additional disclosure requirements
regarding revenue, cash flows and obligations related to contracts with customers.  See ASU 2015-14 above for applicable effective
date of ASU 2014-09.  The guidance permits companies to either apply the requirements retrospectively to all prior periods
presented, or apply the requirements in the year of adoption, through a cumulative adjustment.  In April 2016, the FASB issued
ASU 2016-10 – Revenue from Contracts with Customers – Identifying Performance Obligations and Licensing, clarifying
the implementation guidance on identifying performance obligations and licensing.  Specifically, the amendments reduce the
cost and complexity of identifying promised goods or services and improves the guidance for determining whether promises are separately
identifiable.  The amendments also provide implementation guidance on determining whether an entity's promise to grant a license
provides a customer with either a right to use the entity's intellectual property (which is satisfied at a point in time) or a
right to access the entity's intellectual property (which is satisfied over time).  In March 2016, the FASB also issued ASU
2016-08 – Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross
versus Net).  The amendments in ASU 2016-08 affect the guidance in ASU 2014-09.  ASU 2016-08 requires when a third party
is involved in provided goods or services to a customer, an entity is required to determine whether the nature of its promise is
to provide the specified good or services itself to the customer (that is, the entity is a principal) or to arrange for that good
or service to be provided by the third party to the customer (that is, the entity is an agent).  If the entity is a principal,
upon satisfying a performance obligation, the entity recognizes revenue in the gross amount of consideration to which it expects
to be entitled in exchange for the specified good or service transferred to the customer.  If the entity is an agent, the
entity recognizes revenue in the amount of any fee or commission to which it expects to be entitled in exchange for arranging for
the specified good or service to be provided by the third party.  The effective date and transition requirements for ASU 2016-10
and 2016-08 are the same as the effective date and transition requirements for ASU 2014-09.  The Company is currently evaluating
the effect that implementation of this update will have on its consolidated financial position and results of operations upon adoption.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
April 2014, the FASB issued ASU 2014-08 -</font> <font style="font-style: normal">Presentation of Financial Statements (Topic
205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components
of an Entity.  The update changes the requirements for reporting discontinued operations in Subtopic 205-20.  To be classified
as a discontinued operation, the disposal of a component or group of components must represent a strategic shift that has, or will
have, a major effect on an entity's operations and financial results.  Examples include a disposal of a major geographic area,
a major line of business or a major equity method investment.  The amendments in this ASU are effective prospectively for
reporting periods beginning on or after December 15, 2014, with early adoption permitted.  The adoption of this pronouncement
did not have a material impact on the Company's consolidated financial statements.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
March 2013, the FASB issued ASU 2013-05 – Foreign Currency Matters (Topic 830) – Parent's Accounting for the Cumulative
Translation Adjustment upon derecognition of Certain Subsidiaries or Group of Assets within a Foreign Entity or of an Investment
in a Foreign Entity.  These amendments provide guidance on releasing cumulative translation adjustments when a reporting entity
(parent) ceases to have a controlling financial interest in a subsidiary or a group of assets that is a non-profit activity or
a business within a foreign entity.  In addition, these amendments provide guidance on the release of cumulative translation
adjustments in partial sales of equity method investments and in step acquisitions.  The amendments are effective for fiscal
years and interim reporting periods within those years, beginning after December 15, 2013.  The amendments should be applied
prospectively to derecognition events occurring after the effective date.  Prior periods should not be adjusted.  Early
adoption was permitted.  The Company was required to adopt this standard beginning July 1, 2014.  The adoption of this
pronouncement did not have a material impact on the Company's consolidated financial statements.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">On
July 13, 2015, the Company entered into a global strategic partnership with SPI Energy Co., Ltd. ("SPI"), (formerly known
as Solar Power, Inc.), which includes a Securities Purchase Agreement, a Supply Agreement, and a Governance Agreement.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Pursuant
to the Securities Purchase Agreement, SPI purchased, for an aggregate purchase price of $33,390,000 a total of (i) 8,000,000 shares
of common stock (the "Purchased Common Shares") and (ii) 28,048 shares of Series C Convertible Preferred Stock (the "Purchased
Preferred Shares") which are convertible, subject to the completion of projects under our Supply Agreement with SPI (as described
below), into a total of up to 42,000,600 shares of Common Stock.  </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
aggregate purchase price for the Purchased Common Shares was based on a purchase price per share of $0.6678, and the aggregate
purchase price for the Purchased Preferred Shares was determined based on price of $0.6678 per common equivalent.  Pursuant
to the Securities Purchase Agreement, the Company also issued to SPI a warrant to purchase 50,000,000 shares of Common Stock for
an aggregate purchase price of $36,729,000 (the "Warrant"), at a per share exercise price of $0.7346.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company incurred $807,807 of financing related costs in connection with the transaction.  The specific costs directly attributable
to the Securities Purchase Agreement have been charged against the gross proceeds of the offering.  </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company also entered into a supply agreement with SPI pursuant to which the Company agreed to sell and SPI agreed to purchase certain
products and services offered by the Company from time to time, including certain energy management system solutions for solar
projects (the "Supply Agreement").  Under the Supply Agreement, SPI agreed to purchase energy storage systems with
a total combined power output of 40 megawatts (MW) over a four-year period.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company also entered into a governance agreement with SPI (the "Governance Agreement") that provides SPI certain rights
regarding the Company's Board of Directors and other select governance rights.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Terms
of the Purchased Preferred Shares</b></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Purchased Preferred Shares are perpetual, are not eligible for dividends, and are not redeemable.  Upon any liquidation, dissolution,
or winding up of the Company (a "Liquidation") or a Fundamental Transaction (as defined in the Certificate of Designation
for the Series C Preferred Stock), holders of the Purchased Preferred Shares are entitled to receive out of the assets of the Company
an amount equal to the higher of (1) the Stated Value, which was $28,048,000 as of March 31, 2016 and (2) the amount payable to
the holder if it had converted the shares into common stock immediately prior to the Liquidation or Fundamental Transaction, for
each share of the Purchased Preferred Stock after any distribution or payment to the holders of the Series B Preferred Stock and
before any distribution or payment shall be made to the holders of the Company's existing Common Stock, and if the assets of the
Company shall be insufficient to pay in full such amounts, then the entire assets to be distributed shall be ratably distributed
in accordance with respective amount that would be payable on such shares if all amounts payable thereon were paid in full, which
was $18,252,296 as of March 31, 2016.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Except
as required by law or as set forth in the Certificate of Designation for the Series C Preferred Stock, the Purchased Preferred
Shares do not have voting rights.  While the Series C Preferred Stock is outstanding, the Company may not pay dividends on
its common stock and may not redeem more than $100,000 in common stock per year.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Purchased Preferred Shares were sold for $1,000 per share and are contingently convertible at a conversion price of $0.6678, subject
to adjustment for stock splits, stock dividends, and other designated capital events.  Convertibility of the Purchased Preferred
Shares is dependent upon SPI making purchases of and payments for energy storage systems under the Supply Agreement as follows:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 8pt Times New Roman, Times, Serif">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="width: 18pt; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; width: 18pt; font: italic 8pt Times New Roman, Times, Serif">•</td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">The first one-fourth (the "Series C-1 Preferred Stock") of the Purchased Preferred Shares only become convertible upon the receipt of final payment for five megawatts worth of solar projects that are purchased by SPI in accordance with the Supply Agreement (the "Projects");</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">The second one-fourth (the "Series C-2 Preferred Stock") only become convertible upon the receipt of final payment for an aggregate of 15 megawatts worth of Projects;</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">The third one-fourth (the "Series C-3 Preferred Stock") only become convertible upon the receipt of final payment for an aggregate of 25 megawatts worth of Projects; and</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">The last one fourth (the "Series C-4 Preferred Stock") only become convertible upon the receipt of final payment for an aggregate of 40 megawatts worth of Projects.  </font></td></tr>
</table>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Series C Preferred Stock will not become convertible unless final payment for the Projects is received.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">If
SPI complies with the provisions of the Supply Agreement, as discussed below, it will make sufficient purchases for each tranche
of the Purchased Preferred Shares to vest and become convertible over the next four years.  However, the shares will become
convertible whenever final payment is received for the specified purchases, even if the payments are made later or earlier than
the schedule laid out in the Supply Agreement.  As of March 31, 2016, no purchases had been made under the Supply Agreement
and the Purchased Preferred Shares were therefore not convertible.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Terms
of the Warrant</b></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Warrant entitles SPI to purchase 50,000,000 shares of the Company's common stock for an aggregate exercise price of $36,729,000,
or $0.7346 per share, subject to adjustment for stock splits, stock dividends, and other designated capital transactions. 
The Warrant may not be partially exercised.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Warrant vests and becomes exercisable once SPI purchases and pays for 40 megawatts of Projects, and will not vest or become exercisable
if those purchases and payments do not occur before the termination of the Warrant, which will occur, whether the Warrant has vested
or not, on July 13, 2019.  Prior to exercise, the Warrant provides SPI with no voting rights.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">If
SPI complies with the provisions of the Supply Agreement, as discussed below, it will make sufficient purchases for the Warrant
to vest and become exercisable prior to its termination.  As of March 31, 2016, no purchases had been made under the Supply
Agreement and the Warrant was therefore not vested or exercisable.  As the closing price of the Company's common stock at
March 31, 2016 was below the exercise price of the Warrant, the Warrant was out-of-the-money at that date.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Terms
of the Supply Agreement</b></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Pursuant
to the Supply Agreement, the Company agreed to sell and SPI agreed to purchase products and services offered by the Company from
time to time, including energy management system solutions for solar projects.  The Supply Agreement provides that the
Company agreed to sell and SPI agreed to purchase products and related services that have an aggregated total of at least 5 megawatts
of energy storage rated power output within the first year of the Supply Agreement, 15 megawatts within the first two years, 25
megawatts within the first three years, and 40 megawatts within the first four years of the Supply Agreement.  Presuming that
these commitments are met, all of the Purchased Preferred Shares will become convertible and the Warrant will vest, as described
above.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Supply Agreement contains customary representations, warranties and covenants by the Company and SPI and prohibits the Company
from selling lower quantities of its Products and Services (each as defined in the Supply Agreement) to other buyers at prices
below those provided to SPI.  However, the Supply Agreement does not otherwise set the prices at which any Products or
Services will be sold. In addition to customary termination rights (including for an uncured material breach, either party may terminate the Supply
Agreement upon one years' prior written notice to the other party; however, neither party may so terminate the Supply Agreement
until all of the Purchased Preferred Shares have become convertible.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0"><b>Accounting for the Securities
Purchase Agreement and the Supply Agreement</b></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0"><b> </b></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">At
closing on July 13, 2015, the Company recognized the fair value of the Purchased Common Shares ($6.8 million, determined by reference
to the closing price of the Company's common stock on the NYSE MKT) as an increase to equity.  The Company also recognized
as equity the fair value of the Series C Preferred Stock ignoring the contingent convertibility on the closing date.  The
closing date fair value of the Series C Preferred Stock ignoring the contingent convertibility of those shares was estimated at
$13.3 million.  This price was determined using the Option-Pricing Method ("OPM") as described in the AICPA Accounting
and Valuation Guide entitled Valuation of Privately-Held-Company Equity Securities Issued as Compensation and a "with"
and "without" methodology to bifurcate the Series C Preferred conversion feature.  The OPM model treats the various
equity securities as call options on the total equity value contingent upon each securities strike price or participation rights. 
At closing of the transaction, the Black-Scholes inputs utilized for the OPM model were: (i) an aggregate equity value of $122.8
million, estimated based on the back-solve methodology to reconcile the closing common stock price ($0.85) as of the valuation
date; (ii) a term of four years, in alignment with the terms of the Supply Agreement; (iii) a risk free rate of 1.4%, from the
Federal Reserve Board's H.15 release as of the transaction date; (iv) a volatility of 101.3%, based on the volatility of the Company's
publicly traded stock price; and (v) the performance vesting requirements of the Purchased Preferred Shares were expected to be
met.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Offering
expenses of $807,807 were recognized as a reduction of the offering proceeds. The specific costs directly attributable to the Securities
Purchase Agreement have been charged against the gross proceeds of the offering.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
cash received by the Company in excess of the fair value of the Purchased Common Shares and the nonconvertible attribute of the
Purchased Preferred Shares was recorded as deferred revenue of $13,290,000.  This amount was allocated to the Supply Agreement
under which the Company expects to perform in the future.  The deferred revenue will be recognized as revenue as sales occur
under the Supply Agreement.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Because
the Purchased Preferred Shares will only become convertible when the Company receives final payment for the stated purchases under
the Supply Agreement, the value of the conversion option on each tranche of Series C Preferred Stock will be recognized as a sales
incentive (a reduction of revenue) and an addition to equity as purchases that lead towards convertibility of that tranche occur,
so long as the Company believes it is probable that the particular tranche will become convertible, pursuant to guidance in FASB
ASC Topic 605-50, "Revenue Recognition – Customer Payments and Incentives."</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Because
the Warrant will only vest and become exercisable if SPI makes sufficient purchases under the Supply Agreement, the same guidance
provides that the fair value of the Warrant be recognized as a sales incentive (a reduction of revenue) and an addition to equity
as sales occur, so long as the Company believes it is probable that SPI will make sufficient purchases during the term of the Warrant
for the Warrant to vest.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">As
SPI does not face a penalty for not purchasing Projects under the Supply Agreement beyond the convertibility of the Purchased Preferred
Shares and the loss of the Warrant, FASB ASC Topic 505-50, "Equity – Equity-Based Payments to Non-Employees," requires
that the fair value of each tranche of Series C Preferred Stock be updated at each reporting date until that tranche vests according
to its terms, and that the fair value of the Warrant be updated at each reporting date until the Warrant vests according to its
terms.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">As
of March 31, 2016, the value of the conversion option on the Series C Preferred Stock was estimated to be $7.30 million and the
value of the Warrant was estimated to be $8.30 million, which was determined using the Option-Pricing Method ("OPM")
as described in the AICPA Accounting and Valuation Guide entitled Valuation of Privately-Held-Company Equity Securities Issued
as Compensation and a "with" and "without" methodology to bifurcate the Series C Preferred conversion feature. 
The OPM model treats the various equity securities as call options on the total equity value contingent upon each security's strike
price or participation rights.  At March 31, 2016, the Black-Scholes inputs utilized for the OPM model were: (i) an aggregate
equity value of $43.36 million, estimated based on the back-solve methodology to reconcile the closing common stock price ($0.28)
as of the valuation date; (ii) a term of 3.25 years, in alignment with the terms of the Supply Agreement; (iii) a risk free rate
of 0.91%, from the Federal Reserve Board's H.15 release as of the transaction date; (iv) a volatility of 106.0%, based on the volatility
of the Company's publicly traded stock price; and (v) the performance vesting requirements of the equity instruments were expected
to be met.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">As
no sales under the Supply Agreement occurred prior to March 31, 2016, no revenue has been recognized pursuant to the Supply Agreement,
and no amounts related to the convertibility option on the Series C Preferred Stock or the Warrant have been reflected in the financial
statements.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Terms
of Governance Agreement</b></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
connection with the closing and pursuant to the Securities Purchase Agreement the Company entered into a Governance Agreement with
SPI (the "Governance Agreement").  Under the Governance Agreement, SPI is entitled to nominate one director
to the Company's board of directors for so long as SPI holds at least 10,000 Purchased Preferred Shares or 25 million shares of
Common Stock or Common Stock equivalents (the "Requisite Shares").  Additionally, for so long as SPI holds
the Requisite Shares (1) following the time at which the Series C-2 Preferred Stock shall have become convertible in full, SPI
shall be entitled to nominate a total of two directors and (2) following the time at which the Series C-3 Preferred Stock shall
have become convertible in full, SPI shall be entitled to nominate a total of three directors; provided in no event shall SPI be
entitled to nominate a number of directors to the Board that would represent a percentage of the Board greater than the percentage
determined by dividing the number of Common Stock Equivalents held by SPI by the sum of (A) the total shares of the Company's Common
Stock outstanding and (B) the number of shares of Common Stock into which the Preferred Stock held by SPI is convertible.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Governance Agreement provides that for so long as SPI holds the Requisite Shares, the Company will not take any of the following
actions without the affirmative vote of SPI: (a) change the conduct by the Company's business; (b) change the number or manner
of appointment of the directors on the board; (c) cause the dissolution, liquidation or winding-up of the Company or the commencement
of a voluntary proceeding seeking reorganization or other similar relief; (d) other than in the ordinary course of conducting the
Company's business, cause the incurrence, issuance, assumption, guarantee or refinancing of any debt if the aggregate amount of
such debt and all other outstanding debt of the Company exceeds $10 million; (e) cause the acquisition, repurchase or redemption
by the Company of any securities junior to the Purchased Preferred Shares; (f) cause the acquisition of an interest in any entity
or the acquisition of a substantial portion of the assets or business of any entity or any division or line of business thereof
or any other acquisition of material assets, in any such case where the consideration paid exceeds $2 million, or cause the Company
to engage in other Fundamental Transactions (as defined in the certificate of designation of preferences, rights and limitations
of the Series C Convertible Preferred Stock); (g) cause the entering into by the Company of any agreement, arrangement or transaction
with an affiliate that calls for aggregate payments (other than payment of salary, bonus or reimbursement of reasonable expenses)
in excess of $120,000; (h) cause the commitment to capital expenditures in excess of $7 million during any fiscal year; (i) cause
the selection or replacement of the auditors of the Company; (j) enter into of any partnership, consortium, joint venture or other
similar enterprise involving the payment, contribution, or assignment by the Company or to the Company of money or assets greater
than $5 million; (k) amend or otherwise change its Articles of Incorporation or by-laws or equivalent organizational documents
of the Company or any subsidiary in any manner that materially and adversely affects any rights of SPI; (l) amend or otherwise
change the Articles of Incorporation or by-laws or equivalent organizational documents of any Subsidiary in any manner; (m) grant,
issue or sell any equity securities (with certain limited exceptions); (n) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect to any of its capital stock; provided, however, that
the dividends called for by Section 3(b) of the Certificate of Designation of Preferences, Rights and Limitations of the Company's
Series B Convertible Preferred Stock shall nonetheless continue to accrue and accumulate on each share of the Company's Series
B Convertible Preferred Stock; (o) reclassify, combine, split or subdivide, directly or indirectly, any of its capital stock; (p)
permit any item of material intellectual property to lapse or to be abandoned, dedicated, or disclaimed, fail to perform or make
any applicable filings, recordings or other similar actions or filings, or fail to pay all required fees and taxes required or
advisable to maintain and protect its interest in such intellectual property; or (q) enter into any contract, arrangement, understanding
or other similar agreement with respect to any of the foregoing.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Additionally,
the Governance Agreement provides a preemptive right to SPI in the case of issuances of equity securities.  As of March 31,
2016, SPI owned approximately 17% of the Company's outstanding common stock.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">On
August 17, 2015 (the "Closing Date"), Holu Energy LLC ("Holu"), the Company's 85%-owned subsidiary, entered
into an Asset Purchase Agreement under which Holu acquired substantially all of the assets of Tian Shan Renewable Energy LLC ("Seller"). 
The transaction was accounted for as a business combination under US GAAP.  The primary reason for the business acquisition
was to penetrate the Hawaii and Pacific market in general, by acquiring a local team of respected expertise, solid projects, and
healthy pipeline.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
aggregate purchase consideration has been allocated to the assets acquired, including customer intangible assets, based on their
respective fair values.  The fair values of the assets purchased approximate the unbilled portion of each contract per the
original terms of the contracts.  This resulted in excess fair value of the net assets acquired over the purchase consideration
of $244,406.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
fair value of total consideration paid includes (1) $225,829 of cash, and (2) $18,577 of contingent consideration.  The contingent
consideration is comprised of 20% of the value of the unbilled portions of certain purchased assets.  Holu will pay immediately
to the Seller any amount of the contingent consideration collected in full after the closing date.  Holu is not obligated
to pay the Seller any amount not collected in full after six months after the date of a project's completion.  All acquired
projects are expected to be completed and billed within the next 12 months.  As of March 31, 2016, none of the contingent
liability has been settled and the Company expects to pay the entire contingent consideration.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
following table summarizes the fair value of the assets acquired as of the date of acquisition:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 88%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Project assets</font></td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">151,522</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Customer intangible assets</font></td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">169,321</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Identifiable net assets</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">320,843</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company recognized a gain on the bargain purchase.  The gain is presented separately in the "Other income" line
of the Company's condensed consolidated statements of operations.  Calculation of the bargain purchase was measured as follows:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 88%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Identifiable net assets acquired</font></td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">320,843</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Less: Fair value of the consideration transferred</font></td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">244,406</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Gain on bargain purchase</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">76,437</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company was able to obtain a bargain purchase on the business combination due to the timing of the transaction.  At the time
of closing, the fair value of certain contracts purchased was unknown and subsequent to the Closing Date, new information became
available regarding the facts and circumstances around these customer contracts.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
addition to the consideration paid for the assets identified above, the Company settled pre-existing transactions that were accounted
for separately in the amount of $171,205.  These transactions related to development and consulting services provided to the
Company by the Seller prior to the acquisition date.  $159,205 of the development fees are capitalized within the "Project
assets" line of the Company's balance sheet and $12,000 has been recognized in the "Selling, general, and administrative"
expense line of the Company's condensed consolidated statements of operations.  The development and consulting services were
settled with cash based on the original contract prices.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
amounts of revenue and net operating income (loss) of Holu included in the Company's condensed consolidated statement of income
from the date of acquisition of August 17, 2015 to the period ending March 31, 2016 are as follows:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 88%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Total product sales</font></td>
<td style="vertical-align: bottom; width: 1%; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">43,104</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Net loss</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">(366,971</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td></tr>
</table>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">For
financial reporting purposes, Holu's assets and liabilities are consolidated with those of the Company and the minority shareholder's
15% interest in Holu is included in the Company's condensed consolidated financial statements as a noncontrolling interest.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Pro-forma
results of operations have not been presented because the effects of the acquired operations were not material individually or
in the aggregate.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Acquisition
Related Expenses</b></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Included
in the condensed consolidated statement of operations for the period from August 17, 2015 to March 31, 2016 were transaction expenses
totaling approximately $33,700 for advisory and legal costs incurred in connection with the business acquisition.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
accompanying condensed consolidated financial statements have been prepared on the basis of a going concern which contemplates
that the Company will be able to realize assets and discharge its liabilities in the normal course of business.  Accordingly,
they do not give effect to any adjustments that would be necessary should the Company be required to liquidate its assets. 
The Company incurred a net loss of $12,145,573 attributable to EnSync, Inc. for the nine months ended March 31, 2016, and as of
March 31, 2016 had an accumulated deficit of $114,819,622 and total EnSync, Inc. equity of $21,986,272.  The ability of the
Company to settle its total liabilities of $17,028,131 and to continue as a going concern is dependent upon increasing revenues
and achieving profitability.  The accompanying condensed consolidated financial statements do not include any adjustments
that might result from the outcome of these uncertainties.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">We
believe that cash and cash equivalents on hand at March 31, 2016 and other potential sources of cash, will be sufficient to fund
our current operations through the fourth quarter of fiscal year 2017.  However, there can be no assurances that unforeseen
circumstances will not require the Company to raise additional investment capital to fund its operations.  If the Company
is unable to obtain additional required funding, the Company's financial condition and results of operations may be materially
adversely affected and the Company may not be able to continue operations.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Inventories
are comprised of the following as of:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-style: italic"> </td><td style="font-style: normal; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-style: normal; text-align: center; border-bottom: Black 1pt solid">March 31, 2016</td><td style="font-style: normal; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-style: normal; text-align: center; border-bottom: Black 1pt solid">June 30, 2015</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 74%; font-style: normal; text-align: left">Raw materials</td><td style="width: 1%; font-style: normal"> </td>
<td style="width: 1%; font-style: normal; text-align: left">$</td><td style="width: 10%; font-style: normal; text-align: right">2,208,610</td><td style="width: 1%; font-style: normal; text-align: left"> </td><td style="width: 1%; font-style: normal"> </td>
<td style="width: 1%; font-style: normal; text-align: left">$</td><td style="width: 10%; font-style: normal; text-align: right">1,125,251</td><td style="width: 1%; font-style: normal; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-style: normal; text-align: left; padding-bottom: 1pt">Work in progress</td><td style="font-style: normal; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-style: normal; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-style: normal; text-align: right">—  </td><td style="padding-bottom: 1pt; font-style: normal; text-align: left"> </td><td style="font-style: normal; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-style: normal; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-style: normal; text-align: right">72,866</td><td style="padding-bottom: 1pt; font-style: normal; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-style: normal; padding-bottom: 2.5pt">Total</td><td style="font-style: normal; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-style: normal; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-style: normal; text-align: right">2,208,610</td><td style="padding-bottom: 2.5pt; font-style: normal; text-align: left"> </td><td style="font-style: normal; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-style: normal; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-style: normal; text-align: right">1,198,117</td><td style="padding-bottom: 2.5pt; font-style: normal; text-align: left"> </td></tr>
</table>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">On
September 23, 2014, the Company was issued a $150,000 convertible promissory note from an unrelated party.  The note accrues
interest at 8% per annum on the outstanding principal amount.  The note matures on the earlier of (a) the date on which the
unrelated party has secured a total of $500,000 or more in additional financing from any source or (b) June 30, 2016, and is classified
as "Note receivable" in the financial statements.  If at the maturity date the note and accrued interest has not
been paid in full, the Company may convert the principal and interest outstanding into shares of the unrelated party's convertible
preferred stock at the then-current valuation.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Property,
plant, and equipment are comprised of the following as of:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-style: italic"> </td><td style="font-style: normal; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-style: normal; text-align: center; border-bottom: Black 1pt solid">March 31, 2016</td><td style="font-style: normal; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-style: normal; text-align: center; border-bottom: Black 1pt solid">June 30, 2015</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 74%; font-style: normal">Land</td><td style="width: 1%; font-style: normal"> </td>
<td style="width: 1%; font-style: normal; text-align: left">$</td><td style="width: 10%; font-style: normal; text-align: right">217,000</td><td style="width: 1%; font-style: normal; text-align: left"> </td><td style="width: 1%; font-style: normal"> </td>
<td style="width: 1%; font-style: normal; text-align: left">$</td><td style="width: 10%; font-style: normal; text-align: right">217,000</td><td style="width: 1%; font-style: normal; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-style: normal; text-align: left">Building and improvements</td><td style="font-style: normal"> </td>
<td style="font-style: normal; text-align: left"> </td><td style="font-style: normal; text-align: right">3,914,825</td><td style="font-style: normal; text-align: left"> </td><td style="font-style: normal"> </td>
<td style="font-style: normal; text-align: left"> </td><td style="font-style: normal; text-align: right">3,532,375</td><td style="font-style: normal; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-style: normal; text-align: left">Manufacturing equipment</td><td style="font-style: normal"> </td>
<td style="font-style: normal; text-align: left"> </td><td style="font-style: normal; text-align: right">3,952,441</td><td style="font-style: normal; text-align: left"> </td><td style="font-style: normal"> </td>
<td style="font-style: normal; text-align: left"> </td><td style="font-style: normal; text-align: right">3,965,750</td><td style="font-style: normal; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-style: normal; text-align: left">Office equipment</td><td style="font-style: normal"> </td>
<td style="font-style: normal; text-align: left"> </td><td style="font-style: normal; text-align: right">420,979</td><td style="font-style: normal; text-align: left"> </td><td style="font-style: normal"> </td>
<td style="font-style: normal; text-align: left"> </td><td style="font-style: normal; text-align: right">407,191</td><td style="font-style: normal; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-style: normal; text-align: left; padding-bottom: 1pt">Construction in process</td><td style="font-style: normal; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-style: normal; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-style: normal; text-align: right">—  </td><td style="padding-bottom: 1pt; font-style: normal; text-align: left"> </td><td style="font-style: normal; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-style: normal; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-style: normal; text-align: right">35,700</td><td style="padding-bottom: 1pt; font-style: normal; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-style: normal; text-align: left">Total, at cost</td><td style="font-style: normal"> </td>
<td style="font-style: normal; text-align: left"> </td><td style="font-style: normal; text-align: right">8,505,245</td><td style="font-style: normal; text-align: left"> </td><td style="font-style: normal"> </td>
<td style="font-style: normal; text-align: left"> </td><td style="font-style: normal; text-align: right">8,158,016</td><td style="font-style: normal; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-style: normal; text-align: left; padding-bottom: 1pt">Less: accumulated depreciation</td><td style="font-style: normal; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-style: normal; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-style: normal; text-align: right">(4,478,159</td><td style="padding-bottom: 1pt; font-style: normal; text-align: left">)</td><td style="font-style: normal; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-style: normal; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-style: normal; text-align: right">(3,993,104</td><td style="padding-bottom: 1pt; font-style: normal; text-align: left">)</td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-style: normal; text-align: left; padding-bottom: 2.5pt">Property, plant and equipment, net</td><td style="font-style: normal; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-style: normal; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-style: normal; text-align: right">4,027,086</td><td style="padding-bottom: 2.5pt; font-style: normal; text-align: left"> </td><td style="font-style: normal; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-style: normal; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-style: normal; text-align: right">4,164,912</td><td style="padding-bottom: 2.5pt; font-style: normal; text-align: left"> </td></tr>
</table>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company recorded depreciation expense of $173,524 and $523,441 for the three and nine months ended March 31, 2016, respectively. 
The Company recorded depreciation expense of $162,010 and $475,700 for the three and nine months ended March 31, 2015, respectively.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company acquired ZBB Technologies, Inc., a former wholly-owned subsidiary, through a series of transactions in March 1996. 
ZBB Technologies Inc. was subsequently merged with and into EnSync, Inc. on January 1, 2012.  The goodwill amount of $1.134
million, the difference between the price paid for ZBB Technologies, Inc. and the net assets of the acquisition, amortized through
fiscal 2002, resulted in the net goodwill amount of $803,079 as of March 31, 2016 and June 30, 2015.</font></p>
<p style="margin: 0pt"></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company's debt consisted of the following
as of:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr>
<td style="vertical-align: top; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 8pt">March 31, 2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 8pt">June 30, 2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; width: 78%"><font style="font-size: 8pt">Current maturities of long-term debt</font></td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; width: 8%; text-align: right"><font style="font-size: 8pt">330,861</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; width: 8%; text-align: right"><font style="font-size: 8pt">324,626</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; padding-bottom: 1.5pt"><font style="font-size: 8pt">Long-term debt</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 8pt">1,136,798</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 8pt">1,053,581</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; padding-bottom: 3pt"><font style="font-size: 8pt">Total</font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 8pt">1,467,659</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 3pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 3pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 8pt">1,378,207</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 3pt"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0">Bank loans, notes payable, and other debt consisted of the following
as of:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr>
<td style="vertical-align: top; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 8pt">March 31, 2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 8pt">June 30, 2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"> </td></tr>
<tr>
<td style="vertical-align: top"> </td>
<td style="vertical-align: bottom"> </td>
<td colspan="2" style="vertical-align: top"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td colspan="2" style="vertical-align: top"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"><font style="font-size: 8pt">Note payable to Wisconsin Econcomic Development Corporation payable in</font></td>
<td style="vertical-align: bottom"> </td>
<td colspan="2" style="vertical-align: top"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td colspan="2" style="vertical-align: top"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; width: 78%"><font style="font-size: 8pt">    monthly installments of $23,685, including interest at 2%, with the final </font><br />
<font style="font-size: 8pt">    payment due May 1, 2018; collateralized by equipment purchased with the </font><br />
<font style="font-size: 8pt">    loan proceeds and substantially all assets of the Company not otherwise </font><br />
<font style="font-size: 8pt">    collateralized.  The Company is required to maintain and increase by a </font><br />
<font style="font-size: 8pt">    specified number of employees, and the interest rate is increased in certain </font><br />
<font style="font-size: 8pt">    cases for failure to meet this requirement.</font></td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; width: 8%; text-align: right"><font style="font-size: 8pt">602,141</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; width: 8%; text-align: right"><font style="font-size: 8pt">804,550</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"><font style="font-size: 8pt">Bank loan payable in fixed monthly installments of $6,800 of principal and</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"><font style="font-size: 8pt">    interest at a rate of 0.25% below prime, as defined, subject to a floor of 5% </font><br />
<font style="font-size: 8pt">    with any remaining principal and interest due at maturity on June 1, 2018; </font><br />
<font style="font-size: 8pt">    collateralized by the building and land.</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">533,692</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">573,657</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"><font style="font-size: 8pt">Equipment finance obligation, interest payable in quarterly installments ranging</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"><font style="font-size: 8pt">    between $1,510 and $2,555 at an imputed interest rate of approximately </font><br />
<font style="font-size: 8pt">    2.44% over 20 years.  See Note 15 for discussion of sale-leaseback </font><br />
<font style="font-size: 8pt">    transaction.</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">331,826</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: right"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: right"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; padding-bottom: 3pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 8pt">1,467,659</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 2.25pt double"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 8pt">1,378,207</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 2.25pt double"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0">Maximum aggregate annual principal payments for fiscal periods
subsequent to March 31, 2016 are as follows:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; width: 89%"><font style="font-size: 8pt">2016</font></td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; width: 8%; text-align: right"><font style="font-size: 8pt">81,920</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"><font style="font-size: 8pt">2017</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">332,954</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"><font style="font-size: 8pt">2018</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">720,959</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"><font style="font-size: 8pt">2019</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"><font style="font-size: 8pt">2020</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; padding-bottom: 1.5pt"><font style="font-size: 8pt">2021 and thereafter</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 8pt">331,826</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; padding-bottom: 3pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 3pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 8pt">1,467,659</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 2.25pt double"> </td></tr>
</table>
<p style="margin: 0pt"></p>
<p style="margin: 0pt"></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company previously adopted the 2002 Stock Option Plan ("2002 Plan") in which a stock option committee could grant up
to 1,000,000 shares to key employees or non-employee members of the board of directors.  The options vest in accordance with
specific terms and conditions contained in an employment agreement.  If vesting terms and conditions are not defined in an
employment agreement, then the options vest as determined by the stock option committee.  If the vesting period is not defined
in an employment agreement or by the stock option committee, then the options immediately vest in full upon death, disability,
or termination of employment.  Vested options expire upon the earlier of either the five year anniversary of the vesting
date or termination of employment.  No shares are available to be issued under the 2002 Plan.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company also previously adopted the 2007 Equity Incentive Plan ("2007 Plan") that authorized the board of directors
or a committee to grant up to 300,000 shares to employees and directors of the Company.  Unless defined in an employment
agreement or otherwise determined, the options vest ratably over a three-year period.  Options expire 10 years after the
date of grant.  No shares are available to be issued under the 2007 Plan.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">In
November 2010, the Company adopted the 2010 Omnibus Long-Term Incentive Plan ("Omnibus Plan") which authorizes a committee
of the board of directors to grant stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted
stock, other stock-based awards, and cash awards.  The Omnibus Plan authorized up to 800,000 shares plus shares of Common
Stock underlying any outstanding stock option of other awards granted by any predecessor employee stock plan of the Company that
is forfeited, terminated, or cancelled without issuance of shares, to employees, officers, non-employee members of the board of
directors, consultants, and advisors.  Unless otherwise determined, options vest ratably over a three-year period and expire
8 years after the date of grant.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">At
the annual meeting of shareholders held on November 7, 2012, the Company's shareholders approved an amendment of the Omnibus Plan
which increased the number of shares of the Company's common stock available for issuance pursuant to awards under the Omnibus
Plan by 900,000 shares and the creation of the 2012 Non-Employee Director Equity Compensation Plan ("2012 Director Equity
Plan"), under which the Company may issue up to 700,000 restricted stock unit awards and other equity awards to our non-employee
directors pursuant to the Company's director compensation policy.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">At
the annual meeting of shareholders held on November 18, 2014, the Company's shareholders approved an amendment of the Omnibus
Plan which increased the number of shares of the Company's common stock available for issuance pursuant to awards under the Omnibus
Plan by 1,250,000.  The shareholders also approved an amendment of the 2012 Director Equity Plan which increased the number
of shares of the Company's common stock available for issuance pursuant to awards under the 2012 Director Equity Plan by 1,000,000.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">At
the annual meeting of shareholders held on November 17, 2015, the Company's shareholders approved an amendment of the Omnibus
Plan which increased the number of shares of the Company's common stock available for issuance pursuant to awards under the Omnibus
Plan by 5,000,000.  The shareholders also approved an amendment of the 2012 Director Equity Plan which increased the number
of shares of the Company's common stock available for issuance pursuant to awards under the 2012 Director Equity Plan by 1,500,000. 
As of March 31, 2016, there were a total of 2,400,910 shares available to be issued under the Omnibus Plan and 1,092,804 shares
available to be issued under the 2012 Director Equity Plan.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">In
aggregate for all plans, at March 31, 2016, there were a total of 4,108,027 options and 4,137,244 RSUs outstanding.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing method.  The Company
uses historical data to estimate the expected price volatility, the expected option life and the expected forfeiture rate. 
The Company has not made any dividend payments nor does it have plans to pay dividends in the foreseeable future.  The following
assumptions were used to estimate the fair value of options granted during the nine months ended March 31, 2016 and March 31,
2015 using the Black-Scholes option-pricing model:</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr>
<td style="vertical-align: top; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="6" style="vertical-align: top; border-bottom: black 1.5pt solid; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Nine
Months Ended March 31,</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr>
<td style="vertical-align: top; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1.5pt solid; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1.5pt solid; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; width: 78%"><font style="font: 8pt Times New Roman, Times, Serif">Expected
life of option (years)</font></td>
<td style="vertical-align: bottom; width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; width: 8%; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">4</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; width: 8%; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">4</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif">Risk-free interest
rate</font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">1.12
- 1.50 %</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">1.08
- 1.42 %</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif">Assumed volatility</font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">100.77
- 101.70 %</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">99.78
- 103.90 %</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif">Expected dividend
rate</font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">0.00
%</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">0.00
%</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif">Expected forfeiture
rate</font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">6.23
- 12.63 %</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">5.00
- 6.32 %</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">Time-vested
and performance-based stock awards, including stock options and RSUs are accounted for at fair value at date of grant.  Compensation
expense is recognized over the requisite service and performance periods.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">During
the three and nine months ended March 31, 2016 and March 31, 2015, the Company's results of operations include compensation expense
for stock options and RSUs granted under its various equity incentive plans.  The amount recognized in the condensed consolidated
financial statements related to stock-based compensation was $422,923 and $886,463, based on the amortized grant date fair value
of options and RSUs during the three and nine months ended March 31, 2016, respectively.  The amount recognized in the financial
statements related to stock-based compensation was $302,908 and $1,156,720, based on the amortized grant date fair value of options
and RSUs during the three and nine months ended March 31, 2015, respectively.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif">Information
with respect to stock option activity is as follows:</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="text-align: center; vertical-align: bottom">
<td style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: black 1.5pt solid"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif">Number</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> of</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> Options </font></p></td>
<td nowrap="nowrap" style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: black 1.5pt solid"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif">Weighted</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> Average</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> Exercise
Price </font></p></td>
<td nowrap="nowrap" style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: black 1.5pt solid"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif">Average</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> Remaining</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> Contractual
Life</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> (in
years) </font></p></td>
<td nowrap="nowrap" style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif">Balance at June 30,
2014</font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1,419,068</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">3.23</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif">   Options
granted</font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">423,000</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">0.85</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif">   Options
forfeited</font></td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">(264,290</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif">)</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">3.22</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="vertical-align: top; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif">Balance at June 30,
2015</font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1,577,778</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">2.60</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; width: 3%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">5.74</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif">   Options
granted</font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">2,776,600</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">0.58</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif">   Options
forfeited</font></td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">(246,351</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif">)</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">4.19</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif">Balance
at March 31, 2016</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">4,108,027</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1.14</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">6.73</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif">The
following table summarizes information relating to the stock options outstanding as of March 31, 2016:</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr>
<td colspan="2" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1.5pt solid; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1.5pt solid"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1.5pt solid; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"> Outstanding</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1.5pt solid"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1.5pt solid"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1.5pt solid; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1.5pt solid"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1.5pt solid; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif"> Exercisable</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1.5pt solid"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1.5pt solid"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1.5pt solid"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="text-align: center; vertical-align: bottom">
<td colspan="2" style="border-bottom: black 1.5pt solid"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif">Range
of Exercise Prices </font></p></td>
<td nowrap="nowrap" style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: black 1.5pt solid"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif">Number</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> of</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> Options </font></p></td>
<td nowrap="nowrap" style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: black 1.5pt solid"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif">Average</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> Remaining</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> Contractual
Life</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> (in
years) </font></p></td>
<td nowrap="nowrap" style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: black 1.5pt solid"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif">Weighted</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> Average</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> Exercise</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> Price </font></p></td>
<td nowrap="nowrap" style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: black 1.5pt solid"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif">Number</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> of</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> Options </font></p></td>
<td nowrap="nowrap" style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: black 1.5pt solid"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif">Average</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> Remaining</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> Contractual
Life</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> (in
years) </font></p></td>
<td nowrap="nowrap" style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: black 1.5pt solid"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif">Weighted</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> Average</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> Exercise</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> Price </font></p></td>
<td nowrap="nowrap" style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 1%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 20%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">0.31 to
$1.00</font></td>
<td nowrap="nowrap" style="width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 10%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">3,070,650</font></td>
<td nowrap="nowrap" style="width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 10%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">7.33</font></td>
<td nowrap="nowrap" style="width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 10%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">0.58</font></td>
<td nowrap="nowrap" style="width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 10%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">189,883</font></td>
<td nowrap="nowrap" style="width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 10%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">6.07</font></td>
<td nowrap="nowrap" style="width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="width: 1%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="width: 10%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">0.69</font></td>
<td nowrap="nowrap" style="width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1.01 to $2.50</font></td>
<td nowrap="nowrap"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">724,327</font></td>
<td nowrap="nowrap"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">6.00</font></td>
<td nowrap="nowrap"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1.51</font></td>
<td nowrap="nowrap"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">220,763</font></td>
<td nowrap="nowrap"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">5.36</font></td>
<td nowrap="nowrap"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1.81</font></td>
<td nowrap="nowrap"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">2.51 to $5.00</font></td>
<td nowrap="nowrap"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">98,400</font></td>
<td nowrap="nowrap"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">3.23</font></td>
<td nowrap="nowrap"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">3.95</font></td>
<td nowrap="nowrap"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">98,400</font></td>
<td nowrap="nowrap"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">3.23</font></td>
<td nowrap="nowrap"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">3.95</font></td>
<td nowrap="nowrap"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="padding-bottom: 1.5pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">5.01
to $6.95</font></td>
<td nowrap="nowrap" style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1.5pt solid"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">214,650</font></td>
<td nowrap="nowrap" style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1.5pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">2.06</font></td>
<td nowrap="nowrap" style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1.5pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">6.47</font></td>
<td nowrap="nowrap" style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1.5pt solid"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1.5pt solid; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">214,650</font></td>
<td nowrap="nowrap" style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1.5pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">2.06</font></td>
<td nowrap="nowrap" style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1.5pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">6.47</font></td>
<td nowrap="nowrap" style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: #CCEEFF">
<td colspan="2" style="vertical-align: top; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif">Balance
at March 31, 2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">4,108,027</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">6.73</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1.14</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">723,696</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">4.28</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">3.19</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">During
the nine months ended March 31, 2016, options to purchase 2,776,600 shares were granted to employees exercisable at $0.31 to $0.85
per share based on various service-based and performance-based vesting terms from July 2015 through March 2019 and exercisable
at various dates through March 2024.  During the nine months ended March 31, 2015, options to purchase 420,500 shares were
granted to employees exercisable at $0.48 to $1.67 per share based on service based vesting terms from July 2014 through March
2018 and exercisable at various dates through March 2023.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">There
was no aggregate intrinsic value of outstanding options based on the Company's adjusted closing stock price of $0.28 as of March
31, 2016.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">A
summary of the status of unvested employee stock options as of March 31, 2016 and June 30, 2015 and changes during the nine months
and year then ended is presented below:</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="text-align: center; vertical-align: bottom">
<td style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: black 1.5pt solid"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif">Number</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"></font>of</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> Options </font></p></td>
<td nowrap="nowrap" style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: black 1.5pt solid"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif">Weighted</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> </font>Average</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> </font>Grant
Date</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> Fair
Value</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> </font>Per
Share</p></td>
<td style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="border-bottom: black 1.5pt solid"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0 0pt -40pt; text-indent: 0.5in"><font style="font: 8pt Times New Roman, Times, Serif">Average</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0 0pt -40pt; text-indent: 0.5in"><font style="font: 8pt Times New Roman, Times, Serif">Remaining</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"></font>Contractual
Life</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> (in
years) </font></p></td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; width: 69%"><font style="font: 8pt Times New Roman, Times, Serif">Balance
at June 30, 2014</font></td>
<td style="vertical-align: bottom; width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; width: 5%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">822,469</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; width: 1%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: bottom; width: 6%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1.63</font></td>
<td style="vertical-align: bottom; width: 1%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: top; width: 16%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif">   Options
granted</font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">423,000</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">0.85</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif">   Options
vested</font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">(347,328</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif">)</font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1.42</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif">   Options
forfeited</font></td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">(121,616</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif">)</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">2.31</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: top; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif">Balance at June 30,
2015</font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">776,525</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1.19</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif">   Options
granted</font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">2,776,600</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">0.64</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif">   Options
vested</font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">(59,529</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif">)</font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1.18</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif">   Options
forfeited</font></td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">(109,265</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif">)</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">0.88</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: top; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif">Balance
at March 31, 2016</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">3,384,331</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">0.70</font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: top; padding-bottom: 3pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">7.25</font></td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">Total
fair value of options granted for the nine months ended March 31, 2016 and March 31, 2015 was $1,113,441 and $249,419, respectively. 
At March 31, 2016, there was $742,736 in unrecognized compensation cost related to unvested stock options, which is expected to
be recognized over a weighted average period of 1.5 years.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">The
Company compensates its directors with RSUs and cash.  On November 17, 2015, 864,000 RSUs were granted to the Company's directors
in partial payment of director's fees through November 2016 under the 2012 Director Equity Plan.  As of March 31, 2016, 432,000
of the RSUs had vested and there were $108,000 and $306,000 in director's fees expense settled with RSUs for the three and nine
months ended March 31, 2016.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">On
November 17, 2015, the Company's CEO was awarded 1,500,000 RSUs.  750,000 of these RSUs vest over three years, beginning
on November 17, 2016.  The remaining 750,000 of these RSUs vest upon the satisfaction of certain performance targets that
must be met on or before June 30, 2019.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif">As
of March 31, 2016, there were 1,932,000 of unvested RSUs and $872,250 in unrecognized compensation cost.  Generally, shares
of common stock related to vested RSUs are to be issued six months after the holder's separation from service with the Company.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif">The
table below summarizes the activity of the RSUs for the nine months ended March 31, 2016 and the year ended June 30, 2015:</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr style="text-align: center; vertical-align: bottom">
<td style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: black 1.5pt solid"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif">Number
of</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> </font>Restricted</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> Stock
Units</font></p></td>
<td nowrap="nowrap" style="border-bottom: black 1.5pt solid"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td colspan="2" style="border-bottom: black 1.5pt solid"><p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif">Weighted</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> Average</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> </font>Valuation</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 8pt Times New Roman, Times, Serif"> </font>Price
Per Unit<font style="font: 8pt Times New Roman, Times, Serif"> </font></p></td>
<td nowrap="nowrap" style="padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; width: 78%"><font style="font: 8pt Times New Roman, Times, Serif">Balance
at June 30, 2014</font></td>
<td style="vertical-align: bottom; width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; width: 8%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1,346,813</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; width: 1%"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: bottom; width: 8%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1.87</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif">   RSUs
granted</font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">922,500</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1.05</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif">   RSUs
forfeited</font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">(103,334</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif">)</font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1.69</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif">   Shares
issued</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">(229,944</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1.5pt solid"><font style="font: 8pt Times New Roman, Times, Serif">)</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">0.80</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif">Balance at June 30,
2015</font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1,936,035</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1.53</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif">   RSUs
granted</font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">2,364,000</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">0.50</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif">   RSUs
forfeited</font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif">   Shares
issued</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">(162,791</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1.5pt solid"><font style="font: 8pt Times New Roman, Times, Serif">)</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">0.72</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif">Balance
at March 31, 2016</font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">4,137,244</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 2.25pt double"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1.01</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif"> </font></td></tr>
</table>
<p style="margin: 0pt"></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">At
March 31, 2016, the following warrants to purchase the Company's common stock were outstanding and exercisable:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 8pt Times New Roman, Times, Serif">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="width: 18pt; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; width: 18pt; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">81,579 warrants exercisable at $0.95 per share and which expire in September 2016 issued as placement agent's compensation in connection with the sale of $3.0 million of preferred stock on September 27, 2013 as described in Note 14.</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">1,710,525 warrants exercisable at $0.95 per share and which expire in September 2016 issued in connection with Securities Purchase Agreements entered into with certain investors providing for the sale of a total of $3.0 million of preferred stock on September 27, 2013 described in Note 14.  In March 2014, 1,447,369 warrants were exercised via a cashless exercise resulting in the issuance of 850,169 shares of common stock of the Company.</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">15,000 warrants were exercisable at $2.10 per share and expired in July 2015 issued as partial payment for services.</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">45,000 warrants are exercisable at $0.37 per share and expire in February 2019 issued as partial payment for services.</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">306,902 warrants exercisable at $2.375 per share and which expire in June 2017 issued in connection with the Underwriting Agreement entered into with MDB Capital Group, LLC as part of underwriting compensation which provided for the sale of $12 million of common stock on June 19, 2012.  In March 2014, 272,159 warrants were exercised via a cashless exercise resulting in the issuance of 53,048 shares of common stock of the Company.</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">511,604 warrants exercisable at $2.65 per share and which expire in May 2017 issued in connection with Securities Purchase Agreements entered into with certain investors providing for the sale of a total of $2,465,000 of Zero Coupon Convertible Subordinated Notes on May 1, 2012.</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">6,300 warrants were exercisable at $5.00 per share and expired in July 2015 issued as partial payment for services.</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">224,375 warrants were exercisable at $5.20 per share and expired in September 2015 issued to certain purchasers of Company shares in March 2010.</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">71,667 warrants were exercisable at $6.65 per share and expired in August 2015 issued to certain purchasers of Company shares in August 2009.</font></td></tr>
</table>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0"><font style="font-style: normal">The table below summarizes
warrant balances and activity for the nine months ended March 31, 2016 and the year ended June 30, 2015:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0"><font style="font-style: normal"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal"> </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal"> </font></td>
<td colspan="2" nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">Number of <br />
Warrants</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.05pt; font: 8pt Times New Roman, Times, Serif; text-align: center"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.05pt; font: 8pt Times New Roman, Times, Serif; text-align: center"> </td>
<td colspan="2" nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">Weighted<br />
Average<br />
Exercise Price<br />
Per Share</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal"> </font></td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 76%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Balance at June 30, 2014</font></td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">2,933,752</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">1.88</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">   Warrants granted</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">   Warrants expired</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(5,800</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">5.00</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">   Warrants exercised</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Balance at June 30, 2015</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">2,927,952</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">1.88</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">   Warrants granted</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">45,000</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">0.37</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">   Warrants expired</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(317,342</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">5.38</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">   Warrants exercised</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Balance at March 31, 2016</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">2,655,610</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">1.43</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Basic
net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of
common shares outstanding for the period reported.  Diluted net loss per common share is computed giving effect to all dilutive
potential common shares that were outstanding for the period reported.  Diluted potential common shares consist of incremental
shares issuable upon exercise of stock options and warrants and conversion of preferred stock.  In computing diluted net loss
per share for the nine months ended March 31, 2016 and March 31, 2015, no adjustment has been made to the weighted average outstanding
common shares as the assumed exercise of outstanding options and warrants and conversion of preferred stock is anti-dilutive.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Potential
common shares not included in calculating diluted net loss per share are as follow:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="6" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">As of March 31,</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 76%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Stock options and restricted stock units</font></td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">8,245,271</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">3,732,272</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Stock warrants</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">2,655,610</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">2,933,752</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Series B preferred shares</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">3,099,153</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">3,143,380</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Total</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">14,000,034</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">9,809,404</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Amendment to the Articles of
Incorporation</b></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">On
November 17, 2015, the Company filed with the Wisconsin Department of Financial Institutions an amendment to the Company's Articles
of Incorporation (the "Articles of Amendment") increasing the number of authorized shares of common stock from 150,000,000
shares to 300,000,000 shares.  The Articles of Amendment were approved by the Company's shareholders on November 17, 2015.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>SPI Energy Co., Ltd. Securities
Purchase Agreement</b></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">On
July 13, 2015 we entered into a Securities Purchase Agreement (the "Purchase Agreement") with SPI Energy Co., Ltd. ("SPI"),
(formerly known as Solar Power, Inc.), pursuant to which we sold SPI for an aggregate purchase price of $33,390,000 a total of
(i) 8,000,000 shares of common stock (the "Purchased Common Shares") and (ii) 28,048 shares of Series C Convertible Preferred
Stock (the "Purchased Preferred Shares") which are convertible, subject to the completion of projects under our supply
agreement with SPI (as described below), into a total of up to 42,000,600 shares of Common Stock.  The aggregate purchase
price for the Purchased Common Shares was based on a purchase price per share of $0.6678 and the aggregate purchase price for the
Purchased Preferred Shares was determined based on a price of $0.6678 per common share equivalent.  Pursuant to the Purchase
Agreement, SPI was also issued a warrant to purchase 50,000,000 shares of Common Stock for an aggregate purchase price of $36,729,000
(the "Warrant").</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
connection with the Purchase Agreement, the Company incurred $807,807 of financing related costs.  The specific costs directly
attributable to the Purchase Agreement have been charged against the gross proceeds of the offering.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company also entered into a supply agreement with SPI pursuant to which the Company agreed to sell and SPI agreed to purchase certain
products and services offered by the Company from time to time, including certain energy management system solutions for solar
projects (the "Supply Agreement").</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Purchase Preferred Shares were sold for $1,000 per share and are convertible at a conversion price of $0.6678 provided that (A)
the first one-fourth (the "Series C-1 Preferred Stock") of the Purchased Preferred Shares only become convertible upon
the completion of five megawatts worth of solar projects in accordance with the Supply Agreement (the "Projects"), (B)
the second one-fourth (the "Series C-2 Preferred Stock") only become convertible upon the completion of 15 megawatts
worth of Projects, (C) the third one-fourth (the "Series C-3 Preferred Stock") only become convertible upon the completion
of 25 megawatts worth of Projects, and (D) the last one-fourth (the "Series C-4 Preferred Stock") only become convertible
upon the completion of 40 megawatts worth of Projects.  The Warrant represents the right to acquire 50,000,000 shares of Common
Stock at an exercise price equal to $0.7346.  The Warrant only becomes exercisable upon the completion of 40 megawatts worth
of Projects.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>August 27, 2014 Underwritten
Public Offering</b></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">On
March 13, 2013, the Company entered into a Common Stock Purchase Agreement ("Common Stock Purchase Agreement") with Aspire
Capital Fund, LLC, an Illinois limited liability company ("Aspire Capital"), which provided that, upon the terms and
subject to the conditions and limitations set forth therein, Aspire Capital was committed to purchase up to an aggregate of $10
million of shares of the Company's common stock over the two-year term of the Common Stock Purchase Agreement.  On August
18, 2014, the Company provided notice to Aspire Capital electing to terminate the Common Stock Purchase Agreement.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">On
August 27, 2014, the Company completed an underwritten public offering of its common stock at a price to the public of $1.12 per
share.  The Company sold a total of 13,248,000 shares of its common stock in the offering for aggregate proceeds of approximately
$14.8 million.  The Company received approximately $13.7 million of net proceeds from the offering, after deducting the underwriting
discount and expenses.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>March 19, 2014 Underwritten
Public Offering</b></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">On
March 19, 2014, the Company completed an underwritten public offering of its common stock at a price to the public of $2.25 per
share.  The Company sold a total of 6,325,000 shares of its common stock in the offering for aggregate proceeds of approximately
$14.2 million.  The Company received approximately $13.0 million of net proceeds from the offering, after deducting the underwriting
discount and expenses.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Series B Convertible Preferred
Stock Securities Purchase Agreement</b></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">On
September 26, 2013 the Company entered into a Securities Purchase Agreement with certain investors providing for the sale of 3,000
shares of Series B Convertible Preferred Stock (the "Preferred Stock").  Certain Directors of the Company purchased
500 shares.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Shares
of Preferred Stock were sold for $1,000 per share (the "Stated Value") and accrue dividends on the Stated Value at an
annual rate of 10%.  The net proceeds to the Company, after deducting $96,966 of offering costs, were $2,903,004.  During
the year ended June 30, 2014, 425 shares of Preferred Stock were converted into 470,171 shares of common stock of the Company. 
During the nine months ended March 31, 2016, 275 shares of Preferred Stock were converted into 352,696 shares of common stock of
the Company.  At March 31, 2016, 2,300 shares of Preferred Stock were convertible into 3,099,153 shares of common stock of
the Company ("Common Stock") at a conversion price equal to $0.95.  Upon any liquidation, dissolution or winding
up of the Company, holders of Preferred Stock are entitled to receive out of the assets of the Company an amount equal to two times
the Stated Value, plus any accrued and unpaid dividends thereon.  At March 31, 2016 the liquidation preference of the Preferred
Stock was $5,244,195.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
connection with the purchase of the Preferred Stock, investors received warrants to purchase a total of 3,157,895 shares of Common
Stock at an exercise price of $0.95.  The warrants are exercisable at any time prior to September 27, 2016.  During the
year ended June 30, 2014, 1,447,370 warrants were exercised via a cashless exercise resulting in the issuance of 850,169 shares
of common stock of the Company.  In addition, the Company issued a total of 81,579 warrants to a placement agent in connection
with the transaction.  These warrants expire on September 27, 2016.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Asset Retirement Obligations</b></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">FASB
ASC Topic 410, "Asset Retirement and Environmental Obligations," requires the fair value of a liability for an asset
retirement obligation be recorded in the period in which it is incurred if a reasonable estimate of fair value can be made and
that the associated asset retirement costs be capitalized as part of the carrying amount of the long-lived asset.  The retirement
obligation relates to estimated costs for the removal and shipment of a solar power system under an equipment lease.  Accrued
asset retirement obligations are recorded at net present value and discounted over the life of the lease.  The Company had
an asset retirement obligation of $18,527 as of March 31, 2016 and none as of June 30, 2015.  This retirement obligation is
classified as "Other long-term liabilities" in the condensed consolidated balance sheets.  The table below summarizes
the asset retirement obligation balances and activity as of:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-style: italic"> </td><td style="font-style: normal; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-style: normal; text-align: center; border-bottom: Black 1pt solid">March 31, 2016</td><td style="font-style: normal; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-style: normal; text-align: center; border-bottom: Black 1pt solid">June 30, 2015</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 74%; font-style: normal">Balance at beginning of period</td><td style="width: 1%; font-style: italic"> </td>
<td style="width: 1%; font-style: italic; text-align: left"> </td><td style="width: 10%; font-style: italic; text-align: right">—   </td><td style="width: 1%; font-style: italic; text-align: left"> </td><td style="width: 1%; font-style: italic"> </td>
<td style="width: 1%; font-style: italic; text-align: left"> </td><td style="width: 10%; font-style: italic; text-align: right">—  </td><td style="width: 1%; font-style: italic; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-style: normal; text-align: left; padding-bottom: 1pt">Liabilities incurred</td><td style="font-style: normal; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-style: normal; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-style: normal; text-align: right">18,527</td><td style="padding-bottom: 1pt; font-style: normal; text-align: left"> </td><td style="font-style: normal; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-style: normal; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-style: normal; text-align: right">—  </td><td style="padding-bottom: 1pt; font-style: normal; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-style: normal; padding-bottom: 2.5pt">Balance at end of period</td><td style="font-style: normal; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-style: normal; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-style: normal; text-align: right">18,527</td><td style="padding-bottom: 2.5pt; font-style: normal; text-align: left"> </td><td style="font-style: normal; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-style: normal; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-style: normal; text-align: right">—  </td><td style="padding-bottom: 2.5pt; font-style: normal; text-align: left"> </td></tr>
</table>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Leasing Activities</b></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Sale-leaseback Transactions</p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">During
the three months ended March 31, 2016, the Company entered into a sale-leaseback transaction with a non-related party.  The
Company evaluated the transaction under FASB ASC Subtopic 842-40, "Sale and Leaseback Transactions" and concluded that
the transfer of the asset did not qualify as a sale and is accounted for in accordance with other Topics.  The liability is
presented in the debt table in Note 10 as an equipment financing obligation.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Finance Leases</p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company executed a lease-to-own agreement for certain office equipment from a non-related company that includes a bargain purchase
of $1 at the end of the lease term.  The Company is required to pay monthly installments of $1,158 for twelve months beginning
in July 2015.  Amortization of the right of use asset recognized during the nine months ended March 31, 2016 was $3,380 and
no amortization expense was recognized during the nine months ended March 31, 2015.  Amortization expense related to finance
lease obligations is included in the "Depreciation and amortization" in the condensed consolidated statements of operations. 
The associated interest expense on the lease liability recognized during the nine months ended March 31, 2016 was $340 and no interest
expense was recognized during the nine months ended March 31, 2015.  Interest expense related to finance lease obligations
is included in the "Interest expense" in the condensed consolidated statements of operations.  As of March 31, 2016,
the net carrying value of the asset was $10,141 and is included in "Property, plant, and equipment, net" and the related
liability of $3,444 is included in "Accrued expenses" in the condensed consolidated balance sheets.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Operating Leases</p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company leases office space in Madison, Wisconsin from a non-related company under the terms of a lease that expires October 31,
2017.  Monthly rent for the first twelve months of the lease is $1,580 and increases by 3% for each succeeding 12 month period. </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company leased an Australian research and development facility from a non-related Australian company under the terms of a lease
that was due to expire on October 31, 2016.  Subsequently, the Company entered into a lease termination agreement that was
effective January 1, 2016.  The Company was required to pay a rent shortfall of $36,521 and a leasing fee of $7,313. 
Lease expense recognized during the nine months ended March 31, 2016 was $95,422 and is included in operating expenses in the condensed
consolidated statements of operations.  The carrying value of the right of use asset was $32,136 and is separately stated
on the condensed consolidated balance sheets.  The related short-term and long-term liabilities of $19,964 and $12,172 are
included in "Accrued expenses" and "Other long-term liabilities," respectively, in the condensed consolidated
balance sheets.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Operating
lease expense recognized during the nine months ended March 31, 2016 and March 31, 2015 was $95,422 and $66,961, respectively.  
Operating lease expense is included in operating expenses in the condensed consolidated statements of operations.  As of March
31, 2016 and June 30, 2015, the carrying value of the right of use asset was $32,136 and $85,656, respectively, and is separately
stated on the condensed consolidated balance sheets.  The related short-term and long-term liabilities as of March 31, 2016
were $19,964 and $12,172 and as of June 30, 2015 were $85,656 and $0, respectively.  The short-term and long-term liabilities
are included in "Accrued expenses" and "Other long-term liabilities," respectively, in the condensed consolidated
balance sheets.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Information
regarding the weighted-average remaining lease term and the weighted-average discount rate for finance and operating leases as
of March 31, 2016 and June 30, 2015 are summarized below:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"></font></p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr>
<td style="vertical-align: top; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 8pt">March 31, 2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 8pt">June 30, 2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"> </td></tr>
<tr>
<td style="vertical-align: top"><font style="font-size: 8pt">Weighted-average remaining lease term (in years)</font></td>
<td style="vertical-align: bottom"> </td>
<td colspan="2" style="vertical-align: top"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td colspan="2" style="vertical-align: top"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; width: 78%"><font style="font-size: 8pt">     Finance leases</font></td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 8%; text-align: center"><font style="font-size: 8pt">0.25</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 8%; text-align: center"><font style="font-size: 8pt">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"><font style="font-size: 8pt">    Operating leases</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">1.58</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">0.50</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"><font style="font-size: 8pt">Weighted-average discount rate</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"><font style="font-size: 8pt">    Finance leases</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">  5.0 %</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"><font style="font-size: 8pt">   Operating leases</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">  5.0 %</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">  5.0 %</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
</table>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The table below reconciles the undiscounted
cash flows for the first five years and total of the remaining years to the finance lease liabilities and operating lease liabilities
recorded in the condensed consolidated balance sheets:</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr>
<td style="vertical-align: top; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 8pt">Finance Leases</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 8pt">Operating Leases</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; width: 78%"><font style="font-size: 8pt">2016</font></td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 1%"><font style="font-size: 8pt">$ </font></td>
<td style="vertical-align: bottom; width: 8%; text-align: right"><font style="font-size: 8pt">3,474</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 1%"><font style="font-size: 8pt">$ </font></td>
<td style="vertical-align: bottom; width: 8%; text-align: right"><font style="font-size: 8pt">5,260</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"><font style="font-size: 8pt">2017</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">21,440</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; padding-bottom: 1.5pt"><font style="font-size: 8pt">2018</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 8pt">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 8pt">7,180</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; padding-bottom: 1.5pt"><font style="font-size: 8pt">Total undiscounted lease payments</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 8pt">3,474</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 8pt">33,880</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; padding-bottom: 1.5pt"><font style="font-size: 8pt">Present value adjustment</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 8pt">(30</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1.5pt solid"><font style="font-size: 8pt">)</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 8pt">(1,744</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1.5pt solid"><font style="font-size: 8pt">)</font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; padding-bottom: 3pt"><font style="font-size: 8pt">Net finance lease and operating lease liabilities</font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double"><font style="font-size: 8pt">$ </font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 8pt">3,444</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 2.25pt double"> </td>
<td style="vertical-align: bottom; padding-bottom: 3pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double"><font style="font-size: 8pt">$ </font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 8pt">32,136</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 2.25pt double"> </td></tr>
</table>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0">Short-term Leases</p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company leases office space in Honolulu, Hawaii from a non-related party under the terms of a lease that expires September 15,
2016.  Monthly rent for the twelve month rental period is $4,250.  Rent expense of $34,000 was recognized during the
nine months ended March 31, 2016 and no short-term rent expense was recognized during the nine months ended March 31, 2015. 
Short-term rent expense is included in operating expenses in the condensed consolidated statement of operations.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>Employment Contracts</b></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company has entered into employment contracts with executives and management personnel.  The contracts provide for salaries,
bonuses and stock option grants, along with other employee benefits.  The employment contracts generally have no set term
and can be terminated by either party.  There is a provision for payments of up to six months of annual salary as severance
if the Company terminates a contract without cause, along with the acceleration of certain unvested stock option grants. 
During the nine months ended March 31, 2016, the Company recorded $125,000 of severance for the former CEO.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">All
Australian based employees are entitled to varying degrees of benefits on retirement, disability, or death.  The Company contributed
to an accumulation fund on behalf of the employees under an award which is legally enforceable.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">For
U.S. employees, the Company has a 401(k) plan.  All active participants are 100% vested immediately.  Expenses under
these plans were $28,990 and $89,556 for the three and nine months ended March 31, 2016, respectively.  Expenses under these
plans were $26,260 and $71,963 for the three and nine months ended March 31, 2015.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
provision for income taxes consists of the following:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="6" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">Nine Months Ended March 31,</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 76%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Current</font></td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(468</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Deferred</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 2.25pt"><font style="font-size: 8pt; font-style: normal">Provision for income taxes</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 2.25pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: Black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">(468</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 2.25pt"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 2.25pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: Black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 2.25pt"> </td></tr>
</table>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company accounts for income taxes using an asset and liability approach which generally requires the recognition of deferred income
tax assets and liabilities based on the expected future income tax consequences of events that have previously been recognized
in the Company's financial statements or tax returns.  In addition, a valuation allowance is recognized if it is more likely
than not that some or all of the deferred income tax assets will not be realized in the foreseeable future.  Deferred income
tax assets are reviewed for recoverability based on historical taxable income, the expected reversals of existing temporary differences,
tax planning strategies and projections of future taxable income.  As a result of this analysis, the Company has provided
for a valuation allowance against its net deferred income tax assets as of March 31, 2016 and June 30, 2015.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0"><font style="font-style: normal">The Company's combined
effective income tax rate differed from the U.S. federal statutory income rate as follows:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0"><font style="font-style: normal"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="6" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">As of March 31,</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 66%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Income tax expense/(benefit) computed at the U.S. federal statutory rate</font></td>
<td style="vertical-align: bottom; width: 3%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 3%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 8%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">-34</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 3%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">%</font></td>
<td style="vertical-align: bottom; width: 3%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 3%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 8%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">-34</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 3%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">%</font></td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Change in valuation allowance</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">34</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">%</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">34</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">%</font></td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 2.25pt"><font style="font-size: 8pt; font-style: normal">Total</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 2.25pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: Black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">0</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 2.25pt"><font style="font-size: 8pt; font-style: normal">%</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 2.25pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: Black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">0</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 2.25pt"><font style="font-size: 8pt; font-style: normal">%</font></td></tr>
</table>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0"><font style="font-style: normal">Significant components
of the Company's net deferred income tax assets as of March 31, 2016 and June 30, 2015 were as follows:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0"><font style="font-style: normal"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">March 31, 2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">June 30, 2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 66%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Federal net operating loss carryforwards</font></td>
<td style="vertical-align: bottom; width: 3%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 3%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 8%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">16,340,673</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 3%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 3%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 3%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 8%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">11,780,604</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 3%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Federal - other</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">2,149,682</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">2,783,304</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Wisconsin net operating loss carryforwards</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">2,595,046</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">1,748,976</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Australia net operating loss carryforwards</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">1,283,031</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">1,497,779</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"><font style="font-size: 8pt; font-style: normal">Deferred income tax asset valuation allowance</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">(22,368,432</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">(17,810,663</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"><font style="font-size: 8pt; font-style: normal">)</font></td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Total deferred income tax assets</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company has U.S. federal net operating loss carryforwards of approximately $48.1 million as of March 31, 2016, that expire at various
dates between June 30, 2017 and 2034.  The Company also has $6.3 million in other federal deferred tax assets comprised of
charitable contributions carryforwards and intangible amortization.  The Company has U.S. federal research and development
tax credit carryforwards of approximately $247,000 as of March 31, 2016 that expire at various dates through June 30, 2033. 
As of March 31, 2016, the Company has approximately $49.4 million of Wisconsin net operating loss carryforwards that expire at
various dates between June 30, 2015 and 2028.  As of March 31, 2016, the Company also has approximately $4.3 million of Australian
net operating loss carryforwards available to reduce future taxable income of its Australian subsidiaries with an indefinite carryforward
period.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">A
reconciliation of the beginning and ending balance of unrecognized income tax benefits is as follows:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">March 31, 2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">June 30, 2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 76%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal"> Beginning balance</font></td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">196,583</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal"> Lapses of statutes of limitations</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(161,344</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"><font style="font-size: 8pt; font-style: normal"> Effect of foreign currency translation</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">(35,239</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"><font style="font-size: 8pt; font-style: normal">)</font></td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal"> Ending balance</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company's issuance of additional shares of common stock has constituted an ownership change under Section 382 of the Internal Revenue
Code which places an annual dollar limit on the use of net operating loss ("NOL") carryforwards and other tax attributes
that may be utilized in the future.  The calculation of the annual limitation of usage is based on a percentage of the equity
value immediately after any ownership change.  The annual amount of tax attributes that may be utilized after the change in
ownership is limited.  Previous issuances of additional shares of common stock also resulted in ownership changes and the
annual amount of tax attributes from previous years is limited as well.  The estimated U.S. federal net operating loss carryforward
expected to expire due to the Section 382 limitation is $44.5 million and the estimated state net operating losses expected to
expire due to the limitation is $28.2 million.  The net operating loss deferred tax assets reflect this limitation.</font></p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">EnSync, Inc. and its subsidiaries ("EnSync,"
"we," "us," "our," or the "Company") develop, license, and manufacture innovative energy
management systems solutions serving the commercial and industrial ("C&I") building, utility, and off-grid markets. 
Incorporated in 1998, EnSync is headquartered in Menomonee Falls, Wisconsin, USA with offices in Madison, Wisconsin, Petaluma,
California, Honolulu, Hawaii, and Shanghai, China.  In August 2015, we changed our corporate name from ZBB Energy Corporation
to EnSync, Inc., and we regularly use the name EnSync Energy Systems for marketing and branding purposes.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">EnSync develops and commercializes application
solutions for advanced energy management systems critical to the transition from a "coal-centric economy" to one reliant
on renewable energy sources.  EnSync synchronizes conventional utility, distributed generation and storage assets to seamlessly
ensure the least expensive and most reliable electricity available, thus enabling the future of energy networks.  These advanced
systems directly connect wind and solar equipment to the grid and other systems that can form various levels of micro-grids as
well as power quality regulation solutions.  EnSync brings vital power control and energy storage solutions to problems caused
by incorporation of increasingly pervasive renewable energy generating assets that are part of the grid power transmission and
distribution network used in commercial, industrial, and multi-tenant buildings.  The Company also develops and commercializes
energy management systems for off-grid applications such as island or remote power.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We recently began addressing our target markets
through power purchase agreements ("PPAs") under which we agree to provide, and the customer agrees to purchase, electricity
from us at a fixed rate for a 20-year period.  Under this structure we develop and supply a system that uses our and other
companies' products and the customer receives the benefit of a low and fixed price for electricity without any upfront costs. 
Because this business model requires significant capital outlays, our monetization strategy is we either sell the PPAs outright
or enter into sale-leaseback transactions.</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The condensed consolidated financial statements
include the accounts of the Company and those of its wholly-owned subsidiaries ZBB Energy Pty Ltd. (formerly known as ZBB Technologies,
Ltd.), Century West PNL LLC, Kona CE, LLC, various other PPA subsidiaries, its eighty-five percent owned subsidiary Holu Energy
LLC, and its sixty percent owned subsidiary ZBB PowerSav Holdings Limited located in Hong Kong, which was formed in connection
with the Company's investment in a China joint venture.</p>
<p style="font: 11pt/107% Calibri, Helvetica, Sans-Serif; margin: 0 0 8pt"> </p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles
generally accepted in the United States ("US GAAP") for interim financial data and with the instructions to Form 10-Q
and Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and notes required by US GAAP for
complete financial statements.  In the opinion of management, all adjustments (consisting only of adjustments of a normal
and recurring nature) considered necessary for fair presentation of the results of operations have been included.  Operating
results for the three and nine month periods ended March 31, 2016 are not necessarily indicative of the results that might be expected
for the year ending June 30, 2016.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
condensed consolidated balance sheet at June 30, 2015 has been derived from audited financial statements at that date, but does
not include all of the information and disclosures required by US GAAP.  For a more complete discussion of accounting policies
and certain other information, refer to the Company's annual report filed on Form 10-K for the fiscal year ended June 30, 2015
filed with the Securities and Exchange Commission on September 28, 2015.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
accompanying condensed consolidated financial statements include the accounts of the Company and its wholly and majority-owned
subsidiaries and have been prepared in accordance with US GAAP.  All significant intercompany accounts and transactions have
been eliminated in consolidation.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions.  These
estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amount of revenues and expenses during the reporting period.  It
is reasonably possible that the estimates we have made may change in the near future.  Significant estimates underlying the
accompanying condensed consolidated financial statements include those related to:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 8pt Times New Roman, Times, Serif">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="width: 18pt; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; width: 18pt; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">the timing of revenue recognition;</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">allocation of purchase price in the business combination;</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">the allowance for doubtful accounts;</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">provisions for excess and obsolete inventory;</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">the lives and recoverability of property, plant and equipment and other long-lived assets, including goodwill;</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">contract costs, losses, and reserves;</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">warranty obligations;</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">income tax valuation allowances;</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">discount rates for finance and operating lease liabilities;</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">asset retirement obligations;</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">stock-based compensation; and</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">valuation of equity instruments and warrants.</font></td></tr>
</table>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company's financial instruments consist of cash and cash equivalents, restricted cash on deposit, accounts receivable, a note receivable,
accounts payable, bank loans, notes payable, equipment financing, lease obligations, asset retirement obligations, equity instruments,
and warrants.  The carrying amounts of the Company's financial instruments approximate their respective fair values due to
the relatively short-term nature of these instruments, except for the bank loans, notes payable, equipment financing, asset retirement
obligations, equity instruments, and warrants.  The carrying amounts of the bank loans and notes payable approximates fair
value due to the interest rate and terms approximating those available to us for similar obligations.  The interest rate on
the equipment financing obligation was imputed based on the requirements described in FASB ASC Topic 842-40-30-6. The asset
retirement obligation is calculated as the present value of the estimated fair value of the future obligation using the Company's
credit-adjusted risk-free rate. The fair value of the nonconvertible attribute and conversion option of the Series C Preferred
Stock and related Warrant was determined using the Option-Pricing Method ("OPM") as described in the AICPA Accounting
and Valuation Guide entitled Valuation of Privately-Held-Company Equity Securities Issued as Compensation and a "with"
and "without" methodology to bifurcate the Series C Preferred conversion feature.  The OPM model treats the various
equity securities as call options on the total equity value contingent upon each security's strike price or participation rights. 
The Black-Scholes inputs utilized for the OPM model were: (i) an aggregate equity value estimated based on the back-solve methodology
to reconcile the closing common stock price as of the valuation date; (ii) a term in alignment with the terms of the Supply Agreement;
(iii) a risk free rate from the Federal Reserve Board's H.15 release as of the transaction date; (iv) the volatility of the Company's
publicly traded stock price; and (v) the performance vesting requirements of the equity instruments that were expected to be met.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company accounts for the fair value of financial instruments in accordance with Financial Accounting Standards Board ("FASB")
Accounting Standards Codification ("ASC") Topic 820, "Fair Value Measurements and Disclosures."  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.  The degree of judgment utilized in measuring the fair value of assets
and liabilities generally correlates to the level or pricing observability.  FASB ASC Topic 820 describes a fair value hierarchy
based on the following three levels of inputs, of which the first two are considered observable and the last unobservable, that
may be used to measure fair value:</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Level
1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access
at the measurement date.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Level
2 inputs are inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly, for
similar assets or liabilities in active markets.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Level
3 inputs are unobservable inputs for the asset or liability.  As such, the prices or valuation techniques require inputs that
are both significant to the fair value measurement and are unobservable.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company considers all highly liquid investments with maturities of three months or less to be cash equivalents.  The Company
maintains its cash deposits at financial institutions predominately in the United States, Australia, Hong Kong, and China. 
The Company has not experienced any losses in such accounts.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company had no restricted cash and $60,193 in restricted cash on deposit as of March 31, 2016 and June 30, 2015, respectively,
as collateral for certain credit arrangements.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Credit
is extended based on an evaluation of a customer's financial condition.  Accounts receivable are stated at the amount the
Company expects to collect from outstanding balances.  The Company records allowances for doubtful accounts based on customer-specific
analysis and general matters such as current assessments of past due balances and economic conditions.  The Company writes
off accounts receivable against the allowance when they become uncollectible.  Accounts receivable are stated net of an allowance
for doubtful accounts of $10,878 as of March 31, 2016 and $11,074 as of June 30, 2015.  The composition of accounts receivable
by aging category is as follows as of:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" nowrap="nowrap" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">March 31, 2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" nowrap="nowrap" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">June 30, 2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 74%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Current</font></td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 10%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">11,226</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 10%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">4,291</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">30-60 days</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">101</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">60-90 days</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">24,713</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">3,555</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Over 90 days</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">1,486</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">105,248</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Total</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">37,526</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">113,093</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Inventories
are stated at the lower of cost or market.  Cost is computed using standard cost, which approximates actual cost, on a first-in,
first-out basis.  The Company provides inventory write-downs based on excess and obsolete inventories based on historical
usage.  The write-down is measured as the difference between the cost of the inventory and market based upon assumptions about usage
and charged to the provision for inventory, which is a component of cost of sales.  At the point of the loss recognition,
a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the
restoration or increase in that newly established cost basis.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Customer
intangible assets are reviewed quarterly for impairment due to the expected short-term nature of the asset.  The customer
intangible asset is amortized as revenue from the acquired contracts is recognized in our condensed consolidated statements of
operations.  To date, there have been no write-offs recorded for impairments.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">As
of March 31, 2016, the gross carrying value of the customer intangible asset is $169,321 and the accumulated amortization is $46,206,
resulting in a net customer intangible asset of $123,115.  Amortization expense recognized during the three and nine months
ended March, 31, 2016 was $31,759 and $46,206, respectively.  There was no amortization expense recognized during the three
or nine months ended March 31, 2015.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company has one note receivable from an unrelated party.  On December 18, 2015, the Company and the unrelated party amended
the terms of the note receivable.  The note matures on the earlier of (a) the date on which the unrelated party has secured
a total of $500,000 or more in additional financing from any source or (b) June 30, 2016 and is classified as "Note receivable"
in the financial statements.  We regularly evaluate the financial condition of the borrower to determine if any reserve for
an uncollectible amount should be established.  To date, no such reserve is required.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Deferred
customer project costs consist primarily of the costs of products delivered and services performed that are subject to additional
performance obligations or customer acceptance.  These deferred customer project costs are expensed at the time the related
revenue is recognized.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Project
assets consist primarily of capitalized costs which are incurred by the Company prior to the sale of the photovoltaic, storage
or energy management systems and power purchase agreement to a third-party.  These costs are typically for the construction,
installation and development of these projects.  Construction and installation costs include primarily material and labor
costs.  Development fees can include legal, consulting, permitting, and other similar costs.  Once we enter into a definitive
sales agreement, we reclassify project assets to deferred PPA project costs on our condensed consolidated balance sheet until the
sale is completed and we have met all of the criteria to recognize the sale as revenue, which is typically subject to real estate
revenue recognition requirements.  We expense project assets to cost of sales after each respective project asset is sold
to a customer and all revenue recognition criteria have been met (matching the expensing of costs to the underlying revenue recognition
method).  We classify project assets as current as the time required to develop, construct, and sell the projects is expected
within the next 12 months.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">We
review project assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. 
We consider a project commercially viable or recoverable if it is anticipated to be sold for a profit once it is either fully developed
or fully constructed.  We consider a partially developed or partially constructed project commercially viable or recoverable
if the anticipated selling price is higher than the carrying value of the related project assets.  We examine a number of
factors to determine if the project will be recoverable, the most notable of which include whether there are any changes in environmental,
ecological, permitting, market pricing, or regulatory conditions that impact the project.  Such changes could cause the costs
of the project to increase or the selling price of the project to decrease.  If a project is not considered recoverable, we
impair the respective project assets and adjust the carrying value to the estimated recoverable amount, with the resulting impairment
recorded within operating expenses.  The Company did not record any impairment charges during the three or nine months ended
March 31, 2016.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Land,
building, equipment, computers, furniture and fixtures are recorded at cost.  Maintenance, repairs and betterments are charged
to expense as incurred.  Depreciation is provided for all plant and equipment on a straight-line basis over the estimated
useful lives of the assets.  The estimated useful lives used for each class of depreciable asset are:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top; font: 8pt Times New Roman, Times, Serif">
<td style="width: 55%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="width: 45%; text-decoration: underline; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal"><u>Estimated Useful Lives</u></font></td></tr>
<tr style="vertical-align: top; background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Manufacturing equipment</font></td>
<td style="text-align: center; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">3 - 7 years</font></td></tr>
<tr style="vertical-align: top; background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Office equipment</font></td>
<td style="text-align: center; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">3 - 7 years</font></td></tr>
<tr style="vertical-align: top; background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Building and improvements</font></td>
<td style="text-align: center; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">7 - 40 years</font></td></tr>
</table>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company completed a review of the estimated useful lives of specific assets for the nine months ended March 31, 2016 and determined
that there were no changes in the estimated useful lives of assets.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
accordance with FASB ASC Topic 360, "Impairment or Disposal of Long-Lived Assets," the Company assesses potential impairments
to its long-lived assets including property, plant, equipment and intangible assets when there is evidence that events or changes
in circumstances indicate that the carrying value may not be recoverable.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">If
such an indication exists, the recoverable amount of the asset is compared to the asset's carrying value.  Any excess of the
asset's carrying value over its recoverable amount is expensed in the statement of operations.  In assessing value in use,
the estimated future cash flows are discounted to their present value using a pre-tax discount rate.  Management has determined
that there were no long-lived assets impaired as of March 31, 2016 and June 30, 2015.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Investee
companies that are not consolidated, but over which the Company exercises significant influence, are accounted for under the equity
method of accounting.  Whether or not the Company exercises significant influence with respect to an investee depends on an
evaluation of several factors including, among others, representation on the investee company's board of directors and ownership
level, which is generally a 20% to 50% interest in the voting securities of the investee company.  Under the equity method
of accounting, an investee company's accounts are not reported in the Company's condensed consolidated balance sheets and statements
of operations; however, the Company's share of the earnings or losses of the investee company is reflected in the caption ''Equity
in loss of investee company" in the condensed consolidated statements of operations.  The Company's carrying value in
an equity method investee company is reported in the caption ''Investment in investee company'' in the Company's condensed consolidated
balance sheets.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">When
the Company's carrying value in an equity method investee company is reduced to zero, no further losses are recorded in the Company's
condensed consolidated financial statements unless the Company guaranteed obligations of the investee company or has committed
additional funding.  When the investee company subsequently reports income, the Company will not record its share of such
income until it equals or exceeds the amount of its share of losses not previously recognized.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Goodwill
is recognized as the excess cost of an acquired entity over the net amount assigned to assets acquired and liabilities assumed. 
Goodwill is not amortized but reviewed for impairment annually as of June 30 or more frequently if events or changes in circumstances
indicate that its carrying value may be impaired.  These conditions could include a significant change in the business climate,
legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
first step of the impairment test requires the comparing of a reporting unit's fair value to its carrying value.  If the carrying
value is less than the fair value, no impairment exists and the second step is not performed.  If the carrying value is higher
than the fair value, there is an indication that impairment may exist and the second step must be performed to compute the amount
of the impairment.  In the second step, the impairment is computed by estimating the fair values of all recognized and unrecognized
assets and liabilities of the reporting unit and comparing the implied fair value of reporting unit goodwill with the carrying
amount of that unit's goodwill.  The Company determined fair value as evidenced by market capitalization, and concluded that
there was no need for an impairment charge as of March 31, 2016 and June 30, 2015.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Accrued
expenses consist of the Company's present obligations related to various expenses incurred during the period and includes a reserve
for estimated contract losses, other accrued expenses, and warranty obligations.  Included in accrued expenses as of June
30, 2015 was a reserve of approximately $685,000, for a product upgrade initiative established in the fourth quarter of fiscal
2014.  The product upgrade initiative was completed during the quarter ended March 31, 2016 and the unused reserve of $186,000
was reversed during the period.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Subsequent
to commercialization, installation and commissioning of units in the field, the Company garnered meaningful insights that resulted
in system design modifications and other general upgrades, which improved the performance, efficiency, and reliability of its systems. 
In the interest of enhancing customer satisfaction, the Company launched the product upgrade initiative to implement these improvements
at certain locations of its installed base through fiscal year 2016.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company typically warrants its products for the shorter of twelve months after installation or eighteen months after date of shipment. 
Warranty costs are provided for estimated claims and charged to cost of product sales as revenue is recognized.  Warranty
obligations are also evaluated quarterly to determine a reasonable estimate for the replacement of potentially defective materials
of all energy storage systems that have been shipped to customers within the warranty period.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">While
the Company actively engages in monitoring and improving its evolving battery and production technologies, there is only a limited
product history and relatively short time frame available to test and evaluate the rate of product failure.  Should actual
product failure rates differ from the Company's estimates, revisions are made to the estimated rate of product failures and resulting
changes to the liability for warranty obligations.  In addition, from time to time, specific warranty accruals may be made
if unforeseen technical problems arise.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">As
of March 31, 2016 and June 30, 2015, included in the Company's accrued expenses were $106,738 and $176,967, respectively, related
to warranty obligations.  The following is a summary of accrued warranty activity as of:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="text-align: center; font: italic 8pt Times New Roman, Times, Serif; vertical-align: bottom"> </td>
<td nowrap="nowrap" style="text-align: center; font: italic 8pt Times New Roman, Times, Serif; vertical-align: bottom"> </td>
<td colspan="2" nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">March 31, 2016</font></td>
<td nowrap="nowrap" style="text-align: center; font: italic 8pt Times New Roman, Times, Serif; vertical-align: bottom"> </td>
<td nowrap="nowrap" style="text-align: center; font: italic 8pt Times New Roman, Times, Serif; vertical-align: bottom"> </td>
<td colspan="2" nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">June 30, 2015</font></td>
<td nowrap="nowrap" style="text-align: center; font: italic 8pt Times New Roman, Times, Serif; vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 76%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Beginning balance</font></td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">176,967</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">731,910</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Accruals for warranties during the period</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">39,415</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">167,901</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Settlements during the period</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(316,903</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(480,683</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"><font style="font-size: 8pt; font-style: normal">Adjustments relating to preexisting warranties</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">207,259</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">(242,161</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"><font style="font-size: 8pt; font-style: normal">)</font></td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Ending balance</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">106,738</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">176,967</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Revenues
are recognized when persuasive evidence of a contractual arrangement exists, delivery has occurred or services have been rendered,
the seller's price to buyer is fixed and determinable, and collectability is reasonably assured.  The portion of revenue related
to installation and final acceptance, is deferred until such installation and final customer acceptance are completed.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">From
time to time, the Company may enter into separate agreements at or near the same time with the same customer.  The Company
evaluates such agreements to determine whether they should be accounted for individually as distinct arrangements or whether the
separate agreements are, in substance, a single multiple element arrangement.  The Company evaluates whether the negotiations
are conducted jointly as part of a single negotiation, whether the deliverables are interrelated or interdependent, whether the
fees in one arrangement are tied to performance in another arrangement, and whether elements in one arrangement are essential to
another arrangement.  The Company's evaluation involves significant judgment to determine whether a group of agreements might
be so closely related that they are, in effect, part of a single arrangement.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Our
collaboration agreements typically involve multiple elements or deliverables, including upfront fees, contract research and development,
milestone payments, technology licenses or options to obtain technology licenses, and royalties.  For these arrangements,
revenues are recognized in accordance with FASB ASC Topic 605-25,</font> <font style="font-style: normal">"Revenue Recognition
– Multiple Element Arrangements."  The Company's revenues associated with multiple element contracts is based on
the selling price hierarchy, which utilizes vendor-specific objective evidence ("VSOE") when available, third-party evidence
("TPE") if VSOE is not available, and if neither is available then the best estimate of the selling price is used. 
The Company utilizes best estimate for its multiple deliverable transactions as VSOE and TPE do not exist.  To be considered
a separate element, the product or service in question must represent a separate unit under SEC Staff Accounting Bulletin 104,
and fulfill the following criteria: the delivered item(s) has value to the customer on a standalone basis; there is objective and
reliable evidence of the fair value of the undelivered item(s); and if the arrangement includes a general right of return relative
to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in our control.
For arrangements containing multiple elements, revenue from time and materials based service arrangements is recognized as the
service is performed.  Revenue relating to undelivered elements is deferred at the estimated fair value until delivery of
the deferred elements.  If the arrangement does not meet all criteria above, the entire amount of the transaction is deferred
until all elements are delivered.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
portion of revenue related to engineering and development is recognized ratably upon delivery of the goods or services pertaining
to the underlying contractual arrangement, or revenue is recognized as certain activities are performed by the Company over the
estimated performance period.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company recognizes revenue for the sales of PPA systems following the guidance in FASB ASC Topic 360, "Accounting for Sales
of Real Estate."  We record the sale as revenue after the initial and continuing investment requirements have been met
and whether collectability from the buyer is reasonably assured.  We may align our revenue recognition and release our project
assets or deferred PPA project costs to cost of sales with the receipt of payment from the buyer if the sale has been consummated
and we have transferred the usual risks and rewards of ownership to the buyer.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company charges shipping and handling fees when products are shipped or delivered to a customer, and includes such amounts in product
revenues and shipping costs in cost of sales.  The Company reports its revenues net of estimated returns and allowances.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Total
revenues of $160,138 and $815,375 were recognized for the three and nine months ended March 31, 2016, respectively.  Revenues
for the three months ended March 31, 2016 were comprised of two significant customers (95% of revenues) and revenues for the nine
months ended March 31, 2016 were comprised of three significant customers (85% of revenues).  Total revenues of $584,817 and
$1,450,332 were recognized for the three and nine months ended March 31, 2015, respectively.  Revenues for the three months
ended March 31, 2015 were comprised of two significant customers (88% of revenue) and revenues for the nine months ended March
31, 2015 were comprised of two significant customers (79% of revenue).  The Company had one significant customer with an outstanding
receivable balance of $23,000 (62% of accounts receivable, net) as of March 31, 2016.  The Company had two significant customers
with outstanding receivable balances of $77,000 and $31,000 (68% and 28% of accounts receivable, net) as of June 30, 2015.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">We
assess whether a substantive milestone exists at the inception of our agreements.  In evaluating if a milestone is substantive
we consider whether:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 8pt Times New Roman, Times, Serif">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="width: 18pt; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; width: 18pt; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">Substantive uncertainty exists as to the achievement of the milestone event at the inception of the arrangement;</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">The achievement of the milestone involves substantive effort and can only be achieved based in whole or in part on our performance or the occurrence of a specific outcome resulting from our performance;</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">The amount of the milestone payment appears reasonable either in relation to the effort expended or the enhancement of the value of the delivered item(s);</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">There is no future performance required to earn the milestone; and</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">The consideration is reasonable relative to all deliverables and payment terms in the arrangement.</font></td></tr>
</table>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">If
any of these conditions are not met, we do not consider the milestone to be substantive and we defer recognition of the milestone
payment and recognize it as revenue over the estimated period of performance, if any.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">On
April 8, 2011, the Company entered into a Collaboration Agreement (the "Collaboration Agreement") with Honam Petrochemical
Corporation, now known as Lotte Chemical Corporation ("Lotte"), pursuant to which the Company and Lotte collaborated
on the technical development of the Company's third generation zinc bromide flow battery module (the "Version 3 Battery Module")
and Lotte received a fully paid-up, exclusive and royalty-free license to sell and manufacture the Version 3 Battery Module in
South Korea and a non-exclusive royalty-bearing license to sell the Version 3 Battery Module in Japan, Thailand, Taiwan, Malaysia,
Vietnam and Singapore.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">On
December 16, 2013, the Company and Lotte entered into a Research and Development Agreement (the "R&D Agreement")
pursuant to which the Company has agreed to develop and provide to Lotte a 500kWh zinc bromide flow battery system, including a
zinc bromide chemical flow battery module and related software (the "Product"), on the terms and conditions set forth
in the R&D Agreement (the "Lotte Project"). Subject to the satisfaction of certain specified milestones, Lotte is
required to make payments to the Company under the R&D Agreement totaling $3,000,000 over the term of the Lotte Project. 
We recognize revenue based upon a Performance Based Method pursuant to the model described in FASB ASC Subtopic 980-605-25, where
revenue is recognized based on the lesser of the amount of nonrefundable cash received or the amounts due based on the proportional
amount of the total effort expected to be expended on the contract that has been provided to date as there does not exist substantial
doubt that the milestones will be achieved.  The Company recognized $95,382 and $264,389 of revenue under this agreement for
the three and nine months ended March 31, 2016, respectively.  The Company recognized $297,173 and $483,650 of revenue under
the R&D Agreement for the three and nine months ended March 31, 2015, respectively.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Additionally,
on December 16, 2013, we entered into an Amended License Agreement with Lotte (the "Amended License Agreement"). 
Pursuant to the Amended License Agreement, we granted to Lotte, (1) an exclusive and royalty-free limited license in South Korea
to use the Company's zinc bromide flow battery module, zinc bromide flow battery stack and the technical information and know how
related to the intellectual property arising from the Lotte Project (collectively, the "Technology") to manufacture or
sell a zinc bromide flow battery (the "Lotte Product") in South Korea and (2) a non-exclusive (a) royalty-free limited
license for Lotte and its affiliates to use the Technology internally in all locations other than China and South Korea to manufacture
the Lotte Product and (b) royalty-bearing limited license to sell the Lotte Product in all locations other than China, the United
States and South Korea. Lotte is required to pay us a total license fee of $3,000,000 under the Amended License Agreement plus
up to an additional $1,000,000 if certain specific milestones are successfully achieved.  In addition, Lotte is required to
make ongoing royalty payments to the Company equal to a single digit percentage of Lotte's net sales of the Lotte Product outside
of South Korea until December 31, 2019.  The original license fees were subject to a 16.5% non-refundable Korea withholding
tax.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Overall
since December 16, 2013 through March 31, 2016 there were $5,250,000 of payments received and $5,049,836 of revenue recognized
under the Lotte R&D and Amended License Agreements.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Engineering
and development costs related to the R&D Agreement totaled $221,628 and $357,795 for the three and nine months ended March
31, 2016, respectively.  Engineering and development costs related to the R&D Agreement totaled $33,078 and $202,223 for
the three and nine months ended March 31, 2015, respectively.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">As
of March 31, 2016 and June 30, 2015, the Company had no unbilled amounts from engineering and development contracts in process. 
The Company had received $105,000 and $370,000, which is included in "Customer deposits" in the condensed consolidated
balance sheets, of customer payments for engineering and development contracts, representing deposits in advance of performance
of the contracted work as of March 31, 2016 and June 30, 2015, respectively.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
accordance with FASB ASC Topic 730, "Research and Development," the Company expenses advanced engineering and development
costs as incurred.  These costs consist primarily of materials, labor, and allocable indirect costs incurred to design, build,
and test prototype units, as well as the development of manufacturing processes for these units.  Advanced engineering and
development costs also include consulting fees and other costs.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">To
the extent these costs are separately identifiable, incurred and funded by advanced engineering and development type agreements
with outside parties, they are shown separately on the condensed consolidated statements of operations as a "Cost of engineering
and development."</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company measures all "Share-Based Payments," including grants of stock options, restricted shares and restricted stock
units in its condensed consolidated statement of operations based on their fair values on the grant date, which is consistent with
FASB ASC Topic 718, "Stock Compensation," guidelines.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Accordingly,
the Company measures share-based compensation cost for all share-based awards at the fair value on the grant date and recognizes
share-based compensation over the service period for awards that are expected to vest.  The fair value of stock options is
determined based on the number of shares granted and the price of the shares at grant, and calculated based on the Black-Scholes
valuation model.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company compensates its outside directors with restricted stock units ("RSUs") and cash.  The grant date fair value
of the RSU awards is determined using the closing stock price of the Company's common stock on the day prior to the date of the
grant, with the compensation expense amortized over the vesting period of RSU awards, net of estimated forfeitures.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company only recognizes expense for those options or shares that are expected ultimately to vest, using two attribution methods
to record expense, the straight-line method for grants with only service-based vesting or the graded-vesting method, which considers
each performance period, for all other awards.  See further discussion of stock-based compensation in Note 11.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Advertising
costs of $4,103 and $14,362 were incurred for the three and nine months ended March 31, 2016, respectively.  Advertising costs
of $3,284 and $16,245 were incurred for the three and nine months ended March 31, 2015, respectively.  These costs were charged
to selling, general, and administrative expenses as incurred.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company records deferred income taxes in accordance with FASB ASC Topic 740, "Accounting for Income Taxes."  FASB
ASC Topic 740 requires recognition of deferred income tax assets and liabilities for temporary differences between the tax basis
of assets and liabilities and the amounts at which they are carried in the financial statements, based upon the enacted tax rates
in effect for the year in which the differences are expected to reverse.  The Company establishes a valuation allowance when
necessary to reduce deferred income tax assets to the amount expected to be realized.  There were no net deferred income tax
assets recorded as of March 31, 2016 and June 30, 2015.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company applies a more-likely-than-not recognition threshold for all tax uncertainties as required under FASB ASC Topic 740, which
only allows the recognition of those tax benefits that have a greater than fifty percent likelihood of being sustained upon examination
by the taxing authorities.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company's U.S. Federal income tax returns for the years ended June 30, 2012 through June 30, 2015 and the Company's Wisconsin and
Australian income tax returns for the years ended June 30, 2011 through June 30, 2015 are subject to examination by taxing authorities. 
As of March 31, 2016, there were no examinations in progress.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company uses the United States dollar as its functional and reporting currency, while the Australian dollar and Hong Kong dollar
are the functional currencies of its foreign subsidiaries.  Assets and liabilities of the Company's foreign subsidiaries are
translated into United States dollars at exchange rates that are in effect at the balance sheet date while equity accounts are
translated at historical exchange rates.  Income and expense items are translated at average exchange rates which were applicable
during the reporting period.  Translation adjustments are recorded in accumulated other comprehensive loss as a separate component
of equity in the condensed consolidated balance sheets.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company follows the FASB ASC Topic 260, "Earnings per Share," provisions which require the reporting of both basic and
diluted earnings (loss) per share.  Basic earnings (loss) per share is computed by dividing net income (loss) available to
common stockholders by the weighted average number of common shares outstanding for the period.  Diluted earnings (net loss)
per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised
or converted into common stock.  In accordance with the FASB ASC Topic 260, any anti-dilutive effects on net income (loss)
per share are excluded.  As of March 31, 2016 and March 31, 2015 there were 14,000,034 and 9,809,404 shares of common stock
underlying convertible preferred stock, options, restricted stock units and warrants that are excluded, respectively.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Financial
instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and accounts receivable.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company maintains significant cash deposits primarily with one financial institution.  The Company has not previously experienced
any losses on such deposits.  Additionally, the Company performs periodic evaluations of the relative credit rating of the
institution as part of its banking strategy.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Concentrations
of credit risk with respect to accounts receivable are limited due to accelerated payment terms in current customer contracts and
creditworthiness of the current customer base.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Certain
amounts previously reported have been reclassified to conform to the current presentation.  The reclassifications did not
impact prior period results of operations, cash flows, total assets, total liabilities, or total equity.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company has determined that it operates as one reportable segment.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">From
time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company
as of the specified effective date.  Unless otherwise discussed, the Company believes that the impact of recently issued standards
that are not yet effective and not included below will not have a material impact on our financial position or results of operations
upon adoption.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
March 2016, the FASB issued Accounting Standards Update ("ASU") 2016-09 – Compensation – Stock Compensation
(Topic 780): Improvements to Employee Share-Based Payment Accounting.  ASU 2016-09 modifies US GAAP by requiring the following,
among others: (1) all excess tax benefits and tax deficiencies are to be recognized as income tax expense or benefit on the income
statement (excess tax benefits are recognized regardless of whether the benefit reduces taxes payable in the current period); (2)
excess tax benefits are to be classified along with other income tax cash flows as an operating activity in the statement of cash
flows; (3) in the area of forfeitures, an entity can still follow the current US GAAP practice of making an entity-wide accounting
policy election to estimate the number of awards that are expected to vest or may instead account for forfeitures when they occur;
and (4) classification as a financing activity in the statement of cash flows of cash paid by an employer to the taxing authorities
when directly withholding shares for tax withholding purposes.  ASU 2016-09 is effective for annual periods beginning after
January 1, 2017, including interim periods.  Early adoption is permitted.  The Company is currently assessing the impact
the adoption of ASU 2016-09 will have on its consolidated financial statements.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
March 2016, the FASB issued ASU 2016-07 – Investments – Equity Method and Joint Ventures (Topic 323): Simplifying the
Transition to the Equity Method of Accounting, which simplifies the accounting for equity method investments by removing the requirements
that an entity retroactively adopt the equity method of accounting if an investment qualifies for use of the equity method as a
result of an increase in the level of ownership or degree of influence.  The amendments require that the equity method investor
add the cost of acquiring the additional interest in the investee to the current basis of the investor's previously held interest
and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting.  ASU
2016-07 is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, and must apply
a prospective adoption approach.  Early adoption is permitted.  The Company does not expect adoption of this guidance
to have a significant impact on its consolidated financial statements.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
March 2016, the FASB issued ASU 2016-06 – Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments
(a consensus of the Emerging Issues Task Force), which requires that embedded derivatives be separate from the host contract and
accounted for separately as derivatives if certain criteria are met, including the "clearly and closely related" criterion. 
The amendments in this update clarify the requirements for assessing whether contingent call (put) options that can accelerate
the payment of principal on debt instruments are clearly and closely related to their debt hosts.  An entity performing the
assessment under the amendments is required to assess the embedded call (put) options solely in accordance with the four-step decision
sequence.  The amendments apply to all entities that are issuers or investors in debt instruments (or hybrid financial instruments
that are determined to have a debt host) with embedded call (put) options.  ASU 2016-06 is effective for fiscal years beginning
after December 15, 2016 and interim periods within those years, and must apply a modified retrospective transition approach. 
Early adoption is permitted.  The Company does not expect adoption of this guidance to have a significant impact on its consolidated
financial statements.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
March 2016, the FASB issued ASU 2016-05 – Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on
Existing Hedge Accounting Relationships (a consensus of the Emerging Issues Task Force), which provides guidance clarifying that
the novation of a derivative contract (i.e. a change in counterparty) in a hedge accounting relationship does not, in and of itself,
require dedesignation of that hedge accounting relationship.  This ASU amends ASC 815 to clarify that such a change does not,
in and of itself, represent a termination or the original derivative instrument or a change in the critical terms of the hedge
relationship.  ASU 2016-05 allows the hedging relationship to continue uninterrupted if all of the other hedge accounting
criteria are met, including the expectation that the hedge will be highly effective when the creditworthiness of the new counterpart
to the derivative contract is considered.  The amendments of this ASU are effective for reporting periods beginning after
December 15, 2016.  Early adoption is permitted.  Entities may adopt the guidance prospectively or use a modified retrospective
approach.  The Company does not expect adoption of this guidance to have a significant impact on its consolidated financial
statements.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
February 2016, the FASB issued ASU 2016-02 – Leases (Topic 842): Amendments to the FASB Accounting Standards Codifications,
to increase transparency and comparability among entities by recognizing lease assets and lease liabilities on the balance sheet
and disclosing key information about leasing arrangements.  ASU 2016-02 is effective for reporting periods beginning after
December 15, 2018, including interim periods within those fiscal years.  Early adoption is permitted.  Companies must
apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest
comparative period presented.  Lessees and lessors may not apply a full retrospective transition approach.  The Company
has early adopted ASU 2016-02 effective January 1, 2016.  With the adoption of ASU 2016-02, the Company has elected to apply
the package of practical expedients and use of hindsight detailed in ASC 842.  Additionally, the Company elects the practical
expedient in ASC Subtopic 842-10 to not separate nonlease components from lease components and instead account for each separate
lease component and nonlease components associated with that lease component as a single lease component by class of the underlying
asset.  The Company also elected not to recognize right of use assets and lease liabilities for short term leases, which has
a lease term of 12 months or less and does not include an option to purchase the underlying asset that the Company is reasonably
certain to exercise.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
January 2016, the FASB issued ASU 2016-01 – Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement
of Financial Assets and Financial Liabilities.  This guidance makes specific improvements to existing US GAAP for financial
instruments, including requiring equity investments (except those accounted for under the equity method of accounting, or those
that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income;
requiring entities to use the exit price notion when measuring fair value of financial instruments for disclosure purposes; requiring
separate presentation of financial assets and financial liabilities by measurement category and form of financial asset and requiring
entities to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting
from a change in the instrument-specific credit risk (also referred to as "own credit") when the organization has elected
to measure the liability at fair value in accordance with the fair value option.  The guidance is effective for public business
entities for fiscal years beginning after December 15, 2017.  Early adoption of the own credit provision is permitted. 
The Company does not expect adoption of this guidance to have a significant impact on its consolidated financial statements.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
September 2015, the FASB issued ASU 2015-16 – Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period
Adjustments.  The amendments in this update eliminate the requirement for entities to retrospectively account for adjustments
made to provisional amounts recognized in a business combination.  For public business entities, the amendments are effective
for fiscal years beginning after December 15, 2015, including interim reporting periods within those fiscal years.  The amendments
should be applied prospectively to adjustments to provisional amounts that occur after the effective date.  The Company does
not expect adoption of this guidance to have a significant impact on its consolidated financial statements.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
August 2015, the FASB issued ASU 2015-14 – Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. 
The amendment defers the effective date of ASU 2014-09 for all entities by one year.  Public business entities should apply
the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods
within that reporting period.  Earlier application is permitted only as of annual reporting periods beginning after December
15, 2016, including interim reporting periods within that reporting period.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
July 2015, the FASB issued ASU 2015-11 – Inventory (Topic 330): Simplifying the Measurement of Inventory.  The amendment
was issued to modify the process in which entities measure inventory.  The amendment does not apply to inventory measured
using last-in, first-out ("LIFO") or the retail inventory method.  This amendment requires entities to measure inventory
at the lower of cost and net realizable value.  Net realizable value is the estimated selling prices in the ordinary course
of business, less reasonably predictable costs of completion, disposal, and transportation.  Subsequent measurement is unchanged
for inventory measured using LIFO or the retail inventory method.  The amendments are effective for fiscal years beginning
after December 31, 2016, including interim periods within those fiscal years on a prospective basis with earlier application permitted
as of the beginning of an interim or annual reporting period.  The Company does not expect adoption of this guidance to have
a significant impact on its consolidated financial statements.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
February 2015, the FASB issued ASU 2015-02 – Consolidation (Topic 810): Amendments to the Consolidation Analysis.  The
amendment is intended to improve certain areas of consolidation guidance for legal entities such as limited partnerships, limited
liability corporations, and securitization structures.  The amendment simplifies reporting requirements by placing more emphasis
on risk of loss when determining a controlling financial interest, reducing the frequency of application of related-party guidance
when determining a controlling financial interest in a variable interest entity ("VIE"), and changing consolidation conclusions
for public companies in several industries that typically make use of limited partnerships or VIEs.  The amendment is effective
for fiscal years beginning after December 31, 2015.  Early adoption is permitted.  The Company does not expect adoption
of this guidance to have a significant impact on its consolidated financial statements.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
January 2015, the FASB issued ASU 2015-01 – Income Statement – Extraordinary and Unusual Items (Subtopic 225-20): Simplifying
Income Statement Presentation by Eliminating the Concept of Extraordinary Items.  The amendment was issued to reduce complexity
in the accounting standards by eliminating the concept of extraordinary items from US GAAP.  The amendment is effective for
annual periods ending after December 15, 2015.  The change may be applied prospectively or retrospectively to all prior periods
presented in the financial statements.  Early adoption is permitted.  The Company does not expect adoption of this guidance
to have a significant impact on its consolidated financial statements.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
August 2014, the FASB issued ASU 2014-15 – Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern
(Subtopic 205-40).  The update requires management to perform a going concern assessment if there is substantial doubt about
an entity's ability to continue as a going concern within one year of the financial statement issuance date.  Under the new
standard, the definition of substantial doubt incorporates a likeliness threshold of "probable" that is consistent with
the current use of the term defined in US GAAP for loss contingencies (Topic 450 – Contingencies).  Management will
need to consider conditions that are known and reasonably knowable at the financial statement issuance date and determine whether
the entity will be able to meet its obligations within the one-year period.  Additional disclosures are required if it is
probable that the entity will be unable to meet its current obligations.  The amendments in this ASU will be effective for
annual periods ending after December 15, 2016.  Early adoption is permitted.  The Company does not expect the adoption
of ASU 2014-15 to have a material effect on our financial position, results of operations or cash flows.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
June 2014, the FASB issued ASU 2014-12 - Compensation – Stock Compensation (Topic 718).  The amendment requires that
entities treat performance targets that can be met after the requisite service period of a share-based payment award as performance
conditions that affect vesting and, accordingly, the performance target should not be reflected in estimating the grant-date fair
value of the award.  Compensation expense should be recognized in the period in which it becomes probable that the performance
target will be achieved.  ASU 2014-12 is effective for annual periods and interim periods within those annual periods beginning
after December 15, 2015<b>.  </b>The Company is required to adopt this standard beginning July 1, 2016.  ASU 2014-12
does not contain any new disclosure requirements.  The Company does not expect the adoption of ASU 2014-12 to have a material
effect on our financial position, results of operations or cash flows.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
May 2014, the FASB issued ASU 2014-09 – Revenue from Contracts with Customers (Topic 606).  The amendment outlines a
single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most
current revenue recognition guidance, including industry-specific guidance.  The core principle of the revenue model is that
an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration
to which the entity expects to be entitled in exchange for those goods or services.  In applying the revenue model to contracts
within its scope, an entity identifies the contract(s) with a customer, identifies the performance obligations in the contract,
determines the transaction price, allocates the transaction price to the performance obligations in the contract and recognizes
revenue when the entity satisfies a performance obligation.  ASU 2014-09 also includes additional disclosure requirements
regarding revenue, cash flows and obligations related to contracts with customers.  See ASU 2015-14 above for applicable effective
date of ASU 2014-09.  The guidance permits companies to either apply the requirements retrospectively to all prior periods
presented, or apply the requirements in the year of adoption, through a cumulative adjustment.  In April 2016, the FASB issued
ASU 2016-10 – Revenue from Contracts with Customers – Identifying Performance Obligations and Licensing, clarifying
the implementation guidance on identifying performance obligations and licensing.  Specifically, the amendments reduce the
cost and complexity of identifying promised goods or services and improves the guidance for determining whether promises are separately
identifiable.  The amendments also provide implementation guidance on determining whether an entity's promise to grant a license
provides a customer with either a right to use the entity's intellectual property (which is satisfied at a point in time) or a
right to access the entity's intellectual property (which is satisfied over time).  In March 2016, the FASB also issued ASU
2016-08 – Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross
versus Net).  The amendments in ASU 2016-08 affect the guidance in ASU 2014-09.  ASU 2016-08 requires when a third party
is involved in provided goods or services to a customer, an entity is required to determine whether the nature of its promise is
to provide the specified good or services itself to the customer (that is, the entity is a principal) or to arrange for that good
or service to be provided by the third party to the customer (that is, the entity is an agent).  If the entity is a principal,
upon satisfying a performance obligation, the entity recognizes revenue in the gross amount of consideration to which it expects
to be entitled in exchange for the specified good or service transferred to the customer.  If the entity is an agent, the
entity recognizes revenue in the amount of any fee or commission to which it expects to be entitled in exchange for arranging for
the specified good or service to be provided by the third party.  The effective date and transition requirements for ASU 2016-10
and 2016-08 are the same as the effective date and transition requirements for ASU 2014-09.  The Company is currently evaluating
the effect that implementation of this update will have on its consolidated financial position and results of operations upon adoption.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
April 2014, the FASB issued ASU 2014-08 -</font> <font style="font-style: normal">Presentation of Financial Statements (Topic
205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components
of an Entity.  The update changes the requirements for reporting discontinued operations in Subtopic 205-20.  To be classified
as a discontinued operation, the disposal of a component or group of components must represent a strategic shift that has, or will
have, a major effect on an entity's operations and financial results.  Examples include a disposal of a major geographic area,
a major line of business or a major equity method investment.  The amendments in this ASU are effective prospectively for
reporting periods beginning on or after December 15, 2014, with early adoption permitted.  The adoption of this pronouncement
did not have a material impact on the Company's consolidated financial statements.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
March 2013, the FASB issued ASU 2013-05 – Foreign Currency Matters (Topic 830) – Parent's Accounting for the Cumulative
Translation Adjustment upon derecognition of Certain Subsidiaries or Group of Assets within a Foreign Entity or of an Investment
in a Foreign Entity.  These amendments provide guidance on releasing cumulative translation adjustments when a reporting entity
(parent) ceases to have a controlling financial interest in a subsidiary or a group of assets that is a non-profit activity or
a business within a foreign entity.  In addition, these amendments provide guidance on the release of cumulative translation
adjustments in partial sales of equity method investments and in step acquisitions.  The amendments are effective for fiscal
years and interim reporting periods within those years, beginning after December 15, 2013.  The amendments should be applied
prospectively to derecognition events occurring after the effective date.  Prior periods should not be adjusted.  Early
adoption was permitted.  The Company was required to adopt this standard beginning July 1, 2014.  The adoption of this
pronouncement did not have a material impact on the Company's consolidated financial statements.</font></p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" nowrap="nowrap" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">March 31, 2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" nowrap="nowrap" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">June 30, 2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 74%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Current</font></td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 10%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">11,226</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 10%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">4,291</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">30-60 days</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">101</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">60-90 days</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">24,713</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">3,555</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Over 90 days</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">1,486</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">105,248</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Total</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">37,526</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">113,093</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top; font: 8pt Times New Roman, Times, Serif">
<td style="width: 80%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="width: 20%; text-decoration: underline; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal"><u>Estimated Useful Lives</u></font></td></tr>
<tr style="vertical-align: top; background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Manufacturing equipment</font></td>
<td style="text-align: center; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">3 - 7 years</font></td></tr>
<tr style="vertical-align: top; background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Office equipment</font></td>
<td style="text-align: center; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">3 - 7 years</font></td></tr>
<tr style="vertical-align: top; background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Building and improvements</font></td>
<td style="text-align: center; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">7 - 40 years</font></td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" nowrap="nowrap" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">March 31, 2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" nowrap="nowrap" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">June 30, 2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 74%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Beginning balance</font></td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 10%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">176,967</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 10%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">731,910</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Accruals for warranties during the period</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">39,415</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">167,901</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Settlements during the period</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(316,903</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(480,683</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"><font style="font-size: 8pt; font-style: normal">Adjustments relating to preexisting warranties</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">207,259</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">(242,161</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"><font style="font-size: 8pt; font-style: normal">)</font></td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Ending balance</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">106,738</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">176,967</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 88%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Identifiable net assets acquired</font></td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">320,843</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Less: Fair value of the consideration transferred</font></td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">244,406</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Gain on bargain purchase</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">76,437</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" nowrap="nowrap" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">March 31, 2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" nowrap="nowrap" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">June 30, 2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 66%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Raw materials</font></td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 14%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">2,208,610</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 14%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">1,125,251</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Work in progress</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">72,866</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Total</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">2,208,610</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">1,198,117</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="text-align: center; font: italic 8pt Times New Roman, Times, Serif; vertical-align: bottom"> </td>
<td nowrap="nowrap" style="text-align: center; font: italic 8pt Times New Roman, Times, Serif; vertical-align: bottom"> </td>
<td colspan="2" nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">March 31, 2016</font></td>
<td nowrap="nowrap" style="text-align: center; font: italic 8pt Times New Roman, Times, Serif; vertical-align: bottom"> </td>
<td nowrap="nowrap" style="text-align: center; font: italic 8pt Times New Roman, Times, Serif; vertical-align: bottom"> </td>
<td colspan="2" nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">June 30, 2015</font></td>
<td nowrap="nowrap" style="text-align: center; font: italic 8pt Times New Roman, Times, Serif; vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 74%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Land</font></td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 10%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">217,000</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 10%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">217,000</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Building and improvements</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">3,914,825</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">3,532,375</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Manufacturing equipment</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">3,952,441</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">3,965,750</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Office equipment</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">420,979</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">407,191</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Construction in process</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">35,700</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Total, at cost</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">8,505,245</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">8,158,016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"><font style="font-size: 8pt; font-style: normal">Less: accumulated depreciation</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">(4,478,159</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">(3,993,104</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"><font style="font-size: 8pt; font-style: normal">)</font></td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Property, plant and equipment, net</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">4,027,086</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">4,164,912</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" nowrap="nowrap" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">March 31, 2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" nowrap="nowrap" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">June 30, 2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 76%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Current maturities of long-term debt</font></td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">330,861</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">324,626</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Long-term debt</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">1,136,798</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">1,053,581</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Total</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">1,467,659</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">1,378,207</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%">
<tr>
<td style="vertical-align: top; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 8pt">March 31, 2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 8pt">June 30, 2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"> </td></tr>
<tr>
<td style="vertical-align: top"> </td>
<td style="vertical-align: bottom"> </td>
<td colspan="2" style="vertical-align: top"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td colspan="2" style="vertical-align: top"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"><font style="font-size: 8pt">Note payable to Wisconsin Econcomic Development Corporation payable in</font></td>
<td style="vertical-align: bottom"> </td>
<td colspan="2" style="vertical-align: top"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td colspan="2" style="vertical-align: top"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; width: 78%"><font style="font-size: 8pt">    monthly installments of $23,685, including interest at 2%, with the final </font><br />
<font style="font-size: 8pt">    payment due May 1, 2018; collateralized by equipment purchased with the </font><br />
<font style="font-size: 8pt">    loan proceeds and substantially all assets of the Company not otherwise </font><br />
<font style="font-size: 8pt">    collateralized.  The Company is required to maintain and increase by a </font><br />
<font style="font-size: 8pt">    specified number of employees, and the interest rate is increased in certain </font><br />
<font style="font-size: 8pt">    cases for failure to meet this requirement.</font></td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; width: 8%; text-align: right"><font style="font-size: 8pt">602,141</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 1%"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; width: 8%; text-align: right"><font style="font-size: 8pt">804,550</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"><font style="font-size: 8pt">Bank loan payable in fixed monthly installments of $6,800 of principal and</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"><font style="font-size: 8pt">    interest at a rate of 0.25% below prime, as defined, subject to a floor of 5% </font><br />
<font style="font-size: 8pt">    with any remaining principal and interest due at maturity on June 1, 2018; </font><br />
<font style="font-size: 8pt">    collateralized by the building and land.</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">533,692</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">573,657</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"><font style="font-size: 8pt">Equipment finance obligation, interest payable in quarterly installments ranging</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"><font style="font-size: 8pt">    between $1,510 and $2,555 at an imputed interest rate of approximately </font><br />
<font style="font-size: 8pt">    2.44% over 20 years.  See Note 15 for discussion of sale-leaseback </font><br />
<font style="font-size: 8pt">    transaction.</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">331,826</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: right"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: right"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; padding-bottom: 3pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 8pt">1,467,659</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 2.25pt double"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double"><font style="font-size: 8pt">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 8pt">1,378,207</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 2.25pt double"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 88%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">2016</font></td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">81,920</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">2017</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">332,954</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">2018</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">720,959</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">2019</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">2020</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">2021 and thereafter</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">331,826</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">1,467,659</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 2.25pt; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font-size: 12pt; width: 100%">
<tr>
<td style="vertical-align: top; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td colspan="6" style="vertical-align: top; border-bottom: black 1.5pt solid; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">Nine Months Ended March 31,</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"> </td></tr>
<tr>
<td style="vertical-align: top; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1.5pt solid; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1.5pt solid; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; width: 78%"><font style="font: 8pt Times New Roman, Times, Serif">Expected life of option (years)</font></td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 8%; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">4</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 8%; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">4</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif">Risk-free interest rate</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">1.12 - 1.50 %</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">1.08 - 1.42 %</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif">Assumed volatility</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">100.77 - 101.70 %</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">99.78 - 103.90 %</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif">Expected dividend rate</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">0.00 %</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">0.00 %</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif">Expected forfeiture rate</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">6.23 - 12.63 %</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font: 8pt Times New Roman, Times, Serif">5.00 - 6.32 %</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font-size: 12pt; width: 100%">
<tr style="text-align: center; vertical-align: bottom">
<td style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid">
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0">Number</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0"> of</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0">Options</p></td>
<td nowrap="nowrap" style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid">
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0">Weighted</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0">Average</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0">Exercise Price</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></p></td>
<td nowrap="nowrap" style="padding-bottom: 1.5pt"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid">
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0">Average</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0">Remaining</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0">Contractual Life</p>
<p style="font: 8pt Times New Roman, Times, Serif; margin: 0pt 0">(in years)</p></td>
<td nowrap="nowrap" style="padding-bottom: 1.5pt"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif">Balance at June 30, 2014</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1,419,068</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">3.23</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td colspan="2" style="vertical-align: top"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif">   Options granted</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">423,000</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">0.85</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td colspan="2" style="vertical-align: top"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif">   Options forfeited</font></td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">(264,290</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif">)</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">3.22</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="vertical-align: top; padding-bottom: 1.5pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif">Balance at June 30, 2015</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1,577,778</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">2.60</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; width: 3%"> </td>
<td style="vertical-align: bottom; width: 9%; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">5.74</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"><font style="font: 8pt Times New Roman, Times, Serif">   Options granted</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">2,776,600</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">0.58</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif">   Options forfeited</font></td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">(246,351</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"><font style="font: 8pt Times New Roman, Times, Serif">)</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">4.19</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt; text-align: right"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif">Balance at March 31, 2016</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">4,108,027</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 3pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 3pt"><font style="font: 8pt Times New Roman, Times, Serif">$</font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">1.14</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 3pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 3pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 3pt; text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">6.73</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 3pt"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td colspan="2" style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">Outstanding</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">Exercisable</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td colspan="2" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">Range of Exercise Prices</font></td>
<td nowrap="nowrap" style="text-align: center; padding-bottom: 1.05pt; font: 8pt Times New Roman, Times, Serif; vertical-align: bottom"> </td>
<td style="text-align: center; padding-bottom: 1.05pt; font: 8pt Times New Roman, Times, Serif; vertical-align: bottom"> </td>
<td colspan="2" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">Number<br />
of<br />
Options</font></td>
<td nowrap="nowrap" style="text-align: center; padding-bottom: 1.05pt; font: 8pt Times New Roman, Times, Serif; vertical-align: bottom"> </td>
<td style="text-align: center; padding-bottom: 1.05pt; font: 8pt Times New Roman, Times, Serif; vertical-align: bottom"> </td>
<td colspan="2" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">Average<br />
Remaining<br />
Contractual Life <br />
(in years)</font></td>
<td nowrap="nowrap" style="text-align: center; padding-bottom: 1.05pt; font: 8pt Times New Roman, Times, Serif; vertical-align: bottom"> </td>
<td style="text-align: center; padding-bottom: 1.05pt; font: 8pt Times New Roman, Times, Serif; vertical-align: bottom"> </td>
<td colspan="2" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">Weighted<br />
Average<br />
Exercise<br />
Price</font></td>
<td nowrap="nowrap" style="text-align: center; padding-bottom: 1.05pt; font: 8pt Times New Roman, Times, Serif; vertical-align: bottom"> </td>
<td style="text-align: center; padding-bottom: 1.05pt; font: 8pt Times New Roman, Times, Serif; vertical-align: bottom"> </td>
<td colspan="2" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">Number <br />
of<br />
Options</font></td>
<td nowrap="nowrap" style="text-align: center; padding-bottom: 1.05pt; font: 8pt Times New Roman, Times, Serif; vertical-align: bottom"> </td>
<td style="text-align: center; padding-bottom: 1.05pt; font: 8pt Times New Roman, Times, Serif; vertical-align: bottom"> </td>
<td colspan="2" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">Average<br />
Remaining <br />
Contractual Life <br />
(in years)</font></td>
<td nowrap="nowrap" style="text-align: center; padding-bottom: 1.05pt; font: 8pt Times New Roman, Times, Serif; vertical-align: bottom"> </td>
<td style="text-align: center; padding-bottom: 1.05pt; font: 8pt Times New Roman, Times, Serif; vertical-align: bottom"> </td>
<td colspan="2" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">Weighted<br />
Average <br />
Exercise <br />
Price</font></td>
<td nowrap="nowrap" style="text-align: center; font: italic 8pt Times New Roman, Times, Serif; vertical-align: bottom"><font style="font-size: 8pt; font-style: normal"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="width: 19%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">0.31 to $1.00</font></td>
<td nowrap="nowrap" style="width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="width: 10%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">3,070,650</font></td>
<td nowrap="nowrap" style="width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="width: 10%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">7.33</font></td>
<td nowrap="nowrap" style="width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="width: 10%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">0.58</font></td>
<td nowrap="nowrap" style="width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="width: 10%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">189,883</font></td>
<td nowrap="nowrap" style="width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="width: 10%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">6.07</font></td>
<td nowrap="nowrap" style="width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="width: 11%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">0.69</font></td>
<td nowrap="nowrap" style="width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">1.01 to $2.50</font></td>
<td nowrap="nowrap" style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">724,327</font></td>
<td nowrap="nowrap" style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">6.00</font></td>
<td nowrap="nowrap" style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">1.51</font></td>
<td nowrap="nowrap" style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">220,763</font></td>
<td nowrap="nowrap" style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">5.36</font></td>
<td nowrap="nowrap" style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">1.81</font></td>
<td nowrap="nowrap" style="font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">2.51 to $5.00</font></td>
<td nowrap="nowrap" style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">98,400</font></td>
<td nowrap="nowrap" style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">3.23</font></td>
<td nowrap="nowrap" style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">3.95</font></td>
<td nowrap="nowrap" style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">98,400</font></td>
<td nowrap="nowrap" style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">3.23</font></td>
<td nowrap="nowrap" style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">3.95</font></td>
<td nowrap="nowrap" style="font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="vertical-align: bottom; background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">5.01 to $6.95</font></td>
<td nowrap="nowrap" style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">214,650</font></td>
<td nowrap="nowrap" style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">2.06</font></td>
<td nowrap="nowrap" style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">6.47</font></td>
<td nowrap="nowrap" style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">214,650</font></td>
<td nowrap="nowrap" style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">2.06</font></td>
<td nowrap="nowrap" style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">6.47</font></td>
<td nowrap="nowrap" style="font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td colspan="2" style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Balance at March 31, 2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">4,108,027</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">6.73</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">1.14</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">723,696</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">4.28</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">3.19</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="font-style: italic; text-align: center"> </td><td style="font-style: normal; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-style: normal; text-align: center; border-bottom: Black 1pt solid">Number <br /> of <br /> Options</td><td style="font-style: normal; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-style: normal; text-align: center; border-bottom: Black 1pt solid">Weighted <br /> Average <br /> Grant Date <br /> Fair Value <br /> Per Share</td><td style="font-style: normal; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-style: normal; text-align: center; border-bottom: Black 1pt solid">Average<br /> Remaining<br /> Contractual Life<br /> (in years)</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 61%; font-style: normal">Balance at June 30, 2014</td><td style="width: 1%; font-style: normal"> </td>
<td style="width: 1%; font-style: normal; text-align: left"> </td><td style="width: 10%; font-style: normal; text-align: right">822,469</td><td style="width: 1%; font-style: normal; text-align: left"> </td><td style="width: 1%; font-style: normal"> </td>
<td style="width: 1%; font-style: normal; text-align: left">$</td><td style="width: 10%; font-style: normal; text-align: right">1.63</td><td style="width: 1%; font-style: normal; text-align: left"> </td><td style="width: 1%; font-style: italic"> </td>
<td style="width: 1%; font-style: italic; text-align: left"> </td><td style="width: 10%; font-style: italic; text-align: right"> </td><td style="width: 1%; font-style: italic; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-style: normal; text-align: left">   Options granted</td><td style="font-style: normal"> </td>
<td style="font-style: normal; text-align: left"> </td><td style="font-style: normal; text-align: right">423,000</td><td style="font-style: normal; text-align: left"> </td><td style="font-style: normal"> </td>
<td style="font-style: normal; text-align: left"> </td><td style="font-style: normal; text-align: right">0.85</td><td style="font-style: normal; text-align: left"> </td><td style="font-style: italic"> </td>
<td style="font-style: italic; text-align: left"> </td><td style="font-style: italic; text-align: right"> </td><td style="font-style: italic; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-style: normal; text-align: left">   Options vested</td><td style="font-style: normal"> </td>
<td style="font-style: normal; text-align: left"> </td><td style="font-style: normal; text-align: right">(347,328</td><td style="font-style: normal; text-align: left">)</td><td style="font-style: normal"> </td>
<td style="font-style: normal; text-align: left"> </td><td style="font-style: normal; text-align: right">1.42</td><td style="font-style: normal; text-align: left"> </td><td style="font-style: italic"> </td>
<td style="font-style: italic; text-align: left"> </td><td style="font-style: italic; text-align: right"> </td><td style="font-style: italic; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-style: normal; text-align: left; padding-bottom: 1pt">   Options forfeited</td><td style="font-style: normal; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-style: normal; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-style: normal; text-align: right">(121,616</td><td style="padding-bottom: 1pt; font-style: normal; text-align: left">)</td><td style="font-style: normal; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-style: normal; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-style: normal; text-align: right">2.31</td><td style="padding-bottom: 1pt; font-style: normal; text-align: left"> </td><td style="font-style: italic; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-style: italic; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-style: italic; text-align: right"> </td><td style="padding-bottom: 1pt; font-style: italic; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-style: normal">Balance at June 30, 2015</td><td style="font-style: normal"> </td>
<td style="font-style: normal; text-align: left"> </td><td style="font-style: normal; text-align: right">776,525</td><td style="font-style: normal; text-align: left"> </td><td style="font-style: normal"> </td>
<td style="font-style: normal; text-align: left"> </td><td style="font-style: normal; text-align: right">1.19</td><td style="font-style: normal; text-align: left"> </td><td style="font-style: italic"> </td>
<td style="font-style: italic; text-align: left"> </td><td style="font-style: italic; text-align: right"> </td><td style="font-style: italic; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-style: normal; text-align: left">   Options granted</td><td style="font-style: normal"> </td>
<td style="font-style: normal; text-align: left"> </td><td style="font-style: normal; text-align: right">2,776,600</td><td style="font-style: normal; text-align: left"> </td><td style="font-style: normal"> </td>
<td style="font-style: normal; text-align: left"> </td><td style="font-style: normal; text-align: right">0.64</td><td style="font-style: normal; text-align: left"> </td><td style="font-style: italic"> </td>
<td style="font-style: italic; text-align: left"> </td><td style="font-style: italic; text-align: right"> </td><td style="font-style: italic; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-style: normal; text-align: left">   Options vested</td><td style="font-style: normal"> </td>
<td style="font-style: normal; text-align: left"> </td><td style="font-style: normal; text-align: right">(59,529</td><td style="font-style: normal; text-align: left">)</td><td style="font-style: normal"> </td>
<td style="font-style: normal; text-align: left"> </td><td style="font-style: normal; text-align: right">1.18</td><td style="font-style: normal; text-align: left"> </td><td style="font-style: italic"> </td>
<td style="font-style: italic; text-align: left"> </td><td style="font-style: italic; text-align: right"> </td><td style="font-style: italic; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-style: normal; text-align: left; padding-bottom: 1pt">   Options forfeited</td><td style="font-style: normal; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-style: normal; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-style: normal; text-align: right">(109,265</td><td style="padding-bottom: 1pt; font-style: normal; text-align: left">)</td><td style="font-style: normal; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-style: normal; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-style: normal; text-align: right">0.88</td><td style="padding-bottom: 1pt; font-style: normal; text-align: left"> </td><td style="font-style: italic; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-style: italic; text-align: left"> </td><td style="border-bottom: Black 1pt solid; font-style: italic; text-align: right"> </td><td style="padding-bottom: 1pt; font-style: italic; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-style: normal; padding-bottom: 2.5pt">Balance at March 31, 2016</td><td style="font-style: normal; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-style: normal; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font-style: normal; text-align: right">3,384,331</td><td style="padding-bottom: 2.5pt; font-style: normal; text-align: left"> </td><td style="font-style: normal; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-style: normal; text-align: left">$</td><td style="border-bottom: Black 2.5pt double; font-style: normal; text-align: right">0.70</td><td style="padding-bottom: 2.5pt; font-style: normal; text-align: left"> </td><td style="font-style: normal; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-style: normal; text-align: left"> </td><td style="border-bottom: Black 2.5pt double; font-style: normal; text-align: right">7.25</td><td style="padding-bottom: 2.5pt; font-style: normal; text-align: left"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal"> </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal"> </font></td>
<td colspan="2" nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">Number of<br />
Restricted<br />
Stock Units</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1pt solid; font: 8pt Times New Roman, Times, Serif; text-align: center"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.05pt; font: 8pt Times New Roman, Times, Serif; text-align: center"> </td>
<td colspan="2" nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">Weighted<br />
Average<br />
Valuation <br />
Price Per Unit</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal"> </font></td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 74%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Balance at June 30, 2014</font></td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 10%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">1,346,813</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 10%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">1.87</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">   RSUs granted</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">922,500</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">1.05</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">   RSUs forfeited</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(103,334</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">1.69</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">   Shares issued</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">(229,944</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">0.80</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Balance at June 30, 2015</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">1,936,035</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">1.53</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">   RSUs granted</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">2,364,000</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">0.50</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">   RSUs forfeited</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">   Shares issued</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">(162,791</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">0.72</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Balance at March 31, 2016</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">4,137,244</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">1.01</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal"> </font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal"> </font></td>
<td colspan="2" nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">Number of <br />
Warrants</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.05pt; font: 8pt Times New Roman, Times, Serif; text-align: center"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.05pt; font: 8pt Times New Roman, Times, Serif; text-align: center"> </td>
<td colspan="2" nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">Weighted<br />
Average<br />
Exercise Price<br />
Per Share</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal"> </font></td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 76%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Balance at June 30, 2014</font></td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">2,933,752</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">1.88</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">   Warrants granted</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">   Warrants expired</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(5,800</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">5.00</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">   Warrants exercised</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Balance at June 30, 2015</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">2,927,952</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">1.88</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">   Warrants granted</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">45,000</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">0.37</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">   Warrants expired</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(317,342</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">5.38</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">   Warrants exercised</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Balance at March 31, 2016</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">2,655,610</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">1.43</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="6" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">As of March 31,</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 76%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Stock options and restricted stock units</font></td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">8,245,271</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">3,732,272</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Stock warrants</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">2,655,610</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">2,933,752</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Series B preferred shares</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">3,099,153</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">3,143,380</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Total</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">14,000,034</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">9,809,404</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="6" nowrap="nowrap" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">Nine Months Ended March 31,</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 76%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Current</font></td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(468</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Deferred</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 2.25pt"><font style="font-size: 8pt; font-style: normal">Provision for income taxes</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 2.25pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: Black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">(468</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 2.25pt"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 2.25pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: Black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 2.25pt"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="6" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">As of March 31,</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 66%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Income tax expense/(benefit) computed at the U.S. federal statutory rate</font></td>
<td style="vertical-align: bottom; width: 3%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 3%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 8%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">-34</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 3%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">%</font></td>
<td style="vertical-align: bottom; width: 3%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 3%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 8%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">-34</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 3%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">%</font></td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Change in valuation allowance</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">34</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">%</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">34</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">%</font></td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 2.25pt"><font style="font-size: 8pt; font-style: normal">Total</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 2.25pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: Black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">0</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 2.25pt"><font style="font-size: 8pt; font-style: normal">%</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 2.25pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: Black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">0</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 2.25pt"><font style="font-size: 8pt; font-style: normal">%</font></td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" nowrap="nowrap" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">March 31, 2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" nowrap="nowrap" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">June 30, 2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 66%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Federal net operating loss carryforwards</font></td>
<td style="vertical-align: bottom; width: 3%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 3%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 8%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">16,340,673</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 3%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 3%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 3%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 8%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">11,780,604</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 3%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Federal - other</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">2,149,682</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">2,783,304</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Wisconsin net operating loss carryforwards</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">2,595,046</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">1,748,976</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Australia net operating loss carryforwards</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">1,283,031</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">1,497,779</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"><font style="font-size: 8pt; font-style: normal">Deferred income tax asset valuation allowance</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">(22,368,432</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">(17,810,663</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"><font style="font-size: 8pt; font-style: normal">)</font></td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Total deferred income tax assets</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" nowrap="nowrap" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">March 31, 2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" nowrap="nowrap" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">June 30, 2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 76%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal"> Beginning balance</font></td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">196,583</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal"> Lapses of statutes of limitations</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(161,344</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"><font style="font-size: 8pt; font-style: normal"> Effect of foreign currency translation</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: Black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">(35,239</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif; padding-bottom: 1pt"><font style="font-size: 8pt; font-style: normal">)</font></td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal"> Ending balance</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
11226
4291
101
0
24713
3555
1486
105248
37526
113093
P3Y
P7Y
P3Y
P7Y
P7Y
P40Y
731910
106738
176967
39415
167901
-316903
-480683
207259
-242161
-1847266
-714346
-1160750
-468340
70328
12230
109418
55326
152150
0
1045668
399470
250562
141144
151522
169321
320843
244406
76437
43104
-366971
-9472006
-3456071
-12145573
-12885808
-12145573
74198
-277589
-3947563
-114819622
-102674049
964828
102286450
-89788242
-1599875
1646240
26
21986272
13941035
0
0
280
1099608
1184763
117104936
137205436
-102674049
-114819622
-1589486
-1584608
1734194
1510219
26
23
17028131
5062279
2208610
1125251
0
72866
2208610
1198117
217000
217000
3914825
3532375
3952441
3965750
420979
407191
0
35700
8505245
8158016
4478159
3993104
4027086
4164912
475700
162010
523441
173524
803079
803079
330861
324626
1136798
1053581
1467659
1378207
602141
804550
533692
573657
331826
0
81920
332954
720959
0
0
331826
P4Y
P4Y
0.0108
0.0112
0.0142
0.0150
0.9978
1.0077
1.0390
1.0170
0.0000
0.0000
0.0500
0.0623
0.0632
0.1263
1419068
4108027
1577778
3070650
724327
98400
214650
2776600
423000
246351
264290
3.23
1.14
2.60
0.58
1.51
3.95
6.47
0.58
0.85
4.19
3.22
P6Y8M23D
P5Y8M27D
P7Y3M29D
P6Y
P3Y2M23D
P2Y22D
P4Y3M11D
P6Y26D
P5Y4M10D
P3Y2M23D
P2Y22D
822469
3384331
776525
2776600
423000
59529
347328
109265
121616
1.63
0.70
1.19
0.64
0.85
1.18
1.42
0.88
2.31
P7Y3M
1346813
4137244
1936035
2364000
922500
0
-103334
-162791
-229944
1.87
1.01
1.53
0.50
1.05
0.00
1.69
0.72
0.80
1156720
302908
886463
422923
2400910
1092804
through March 2023
through March 2024
249419
1113441
742736
P1Y6M
432000
1932000
six months
872250
2927952
2933752
45000
0
-317342
-5800
0
0
2655610
2927952
1.88
1.88
0.37
0.00
5.38
5.00
0.00
0.00
1.43
1.88
3732272
8245271
2933752
2655610
3143380
3099153
9809404
14000034
0
18527
0
18527
0
0.050
0.050
0.050
5260
21440
7180
33880
-1744
32136
3444
10141
0
340
0
3380
66961
95422
125000
32136
85656
71963
26260
89556
28990
0
0
-468
172
0
0
0
0
0
0
-468
172
0.34
0.34
0.34
0.34
0.00
0.00
16340673
11780604
2149682
2783304
2595046
1748976
1283031
1497779
22368432
17810663
0
0
196583
0
0
0
-161344
0
35239
48100000
49400000
4300000
June 30, 2017 and 2034
June 30, 2015 and 2028
6300000
247000
through June 30, 2033
47680821
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Deferred
PPA project costs represents the costs that the Company capitalizes as project assets for arrangements that we accounted for as
real estate transactions after we have entered into a definitive sales arrangement, but before the sale is completed or before
we have met all criteria to recognize the sale as revenue.  We classify deferred PPA project costs as current if the completion
of the sale and the meeting of all revenue recognition criteria are expected within the next 12 months.</font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">If
a project is completed and begins commercial operation prior to entering into or the closing of a sales agreement, the completed
project will remain in project assets or deferred PPA project costs until the sale of such project closes.  Any income generated
by such project while it remains within project assets or deferred PPA project costs is accounted for as a reduction in our basis
in the project, which at the time of sale and meeting all revenue recognition criteria will be recorded within cost of sales.</font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font-size: 8pt">
<tr style="vertical-align: bottom">
<td style="font-style: italic"> </td>
<td style="font-style: normal; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-style: normal; text-align: center; border-bottom: Black 1pt solid">March 31, 2016</td>
<td style="font-style: normal; padding-bottom: 1pt"> </td>
<td colspan="3" style="font-style: normal; text-align: center; border-bottom: Black 1pt solid">June 30, 2015</td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="width: 74%; font-style: normal">Balance at beginning of period</td>
<td style="width: 1%; font-style: italic"> </td>
<td style="width: 1%; font-style: italic; text-align: left"> </td>
<td style="width: 10%; font-style: italic; text-align: right">—  </td>
<td style="width: 1%; font-style: italic; text-align: left"> </td>
<td style="width: 1%; font-style: italic"> </td>
<td style="width: 1%; font-style: italic; text-align: left"> </td>
<td style="width: 10%; font-style: italic; text-align: right">—  </td>
<td style="width: 1%; font-style: italic; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="font-style: normal; text-align: left; padding-bottom: 1pt">Liabilities incurred</td>
<td style="font-style: normal; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-style: normal; text-align: left"> </td>
<td style="border-bottom: Black 1pt solid; font-style: normal; text-align: right">18,527</td>
<td style="padding-bottom: 1pt; font-style: normal; text-align: left"> </td>
<td style="font-style: normal; padding-bottom: 1pt"> </td>
<td style="border-bottom: Black 1pt solid; font-style: normal; text-align: left"> </td>
<td style="border-bottom: Black 1pt solid; font-style: normal; text-align: right">—  </td>
<td style="padding-bottom: 1pt; font-style: normal; text-align: left"> </td></tr>
<tr style="vertical-align: bottom; background-color: rgb(204,238,255)">
<td style="font-style: normal; padding-bottom: 2.5pt">Balance at end of period</td>
<td style="font-style: normal; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-style: normal; text-align: left">$</td>
<td style="border-bottom: Black 2.5pt double; font-style: normal; text-align: right">18,527</td>
<td style="padding-bottom: 2.5pt; font-style: normal; text-align: left"> </td>
<td style="font-style: normal; padding-bottom: 2.5pt"> </td>
<td style="border-bottom: Black 2.5pt double; font-style: normal; text-align: left">$</td>
<td style="border-bottom: Black 2.5pt double; font-style: normal; text-align: right">—  </td>
<td style="padding-bottom: 2.5pt; font-style: normal; text-align: left"> </td></tr>
</table>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-style: normal">  </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0pt 0"> </p>
<table cellspacing="0" cellpadding="0" style="font-size: 12pt; width: 100%">
<tr>
<td style="vertical-align: top; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 8pt">March 31, 2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 8pt">June 30, 2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"> </td></tr>
<tr>
<td style="vertical-align: top"><font style="font-size: 8pt">Weighted-average remaining lease term (in years)</font></td>
<td style="vertical-align: bottom"> </td>
<td colspan="2" style="vertical-align: top"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td colspan="2" style="vertical-align: top"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; width: 78%"><font style="font-size: 8pt">     Finance leases</font></td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 8%; text-align: center"><font style="font-size: 8pt">0.25</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 8%; text-align: center"><font style="font-size: 8pt">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"><font style="font-size: 8pt">    Operating leases</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">1.58</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">0.50</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"><font style="font-size: 8pt">Weighted-average discount rate</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"> </td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"><font style="font-size: 8pt">    Finance leases</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">  5.0 %</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top"><font style="font-size: 8pt">   Operating leases</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">  5.0 %</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: center"><font style="font-size: 8pt">  5.0 %</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font-size: 12pt; width: 100%">
<tr>
<td style="vertical-align: top; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 8pt">Finance Leases</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1.5pt solid; text-align: center"><font style="font-size: 8pt">Operating Leases</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; width: 78%"><font style="font-size: 8pt">2016</font></td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 1%"><font style="font-size: 8pt">$ </font></td>
<td style="vertical-align: bottom; width: 8%; text-align: right"><font style="font-size: 8pt">3,474</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 1%"> </td>
<td style="vertical-align: bottom; width: 1%"><font style="font-size: 8pt">$ </font></td>
<td style="vertical-align: bottom; width: 8%; text-align: right"><font style="font-size: 8pt">5,260</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top"><font style="font-size: 8pt">2017</font></td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom"> </td>
<td style="vertical-align: bottom; text-align: right"><font style="font-size: 8pt">21,440</font></td>
<td nowrap="nowrap" style="vertical-align: bottom"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; padding-bottom: 1.5pt"><font style="font-size: 8pt">2018</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 8pt">-</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 8pt">7,180</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; padding-bottom: 1.5pt"><font style="font-size: 8pt">Total undiscounted lease payments</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 8pt">3,474</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 8pt">33,880</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td></tr>
<tr style="background-color: #CCEEFF">
<td style="vertical-align: top; padding-bottom: 1.5pt"><font style="font-size: 8pt">Present value adjustment</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 8pt">(30</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1.5pt solid"><font style="font-size: 8pt">)</font></td>
<td style="vertical-align: bottom; padding-bottom: 1.5pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid"> </td>
<td style="vertical-align: bottom; border-bottom: black 1.5pt solid; text-align: right"><font style="font-size: 8pt">(1,744</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1.5pt solid"><font style="font-size: 8pt">)</font></td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; padding-bottom: 3pt"><font style="font-size: 8pt">Net finance lease and operating lease liabilities</font></td>
<td style="vertical-align: bottom; padding-bottom: 3pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double"><font style="font-size: 8pt">$ </font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 8pt">3,444</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 2.25pt double"> </td>
<td style="vertical-align: bottom; padding-bottom: 3pt"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double"><font style="font-size: 8pt">$ </font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: right"><font style="font-size: 8pt">32,136</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 2.25pt double"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 88%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Total product sales</font></td>
<td style="vertical-align: bottom; width: 1%; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">43,104</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Net loss</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">(366,971</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td></tr>
</table>
10360721
15045073
21804177
10757461
0
60193
37526
113093
634183
441537
0
545825
123115
0
168148
159107
159978
0
1009730
0
7278755
0
33424222
13275333
2238099
2408528
32136
85656
40524622
20737508
330861
324626
585913
1056744
293346
1214822
1230391
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130123
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2570634
4008698
13290000
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30699
0
23
26
280
0
1184763
1099608
137205436
117104936
-1584608
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1510219
1734194
23496491
15675229
40524622
20737508
0.01
0.01
0.01
0.01
3000
3000
28048
0
3000
3000
28048
0
2300
2575
28048
0
1000
1000
1000
1000
5244195
5635866
18252296
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0.01
0.01
300000000
150000000
47644821
39129334
47644821
39129334
951162
287644
550986
64756
499170
297173
264389
95382
1450332
584817
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4131929
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1257407
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2984
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76437
0
682432
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481870
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0
191701
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71810
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-0.27
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36227708
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76437
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7091533
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41627
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160914
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13290000
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225829
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389266
150000
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261982
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242375
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331827
0
13300000
14837760
6800000
1148023
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13756
53614
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53614
13441366
19971007
-8156
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4684352
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13521
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41048
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18527
25651389
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28048
39129334
47644821
2575
2300
10389
4878
13248000
132480
13557257
229945
162791
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1261229
892111
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28048
80000
19211913
280
0
1009730
124439
187735
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1010493
-815738
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306000
108000
723696
189883
220763
98400
214650
3.19
0.69
1.81
3.95
6.47
<p style="margin-top: 0; margin-bottom: 0; margin-left: 0pt; text-indent: 0; text-align: justify; font: 8pt Times New Roman, Times, Serif">The asset retirement obligation
represents the estimated present value of amounts expected to be incurred to remove a solar power system, repair the property
to which it is affixed, pack and ship the equipment offsite at the end of the lease term. The asset retirement obligation is recognized
in accordance with FASB ASC Topic 410, "Asset Retirement and Environmental Obligations." FASB ASC Topic 410 requires that the
fair value of an asset's retirement obligation be recorded as a liability in the period in which it is incurred and the corresponding
cost capitalized by increasing the carrying amount of the related long-lived asset. Periodic accretion of the discount of the
estimated liability is treated as accretion expense and included in depreciation and amortization in the condensed consolidated
statement of operations.</p>
-275
352696
-3
3527
-3524
0
10077
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">On
August 30, 2011, the Company entered into agreements providing for establishment of a joint venture to develop, produce, sell,
distribute and service advanced storage batteries and power electronics in China (the "Joint Venture").  Joint Venture
partners include ZBB PowerSav Holdings Limited ("Holdco"), AnHui XinLong Electrical Co. and Wuhu Huarui Power Transmission
and Transformation Engineering Co.  The Joint Venture was established upon receipt of certain governmental approvals from
China which were received in November 2011.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Joint Venture operates through a jointly-owned Chinese company located in Wuhu City, Anhui Province named Anhui Meineng Store Energy
Co., Ltd. ("Meineng Energy").  Meineng Energy intends to initially assemble and ultimately manufacture the Company's
products for sale in the power management industry on an exclusive basis in mainland China and on a non-exclusive basis in Hong
Kong and Taiwan.  In addition, Meineng Energy manufactures certain products for EnSync pursuant to a supply agreement under
which we pay Meineng Energy 120% of its direct costs incurred in manufacturing such products.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company's President and Chief Executive Officer ("President and CEO") has served as the Chief Executive Officer of Meineng
Energy since December 2011.  The President and CEO owns an indirect 6% equity interest in Meineng Energy.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
connection with the Joint Venture, on August 30, 2011 the Company and certain of its subsidiaries entered into the following agreements:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 8pt Times New Roman, Times, Serif">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="width: 18pt; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; width: 18pt; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">Joint Venture Agreement of Anhui Meineng Store Energy Co., Ltd. (the "China JV Agreement") by and between ZBB PowerSav Holdings Limited, a Hong Kong limited liability company, and Anhui Xinrui Investment Co., Ltd, a Chinese limited liability company; and,</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">Limited Liability Company Agreement of ZBB PowerSav Holdings Limited by and between ZBB Cayman Corporation and PowerSav New Energy Holdings Limited (the "Holdco Agreement").</font></td></tr>
</table>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">In
connection with the Joint Venture, upon establishment of Meineng Energy, the Company and certain of its subsidiaries entered into
the following agreements:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<table cellspacing="0" cellpadding="0" style="width: 100%; font: 8pt Times New Roman, Times, Serif">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="width: 18pt; font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; width: 18pt; font: italic 8pt Times New Roman, Times, Serif">•</td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">Management Services Agreement by and between Meineng Energy and Holdco (the "Management Services Agreement");</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">License Agreement by and between Holdco and Meineng Energy (the "License Agreement"); and,</font></td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="font: 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">•</font></td>
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif; text-align: justify"><font style="font-size: 8pt; font-style: normal">Research and Development Agreement by and between the Company and Meineng Energy (the "Research and Development Agreement").</font></td></tr>
</table>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Pursuant
to the China JV Agreement, Meineng Energy was capitalized with approximately $13.6 million of equity capital.  The Company's
only capital contributions to the Joint Venture were the contribution of technology to Meineng Energy via the License Agreement
and $200,000 in cash.  The Company's indirect interest in Meineng Energy equaled approximately 33%.  On August 12, 2014,
Meineng Energy received a cash investment of 20,000,000 RMB (approximately $3.2 million) from Wuhu Fuhai-Haoyan Venture Investment,
L.P., a branch of Shenzhen Oriental Fortune Capital Co., Ltd., for a post-closing equity position of 8%.  Required governmental
approval was obtained in October 2014.  This investment capital will be used to fund ongoing operations and development of
the China market, and provided Meineng Energy a 250,000,000 RMB (approximately $42 million) post-closing valuation.  Following
this investment, the Company's indirect investment in Meineng Energy equals approximately 30%.  The Company's indirect gain
as a result of the investment was $775,537, which is net of the gain attributable to the noncontrolling interest of $481,870.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company's investment in Meineng Energy was made through Holdco.  Pursuant to the Holdco Agreement, the Company contributed
technology to Holdco via a license agreement with an agreed upon value of approximately $4.1 million and $200,000 in cash in exchange
for a 60% equity interest.  PowerSav agreed to contribute to Holdco $3.3 million in cash in exchange for a 40% equity interest. 
The initial capital contributions (consisting of the Company's technology contribution and one half of required cash contributions)
were made in December 2011.  The subsequent capital contributions (consisting of one half of the required cash contribution)
were made on May 16, 2012.  For financial reporting purposes, Holdco's assets and liabilities are consolidated with those
of the Company and PowerSav's 40% interest in Holdco is included in the Company's condensed consolidated financial statements as
a noncontrolling interest.  As of March 31, 2016, the Company's indirect investment in the China JV was $746,317.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company's basis in the technology contributed to Holdco was $0 due to US GAAP requirements related to research and development
expenditures.  The difference between the Company's basis in this technology and the valuation of the technology by Meineng
Energy of approximately $4.1 million is accounted for by the Company through the elimination of the amortization expense recognized
by Meineng Energy related to the technology.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company has the right to appoint a majority of the members of the Board of Directors of Holdco and Holdco has the right to appoint
a majority of the members of the Board of Directors of Meineng Energy.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Pursuant
to the Management Services Agreement, Holdco will provide certain management services to Meineng Energy in exchange for a management
services fee equal to five percent of Meineng Energy's net sales for the five year period beginning on the first day of the first
quarter in which the JV Company achieves operational breakeven results and three percent of Meineng Energy's net sales for the
subsequent three years, provided the payment of such fees will terminate upon Meineng Energy completing an initial public offering
on a nationally recognized securities exchange.  To date, no management service fee revenues have been recognized by Holdco.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Pursuant
to the License Agreement (as amended on July 1, 2014), Holdco granted to Meineng Energy (1) an exclusive royalty-free license to
manufacture and distribute the Company's ZBB EnerStore, zinc bromide flow battery, version three (V3) (50KW) (and any other zinc
bromide flow battery product developed internally by us based on the V3 EnerStore, ranging from 50kWh to 500kWh module design)
and ZBB EnerSection, power and energy control center (up to 250KW) (the "Products") in mainland China in the power supply
management industry and (2) a non-exclusive royalty-free license to manufacture and distribute the Products in Hong Kong and Taiwan
in the power supply management industry.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">Pursuant
to the Research and Development Agreement, Meineng Energy may request the Company to provide research and development services
upon commercially reasonable terms and conditions.  Meineng Energy would pay the Company's fully-loaded costs and expenses
incurred in providing such services.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
Company had $55,326 and $109,418 of product sales to Meineng Energy during the three and nine months ended March 31, 2016. 
The Company had $12,230 and $70,328 of product sales to Meineng Energy during the three and nine months ended March 31, 2015. 
During the three and nine months ended March 31, 2016, the Company had total product purchases from Meineng Energy of $399,470
and $1,045,668, respectively.  During the three months ended March 31, 2015, the Company had no product purchases from Meineng
Energy, and during the nine months ended March 31, 2015, the Company had $152,150 of product purchases from Meineng Energy. 
As of March 31, 2016 and June 30, 2015, the total amount due to Meineng Energy was $141,144 and $250,562, respectively.</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal">The
operating results for Meineng Energy for the three and nine months ended March 31, 2016 and March 31, 2015 are summarized as follows:</font></p>
<p style="font: italic 8pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><font style="font-style: normal"> </font></p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="6" nowrap="nowrap" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">Three Months Ended March 31,</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="6" nowrap="nowrap" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">Nine Months Ended March 31,</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 52%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Revenues</font></td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">235,322</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">84,998</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">955,799</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">436,580</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Gross Profit (loss)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(28,187</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(96,943</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(7,259</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(177,844</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Income (loss) from operations</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(468,340</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(714,346</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(1,160,750</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(1,847,266</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Net Income (loss)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(455,840</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(688,811</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(1,112,460</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(1,823,402</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td></tr>
</table>
436580
84998
955799
235322
-177844
-96943
-7259
-28187
-1823402
-688811
-1112460
-455840
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 88%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Project assets</font></td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">151,522</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Customer intangible assets</font></td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">169,321</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Identifiable net assets</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif; text-align: right"><font style="font-size: 8pt; font-style: normal">320,843</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; border-bottom: black 2.25pt double; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="font: 8pt Times New Roman, Times, Serif">
<td nowrap="nowrap" style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="6" nowrap="nowrap" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">Three Months Ended March 31,</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="6" nowrap="nowrap" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">Nine Months Ended March 31,</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">2016</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td colspan="2" style="vertical-align: top; border-bottom: black 1pt solid; font: italic 8pt Times New Roman, Times, Serif; text-align: center"><font style="font-size: 8pt; font-style: normal">2015</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; width: 52%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Revenues</font></td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">235,322</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">84,998</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">955,799</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">$</font></td>
<td style="vertical-align: bottom; width: 9%; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">436,580</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; width: 1%; font: italic 8pt Times New Roman, Times, Serif"> </td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Gross Profit (loss)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(28,187</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(96,943</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(7,259</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(177,844</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td></tr>
<tr style="background-color: #CCEEFF; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Income (loss) from operations</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(468,340</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(714,346</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(1,160,750</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(1,847,266</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td></tr>
<tr style="background-color: white; font: 8pt Times New Roman, Times, Serif">
<td style="vertical-align: top; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">Net Income (loss)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(455,840</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(688,811</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(1,112,460</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"> </td>
<td style="vertical-align: bottom; text-align: right; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">(1,823,402</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; font: italic 8pt Times New Roman, Times, Serif"><font style="font-size: 8pt; font-style: normal">)</font></td></tr>
</table>
P3M
3474
3474
-30
3444
19964
85656
12172
0
34000
P1Y6M29D
P6M