10-K

                             UNITED STATES
                  SECURITIES AND EXCHANGE COMMISSION
                       Washington, D.C. 20549

                               FORM 10-K
(Mark One)

     X    ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
			For the fiscal year ended     June 30, 2014

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
		  For the transition period from        to
		           Commission file number 0-6658

		           SCIENTIFIC INDUSTRIES, INC.
                  (Exact Name of Registrant in Its Charter)

       Delaware                                    04-2217279
_______________________________               ____________________
(State or Other Jurisdiction of               (I.R.S. Employer
 Incorporation or Organization)                 Identification No.)

70 Orville Drive, Bohemia, New York                  11716
________________________________________           __________
(Address of principal executive offices)           (Zip Code)

Registrant's telephone number, including area code (631) 567-4700

Securities registered pursuant to Section 12(b) of the Act:

Title of each class       Name of each exchange on which registered
___________________       _________________________________________
        None                         None

Securities registered pursuant to Section 12(g) of the Exchange Act:

             Common Stock, par value $.05 per share
             ______________________________________
                       (Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act.      Yes [   ]     No [ x ]

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes [   ]     No [ x ]


Indicate by check mark whether the registrant(1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), except for a Report
on Form 8-K required to be filed in February with respect to an acquisition
and (2) has been subject to such filing requirements for the past 90 days.
                                                    Yes [ x ]     No [   ]






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

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (SS 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K.  [ x ]

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

Large accelerated filer [   ]		Accelerated filer	   [   ]

Non-accelerated filer	[   ] 		Smaller reporting company  [ x ]
(Do not check if a smaller reporting company)

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

The aggregate market value of the voting stock held by non-affiliates
computed by reference to the average bid and asked prices of such stock,
as of August 29, 2014 is $2,558,100.

The number of shares outstanding of the registrant's common stock, par
value $.05 per share ("Common Stock") as of August 29, 2014 is 1,469,112
shares.


              DOCUMENTS INCORPORATED BY REFERENCE

None.



                              2





                    SCIENTIFIC INDUSTRIES, INC.



                        Table of Contents

PART I

     ITEM 1.	BUSINESS                                                 4

     ITEM 1A.	RISK FACTORS                                             8

     ITEM 2.	PROPERTIES 						11

     ITEM 3.	LEGAL PROCEEDINGS 					11

     ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 	11

PART II

     ITEM 5.	MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED
STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES		11

     ITEM 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS					12

     ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA		13

     ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE					14

     ITEM 9A.	CONTROLS AND PROCEDURES					14

     ITEM 9B.	OTHER INFORMATION					15

PART III

     ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	15

     ITEM 11.	EXECUTIVE COMPENSATION					16

     ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS				21

     ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND
DIRECTOR INDEPENDENCE							22

     ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES			22

PART IV

     ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES		24

SIGNATURES								30

EXHIBIT 31.0	CERTIFICATION						31

EXHIBIT 32.0	CERTIFICATION						33




                                    3



	Forward Looking Statements.  The Company and its representatives
may from time to time make written or oral forward-looking statements with
respect to the Company's annual or long-term goals, including statements
contained in its filings with the Securities and Exchange Commission and in
its reports to stockholders.

	The words or phrases "will likely result," "will be," "will," "are
expected to," "will continue to," "is anticipated," "estimate," "project" or
similar expressions identify "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Such
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from historical earnings and those
presently anticipated or projected.  Readers are cautioned not to place
undue reliance on any such forward-looking statements, which speak only
as of the date made.



                                PART I

Item 1.  Business.

	General.  Incorporated in 1954, Scientific Industries, Inc., a
Delaware corporation (which along with its subsidiaries, the "Company") is
engaged in the design, manufacture, and marketing of standard benchtop
laboratory equipment ("Benchtop Laboratory Equipment"), and customized
catalyst research instruments ("Catalyst Research Instruments"), under
its wholly-owned subsidiary, Altamira Instruments, Inc., ("Altamira")
and through its wholly-owned subsidiary, Scientific Bioprocessing, Inc.,
("SBI"), the design and development of bioprocessing systems and products
("Bioprocessing Systems").  The Company's products are used primarily for
research purposes by universities, pharmaceutical companies, pharmacies
national laboratories, medical device manufacturers, petrochemical companies
and other industries performing laboratory-scale research.

	Operating Segments.  The Company views its operations as three
segments: the manufacture and marketing of standard Benchtop Laboratory
Equipment for research in university, pharmacy and industrial laboratories
sold primarily through laboratory equipment distributors and online,
the manufacture and marketing of custom-made Catalyst Research Instruments
for universities, government laboratories, and chemical and petrochemical
companies, and the production, marketing and sublicensing of bioprocessing
systems and products for research in university and industrial laboratories.
For certain financial information regarding the Company's operating segments,
see Note 3 to the consolidated financial statements included under Item 8.



	Products.

	Benchtop Laboratory Equipment.   The Company's Benchtop Laboratory
Equipment products consist of mixers and shakers, rotators/rockers,
refrigerated and shaking incubators, and magnetic stirrers sold under the
"Genie (TM)" brand, and pharmacy and laboratory balances under the
"Torbal (TM)" brand.  Sales of the Company's principal product, the
Vortex-Genie(R) 2 Mixer, excluding accessories, represented approximately
41% and 42% of the Company's total net revenues for each of the
fiscal years ended June 30, 2014 ("fiscal 2014") and June 30, 2013
("fiscal 2013"), and 59% and 67%, of the segment's sales for fiscal 2014
and fiscal 2013, respectively.

	The vortex mixer is used to mix the contents of test tubes, beakers,
and other various containers by placing such containers on a rotating cup or
other attachments which cause the contents to be mixed at varying speeds.

	The Company's additional mixers and shakers include a high speed
touch mixer; a mixer with an integral timer, a patented cell disruptor;
microplate mixers, two vortex mixers incorporating digital control and
display; a large capacity multi-vessel vortex mixer and shaker, and a large
capacity orbital shaker.

                                4




	The Company also offers various benchtop multi-purpose rotators
and rockers, designed to rotate and rock a wide variety of containers,
and a refrigerated incubator and an incubator shaker, both of which are
multi-functional benchtop environmental chambers designed to perform
various shaking and stirring functions under controlled environmental
conditions.

	Its line of magnetic stirrers include a patented high/low
programmable magnetic stirrer;  a four-place high/low programmable
magnetic stirrer; a large volume magnetic stirrer available in analog and
digital versions; and a four-place general purpose stirrer also available
in analog and digital versions.

	The Company also markets a line of pharmacy, laboratory, and
industrial digital scales, mechanical balances, moisture analyzers, and
force gauges under its Torbal brand, as a result of an acquisition in
February 2014 (described in detail in Note 2 to the consolidated financial
statements included under Item 8).

	Catalyst Research Instruments.  The Catalyst Research Instrument
products are offered through  the Company's subsidiary, Altamira.  Its
flagship product is the AMI-200(TM), which is used to perform traditional
catalyst characterization experiments on an unattended basis.  The product
also features a stand-alone personal computer to control the instrument
and incorporates proprietary LabVIEW(R)-based software.  The Company's
AMI-300(TM) Catalyst Characterization Instrument incorporates a
sophisticated data handling package and is designed to perform dynamic
temperature-programmed catalyst characterization experiments.  All AMI
model instruments are designed or adapted to a customer's individual
requirements.

	Its other Catalyst Research Instrument products include reactor
systems, high throughput systems and micro-activity reactors, including
the Company's BenchCAT(TM) custom reactor systems.  They are available
with single and multiple reactor paths and with reactor temperatures up
to 1200 degrees Celsius.  The systems feature multiple gas flows, are
available in gas and gas/liquid configurations, and feature one or more
stand-alone personal computers with the LabVIEW(R)-based control software.

	Bioprocessing Systems.  The Company, through SBI, is engaged in
the design and development of bioprocessing systems, principally
microreactor systems using disposable sensors for vessels with volumes
ranging from 250 milliliter to five liters for future sale or licensing.
In addition, the Company sublicenses the patents and technology it holds
exclusively under a license with the University of Maryland, Baltimore
County, ("UMBC"), for which it receives royalties.

	Product Development.  The Company designs and develops
substantially all of its products.  Company personnel formulate plans
and concepts for new products and improvements or modifications of
existing products.  The Company engages outside consultants to augment
its capabilities in areas such as industrial and electronics design.

	Major Customers.  Sales, principally of the Vortex-Genie 2 Mixer,
to two customers, one of which is one of the two major distributors of
laboratory equipment, represented for fiscal 2014 and fiscal 2013, 13%
and 14% of total revenues, and 19% and 22% of Benchtop Laboratory
Equipment product sales.  Sales of Catalyst Research Instrument products
are generally pursuant to a few large orders amounting on average to
over $100,000 to a limited number of customers.  In fiscal 2014, sales
to three customers, which represented at least 10% of that segment's
sales for each, accounted for 45% of the segment's sales (13% of total
revenues).  In fiscal 2013, sales to two customers, accounted for an
aggregate of 32% of the segment's sales (11% of the total revenues).

		Marketing.

	Benchtop Laboratory Equipment.  The Company's Benchtop Laboratory
Equipment products sold under the "Genie" brand are generally distributed
and marketed through an established network of domestic and overseas
laboratory equipment distributors, who sell the Company's products
through printed catalogs, websites and sales force.  See "Major Customers".
The Company's "Torbal" brand products are marketed primarily online via
its websites and sold online and on a direct basis, with


                                  5




only a few distributors.  The Company also markets products through
attendance at industry trade shows, trade publication advertising,
brochures and catalogs, the Company's websites, one sales manager and
one director of marketing in the U.S., and a consultant in Europe.

	In general, due to the reliance on sales through the catalog
distribution system, it takes two to three years for a new benchtop
laboratory equipment product to begin generating meaningful sales.

	Catalyst Research Instruments.  The Company's Catalyst Research
Instruments are sold directly worldwide to universities, government
laboratories, and chemical and petrochemical companies through its sales
personnel and independent representatives engaged on a commission basis.
Its marketing efforts include attendance at various trade shows,
Altamira's website, outside sales representatives, and printed materials.

	Bioprocessing Systems.  The Company's Bioprocessing Systems
products, are currently under development, and will be offered both
directly and through distribution worldwide to university, industrial,
and government laboratories.  It is anticipated that the related
marketing efforts will mainly comprise attendance at various trade
shows, publications, website, and dealer-related activities.

	Assembly and Production.  The Company has an operating facility
in Bohemia, New York from which its Benchtop Laboratory Equipment
Operations are conducted and one in Pittsburgh, Pennsylvania from which
its Catalyst Research Instruments Operations are conducted. The Company
also has a small sales and marketing office in Oradell, New Jersey
related to its Torbal division. The Company's production operations
principally involve assembly of components supplied by various domestic
and international independent suppliers.  The Company has not commenced
production of bioprocessing products, but anticipates that its current
facilities will be adequate for such purpose.

	Patents, Trademarks, and Licenses.

	The Company holds several United States patents relating to its
products, including a patent which expires in September 2015 for the
TurboMix(TM); an accessory to the Vortex-Genie 2 Mixer, a patent which
expires in July 2016 on the Roto-Shake Genie(R); a patent which expires
in November 2022 on the MagStir Genie(R), MultiMagStir Genie(R), and
Enviro-Genie(R), and a patent which expires in January 2023 on
a biocompatible bag with integral sensors.  The Company has several
patent applications pending. The Company does not anticipate, although
it cannot provide assurance any material adverse effect on its
operations following the expiration of the foregoing patents.

	The Company has various proprietary trademarks, including
AMI(TM),BenchCAT(TM), BioGenie(R), Cellphase(R), Cellstation(R),
Disruptor Beads(TM),Disruptor Genie(R), Enviro-Genie(R), Genie(TM),
Incubator Genie(TM), MagStir Genie(R),  MegaMag Genie(R), MicroPlate
Genie(R), MultiMagStir Genie(R), Multi-MicroPlate Genie(R),
Orbital-Genie(R), QuadMag Genie(R), Rotator Genie(R), Roto-Shake
Genie(R), Torbal(R), TurboMix(TM), and Vortex-Genie(R), each of
which it considers important to the success of the related product.
The Company also has several trademark applications pending.  No
representation can be made that any application will be granted or
as to the protection that any existing or future trademark may
provide.

	The Company has several licensing agreements for technology
and patents used in the Company's business, including an exclusive
license from UMBC with respect to rights and know-how under a patent
held by UMBC related to non-disposable sensor technology, which
the Company further sublicenses on an exclusive basis to a German
company, except for non-exclusive rights held by the Company as
it relates to the use of the technology with vessels of sizes
ranging from 250 milliliters to 5 liters, and to applications in
sub-milliliter volumes licensed to a third party.  The Company
also holds a license as to the technology related to its patent
for the Roto-Shake Genie, and a patent related to its TurboMix
attachment for the Vortex-Genie and Disruptor Genie.  Total
license fees paid by the Company under all its licenses for fiscal
2014 and fiscal 2013 amounted to $107,900 and $117,100,
respectively.


                                    6




	Foreign Sales.  The Company's sales to overseas customers,
principally in Asia and Europe, accounted for approximately 51%
and 58% of the Company's net revenues for fiscal 2014 and fiscal
2013, respectively.  Payments are in United States dollars and are
therefore not subject to risks of currency fluctuation, foreign
duties and customs.

	Seasonality.  The Company does not consider its business
to be seasonal.

	Backlog.  The amount of backlog for Benchtop Laboratory
Equipment products is not a significant factor because this line
of products is comprised of standard catalog items requiring lead
times which usually are not longer than two weeks.  There is no
backlog for Bioprocessing Systems.  The backlog for Catalyst
Research Instrument products as of June 30, 2014 was $453,000,
all of which is expected to be filled by June 30, 2015, as
compared to a backlog of $336,800 as of June 30, 2013, all of
which was filled in fiscal 2014.



	Competition.   Most of the Company's principal
competitors are substantially larger and have greater
financial, production and marketing resources than the
Company.  Competition is generally based upon technical
specifications, price, and product recognition and acceptance.
The Company's main competition for its Benchtop Laboratory
Equipment products derives from private label brand mixers
offered by laboratory equipment distributors in the United
States and Europe. However, the Company believes that despite
its smaller size, it is a major market participant in the
global vortex mixer market.

	The Company's major competitors for its Benchtop
Laboratory Equipment are Henry Troemner, Inc. (a private label
supplier to the two largest laboratory equipment distributors
in the U.S. and Europe), IKA-Werke GmbH & Co. KG, a German
company, Benchmark Scientific, Inc., (a United States importer of
China-produced products), and Heidolph Instruments GmbH, a
German company.  The Company's main competitors for its Torbal
products are Ohaus Corporation, an American company, A&D
Company Ltd., a Japanese company, and Adam Equipment Co.,
Ltd., a British company.

	The primary competition for the Company's Catalyst
Research Instrument products is in the form of instruments
produced internally by research laboratory staffs of
potential customers.  Major competitors in the United
States include Quantachrome Instruments, and Micromeritics
Instrument Corporation, each a privately-held company.

       The potential major competitors for the Company's
Bioprocessing Systems are Applikon Biotechnology, B.V.
(Netherlands),  DASGIP Technology GmbH (Germany), and
PreSens - Precision Sensing GmbH (Germany).

	Research and Development.  The Company incurred
research and development expenses, the majority of which related
to its Benchtop Laboratory Equipment products, of $426,700
during fiscal 2014 compared to $450,500 during fiscal 2013.
The Company expects research and development expenditures in
the fiscal year ending June 30, 2015 will be at approximately
the same level as those in fiscal 2014.

	Government and Environmental Regulation.  The Company's
 products and claims with respect thereto have not required
approval of the Food and Drug Administration or any other
government approval.  The Company's manufacturing operations,
like those of the industry in general, are subject to numerous
existing and proposed, if adopted, federal, state, and local
regulations to protect the environment, establish occupational
safety and health standards and cover other matters.  The Company
believes that its operations are in compliance with existing
laws and regulations and the cost to comply is not significant
to the Company.



                                  7



	Employees.  As of August 31, 2014, the Company
employed 31 persons (22 for the Benchtop Laboratory Equipment
Operations and 9 for the Catalyst Research Instruments Operations)
of whom 30 were full-time, including its three executive officers.
All activities of the Bioprocessing Systems Operations are being
performed by employees of the other two operations and consultants.
None of the Company's employees are represented by any union.

	Available Information.  The Company's Annual Report to
Stockholders for fiscal 2014, includes its Annual Report on Form 10-K.
The Annual Report will be mailed to security holders together
with the Company's proxy material and solicitation as it relates
to the Company's 2013 Annual Meeting of Stockholders.  All the
Company's reports, including Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q, Current Reports on Form 8-K and other
information filed with, or furnished to, the Securities and
Exchange Commission (the "SEC" or the "Commission"), including
amendments to such reports, are available on the SEC's website
that contains such reports, proxy and information statements, and
other information regarding companies that file electronically
with the Commission. This information is available at www.sec.gov.
In addition, all the Company's public filings can be accessed
through the Company's website at
http://scientificindustries.com/secfilings.html.



Item 1A.  Risk Factors.

	In connection with the "safe harbor" provisions
of the Private Securities Litigation Reform Act of 1995,
important risk factors are identified below that could affect the
Company's financial performance and could cause the Company's
actual results for future periods to differ materially from any
opinions or statements expressed with respect to such future
periods in any current statements.  The Company undertakes no
obligation to publicly revise any forward-looking
announcements to reflect future events or circumstances.

Dependence on Major Customers

	Sales to one customer, a major laboratory equipment
distributor in the United States, represented 7.9% and 10.9% of
the segment's sales for fiscal 2014 and 2013, respectively.  Sales
to another customer, an overseas laboratory equipment distributor
accounted for 11.2% and 11.5% of the segment's sales for fiscal
2014 and 2013, respectively.

	No representation can be made that the Company will be
successful in continuing to retain either or both customers, or
not suffer a material reduction in sales either which could have
an adverse effect on future operating results of the Company.

One Benchtop Laboratory Equipment Product Accounts for a Substantial
Portion of Revenues

	The Company has a limited number of Benchtop Laboratory
Equipment products with one product, the Vortex-Genie 2 Mixer,
accounting for approximately 59% and 67% of Benchtop Laboratory
Equipment sales, for fiscal 2014 and fiscal 2013, respectively,
and 41% and 42% of total revenues for each of fiscal 2014 and
fiscal 2013.

The Company is a Small Participant in Each of the Industries in
Which It Operates

	The Benchtop Laboratory Equipment industry is a highly
competitive mature industry.  Although the Vortex-Genie 2 Mixer
has been widely accepted, the annual sales of the Benchtop
Laboratory Equipment products ($4,679,100 for fiscal 2014 and
$4,466,000 for fiscal 2013) are significantly lower than
the annual sales of many of its competitors in the industry.
The principal competitors are substantially larger with much
greater financial, production and marketing resources than the
Company.  There are constant new entrants into the vortex mixer
market, including those offering products imported from China,
which the Company is unable to compete on price.  The Torbal
line of products is also a very small unknown brand with
significant competition from well known brands.


                                 8




	The production and sale of Catalyst Research Instruments
products is highly competitive.  Altamira's competitors include
several companies with greater resources and many laboratories which
produce their own instruments.

	The Company's Bioprocessing Systems operation is a
participant in the fast-growing laboratory-scale sector of the
larger bioprocessing products industry, which is dominated by
several large companies with much greater resources than the
Company.

 The Company's Ability to Grow and Compete Effectively Depends
In Part on Its Ability to Develop and Effectively Market New
Products

 	Over the past ten years, the Company has continuously
invested in the development and marketing of new Benchtop Laboratory
Equipment products with a view to increasing revenues and reducing
the Company's dependence on the Vortex-Genie 2 Mixer.  Gross
revenues derived from such other Benchtop Laboratory Equipment
products amounted to $1,909,300 for fiscal 2014 and $1,468,300,
for fiscal 2013.  The segment's ability to compete will depend
upon the Company's success in continuing to develop and market
new laboratory equipment as to which no assurance can be given.



 	The Company relies primarily on distributors and their
catalogs to market the majority of its Benchtop Laboratory
Equipment products, as is customary in the industry.  Accordingly,
sales of new products are heavily dependent on the distributors'
decision to include and retain a new product in the distributors'
catalogs and on their websites.  It may be at least 24 to 36
months between the completion of development of a product and
the distribution of the catalog in which it is first offered;
furthermore, not all distributors feature the Company's
products in their catalogs.

	The Company's line of Catalyst Research Instruments
consists of only a few products.  The ability of the Company to
compete in this segment and expand the line will depend on its
ability to make engineering improvements to existing products
and develop and add new products incorporating more current
technology.  Over the last two fiscal years the Company has
introduced two new catalyst research products to increase its
product offerings and has continuously sought to expand its
outside sales force.

	The success of the Company's new Bioprocessing Systems
operation will be heavily dependent on its ability to develop
and market new products.  New products are being or are to be
developed by the Company's employees and outside consultants.
Such products are of a complex nature of which the Company has
limited or no prior experience and are taking longer to develop
than previously anticipated.  In addition, they will be subject
to beta testing by end users, which could result in design and/or
production changes which could further delay development time.
The sale and marketing of the products, at least initially, will
be through the Company's attendance at trade shows, website,
and a few select distributors.

 	No assurance can be given that the amounts allocated by
the Company for its new product development and sales and
marketing programs will be sufficient to develop additional
commercially feasible products which will be accepted by the
marketplace, or that any distributor will include or retain
any particular product in its catalogs and websites.

The Company May Be Subject to General Economic, Political, and
Social Factors

 	Orders for the Company's products, particularly its
Catalyst Research Instruments products, depend in part, on the
customer's ability to secure funds to finance purchases,
especially government funding.  Availability of funds can be
affected by budgetary constraints.  Factors including a general
economic recession, such as the one which commenced in fiscal
2009 and negatively affected the Company in fiscal 2011 and
fiscal 2012, the European crisis, or a major terrorist attack
would likely have a negative impact on the availability of
funding including government or academic grants to potential
customers.


                            9




	The Company's ability to secure new Catalyst Research
Instruments orders can also be affected by changes in domestic
and international policies pertaining to energy and the environment,
which could affect funding of potential customers.

The Company is Heavily Dependent on Outside Suppliers for the
Components of Its Products

	The Company purchases all its components from outside
suppliers and relies on a few single suppliers for some crucial
Benchtop Laboratory Equipment components, mostly due to cost
considerations.  Most of the Company's suppliers, including
United States vendors, produce the components directly or
indirectly in overseas factories, and orders are subject to long
lead times and potential other risks related to production in a
foreign country.  To minimize the risk of supply shortages, the
Company keeps more than normal quantities on hand of the critical
components that cannot easily be procured or, where feasible
and cost effective, purchases are made from more than one supplier.

	However, a shortage of such components could halt
production and have a material negative effect on the Company's
operations.



The Company's Ability to Compete Depends in Part on Its Ability
To Secure and Maintain Proprietary Rights to its Products

       	The Company has no patent protection for its principal
Benchtop Laboratory Equipment product, the Vortex-Genie 2 Mixer,
the Torbal balances, or for its Catalyst Research products and
limited patent protection on a few other Benchtop Laboratory
Equipment products.  There are several competitive products
available in the marketplace possessing similar technical
specifications and design.

       	As part of the asset purchase by SBI during fiscal 2012,
the Company acquired the rights to various patents for
bioprocessing products which it licenses from UMBC.

       	There can be no assurance that any patent issued,
licensed or sublicensed to the Company provides or will
provide the Company with competitive advantages or will
not be challenged by third parties.  Furthermore, there
can be no assurance that others will not independently develop
similar products or design around the patents.  Any of the
foregoing activities could have a material adverse effect
on the Company.  Moreover, the enforcement by the Company
of its patent or license rights may require substantial
litigation costs.

The Company Has Limited Management Resources

       	The loss of the services of any of Ms. Helena Santos,
the Company's Chief Executive and Financial Officer and
President, Mr. Robert Nichols, the Company's Executive Vice
President, Mr. Brookman March, President  of Altamira, and
Mr. Karl Nowosielski, Torbal Division President or any material
expansion of the Company's operations could place a significant
additional strain on the Company's limited management resources
and could be materially adverse to the Company's operating
results and financial condition.

The Common Stock of the Company is Thinly Traded and is Subject
to Volatility

       	As of August 31, 2014, there were only 1,469,112 shares
of Common Stock of the Company outstanding, of which 344,223
shares (23%) were held by the directors and officers of the
Company.  The Common Stock of the Company is traded on the
Over-the-Counter Bulletin Board and, historically, has been
thinly traded.  There have been a number of trading days
during fiscal 2014 on which no trades of the Company's Common
Stock were reported.  Accordingly, the market price for the
Common Stock is subject to great volatility.



                               10

Item 2.  Properties.

	The Company's executive offices and principal
manufacturing facility for its Benchtop Laboratory Equipment
Operations comprise approximately 25,000 square feet, are located
in Bohemia, New York and held pursuant to a lease which was
due to expire in January 2015, but will expire earlier upon
a move which the Company plans to make to a 19,000 square foot
neighboring facility in the same vicinity from the same landlord,
at a lower rental rate under a new lease beginning November 1, 2014
with an expiration date in February 2025. The Company's Catalyst
Research Instruments Operations are conducted from an approximately
9,000 square foot facility in Pittsburgh, Pennsylvania under a lease
expiring in November 2017.  The Bioprocessing Systems operation does
not occupy a separate physical location. The Company has a 1,200
square foot facility in Oradell, New Jersey from where it conducts its
sales and marketing functions, primarily for the Torbal division of
the Benchtop Laboratory Equipment Operations.  See Note 11 to the
Financial Statements in Item 8.  The leased facilities are suitable
and adequate for each of the Company's operations.  In the opinion
of management, all properties are adequately covered by insurance.

Item 3.  Legal Proceedings.

	The Company is not a party to any pending legal proceedings.

Item 4.  Submission of Matters to a Vote of Security Holders.

	No matters were submitted to a vote of security holders
during the fourth quarter of fiscal 2014.

                               PART II

Item 5.  Market for the Registrant's Common Equity, Related
Stockholder Matters and Issuer Purchases of Equity Securities.



   	The Company's Common Stock is traded in the over-the-counter
market.  The following table sets forth the low and high bid
quotations for each quarter of fiscal 2013 and fiscal 2014, as
reported by the National Association of Securities Dealers, Inc.
Electronic Bulletin Board.  Such quotations reflect inter-dealer
prices, without retail mark-up, mark-down or commission and may
not represent actual transactions:

 For Fiscal Quarter Ended:      Low Bid         High Bid
__________________________      _______         ________
		09/30/12	$  1.51		$  2.00
		12/31/12	   1.62	           2.10
		03/31/13	   1.88	           2.68
		06/30/13	   2.55		   3.06
		09/30/13	   3.21		   3.36
		12/31/13	   3.65		   4.00
		03/31/14	   3.76		   4.80
		06/30/14	   3.10		   3.89



     (a)	As of August 31, 2014, there were 359 record
holders of the Company's Common Stock.

(b)	On November 4, 2013, the Company paid a cash dividend
of $.08 per share to stockholders of record on October 11, 2013.
On November 1, 2012, the Company paid a cash dividend of $.03 per
share to stockholders of record on October 1, 2012.  The Company
is not subject to any agreement which prohibits or restricts the
Company from paying dividends on its Common Stock.


                              11




Item 7.  Management's Discussion and Analysis of Financial
Condition and Results of Operations.

	Forward-Looking statements.  Certain statements contained
in this report are not based on historical facts, but are forward-
looking statements that are based upon various assumptions about
future conditions.  Actual events in the future could differ
materially from those described in the forward-looking information.
Numerous unknown factors and future events could cause such
differences, including but not limited to, product demand, market
acceptance, success of marketing strategy, success of expansion
efforts, impact of competition, adverse economic conditions, and
other factors affecting the Company's business that are beyond the
Company's control, which are discussed elsewhere in this report.
Consequently, no forward-looking statement can be guaranteed.
The Company undertakes no obligation to publicly update forward-
looking statements, whether as a result of new information,
future events or otherwise.  This Management's Discussion and
Analysis of Financial Condition and Results of Operations
should be read in conjunction with the Company's financial
statements and the related notes included elsewhere in this
report.

	Overview.  The Company incurred a loss before income tax
benefit of $107,000 for fiscal 2014 compared to income before
income tax expense of $520,800 for fiscal 2013, primarily as a
result of the loss incurred by the Catalyst Research Instruments
Operations due to lower sales and gross margins, lower profits
derived by the Benchtop Laboratory Equipment Operations as a result
of lower sales of Genie brand products and costs associated with
the recent acquisition of the Torbal business.

	Results of Operations.  Net sales for fiscal 2014 decreased
$341,300 (4.8%) to $6,793,200 from $7,134,500 for fiscal 2013,
reflecting a decrease of $618,200 (24.3%) in net sales of catalyst
research instruments, partially offset by increases of $213,100
(4.8%) in benchtop laboratory equipment sales, and  $63,800 in
the Bioprocessing Systems Operations revenues.  The benchtop
laboratory equipment sales reflected $412,100 derived by the
new Torbal business.

       Sales of catalyst research instruments are comprised of a
small number of large orders, typically averaging more than
$100,000 each.  The lower sales of catalyst research instruments
resulted from a lesser amount of high value orders.  As of June
30, 2014, the order backlog for these products was
$453,000 compared to $336,800 as of June 30, 2013.

	Revenues derived from the new Bioprocessing Systems
Operations consist of net royalties received from sublicensees
and an order for bioprocessing product prototypes during the
second fiscal quarter.  The Company expects that such Operations
will also  generate future revenues from products currently
under development, although no assurance can be given.

	The gross profit percentage for fiscal 2014 was 38.5%
compared to 41.5% for fiscal 2013 due mainly to higher labor
and overhead costs for the catalyst research instruments sales.

	General and administrative expenses for fiscal 2014
increased $235,700 (18.4%) to $1,513,400 compared to $1,277,700
for fiscal 2013, primarily due to the acquisition costs and the
expenses including amortization expense, related to the new
Torbal division of the Benchtop Laboratory Equipment Operations.

	Selling expenses for fiscal 2014 increased $69,800 (9.7%)
to $792,900 from $723,100 from for fiscal 2013 due to higher
expenses incurred by the Benchtop Laboratory Equipment Operations
including expenses for the Torbal division.



                                  12





	Research and development expenses decreased by $23,800
(5.6%) to $426,700 compared to $450,500 for fiscal 2013,
primarily the result of decreased new product development costs
by the Bioprocessing Systems Operations due to the use of lower
cost consultants.

	Total other income decreased by $1,700 (12.7%) to
$11,700 for fiscal 2014 from $13,400 for fiscal 2013, mainly
due to lower interest income and other income on lower investments
balances.

	Income tax benefit for fiscal 2014 was $31,700 compared
to tax expense of $124,400 last year primarily due to the
current period loss.

	As a result of the foregoing, the net loss for fiscal
2014 was $75,300, compared to net income of $396,400 for
fiscal 2013.

	Liquidity and Capital Resources.  Cash and cash
equivalents decreased by $433,600 to $493,700 as of June 30, 2014
from $927,300 as of June 30, 2013.

	Net cash provided by operating activities decreased by
$529,400 to $35,000 for fiscal 2014 as compared to $564,400 for
fiscal 2013, primarily due to the loss incurred of $75,300 for
fiscal 2014 compared to $396,400 income for fiscal 2013, and
increased inventories.  Cash used in investing activities
increased by $5,300 to $259,000 for fiscal 2014 compared to
$253,700 for fiscal 2013, primarily due to the cash used in
the asset purchase of the Torbal business during fiscal 2014.
Net cash used in financing activities increased $56,900 to
$209,600 for fiscal 2014 compared to $152,700 in fiscal 2013
mainly due to the higher dividend paid during fiscal 2014.

       The Company's working capital decreased by $682,700 to
$3,142,400 as of June 30, 2014 compared to $3,825,100 as of June
30, 2013, mainly due to the asset purchase during fiscal 2014.

       The Company has a line of credit with its bank, Bank of
America Merrill Lynch which provides for maximum borrowings of
up to $700,000, bearing interest at 3.00 percentage points above
the LIBOR Index, currently 3.155% and is secured by a pledge of
collateral consisting of the inventory, accounts, chattel paper,
equipment and fixtures of the Company.  Outstanding amounts are
due and payable by November 30, 2015 with a requirement that the
Company is to reduce the outstanding principal balance to zero
during the 30 day period ending on the expiration date of the
promissory note.  As of August 31, 2014, $150,000 was due under
this line.

       Management believes that the Company will be able to meet,
absent a material capital expenditure not currently anticipated,
its cash flow needs during the 12 months ending June 30, 2015 from
its available financial resources including its cash and
investment securities, and operations.

      Capital Expenditures.  During fiscal 2014, the Company
incurred $49,900 in capital expenditures.  The Company expects
that based on its current operations, its capital expenditures
will not be materially higher for the fiscal year ending June
30, 2015.

		Off-Balance Sheet Arrangements.  None.

Item 8.	  Financial Statements and Supplementary Data.

The Financial Statements required by this item are attached
hereto on pages F1-F26.

			   13





Item 9.	  Changes In and Disagreements With Accountants on
Accounting and Financial Disclosure.

		Not applicable.

Item 9A.  Controls and Procedures.

	Evaluation of Disclosure Controls and Procedures.
As of the end of the period covered by this Annual Report on
Form 10-K, based on an evaluation of the Company's disclosure
controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934), the
Chief Executive and Chief Financial Officer of the Company
has concluded that the Company's disclosure controls and
procedures are effective to ensure that information required
to be disclosed by the Company in its Exchange Act reports
is recorded, processed, summarized and reported within the
applicable time periods specified by the SEC's rules and
forms. The Company also concluded that information required to
be disclosed in such reports is accumulated and communicated
to the Company's management, including its principal executive
and principal financial officer, as appropriate to allow timely
decisions regarding required disclosure.

	Management's Annual Report on Internal Control Over
Financial Reporting.  Management is responsible for establishing
and maintaining adequate internal control over the Company's
financial reporting, as such term is defined in Securities
Exchange Act Rule 13a-15(f) and 15d-15(f).  The Company's
internal controls over financial reporting are designed to
provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted
accounting principles.

	The Chief Executive and Financial Officer of the
Company conducted an evaluation of the effectiveness of the
Company's internal controls over financial reporting as of
June 30, 2014 based on the criteria set forth by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO) in
Internal Control - Integrated Framework.

	Based on the assessment of the Company's Chief Executive
and Financial Officer of the Company, it was concluded that as
of June 30, 2014, the Company's internal controls over financial
reporting were effective based on these criteria.

	This annual report does not include an attestation
report of the Company's registered public accounting firm
regarding internal control over financial reporting. Management's
report was not subject to attestation by the Company's registered
public accounting firm pursuant to the rules of the Securities and
Exchange Commission that permit the Company to provide only
management's report in this annual report.

	Changes in Internal Control Over Financial Reporting.
There was no change in the Company's internal controls over
financial reporting that occurred during the most recent fiscal
quarter that materially affected or is reasonably likely to
materially affect the Company's internal controls over financial
reporting.

	Inherent Limitations on Effectiveness of Controls.  The
Company's management, including its Chief Executive and Financial
Officer, believes that its disclosure controls and procedures and
internal controls over financial reporting are designed to
provide reasonable assurance of achieving their objectives
and are effective at the reasonable assurance level. However,
management does not expect that its disclosure controls and
procedures or its internal control over financial reporting
will prevent all errors and all fraud. A control system, no
matter how well conceived and operated, can  provide only
reasonable, not absolute, assurance that the objectives of
the control system are met. Further, the design of a control
system must reflect the fact that there are resource constraints,
and the benefits of controls must be considered relative to
their costs. Because of the inherent limitations in all control
systems, no evaluation of controls can provide absolute
assurance that all control issues and instances of fraud,
if any,

				14



have been detected. These inherent limitations include the
realities that judgments in decision making can be faulty,
and that breakdowns can occur because of a simple error or
mistake. Additionally, controls can be circumvented by the
individual acts of some persons, by collusion of two or more
people or by management override of the controls. The design
of any system of controls also is based in part upon certain
assumptions about the likelihood of future events, and there
can be no assurance that any design will succeed in achieving
its stated goals under all potential future conditions; over
time, controls may become inadequate because of changes in
conditions, or the degree of compliance with policies or
procedures may deteriorate. Because of the inherent limitations
in a cost effective control system, misstatements due to
error or fraud may occur and not be detected.

Item 9B.  Other Information.

		Not applicable.

                          PART III

Item 10.  Directors, Executive Officers and Corporate
Governance.

Directors
	The Company has the following five Directors:

	Joseph G. Cremonese (age 78), a Director since November
2002 and Chairman of the Board since February 2006, has been,
through his affiliate, a marketing consultant to the Company since
1996.  Mr. Cremonese has been since 1991, President of his
affiliate, Laboratory Innovation Company, Ltd., which is a vehicle
for technology transfer and consulting services for companies,
engaged in the production and sale of products for science and
biotechnology.  Since March 2003, he has been a director of
Proteomics, Inc., a producer of recombinant proteins for medical
research.  Prior to 1991, he had been employed by Fisher
Scientific, the largest U.S. distributor of laboratory equipment.

	Roger B. Knowles (age 89), a Director since 1965, has
been retired for the last five years.

	Grace S. Morin (age 66), a Director since December 4, 2006,
had been President, Director and principal stockholder of Altamira
Instruments, Inc. from December 2003 until its acquisition in
November 2006 by the Company.  Ms. Morin had been employed by
Altamira to supervise its administrative functions at the Pittsburgh,
Pennsylvania facility as a full-time employee through March 31,
2009 and since that date as a part-time consultant.  Prior to
December 2003, she was a general business consultant for two years,
and prior thereto a member of senior management of a designer of gas
flow environmental engineered products for approximately four years.

	Helena R. Santos (age 50), a Director since 2009, has been
employed by the Company since 1994, and has served since August 2002
as its President, Chief Executive Officer and Treasurer.  She had
served as Vice President, Controller from 1997 and as Secretary from
May 2001.  Ms. Santos was an internal auditor with a major defense
contractor from March 1991 to April 1994.  She had been previously
employed in public accounting.

	James S. Segasture (age 78), a Director since 1991, has
been retired for the last five years.

	The Directors are elected to three-year staggered terms.
The current terms of the Directors expire at the annual meeting of
stockholders of the Company following: the fiscal year ended June 30,
2014 - two Directors (Messers. Cremonese and Knowles, Class C), the
fiscal year ending June 30, 2015 - two directors (Ms. Santos and Mr.
Segasture, Class A), and the fiscal year ending June 30, 2016 - one
director (Ms. Morin).



                              15




Board Committees

	The Company's Stock Option Committee administers the
Company's 2012 Stock Option Plan.  The members of the committee are
non-management Directors of the Company -  James S. Segasture and
Joseph G. Cremonese.  The members of the Committee serve at the
discretion of the Board.  During fiscal 2014 the Stock Option
Committee held one meeting.

	Grace S. Morin, and James S. Segasture are the current
members of the Company's Compensation Committee serving at the
discretion of the Board.  The Committee administers the Company's
compensation policies.  During fiscal 2014, the Compensation
Committee held one meeting.

	The Board of Directors acts as the Company's Audit
Committee, which in its function as the Committee, held five
meetings during fiscal 2014.  Ms. Santos, who is not "independent"
and Ms. Morin are "financial experts" as defined by the Securities
and Exchange Commission.

Executive Officers

	See above for the employment history of Ms. Santos.

	Robert P. Nichols (age 53), employed by the Company since
February 1998, has served since August 2002 as Executive Vice
President.  Previously, he had been since May 2001 Vice President,
Engineering.  Prior to joining the Company, Mr. Nichols was an
Engineer Manager with Bay Side Motion Group, a precision motion
equipment manufacturer from January 1996 to February 1998.

	Brookman P. March (age 69) has been Director of Sales and
Marketing of Altamira, which has conducted the Catalyst Research
Instruments operation since November 30, 2006 and its President
since July 2008.  He had been Vice President and a Director of
Altamira from December 2003 until it was acquired by the Company.
Mr. March is the husband of Ms. Morin, a Director of the Company.

	Karl D. Nowosielski (age 35), is the President of the
Torbal division of the Benchtop Laboratory Equipment Operations and
Director of Marketing for the Company.  He had been until February
2014 Vice President of Fulcrum, Inc. (the seller of the Torbal
division assets) since 2004.



Section 16(a) Beneficial Ownership Reporting Compliance

	The Company believes that, for fiscal 2014, its officers,
directors and 10% stockholders timely complied with all filing
requirements of Section 16(a) of the Securities Exchange Act of 1934,
as amended.

Code of Ethics

	The Company has adopted a code of ethics that applies to
the Executive Officers and Directors.  A copy of the code of ethics
can be found on the Company's website at www.scientificindustries.com.

Item 11.  Executive Compensation.

	Compensation Discussion and Analysis. The Compensation
Committee reviews and recommends to the Board of Directors the
compensation to be paid to each executive officer.  Executive
compensation, in all instances except for the compensation for
the Chief Executive Officer ("CEO"), is based on recommendations
from the CEO.  The CEO makes a determination by comparing the
performance of each executive being reviewed with objectives
established at the beginning of each fiscal year and with
objectives established during the business year with regard to
the success of the achievement of such objectives and the
successful execution of management targets and goals.


                                16




	With respect to the compensation of the CEO, the
Committee considers performance criteria, 50% of which is related
to the direction, by the CEO, of the reporting executives, the
establishment of executive objectives as components for the
successful achievement of Company goals and the successful
completion of programs leading to the successful completion
of the Business Plan for the Company and 50% is based on the
achievement by the Company of its financial and personnel goals
tempered by the amount of the income or loss of  the Company
during the fiscal year.

	The compensation at times includes grants of options under
its stock option plan to the named executives.  Each officer is
employed pursuant to a long-term employment agreement, containing
terms proposed by the Committee and approved as reasonable by the
Board of Directors.  The Board is cognizant that as a relatively
small company, the Company has limited resources and opportunities
with respect to recruiting and retaining key executives.
Accordingly, the Company has relied upon long-term employment
agreements and grants of stock options to retain qualified personnel.

	Compensation for each of its executive officers provided
by their employment agreements were based on the foregoing factors
and the operating and financial results of the segments under their
management.

	The following table summarizes all compensation paid by
the Company to each of its executive officers for the fiscal years
ended June 30, 2014 and 2013.


SUMMARY COMPENSATION TABLE


                       SUMMARY COMPENSATION TABLE

_____________________________________________________________________

                                                  Non-      Non-
                                                  Equity    Qualified
                                                  Incentive Deferred
Name                                              Plan      Comp-
and                               Stock  Option   Comp-     ensation
Principal  Fiscal  Salary  Bonus  Awards Awards   ensation  Earnings
Position   Year    ($)     ($)    ($)    ($)      ($)       ($)
(a)        (b)     (c)     (d)    (e)    (f)      (g)       (h)
_____________________________________________________________________
Helena R.  2014    150,000  0         0      0        0         0
Santos,    2013    141,000  10,000(1) 0      0        0         0
CEO,
President,
CFO
_____________________________________________________________________
Robert P.  2014    135,000  0         0    500(5)     0         0
Nichols,   2013    129,100  5,000(1)  0      0        0         0
Exec.
V.P.
_____________________________________________________________________
Brookman   2013    135,000  0         0      2,500(4) 0         0
P. March,  2012    131,000  5,000(1)  0      1,900(3) 0         0
Director
of Sales
and
Marketing,
and
President of
Altamira
_____________________________________________________________________
Karl D.   2014    45,800(7) 0         0      3,900(6) 0         0
Nowosielski
President of
Torbal
Division
and Director
of Marketing
_____________________________________________________________________




                   SUMMARY COMPENSATION TABLE (CONTINUED)
_____________________________________________________________________
                     Changes
                     in
                     Pension
                     Value
                     and Non-
                     Qualified  All
Name                 Deferred   Other
and                  Comp-      Comp-
Principal  Fiscal    ensation   ensation   Total
Position   Year      Earnings   ($)        ($)
(a)        (b)                  (i)        (j)
_____________________________________________________________________
Helena R.  2014      0           6,000(2)  156,000
Santos,    2013      0           4,200(2)  155,200
CEO,
President,
CFO
_____________________________________________________________________
Robert P.  2014      0           5,400(2)  140,900
Nichols,   2013      0           3,900(2)  138,000
Exec.
V.P.
_____________________________________________________________________
Brookman   2014      0           5,400(2)  142,900
P. March,  2013      0           5,200(2)  143,100
Director
of Sales
and
Marketing,
and
President of
Altamira
_____________________________________________________________________
Karl D.     2014     0           0          49,700
Nowosielski
President of
Torbal
Divsion
and Director
of Marketing
_____________________________________________________________________


                               17





 (1) Represents amounts earned for fiscal 2013.



(2) The amounts represent the Company's matching contribution under
the Company's 401(k) Plans.

(3) The amount represents compensation expense for stock options
granted valued utilizing the Black-Scholes-Merton options pricing
model, disregarding estimates of forfeitures related to service-
based vesting considerations.  The fiscal 2012 option was valued
at a total of $5,700 of which $1,900 was expensed as stock based
compensation in each of fiscal 2014 and fiscal 2013.

(4) The amount represents the compensation expense for the 2014
and 2012 stock options granted valued utilizing the Black-Scholes-
Merton options pricing model, disregarding estimates of forfeitures
related to service-based vesting considerations.  The 2014 option
was valued at a total of $3,500 of which $600 was expensed in
fiscal 2014.  See Note (3) above.

(5) The amount represents compensation expense for a stock
option granted in fiscal 2014 valued utilizing the Black-
Scholes-Merton options pricing model, disregarding estimates
of forfeitures related to service-based vesting considerations.
The option was valued at a total of $3,500 of which $500
was expensed as stock based compensation in fiscal 2014.

(6) The amount represents compensation expense for a stock
option granted in fiscal 2014 as part of his employment
agreement, valued utilizing the Black-Scholes-Merton options
pricing model, disregarding estimates of forfeitures related
to service-based vesting considerations.  The option was
valued at a total of $3,900, all of which was expensed as
stock based compensation in fiscal 2014.

(7) Represents salary from February 2014 to the end of fiscal
2014.


GRANTS OF PLAN-BASED AWARDS IN FISCAL YEAR ENDED JUNE 30, 2014

	                                        All Other
	                  Estimated  Estimated    Stock
                           Future      Future    Awards:
                           Payouts    Payouts    Number
                            Under      Under       Of
                          Non-Equity  Equity     Shares
                          Incentive  Incentive  Of Stock
                   Grant    Plan       Plan     Or Units
Name               Date       $         $         (#)
(a)                (b)       (c)       (d)        (e)
________________________________________________________
Brookman P. March   12/04/13   0         0          0

Robert P. Nichols   12/04/13   0         0          0

Karl D. Nowosielski 12/04/13   0         0          0

________________________________________________________

GRANTS OF PLAN-BASED AWARDS IN FISCAL YEAR ENDED JUNE 30, 2014
(CONTINUED)



                 All Other
                   Option                 Grant
                   Awards:                 Date
                    Number     Exercise     Fair
                      Of       Or Base    Value of
                   Securities   Price       Stock
                   Underlying  Of Option     And
                    Options     Awards      Option
Name                 #          ($/Sh)      Awards
(a)                 (f)           (g)       (h)
_________________________________________________________

Brookman P. March   2,000        3.50       3,500

Rober P. Nichols    2,000        3.50       3,500

Karl D. Nowosielski 2,000        3.67       3,900

_________________________________________________________



                            18







     OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END


______________________________________________________________

                        Option Awards
______________________________________________________________

                        Number       Equity
           Number       of           Incentive
           of           Securities   Plan Awards:
           Securities   Under-       Number of
           Under-       lying        Securities
           lying Un-    Unexercised  Underlying   Option
           exercised    Options(#)   Unexercised  Exercise Option
           Options(#)   Unexerci-    Unearned     Price    Expiration
Name       Exercisable  sable        Options(#)   ($)      Date
(a)        (b)          (c)          (d)          (e)      (f)
_____________________________________________________________________

Brookman P. 9,834       3,666        0       3.07-3.71  11/2014-12/2023
March

Robert P.
Nichols         0       2,000        0            3.50    12/2023

Karl D.
Nowosielski     0       2,000        0            3.67    02/2024
_____________________________________________________________________


Employment Agreements

      In May 2013, The Company entered into employment agreements
with Ms. Helena R. Santos and Robert P. Nichols extending their
terms of employment to June 30, 2015.  The agreements provide for
annual base salaries for the fiscal years ending June 30, 2014 and
June 30, 2015, for Ms. Santos of $150,000 and $154,000 respectively;
and for Mr. Nichols of $135,000 and $139,000 respectively.  Bonuses,
if any, are to be awarded at the discretion of the Board of Directors
for each of the fiscal years.  For the fiscal year ended June 30, 2013
bonuses of $10,000 and $5,000, for Ms. Santos and Mr. Nichols,
respectively, were authorized.  No bonuses were awarded for
fiscal 2014.

       In May 2012, the Company entered into an employment
agreement with Mr. March extending the term through June 30, 2014,
which was further extended by mutual consent through June 30, 2015.
The agreement provides for an annual base salary of $135,000 and
$140,000 for each of the fiscal years ending June 30, 2014 and
2015.  Bonuses, if any, may be awarded at the discretion of the
Board of Directors.  A bonus of $5,000 was awarded to Mr. March
for fiscal 2013.  No bonus was awarded for fiscal 2014.  Mr.
March is the husband of Grace S. Morin, a
Director of the Company and of Altamira and a former principal
 stockholder of Altamira.

	In February 2014 in conjunction with the acquisition
of the Torbal division assets from Fulcrum, Inc., the Company
entered into an employment agreement with Mr. Nowosielski
providing for his employment through February 2017, which
may be extended by mutual consent for another two years.
The agreement provides for an annual base salary of $140,000,
subject to increases commencing with the second year based
on percentage increases in the Consumer Price Index, plus
discretionary bonuses.  The agreement also provided for
the issuance of 2,000 stock options upon commencement of
employment and 4,000, 5,000, and 6,000 stock options in
February 2015, 2016, and 2017 subject to his continued
employment.  No bonuses have been awarded under the
agreement.

	Each of the foregoing employment agreements contains
confidentiality and non-competition covenants.  The employment
agreements for Ms. Santos, Mr. March, and Mr. Nowosielski
contain termination provisions stipulating that if the
Company terminates the employment other than for death,
disability, or cause (defined as (i) conviction of a felony
or (ii) gross neglect or gross misconduct (including conflict
of interest), the Company shall pay severance payments
equal to one year's salary at the rate of the compensation at
the time of termination, and continue to pay the regular
benefits provided by the Company for a period of two years
from termination.


                              19





Directors' Compensation and Options

                 DIRECTORS' COMPENSATION
           For the Year Ended June 30, 2014

_________________________________________________________________

                                           Non-
                                           Equity
            Fees                           Incentive
            Earned                         Plan
            or Paid    Stock     Option    Comp-
            in Cash    Awards    Awards    ensation
Name        ($)        ($)       ($)       ($)
(a)         (b)        (c)       (d)       (e)
__________________________________________________________________
Joseph G.
Cremonese    29,000      0       8,700(1)   0

Roger B.
Knowles      14,000      0            0     0

Grace S.
Morin        14,000      0            0     0

James S.
Segasture    14,000      0            0     0

___________________________________________________________________


                DIRECTORS' COMPENSATION (CONTINUED)

            Changes
            in
            Pension
            Value and
            Non-       Non-
            qualified  qualified
            Deferred   Deferred    All
            Compens-   Comp-       Other
            ation      ensation    Comp-
            Earnings   Earnings    ensation    Total
Name        ($)        ($)         ($)         ($)
(a)         (f)        (g)         (h)         (i)
____________________________________________________________________

Joseph G.
Cremonese      0         0        41,400(2)   79,100

Roger B.
Knowles        0         0          0         14,000

Grace S.
Morin          0         0         5,700(3)   19,700

James S.
Segasture      0         0          0         14,000

____________________________________________________________________


(1) The amount represents consulting expense recorded in fiscal 2014
for stock options granted in fiscal 2014 utilizing the Black-Scholes-
Merton options pricing model (see Items 12 and 13).

(2) Represents amount paid to his affiliate pursuant to a marketing
consulting agreement (see Items 12 and 13).

(3) Represents compensation received for her administrative services
as a consultant for Altamira (see Items 12 and 13).

	The Company pays each Director who is not an employee of the
Company or a subsidiary a quarterly retainer fee of $2,000 and $1,400
for each meeting attended. In addition, the Company reimburses each
Director for out-of-pocket expenses incurred in connection with
attendance at board meetings in the amount of $50 or the Director's
itemized expenses, whichever is greater.  Mr. Cremonese, as Chairman
of the Board receives an additional fee of $1,300 per month.  During
fiscal 2013, total director compensation to non-employee Directors
aggregated $126,800, including the consulting fees paid to Mr.
Cremonese's affiliate, and to Ms. Morin.

	Under the Company's 2002 Stock Option Plan, none of the
Directors existing at the time of the adoption of the plan were
eligible to receive option grants thereunder.  However, Mr. Joseph G.
Cremonese who was elected a Director for the first time at the 2002
Annual Meeting of Stockholders, was granted ten-year options on
December 1, 2003 to purchase 5,000 shares of the Company's Common
Stock at the exercise price of $1.35 per share; ten-year options
on February 20, 2007 to purchase 5,000 shares of the Company's
Common Stock at the exercise price of $3.10 per share; and five-year
options on September 17, 2009 to purchase 10,000 shares at the
exercise price of $1.88 per share.  He also received on December 4,
2013 five-year options on January 12, 2012 to purchase 10,000
shares at the exercise price of $3.45 per share, and ten-year
options to purchase 5,000 shares at an exercise price of $3.50
per share.  The fiscal 2014 option had a total fair value (as
determined by the Black-Scholes-Merton option pricing model) of
$8,700 all of which was recognized as consulting expense in 2014.
He exercised 5,000 options during fiscal 2014.



                             20





Item 12.  Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters.

	The following table sets forth, as of June 30, 2014, the
number of shares of Common Stock beneficially owned by (i) each
person known to the Company to beneficially own more than 5% of
the outstanding shares of Common Stock, (ii) each director of
the Company, (iii) each named executive officer of the Company,
and (iv) all directors and executive officers as a group.  Shares
not outstanding but deemed beneficially owned by virtue of the
right of any individual to acquire shares within 60 days are
treated as outstanding only when determining the amount of and
percentage of outstanding shares of Common Stock owned by such
individual.  Each person has sole voting and investment power with
respect to the shares shown, except as noted. Except as indicated
in the table, the address for each of the following is c/o
Scientific Industries, Inc., 70 Orville Drive, Bohemia, New York
11716.

			    Amount and
Name                        Nature of Beneficial
                            Ownership                 % of Class
________________________________________________________________

Lowell A. Kleiman	        139,581 (1)		9.5%
16 Walnut Street
Glen Head, NY 11545

Spectrum Laboratories, Inc.     127,986 (2)		8.7%
18617 Broadwick Street
Rancho Dominquez, CA 90220

Fulcrum, Inc.		        126,449 (3)		8.6%
100 Delawanna Avenue
Clifton, NJ 07014

Joseph G. Cremonese	        104,597 (4)             6.9%
Roger B. Knowles	           -                     -
Grace S. Morin		         96,450 (5)             6.5%
James S. Segasture	        162,500 (6)            11.1%
Helena R. Santos	         15,779 		1.1%
Robert P. Nichols	         20,397                 1.4%
Brookman P.  March	         96,450 (7)             6.5%
Karl D. Nowosielski	          2,000 (8)             0.0%
All directors and  executive
officers as a group (8 persons) 401,723 (9)	       26.3%

(1)	Based on information reported in his Schedule 13D filed
with the Securities and Exchange Commission on October 30, 2002.


(2)	Based on information reported on Form 3 filed with the
Securities and Exchange Commission on June 27, 2011.
(3)	Stock issued in connection with the acquisition of the
Torbal division assets from Fulcrum, In. on February 26, 2014.
(4)	57,597 shares are owned jointly with his wife, 7,000
shares are owned by his wife, and 40,000 shares are issuable
upon exercise of options.
(5)	Includes 13,500 shares issuable upon exercise of options
held by her husband, Mr. March.
(6)	Shares owned jointly with his wife.
(7)   Represents 82,950 shares owned by Ms. Morin, his wife and
13,500 shares issuable upon exercise of options.
(8)	Represents shares issuable upon exercise of options.
(9)   Includes 55,500 shares issuable upon exercise of options.



                               21




	     EQUITY COMPENSATION PLAN INFORMATION

The following table sets forth information with respect to
Company options, warrants and rights as of June 30, 2014.

_________________________________________________________________

                  Number of Securities
                  to be Issued Upon    Weighted-Average
                  Exercise of          Exercise Price of
                  Outstanding Options, Outstanding Options,
                  Warrants and Rights  Warrants and Rights ($)
Plan Category          (a)                 (b)
_________________________________________________________________
Equity
Compensation
plans approved by
security holders        61,000             3.11

Equity
Compensation
plans not approved
by security holders      N/A               N/A
_________________________________________________________________
Total                   61,000             3.11
_________________________________________________________________


         EQUITY COMPENSATION PLAN INFORMATION (CONTINUED)
_________________________________________________________________

                  Number of Securities
                  Remaining Available
                  for
                  Future Issuance
                  Under
                  Equity Compensation
                  Plans (Excluding
                  Securities Reflected
                  in Column (a)
Plan Category          (c)
_________________________________________________________________
Equity
Compensation
plans approved by
security holders        82,000

Equity
Compensation
plans not approved
by security holders      N/A
_________________________________________________________________
Total                   82,000
_________________________________________________________________

Item 13.  Certain Relationships and Related Transactions, and
Director Independence.

	Mr. Joseph G. Cremonese, a Director since November 2002,
through his affiliate, Laboratory Innovation Company, Ltd., has
been providing independent marketing consulting services to the
Company since January 1, 2003 pursuant to a consulting agreement
expiring December 31, 2014.  The agreement currently provides that
Mr. Cremonese and his affiliate shall render, at the request of
the Company, marketing consulting services for a monthly payment
of $3,600.  The agreement contains confidentiality and non-
competition covenants.  The Company paid fees of $41,400 and
$39,600 pursuant to the agreement for each of fiscal 2014 and
fiscal 2013.

	Ms. Grace S. Morin, was elected a Director in December
2006 upon the sale of her 90.36% ownership interest in Altamira
to the Company in November 2006.  Up until March 31, 2009, Ms.
Morin had been employed by Altamira as an administrative employee.
Since April 1, 2009, she has provided consulting services on a
part-time basis pursuant to an agreement expiring March 31, 2014
at the rate of $85 per hour, resulting in payments of $5,700 and
$6,100 for fiscal 2014 and fiscal 2013, respectively.  The
agreement contains confidentiality and non-competition covenants.

Item 14.  Principal Accountant Fees and Services.

	The following is a description of the fees incurred by
the Company for services by the firm  of Nussbaum Yates Berg Klein
& Wolpow, LLP (the "Firm") during fiscal 2014 and fiscal 2013.

	The Company incurred for the services of the Firm fees of
approximately $64,000 and $62,000 for fiscal 2014 and 2013,
respectively, in connection with the audit of the Company's annual
financial statements and quarterly reviews; and $6,000 for each
fiscal year for the preparation of the Company's corporate tax
returns.  The Company also paid $12,600 of other fees to the Firm
for fiscal 2014.


                                22





         In approving the engagement of the independent registered
public accounting firm to perform the audit and non-audit services,
the Board of Directors as the Company's audit committee evaluates the
scope and cost of each of the services to be performed including a
determination that the performance of the non-audit services will not
affect the independence of the firm in the performance of the
audit services.







                                23





                               Part IV

Item 15.  Exhibits and Financial Statement Schedules.

       Financial Statements.  The required financial statements of
the Company are attached hereto on pages F1-F26.

       Exhibits.  The following Exhibits are filed as part of this
report on Form 10-K:

    Exhibit Number	Exhibit

	3		Articles of Incorporation and By-Laws:

	3(a)		Certificate of Incorporation of the Company
as amended (filed as Exhibit 1(a-1) to the Company's General Form for
Registration of Securities on Form 10 dated February 14, 1973 and
incorporated by reference thereto.)

	3(b)		Certificate of Amendment of the Company's
Certificate of Incorporation, as filed on January 28, 1985 (filed as
Exhibit 3(a) to the Company's Annual Report on Form 10-K for the
fiscal year ended June 30, 1985 and incorporated by reference thereto.)

    3(c)		By-Laws of the Company, as restated and
amended (filed as Exhibit 3(ii) to the Company's Current Report on
Form 8-K filed on January 6, 2003 and Exhibit 3(ii) to the Company's
Current Report on Form 8-K filed on December 5, 2007 and
incorporated by reference thereto).

	4		Instruments defining the rights of security
holders:

	4(a)		2002 Stock Option Plan (filed as Exhibit
99-1 to the Company's Current Report on Form 8-K filed on November
25, 2002 and incorporated by reference thereto).

	4(b)	       2012 Stock Option Plan (filed as Exhibit 10
to the Company's Current Report on Form 8-K filed on January 23, 2012
and incorporated by reference thereto).

	10		Material Contracts:

	10(a)		Lease between Registrant and AIP Associates,
predecessor-in-interest of current lessor, dated October, 1989 with
respect to Company's offices and facilities in Bohemia, New York
(filed as Exhibit 10(a) to the Company's Annual Report on Form
10-KSB filed on September 28, 2005 and incorporated by reference
thereto).

	10(a)-1		Amendment to lease between Registrant and
REP A10 LLC, successor in interest of AIP Associates, dated
September 1, 2004 (filed as Exhibit 10A-1 to the Company's
Current Report on Form 8-K filed on September 2, 2004, and
incorporated by reference thereto).

	10(a)-2		Second amendment to lease between
Registrant and REP A10 LLC dated November 5, 2007 (filed as
Exhibit 10A-1 to the Company's Current Report on Form 8-K filed
on November 8, 2007, and incorporated by reference thereto).

	10(a)-3		Lease agreement dated August 8, 2014 by
and between the Company and 80 Orvile Drive Associates LLC.


                             24




	10(b)		Employment Agreement dated January 1, 2003,
by and between the Company and Ms. Santos (filed as Exhibit 10(a)
to the Company's Current Report on Form 8-K filed on January 22,
2003, and incorporated by reference thereto).

	10(b)-1		Employment Agreement dated September 1, 2004,
by and between the Company and Ms. Santos (filed as Exhibit 10A-1
to the Company's Current Report on Form 8-K filed on September 1, 2004,
and incorporated by reference thereto).

	10(b)-2		Employment Agreement dated December 29, 2006,
by and between the Company and Ms. Santos (filed as Exhibit 10A-1 to
the Company's Current Report on Form 8-K filed on December 29, 2006,
and incorporated by reference thereto).

	10(b)-3		Employment Agreement dated July 31, 2009
by and between the Company and Ms. Santos (filed as Exhibit 10A-1 to
the Company's Current Report on Form 8-K filed on August 7, 2009,
and incorporated by reference thereto).

	10(b)-4		Employment Agreement dated May 14, 2010 by
and between the Company and Ms. Santos (filed as Exhibit 10A-1 to
the Company's Current Report on Form 8-K filed on May 18, 2010,
and incorporated by reference thereto).

	10(b)-5		Employment Agreement dated September 13,
2011 by and between the Company and Ms. Santos (filed as exhibit
10(b)-5 to the Company's Annual Report on Form 10-K for the fiscal
year ended June 30, 2011, and incorporated by reference thereto).

	10(b)-6		Amended Employment Agreement dated May 20,
2013 by and between the Company and Ms. Santos (filed as Exhibit
10A-1 to the Company's Current Report on Form 8-K filed on May 20,
2013, and incorporated by reference thereto).

	10(c)		Employment Agreement dated January 1, 2003,
by and between the Company and Mr. Robert P. Nichols (filed as
Exhibit 10A-1 to the Company's Current Report on Form 8-K filed
on January 22, 2003, and incorporated by reference thereto).

	10(c)-1	        Employment Agreement dated September 1,
2004, by and between the Company and Mr. Nichols (filed as Exhibit
10A-1 to the Company's Current Report on Form 8-K filed on
September 1, 2004, and incorporated by reference thereto).

	10(c)-2 	Employment Agreement dated December
29, 2006, by and between the Company and Mr. Nichols (filed as
Exhibit 10A-1 to the Company's Current Report on Form 8-K filed
on December 29, 2006, and incorporated by reference thereto).

	10(c)-3		Employment Agreement dated July 31, 2009
by and between the Company and Mr. Nichols (filed as Exhibit
10A-2 to the Company's Current Report on Form 8-K filed on
August 7, 2009, and incorporated by reference thereto).

	10(c)-4		Employment Agreement dated May 14, 2010
by and between the Company and Mr. Nichols (filed as Exhibit
10A-2 to the Company's Current Report on Form 8-K filed on
May 18, 2010, and incorporated by reference thereto).

	10(c)-5		Employment Agreement dated September
13, 2011 by and between the Company and Mr. Nichols (filed as
Exhibit 10(c)-5 to the Company's Annual Report on Form 10-K for
the fiscal year ended June 30, 2011, and incorporated by
reference thereto).

	10(c)-6		Amended Employment Agreement dated
May 20, 2013 by and between the Company and Mr. Nichols
(filed as Exhibit 10A-2 to the Company's current Report
on Form 8-K filed on May 20, 2013, and incorporated by
reference thereto).

                             25




	10(d)		Consulting Agreement dated January 1,
2003 by and between the Company and Mr. Cremonese and his
affiliate, Laboratory Innovation Company, Ltd. (filed as Exhibit
10(b) to the Company's Current Report on Form 8-K filed on
January 6, 2003, and incorporated by reference thereto).

	10(d)-1		Amended and Restated Consulting
Agreement dated March 22, 2005, by and between the Company and
Mr. Cremonese and Laboratory Innovation Company, Ltd. (filed
as Exhibit 10A-1 to the Company's Current Report on Form 8-K
filed on March 23, 2005, and incorporated by reference thereto).

	10(d)-2		Second Amended and Restated Consulting
Agreement dated March 15, 2007, by and between the Company and
Mr. Cremonese and Laboratory Innovation Company Ltd. (filed as
Exhibit 10A-1 to the Company's Current Report on Form 8-K filed
on March 16, 2007, and incorporated by reference thereto).

	10(d)-3		Third Amended and Restated Consulting
Agreement dated September 23, 2009, by and between the Company
and Mr. Cremonese and Laboratory Innovation Company, Ltd.
(filed as Exhibit 10 to the Company's Annual Report on Form 10-K
field on September 24, 2009, and incorporated by reference
thereto).

	10(d)-4		Fourth Amended and Restated Consulting
Agreement dated January 7, 2011 (filed as Exhibit 10A-1 to the
Company's Current Report on Form 8-K (filed on January 18,
2011, and incorporated by reference thereto).

	10(d)-5		Fifth Amendment and Restated Consulting
Agreement dated January 20, 2012 (filed as Exhibit 10 to the
Company's Current Report on Form 8-K (filed on January 23,
2012, and incorporated by reference thereto).

	10(d)-6		Agreement extension dated November 29,
2012 to Amended and Restated Consulting Agreement (filed as
Exhibit 10 to the Company's Current Report on Form 8-K filed
on December 4, 2012, and incorporated by reference thereto).

	10(d)-7		Agreement extension dated December 12,
2013 to Amended and Restated Consulting Agreement (filed as
Exhibit 10 to the Company's Current Report on Form 8-K filed
on December 12, 3013, and incorporated by reference thereto).

	10(e)		Sublicense from Fluorometrix Corporation
(filed as Exhibit 10(a)1 to the Company's Current Report on Form
8-K filed on June 14, 2006, and incorporated by reference
thereto).

	10(f)		Stock Purchase Agreement, dated as of
November 30, 2006, by and among the Company and Grace Morin,
Heather H. Haught and William D. Chandler (filed as Exhibit
2.1 to the Company's Current Report on Form 8-K filed on
December 5, 2006, and incorporated by reference thereto).

	10(g)		Escrow Agreement, dated as of November
30, 2006, by and among the Company and Grace Morin, Heather H.
Haught and William D. Chandler (filed as Exhibit 10(a) to the
Company's Current Report on Form 8-K filed on December 5, 2006,
and incorporated by reference thereto).

	10(h)		Registration Rights Agreement, dated
as of November 30, 2006, by and among the Company and Grace
Morin, Heather H. Haught and William D. Chandler (filed as
Exhibit 10(b) to the Company's Current Report on Form 8-K
filed on December 5, 2006, and incorporated by reference
thereto).

                              26





        10(i)	        Employment Agreement, dated as of
November 30, 2006, between Altamira Instruments, Inc. and
Brookman P. March (filed as Exhibit 10(c) to the Company's
Current Report on Form 8-K filed on December 5, 2006, and
incorporated by reference thereto).

	10(i)-1		Employment Agreement, dated as of
October 30, 2008, between Altamira Instruments, Inc. and
Brookman P. March (filed as Exhibit 10A-2 to the Company's
Current Report on Form 8-K filed on October 30, 2008, and
incorporated by reference thereto).

        10(i)-2	        Employment Agreement, dated as of
October 1, 2010, between Altamira Instruments, Inc., and
Brookman P. March (filed as Exhibit 10A-1 to the Company's
Current Report on Form 8-K filed on October 13, 2010, and
incorporated by reference thereto).

	10(i)-3	        Employment Agreement, dated as of
 May 18, 2012 between Altamira Instruments, Inc. and
Brookman P. March (filed as Exhibit 10(i)-3 to the Company's
Annual Report on Form 10-K filed on September 27, 2012, and
incorporated by reference thereto).

	10(i)-4		Agreement Extension, dated as of
May 21, 2014 between Altamira Instruments, Inc.
and Brookman P. March (filed as Exhibit 10 to the Company's
Current Report on Form 8-K filed on May 21, 2014, and
incorporated by reference thereto).

	10(j)		Indemnity Agreement, dated as of
April 13, 2007 by and among the Company and Grace Morin,
Heather H. Haught and William D. Chandler (filed as
Exhibit 10(j) to the Company's Annual Report on Form
10-KSB filed on September 28, 2007 and incorporated
by reference thereto).

	10(k)		Lease between Altamira Instruments,
Inc. and Allegheny Homes, LLC, with respect to the
Company's Pittsburgh, Pennsylvania facilities (filed as
Exhibit 10(k) to the Company's Annual Report on Form 10-KSB
filed on September 28, 2007 and incorporated by reference
thereto).

	10(k)-1		Lease between Altamira Instruments,
Inc. and Allegheny Homes, LLC, with respect to the Company's
Pittsburgh, Pennsylvania facilities (filed as Exhibit 10(k)-1
to the Company's Quarterly Report on Form 10-Q filed on
February 14, 2013, and incorporated by reference thereto).

	10(l)		Line of Credit Agreements dated
October 30, 2008, by and among the Company and Capital
One, N.A. (filed as Exhibits 10-A1(a) through (f) to the
Company's Current Report on Form 8-K filed on October 30,
2008, and incorporated by reference thereto).

	10(l)-1		Restated Promissory Note Agreement
dated January 20, 2010 by and among the Company and Capital
One N.A. (filed as Exhibit 99.1 to the Company's Current
Report on Form 8-K filed on January 20, 2010, and
incorporated by reference thereto).

	10(l)-2		Restated Promissory Note Agreement
dated January 5, 2011 by and among the Company and Capital
One N.A. (filed as Exhibit 99.1 to the Company's Current
Report on Form 8-K filed on January 6, 2011, and
incorporated by reference thereto).


                              27





	10(m)		Consulting Agreement dated April 1,
2009 by and between the Company and Grace Morin (filed as
Exhibit 10A-1 to the Company's Current Report on Form 8-K
filed on April 1, 2009, and incorporated by reference
thereto).

        10(n)	  Line of Credit Agreements dated June 14,
2011, by and among the Company and JPMorgan Chase Bank,
N.A. (filed as Exhibits 99.1 through 99.3 to the Company's
Current Report on Form 8-K filed on June 16, 2011, and
incorporated by reference thereto).

       10(n)-1	 Promissory Note dated June 5, 2013 by
and among the Company and JP Morgan Chase Bank, N.A.
(filed as Exhibit 99 to the Company's Current Report on
Form 8-K filed on June 7, 2013, and incorporated by
reference thereto).

       10(o)	Purchase Agreement, dated as of
November 14, 2011, by and among the Company, Scientific
Bioprocessing, Inc., and Fluorometrix Corporation (filed
as Exhibit 2.1 to the Company's Current Report on Form 8-K
filed on November 17, 2011, and incorporated by reference
thereto).

       10(p)	Escrow Agreement, dated as of November
14, 2011, by and among the Company, Scientific Bioprocessing,
Inc., and Fluorometrix Corporation (filed as Exhibit 10(A) to
the Company's Current Report on Form 8-K filed on November
17, 2011, and incorporated by reference thereto).

       10(q)	Research and Development Agreement dated as
of November 14, 2011, by and between Scientific
Bioprocessing, Inc. and Biodox R&D Corporation (filed as
Exhibit 10(B) to the Company's Current Report on Form 8-K
filed on November 17, 2011, and incorporated by reference
thereto).

      10(q)-1	Notice of termination of Research and
Development Agreement dated June 12, 2013 (filed as
Exhibit 99 to the Company's Current Report on Form 8-K
filed on June 27, 2013, and incorporated by reference
thereto).

      10(r)	Non-Competition Agreement, dated as of
November 14, 2011, by and among the Company, Scientific
Bioprocessing, Inc., and Joseph E. Qualitz (filed as Exhibit
10(D) to the Company's Current Report on Form 8-K filed
on November 17, 2011, and incorporated by reference thereto).

      10(s)	Promissory Note, dated as of November 14,
2011, by and between the Company and the University of
Maryland, Baltimore County (filed as Exhibit 10(c) to the
Company's Current Report on Form 8-K filed on November
17, 2011, and incorporated by reference thereto).

      10(t)	License Agreement, dated as of January
31, 2001 by and between University of Maryland, Baltimore
County and Fluorometrix Corporation (filed as Exhibit
10(E) to the Company's Current Report on Form 8-K filed
on November 21, 2011, and incorporated by reference
thereto).

     10(u)	Line of Credit Agreements dated June 25, 2014,
by and among the Company and Bank of America Merrill
Lynch (filed as Exhibits 99.1 through 99.2 (to the Company's
Current Report on Form 8-K filed on July 2, 2014, and
incorporated by reference thereto).


                               28



      10(v)	Asset Purchase Agreement, dated as of February
26, 2014, by and among the Company and Fulcrum, Inc. (filed
as Exhibit 2.1 to the Company's Current Report on Form 8-K
filed on February 28, 2014, and incorporated by reference
thereto).

      10(v)-1	Escrow Agreement, dated as of February 26,
2014, by and among the Company, and Fulcrum, Inc. (filed as
Exhibit 10(e) to the Company's Current Report on Form 8-K
filed on February 28, 2014, and incorporated by reference
thereto).

      10(v)-2	Non-Competition Agreements, dated as of
February 26, 2014, by and among the Company, and James
Maloy and Karl Nowosielski (filed as Exhibits 10(b) and 10(c)
to the Company's Current Report on Form 8-K filed on
February 28, 2014, and incorporated by reference thereto).

     10(v)-3	Registration Rights Agreement, dated as
of February 26, 2014, by and among the Company, and
Fulcrum, Inc. (filed as Exhibit 10(d) to the Company's
Current Report on Form 8-K filed on February 28, 2014,
and incorporated by reference thereto).

     10(v)-4	Supply Agreement, dated as of February
20, 2014, by and among the Company, and Axis Sp 3.O.O.
(filed as Exhibit 10(g) to the Company's Current Report
on Form 8-K filed on February 28, 2014, and incorporated
by reference thereto).

	14		Code of Ethics (filed as Exhibit
14 to the Company's Annual Report on Form 10-KSB filed on
September 28, 2007 and incorporated by reference thereto).

	21		Subsidiaries of the Registrant

Altamira Instruments, Inc., a Delaware Corporation, is a
wholly-owned subsidiary of the Company.

Scientific Bioprocessing, Inc., a Delaware Corporation, is
a wholly-owned subsidiary of the Company since November 2011.

Scientific Packaging Industries, Inc., a New York
corporation, is a wholly-owned inactive subsidiary of
the Company.

	31.01		Certification of Chief Executive
Officer and Chief Financial Officer pursuant to Section
302 of Sarbanes-Oxley Act of 2002.

	32.01		Certification of Chief Executive
Officer and Chief Financial Officer pursuant to Section
906 of Sarbanes-Oxley Act of 2002.





                          29





                     SIGNATURES

		Pursuant to the requirements of Section13
or 15(d) of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

				SCIENTIFIC INDUSTRIES, INC.
				(Registrant)

				/s/ Helena R. Santos
                                ____________________
				Helena R. Santos
				President, Chief Executive
                                Officer, Treasurer
                                Chief Financial and Principal
                                Accounting Officer




Date:  September 26, 2014

		Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities
and on the dates indicated.


Name				Title 	                    Date
_______________________  __________________________   _________________

 /s/ Helena R. Santos    President and Treasurer (Chief	September 26, 2014
Helena R. Santos	  Executive Officer and Financial
			  Officer) and Director

 /s/ Joseph G. Cremonese Chairman of the Board		September 26, 2014
Joseph G. Cremonese

/s/ Roger B. Knowles     Director			September 26, 2014
Roger B. Knowles

/s/ Grace S. Morin       Director			September 26, 2014
Grace S. Morin

/s/ James S. Segasture   Director		        September 26, 2014
James S. Segasture







                                     30



___________________________________________________________________________









           SCIENTIFIC INDUSTRIES, INC.
                AND SUBSIDIARIES

        FINANCIAL STATEMENTS AND REPORT OF
   INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

                AS OF AND FOR THE
       YEARS ENDED JUNE 30, 2014 AND 2013




     SCIENTIFIC INDUSTRIES, INC. & SUBSIDIARIES

AS OF AND FOR THE YEARS ENDED JUNE 30, 2014 AND 2013



                        CONTENTS


	                                                Page
                                                        ----

Report of independent registered public accounting firm	 F-1


Consolidated financial statements:

	Balance sheets	                                 F-2

	Statements of operations                         F-3

	Statements of comprehensive income (loss)        F-4

	Statements of shareholders' equity	         F-5

	Statements of cash flows	             F-6 - F-7

	Notes to financial statements	             F-8 - F-26






REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



Board of Directors and Shareholders
Scientific Industries, Inc.
Bohemia, New York

We have audited the accompanying consolidated balance sheets of
Scientific Industries, Inc. and subsidiaries (the "Company") as
of June 30, 2014 and 2013, and the related consolidated statements
of operations, comprehensive income (loss), shareholders' equity
and cash flows for the years then ended. These consolidated
financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States).  Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial
statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included
consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control
over financial reporting.  Accordingly, we express no such opinion.
An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated
financial statements, assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the
consolidated financial position of Scientific Industries, Inc.
and subsidiaries as of June 30, 2014 and 2013, and the
consolidated results of their operations and their cash flows for
the years then ended in conformity with U.S. generally accepted
accounting principles.



/s/ Nussbaum Yates Berg klein & Wolpow, LLP

Nussbaum Yates Berg Klein & Wolpow, LLP
Melville, New York


September 26, 2014

                             F-1






        SCIENTIFIC INDUSTRIES, INC. & SUBSIDIDARIES

              CONSOLIDATED BALANCE SHEETS

             AS OF JUNE 30, 2014 AND 2013

                           ASSETS

                                            2014        2013
                                          _________   _________
Current assets
  Cash and cash equivalents               $ 493,700   $ 927,300
  Investment securities                     415,400     908,400
  Trade accounts receivable, less
   allowance for doubtful accounts
   of $11,600 in 2014 and 2013              756,700     815,900
  Inventories                             2,309,200   1,705,600
  Prepaid and other current assets          123,100      59,000
  Deferred taxes                             86,000      86,600
                                         __________  __________
      Total current assets                4,184,100   4,502,800

Property and equipment, net                 252,100     156,500

Intangible assets, net                    1,795,900     773,500

Goodwill                                    705,300     589,900

Other assets                                 28,200	 24,100

Deferred taxes                              146,200	106,200
                                         __________  __________

       Total assets			 $7,111,800  $6,153,000
                                         ==========  ==========


           LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
  Accounts payable			 $  373,700  $  156,800
  Customer advances                          89,500      15,900
  Accrued expenses and taxes		    442,800     407,700
  Contingent consideration,
   current portion                          109,000      19,000
  Notes payable, current portion             26,700      78,300
                                         __________  __________

        Total current liabilities         1,041,000     677,700

Contingent consideration payable,
  less current portion                      391,000      51,600

Notes payable, less current portion            -         26,700
                                         __________  __________

        Total liabilities                 1,432,700     756,000
                                         __________  __________
Shareholders' equity:

  Common stock, $.05 par value;
   authorized 7,000,000 shares;
   issued 1,488,914 shares in 2014
   and 1,357,465 in 2013		     74,400      67,900
  Additional paid-in capital              2,420,700   1,977,100
  Accumulated other comprehensive gain
   (loss), unrealized holding gain
   (loss) on investment securities	      1,100     (13,600)
  Retained earnings                       3,235,300   3,418,000
                                         __________  __________
					  5,731,500   5,449,400

Less common stock held in treasury at
cost, 19,802 shares			     52,400	 52,400
                                         __________  __________
        Total shareholders' equity        5,679,100   5,397,000
                                         __________  __________

        Total liabilities and
         shareholders' equity		 $7,111,800  $6,153,000
                                         ==========  ==========

    See notes to consolidated financial statements.

                            F-2




     SCIENTIFIC INDUSTRIES, INC. & SUBSIDIDARIES

         CONSOLIDATED STATEMENTS OF OPERATIONS

      FOR THE YEARS ENDED JUNE 30, 2014 AND 2013

                                          2014         2013
                                      __________  ____________
Revenues			      $6,793,200    $7,134,500

Cost of sales			       4,178,900     4,175,800
                                      __________    __________
Gross profit                           2,614,300     2,958,700
                                      __________    __________

Operating expenses:
  General and administrative	       1,513,400     1,277,700
  Selling			         792,900       723,100
  Research and development               426,700       450,500
                                      __________    __________
       Total operating expenses	       2,733,000     2,451,300
                                      __________    __________
Income (loss) from operations		(118,700)     507,400
				      __________    __________
Other income (expense):
  Interest income		            -            6,800
  Other income				  14,800        11,400
  Interest expense                        (3,100)       (4,800)
                                      __________    __________
        Total other income                11,700        13,400
                                      __________    __________
Income (loss) before income tax
  expense (benefit)     		(107,000)      520,800
                                      __________    __________
Income tax expense (benefit):
  Current			             400       106,800
  Deferred	                        ( 32,100)       17,600
                                      __________    __________
        Total income tax expense
          (benefit)		        ( 31,700)      124,400
                                      __________    __________
Net income (loss)		      $ ( 75,300)   $  396,400
                                      ==========    ==========
Basic earnings (loss) per common share   $ (.05)       $ .30
                                         =======       =====
Diluted earnings (loss) per common share $ (.05)       $ .30
                                         =======       =====

Weighted average common shares
 outstanding, basic                   1,385,054     1,337,048
                                      =========     =========
Weighted average common shares
 outstanding, assuming dilution       1,385,054     1,342,212
                                      =========     =========

      See notes to consolidated financial statements.

                            F-3




     SCIENTIFIC INDUSTRIES, INC. & SUBSIDIDARIES

   CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

      FOR THE YEARS ENDED JUNE 30, 2014 AND 2013

                                         2014        2013
                                      __________  __________

Net income (loss)		      $ ( 75,300) $  396,400

Other comprehensive income (loss):
  Unrealized holding gain (loss)
  arising during period,
  net of tax                              14,700   (   1,000)
                                      __________  __________

Comprehensive income (loss)            $ (60,600)  $ 395,400
                                       ==========  =========


      See notes to consolidated financial statements.

                            F-4




         SCIENTIFIC INDUSTRIES, INC. & SUBSIDIARIES

       CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

         FOR THE YEARS ENDED JUNE 30, 2014 AND 2013

                            Common Stock     Additional  Accumulated
                            ______________   Paid-in     Other Compr-
                            Shares  Amount   Capital     ehensive Gain
                                                            (Loss)
                           _______  _______  __________  _____________

Balance, July 1, 2012     1,355,514 $67,800  $1,968,700  $  (12,600)

Net income                     -       -           -           -

Unrealized holding loss
 on investment securities,
 net of tax                    -       -           -         (1,000)

Exercise of stock options     5,000     250        (250)       -

Tender   of common stock     (3,049)  ( 150)        150        -

Stock-based compensation       -       -          8,500        -

Cash dividend declared
 and paid, $.03 per share      -       -           -           -
                          _________  _______  _________  ___________
Balance, June 30, 2013    1,357,465  67,900   1,977,100     (13,600)

Net income                     -       -           -           -

Unrealized holding gain
 on investment securities,
 net of tax                    -       -           -         14,700

Exercise of stock options     5,000     200       6,500        -

Issuance of common stock    126,449   6,300     421,100        -

Stock-based compensation       -       -         16,000        -

Cash dividend declared
 and paid, $.08 per share      -       -           -           -
                          _________ _______  __________  ___________
Balance, June 30, 2014    1,488,914 $74,400  $2,420,700  $    1,100
                          ========= =======  ==========  ===========


          See notes to consolidated financial statements.


                             F-5




           SCIENTIFIC INDUSTRIES, INC. & SUBSIDIARIES

    CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (CONTINUED)

	         YEARS ENDED JUNE 30, 2014 AND 2013


                          Retained      Treasury Stock  Shareholders'
                                        ______________
                          Earnings      Shares  Amount  Equity
                         __________     ______  _______  ____________

Balance, July 1, 2012    $3,061,700     19,802  $52,400  $5,033,200

Net income                  396,400       -        -        396,400

Unrealized holding loss
 on investment securities,
 net of tax                    -          -        -         (1,000)

Exercise of stock options      -          -        -           -

Tender of common stock         -          -        -           -

Stock-based compensation       -          -        -          8,500

Cash dividend declared
 and paid, $.03 per share   (40,100)      -        -        (40,100)
                         __________    _______  _______  ___________
Balance, June 30, 2013    3,418,000     19,802   52,400   5,397,000

Net loss                    (75,300)      -        -        (75,300)

Unrealized holding gain
 on investment securities,
 net of tax                    -          -        -         14,700

Exercise of stock options      -          -        -          6,700

Issuance of common stock       -          -        -        427,400

Stock-based compensation       -          -        -         16,000

Cash dividend paid, $.08
 per share                 (107,400)      -        -       (107,400)
                         __________   _______   ________ ___________
Balance, June 30, 2014   $3,235,300    19,802   $52,400  $5,679,100
                         ==========   =======   =======  ===========



          See notes to consolidated financial statements.


                             F-5




           SCIENTIFIC INDUSTRIES, INC. & SUBSIDIARIES

             CONSOLIDATED STATEMENTS OF CASH FLOWS

          FOR THE YEARS ENDED JUNE 30, 2014 AND 2013


                                              2014       2013
                                          __________  __________


Operating activities:
 Net income (loss)              	  $ ( 75,300) $  396,400
                                          __________  __________
 Adjustments to reconcile net income (loss)
  to net cash provided by operating activities:
    Depreciation and amortization	     262,800     178,800
    Deferred income tax expense (benefit)    (32,100)	  17,600
    Loss on sale of investment securities     19,500       7,600
    Stock-based compensation		      16,000	   8,500
     Changes in operating assets and
      liabilities, net of effect of
       acquisition:
        Trade accounts receivable             59,200    (192,400)
        Inventories                         (459,600)   ( 91,900)
        Prepaid and other current assets    ( 64,100)    108,800
        Other assets                        (  4,100)      1,600
        Accounts payable		     216,900      42,000
        Customer advances		      73,600    ( 82,600)
        Accrued expenses and taxes	      22,200	 170,000
                                          __________  __________
            Total adjustments		     110,300	 168,000
                                          __________  __________
            Net cash provided by
             operating activities             35,000     564,400
                                          __________  __________
Investing activities, net of effect
 of acquisition:
 Payment for intangible assets acquired
  in acquisition (Note 2)                   (700,000)       -
 Purchase of investment securities,
  available for sale			    ( 25,000)	(920,500)
 Redemption of investment securities,
  available for sale                         518,800     717,600
 Capital expenditures			     (49,900)    (37,500)
 Purchase of other intangible assets	     ( 2,900)	 (13,300)
                                           _________   _________
Net cash used in investing activities	    (259,000)   (253,700)
                                           _________   _________
Financing activities:
  Line of credit proceeds                     150,000       -
  Line of credit repayments                  (150,000)      -
  Payment of contingent consideration         (30,600)   (36,800)
  Proceeds from exercise of stock options	6,700       -
  Cash dividend declared and paid	     (107,400)	 (40,100)
  Principal payments on note payable          (78,300)   (75,800)
                                           __________  _________
Net cash used in financing activities	     (209,600)  (152,700)
                                           __________  _________


                              F-6





           SCIENTIFIC INDUSTRIES, INC. & SUBSIDIARIES

       CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

          FOR THE YEARS ENDED JUNE 30, 2014 AND 2013


                                              2014       2013
                                          __________  __________


Net increase (decrease) in cash and
 cash equivalents			    (433,600)    158,000

Cash and cash equivalents, beginning
 of year				     927,300     769,300
                                           _________  __________
Cash and cash equivalents, end of year     $ 493,700  $  927,300
                                           =========  ==========
Supplemental disclosures:

  Cash paid during the period for:
   Income taxes         		   $  152,100  $    -
   Interest                                     3,100      4,800

Non-cash investing and financing activities (Note 2)


         See notes to consolidated financial statements.

                              F-7

       SCIENTIFIC INDUSTRIES, INC. & SUBSIDIARIES

       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

    AS OF AND FOR THE YEARS ENDED JUNE 30, 2014 AND 2013



1.	Summary of Significant Accounting Policies

Nature of Operations

Scientific Industries, Inc. and its subsidiaries (the "Company")
design, manufacture, and market a variety of benchtop laboratory
equipment, bioprocessing products and catalyst research instruments.
The Company is headquartered in Bohemia, New York where it produces
benchtop laboratory equipment for research and has another location
in Pittsburgh, Pennsylvania, where it produces a variety of
custom-made catalyst research instruments and designs bioprocessing
products, and a small facility in Oradell, New Jersey related to
benchtop laboratory equipment. The equipment sold by the Company
includes mixers, shakers, stirrers, refrigerated incubators, pharmacy
balances and scales, catalyst characterization instruments, reactor
systems and high throughput systems. The Company also sublicenses
certain patents and technology under a license with the University of
Maryland, Baltimore County, and receives royalty fees from the
sublicenses.

Principles of Consolidation

The accompanying consolidated financial statements include the
accounts of Scientific Industries, Inc., Scientific Packaging
Industries, Inc., an inactive wholly-owned subsidiary, Altamira
Instruments, Inc. ("Altamira"), a Delaware corporation and
wholly-owned subsidiary, and Scientific Bioprocessing, Inc.
("SBI"), a Delaware corporation and wholly-owned subsidiary,
(all collectively referred to as the "Company"). All material
intercompany balances and transactions have been eliminated.

Revenue Recognition

Revenue from product sales is recognized when all the following
criteria are met:

*	Receipt of a written purchase order agreement which is
binding on the customer.
*	Goods are shipped and title passes.
*	Prices are fixed.
*	Collectability is reasonably assured.
*	All material obligations under the agreement have been
substantially performed.

Substantially all orders are F.O.B. shipping point, all sales
are final without right of return or payment contingencies, and
there are no special sales arrangements or agreements with any
customers.

Royalty revenue received under the Company's sublicenses is
recorded net of payments due to its licensors.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments
purchased with a maturity of 90 days or less to be cash equivalents.
At times, cash balances may be in excess of the Federal Deposit
Insurance Corporation ("FDIC") insurance limit.  As of June 30, 2014
and 2013, $52,800 and $256,200, respectively of cash balances were
in excess of such limit.

                           F-8




        SCIENTIFIC INDUSTRIES, INC. & SUBSIDIARIES

     CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

       FOR THE YEARS ENDED JUNE 30, 2014 AND 2013



1.	Summary of Significant Accounting Policies (Continued)

Accounts Receivable

In order to record the Company's accounts receivable at their
net realizable value, the Company must assess their
collectability.  A considerable amount of judgment is required
in order to make this assessment, including an analysis of
historical bad debts and other adjustments, a review of the
aging of the Company's receivables, and the current
creditworthiness of the Company's customers.  The Company
has recorded allowances for receivables which it considered
uncollectible, including amounts for the resolution of
potential credit and other collection issues such as disputed
invoices, customer satisfaction claims and pricing discrepancies.
However, depending on how such potential issues are resolved,
or if the financial condition of any of the Company's customers
was to deteriorate and its ability to make required payments
became impaired, increases in these allowances may be required.
The Company actively manages its accounts receivable to minimize
credit risk.  The Company does not obtain collateral for its
accounts receivable.

Customer Advances

In the ordinary course of business, customers may make advance
payments for purchase orders. Such amounts, when received, are
categorized as liabilities under the caption customer advances.

Investment Securities

Securities available for sale are carried at fair value with
unrealized gains or losses reported in a separate component
of shareholders' equity. Realized gains or losses are determined
based on the specific identification method.

Inventories

Inventories are valued at the lower of cost (determined on a
first-in, first-out basis) or market value, and have been reduced
by an allowance for excess and obsolete inventories.  The estimate
is based on management's review of inventories on hand compared
to estimated future usage and sales. Cost of work-in-process and
finished goods inventories include material, labor and manufacturing
overhead.

Property and Equipment

Property and equipment are stated at cost.  Depreciation of
property and equipment is provided for primarily by the straight-line
method over the estimated useful lives of the assets. Leasehold
improvements are amortized by the straight-line method over the
term of the related lease or the estimated useful lives of the assets,
whichever is shorter.

                           F-9


        SCIENTIFIC INDUSTRIES, INC. & SUBSIDIARIES

     CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

        FOR THE YEARS ENDED JUNE 30, 2014 AND 2013




1.	Summary of Significant Accounting Policies (Continued)

Intangible Assets

Intangible assets consist primarily of acquired technology, customer
relationships, non-compete agreements, patents, licenses, websites,
intellectual property and research and development ("IPR&D"),
trademarks and trade names. All intangible assets are amortized
on a straight-line basis over the estimated useful lives of the
respective assets, generally 3 to 10 years. The Company continually
evaluates the remaining estimated useful lives of intangible assets
that are being amortized to determine whether events or circumstances
warrant a revision to the remaining period of amortization.

Goodwill and Long-Lived Assets

Goodwill represents the excess of purchase price over the fair value
of identifiable net assets acquired in a business combination.
Goodwill and long-lived intangible assets are tested for impairment
at least annually in accordance with the provisions of ASC No. 350,
"Intangibles-Goodwill and Other" ("ASC No. 350").  ASC No. 350
requires that goodwill be tested for impairment at the reporting
unit level (operating segment or one level below an operating
segment) on an annual basis and between annual tests if an event
occurs or circumstances change that would more likely than not
reduce the fair value of a reporting unit below its carrying value.
Application of the goodwill impairment test requires judgment,
including the identification of reporting units, assignment of
assets and liabilities to reporting units, assignment of goodwill
to reporting units, and determination of the fair value of each
reporting unit.  The Company tests goodwill and long-lived assets
annually as of June 30, the last day of its fiscal year, unless an
event occurs that would cause the Company to believe the value
is impaired at an interim date.

Impairment of Long-Lived Assets

The Company follows the provisions of ASC No. 360-10, "Property,
Plant and Equipment - Impairment or Disposal of Long-Lived Assets
("ASC No. 360-10"). ASC No. 360-10 which requires evaluation of
the need for an impairment charge relating to long-lived assets
whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable.  If an
evaluation for impairment is required, the estimated future
undiscounted cash flows associated with the asset would be
compared to the asset's carrying amount to determine if a write
down to a new depreciable basis is required.  If required, an
impairment charge is recorded based on an estimate of future
discounted cash flows. No impairment change has been recorded
for the years ended June 30, 2014 and 2013.

                         F-10



        SCIENTIFIC INDUSTRIES, INC. & SUBSIDIARIES

    CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

       FOR THE YEARS ENDED JUNE 30, 2014 AND 2013




1.	Summary of Significant Accounting Policies (Continued)

Income Taxes

The Company and its subsidiaries file a consolidated U.S. federal
income tax return.  Income taxes are accounted for under the
asset and liability method. The Company provides for federal,
and state income taxes currently payable, as well as for those
deferred due to timing differences between reporting income and
expenses for financial statement purposes versus tax purposes.
Deferred tax assets and liabilities are recognized for the
future tax consequences attributed to temporary differences
between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases. Deferred
tax assets and liabilities are measured using enacted income
tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered
or settled.  The effect of a change in income tax rates is
recognized as income or expense in the period that includes
the enactment date.

The Company recognizes the effect of income tax positions only
if those positions are more likely than not of being sustained.
Recognized income tax positions are measured at the largest
amount that is greater than 50% likely of being realized.
Changes in recognition or measurement are reflected in the period
in which the change in judgment occurs.

Advertising

Advertising costs are expensed as incurred.  Advertising expense
amounted to $53,200 and $30,000 for the years ended June 30, 2014
and 2013, respectively.

Shipping and Handling

The Company classifies costs associated with shipping and
handling fees as a component of cost of goods sold.

Stock Compensation Plan

The Company has a ten-year stock option plan (the "2012 Plan")
which provides for the grant of options to purchase up to
100,000 shares of the Company's Common Stock, par value $.05
per share ("Common Stock"), plus 57,000 shares under options
previously granted under the 2002 Stock Option Plan of the
Company (the "Prior Plan"). The 2012 Plan provides for the
granting of incentive or non-incentive stock options as defined
in the 2012 Plan and options under the 2012 Plan may be granted
until 2022. Incentive stock options may be granted to employees
at an exercise price equal to 100% (or 110% if the optionee
owns directly or indirectly more than 10% of the outstanding
voting stock) of the fair market value of the shares of Common
Stock on the date of the grant which shall not be less than
the book value per share of Common Stock as of the end of
the most recent fiscal quarter. Non-incentive stock options
shall not be granted at less than the fair market value of
the shares of Common Stock on the date of grant, and the per
share book value. At June 30, 2014 and 2013, 82,000 and 93,000
shares respectively, of Common Stock were available for grant
of options under the 2012 Plan.

                          F-11



SCIENTIFIC INDUSTRIES, INC. & SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

FOR THE YEARS ENDED JUNE 30, 2014 AND 2013



1.	Summary of Significant Accounting Policies (Continued)

Stock Compensation Plan (Continued)

Stock-based compensation is accounted for in accordance with
ASC No. 718 "Compensation-Stock Compensation" ("ASC No. 718")
which requires compensation costs related to stock-based
payment transactions to be recognized. With limited exceptions,
the amount of compensation cost is measured based on the
grant-date fair value of the equity or liability instruments
issued. In addition, liability awards are measured at each
reporting period. Compensation costs are recognized over the
period that an employee provides service in exchange for the
award. During the year ended June 30, 2014, the Company
granted 11,000 options to employees and the Chairman of the
Board of Directors that had a fair value of $19,500. The fair
value of the options granted during fiscal year 2014 was
determined using the Black-Scholes-Merton option-pricing model.
The weighted average assumptions used for fiscal 2014, was
an expected life of 10 years; risk free interest rate of
2.75%; volatility of 62%, and dividend yield of 2.92%. The
weighted-average value per share of the options granted in
2014 was $1.78, and stock-based compensation costs were
$16,000 and $8,500 for the years ended June 30, 2014 and 2013.
Stock-based compensation costs related to nonvested awards to
be recognized in the future are $9,000 and $3,700 as of
June 30, 2014 and 2013, respectively.

Use of Estimates

The preparation of financial statements in conformity with
accounting principles generally accepted in the United States
of America requires management to make estimates and judgments
that affect the amounts reported in the financial statements
and accompanying notes. The actual results experienced by the
Company may differ materially from management's estimates.

Earnings (Loss) Per Common Share

Basic earnings (loss) per common share is computed by dividing
net income (loss) by the weighted-average number of shares
outstanding. Diluted earnings per common share includes the
dilutive effect of stock options.

                        F-12





     SCIENTIFIC INDUSTRIES, INC. & SUBSIDIARIES

   CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

     FOR THE YEARS ENDED JUNE 30, 2014 AND 2013




1.	Summary of Significant Accounting Policies (Continued)

New Accounting Pronouncements

In July 2013, the Financial Accounting Standards Board
("FASB") issued ASU 2013-11, Income Taxes (Topic 740), which
clarifies the presentation requirements of unrecognized tax
benefits when a net operating loss carries forward, a similar
tax loss, or a tax credit carry forward exists at the reporting
date. The amendments in this ASU are effective for the fiscal
years, and interim periods within those years, beginning after
December 15, 2013 and should be applied prospectively. The
adoption of this ASU did not have a material impact to the
Company's consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from
Contracts with Customers amending revenue recognition
requirements for multiple-deliverable revenue arrangements.
This update provides guidance on how revenue is recognized
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 the
goods or services. This determination is made in five steps:
(i) identity the contract with the customer: (ii) identify the
performance obligations in the contract; (iii) determine the
transaction price; (iv) allocate the transaction price to the
performance obligations in the contract; and (v) recognize
revenue when (or as) the entity satisfies a performance
obligation. The update is effective for the Company beginning
July 1, 2017. Early adoption is not permitted. The Company is
currently evaluating the impact this guidance may have on
its financial condition and results of operations.

In June 2014, the FASB issued ASU 2014-12, Compensation -
Stock Compensation (Topic 718): Accounting for Share-Based
Payments When the Terms of an Award Provide that a Performance
Target Could be Achieved After the Requisite Service Period.
This update affects reporting entities that grant their
employee's targets that affects vesting could be achieved after
the requisite service period. The new standard requires that
a performance target that affects vesting and that could be
achieved after the requisite services priod be treated as a
performance condition. The new standard will be effective for
the Company beginning July 1, 2015, and early adoption is
permitted. The Company expects the adoption will not have a
material impact on its financial condition, results of
operations or cash flows.

2.	Acquisition

On February 26, 2014, the Company acquired substantially all
the assets of a privately owned company consisting principally
of inventory, fixed assets, and intangible assets related
to the production and sale of a variety of laboratory and
pharmacy balances and scales. The acquisition was pursuant
to an asset purchase agreement whereby the Company paid the
sellers $700,000 in cash, 126,449 shares of Common Stock
valued at $427,500 (of which 31,612 are held in escrow for
one year) and agreed to make additional cash payments based
on a percentage of net sales of the business acquired equal
to 8% for the period ending June 30, 2014 annualized, 9% for
the year ending June 30, 2015, 10% for the year ending June
30, 2016 and 11% for the year ending June 30, 2017, estimated
at a present value of $460,000 on the date of acquisition.
Payments related to this contingent consideration for
each period are due in September following the fiscal year.


                         F-13



      SCIENTIFIC INDUSTRIES, INC. & SUBSIDIARIES

   CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

      FOR THE YEARS ENDED JUNE 30, 2014 AND 2013


2.	Acquisition (Continued)

The products, which are similar to the Company's other Benchtop
Laboratory Equipment, and in many cases used by the same
customers, are marketed under the Torbal(R) brand. The principal
customers are pharmacies, pharmacy schools, universities,
government laboratories, and industries utilizing a precision
scale. The products are sold primarily on a direct basis,
including through the Company's e-commerce site.

Management of the Company allocated the purchase price based
on its valuation of the assets acquired, as follows:


Current assets              $   144,000
Property and equipment          118,100
Goodwill*                       115,400
Other intangible assets       1,210,000
                            ___________
Total Purchase Price        $ 1,587,500
                            ===========

          *See Note 7, "Goodwill and Other Intangible Assets".

Of the $1,210,000 of the acquired other intangible assets, $570,000
was assigned to technology and websites with a useful life of
5 years, $120,000 was assigned to customer relationships with an
estimated useful life of 9 years, $140,000 was assigned to the trade
name with an estimated useful life of 6 years, $110,000 was assigned
to the IPR&D with an estimated useful life of 3 years, and $270,000
was assigned to non-compete agreements with an estimated useful
life of 5 years.

In connection with the acquisition, the Company entered into a
three-year employment agreement with the previous Chief Operating
Officer of the acquired business as President of the Company's
new Torbal Division and Director of Marketing for the Company. The
agreement may be extended by mutual consent for an additional
two years.

The Company was unable to obtain audited financial statements of
the business acquired in connection with the acquisition. The
inability to include the related audited financial statements as
required by the Securities Exchange Act of 1934 in the related
Report on Form 8-K filing resulted in the inability of the Company
to register under the Securities Act of 1933, as amended, offerings
of the Company's securities during the one year period ending
February 2015.

                          F-14



      SCIENTIFIC INDUSTRIES, INC. & SUBSIDIARIES

   CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

     FOR THE YEARS ENDED JUNE 30, 2014 AND 2013



2.	Acquisition (Continued)

Pro forma results

The unaudited pro forma condensed consolidated financial
information in the table below summarizes the consolidated
results of operations of the Company including its new Torbal
Division, on a pro forma basis, as though the companies had
been consolidated as of the beginning of the fiscal year ended
June 30, 2013. The unaudited pro forma condensed financial
information presented below is for informational purposes only
and is not intended to represent or be indicative of the
consolidated results of the operations that would have been
achieved if the acquisition had been completed as of the
commencement of the fiscal year presented. In addition, the
Company was unable to obtain audited historical information and,
therefore the information presented is based on management's
best judgment and the effects of the acquisition including
amortization expense and excluding total acquisition related
costs incurred of $79,500 for the year ended June 30, 2014:


                                   2014             2013

Revenues
                               $7,623,200       $8,384,500

Net income (loss)              $  (69,300)      $  307,600

Net income (loss) per
  share - basic                $   (.05)        $   .21

Net income (loss) per
   share - diluted             $   (.05)        $   .21

3.	Segment Information and Concentrations

The Company views its operations as three segments:  the
manufacture and marketing of standard benchtop laboratory
equipment for research in university, hospital and industrial
laboratories sold primarily through laboratory equipment
distributors and laboratory and pharmacy balances and scales
("Benchtop Laboratory Equipment Operations"), the manufacture
and marketing of custom-made catalyst research instruments
for universities, government laboratories, and chemical and
petrochemical companies sold on a direct basis ("Catalyst
Research Instruments Operations") and the design of
bioprocessing systems and products and related royalty
income ("Bioprocessing Systems").

                     F-15



    SCIENTIFIC INDUSTRIES, INC. & SUBSIDIARIES

  CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

     FOR THE YEARS ENDED JUNE 30, 2014 AND 2013




3.	Segment Information and Concentrations (Continued)

Segment information is reported as follows:

               Benchtop    Catalyst     Bio-       Corporate
               Laboratory  Research     processing and       Conso-
               Equipment   Instruments  Systems    Other     lidated
               __________  ___________  __________ _________ __________
June 30, 2014:

 Revenues      $4,679,100  $1,923,300   $ 190,800  $   -     $6,793,200
 Foreign Sales	2,617,300     866,900       2,000      -      3,486,200
 Income (Loss)
  From Operations 156,000   ( 145,700)  (  49,500) ( 79,500)   (118,700)
 Assets     	4,129,100   1,535,300     799,800   647,600   7,111,800
 Long-Lived Asset
  Expenditures  1,476,500      11,300       8,500     -       1,496,300
 Depreciation and
    Amortization  130,900      35,000      96,900      -        262,800



               Benchtop    Catalyst     Bio-       Corporate
               Laboratory  Research     processing and       Conso-
               Equipment   Instruments  Systems    Other     lidated
               __________  ___________  __________ _________ __________
June 30, 2013:

 Revenues      $4,466,000  $2,541,500   $ 127,000  $   -     $7,134,500
 Foreign Sales	2,549,100   1,603,800        -         -      4,152,900
 Income (Loss)
  From Operations 525,900     151,400  ( 169,900)      -        507,400
 Assets     	2,501,600   1,646,600     903,600 1,101,200   6,153,000
 Long-Lived Asset
    Expenditures   18,300      23,300       9,200      -         50,800
 Depreciation and
    Amortization   43,300      35,300     100,200      -        178,800


                                   F-16




    SCIENTIFIC INDUSTRIES, INC. & SUBSIDIARIES

  CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

     FOR THE YEARS ENDED JUNE 30, 2014 AND 2013


4.	Fair Value of Financial Instruments

The Financial Accounting Standards Board defines the fair value of
financial instruments as the amount 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.  Fair value
measurements do not include transaction costs.

The accounting guidance also expands the disclosure requirements
around fair value and establishes a fair value hierarchy for
valuation inputs.  The hierarchy prioritizes the inputs into
three levels based on the extent to which inputs used in
measuring fair value are observable in the market.  Each fair
value measurement is reported in one of the three levels, which is
determined by the lowest level input that is significant to the
fair value measurement in its entirety.  These levels are
described below:

	Level 1	Inputs that are based upon unadjusted quoted
prices for identical instruments traded in active markets.

	Level 2	Quoted prices in markets that are not considered
to be active or financial instruments for which all significant
inputs are observable, either directly or indirectly.

	Level 3	Prices or valuation that require inputs that are
both significant to the fair value measurement and unobservable.

The following tables set forth by level within the fair value
hierarchy the Company's financial assets that were accounted
for at fair value on a recurring basis at June 30, 2014 and 2013
according to the valuation techniques the Company used to
determine their fair values:




                                    Fair Value Measurements Using Inputs
                                                Considered as

Assets:
                            Fair Value at
                            June 30, 2014   Level 1    Level 2  Level 3
                            ______________  __________ _______  ________


Cash and cash equivalents	$  493,700  $  493,700  $  -    $  -
Available for sale securities      415,400     415,400     -       -
                                __________  __________  _______ ________
Total			        $  909,100  $  909,100  $  -    $  -
                                ==========  ==========  ======= ========
Liabilities:

Contingent consideration        $  500,000  $    -      $  -   	$500,000
                                ==========  ==========  ======= ========




                                    Fair Value Measurements Using Inputs
                                                Considered as

Assets:
       Fair Value at
                            June 30, 2013   Level 1    Level 2  Level 3
                            ______________  __________ _______  ________


Cash and cash equivalents	$  927,300  $  927,300  $  -    $  -
Available for sale securities      908,400     908,400     -       -
                                __________  __________  _______ ________
Total			        $1,835,700  $1,835,700  $  -    $  -
                                ==========  ==========  ======= ========
Liabilities:

Contingent consideration        $   70,600  $    -      $  -   	$ 70,600
                                ==========  ==========  ======= ========


                                            F-17





    SCIENTIFIC INDUSTRIES, INC. & SUBSIDIARIES

  CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

     FOR THE YEARS ENDED JUNE 30, 2014 AND 2013




4.	Fair Value of Financial Instruments (Continued)

Investments in marketable securities classified as available-for-sale
by security type at June 30, 2014 and 2013 consisted of the following:


                                                            Unrealized
                                               	    Fair   Holding Gain
                                        Cost        Value     (Loss)
	                           ____________  _________ ____________

At June 30, 2014:

       Available for sale:
        Equity securities           $   29,300   $  38,500  $   9,200
        Mutual funds                   385,000     376,900    ( 8,100)
                                    __________   _________  __________
                                    $  414,300   $ 415,400  $   1,100
                                    ==========   =========  ==========

                                                           Unrealized
                                               	    Fair   Holding Gain
                                        Cost        Value     (Loss)
	                           ____________  _________ ____________

At June 30, 2013:

       Available for sale:
        Equity securities           $   29,300   $  33,200  $   3,900
        Mutual funds                   892,700     875,200    (17,500)
                                    __________   _________  __________
                                    $  922,000   $ 908,400  $ (13,600)
                                    ==========   =========  ==========



5.	Inventories


                                 2014              2013
                              __________        __________


Raw materials		      $1,617,100	$1,336,800
Work-in-process			 366,200	   254,000
Finished goods			 325,900	   114,800
                              __________        __________

			      $2,309,200	$1,705,600
                              ==========        ==========


                                 F-18






    SCIENTIFIC INDUSTRIES, INC. & SUBSIDIARIES

  CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

     FOR THE YEARS ENDED JUNE 30, 2014 AND 2013



6.	Property and Equipment




                      Useful Lives
                         (Years)              2014          2013
                       ____________        __________   __________

Automobiles                  5              $  14,900    $  14,900
Computer equipment          3-5               155,800      132,100
Machinery and equipment	    3-7               744,800      627,500
Furniture and fixtures	    4-10              206,900      181,000
Leasehold improvements	    3-5                72,800       71,700
                                            _________    _________
                                            1,195,200    1,027,200
Less accumulated depreciation
  and amortization                            943,100      870,700
                                            _________    _________
                                            $ 252,100    $ 156,500
                                            =========    =========

Depreciation expense was $71,900 and $61,700 for the years ended
June 30, 2014 and 2013, respectively.

7.	Goodwill and Other Intangible Assets

Goodwill represents the excess of the purchase price over the fair
value of the net assets acquired in connection with the Company's
acquisitions. Goodwill amounted to $705,300 and $589,900 at June 30,
2014 and 2013 respectively, all of which is expected to be deductible
for tax purposes.



                         F-19





    SCIENTIFIC INDUSTRIES, INC. & SUBSIDIARIES

  CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

     FOR THE YEARS ENDED JUNE 30, 2014 AND 2013


7.	Goodwill and Other Intangible Assets (Continued)

The components of other intangible assets are as follows:



                         Useful              Accumulated
                         Lives     Cost      Amortization  Net
                         ______    ________  ____________  _________

At June 30, 2014:

  Technology, trademarks 5/10 yrs. $1,226,800  $ 489,100   $ 737,700
  Trade names             6 yrs.      140,000      7,800     132,200
  Websites                5 yrs.      210,000     14,000     196,000
  Customer relationships 9/10 yrs.    357,000    215,800     141,200
  Sublicense agreements  10 yrs.      294,000     77,200     216,800
  Non-compete agreements  5 yrs.      384,000    126,300     257,700
  IPR&D                   3 yrs.      110,000     12,200      97,800
  Other intangible assets 5 yrs.      157,400    140,900      16,500
                                   __________  _________   _________
                                   $2,879,200 $1,083,300  $1,795,900
                                   ==========  =========   =========

                         Useful              Accumulated
                         Lives     Cost      Amortization  Net
                         ______    ________  ____________  _________

At June 30, 2013:

  Technology, trademarks 5/10 yrs. $  865,400  $ 402,100   $ 463,300
  Customer relationships 10 yrs.      237,000    203,200      33,800
  Sublicense agreements  10 yrs.      294,000     47,800     246,200
  Non-compete agreements  5 yrs.      114,000    105,900       8,100
  Other intangible assets 5 yrs.      156,000    133,900      22,100
                                   __________  _________   _________
                                   $1,666,400  $ 892,900   $ 773,500
                                   ==========  =========   =========



Total amortization expense was $190,900 and $117,100 in 2014 and 2013,
respectively.

Estimated future amortization expense of intangible assets is as follows:


Fiscal Years
____________

   2015  	$	348,300
   2016 		352,400
   2017 		337,100
   2018 	  	323,300
   2019			244,800
Thereafter		190,000
                _______________
        	$     1,795,900
                ===============


                                  F-20




    SCIENTIFIC INDUSTRIES, INC. & SUBSIDIARIES

  CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

     FOR THE YEARS ENDED JUNE 30, 2014 AND 2013


8.	Loan Payable, Bank

In June 2014, the Company obtained a line of credit with Bank of
America Merrill Lynch which provides for maximum borrowings of up
to $700,000, bearing interest currently at 3.155% per annum (based
on 3.00 percentage points over the LIBOR Index) and secured by a
pledge of collateral consisting of the inventory, accounts, chattel
paper, and equipment and fixtures of the Company. Outstanding amounts
are due and payable by November 30, 2015 with a requirement that the
Company is to reduce the outstanding principal balance to zero during
the 30 day period ending on the anniversary date of the Note. This
line of credit replaced a $700,000 line of credit with JP Morgan Chase
Bank, N.A. The Company did not have any amounts outstanding under
the lines at June 30, 2014 and 2013.

9.	Notes Payable

The Company has a $230,000 36-month note payable through October 2014,
to University of Maryland, Baltimore County, which was part of the
consideration paid for the acquisition of the bioprocessing products
business in November 2011, with monthly payments of $6,714 bearing
interest at 3.25%. Amounts due under the note was $26,700 and $105,000
at June 30, 2014 and 2013, respectively.

10.	Employee Benefit Plans

During the fiscal year ended June 30, 2013, the Company adopted a
single 401(k) profit sharing plan covering all its employees, which
provides for voluntary employee salary contributions not to exceed
the statutory limitations provided by the Internal Revenue Code.
The plan provides for Company matching contribution equal to 100%
of employee's deferral up to 3% of pay, plus 50% of employee's
deferral over 3% of pay up to 5%. Previously, the Company had two
separate plans. Total matching contributions amounted to $49,600 and
$42,800 for the years ended June 30, 2014 and 2013, respectively.

11.	Commitments and Contingencies

The Company's current lease for its existing Bohemia, New York
premises expires in January 2015, but will terminate upon the Company's
move to a smaller neighboring facility in the same vicinity from the
same landlord, at a lower rental rate under a new lease through
February 2025, which requires minimum annual rental payments plus
other expenses, including real estate taxes and insurance. The future
minimum annual rental expense, computed on a straight-line basis, is
approximately $177,600 under the terms of the new lease. Rental
expense for the Bohemia facility under its current lease amounted to
approximately $239,800 in 2014 and $233,500 in 2013. Accrued rent,
payable in future years, amounted to $18,700 and $44,200 at June 30,
2014 and 2013, respectively.

The Company is also obligated under an operating lease for its
facility in Pittsburgh, Pennsylvania, through November 2017, which
requires monthly minimum rental payments through November 2017, plus
common area expenses. Total rental expenses for the Pittsburgh
facility was $95,000 and $77,200 for the fiscal years ended June 30, 2014
and 2013.

                             F-21




    SCIENTIFIC INDUSTRIES, INC. & SUBSIDIARIES

  CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

     FOR THE YEARS ENDED JUNE 30, 2014 AND 2013


11.	Commitments and Contingencies (Continued)

In addition, the Company's new Torbal division was operating from a
Clifton, New Jersey facility and as of mid-July 2014 moved to a
significantly smaller office facility in Oradell, New Jersey from
which it performs its sales and marketing functions. The Company was
obligated under a previous agreement to pay $24,000 for an early lease
termination for the Clifton facility. Total rental expenses for the
New Jersey facilities, including the fee, was $47,900 for the fiscal
year ended June 30, 2014.

The Company's approximate future minimum rental payments under all
operating leases are as follows:


Fiscal Years
____________

   2015        $   251,700
   2016            255,600
   2017    	   264,000
   2018  	   205,000
   2019		   174,000
 Thereafter        841,600
               ___________

               $ 1,991,900
               ===========

The Company has employment contracts with its President providing
for an annual base salary of $154,000 and $150,000 for the fiscal
years ending June 30, 2015 and 2014 and with its Executive Vice
President providing for an annual base salary of $139,000 and
$135,000 for the fiscal years ending June 30, 2015 and 2014.
Both contracts also provide for discretionary performance bonuses.
Bonuses of $10,000 and $5,000 were awarded to the President and
Executive Vice President, respectively, for the year ended
June 30, 2013.  No bonuses were awarded for the fiscal year
ended June 30, 2014 to either executive except for a stock
option granted to the Executive Vice President during the year
ended June 30, 2014, valued at $3,500 using the Black-Scholes-
Merton option pricing model.

The Company has an employment contract with the President of
Altamira through June 30, 2015, which may be extended by mutual
consent for an additional year. The contract provides for an
annual base salary of $140,000 and $135,000 for each of the
fiscal years ending June 30, 2015 and 2014, respectively, plus
discretionary bonuses. A bonus of $5,000 was awarded for the
fiscal year ended June 30, 2013.  No bonus was awarded for
the fiscal year ended June 30, 2014, except for a stock
option granted during the year ended June 30, 2014, valued
at $3,500 using the Black-Scholes-Merton option pricing model.

The Company has a consulting agreement which expires on
December 31, 2014 with an affiliate of the Chairman of the
Board of Directors for marketing consulting services. The
agreement provides that the consultant be paid a monthly
fee of $3,600 for a certain number of consulting days as
defined in the agreement. Stock options were granted to the
Chairman of the Board of Directors valued at $8,700 during
the year ended June 30, 2014. Consulting expense related to
this agreement amounted to $50,100 and $44,600 for the
years ended June 30, 2014 and 2013, respectively.

                          F-22






    SCIENTIFIC INDUSTRIES, INC. & SUBSIDIARIES

  CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

     FOR THE YEARS ENDED JUNE 30, 2014 AND 2013



11.	Commitments and Contingencies (Continued)

The Company has an employment agreement dated February 2014
with the President of its Torbal Division which expires in
February 2017, which may be extended by mutual consent for
another two years. The contract provides for an annual base
salary of $140,000 subject to increases commencing with the
second year based on percentage increases in the Consumer
Price Index from the end of the immediately preceding year's
CPI plus discretionary bonuses. No bonuses were awarded
during the fiscal year ended June 30, 2014, however as
part of the employment agreement, he was awarded a 2,000
share stock option upon commencement of his employment with
the Company valued at $3,900 using the Black-Scholes-Merton
option pricing model. In addition, he is to be granted,
subject to his continued employment in February 2015, 2016
and 2017 options for 4,000 shares, 5,000 shares and 6,000
shares, respectively.

The Company had a consulting agreement which expired March
31, 2014 with another member of its Board of Directors for
administrative services providing that the consultant
be paid at the rate of $85 per hour. Consulting expense
related to this agreement amounted to $5,700 and $6,100
for the fiscal years ended June 30, 2014 and 2013,
respectively.

12.	Income Taxes

The reconciliation of the provision for income taxes at
the federal statutory rate of 35% to the actual tax expense
or benefit for the applicable fiscal year was as follows:



                                      2014                2013
                                __________________  _________________

                                          % of                % of
                                          Pre-tax             Pre-tax
                                 Amount   Income     Amount   Income
                                 _______  _______   ________  _______

Computed "expected" income tax $(37,500)   (35.0%) $182,300    35.0%
Research and development
  credits                       ( 1,600)   ( 1.5)   (30,700)  ( 5.9)
Other, net                        7,400      6.9    (27,200)  ( 5.2)
                               _________  _______  _________   ______
Income tax expense (benefit)   $(31,700)  (29.6%)  $124,400    23.9%
                               =========  =======  =========   ======



                              F-23







    SCIENTIFIC INDUSTRIES, INC. & SUBSIDIARIES

  CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

     FOR THE YEARS ENDED JUNE 30, 2014 AND 2013


12.	Income Taxes (Continued)

Deferred tax assets and liabilities consist of the following:



                                             2014         2013
                                         __________   __________
Deferred tax assets:
  Amortization of intangible assets      $ 153,300    $ 146,100
  Various accruals                          75,100       49,600
  Other                                     48,100       53,400
                                         _________    _________
                                           276,500      249,100

Deferred tax liability:
  Depreciation of property
    and amortization of goodwill           (44,300)     (56,300)
                                         __________   __________
Net deferred tax assets                  $ 232,200    $ 192,800
                                         ==========   ==========

The breakdown between current and long-term deferred tax assets and
liabilities is as follows:


                                             2014         2013
                                         __________   __________

Current deferred tax assets              $  86,000    $  86,600
                                         _________    _________
Long-term deferred tax assets              190,500      162,500
Long-term deferred tax liabilities         (44,300)     (56,300)
                                         __________   __________
Net long-term deferred tax asset           146,200      106,200
                                         __________   __________

Net deferred tax assets                  $ 232,200    $ 192,800
                                         ==========   ==========


ASC No. 740 clarifies the accounting for uncertainty in income
taxes recognized in an enterprise's financial statements and
prescribes a recognition threshold and measurement attribute for
the financial statement recognition and measurement of a tax
position taken or expected to be taken in a tax return. ASC
No. 740 also provides guidance on derecognition, classification,
interest and penalties, accounting in interim periods, disclosure,
and transition. As of June 30, 2014 and 2013, the Company did not
have any unrecognized tax benefits related to various federal
and state income tax matters.

The Company's policy is to recognize interest and penalties on
any unrecognized tax benefits as a component of income tax expense.
The Company does not have any accrued interest or penalties
associated with any unrecognized tax benefits. The Company is
subject to U.S. federal income tax, as well as various state
jurisdictions. The Company is currently open to audit under the
statute of limitations by the federal and state jurisdictions
for the years ending June 30, 2011 through 2013. The Company
does not anticipate any material amount of unrecognized tax
benefits within the next 12 months.


                           F-24






    SCIENTIFIC INDUSTRIES, INC. & SUBSIDIARIES

  CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

     FOR THE YEARS ENDED JUNE 30, 2014 AND 2013


13.	Stock Options

Option activity is summarized as follows:



                                     Fiscal 2014        Fiscal 2013
                                  _________________ __________________

                                          Weighted-          Weighted-
                                           Average            Average
                                           Exercise           Exercise
                                   Shares   Price   Shares     Price
                                  _______  _______  _______   ________
Shares under option:
  Outstanding, beginning of year   55,000  $  2.86   60,000   $  2.73
  Granted                          11,000     3.53     -          -
  Exercised                        (5,000)    1.35   (5,000)     1.25
                                  ________          ________
Outstanding, end of year           61,000     3.11   55,000      2.86
                                  ________ _______  ________  ________
Options exercisable at year-end    48,300  $  2.82   51,000   $  2.81
                                  ________ _______  ________  ________
Weighted average fair value per
  share of options granted
  during fiscal 2014                       $1.78
                                           _____



            As of June 30, 2014                    As of June 30, 2014
            Options Outstanding                        Exercisable
_______________________________________________   ______________________

                        Weighted-
                        Average       Weighted-               Weighted-
Range                   Remaining     Average                 Average
Exercise    Number      Contractual   Exercise    Number      Exercise
Prices      Outstanding Life (Years)  Price       Outstanding Price
_________   ___________ ____________  _________   ___________ _________

$1.88        10,000        .2         $  1.88      10,000     $  1.88

$3.07-$3.71  51,000       4.17        $  3.35      38,300     $  3.28
            ________                              ________
             61,000                                48,300
            ________                              ________



            As of June 30, 2013                    As of June 30, 2013
            Options Outstanding                        Exercisable
_______________________________________________   ______________________

                        Weighted-
                        Average       Weighted-               Weighted-
Range                   Remaining     Average                 Average
Exercise    Number      Contractual   Exercise    Number      Exercise
Prices      Outstanding Life (Years)  Price       Outstanding Price
_________   ___________ ____________  _________   ___________ _________

$1.35-$1.88  15,000        .94         $  1.70      15,000     $  1.70

$3.07-$3.71  40,000       3.72         $  3.30      36,000     $  3.27
            ________                               ________
             55,000                                 51,000
            ________                               ________

                                 F-25







    SCIENTIFIC INDUSTRIES, INC. & SUBSIDIARIES

  CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

     FOR THE YEARS ENDED JUNE 30, 2014 AND 2013





14.	Earnings (Loss) Per Common Share

Earnings (loss) per common share data was computed as follows:



                                            2014         2013
                                         __________   __________
Net income (loss)                        $ ( 75,300)   $ 396,400
                                         __________   __________
Weighted average common shares
  outstanding                             1,385,054    1,337,048
Effect of dilutive securities                  -           5,164
                                         __________   __________
Weighted average dilutive common
  shares outstanding                      1,385,054    1,342,212
                                         __________   __________

Basic earnings (loss) per common share   $    (.05)   $      .30
                                         ==========   ==========
Diluted earnings (loss) per common share $    (.05)   $      .30
                                         ==========   ==========

Approximately 59,000 shares of the Company's common stock issuable
upon the exercise of outstanding options were excluded from the
calculation of diluted loss per common share, for the fiscal year
ended June, 2014, because the effect would be anti-dilutive due
to the loss for the period.

Approximately 40,000 shares of the Company's common stock issuable
upon the exercise of outstanding options were excluded from the
calculation of diluted earnings per common share for the year ended
June 30, 2013, because the effect would be anti-dilutive.



                          F-26

EX-32

                                          Exhibit 32.0


       CERTIFICATION PURSUANT TO SECTION 906
              OF THE SARBANES-OXLEY ACT

I, Helena R. Santos, the Chief Executive Officer and Chief Financial
Officer of Scientific Industries, Inc. (the "Company"), certify, to
the best of my knowledge that:

1.  I have reviewed this Annual Report on Form 10-K of the Company
for the year ended June 30, 2014 (the "Annual Report");

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

3.  the information contained in the Annual Report fairly presents,
in all material respects, the financial condition and results of
operations of Scientific Industries, Inc.



Date:	September 26, 2014
                                By: 	/s/ Helena R. Santos
					Helena R. Santos
					Chief Executive Officer and
					Chief Financial Officer





                              33

EX-31

                                                 Exhibit 31.0



                 CERTIFICATION PURSUANT TO SECTION 302
                      OF THE SARBANES-OXLEY ACT


I, Helena R. Santos, certify that:

(1)      I have reviewed this Annual Report on Form 10-K of
Scientific Industries,  Inc.;

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

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

(4)     I am responsible for establishing and maintaining
disclosure controls and procedures (as defined in Securities
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:

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

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

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

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

 (5)       I have disclosed, based on my most recent
evaluation of internal control over financial reporting,
to the registrant's auditors and the audit committee of the
registrant's Board of Directors (or persons performing the
equivalent functions);

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

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


Date:	September 26, 2014

By:		/s/ Helena R. Santos

Helena R. Santos

Chief Executive Officer and

Chief Financial Officer






































32

EX-10

                STANDARD FORM OF LOFT LEASE
        The Real  Estate  Board  of New York,  Inc.
                           7/04






Agreement of Lease, made as of this 8th day of August in the
year 2014, betweeen  80 ORVILLE DRIVE ASSOCIATES LLC, a Delaware
limited liability company, having an address c/o Rechler Equity
Partners, 85 South Service Road, Plainview, New York, party of
the first part, hereinafter reerred to as OWNER,
and SCIENTIFIC INDUSTRIES, INC., a Delaware corporation, having
its principal business address at 70 Orville Drive, Bohemia,
New York 11716, party of th second part, hereinafter referred
to as Tenant,

WITNESSETH:  Owner hereby leases to Tenant and Tenant hereby
hires from Owner that certain 18,950 square foot space
(designated as Suite 102), substantially as shown on the Rental
Plan annexed hereto as Exhibit "A", located in the building
80 Orville Drive, Bohemia, New York

(or until such term shall sooner cease and expire as hereinafter
provided) to commence on * and to end on * and both dates inclusive
at the annual rental rate of "

* As set forth in the rider annexed hereto


which Tenant agrees to pay in lawful  money of the United States
which shall be legal tender in payment of all debts and dues,
public and private. at the time of payment, in equal monthly
installments in advance on the first day of each month during said
term, at the office of Owner or such other place as Owner may
designate,  without any setoff or deduction whatsoever, except
that Tenant shall pay the first full monthly installment(s) on
the execution hereof (unless this lease be a renewal).

In the event that, at the commencement of the term of this lease,
or thereafter, Tenant shall be in default in the payment of rent
to Owner pursuant to the terms of another lease with Owner or
with Owner's predecessor in interest, Owner may at Owner's  option
and without notice to Tenant add the amount  of such arrears to
any monthly  installment of rent payable hereunder and the same
shall be payable to Owner as additional rent.

        The parties  hereto, for themselves,  their heirs,
distributes, executors, administrators,  legal representative,
successors and assigns,  hereby covenant as follows:

Rent:           l.   Tenant  shall pay the rent as above  and
as hereinafter provided.
Occupancy:      2.   Tenant shall use and occupy the demised
premises for light assembly and warehousing of laboratory
products and offices ancillary threto.

provided such use is in accordance with the certificate of
occupancy for the building, if any, and for no other purpose.



Alterations:    3.   Subject to the terms of Par. 45 of the Rider,
Tenant  shall  make  no  changes  in or  to  the demised premises
of any nature without Owner's prior written consent of Owner, and to
the provisions  of  this article,  Tenant,  at  Tenant's expense,
may  make alterations, installations.addirions  or improvements
which are nonstructural and which do not affect utility services
or plumbing and electrical lines,  in or to  the interior of the
demised premises, using contractors or mechanics first approved in
each instance  by Owner (such approval not to be unreasonably
withheld, conditioned or delayed).  Tenant sha1l at its expense,
before making any alterations, additions, installations or
improvements obtain all permits,  approvals and certificates
required  by any governmental or quasi-governmental bodies and
(upon comp1etion)  certificates  of final approval  thereof, if
required, and shall deliver promptly duplicates of all such
permits, approvals and certificates to Owner. Tenant agrees to
carry, and will cause Tenant's contractors and  sub-contractors
to carry, such worker's compensation. commercial general hability,
personal and property  damage  insurance as Owner  may  reasonably
require.  If any mechanic's lien is filed against tbe demised
premises,  or the building of which the same forms a part,
for work claimed to have been done for, or materials furnished to,
Tenant, whether or not done pursuant to this article, the same
shall be discharged by Tenani within thirty (30) days thereafter,
at Tenant's expense, by payment or filing a bond as permitted
by law. All fixtures and all paneling, partitions, railings and
like installations,installed in the demised premises at any time,
either by Tenant or  by  Owner  on  Tenant's behalf, shall, upon
installation,  become the property  of  Owner  and shall  remain
upon and be surrendered  with the demised premises unless Owner,
by notice  to  Tenant no later than twenty (20) days prior to
the date fixed as the termination of this lease, elects to
relinquish  Owner's right thereto and to  have them  removed by
Tenant, in which  event the same  shall be removed from  the
demised  premises  by Tenant prior to the expiration of the lease,
at Tenant's expense. Nothing in this article shall be construed
to give Owner title to, or to prevent Tenant's removal  of
trade fixtures,  moveable  office furniture  and equipment, but
upon removal of same from the demised premises, or upon removal
of other installations as may be required by Owner.  Tenant
shall promptly, and at its expense, repair and restore the
demised premises to the condition existing prior to any such
installations (reasonable wear and tear and casualty excepted),
and repair any damage to the demised premises of the building
due to such removal.  All property permitted or required to be
removed by Tenant at the end of the term remaining in the demised
premises after Tenant's removal shall be deemed abandoned and
may, at the election of Owner, either be reatined as Owner's
property of removed from the demised premises by Owner, at
Tenant's expense.

Repairs:	4.  Owner shall maintain and repair the exterior
of and the public portions of the building and make all
structural repairs (as defined in Par. 48 of the Rider).  Tenant
shall, throughout the term of this lease, take good care of the
demised premises, including the bathrooms and lavatory facilities
contained therein, if any, the windows, and window frames, and the
fixtures and appurtenances therein (reasonable wear and tear excepted)
and at Tenant's sole cost and expense promptly make all repairs
thereto and to the building, whether structureal or non-structural
in nature, cause by, or resulting from, the carelessnesss, omission,
neglect or improper conduct of Tenant, Tenant's servants, employees,
invitees, or licensees, and whether or not arising from
Tenant's conduct or omission, when required by other provisions of
this lease, including article 6.  Tenant shall also repair all
damage to the building and the demised premises caused by the moving
of Tenant's fixtures, furniture, or equipment.  All the aforesaid
repairs shall be of quality or class equal to the original work or
construction.  If Tenant fails, after ten (10) days notice, to proceed
with due diligence to make repairs required to be made by
Tenant, the same may be made by Owner at the expense of Tenant,
and the expenses thereof incurred by Owner sha1l be collectible,
as additional rent, after rendition of a bill or statement
therefore. Owner agrees that in making such repairs, Owner shall
use commercially reasonable efforts to minimize interference with
Tenant's use and occupancy of the demised premises and its access
thereto.  Owner further agrees to perform all such repairs in a
good and workmanlike manner with due diligence. If the demised
premises be or become infested with vermin, Tenant shall at its
expense, cause the same to be exterminated.  Tenant shall give
Owner prompt notice of any defective condition in any plumbing,
heating system or elecmcal lines located in the demised  premises
and following  such notice,  Owner shall remedy the condition
with due diligence, but at the expense  of Tenant, if repairs
are necessitated by  damage or injury attributable  to Tenant,
Tenant's servants, agents, employees, invitees or licensees as
aforesaid.  Except as specifically provided in Article 9 or
elsewhere in this lease, there shall be no allowance to Tenant
for a diminution  of rental value and no liability on the part  of
Owner by reason of inconvenience, annoyance  or injury to business
arising from Owner.  Tenant  or  others   making   or  failing
to  make any  repairs, alterations, addinons  or improvements
in or to any portion of the building or the demised premises,
or in and to the fixtures,  appurtenances  or equipment thereof.
It is specifically agreed that Tenant shall not  be entitled to any
setoff or reduction of rent by reason of any failure of Owner to
comply with the covenants of this  or any other article of this
lease.  Tenant agrees that Tenant's sole remedy at law in such
instance will be by way of an action for damages for breach of
contract.  The provisions of this Article 4 with respect to the
making of repairs shall not  apply in the case of fire or other
casualty  with regard to which Article 9 hereof shall apply.

Window          S. Tenant will not clean nor require. permit, suffer
Cleaning:          or allow any window in the demised premises to

be cleaned from the outside in violatioa of Section 202 of the
New York State Labor  Law or any other applicable law, or of the
Rules of the Board of Standards and Appeals, or of any other Board
or body having or asserting jurisdiction.



Requirements
of Law
Fire Insurance,
Flood Loads:

6.  Prior to the commencement  of the lease term,  if Tenant is then in
possession, and at all times thereafter, Tenant shall at Tenant's sole cost
and expense, promptly  comply  with all present and future laws, orders
and regulations of  all  state, federal. municipal and local governments,
departments, comissions and boards and any direction of any public officer
pursuant to law, and all orders, and regulations of the New Yor kBoard of
Fire Underwriters, Insurance Services Office, or any similar body which
shall impose any violation. order or  duty upon  Owner  or  Tenant with
respect to  the  demised  premises, arising out of Tenant's use or
manner of use thereof, or, with respect to the building, if arising out of
Tenant's use or manner of use of the demised premises of the building
(including the use permitted  under the lease).  Except as providedin
Article 30 hereof, or in Paragraphs 45 or 48 of the Rider, nothing herein
shall require Tenant to make structural repairs or alterations unless
Tenant has, by  its manner  of use of the demised  premises  or method
of operation  therein, violated any such laws, ordinances, orders,
rules,  regulatious  or requirements with respect  thereto.  In the event
that there are alterations required to be performed to the demised premises
to comply with applicable law that are not Tenant's responsibility hereunder,
Owner shall perform such alternations.  Tenant shall  not do or permit
any act or thing to be done in or to the demised premises which is contrary
to law, or which  will invalidate or be  in conflict with public liability,
fire  or other policies of insurance at any time carried by or for the
benefit of Owner,or which shall or might subject Owner to any liability
or responsibility to any person, or  for property damage.  Tenant  shall
not  keep  anything  in  the  demised premises except as now or
hereafter permitted by  the  Fire Department, Board of Fire Underwriters,
Fire Insurance Rating Organization and other authority having jurisdiction,
and then only in such manner and such quantity so as not to increase
the rate for fire insurance applicable to the building, nor use the demised
premises in a manner which will increase  the insurnnce rate for the building
or any  property located therein over that in effect prior to the
commencement of Tenant's  occupancy. If by reason of failure to comply with
the foregoing the fire insurance rate shall, at the beginning  of this lease
or at any time thereafter, be higher than it otherwise would be, then
Tenant shall reimburse Owner; as addinonal rent for that ponion  of all
fire insurance  premiums  thereafter  paid by Owner which shall have been
changed because of such failure by Tenant. In any action or proceeding
wherein Owner and Tenant are parties, a schedule or "make-up"or rate
for the building or demised premises issued by a body making fire insurance
rates applicable to said premises  shall be conclusive evidence of the
facts therein stated and of the several items and charges in the fire
insurance rates then applicable to  said parties.   Tenant shall not
place a load upon any floor of the demised premises exceeding the floor
load per square foot area which it was designed  to carry and which is
allowed by law.  Owner reserves the right to prescribe the weight and
position of all safes, business machines,  and  mechanical equipment.
Such  installations shall be placed and maintained by Tenant, at Tenant's
expense, in settings sufficient in  Owner's judgment to absorb and
prevent vibration, noise, and annoyance.


Subordination:             7.    This lease  is subject and subordinate
to all ground or underlying leases and to all mortgages which may now
or hereafter affect such leases or the real property of which the
demised premises are  a  part, and  to  all renewals, modifications,
consolidations, replacements and extensions of any such underlying leases
and mortgages. This clause shall be self-operative and no further
instrument or subordination  shall be required by any ground or underlying
lessor or by any mortgagee,  affecting any lease or the real propeny of
which the demised premises are a part. In confirmation of such
subordination, Tenant shall from time to time execute promptly any
certificate that Owner may reasonably request.


Tenant's                  8.  Owner or its agents shall not be liable
Liability Insurance       for any damage to  property  of Tenant or of
Property                  others entrusted to employees of the building,
Loss,	                  nor for the loss of, or damage to, any property
Damage,                   of Tenant by theft or otherwise, nor for any
Indemnity:                injury or damage to persons or property resulting
                          from any  cause of whatsoever nature, unless
                          caused by, or due to, the negligence willful
                          coduct of Owner,its agents, servants or
                          employees; Owner or its ageors shall not be
                          liable for any damage caused by other tenants
or persons in, upon or about said building or caused by operations, in
connection of any private, public or quasi public work.  If at any time
any windows of the demised premises are temporarily closed, darkened or
bricked up (or permanently closed, darkened or bricked up, if required
by law), for any reason whatsoever including, but not limited to, Owner's
own acts, Owner shall not be liable for any damage Tenant may sustain
thereby, and Tenant shall not be entitled to any compensation therefore
nor abatement or diminution of rent, nor shall the same release Tenant
from its obligations hereunder nor constitute an eviction.


Destruction
Fire, and
Other
Casualty:

9. (a) If the demised premises or any part thereof shall be damaged
by fire or other casualty, Tenant shall give immediate notice thereof
to Owner and this lease shall continue in full force and effect
except as hereinafter set forth.  (b) If the demised premises are
partially damaged or rendered partially unusable by fire or other
casualty, the damages thereto shall be repaired by, and at the expense
of Owner, and the rent and other items of additional rent, until such
repair shall be substantially completed as defined in Paragraph 42(b)
of the Rider, shall be apportioned from the day following the casualty
according to the part of the demised premises which is usable.  If a
substantial portion of the demised premises is damaged, and Tenant
cannot operate any part of its business previously operated in the
balance of the demised premises in an economically feasible manner,
fixed rent and additional rent will abate for the entire demised
premises.   (c)  If the demised premises are totally damaged
or rendered wholly unusable by fire or other casualty, then the
rent and other items of additional rent as hereinafter expressly
provided shall be proportionately paid up to the time of the casualty
and thenceforth shall cease until the date when the demised
premises shall have been repaired and restored by Owner (or sooner
reoccupied in part by Tenant then rent shall be apportioned as
provided in subsection (b) above), subject to Owenr's right to elect
not to restore the same as hereinafter provided.  (d) If the demised
premises are rendered wholly unusable or (whether or not the demised
premises are damaged in whole or in part) if the building shall be
so damaged that Owner shall decide to demolish it or to rebuild it,
then, in any of such events, Owner may elect to terminate this lease
by written notice to Tenant, given within sixty (60) days after
such fire or casulaty, or thirty (30) days after adjustment of the
insurance claim for such fire or casualty, whichever is
sooner, specifying a date for the expiration of the lease, which
date shall not be more than thirty (30) days after giving of such
notice, and upon the date specified in such notice the term of this
lease shall expire as fully and completely as if such date were the
date set forth above for the termination oft his lease, and Tenant
shall forthwith quit, surrender and vacate the demised premises
without prejudice however to Owner's rights and remedies against
Tenant under the lease provisions in effect prior to such
termination, and any rent owign shall be paid up to such date,
and any payments of rent made by Tenant which were on account of
any period subsequent to such date shall be returned to Tenant.
Unless Owner shall serve a termination notice as provided for
herein, Owner shall make the repairs and restorations under the
conditions of (b) and (c) hereof, with all reasonable expedition,
subject to delays due to adjustment of insurance claims, labor
troubles and causes beyond Owner's control.  After any such
casualty, Tenant shall cooperate with Owner's restoration by
removing from the damaged portion of demised premises as promptly
as reasonably possible, all of Tenant's salvageable inventory
and movable equipment, furniture,  and other property.
Tenant's liability fur rent shall resume five (5) days after
written notice from Owner that the demised  premises are
substantially complete (as defined in the Rider)  for  Tenant's
occupancy.   (e) Nothing contained  hereinabove  shall
relieve  Tenant from liability that may exist as a result of damage
from fire or other casualty. Norwiths1anding anything  contained
to  the contrary in subdivisions  (a) through  (e)  hereof,
including Owner's  obligation  to  restore  under subparagraph
(b) and (c) above, each party shall look first  to any insurance
in its favor  before making any claim against  the other party
for recovery for loss or damage resulting  from fire or other
casualty, and to the extent that such insurance is in force and
collectible. and to the extent permitted by law, Owne rand
Tenant eac hhereby releases and waives  all right of recovery
with respect tO subbparagraphs (b), (d) and (e) above, against
the other or any one claiming through or under each of them by
way of subrogation or otherwise. The release and waiver herein
referred to shall be deemed to include any  loss or  damage  to
the demised premises  and/or  tO   any  personal property,
equipment, trade  fixtures, goods  and  merchandise located
therin.  The foregoing release  and  waiver  shall  be in force
only if  both releasors' insurance policies contain a clause
providing that such a release or waiver shall not unvalidate
the insurnnce. If, and to the extent that such waiver can
be obtained only  by the payment of additiooal premiums, then the
party benefiting from the waiver  shall pay such premium
within ten (l0) days after written demand or shall be deemed to
have agreed that the party obtaining insurance  coverage
shall  be  free of any  further obligation under the provisions
hereof with respect to  waiver of subrogation.  Tenant
acknowledges  that Owner will  not  carry insurance  on Tenant's
furniture and/or furnishings  or  any   fixtures  or  equipment,
or appurtenances removable  by  Tenant, and  agrees  that Owner
will not be obligated to repair any damage thereto or replace
the same.(f)Tenant hereby waives the provisions of Section 227
of the Real Property Law and agrees that the provisions of this
article shall govern and control in lieu thereof.

Eminent
demised
Domain:

10.    If  the  whole  or  any  material part   of  the  by premises
shall  be  acquired  or  condemned by Eminent Domain  for any public
or quasi public use or purpose, thenand in that event, the term of
this lease shall cease and terminate from the date of title vesting
in such procccding and Tenant shall have no claim for the value of a
ny unexpired term of said lease. Tenant shall have the right to make
an independent claim to the condemning authority for the value of
Tenant's moving expenses and personal property, trade fixtures and
equipment. provided Tenant is entitled pursuant to the terms
of the lease to remove such property, trade fixtures and equipment
at the end of the term, and provided further such claim does
not reduce Owner's award.


Assignment,
Mortgage,
Etc.:


11.     Tenant, for itself, its  heirs, distributees, executors,
administrators,  legal  representatives, successors and assigns,
expressly covenants  that it shall  not  assign,  mortgage or
encumber  this agreement, nor underlet, or suffer or permit the
demised premises or any part thereof to be used by others, without
the prior written consent of Owner in each instance.  Transfer of
the majority of the stock of a corporate Tenant or the majority
interest in any partnership or other legal entity which is Tenant
shall be deemed an assignment.  If this lease be assigned, or if the
demised premises or any part thereof be underlet or occupied fby
anybody other than Tenant, Owner may, after default by Tenant, collect
rent from the assignee, undertenant or occupant, and apply the net
amounts collected to the rent herein reserved, but no such
assignment, underletting, occupancy, or collection shall be
deemed a waiver of this covenant, or the acceptance of the
assignee, undertenant or occupant as tenant, or a release of
Tenant from the furhter performance of Tenant of covenants on the
part of Tenant herein contained.  The consent by Owner to an
assignment or underletting shall not in any way be construed to
relieve Tenant from obtaining the express consent in writing
of Owner to any further assignment or underletting.  See
Par. 54 of Rider.

Electric Current:

12.  Rates and conditions in respect to submetering or rent
inclusion, as the case may be, to be added in RIDER attached hereto,
Tenant covenants and agrees that at all times its use of electric
current shall not exceed the capacity of existing feeders to the
building or the risers or wiring installation, and Tenant may not
use any electrical equipment which, in Owner's opinion, reasonably
exercised, will overload such installations or interfere with the
use thereof by other tenants of the building.  The change at any
time of the character of electric service shall in no way make Owner
liable or responsible to Tenant, for any loss, damages or expenses
which Tenant may sustain.

Access to
Premises:

13.  Owner or Owner's agents shall have the right (but shall not
be obligated) to enter the demised premises in any emergency at
any time, and, at other reasonable times upon reasonable advance
notice to Tenant (except in the event of an emergency) to examine
the same and to make such repairs, replacements and improvements
as owner may deem necessary and reasonably desirable to any
portion of the building, or which Owner may elect to perform in
the demised premises after Tenant's failure to make repairs,
or perform any work which Tenant is obligated to perform under
this lease, or for the purpose of complying with laws, regulations
and other directions of governmental authorities.  Tenant shall
permit Owner to use, maintain and replace pipes, ducts, and conduits
in and through the demised premises, and to erect new pipes, ducts,
and conduits therein provided, wherever possible, that they are within
walls or otherwise concealed.  Owner may during the progress of any
work in the demised premises, take all necessary materials and
equipment into said premises without the same constituting an
eviction, nor shall Tenant be entitled to any abatement of rent
while such work is in progress, nor to any damages by reason of
loss or interruption of business or otherwise.  Notwithstanding
the foregoing, Owner will be liable for any damage caused by
the negligence or willful misconduct of Owner or Owner's agents
or employees, throughout the term hereof Owner shall have the
right to enter the demised premises at reasonable hours upon
reasonable advance notice to Tenant, for the purpose of
showing the same to prospective purchasers or mortgagees of the
building, and during the last twelve (12) months of the term for
the purpose of showing the same to prospective tenants, and
may, during said twelve (12) months period, place upon the
demised premises the usual notices "To Let" and "For Sale"
which notices Tenant shall permit to remain thereon without
molestation.  If Tenant is not present to open and permit
an entry into the demised premises, Owner or Owner's agents
may enter the same whenever such entry may be necessary
or permissible by master key or forcibly, and provided
reasonable care is exercised to safeguard Tenant's property,
such entry shall not render Owner or its agents liable
therefore, nor in any event shall the obligations of Tenant
hereunder be affected.  If during the last month of the
term Tenant shall have removed all or substantially  all of
Tenant's property therefrom, Owner may immediately enter,
alter, renovate or redecorate the demised premises without
limitation or abatement of rent, or incurring liability to
Tenant for any compensation, adn such act shall have no
effect on this lease or Tenant's obligation hereunder.
When exercising Owenr's rights hereunder, Owner agrees that
Owner shall use commercially reasonable efforts to minimize
interference with Tenant's use and occupancy of the demised
premises and its access thereto, and Owner agrees to perform
all such work with due diligence.



Vault,
Vault Space,
Area:

14.  No vaults, valut space or area, whether or not enclosed
or covered, not within the property line of the building is
leased hereunder, anything contained in or indicated on any
sketch, blue print or plan, or anything contained elsewhere
in this lease to the contrary notwithstanding.  Owner makes no
representation as to the location of the property line of
the building, which Tenant may be permitted to use and/or
occupy, is to be used and/or occupied under a revocable
license, and if any such license be revoked, or if the amount
of such space or area to be diminished or required by
any federal, state or municipal authority or public utility,
Owner shall not be subject to any liability, nor shall
Tenant be entitled to any compensation or diminution or
abatement of rent, nor shall such revocation, diminution or
requisition be deemed constructive or actual eviction.
Any tax, fee or charge of municipal authorities for such
vault or area shall be paid by Tenant, if used by Tenant,
whether or not specifically leased hereunder.

Occupancy:

 15.  Tenant will not at any time use or occupy the demised
premises in violation of tbe certificate of occupancy issued
for the building of which the demised premises are a part.
Tenant bas inspected  the demised premises and accepts them as
is, subject to  the rider  annexed hereto with respect to Owner's
work, if any. In any event, Owner makes no  representation as
to  the condition of the demised premises and Tenant agrees to
accept the same subject to violations, whether or not of record.
lf any governmental license or pemiit shall be required for
the  proper and lawful conduct of  Tenant's  business,  Tenant
shall be responsible for, and shall procure and maintain, such
license or permit.  Owner represents and warrants that, to the
best of Owner's knowledge, the demised premises are free from
Asbestos Containing Materials.  Owner agrees to defend,
indemnify and hold harmless Tenant from and against any claims,
demands, penalties, fines, liabilities, settlements, damages,
costs or expenses, arising out of a breach of the foregoing
representation and warranty by Owner.


Bankruptcy:
16.   (a) Anything  elsewhere  in this lease to  the contrary
notwithstanding,  this  lease  may   be cancelled by  Owner by
sending  of  a written  notice  to Tenant  within  a reasonable
time after the happening  of any one or more of the following
events:  (1 )the  commencement  of a case in bankruptcy or under
the laws of any state naming Tenant(or a guarantor  of any of
Tenant'sobligations under this lease) as the debtor; which, in the
case of an involuntary bankruptcy, is not dismissed within sixty
(60) days of the commencement thereof or (2) the making by Tenant
(or a guarantor of any of Tenant's  obligations under this  lease)
of  an  assignment  or  any  other arrangement  for the benefit of
creditors under  any state stature.   Neither Tenant nor any person
claiming through or under Tenant, or by reason of any statute or
order  of court, shall thereafter be  entitled to  possession of the
premises  demised,  but  shall  forthwith quit  and  surrender the
demised premises.   If this lease shall be assigned in accordance
with its terms, the provisions of this Article 16 shall be applicable
only to the party then owning Tenant's interest in this lease.
(b) It is stipulated and agreed that in the event of the termination
of this lease pursuant to (a) hereof, Owner shall forthwith,
notwithstanding any other provisioas of this lease to the contrary,
to the extent permitted by law, be entitled to recover from
Tenant, as and for liquidated damages, an amount equal to  the
difference between the rental reserved hereunder for the unexpired
portion of the term demised and the fair and reasonable rental
value of the demised premises for the same  period.    In  the
computation of  such  damages the  difference between any installment
of rent  becoming due hereunder after the date of termination and
the fair and reasonable rental value of the demised premises
for the period for whicb such installment was payable shall be
discounted to the date of ternination at the rate of four percent
(4%) per annum. If the demised  premises or any part  thereof be
relet by Owner for the unexpired term of said lease, or any part
thereof  before presentation of proof of such liquidated damages
to any court, commission or tribunal, the amouct of rent
reserved upon  such reletting shall be deemed to be the fair and
reasonable rental value for the part  or the whole of the demised
premises so re-let during the term of tbe re-letting.  Nothing herein
contained shall limit or preJUdice the right of the Owner  to
prove for and obtain as liquidated damages by reason of such
termination an amount  equal to the maximum allowed by any
statute or  rule of  law in  effect at the time  wben, and
governing the proceedings in which, such damages are to be proved
whether or not  such amount be greater, equal to, or less than
the amount of the difference referred to above.


Default:

17.   (1)  If Tenant defaults in fulfilling any of the
covenants of this lease other than the covenants for the payment
of rent  or additional rent;  or if the demised premises becomes
vacant or deserted, or if this lease be rejected under SS365
of Title 11 of the U.S. Code (Bankruptcy  Code); or if any
execution or attachment  shall be issued against Tenant ar any
of Tenant's property  whereupon  the demised premises  shall
be taken or occupied by someone  Other than Tenant; or if
Tenant shall be in default after the expiration of all applicable
notice and cure periods with respect to any other lease between
Owner and Tenant; or if Tenant shall have failed, after five
(5) days written notice to redeposit with owner any portion
of the security deposited hereunder which Owner  has applied to
the payment of any rent and additional  rent due and payable
hereunder; or if Tenant fails to move into or take possessionof the
demised premises withm thirty (30) days after the commencement of
the term of this lease, of which fact Owner shall be the sole
judge; then  in any one or more of such events, upon
Owner serving a written fifteen (15)  days notice upon Tenant
specifying the nature of said default, and upon the expiration of
said fifteen (15)  days, if Tenant shall have tailed to comply
with or remedy such default, or if the said default or omission
complained of shall be of a nature that the same cannot be
completely cured or remedied within said fifteen (15) day period,
and if Tenant shall not have diligently commenced during such
default within such fifteen (15) day period, and shall not
thereafter with reasonable diligence and in good faith, proceed
to remedy or cure such default, then Owner may serve a written
five (5) days notice of cancellation of this lease upon Tenant,
and upon the expiration of said five (5) days this lease and
the term thereunder shall end and expire as fully and completely
as if the expiration of such five (5) day period were the day
herein definitely fixed for the end and expiration of this
lease and the term thereof, and Tenant shall thenq uit and
surrender the demised premises to Owner, but Tenant shall
remain liable as hereinafter provided.

(2) If the notice provided for in (1) hereof shall have been
given, and the term shall expire as aforesaid; or if Tenant
shall be in default in the payment of the rent reserved herein
or any item of additional rent herein mentioned, or any part
of either, or in making any other payment herein rqeuired and
such payment default has not been cured within five (5) days
after notice hereof; then, and in any of such events, owner
may without notice, re-enter the demised premises either
by force or otherwise, and dispossess Tenant by summary
proceedings or otherwise, and the legal representative of
Tenant or other occupant of the demises premises, and remove
their effects and hold the demised premises as if this
lease had not been made, and Tenant hereby waives the
service of notice of intention to re-enter or to institute
legal proceedings to that end.  If Tenant shall make default
hereunder prior to the date fixed as the commencement of any
renewal or extension of this lease, Owner may cancel and
terminate such renewal or extension agreement by written
notice.


Remedies of
Owner and
Waiver of
Redemption:

18. In case of any such default, re-entry, expiration and/or
disposes by summary proceedings or otherwise, (a) the rent, and
additional rent, shall become due thereupon and be paid up to the
time of such re-entry, disposess and/or expiration, (b) Owner
may re-let the demised premises or any part of parts thereof,
either in the name of Owner or otherwise, for a term or terms,
which may at Owner's option be less than or exceed the period
which would otherwise have constituted the balance of the term
of this lease and may grant concessions or free rent or charge
a higher rental than that in this lease.  (c) Tenant or the
legal representatives of Tenant shall also pay to Owner as
liquidated damages for the failure of Tenant to observe and
perform said Tenant's covenants herein contained, any
deficiency between the rent hereby reserved and or convenanted
to be paid and the net amount if any, of the rents collected
on account of the subsequent lease or leases of the demised
premises for each month of the period which would otherwise
have constituted the balance of the term of this lease.  The
failure of Owner to re-let the demised premises or any part
or parts thereof shall not release or affect Tenant's liability
for damages. In computing such liquidated damages there shall
be added to the said deficiency such expenses as Owner may
incur in connection with re-letting such as reasonable
attorney's fees, brokerage, advertising, and for keeping the
demised premises in good order or for preparing the same for
re-letting.  Any such liquidated damages shall be apid in
monthly installments by Tenant on the rent day specified in
this lease, and any suit brought to collect the amount of
the deficiency for any month shall not prejudice in any way
the rights of Owner to collect the deficiency for any
subsequent month by a similar proceeding. Owner, in putting
the demised premises in good order or preparing the same for
re-rental may, at Owner's option, make such alterations,
repairs, replacements, and/or decorations in the demised
premises as Owner, in Owner's sole judgement, considers
advisable and necessary for the purpose of re-letting the
demised premises, and the making of such alterations, repairs,
replacements, and/or decorations shall not operate or be
construed to release Tenant from liability hereunder as
aforesaid. Owner shall in no event be liable in any way
whatsoever for failure to re-let the demises premises, or
in the event that the demised premises are re-let for failure
to collect the rent thereof under such re-letting, and in
no event shall Tenant be entitled to receive any excess, if
any, of such net rents collected over teh sums payable by
Tenant to Owner hereunder.  In the event of a breach or
threatened breach by Tenant of any of the covenants or
provisions hereof, Owner shall have teh right of
injunction and the right to invoke any remedy allowed at law
or in equity as if re-entry, summary proceedings and other
remedies were not herein provided for.  Mention in this
lease of any particular remedy, shall not preclude Owner from
any other remedy, in law or in equity.  Tenant hereby
expressly waives any and all rights of redemption granted
by or under any present or future laws.


Fees and
Expenses:

19.   If Tenanl shall default in the observance or performance
of any term or covenant on Tenant's part to be observed or
performed under, or by virtue of, any of the terms or
provisions in any article of this lease, after notice if
requried, and upon expiration of the applicable grace period,
if any, (except in an emergency), then, unless otherwise provided
elsewhere in this lease, Owner may immediately, or at any time
thereafter, and without notice, perform the obligation of Tenant
thereunder. If Owner, in connection with the foregoing, or in
connection with any default by Tenant in the covenant to pay
rent hereunder, makes any expenditures or incurs any obligations
for the payment of money; including but not limited to
reasonable attorneys' fees, in instituting, prosecuting or
defending any action or proceeding, and prevails in any such
action or proceeding, then Tenant will reimburse Owner for such
sums so paid or obligations incurred with interest and costs.
The foregoing expenses incurred by reason of Tenant's default
shall be deemed to be additional rent hereunder and shall be
paid by Tenant to Owenr within ten (10) days of rendition of
any bill or statement to Tenant therefore.  If Tenant's lease
term shall have expired at the time of making such expenditures
or incurring of such obligations such sums shall be recoverable
by Owner as damages.


Building
Alterations and
Management:


20. Owner shall have the right at any time, without the same
constituting an eviction and  without incurring liability to
Tenant therefore, to change the arrangement  and or location
of public entrances, passageways, doors, doorways, corridors,
elevators, stairs, toilets or othe rpublic parts of the
building,  and to change the name, number or designation by
which the building may be known upon reasonable written notice
to Tenant, provided any such change does not materially
adversely affect Tenant's access to, or use and enjoyment of,
the demised premises or in any way diminish Tenant's usable
square footage.  Owner shall use all reasonable efforts to
perform all work or other business in the demised premises
in a manner designed to minimize interference with Tenant's
normal business operations.  There shall be no allowance to
Tenant for diminution of rental value and no liability
on the part  of Owner by reason of inconvenience, annoyance
or injury to business  arising from Owner  or other Tenant
making  any repairs  in the building or any such alterations,
additions and improvements.  Furthermore, Tenant shall not
have any  claim against Owner  by  reason  of imposition of
any controls of the manner of access to the building by Tenant's
social or business visitors, as Owner may deem necessary,
for the security of the building and its occupants.


No Repre-
sentations
by Owner:


21. Neither Owner nor Owner's agents have made any representations
or promises with respect to  the physical condition of the building,
the land upon which is erected, the demised premises,  the rents,
leases, expenses of operation, or any other matter or thing
affecting or related to the demised premises or the building,
except as herein expressly set forth, and  no rights, easements
or licenses are acquired by Tenant by implication or otherwise
except as expressly set forth in the provisions of this lease.
Tenant bas inspected or has waived the right to inspect the building
and the demised premises, and is thoroughly acquainted with their
condition and agrees to take the same "as-is" on the date possession
is tendered subject to Owner's completion in a good and workmanlike
manner of Landlord's WOrk (as defined in the Rider), and acknowledges
that the taking of possession of the demised premises by Tenant
shall be conclusive evidence that1 the said premises, and the
building of which the same form a part, were in good and
satisfactory condition at the time such possession was so  taken,
except as  to  latent defects.  All understandings and agreements
heretofore made between the parties hereto are merged  in  this
contract, which  alone fully and completely  expresses the agreement
between Owner and Tenant, and any executory agreement hereafter
made  shall  be ineffective  to  change,  modify,  discharge  or
effect an abandomnent of it in whole  or in part, unless such
executory agreement is in writing and signed by  the party against
whom eenforcement of the change, modification, discharge
orabandonment is sought.




End of
Term:

22.  Upon the expiration or other termination of the term of
this  lease, Tenant shall quit and surrender to Owner 1he demised
premises, "broom-clean" in good order and condition, ordinary  wear
and damages which Tenant is not required to repair as provided
elsewherein this lease excepted, and Tenant shall remove all its
property from the demised premises.  Tenant'sobligation to observe
or  perform  this  covenant shall  survive  the  expiration  or  other
termination of this lease. If the last day of the term of this lease,
or any renewal thereof falls on Sunday, this  lease shall expire at
noon  on the preceding Saturday, unless it be a legal holiday, in which
case it shall expire at noon on the preceding business day.

Quiet
Enjoyment:


23.  Owner covenants and agrees with Tenant that upon Tenant paying
the rent and additional rent and observing and performing all the terms,
covenants and conditions.on Tenant's part to be observed and performed,
Tenant may peaceably and  quietly eojoy   the  premises hereby demised'
subject, nevertheless, to the terms and conditions of this lease including,
but not limited to, Article 34 hereof. and to the ground leases, underlying
leases and mortgages bereinbefore mentioned.

Failure to
Give
Possession:

24.  If Owner is unable to give possession of the demised premises
on the date of the commencement of the term hereof because of the tenant,
undertenant or occupants, of if the demised premises are located in a
building being construed, because such building has not been sufficiently
completed to make the premises ready for occupancy or because of the
fact that a certificate of occupancy has not been procured, or if Owner
has not completed any work required to be performed by Owner, or for any
other reason.  Owner shall not be subject to any liability for failure to
give possession on said date and the validity of the lease shall not
be impaired under such circumstances, nor shall the same be construed
in any way to extend the term of this lease, but the rent payable
hereunder shall be abated (provided Tenant is not responsible for Owner's
inability to obtain possession or complete any work required) until after
Owner shall have given Tenant notice that Owner is able to deliver
possession in the condition required by this lease.  If permission is
given to Tenant to enter into possession of the demised premises, or
to occupy premises other than the demised premises, prior to the date
specified as the commencement of the term of this lease, Tenant
covenants and agrees that such possession and/or occupancy shall be
deemed to be under all the terms, covenants, conditions and provisions
of this lease, except the obligation to pay the fixed annual rent set
forth in page one of this lease.  The provisions of this article are
intended to constitute "an express provision to the contrary" within
the meaning of Section 223 of the New York Real Property Law.

No Waiver:

25.    The  failure  of  Owner or Tenant to  seek  redress  for
violation of. or to insist upon the strict performance  of, any
covenant or condition of this lease, or of any of the Rules or
Regulations, set forth or hereafter adopted by Owner, shall not
prevent a subsequent act, which would have originally constituted a
violation, from having all the force and effect of an original violation.
The receipt by Owner of rent with knowledge  of the breach of any
covenantof this lease shall not be deemed a waiver of such breach, and
no provision of this lease shall be deemed to have been waived by
Owner unless such waiver be in writing signed by Owner.  No payment
by Tenant, or receipt by Owner, of a lesser amount than the monthly
rent herein stipulated shall be deemed to be other than on account
of the earliest stipulated rent,  nor shall any endorsement or statement
of any check or any letter accompanying any check or payment
as rent be deemed an accord and satisfaction, and Owner may accept such
check or payment without prejudice to Owner's right to recover the
balance of such rent  or pursue any other remedy in this lease provided
All  checks tendered to Owner as and for the rent of the demised premises
shall be deemed payments  fur the account of Tenant.   Acceptance by Owner
of rent from anyone other than Tenant shall not be deemed to operate as
an attornment to Owner by the payor of such rent, or as a consent by
Owner to an assignment or  subletting  by Tenant of  the demised
premises  to  such payor, or as a modification of the provisions of
this lease.  No act or thing done by Owner or Owner's agents during
the term hereby demised shall be deemed an acceptance of a surrender
of said premises, and no agreement to accept such surrender shall be
valid unless in writing signed by Owner.  No Employee of Owner or
Owner's agent shall have any power to accept the keys of said premises
prior to the termination of the lease, and the delivery of keys to any
such agent or employee shall not operate as a termination of the
lease, and the delivery of keys to any such agent or employee shall
not operate as a termination of the lease or a surrender of the
demised premises.

Waiver of
Trial by Jury:

26. It is mutually agreedby and between Owner and Tenant that the
respective parties hereto shall, and they hereby do,waive trial by
jury in any action, proceeding or counterclaim brought by either
of the parties hereto against the other (except for personal injury or
property damage) on any matters whatsoever arising out of or in any
way connected with this lease, the relationship of Owner and Tenant,
Tenant's use of or occupancy of demised premises, and any emergency
statutory or any other statutory remedy.  It is further mutually
agreed that in the event Owner commences any proceedings or action for
possession, including a summary proceeding for possession of the
demised premises, Tenant will not interpose any counterclaim, of
whatever nature or description, in any such proceeding, including
a counterclaim under Article 4, except for statutory mandatory
counterclaims.

Inability to

27.  This lease and the obligation of Tenant to pay rent hereunder
and  perform all  of  the  other covenants and agreements hereunder
on  part  of Tenant to be performed  shall in no way be affected,
impaired or excused because Owneris unableto fulfill any of its
obligations under this lease,or to supply, or  is delayedin supplying,
any service  expressly or impliedly to be supplied, or is unable to
make. or is delayedinmaking, any repairs,additions, alterations or
decorations,or is unable to supply, or is delayed in supplying,
any equipment, fixtures or other  materials, if Owner is prevented or
delayed from doing so by reason of strike or labor troubles,or any
cause whatsoever beyond Owner's sole  control including,  bur  not
limited  to, government preemption or restrictions, or by reason of any
rule, orderor regulationof any department or subdivision thereof of any
government agency, or by reason of the conditions which have been or
are affected, either directlyor indirectly, by war or other emergency.



Bills and
any
Notices:

28.  Except as otherwisein this lease provided, any notice, statement,
demand or other commumcation required or permittedto be given, rendered
or made by either party to the other, pursuant  to this lease or
pursuant to any applicable law or requirement of public authority,
shall  be in writing (whether or not so stated elsewhere in this lease)
and shall be deemed to have been properly given, rendered or made, if
sent by registered or certified mail (expressmail, if available),return
receipt requested, or by courier guaranteeing overnight delivery and
furnishing a receipt in evidence thereof, addressed  to the other
party at the address hereinaboveset forth (except that after the date
specified as the commencement  of the term  of  this lease, Tenant's
address, unless Tenant shall  give notice to the contrary, shall be
the building),  and shall be deemed to have been given, rendered
or made 9a) o the date delivered, if delivered to Tenant personally,
(b) on the date delivered, if delivered by overnight courier or
(c) on the date which is two (2) days after being mailed.
Either party   may, by notice  as aforesaid, designate  a different
address or addresses for notices statements, demand or other
communications intended for it.   Notices given by Owner's managing
agent shall be deemed a valid notice if addressed and set in
accordance with the provisions of this Article. At Owner's option,
notices and bills to Tenant may be sent by hand delivery.


Water Charges:



29.  If Tenant requires,  uses or consumes water for any  purpose in
addition to ordinary lavatory purposes (of which fact Owner shall be
the sole judge) Owner may install a wate rmeter and thereby measure
Teaant's water consumption  for all purposes.  Tenant shall pay  Owner
for the cost of the meter and the cost of tae  installation. Throughout
the duration of Tenant's occupancyT, enant shall keep said meter and
installation equipmentin good working order and repair at Tenant's own
cost and expense.   In the event Tenant fails to maintain the meter and
installation equipment in good worrking order and repair (of which fact
Owner shall be the solejudge) Owner may
cause such meterand equipment.to be replaced or repaired, and collect the
cost thereoffrom  Tenant as additional rent   Tenant agrees to pay for
water consumed,as shownon said meteras and when bills are rendered,
and in the eventTenant defaults in the making of such payment, Owner may
pay such charges and collect the same from Tenant as additional rent.
Tenant covenants and agrees to pay, as additional rent,  the sewer rent,
charge or any other taX, rent or levy which now or hereafter is assessed,
imposed or a lien upon the demised premises,or the realty of which
they are a part,  pursuant to any law, order or regulation made or
issued in connection with the use, consumption, maintenance or supply
of water,  the water  system  or  sewage  or sewage connection or system.
If the building, the demised premises, or any part thereof,is supplied
with water through a meter through which water is also supplied to other
premises, Tenanr  shall pay to Owner, as additional rent,
r"""'~         on the first day of each month.  *    % $ XXXXXXX) of
the total meter charges as Tenant's portion. Independentlyof, and
in addition to, any of the remedies reserved to Owner herein above
or elsewhere in this lease, Owner  may sue forand collect any monies
to be paid by Tenant, or paid by Owner, for any of the reasons or
purposes herein aboveset forth.


Sprinklers:

30.  Anything elsewhere in this lease to the contrary notwithstanding,
if  the New  York Board  of Fire Underwriter;  or  the New  York Fire
Insurance Exchange  or  any bureau, department or official of the federal,
state or city government recommend or require, as a result of Tenant's
specific use of the demised premises, the  installation of  a  sprinkler
system,  or that any  changes, modifications, alterations, or additional
sprinkler heads or other equipment be made  or  supplied  in an  existing
sprinkler  system  by  reason of Tenant's business, the location of
partitions, trade fixtures, or other contents of the demised premises,
or if any such sprinkler system installations,
modifications, alterations, additional sprinkler heads or other
such equipment, become necessary, by reason of Tenant's specific use of
the demised premises or the location of partitions, trade fixtures or
other contents of the demised premises, to prevent the imposition of a
penalty or charge against the full allowance for a sprinkler system in
the fire insurance rate set by said Exchange or any otherbody making fire
insurance rates, or by any fire insurance company, Tenant shall, at Tenant's
expense, promptly make such sprinkler system installations, changes,
modifications, alterations, and supply additional sprinkler heads or other
equipment as required, whether the work involved shall be structural or
non-structural in nature. Tenant shall pay to Owner as additional rent
*, on the first day of each month during the term of this lease of the
contract perice for sprinkler supervisory service.



Elevators, Heat,
Cleaning:


31.  Tenant shall, at Tenant's expense, keep the demised premises,
including the windows, clean and in order, to the reasonable
satisfaction of owner, and for that purpose shall employ person or persons,
or corpororations approved by Owner.  Tenant shall pay to Owner the cost
of removal of any of Tenant's refuse and rubbish from teh building.
Bills for the same shall be rendered by Owner to Tenant at such time as
Owner may elect, and shall be due and payable hereunder, and the amount
of such bills shall be deemed to be, and be paid as additional rent.
Tenant shall, however, have the option of independently contracting for
the removal of such rubbish and refuse in the event that Tenant does
not wish to have same done by employees of owner Under such
circumstances, however, the removal of such refuse and rubbish by
others shall be subject to such rules and regulations as, in the
judgment of Owner, are necessary for the proper operation of the
building.  Owner reserves the right to stop service of the heating,
elevator, plumbing and electric systems, when necessary by reason
of accident or emergency, or for repairs, alterations, replacements
or improvements, which in the judgement of Owner are desirable or
necessary to be made, until said repairs, alterations, replacements
or improvements shall have been completed.  If the building of
which the demised premises are a part supplies manually operated
elevator service, Owner may proceed diligently with alterations
necessary to substitute automatic control elevator service without
in any way affecting teh obligations of Tenant hereunder.

* - Tenant's proportionate Share

Captions:

33.  The Captions are inserted only as a matter of convenience
and  for  reference, and  in no  way define, limit or descibe
the scope of this lease nor the intent of any provision thereof.



Definitions:

34.  The term"Owner"as used in this lease means only the owner
of the fee or of the leasehold of the building, or the mortgagee
in possession for the time being, of the land and building (or the
owner of a lease of the building or of the land and building)
of which the demised premises form a part, so that in the event of
any sale or sales or conveyance, assignment or transfer of said
land and building or of said lease, or in the event of a lease
of said building, or of the land and building, the said Owner
shall be and hereby is entirely freed and relieved of all
covenants and obligations of Owner hereunder, and it shall be
deemed and construed without further agreement between the
parties or their successors in interest;  or between the parties
and  the purchaser, grantee, assignee or transferee at any such
sale, or the said lessee of the building, or of the land
and building, that the purchaser or the lessee of the building
has assumed and agreed  to carry out any and all covenants and
obligations  of  Owner hereunder.  The words "re-enter"and
"re-entry" as used in this lease are not restricted  to  their
technical lega1 meaning. The  term  "rent" includes  the
annual rental rate whether so expressed or expressed in monthhly
installments, and "additional rent," "Additional rent" means
all sums which shall be due to Owner from Tenant under this lease,
in addition to the annual rental rate. The term "business days''
as used in this lease, shall exclude Saturdays, Sundays
and all days observed by the State or Federal Government as
legal holidays, and those designated as holidays by the applicable
building service union employees  service contract, or  by  the
applicable Operating  Engineers contract  with respect to HVAC
service.  Wherever it is expressly provided in this lease that
consent shall not be unreasonably withheld, such consent shall
not be unreasonably delayed.

Adjacent
Excavation-
Shoring:

35.  If an excavation shall be made upon land adjacent to the
demised premises, or shall be authorized to be made, Tenant shall
afford to the person causing or authorized to cause such
excavation, a license to enter upon the demised premises for the
purpose of doing such work as said person shall deem
necessary to preserve the wall or the building, of which
demised premises form a part, from injury or damage, and to
support the same by proper foundations, without any claim for
damages or indemnity against Owner, or diminution or abatement
of rent.

Rules and
Regulations:

36.  Tenant and Tenant's servants, employees, agetns, visitors
and licensees, shall observe faithfully, and comply strictly
with, the Rules and Regulations annexed hereto and such other
and further reasonable Rules and Regulations as owner or
Owner's agents may from time to time adopt.  Notice of any
additional Rules or Regulations shall be given in such manner
as Owner may elect.  In case Tenant disputes the reasonableness
of any additional Rules, or Regulations hereafter made or
adopted by Owner or Owner's agents, the parties hereto agree
to submit the question of the reasonableness of any additional
Rules, or Regulations upon Tenant's part shall be deemed waived
unless the same shall be asserted by service of a notice, in
writing, upon Owner, within fifteen (15) days after the
giving of notice thereof.  Nothing in this lease contained
shall be construed to impose upon Owner any duty or obligation
to enforce Rules and Regulations or terms, covenants or
conditions, in any other lease, as against any other tenant,
and Owner shall not be liable to Tenant for violation of the
same by an other tenant, its servants, employees, agents,
visitors or licensees.


Glass:

37. Owner shall replace, at the expense of Tenant, any  and
all  plate  and  other glass  damaged  or broken from any cause
whatsoever in  and  about  the demised premises. Owner may
insure and keep insured. ar Tenant's expense, all plate and other
glass in the demised premises for and in the name of Owner.
Bills for the premiums therefore shall be rendered  by Owner to
Tenant at such times as Owner  may elect, and shall be  due
from, and payable by Tenant when rendered, and  the amount
thereof shall be deemed to be, and be paid as, additional
rent.

Estoppel  Certificate:

38.   Tenant, at any time, and  from time to rime, upon at
least ten (10) days prior notice by Owner, shall execute,
acknowledge and deliverto Owner,  and/or to any other person,
firm or corporation specified  by Owner, a statemenf c
ertifying that this lease is unmodified and in full force and
effect (or if there have been modifications, that  the  same
is  in full  force  and  effect  as  modified and stating the
modifications), stating the dates to which the rent and
additional rent have been paid, stating whether or not
to Tenant's knowledge, there exists any default by Owner under
this lease, and, if so, specifying each such default and
such other informationas sball be reasonably required of Tenant.


Successors
and Assigns:


40. The covenants, conditions and  agrcemems comamed in this
lease shall bind and inure to the benefit of Owner and Tenant
and their respective heirs,  distributees. executors,
administrators, successors, and  except as otherwise  provided
in this lease, their assigns, Tenant shall look only  to
Owner's estate and interest in the land and building for the
satisfaction of Tenant's remedies for the collection of a
judgement (or other judicial process) against Owner in the
event of any default by Owner hereunder, and no other property
or assets of such Owner (or any partner, member, officer or
director thereof, disclosed or undisclosed), shall be subject
to levy, execution or other enforcement procedure for the
satisfaction of Tenant's remedies under, or with respect to,
this lease, the relationship of Owner and Tenant hereunder, or
Tenant's use and occupancy of the premises.

SEE RIDER ANNEXED HERETO AND MADE A PART HEREOF



In Witness Whereof, Owner and Tenant  have  respectively
signed  and  sealed  this  lease  as of the day and
year first above written.

80 ORVILLE DRIVE ASSOCIATES LLC
By:  Rechler Equity I LLC, its managing member
By:  Rechler Equity MM I LLC, its managing member
By:  Rechler Equity LLC, its managing member

By: /s/ Mitchell Rechler
Name:_______________
Title:______________


SCIENTIFIC INDUSTRIES, INC.

By: /s/ Helena Santos
_____________________

Name:

Title:

                   ACKNOWLEDGEMENT



STATE OF NEW  YORK,

SS.:

COUNTY OF

    On the                          day of
in the year              before me,  the undersigned,
a Notary  Public  in and for said State, personally appeared
__________________________________personally known to me or
proved to me on the basis of satisfactory evidence  to be the
inclividual(s) whose  name(s)  is (are) subscribed  to the
within instrument  and acknowledged to me that he/sbe/they
executed  the same  in his/her/their  capacity(ies),  and that
by his/her/their signature(s)  on the instrument, the
individual(s), or the person  upon behalf of which the
individual(s) acted, executed the instrument.


_______________________
NOTARY  PUBLIC

           IMPORTANT   -  PLEASE   READ



RULES AND REGULATIONS  ATTACHED  TO AND MADE A PART oF THIS
LEASE
IN ACCORDANCE WITH ARTICLE 36.


   1.  The sidewalks, entrances. driveways, passages, courts,
elevators, vestibules, stairways, corridors or halls shall not,
be  obstructed or encumbered by Tenant or used for any purpose
other than for ingress or egress from the demised premises  and
for delivery of merchandise  and equipment in a prompt and
efficient manner, using elevators and passageways designated for
such delivery by Owner. There  shall not be used many space, or
in  the public hall of the building, either by Tenant or by
jobbers or others in the delivery  or receipt of merchandise,
any hand trucks, except those equipped with rubber tires and
sideguards.  If  said premises are situated on the ground  floor
of the  building. Tenant shall further, at Tenant's expense.
keep the sidewalk and curb in fron1 of said premises clean
and me from see. snow,din and rubbish.

    2. The water and wash closest and plumbing fixtures shall
not be used for any  purposes other  than  those  for  which
they  were  designed or constructed, and no  sweepings, rubbish,
rags,  acids  or other substance shall be deposited therein,
and the expense of any breakage, stoppage, or damage resulting
from the violation of this rule shall be borne by Tenant,
whether or not caused by Tenant, its clerks, agents, employees
or visitors.

   3. No carpet, rug or other article shall be hnng or shaken
out  of any window of the building; and Tenant shall nor sweep
or throw. or permit to be swept  or lhrc:wn substances from the
demised  premises, any  dirt or other substance into any of the
corridors of halls, elevators, or out of the doors or windows or
stairways of the building, and Tenant shall not use, keep, or
permit to be used or kept, any foul or noxious gas or substance
in the  demised  premises, or permit or suffer  the demised
premises to  be occupied or used in a manner offensive or
objectionable to Owner or other occupant of the  buildings by
reason of noise, odors, and or vibrations, or interfere in
any way, with other tenants or those having business therein,
nor shall any bicycles, vehicles, animals, fish or birds be
kept in or about the  building.   Smoking or carrying lighted
cigars or cigarettes in the building is prohibited.

    4.  No  awnings  or other projections  shall be attached
to the outside walls of the building without the prior written
consent of Owner.

_   5. No sign, advertisement, notice or other lettering shall
be exhibited, inscribed, painted or affixed by Tenant on any
part of the outside of the demised premises or the building, or
on the inside of the demised premises if the same is visible
from the outside of the demised premises, withou the prior
written consent of Owner, except that the name of Tenant may
appear on the entrance door of the demised premises. In the
event of the violation of the foregoing by Tenant, Owner may
removes ame without any liability, and may charge the expense
incurred by such removal to Tenant.  Interior signs on doors
and directory tablet shall be inscribed, painted, or affixed
for Tenant by Owner at the expense of Tenant, and shall be of
a size, color and style acceptable to Owner.

6.  Tenant shall not mark, paint, drill into,  or in any way
deface any part of the demised premises or the building of
which they form a part.  No boring, cutting, or stringing of wires
shall be permitted, except with the prior written consent of
Owner and as Owner may direct.  Tenant shall not lay linoleum,
or other similar floor covering, so that the same shall come
in direct contact with the floor of the demised premises,  and,
if linoleum or other similar floor covering is desired to be
used, an  interlining of builder's deadening felt shall be first
affixed to the floor, by a paste or other material, soluble in
water, the use of cement or other similar adhesive material
being expressly prohibited.

    7.  No additional locks or bolts of any kind shall be
placed upon  any of the doors or windows by  Tenant, nor shall
any changes be made in existing locks or mechanism thereof,
Tenant must, upon the termination of his tenancy, restore to
Owner all keys of stores, offices and toiler rooms either
furnished to, or otherwise procured by, Tenant, and in the
event of the loss of any keys, so furnished.  Tenant  shall
pay to Owner the cost thereof.

    8.   Freight, furniture, business equipment, merchandise
and bulky matter  of  any description shall be  delivered to
and  removed from  the demised premises only on the freight
elevators and through the service entrances and  corridors,
and  only   during   hours, and  in  a  manner approved by Owner,
Owner reserve sthe right to inspect all freight to be brought
into the building, and  to exclude from the building all freight
which violates any of these Rules and Regulations of the lease,
of which these Rules and Regulations are a part.

   9:  Tenant shall not obtain for use upon  the demised premises
ice, drinking water, towel and other similar services, or accept
barbering or bootblacking services in the demised premises,
except  from  persons authorized by  Owner, and at  hours
and  under regulations fixed  by Owner.   Canvassing,  soliciting
and peddling to the building is prohibited and Tenant  shall
cooperate to prevent the same.


  ll.   Owner shall have the right to prohibit any advertising by
Tenant which in Owner's opinion, tends to impair  the reputation
of the building or its desirability as a loft building, and upon
written  notice from Owner. Tenant  shall refrain  from or
discontinue such advertising.

12. Tenant shall not bring or permit to be brought or kept, in
or on the demised premises, any inflammable, combustible, explosive
or hazardous fluid, material, chemical or substance. or cause or
permit any odors of  cooking or other processes, or any unusual or
other objectionable odors, to permeate in, or emanate from, the
demised premises.

    13.  Tenant shall not use the demised premises in a manner
which disturbs or  interferes with  other  tenants  in the
beneficial use  of  their premises.

    14.  Refuse and  Trash.     (1) Compliance by Tenant.  Tenant
covenants and agrees, at  its sole  cost and expense,to comply with
all present and future laws, orders, and  regulations, of all state,
federal, municipal, and local governments, departments,  commissions
and boards  regarding the  ollection, sorting, separation and
recycling of waste products, garbage, refuse  and  trash.
Tenant shall  sort  and separate such waste products, garbage,
refuse  and  trash into  such categoriesas providedby law.  Each
separately sorted category of waste products,  garbage.  refuse
and  trash  shall  be  placed in  separate receptacles reasonably
approved by  Owner, Tenant  shall  remove, or cause to be removed
by a contractor acceptable to Owner, at Owner's sole discretion,
such items  as Owner may  expressly designate. (2) Owner's Rights
in Event of Noncompliance.  Owner has  the option  to refuse
to collect or accept from Tenant waste  products. garbage, refuse
or  trash  (a) that  is not  separated and sorted as required by
law or (b) which consists of such items as  Owner may  expressly
designate for Tenant's removal, and to require Tenant  to arrange
for such collection at  Tenant's sole cost  and expense, utilizing
a contractor satisfactory to Owner, Tenant shall pay all costs,
expenses, fines, penalties or damages that may be imposed on
Owner or Tenant by reason  of Tenant's failure to comply with the
provisions of this Building Rule  14, and, at Tenant's sole
cost and expense, shall indemnity, defend and  hold Owner harmless
(including reasonable legal fees and expenses) from  and against
actions, claims  and suits arising  from such noncompliance,
utilizing counsel  reasonably satisfactory to Owner
___________________________________________________________________
RIDER TO LEASE dated August 5, 2014 between 80 ORVILLE
DRIVE ASSOCIATES LLC, as Owner, and SCIENTIFIC INDUSTRIES, INC.,
as Tenant

41.	Definitions.  For purposes of this lease, the term
"Building" shall mean the building located at 80 Orville Drive,
Bohemia, New York of which the Demised Premises form a part, and
the term "Real Property" shall mean the Building and the land and
improvements appurtenant to and used in connection with the Building.
The parties hereby stipulate and agree that the Demised Premises
(herein referred to as the "Demised Premises" or the "demised
premises") contains 18,950 rentable square feet of space
(designated at Suite 102) in the Building containing 92,742
rentable square feet which constitutes 20.43 percent of the area
of the Building ("Tenant's Proportionate Share").  For the purposes
of this rider, all references to the term "Landlord" shall mean and
refer to Owner.

42.	Term.

       (a)	The term ("Term", "term" or "Demised Term") of this
lease, Tenant's right to occupy the Demised Premises and Tenant's
obligation to pay Rent (as defined in Paragraph 43 hereof) and all
items of additional rent shall commence on the later to occur of (i)
Substantial Completion (as hereinafter defined) of Landlord's Work
(as hereinafter defined), and (ii) November 1, 2014 (the "Commencement
Date"); provided, however, that, subject to the terms of Paragraph 64
hereof, if Substantial Completion has not occurred on or prior to
January 31, 2015, then Tenant shall have the right to holdover under
the 70 Orville Lease (as hereinafter defined), without penalty,
until Substantial Completion of Landlord's Work and delivery of
possession of the Demised Premises to Tenant in the condition required
hereunder have occurred.  Upon the occurrence of the Commencement
Date, the 70 Orville Lease shall terminate.  The Term of this lease
shall expire on the day preceding the day which is ten (10) years and
three (3) months after (x) the Commencement Date (but only if the
Commencement Date occurred on the first day of a calendar month) or
(y) the first day of the first full calendar month following the
Commencement Date (if the Commencement Date did not occur on the
first day of a calendar month) (the "Expiration Date").

        (b)	The terms "Substantial Completion" and "Substantially
Completed" (or other variations thereof), as used herein, are defined
to mean when the only items of Landlord?s Work needed to be completed
are punchlist items, the non-completion of which would not delay
occupancy, including, without limitation, such details of construction,
decoration, mechanical adjustment or installation which do not hinder
or impede the use or occupancy of the Demised Premises for its
intended use; but if Landlord shall be delayed in such "Substantial
Completion" as a result of (i) Tenant's changes to the plans or
specifications attached hereto as Exhibit A; (ii) Tenant's request
for materials, finishes or installations other than Landlord's
standard; (iii) the performance or completion of any work, labor or
services by a party employed by Tenant; (vi) Tenant's interference
or failure to reasonably cooperate with the performance of
Landlord's Work (including without limitation the execution of
documents required by the local municipality); (v) Tenant's
failure to approve, or approve subject to adjustments required to
reflect the Rental Plan annexed hereto as Exhibit A, final
construction documents within five (5) business days after
submission thereof to Tenant for approval; (vi) Tenant's failure
to provide Landlord with finish specifications for Landlord's
Work within seven (7) days of Landlord's delivery to Tenant of a
fully-executed original of this lease; or (vii) Tenant's failure
to pay the initial installment of Rent and/or the other monies
to be paid to Landlord as required hereunder (it being understood
and agreed that Landlord shall not be required to commence the
performance of Landlord?s Work until all such deliveries and
payments have been made) (all such delays being hereinafter
referred to as ?Tenant Delay?); then the Commencement Date
shall be accelerated by the number of days of such Tenant Delay
(however, Landlord shall not be obligated to deliver the Demised
Premises to Tenant and Tenant shall not have the right to occupy
the Demised Premises until Landlord?s Work is ?Substantially
Completed?).  Moreover, in the event of an accumulation of
Tenant Delays in excess of forty-five (45) days in the aggregate,
the Commencement Date shall automatically be deemed to be the
date that is ten weeks following the effective date of this
lease.  Tenant waives any right to rescind this lease under
Section 223-a of the New York Real Property Law or any successor
statute of similar import then in force and further waives the
right to recover any damages which may result from Landlord's
failure to deliver possession of the Demised Premises on the
Commencement Date set forth in Paragraph 42(a) above.  Landlord
will obtain a Certificate of Occupancy or Certificate of
Completion for the Demised Premises after the Commencement Date.
Notwithstanding anything to the contrary contained herein,
Landlord shall use commercially reasonable efforts to complete
any punchlist items within thirty (30) days of Substantial
Completion, provided same shall be reasonably capable of
completion within such timeframe.

       (c)	A "Lease Year" shall be comprised of a period
of twelve (12) consecutive months (except the eleventh Lease Year,
which shall consist of three (3) consecutive months).  The first
Lease Year shall commence on the Commencement Date but,
notwithstanding the first sentence of this paragraph, if the
Commencement Date is not the first day of a month, then the first
Lease Year shall include the additional period from the
Commencement Date to the end of the then current month.  Each
succeeding Lease Year shall end on the anniversary date of the
last day of the preceding Lease Year (except the eleventh Lease
Year).  For example, if the Commencement Date is December 1, 2014,
the first Lease Year would begin on December 1, 2014, and end on
November 30, 2015, and each succeeding Lease Year would end on
November 30th (except the eleventh Lease Year, which would end
on February 28, 2025).  If, however, the Commencement Date is
December 2, 2014 the first Lease Year would end on December 31,
2015, the second Lease Year would commence on January 1, 2016,
and each succeeding Lease Year would end on December 31st
(except the eleventh Lease Year, which would end on March 31,
2025).

       (d)	If, within five (5) business days after
Landlord's delivery to Tenant of a notice (which may be via fax
or email or via written notice) confirming the Commencement Date
under this lease and, if applicable, the date of substantial
completion, Tenant does not object to the accuracy of the dates
set forth in such notice, Tenant shall be deemed to have
approved the dates set forth in said notice.

    	(e)	Tenant shall be provided access to the Demised
Premises (i) three (3) weeks prior to the Commencement Date for
the setting up and installation of telephone, computer and
internet connections, compression lines and an alarm system,
and (ii) two (2) weeks prior to the Commencement Date in order
to place inventory and personal property and for installation
of furniture, fixtures and equipment, provided, however, that
(a) in no event shall Tenant install any racks in the Demised
Premises in the event Substantial Completion has not occurred
and (b) in no event shall Tenant materially interfere with
Landlord?s Work during such early access periods.  If Tenant
or its agents and/or contractors enter the Demised Premises
prior to the Commencement Date in order for Tenant to install
its telephone, internet and computer lines, alarm system, or
furniture, or for the performance of any Alterations (as
hereinafter defined) or installations in preparation for Tenant's
 occupancy thereof, all of the provisions of this lease,
except Tenant's obligation to pay Rent, shall govern such entry
(including without limitation, Tenant's insurance and
indemnification obligations).  Any such entry shall be subject
to Landlord?s prior written consent.    Prior to entering the
Demised Premises Tenant shall deliver to Landlord (a) evidence
of all insurance policies required to be maintained by Tenant
under this lease, and (b) evidence of insurance satisfactory
to Landlord maintained by the contractors or vendors entering
the Demised Premises.  Tenant shall coordinate Tenant?s (and/or
Tenant's contractors and/or Tenant?s employees) entry upon the
Demised Premises and the performance of the above-referenced
installations (and the timing thereof) with Landlord, and Tenant
(and Tenant's contractors and employees) shall not interfere with
Landlord's performance of Landlord's Work (hereinafter defined),
if any, in entering upon the Demised Premises and/or in performing
such installations.  In the event that Tenant (and/or Tenant's
contractors and/or Tenant's employees) interferes with Landlord's
performance of Landlord's Work, such interference shall
be deemed a Tenant Delay (in addition to those delineated herein).

43.	Rent.

       (a)	During the term of this lease, Tenant shall pay
minimum annual rent ("Rent?) as follows:

During the first Lease Year, the Rent shall be $176,866.62,
payable $37,899.99 for the first month and $12,633.33 for each
of the second through twelfth months.

During the second Lease Year, the Rent shall be $156,147.96,
payable in equal monthly installments of $13,012.33.

During the third Lease Year, the Rent shall be $160,832.40,
payable in equal monthly installments of $13,402.70.

During the fourth Lease Year, the Rent shall be $165,657.36,
payable in equal monthly installments of $13,804.78.

During the fifth Lease Year, the Rent shall be $170,627.16,
payable in equal monthly installments of $14,218.93.

During the sixth Lease Year, the Rent shall be $175,746.00,
payable in equal monthly installments of $14,645.50.

During the seventh Lease Year, the Rent shall be $181,018.32,
payable in equal monthly installments of $15,084.86.

During the eighth Lease Year, the Rent shall be $186,448.92,
payable in equal monthly installments of $15,537.41.

During the ninth Lease Year, the Rent shall be $192,042.36,
payable in equal monthly installments of $16,003.53.

During the tenth Lease Year, the Rent shall be $197,803.56,
payable in equal monthly installments of $16,483.63.

During the eleventh Lease Year (which shall consist of
three (3) months only), the Rent shall be $25,667.76, payable
$16,978.14 for the first month and $4,344.81 for each of the
second and third months.

       (b)	Additionally, should the Commencement Date
be a date other than the first day of a calendar month, Tenant
shall pay a pro rata portion of the Rent on a per diem basis,
based upon the second full calendar month of the first Lease
Year, from such date to and including the last day of that
current calendar month, and the first Lease Year shall
include said partial month.  The rent payable for such
partial month shall be in addition to the Rent payable
pursuant to the Rent schedule set forth above.  Tenant
will pay any partial month's Rent within ten (10) days of
Landlord's delivery of an invoice
therefor.

       (c)	The minimum annual rent hereinabove provided
for shall be in addition to all other payments to be made by
Tenant as herein provided except as set forth to the contrary
in this lease.  It is the purpose and intent of the parties
hereto that the minimum annual rent shall be absolutely net to
Landlord, except as set forth to the contrary in this lease,
so that this lease shall yield, net to the Landlord, the minimum
annual rent, and that all costs, expenses and obligations of
every kind and nature whatsoever relating to the Demised
Premises which may arise or become due during the term of this
lease shall be paid by Tenant and that Landlord shall be
indemnified and saved harmless by Tenant from and against the
same, except as otherwise expressly provided in this lease.

       (d)	Any sums of money required to be paid by
Tenant to Landlord in addition to the rent reserved under
this Paragraph 43, shall be deemed additional rent, shall be
paid within ten (10) days after written demand therefor
(unless another time period is provided herein) without
deduction or offset, and in the event Tenant fails to pay
such additional rent, Landlord shall be entitled to the same
remedies under this lease or by law, as are available to
Landlord for the nonpayment of rent, including, without
limitation, summary dispossess proceedings.

        (e)	Notwithstanding the Rent schedule set forth
in Paragraph 43(a) above, provided Tenant is not in monetary
default of any of its obligations under this lease beyond the
expiration of any applicable notice and cure period, Tenant
shall receive a Rent credit in the total amount of $34,346.85
to be applied in three (3) installments of $11,448.95 toward
the Rent due with respect to each of the second and third
full calendar months of the first Lease Year and the first
full calendar month of the second Lease Year.

44.	Utilities.

	(a)	Tenant shall furnish and pay for, at its sole
cost and expense, all utilities supplied to the Demised Premises
(with the exception of water) by any utility company, whether
public or private, including but not limited to gas, electricity,
fuel oil and telephone.   Tenant shall open an account in its
own name on or before the Commencement Date.  Notwithstanding
the foregoing, if as of the Commencement Date, the electric
and/or natural gas service is not separately metered for the
Demised Premises Tenant shall pay to Landlord, as additional
rent, within ten (10) days of Landlord?s invoice thereof, a
prorata share of the electricity and/or natural gas charges
as measured by the meter servicing the Demised Premises (such
prorata share to be calculated based upon the portion of the
area served by such meters represented by the Demised Premises).
In the event Tenant fails to open an account in its own name
with the electric and/or natural gas utility company as of the
Commencement Date (or as of the date that the Demised Premises
becomes separately metered, if later than the Commencement Date),
Tenant shall reimburse Landlord for the utility charges incurred
by Landlord in providing service to the Demised Premises prior
to the date the accounts have been transferred and shall pay
Landlord's administrative fee of seven and one-half (7.5%)
percent of the amount so due.  Such sums shall be paid by
Tenant as additional rent, within ten (10) days of Landlord's
invoice therefor.  Nothing in the foregoing shall be deemed to
relieve Tenant from the obligation to transfer the accounts to
its name or to prevent Landlord from terminating the utility
service account in its name effective as of the Commencement
Date or any date thereafter.

	(b)	The parties hereby acknowledge and agree that
the Demised Premises are not separately metered for water or for
sprinkler supervisory service.  In addition to the additional
rent payable under Paragraph 47 below, Tenant shall pay to
Landlord, as additional rent, within ten (10) days of Landlord's
invoice therefor, Tenant's Proportionate Share of Landlord's cost
for water consumed at the Building and/or Real Property, for
sprinkler supervisory service and for sewer charges, if any,
assessed or imposed against the Building and/or Real Property.
Tenant shall not use water for other than normal lavatory
purposes.

45.	Alterations.

	(a)	Supplementing Paragraph 3 of the printed form
portion of this lease, any amount billed by Landlord's
construction affiliate in connection with any work performed
by such affiliate on behalf of Tenant shall be deemed to be
additional rent for purposes of this lease.  Further supplementing
Paragraph 3 of the printed form portion of this lease, with respect
to any and all alterations, installations, additions and
improvements (each, an "Alteration") permitted by Landlord to
be performed by or on behalf of Tenant in the Demised Premises
(other than Landlord?s Work), Tenant will deliver to Landlord
certificates evidencing Worker's Compensation Insurance and
Contractor's General Liability Insurance in the amount reasonably
satisfactory to Landlord (but in no event less than the amounts
set forth in paragraph 59 herein) prior to the commencement of
such work.  Any and all Alterations and any and all structures
or fixtures, except movable trade fixtures not attached to the
realty, installed by or on behalf of Tenant shall be deemed
attached to the freehold and automatically become the property
of Landlord upon installation, unless Landlord shall elect
otherwise.  If Landlord elects to have Tenant remove same at the
expiration of the term of this lease, Tenant shall, prior to the
expiration or sooner termination of the term of this lease,
perform such removal and repair, at its own cost and expense,
any damage to the Demised Premises caused by said removal.
Notwithstanding the foregoing, Landlord may, at its option, in
lieu of requiring Tenant to perform such removal and restoration,
invoice Tenant for the reasonable estimated cost for performing
such work and Tenant shall pay such invoice, as additional rent,
within thirty (30) days of such invoice.   All Alterations
(other than those performed by Landlord or its construction
affiliate) made to the Demised Premises shall be subject to
Landlord's construction inspection fee of 8% of the cost thereof
which shall be payable, as additional rent, to Landlord's
construction affiliate.  Such 8% fee shall not be charged in
connection with Tenant?s initial setup of the Demised Premises
in order to prepare the Demised Premises for Tenant's initial
occupancy thereof.  In receiving such fee, Landlord assumes no
responsibility for the quality or manner in which any Alterations
are performed (except for those Alterations performed by Landlord
or Landlord's construction affiliate).  Tenant shall not, without
the express written consent of Landlord, enter upon the roof or
attach or install anything thereon or make any Alterations thereto.
With respect to any mechanic?s lien for which Tenant is responsible
for removing or bonding hereunder, Tenant shall reimburse Landlord
for all costs and expenses incurred by Landlord in connection
therewith (including, without limitation, reasonable attorneys'
fees and disbursements of Landlord and any sums payable to Landlord's
lender in connection therewith).  Notwithstanding anything
contained herein to the contrary, Landlord shall not unreasonably
withhold, condition or delay its consent to any proposed non-
structural and interior Alteration, provided that, Landlord shall
have the right to require Tenant to employ Landlord or its
construction affiliate to perform any Material Alteration (as
hereinafter defined).  The term "Material Alteration", as used
herein, means any Alteration which may, in the reasonable opinion
of Landlord (i) be structural in nature; (ii) affect the exterior
or any structural portions or components of the Building; (iii)
be visible from outside of the Demised Premises; (iv) affect
the usage or proper functioning of any of the Building systems
(including, without limitation, the heating, ventilation, air
conditioning, plumbing, electrical, sprinkler or security systems
serving the Building); (v) jeopardize health safety or life
safety; (vi) require a change to the certificate of occupancy
for the Building; (vii) require the issuance of a building permit
or other authorization by any governmental or quasi-governmental
entity exercising jurisdiction over the Building; (viii) require
the consent of any mortgagee or ground lessor of the Building
and/or the Real Property; (ix) cause any previously non-mandatory
legal requirement to become a mandatory legal requirement with
regard to the Building (including, without limitation, any such
legal requirement set forth in the Americans with Disabilities
Act); or (x) have a cost of completion in excess of $10,000.00.
With respect to any such Material Alterations performed by
Landlord or Landlord?s construction affiliate, Landlord or
Landlord's construction affiliate shall charge Tenant for such
work at rates that are comparable to those of other general
contractors in the local market (i.e., Suffolk County, New York).
Landlord hereby agrees that Tenant shall be permitted to install
a kitchenette and compressor lines within the Demised Premises
provided that such installation does not materially interfere
with or delay Landlord's Work.

	(b)	Tenant shall not be permitted to make, or to
engage a contractor or artist to make, any Alterations,
decorations, installations, additions or other improvements
("Visual Alteration?) which may be considered a work of visual
art of any kind, and/or which might fall within the protections
of the Visual Artists Rights Act of 1990 ("VARA") unless:  (i)
Tenant obtains, from each artist and/or contractor who will be
involved in said Visual Alteration, valid written waivers of
such artist's and/or contractor's rights under VARA in form
and content reasonably acceptable to Landlord; and (ii) Landlord
consents to such Visual Alteration in writing.  In the event that
\a claim is brought under VARA with respect to any Visual
Alteration performed in or about the Building by or at the
request of Tenant or Tenant's agents or employees, Tenant shall
indemnify and hold harmless Landlord against and from any
and all such claims.  If any action or proceeding shall be
brought against Landlord by reason of such claim under VARA,
Tenant agrees that Tenant, at its expense, will resist and
defend such action or proceeding and will employ counsel
reasonably satisfactory to Landlord therefor.  Tenant shall
also pay any and all damages sustained by Landlord as a
result of such claim, including, without limitation,
reasonable attorney?s fees and the cost to Landlord of
complying with VARA protections (which shall include damages
sustained as a result of Landlord's inability to remove
Visual Alterations from the Demised Premises).  Failure of
Tenant to strictly comply with the provisions of this
Paragraph 45(b) shall be deemed a default under this lease,
and Landlord shall be entitled to pursue all appropriate
remedies provided herein, as well as at law or in equity.
The provisions of this Paragraph 45(b) shall survive the
expiration or sooner termination of this lease.

46.	Sewer/Sanitary.   It is understood and agreed that
in the event that sewer lines are installed or brought to
the Building, Landlord shall have no obligation to connect
the Demised Premises to such sewer lines; however, the Tenant
may, at its own cost and expense, request Landlord to connect
to such sewer lines.  In the event Landlord is required to
connect the Building to such sewer lines, Tenant shall
reimburse Landlord, as additional rent, within ten (10) days
of Landlord's demand therefor, Tenant's Proportionate Share
of all costs and expenses incurred by the Landlord, directly
or indirectly, in connection with the Landlord's compliance
with such requirement.

47.	Common Area Maintenance.  Tenant agrees to pay, upon
Landlord's demand therefor, as additional rent, an amount
equal to Tenant's Proportionate Share of "Landlord's Cost"
 of maintenance and repair of the Building and the landscaped,
parking and other common areas thereof.  The term "Landlord's
Cost", as used herein, shall be deemed to include, without
limiting the generality of the foregoing, gardening,
landscaping, planting, replanting and replacement of flowers,
shrubbery, trees and grass, striping, the cost of electricity
and maintenance and replacement of exterior fixtures and bulbs,
with respect to the parking areas, repair of paving, curbs
and walkways, repair and cleaning of drainage facilities, trash,
rubbish and garbage removal with respect to the exterior of
the Real Property, snow and ice removal, exterminating, exterior
lighting, maintenance repair and replacement of the sanitary
system, maintenance and repair of the roof,  rental of
machinery and equipment, cost of personnel to implement
all of the foregoing, security and security guard service,
if any, and other similar costs of the type incurred in the
operation of comparable properties plus Landlord's administrative
fee of seven and one-half percent on any amounts exceeding the
Base CAM Charge. Landlord and Tenant stipulate and agree that
Tenant?s Proportionate Share of Landlord?s Cost shall be
initially $852.75 per month (the "Base CAM Charge").  The parties
hereby agree that the Base CAM Charge is included in the rent
set forth in Paragraph 43 hereof.  In the event that Tenant?s
Proportionate Share of Landlord's Cost increases over the
Base CAM Charge at any time during the term of this lease,
Landlord shall have the right to bill such increase to
Tenant monthly or otherwise and Tenant shall pay such increase
as additional rent within ten (10) days of Landlord's written
demand therefor.  Notwithstanding the foregoing, in the event
that maintenance and repair of the Building, any building
systems or the landscaped, parking and other common areas
thereof are occasioned by the negligence or willful misconduct
of Tenant, its agents, contractors, employees or invitees,
Landlord shall perform the repair, at Tenant?s sole cost
and expense.

48.	Repairs.

	(a)	Subject to the provisions of Paragraphs 9
and 58 of this Lease, during the full term of this lease,
Landlord shall make all structural repairs to the Demised
Premises, except those which shall have been occasioned by
the negligence or willful misconduct of Tenant, its agents,
contractors, employees or invitees, which repairs Landlord
shall make at Tenant?s sole cost and expense. Structural
repairs are hereby defined to be repairs to the roof (but
subject to the terms of Paragraph 47 hereof), the roof
supports, the bearing walls, foundation, the structural
steel and the exterior of the Building (except for windows,
doors and plate glass).   Except for Landlord's obligations
specifically set forth in this Paragraph 48,  Tenant shall,
at its own cost and expense, keep the Demised Premises in
good condition, repair and appearance at all times
throughout the term of this lease including, without
limitation, (i) maintenance, repair and replacement of
the electrical, plumbing, sprinkler (but only to the
extent that such sprinkler system is in the Demised
Premises or exclusively services the Demised Premises),
heating, air conditioning, ventilation, life safety and
all other mechanical systems (but only to the extent
that such life safety and other mechanical systems are
in the Demised Premises or exclusively service the Demised
Premises) servicing the Demised Premises; (ii) regularly-
scheduled cleaning and maintenance of the interior of
the Demised Premises; and (iii) the maintenance, repair
and replacement of all windows, doors and plate glass.
Notwithstanding anything to the contrary contained herein,
upon the expiration or sooner termination of this lease,
the Building systems shall be delivered to Landlord in
working order.  Tenant shall at all times obtain and keep
in full force and effect for the benefit of Landlord and
Tenant with a responsible company doing business in Suffolk
County reasonably approved by Landlord a service, repair
and maintenance contract with respect to the heating,
ventilating and air conditioning systems servicing the
Demised Premises.  A copy of such contract and renewals
thereof shall, upon issuance and thereafter not later
than ten (10) days prior to expiration, be furnished to
Landlord together with evidence of payment.
Notwithstanding anything to the contrary contained
herein, Tenant shall not be required to make any repairs
(whether structural or non-structural) to the extent same
are necessitated by the gross negligence or willful
misconduct of Landlord or its agents, employees or
contractors.

	(b)	If the Demised Premises shall be totally
damaged or rendered wholly untenantable by fire or other
casualty, and Landlord has not terminated this lease
pursuant to subsection (c) of Article 9 hereof, then
Landlord shall, as soon as reasonably practicable following
the occurrence of the subject fire or other casualty,
deliver to Tenant written notice of Landlord?s independent
architect?s estimated time for restoration of the Premises.
If the estimated date of completion of such restoration work
(the "Estimated Date of Completion") is more than twelve
(12) months, then Tenant shall have the right to
terminate this lease by written notice delivered to Landlord
within thirty (30) days following receipt of such written
notice by Landlord.  In addition, if Landlord has not
completed the making of the required repairs and restored
and rebuilt the Premises and/or access thereto prior to the
Estimated Date of Completion, Tenant may serve notice on
Landlord of its intention to terminate this lease and, if
within thirty (30) days thereafter Landlord shall not have
completed the making of the required repairs and restored
and rebuilt the Premises, this lease shall terminate on the
expiration of such thirty (30) day period as if such
termination date were the Expiration Date.  In the event
of the occurrence of a casualty described in the first
sentence of this Paragraph 48(b), provided that Landlord
does not terminate this lease pursuant to subsection
(c) of Article 9 hereof, Landlord shall use commercially
reasonable efforts to relocate Tenant to temporary space
in a building owned by Landlord or Landlord?s affiliate,
subject to availability.

49.	Taxes.

	(a)	As used in and for the purposes of this
Paragraph 49, the following definitions shall apply:

		(i)	"Taxes" shall be the real estate
taxes, assessments, special or otherwise, sewer rents,
rates and charges, and any other governmental charges,
general, specific, ordinary or extraordinary, foreseen or
unforeseen, levied on a calendar year or fiscal year basis
against the Real Property or any interest therein.
Notwithstanding the foregoing, any tax benefit granted to,
or for the exclusive benefit of another tenant of the
Building shall be disregarded for the purposes of
calculating "Taxes" so that the ?Taxes? shall be all
payments that would have been payable by Landlord with
respect to the Real Property if not for such additional
benefit, it being understood and agreed that Landlord
shall not have the right to collect more in Taxes than
Landlord is obligated to pay.  If at any time during
the Term the method of taxation prevailing at the date
hereof shall be altered so that there shall be levied,
assessed or imposed in lieu of, or as in addition to,
or as a substitute for, the whole or any part of the
taxes, levies, impositions or charges now levied,
assessed or imposed on all or any part of the Real
Property (w) a tax, assessment, levy, imposition or
charge based upon the rents received by Landlord,
whether or not wholly or partially as a capital levy
or otherwise, or (x) a tax, assessment, levy,
imposition or charge measured by or based in whole or
in part upon all or any part of the Real Property and
imposed on Landlord, or (y) a license fee measured by
the rent payable by Tenant to Landlord, or (z) any other
tax, levy, imposition, charge or license fee however
described or imposed; then all such taxes, levies,
impositions, charges or license fees or any part
thereof, so measured or based, shall be deemed to be
Taxes; provided, however, in no event shall Taxes
include any income taxes imposed on Landlord as the
owner of the Real Property (unless imposed as a
substitute or in lieu of other Taxes).

		(ii)	"Base Year Taxes" shall be
the Taxes actually due and payable with respect to
the 2014/2015 tax year.

		(iii)	"Escalation Year" shall mean
each calendar year which shall include any part of
the Term.

	(b)	Tenant shall pay Landlord increases
in Taxes levied against the Real Property as follows:
If the Taxes actually due and payable with respect
to the Real Property in any Escalation Year shall be
increased above the Base Year Taxes, then the Tenant
shall pay to the Landlord, as additional rent for
such Escalation Year, a sum equal to Tenant's
Proportionate Share of said increase ("Tenant's Tax
Payment" or "Tax Payment").

	(c)	Landlord shall render to Tenant a
statement containing a computation of Tenant's Tax
Payment ("Landlord's Statement").   Within fifteen
(15) days after the rendition of the Landlord's
Statement,  Tenant shall pay to Landlord the amount
of Tenant?s Tax Payment.  At Landlord's option, on
the first day of each month following the rendition
of each Landlord?s Statement, Tenant shall pay to
Landlord, on account of Tenant?s next Tax Payment,
a sum equal to one-twelfth (1/12th) of Tenant's last
Tax Payment due hereunder, which sum shall be subject
to adjustment for subsequent increases in Taxes.

	(d)	Intentionally omitted.

	(e)	Only Landlord shall have the right to
institute tax reduction or other proceedings for the
purpose of changing the Taxes (a "Tax Contest").
Tenant shall not institute or maintain any Tax Contest.
If, as a result of a Tax Contest, Landlord receives a
refund of Taxes attributable to any tax year or tax
years occurring during the Term (including the Base
Year Taxes), then, Landlord shall recalculate each
affected Tenant?s Tax Payment based upon the finally
determined Taxes for each affected Escalation Year
and deliver a revised Landlord?s Statement to Tenant.
If the Tenant?s Tax Payment on the revised Landlord's
 Statement exceeds the amount paid by Tenant for the
original Tenant?s Tax Payment, then Tenant shall pay
to Landlord such excess, as additional rent, within
fifteen (15) days of the delivery of the revised
Landlord's Statement.  In the event that the amount
paid by Tenant for the original Tenant's Tax Payment
exceeds the amount of the revised Tenant's Tax Payment,
then, provided Tenant had made full payment of Tenant's
Tax Payment for all affected Escalation Years, Landlord,
at its option, shall either refund such excess to Tenant,
or credit such excess to Tenant towards a future payment
of Taxes.  Landlord shall have the right to include in
the calculation of Taxes (for a subsequent tax year), or
to deduct from any refund that may become due to Tenant
as a result of the Tax Contest, the reasonable costs
and expenses incurred by Landlord in instituting and
prosecuting a Tax Contest hereunder.  If at the end of
the Term of this lease there remains a balance relating
to any overpayments made by Tenant with respect to
Taxes, such balance shall be refunded to Tenant.

	(f)	Landlord's failure to render a
Landlord's Statement with respect to any Escalation Year
shall not prejudice Landlord's right to render a
Landlord's Statement with respect to any Escalation Year.
The obligations of Tenant under the provisions of this
Article with respect to any additional rent for any
Escalation Year shall survive the expiration or any
sooner termination of the Demised Term.

	(g)	Notwithstanding anything contained to
the contrary in this Paragraph 49, if any increase
in Taxes shall be due to improvements made or performed
by or on behalf of Tenant, such increases shall be paid
in full by Tenant each year without apportionment.
	(h)	If the Taxes for any Escalation Year
shall equal or be less than the Base Year Taxes,
Tenant shall not be obligated to make any payments to
Landlord pursuant to this Section 49 in respect of
a Tenant's Tax Payment for such Escalation Year, but
in no event shall Tenant be entitled to any refund
or reduction in the Rent by reason of such fact.

50.	Landlord's  Financing.  At the request of
Landlord, Tenant agrees to furnish Landlord with a
current financial statement prepared by a certified
public accountant or any other instrument which may
be needed by Landlord for purposes of financing or
selling the Real Property.  If, in connection with
obtaining financing for the Real Property, a banking,
insurance or other recognized institutional lender
shall request reasonable modifications in this lease
as a condition to such financing, Tenant will enter
into an agreement reflecting such modifications
provided that such modifications do not increase the
obligations of Tenant hereunder (other than to a de
minimus extent) or materially adversely affect the
leasehold interest hereby created.

51.	Use.

	(a)	Tenant covenants that the Demised
Premises will not be used so as to materially and
adversely interfere with other tenants in the Building.
Tenant also covenants that no noise or noxious fumes
or odors will be created by Tenant so as to materially
and adversely interfere with the quiet enjoyment of
the other tenants of their respective demised portions
of the Building.  Landlord shall be the sole judge on
the question of noise, noxious fumes and odors.

	(b)	Tenant shall provide and maintain, at
its expense, the hand-held fire extinguishers that are
required to be maintained in Demised Premises by the
governmental agency having jurisdiction over this
matter.

	(c)	Tenant shall not obstruct or encumber,
or cause to be obstructed or encumbered, the sidewalks,
area ways or other public portions of the Real Property,
without limitation, the parking area, driveways and
access areas adjacent to the Demised Premises and used
in conjunction therewith; nor shall Tenant use same nor
permit same to be used for any purpose other than
ingress and egress to and from the Demised Premises.
However, Tenant may use the loading area appurtenant
to the Demised Premises for loading and unloading.
Tenant shall not store any materials, goods or other
items outside the building or the Demised Premises
including, without limitation, inventory, furniture
or equipment.

	(d)	Tenant shall, at its own cost and
expense, procure all necessary certificates, permits,
orders or licenses which may be required for the conduct
of its business by any governmental statute, regulation,
ordinance or agency and that all governmental requirements
relating to the use or uses of the Demised Premises by
the Tenant shall be complied with by the Tenant at its
own cost and expense.

	(e)	Tenant agrees that the value of the
Demised Premises and the reputation of the Landlord
will be seriously injured if the Demised Premises
are used for any obscene or pornographic purposes or if
any obscene or pornographic material is permitted in
the Demised Premises.  Tenant further agrees that
Tenant will not permit any of these uses by Tenant or
a sublessee or assignee of the Demised Premises.
This Paragraph shall directly bind any successors in
interest to Tenant.  Tenant agrees that if at any time
Tenant violates any of the provisions of this Paragraph,
such violation shall be deemed a breach of a substantial
obligation of the terms of this lease and objectionable
conduct.  Pornographic material is defined for purposes
of this Paragraph as any written or pictorial matter with
prurient appeal or any objects or instruments that are
primarily concerned with lewd or prurient sexual activity.
Obscene material is defined here as it is in Penal
Law ?235.00.

52.	End of Term.	 In the event Tenant fails to
surrender the Demised Premises to Landlord in the
condition required by the terms of this lease on or
before the expiration or earlier termination of this
lease,  Tenant shall: one hundred fifty (150%) percent
of the Rent payable by Tenant for the third month prior to
the Expiration Date, with respect to the first two months
of holdover only, and two hundred (200%) percent of the
Rent payable by Tenant for the third month prior to the
Expiration Date of the term of this lease with respect to
any further holdover, and otherwise observe, fulfill and
perform all of its obligations under this lease, including,
but not limited to, those pertaining to additional rent, in
accordance with its terms; (ii)  be liable to Landlord for
any payment or rent concession which Landlord may be
required to make to any tenant in order to induce such
tenant not to terminate an executed lease covering all or
any portion of the Demised Premises by reason of the
holdover by Tenant; and (iii)  be liable to Landlord for
any actual damages suffered by Landlord (including any
reasonable attorneys? fees and disbursements) as the result
of Tenant?s failure to surrender the Demised Premises.
Notwithstanding anything contained in this Paragraph to
the contrary, the acceptance of any Rent or use and
occupancy paid by Tenant pursuant to this Paragraph 52,
shall not preclude Landlord from commencing and prosecuting
a holdover or eviction action or proceeding or any action or
proceeding in the nature thereof.  The provisions of this
Paragraph 52 shall be deemed to be an "agreement expressly
providing otherwise" within the meaning of Section 232-c
of the Real Property Law of the State of New York and any
successor law of like import.  Tenant expressly waives, for
itself and for any person claiming through or under Tenant,
any rights which Tenant or any such person may have under
the provisions of Section 2201 of the New York Civil Practice
Law and Rules and of any successor law of like import then
in force, in connection with any holdover or summary
proceeding which Landlord may institute to regain possession
of the Demised Premises.  No holding over by Tenant after
the Term shall operate to extend the Term.  The holdover,
 with respect to all or any part of the Demised Premises,
of a person deriving an interest in the Demised Premises
from or through Tenant, including, but not limited to, an
assignee or subtenant, shall be deemed a holdover by Tenant
in the entire Demised Premises.   If at any time during the
last month of the Term Tenant shall have removed all or
substantially all of Tenant's property from the Demised
Premises, Landlord may, and Tenant hereby irrevocably
grants to Landlord a license to, immediately enter and
alter, renovate and redecorate the Demised Premises,
without elimination, diminution or abatement of Rent, or
incurring liability to Tenant for any compensation, and
such acts shall have no effect upon this lease.

53.	Landlord's Work.  Tenant hereby accepts the Demised
Premises in its current ?as is? condition and agrees that
Landlord shall not be obligated to perform any work, make
any installation or incur any expense in order to prepare
the Demised Premises for Tenant?s occupancy, except that
Landlord shall deliver possession of the Demised Premises
with all building mechanical equipment the plumbing,
electrical and heating, ventilating and air conditioning
systems, sprinkler, the lights, man doors and garage doors
operational and in good working order and condition and
operational for its purpose, and Landlord, at its expense,
will perform the work and make the installations, as set
forth on the Rental Plan annexed hereto as Exhibit A,
which work is sometimes hereinafter referred to as the
"Landlord's Work".  In the event that there is a conflict
or inconsistency between the provisions of this lease
(including the exhibits annexed hereto) and the work set
forth on the final construction documents to be prepared by
Landlord for Landlord?s Work and approved by Landlord and
Tenant after the date hereof, such final construction
documents shall be controlling.

54.	Assignment/Subletting.

	(a)	Tenant covenants that it shall not assign
this lease nor sublet the Demised Premises or any part
thereof without the prior written consent of Landlord
in each instance.   Tenant may assign this lease or sublet
the Demised Premises with Landlord's written consent provided:

             (i)	That such assignment or sublease is
for a use which is in compliance with the terms of this lease,
the then existing zoning regulations and the Certificate of
Occupancy;

             (ii)	That at the time of such assignment
or subletting, there is no default under the terms of this
lease on Tenant's part which has not been cured prior to the
expiration of all applicable grace periods;

             (iii)	That in the event of an assignment,
the assignee assumes in writing the performance of all of
the terms and obligations to be performed by  Tenant under
this lease from and after the date of such assignment;

              (iv)	That a fully-executed copy of said
assignment or sublease be delivered by certified mail to
Landlord at the address herein set forth within ten (10)
days from the said assignment or sublease and within ninety
(90) days of the date that Tenant first provides Landlord
with the information required under Paragraph 54(f) below;

             (v)	That, in the event Tenant shall
request Landlord?s consent to a proposed assignment of this
lease or proposed sublease of all or a portion of the Demised
Premises, Tenant shall pay or reimburse to Landlord the
reasonable attorney fees and disbursements incurred by
Landlord in processing such request not to exceed $1,000.00
for the review of the proposed sublease and the initial
preparation of the consent document;

             (vi)	Such assignment or subletting shall
not, however, release Tenant from its liability for the full
and faithful performance of all of the terms and conditions
of this lease;

             (vii)	If this lease be assigned, or if
the Demised Premises or any part thereof be sublet or
occupied by anybody other than Tenant, Landlord may, after
default by Tenant, collect Rent and additional rent from the
assignee, subtenant or occupant, and apply the net amount
collected to the Rent and additional rent herein reserved;

       (b)	Notwithstanding anything contained in this
Paragraph 54 to the contrary, no assignment or subletting
shall be made by Tenant in any event until Tenant has offered
to terminate this lease as of the last day of any calendar
month during the term hereof and to vacate and surrender the
Demised Premises to Landlord on the date fixed in the notice
served by Tenant upon Landlord (which date shall be no sooner
than forty-five (45) days after receipt by Landlord of the
offer to terminate and no later than the date of such
proposed assignment or the commencement date of such proposed
sublease), and Landlord, within fifteen (15) days after the
receipt thereof, has not accepted in writing the offer by
Tenant to cancel and terminate this lease and to vacate and
surrender the Demised Premises.

       (c)	Notwithstanding anything contained to the
contrary in this lease, in no event shall Tenant have the
right to enter into more than one sublease at any time.

       (d)	Tenant shall not mortgage, pledge,
hypothecate or otherwise encumber its interest under this
lease without Landlord's prior written consent.

       (e)	Without affecting any of its other obligations
under this lease, Tenant will pay Landlord as additional rent
fifty (50%) percent of any sums or other economic consideration,
which (i) are payable to Tenant as a result of an assignment or
subletting whether or not referred to as rentals under the
assignment or sublease (after deducting therefrom the reasonable
costs and expenses incurred by Tenant in connection with the
assignment or subletting in question, including, without
limitation, broker commissions, reasonable attorneys? fees and
tenant improvement costs); and (ii) exceed in total the sums
which Tenant is obligated to pay Landlord under this lease
(prorated to reflect obligations allocable to that portion of
the Demised Premises subject to such sublease), it being the
express intention of the parties that Landlord and Tenant
shall share in any profit by reason of such sublease or
assignment.  The failure or inability of the assignee or
subtenant to pay rent pursuant to the assignment or sublease
will not relieve Tenant from its obligations to Landlord under
this Paragraph 54(e).  Tenant will not amend the assignment or
sublease in such a way as to reduce or delay payment of amounts
which are provided in the assignment or sublease approved by
Landlord.  Any amendment or modification of an assignment or
sublease shall be deemed to be a new assignment or sublease
and shall require the prior written consent of Landlord.

       (f)	Prior to any proposed subletting or assignment,
Tenant shall submit to Landlord a written notice of the proposed
subletting or assignment, which notice shall contain or be
accompanied by the following information:  (i) the name and
address of the proposed subtenant or assignee; (ii) the nature
and character of the business of the proposed subtenant or
assignee and its proposed use of the premises to be demised;
(iii)   the most recent three (3) years of balance sheets and
profit and loss statements of the proposed subtenant or assignee
or other financial information reasonably satisfactory to Landlord;
and (iv) such shall be accompanied by a copy of the proposed
sublease or assignment of lease.

       (g)	The listing of an assignee's or subtenant's
name on the door or Building directory shall not be deemed
 Landlord's consent hereunder.

       (h)	Tenant may, without the consent of Landlord,
assign this lease, or sublet all or a portion of the Demised
Premises, to an affiliated entity (i.e., an entity 20% or more
of whose ownership interest is owned by the same owners owning
20% or more of Tenant's ownership interest), parent or subsidiary
corporation of Tenant, provided that: (i) in the case of an
assignment, Tenant shall deliver to Landlord a fully-executed
assignment and assumption agreement pursuant to which such
assignee agrees to assume and perform all of the obligations of
Tenant under this lease, and (ii) Tenant shall not be released or
discharged from any liability under this lease by reason of such
assignment.   In addition, Landlord shall grant its consent to a
request by Tenant to assign this lease to an entity to which it
sells its business as a going concern (either by selling or
assigning all or substantially all of its assets or stock) or
with which it may be consolidated or merged, provided that the
assignee has the same net worth (as calculated under generally
accepted accounting principals consistently applied, as the
Tenant prior to the proposed sale and/or assignment and further
provided that assignee shall, in writing, assume and agree to
perform all of the obligations of Tenant under this lease and
it shall deliver such assumption with a copy of such assignment
to Landlord within ten (10) days thereafter, and that Tenant shall
not be released or discharged from any liability under this
lease by reason of such assignment.

       (i)  Landlord agrees that it shall not unreasonably
withhold, condition or delay its consent to a subletting or
assignment in accordance with the terms of this Paragraph 54.
In determining reasonableness, there shall be taken into account
the character and reputation of the proposed subtenant or
assignee, the specific nature of the proposed subtenant's or
assignee's business and whether same is in keeping with other
tenancies in the building; the financial standing of the proposed
subtenant or assignee; and the impact of all of the foregoing
upon the Building and the other tenants of Landlord therein.
Landlord shall not be deemed to have unreasonably withheld its
consent if it refuses to consent to a subletting or assignment
to an existing tenant in any building which is owned by Landlord
or its affiliate or to a proposed subtenant or assignee with
whom Landlord is negotiating a lease or if at the time of
Tenant's request, Tenant is in default, beyond applicable
grace and notice periods provided herein for the cure thereof,
of any of the terms, covenants and conditions of this lease to
be performed by Tenant, or, if Landlord's lender's consent to
 such transaction is required and same is not granted.

55.	Parking.  The parking areas available for the use of
the Tenant herein and the other tenants of the Building of
which the Demised Premises form a part are to be used by Tenant,
its servants, employees, agents, business invitees and patrons
on a first come first served basis, subject to the rules and
regulations of Landlord.  However, in no event shall Tenant
use more than Tenant's Proportionate Share of the total number
of spaces at the Building.   It is also understood and agreed
that Landlord shall have the right at any time to modify or
alter the parking layout and traffic pattern in the parking
areas and to diminish the available parking areas without any
liability to Tenant or any diminution or abatement of rent or
additional rent; provided, however, that Landlord agrees to
use commercially reasonable efforts to minimize interference
with Tenant's use and occupancy of the Demised Premises and
its access thereto when modifying or altering such parking
layout and/or traffic pattern.

56.	Cleaning and Rubbish Removal.

	(a)	All cleaning and janitorial work at the
Demised Premises shall be done by Tenant at the sole cost
and expense of Tenant.  Tenant shall provide for its own
trash, rubbish and garbage removal at its own expense and
all rubbish, trash and garbage shall be kept at and removed
from the Demised Premises subject to the rules and regulations
of the appropriate municipal authorities having jurisdiction
thereof, and shall at all times be kept in closed dumpsters
to be provided by Tenant at its sole cost and expense in
locations determined by Landlord.

	(b)	Tenant shall pay directly to the applicable
governmental municipalities any waste generation fee(s)
(including any service charges imposed in connection therewith)
which are charged by such governmental municipalities in
connection with Tenant?s use of Tenant?s designated dumpster
at the Building (collectively, the "Waste Generation Fees").
Within fifteen (15) days of Landlord?s demand for official
receipts stamped paid by the applicable governmental
authorities, Tenant shall provide Landlord with copies of
such receipts or other proof satisfactory to Landlord
evidencing such payment.  If Tenant fails to pay the Waste
Generation Fees when due, Landlord may, but is not obligated
to, pay such Waste Generation Fees and all such Waste
Generation Fees paid by Landlord, plus any and all additional
costs and expenses incurred by Landlord in connection therewith,
including reasonable attorney?s fees, shall be deemed
additional rent and shall be payable by Tenant upon demand.
Tenant's payment of the Waste Generation Fees shall be in
addition to (and not in lieu of) any amounts which Tenant may
pay in connection with its removal of trash, rubbish and
garbage from its Demised Premises.

57.	Hazardous Materials.   Tenant shall keep or cause
the Demised Premises to be kept free of Hazardous Materials
(hereinafter defined).  Notwithstanding the foregoing,
Tenant shall be entitled to keep and use, in compliance
with all applicable laws and subject to the further
provisions of this Paragraph 57, the materials set forth
on Schedule "A" (the "Permitted Materials") in the quantities
set forth therein.  Without limiting the foregoing,
Tenant shall not cause or permit the Demised Premises to
be used to generate, manufacture, refine, transport,
treat, store, handle, dispose, transfer, produce or
process Hazardous Materials (other than Permitted
Materials) nor shall Tenant cause or permit, as a result
of any intentional or unintentional act or omission
on the part of Tenant or any person or entity claiming
through or under Tenant or any of their employees,
contractors, agents, visitors or licensees (collectively,
?Related Parties?), a release of Hazardous Materials
onto the Demised Premises or onto any other property.
Tenant shall comply with and ensure compliance by all
Related Parties with all applicable Federal, State and
Local laws, ordinances, rules and regulations, whenever
and by whomever triggered, and shall obtain and comply
with, and ensure that all Related Parties obtain and
comply with, any and all approvals, registrations or
permits required thereunder.   Tenant shall (i) conduct
and complete all investigations, studies, samplings, and
testing, and all remedial removal and other actions
necessary to clean up and remove such Hazardous Materials,
on, from, or affecting the Demised Premises (a) in
accordance with all applicable Federal, State and Local
laws, ordinances, rules, regulations, policies, orders
and directives, and (b) to the satisfaction of Landlord,
and (ii) defend, indemnify, and hold harmless Landlord,
its employees, agents, officers, members, partners, principals
and directors, from and against any claims, demands,
penalties, fines, liabilities, settlements, damages, costs,
or expenses of whatever kind or nature, known or unknown,
contingent or otherwise, arising out of, or in any way
related to, (a) the presence, disposal, release, or
threatened release of such Hazardous Materials which are on,
from, or affecting the soil, water, vegetation, buildings,
personal property, persons, animals, or otherwise;
(b) any personal injury (including wrongful death) or
property damage (real or personal) arising out of or
related to such Hazardous Materials; (c) any lawsuit
brought or threatened, settlement reached, or government
order relating to such Hazardous Materials; and/or (d)
any violation of laws, orders, regulations, requirements,
or demands of government authorities, or any policies or
requirements of Landlord, which are based upon or in any
way related to such Hazardous Materials, including, without
limitation, reasonable attorney and consultant fees,
investigation and laboratory fees, court costs, and
litigation expenses.  Tenant shall immediately notify
Landlord in writing of any actual or threatened release
of any Hazardous Materials on, in or about the Demised
Premises, including notification to Landlord if Tenant
receives any notice or requests for inspection or
information from any Federal, State or local official or
agency which pertains to Hazardous Materials.  Copies of
all reports, notices, correspondence, and other documents
received from or submitted to governmental authorities,
and of all technical data, test results, expert opinions
and other materials generated in connection with the
contamination or other response or remedial activities,
shall be provided to Landlord.   At the expiration
or earlier termination of this lease or in the event
this lease is terminated, or Tenant is dispossessed,
Tenant shall deliver the Demised Premises to Landlord
free of any and all Hazardous Materials so that the
conditions of the Demised Premises shall conform with
all applicable Federal, State and Local laws, ordinances,
rules or regulations affecting the Demised Premises for
which Tenant is responsible hereunder.  In the event that
Landlord has a good faith belief that there has been a
release of Hazardous Materials for which Tenant is
responsible hereunder, Landlord shall have the right to
engage an environmental engineering or consulting firm
to conduct an inspection of the Real Property and Demised
Premises at Tenant?s sole cost and expense.  Tenant shall
reimburse Landlord for the cost of any such inspection
as well as the cost of any clean-up and testing performed
pursuant thereto with respect to Hazardous Materials for
which Tenant is responsible hereunder.  In no event shall
Tenant be responsible for or with respect to any Hazardous
Materials in existence, arising or located on, at or under
the Demised Premises prior to the Commencement Date.  For
purposes of this paragraph, "Hazardous Materials" includes,
without limitation, any flammable explosives, radioactive
materials, hazardous materials, hazardous wastes, hazardous
or toxic substances, or related materials defined in the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended (42 U.S.C. Sections
9601, et seq.), the Hazardous Materials Transportation
Act, as amended (49 U.S.C. Sections 1801 et seq.), the
Resource Conservation and Recovery Act, as amended
(42 U.S.C. Sections 9601, et seq.), and in the regulations
adopted and publications promulgated pursuant thereto, or
any other Federal, State or Local environmental law,
ordinance, rule, or regulation.  Tenant's obligations
under this Paragraph 57 shall survive the expiration or
earlier termination of the term of this lease.

58.	Default.
	(a)	In addition to the rights and remedies
set forth in Paragraphs 17 and 18 hereof, Landlord
shall have the right to cancel this lease in the manner
therein provided in the event that (i) Tenant shall
have failed to pay any installment of Rent provided
herein within five (5) days after written notice and
demand for payment thereof or (ii) shall have defaulted
in payment of additional rent set forth herein for a
period of five (5) days after written notice and demand
for payment of same, or (iii) Tenant has not, within three
(3) days of notice from Landlord, commenced and diligently
prosecuted the cure of a default, the continuation of
which, is a threat to the safety or welfare of the
Building occupants or public.

	(b)	In any case in which the Rent or additional
rent is not paid within five (5) days of the day when
same is due, Tenant shall pay a late charge equal to 8-1/2
cents for each dollar so due, and in addition thereto.
Tenant further agrees that the late charge imposed is fair
and reasonable, complies with all laws, regulations and
statutes, and constitutes an agreement between Landlord
and Tenant as to the estimated compensation for costs and
administrative expenses incurred by Landlord due to the late
payment of rent by Tenant.  Tenant further agrees that the
late charge assessed pursuant to this lease is not interest,
and the late charge does not create a borrower/lender or
borrower/creditor relationship between Landlord and Tenant.
The demand and collection of the aforesaid late charges shall
in no way be deemed a waiver of any and all remedies that
the Landlord may have under the terms of this lease by summary
proceedings or otherwise in the event of a default in
payment of rent or additional rent.  Notwithstanding the
foregoing, the late charge set forth above shall not apply
with respect to the first late payment in any twelve (12)
month period by Tenant provided such late payment is
eventually made within thirty (30) days of notice that same
is overdue) and is not then otherwise in default under
this lease.

	(c)	In the event that Landlord shall bring
any proceeding against Tenant for recovery of money
damages, or for possession of the Demised Premises by
reason of nonpayment of Rent or additional rent, or if
Landlord shall otherwise engage an attorney in connection
with the enforcement of any provision of this Lease or,
after the expiration of all applicable notice and cure
periods, for nonperformance by Tenant of the terms and
conditions of this lease, or for breach of lease or if
Landlord shall successfully defend an action by Tenant
relating in any way to this Lease, and Landlord shall incur
costs and expenses by reason thereof or by reason of such
default, such charges, including reasonable legal fees,
shall be due and payable from Tenant as additional rent and
shall become immediately due and payable upon the incurrence
of same.  Said amount may be included in the petition and
shall be deemed additional rent.  This provision shall
expressly apply following the expiration or early termination
of this Lease where the Tenant, subtenant or assignee
continues in possession of the Demised Premises.

	(d)	 Tenant agrees to give Landlord written
notice of any proposed change in the ownership of the
majority of the outstanding capital stock of Tenant or any
change in the ownership of the majority of the assets of
Tenant.  Failure of Tenant to give the notice provided for
in the preceding sentence shall be deemed a non-curable
default by Tenant pursuant to this lease (that is, a default
which has already extended beyond the applicable grace
period, if any, following notice from Landlord), giving
Landlord the right, at its option, to cancel and terminate
this lease or to exercise any and all other remedies
available to Landlord hereunder or as shall exist at law
or in equity.

	(e)	At any time after this Lease is terminated
or the Term shall have expired and come to an end or
Landlord shall have re-entered upon the Demised Premises,
as the case may be, whether or not Landlord shall have
collected any monthly deficiencies pursuant to Paragraph 18
of the preprinted portion of this lease, Landlord, at its
sole discretion, shall be entitled to recover from Tenant,
and Tenant shall pay to Landlord, on demand, as and for
liquidated and agreed final damages, a sum equal to the
amount by which the Rent and additional rent reserved in
this lease for the period which otherwise would have
constituted the unexpired portion of the Term exceeds the
then fair and reasonable rental value of the Demised
Premises for the same period, both discounted to present
worth at the rate of four (4%) per cent per annum.  If,
before presentation of proof of such liquidated damages
to any court, commission, or tribunal, the Demised Premises,
or any part thereof, shall have been relet by Landlord for
the period which otherwise would have constituted the
unexpired portion of the Demised Term, or any part thereof,
the amount of Rent and additional rent reserved upon such
reletting shall be deemed, prima facie, to be the fair and
reasonable rental value for the part or the whole of the
Demised Premises so relet during the term of the reletting.

	(f)	Nothing contained in this Lease shall be
construed as limiting or precluding the recovery by Landlord
against Tenant of any sums or damages to which, in addition
to the damages particularly provided above, Landlord may
lawfully be entitled by reason of any default hereunder on
the part of the Tenant.  Anything in this Lease to the
contrary notwithstanding, during the continuation of any
default by Tenant, Tenant shall not be entitled to exercise
any rights or options, or to receive any funds or proceeds
being held, under or pursuant to this Lease.

	(g)	The specified remedies to which Landlord may
resort hereunder are cumulative and are not intended to be
exclusive of any other remedies or means of redress to which
Landlord may lawfully be entitled, and Landlord may invoke
any remedy allowed at law or in equity as if specific remedies
were not herein provided for.

59.	Insurance.

	(a)	Tenant shall obtain and keep in full force
and effect during the Term, at its own cost and expense,
(i) Commercial General Liability Insurance, on an occurrence
basis, such insurance to afford protection in an amount of
not less than One Million ($1,000,000) Dollars coverage for
bodily injury, death and property damage arising out of any
one occurrence and Two Million ($2,000,000) Dollars in
the aggregate (such limit to apply on a "per location basis"),
protecting Tenant as the insured and Landlord and its
construction affiliate and management company, as well as
any other parties whose names have been provided by Landlord
to Tenant from time to time, as additional insureds (in a
blanket endorsement form satisfactory to Landlord in its
reasonable discretion) against any and all claims for
personal injury, death or property damage, such insurance
to provide primary coverage without contribution from any
other insurance carried by or for the benefit of Landlord or
any other party named as an additional insured; Such insurance
shall include coverage for a blanket contractual liability
covering the indemnification requirements of this lease and
shall also include Products/Completed Operations (ii)
"All Risk" Property Insurance on Tenant?s property including
improvements and betterments made by or on the behalf of
Tenant, (and including, without limitation, Business
Interruption coverage providing for the payment of all
rent and additional rent payable under this lease for a
period of twelve (12) months including ?Extra Expense? and
Equipment Breakdown Insurance) insuring Tenant?s property and
equipment for the full insurable value thereof or replacement
cost value thereof, whichever is greater; (iii) Workers
Compensation Coverage and Employers Liability Coverage as
required by law; (iv) New York DBL Coverage, as required
by law; (v) Business Automobile Coverage in an amount of
not less than One Million ($1,000,000) Dollars combined
single limit per accident for bodily injury or property damage
(which policy form shall include coverage for "Any Auto"
which includes autos owned, hired and non-owned); (vi)
Umbrella Liability Coverage with limits of liability of
not less than Three Million ($3,000,000) Dollars per
occurrence and general aggregate per location; and (vii)
any other insurance required by law.   All deductibles
shall be paid by Tenant and shall not exceed $10,000.00.
None of Tenant's insurance policies may provide for a self-
insured retention.  Landlord may require Tenant to
increase the limits of the liability coverage described in
(i) above or obtain additional coverage, from time
to time, to that amount of insurance which in Landlord's
reasonable judgment is then being customarily
required by landlords for similar space in buildings in
the municipality in which the Building is located.

	(b)	All insurance required to be carried by
Tenant pursuant to the terms of this lease (i) shall
be written in form and substance reasonably satisfactory
to Landlord by a good and solvent insurance company of
recognized standing, admitted to do business in the State
of New York, which shall be reasonably satisfactory to
Landlord and shall be rated in Best's Insurance Guide or
any successor thereto as having a Best?s Rating of not
less than "A" and a "Financial Size Category" of not less
than "X", or if such ratings are not then in effect, the
generally accepted equivalent thereof or such other
financial rating as Landlord may at any time consider
appropriate; and (ii) shall contain a provision that no
act or omission of Tenant shall affect or limit the
obligations of the insurance company to pay the amount
of any loss sustained.  Tenant shall procure, maintain
and place such insurance and pay all premiums and charges
therefor and upon failure to do so (after the expiration
of all applicable notice and cure periods) Landlord or
any other additional insured party referred to above may,
but shall not be obligated to, procure, maintain and
place such insurance or make such payments, and in such
event the Tenant agrees to pay the amount thereof, plus
interest at the maximum rate permitted by law, to Landlord
on demand and said sum shall be in each instance collectible
as additional rent on the first day of the month following
the date of payment by Landlord.  Tenant shall cause to be
included in all such insurance policies a provision to the
effect that the same will be non-cancelable and that no
material change in coverage shall be made thereto unless
Landlord and all additional insureds referred to above shall
have received at least  thirty (30) days prior written
notice thereof by certified mail, return receipt requested.
The original insurance policies or appropriate certificates
(on the form currently designated "Acord Form 27" or its
equivalent) shall be deposited with Landlord on or prior to
the commencement of the Term hereof.  Any renewals,
replacements or endorsements thereto shall also be deposited
with Landlord to the end that said insurance shall be in
full force and effect during the Term.

	(c)	Tenant shall cause each insurance policy
carried by it and insuring its fixtures and contents, or
the betterments and improvements made by Tenant, against
loss by fire and other hazards to be written in a manner so
as to provide that the insurer waives all right of recovery
by way of subrogation against Landlord in connection with
any loss or damage covered by any such policy or policies.
Landlord shall not be liable to the Tenant for any loss or
damage caused by fire or other hazards.

	(d)	Landlord will cause each insurance policy
carried by Landlord and insuring the Building and Demised
Premises against loss by fire and other hazards to be written
in such a manner so as to provide that the insurer waives all
right of recovery by way of subrogation against Tenant in
connection with any loss or damage covered by such policy or
policies.  Tenant shall not be liable to Landlord for
any loss or damage caused by fire or other hazard.

	(e)	If Tenant shall at any time fail to maintain
insurance as, and to the extent, required hereunder, Tenant
hereby releases Landlord from all loss or damage which could
have been covered by such insurance if Tenant had maintained
such insurance, including the deductible and/or uninsured
portion thereof.  In no event, however, shall the foregoing
clause increase the liability Landlord may otherwise have
under this lease for such loss or damage.

	(f)	All insurance coverage shall be provided in
compliance with the requirements herein and shall contain
no non-standard, special, and/or unusual exclusions or
restrictive endorsements without the prior written
consent of Landlord.

	(g)	Tenant shall reimburse Landlord, as
additional rent (the ?Insurance Cost?), for Tenant's
Proportionate Share of all premiums for insurance carried
by Landlord on or with respect to the Building (including,
without limitation, Landlord's All-risk property insurance
upon the Building and Real Property, as well as environmental,
Commercial General Liability, Umbrella/Excess Liability, Auto
Liability and workman?s compensation insurance).  Landlord
and Tenant stipulate and agree that Tenant's Proportionate
Share of the Insurance Cost shall be initially $331.63 per
month (the "Base Insurance Charge").  The parties hereby
agree that the Base Insurance Charge is included in the rent
set forth in Paragraph 43 hereof.  In the event that Tenant's
Proportionate Share of the Insurance Cost increases over
the Base Insurance Charge at any time during the term of this
lease, Landlord shall have the right to bill such increase
to Tenant monthly or otherwise and Tenant shall pay such
increase as additional rent within ten (10) days of
Landlord's demand therefor.

60.	Broker.  Each of Landlord and Tenant represents
that this lease was brought about by Corporate
Commercial Realty LLC (the "Broker") as broker and all
negotiations with respect to this lease were conducted
exclusively with the Broker.  Each of Landlord and Tenant
agrees that if any claim is made for commissions by any
other broker through or on account of any acts of Landlord
or Tenant, such party will indemnify, defend and hold the
other party free and harmless from any and all liabilities
and expenses in connection therewith, including such other
party's reasonable attorney?s fees.  With respect to the
foregoing, in the event Tenant elects to use any broker
(the "New Broker") other than or together with the
Broker in connection with the extension of this lease
(whether by way of a renewal option or a separate extension
agreement), Tenant shall be responsible for (and indemnify
Landlord against) the commission claimed by the New Broker
and any liabilities and expenses, including reasonable attorney
fees, incurred by Landlord with respect thereto.  Landlord
shall be responsible for and shall pay Broker pursuant to a
separate written agreement between Landlord and Broker on a
form issued by Landlord?s office.

61.	Conditions of Landlord?s Liability.   Landlord and
Landlord's agents and employees shall not be liable for, and
Tenant waives all claims for, loss or damage to Tenant's
business or damage to person or property sustained by Tenant
resulting from any accident or occurrence (unless caused by or
resulting from the negligence of Landlord or Landlord's agents,
employees, contractors or representatives other than accidents
or occurrences against which Tenant is insured and except to
the extent Tenant is contributorily negligent) in or upon the
Demised Premises or the Building, including, but not limited to,
claims for damage resulting from: (i) any equipment or
appurtenances becoming out of repair; (ii) injury done or
occasioned by wind; (iii) any defect in or failure of plumbing,
heating or air conditioning equipment, electric wiring or
installation thereof, gas, water, or steam pipes, stairs,
porches, railings or walks; (iv) broken glass; (v) the
backing up of any sewer pipe or downspout; (vi) the bursting,
leaking or running of any tank, tub, washstand, water closet,
waste pipe, drain or other pipe or tank in, upon or about
the Building or the Demised Premises; (vii) the escape of
steam or hot water; (viii) water, snow or ice being upon or
coming through the roof, skylight, trapdoor, stairs, doorways,
show windows, walks or any other place upon or near the
Building or the Demised Premises or otherwise; (ix) the falling
of any fixture, plaster, tile or stucco; and (x) any act,
omission or negligence of other tenants, licensees or of any
other persons or occupants of the Building or of adjoining or
contiguous buildings or of owners of adjacent or contiguous
property.  Whenever Tenant shall claim under this lease that
Landlord has unreasonably withheld or delayed its consent to
some request of Tenant for which Landlord is specifically
obligated to be reasonable under this lease, Tenant shall
have no claim for damages by reason of such alleged
withholding or delay, and Tenant's sole remedy thereof shall
be a right to obtain specific performance or injunction but
in no event with recovery of damages.

62.	Partnership Tenant.  If Tenant is a partnership (or
is comprised of two (2)  or more persons, individually or as
co-partners of a partnership) or if Tenant?s interest in this
lease shall be assigned to a partnership (or to two (2) or
more persons, individually or as co-partners of a partnership)
pursuant to Paragraph 54 (any such partnership and such persons
are referred to in this Paragraph as "Partnership Tenant"),
the following provisions of this Section shall apply to such
Partnership Tenant:   (a)  the liability of each of the parties
comprising Partnership Tenant shall be joint and several, and
(b) each of the parties comprising Partnership Tenant hereby
consents in advance to, and agrees to be bound by, any
modifications of this lease which may hereafter be made, and
 by any notices, demands, requests or other communications
which may hereafter be given, by Partnership Tenant or by any
of the parties comprising Partnership Tenant, and (c) any
bills, statements, notices, demands, requests and other
communications given or rendered to Partnership Tenant or
to any of the parties comprising Partnership Tenant shall be
deemed given or rendered to Partnership Tenant and to all
such parties and shall be binding upon Partnership Tenant
and all such parties, and (d) if Partnership  Tenant shall
admit new partners, all of such new partners shall, by their
admission to Partnership Tenant, be deemed to have assumed
performance of all of the terms, covenants and conditions
of this lease on Tenant?s part to be observed and performed,
and (e)  Partnership Tenant shall give prompt notice to
Landlord of the admission of any such new partners, and
upon demand of Landlord, shall cause each such new partner
to execute and deliver to Landlord an agreement in form
satisfactory to Landlord, wherein each such new partner
shall assume performance of all of the terms, covenants
and conditions of this lease on Tenant?s part to be observed
and performed (but neither Landlord?s failure to request
any such agreement nor the failure of any such new partner
to execute or deliver any such agreement to Landlord shall
vitiate the provisions of subdivision (d) of this Paragraph).

63. 	Miscellaneous.

	(a)	This lease shall not be recorded.  No
memorandum of this lease shall be recorded without the
express written consent of Landlord.

	(b)	The invalidity or unenforceability of any
provision of this lease shall in no way affect the validity
or enforceability of any of the other provisions contained in
this lease. Landlord and Tenant understand, agree and
acknowledge that this lease has been freely negotiated by
both parties and that, in the event of any controversy, dispute,
 or contest over the meaning, interpretation, validity, or
enforceability of this lease or any of its terms and conditions,
there shall be no inference, presumption or conclusion drawn
whatsoever against either party by virtue of that party having
drafted this lease or any portion hereof.

	(c)	There are no oral agreements between the
parties hereto affecting this lease and this lease supersedes
and cancels any and all previous representations, negotiations,
arrangements and understandings, if any, between the parties
hereto with respect to the subject matter hereof, and shall not
be used to interpret or construe this lease.

	(d)	Wherever in this lease there is any conflict
between the provisions of any of the preprinted portions of the
lease and the non-preprinted portions of the lease (e.g.
typewritten or handwritten changes to the pre-printed form and
the provisions of this rider), the non-preprinted provisions
shall be deemed to supersede the preprinted provisions.

	(e)	Any references in the printed portions of this
lease to the City of New York and the Administrative Code of
the City of New York are deemed deleted, and where applicable
the town in which the Demised Premises is located and other
local governmental authorities and their ordinances shall
be substituted in lieu thereof.

	(f)	This lease may not be changed, modified or
discharged, in whole or in part, orally, and no executory
agreement shall be effective to change, modify or discharge,
in whole or in part, this lease or any obligations under this
lease, unless such agreement is set forth in a written
instrument executed by the party against whom enforcement of
the change, modification or discharge is sought.
(g)	The mailing or delivery of this lease by the
Landlord to Tenant, its agent or attorney, shall not be
deemed an offer nor shall any obligation or liability be
created on the part of Landlord or Tenant until such time
as this lease, duly executed by the Landlord and Tenant, is
delivered to each other or their agents or attorneys.

	(h)	Tenant shall give notice to Landlord,
promptly after Tenant learns thereof, of (i) any accident
in or about the Demised Premises, (ii) all fires and other
casualties within the Demised Premises, (iii) all damages to
or defects in the Demised Premises, including the fixtures,
equipment and appurtenances thereof for the repair of which
Landlord might be responsible, and (iv) all damage to or
defects in any parts or appurtenances of the Building's
sanitary, electrical, heating, ventilating, air conditioning,
elevator and other systems located in or passing through the
Demised Premises or any part thereof.

	(i)	Landlord agrees to install, repair and
maintain, at its sole cost and expense, Landlord's Building
standard identification sign for Tenant at the main entrance
to the Building.  Any changes to such sign shall be at
Tenant's sole cost and expense.

	(j)	In the event that Tenant is not an individual,
Tenant represents that the officer or officers, partner or
partners, member or members or manager or managers executing
this lease have the requisite authority to do so.

	(k)	Tenant hereby acknowledges that Landlord
makes no representations as to the compatibility of the
Building systems with Tenant's equipment.

	(l)	Tenant shall indemnify, hold harmless and
defend Landlord, its affiliates, managing agents,
construction company, subsidiaries, directors, officers,
employees and agents from and against any and all liabilities,
claims, demands, damages, costs, expenses (including reasonable
attorney fees) suits, judgments whether actual or alleged,
including such for bodily injury or wrongful death to any
person (including tenant employees and invitees) and property
damage to any property, arising out of or in connection with
the operations or business of the Tenant at the demised
premises or real property; the acts or omissions of the
Tenant, its sub-tenants, its employees, invitees, contractors
or agents; or any breach of this lease or improper conduct.
Upon notification by the Landlord of an indemnifiable event,
Tenant at its own expense shall arrange for Landlord's
defense (at Landlord?s option) and confirm indemnification.
Tenants will still be responsible to fulfill its obligations
 under this Article in the event Tenant or Tenants insurance
company does not accept a tender of claim by the Landlord.
These indemnification provisions are to continue after
lease expiration and are not limited by the amount of
available insurance in place.

	(m)  This lease shall be construed in accordance
with and governed by the internal laws (without reference
to choice or conflict of laws) of the State of New York.
In respect of any dispute between the parties regarding the
subject matter hereof, the parties hereby irrevocably
consent and submit to in personam jurisdiction in the
courts of New York, located in the county in which the
Building is located, including the United States courts
located in said county, and to all proceedings in such courts.
The parties hereby agree that such courts shall be the venue
and exclusive and proper forum in which to adjudicate any case
or controversy arising either, directly or indirectly, under
or in connection with this lease and that they will not contest
or challenge the jurisdiction or venue of these courts.

	(n)  Notwithstanding anything contained to the
contrary in this lease, Tenant hereby waives any right to
recover against Landlord any indirect, consequential, special,
punitive or incidental damages against Landlord in any cause
of action, proceeding or claim arising out of, or in connection
with, this lease.

64.	Tenant's Current Premises.  Landlord hereby agrees
that, in the event that the Commencement Date does not occur
on February 1, 2015, provided that Tenant is not then in monetary
default under the terms of the 70 Orville Lease (as hereinafter
defined), Tenant shall be permitted to continue to occupy its
current premises at 70 Orville Drive, Bohemia, New York (the
"70 Orville Premises") from the period commencing on February 1,
2015 and continuing through and including the Commencement Date.
During any such period, Tenant shall continue to pay to Landlord
basic rent at the rate set forth in that certain Agreement of
Lease dated as of October __, 1989 between Landlord's
predecessor-in-interest, as landlord, and Tenant, as tenant,
for certain premises at the building owned by Landlord's affiliate
and located at 70 Orville Drive, Bohemia, New York (as amended,
the "70 Orville Lease") as of the expiration of the 70 Orville
Lease (pro rated for any partial month), as well as any amounts
of additional rent currently payable under the 70 Orville Lease.

65.	Awning.  Notwithstanding anything to the contrary
contained herein, upon prior written consent from Landlord,
which consent shall not be unreasonably withheld, conditioned
or delayed, Tenant shall be permitted, to the extent permitted
under applicable law and provided that Tenant obtains all
necessary approvals and permits for same, to place an awning
over the rear entrance loading dock to protect against
inclement weather.  The size, design and exact location of
such awning shall be subject to the approval of Landlord,
which approval shall not be unreasonably withheld, conditioned
or delayed.  Any work performed by Tenant or Tenant?s contractor
with respect to any such awning shall be performed in strict
accordance with Article 3 and Paragraph 45 hereof, provided
that there shall be no Landlord construction affiliate fee
due and payable in connection therewith.  Landlord makes no
representations that Tenant will receive any necessary
approvals and/or permits for such awning and Tenant?s failure
to obtain same shall not affect the validity of this lease.


	IN WITNESS WHEREOF, Landlord and Tenant have respectively
signed this lease as of the day and year first above written.


Landlord:	80 ORVILLE DRIVE ASSOCIATES LLC
		By: Rechler Equity I LLC, its managing member
		By: Rechler Equity MM I LLC, its managing member
		By: Rechler Equity LLC, its managing member

                             By: /s/ Mitchell Rechler
                             ________________________
                             Name:
                             Title:


                    Tenant:	SCIENTIFIC INDUSTRIES, INC.


                                By: /S/Helena R. Santos
                                _______________________
                                Name: Helena R. Santos
    	                        Title:  President


                           SCHEDULE A



                        PERMITTED MATERIALS

"Permitted Materials" means those normally utilized in an
office environment, including, without limitation, Hazardous
Materials which may be contained in cleaning solutions or
products utilized in photostatic copying and other office
machines in commercially reasonable amounts.


                           EXHIBIT A

         RENTAL PLAN DATED AS OF JULY __, 2014

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6. Property and Equipment (Details) (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Property and Equipment, gross	$ 1,195,200	$ 1,027,200
Less accumulated depreciation and amortization	943,100	870,700
Net	252,100	156,500
Automobiles
Property and Equipment, gross	14,900	14,900
Useful Lives	5 years
Computer equipment
Property and Equipment, gross	155,800	132,100
Computer equipment | Minimum
Useful Lives	3 years
Computer equipment | Maximum
Useful Lives	5 years
Machinery and equipment
Property and Equipment, gross	744,800	627,500
Machinery and equipment | Minimum
Useful Lives	3 years
Machinery and equipment | Maximum
Useful Lives	7 years
Furniture and fixtures
Property and Equipment, gross	206,900	181,000
Furniture and fixtures | Minimum
Useful Lives	4 years
Furniture and fixtures | Maximum
Useful Lives	10 years
Leasehold improvements
Property and Equipment, gross	$ 72,800	$ 71,700
Leasehold improvements | Minimum
Useful Lives	3 years
Leasehold improvements | Maximum
Useful Lives	5 years

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13. Stock Options (Details 1) (USD $)				12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2014 Exercise Price Range 1.88	Jun. 30, 2014 Exercise Price Range 3.07 to 3.71	Jun. 30, 2013 Exercise Price Range 3.07 to 3.71	Jun. 30, 2013 Exercise Price Range 1.35 to 1.88
Number of Options Outstanding, Ending	61,000	55,000	60,000	10,000	51,000	40,000	15,000
Weighted Average Remaining Contractual Life				2 months 12 days	4 years 2 months 1 day	3 years 8 months 19 days	11 months 8 days
Weighted Average Exercise Price Outstanding, Ending	$ 3.11	$ 2.86	$ 2.73	$ 1.88	$ 3.35	$ 3.30	$ 1.70
Number of Options Exercisable	48,300	51,000		10,000	38,300	36,000	15,000
Weighted Average Exercise Price Exercisable	$ 2.82	$ 2.81		$ 1.88	$ 3.28	$ 3.27	$ 1.70

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12. Income Taxes (Details 2) (USD $)	Jun. 30, 2014	Jun. 30, 2013
Income Taxes Details 2
Current deferred tax assets	$ 86,000	$ 86,600
Long-term deferred tax assets	190,500	162,500
Long-term deferred tax liabilities	(44,300)	(56,300)
Net long-term deferred tax asset	146,200	106,200
Net deferred tax assets	$ 232,200	$ 192,800

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2. Acquisition (Details) (USD $)	Jun. 30, 2014
Acquisition Details
Current Assets	$ 144,000
Property Plant and Equipment	118,100
Goodwill	115,400
Other Intangible Assets	1,210,000
Total Purchase Price	$ 1,587,500

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4. Fair Value of Financial Instruments (Tables)

12 Months Ended

Jun. 30, 2014

Investments, All Other Investments [Abstract]

Fair Value Inputs

Assets:			Fair Value Measurements Using Inputs Considered as
	Fair Value at June 30, 2014		Level 1		Level 2		Level 3
Cash and cash equivalents	$	493,700	$	493,700	$	—	$	—
Available for sale securities		415,400		415,400		—		—
Total	$	909,100	$	909,100	$	—	$	—
Liabilities:
Contingent consideration	$	500,000	$	—	$	—	$	500,000

Assets:			Fair Value Measurements Using Inputs Considered as
	Fair Value at June 30, 2013		Level 1		Level 2		Level 3
Cash and cash equivalents	$	927,300	$	927,300	$	—	$	—
Available for sale securities		908,400		908,400		—		—
Total	$	1,835,700	$	1,835,700	$	—	$	—
Liabilities:
Contingent consideration	$	70,600	$	—	$	—	$	70,600

Investments in Marketable Securitites

Investments in marketable securities classified as available-for-sale by security type at June 30, 2014 and 2013 consisted of the following:

	Cost		Fair Value		Unrealized Holding Gain (Loss)
At June 30, 2014:
Available for sale:
Equity securities	$	29,300	$	38,500	$	9,200
Mutual funds		385,000		376,900		(8,100	)
	$	414,300	$	415,400	$	1,100
		Cost		Fair Value		Unrealized Holding Gain (Loss)
At June 30, 2013:
Available for sale:
Equity securities	$	29,300	$	33,200	$	3,900
Mutual funds		892,700		875,200		(17,500	)
	$	922,000	$	908,400	$	(13,600	)

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14. Earnings (Loss) per common share (Details Narrative)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Equity [Abstract]
Common stock issuable upon the exercise of outstanding options	59,000	40,000

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7. Goodwill and Other Intangible Assets (Details Narrative) (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Goodwill And Other Intangible Assets Details Narrative
Estimated future amortization expense 2015	$ 348,300
Estimated future amortization expense 2016	352,400
Estimated future amortization expense 2017	337,100
Estimated future amortization expense 2018	323,300
Estimated future amortization expense 2019	244,800
Estimated future amortization expense thereafter	190,000
Total	1,795,900	773,500
Total amortization expense	$ 190,900	$ 117,100

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4. Fair Value of Financial Instruments (Details 1) (USD $)	Jun. 30, 2014	Jun. 30, 2013
Cost	$ 414,300	$ 922,000
Fair Value	415,400	908,400
Unrealized Holding Gain (Loss)	1,100	(13,600)
Equity Securities
Cost	29,300	29,300
Fair Value	38,500	33,200
Unrealized Holding Gain (Loss)	9,200	3,900
Mutual Funds
Cost	385,000	892,700
Fair Value	376,900	875,200
Unrealized Holding Gain (Loss)	$ (8,100)	$ (17,500)

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13. Stock Options (Details) (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Stock Options Details
Number of Options Outstanding, Beginning	55,000	60,000
Number of Options Granted	11,000	0
Number of Options Exercised	5,000	5,000
Number of Options Outstanding, Ending	61,000	55,000
Number of Options Exercisable	48,300	51,000
Weighted Average Exercise Price Outstanding, Beginning	$ 2.86	$ 2.73
Weighted Average Exercise Price Granted	$ 3.53
Weighted Average Exercise Price Exercised	$ 1.35	$ 1.25
Weighted Average Exercise Price Outstanding, Ending	$ 3.11	$ 2.86
Weighted Average Exercise Price Exercisable	$ 2.82	$ 2.81
Weighted average fair value per share of options granted	$ 1.78

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2. Acquisition

12 Months Ended

Jun. 30, 2014

Text Block [Abstract]

Acquisition

On February 26, 2014, the Company acquired substantially all the assets of a privately owned company consisting principally of inventory, fixed assets, and intangible assets related to the production and sale of a variety of laboratory and pharmacy balances and scales. The acquisition was pursuant to an asset purchase agreement whereby the Company paid the sellers $700,000 in cash, 126,449 shares of Common Stock valued at $427,500 (of which 31,612 are held in escrow for one year) and agreed to make additional cash payments based on a percentage of net sales of the business acquired equal to 8% for the period ending June 30, 2014 annualized, 9% for the year ending June 30, 2015, 10% for the year ending June 30, 2016 and 11% for the year ending June 30, 2017, estimated at a present value of $460,000 on the date of acquisition. Payments related to this contingent consideration for each period are due in September following the fiscal year.

The products, which are similar to the Company’s other Benchtop Laboratory Equipment, and in many cases used by the same customers, are marketed under the Torbal® brand. The principal customers are pharmacies, pharmacy schools, universities, government laboratories, and industries utilizing a precision scale. The products are sold primarily on a direct basis, including through the Company’s e-commerce site.

Management of the Company allocated the purchase price based on its valuation of the assets acquired, as follows:

Current assets	$	144,000
Property and equipment		118,100
Goodwill*		115,400
Other intangible assets		1,210,000
Total Purchase Price	$	1,587,500

*See Note 7, “Goodwill and Other Intangible Assets”.

Of the $1,210,000 of the acquired other intangible assets, $570,000 was assigned to technology and websites with a useful life of 5 years, $120,000 was assigned to customer relationships with an estimated useful life of 9 years, $140,000 was assigned to the trade name with an estimated useful life of 6 years, $110,000 was assigned to the IPR&D with an estimated useful life of 3 years, and $270,000 was assigned to non-compete agreements with an estimated useful life of 5 years.

In connection with the acquisition, the Company entered into a three-year employment agreement with the previous Chief Operating Officer of the acquired business as President of the Company’s new Torbal Division and Director of Marketing for the Company. The agreement may be extended by mutual consent for an additional two years.

The Company was unable to obtain audited financial statements of the business acquired in connection with the acquisition. The inability to include the related audited financial statements as required by the Securities Exchange Act of 1934 in the related Report on Form 8-K filing resulted in the inability of the Company to register under the Securities Act of 1933, as amended, offerings of the Company’s securities during the one year period ending February 2015.

Pro forma results

The unaudited pro forma condensed consolidated financial information in the table below summarizes the consolidated results of operations of the Company including its new Torbal Division, on a pro forma basis, as though the companies had been consolidated as of the beginning of the fiscal year ended June 30, 2013. The unaudited pro forma condensed financial information presented below is for informational purposes only and is not intended to represent or be indicative of the consolidated results of the operations that would have been achieved if the acquisition had been completed as of the commencement of the fiscal year presented. In addition, the Company was unable to obtain audited historical information and, therefore the information presented is based on management’s best judgment and the effects of the acquisition including amortization expense and excluding total acquisition related costs incurred of $79,500 for the year ended June 30, 2014:

		2014			2013
Revenues	$	7,623,200		$	8,384,500
Net income (loss)	$	(69,300	)	$	307,600
Net income (loss) per share – basic	$	(.05	)	$	.21
Net income (loss) per share - diluted	$	(.05	)	$	.21

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11. Commitments and Contingencies (Details) (USD $)	Jun. 30, 2014
Commitments and Contingencies Disclosure [Abstract]
2015	$ 251,700
2016	255,600
2017	264,000
2018	205,000
2019	174,000
Thereafter	841,600
Total	$ 1,991,900

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11. Commitments and Contingencies (Tables)

12 Months Ended

Jun. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Schedule of future minimum rental payments

The Company’s approximate future minimum rental payments under all operating leases are as follows:

Fiscal Years
2015	$	251,700
2016		255,600
2017		264,000
2018		205,000
2019		174,000
Thereafter		841,600
	$	1,991,900

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7. Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Jun. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

The components of other intangible assets are as follows:

	Useful Lives		Cost		Accumulated Amortization		Net
At June 30, 2014:
Technology, trademarks	5/10 yrs.	$	1,226,800	$	489,100	$	737,700
Trade names	6 yrs.		140,000		7,800		132,200
Websites	5 yrs.		210,000		14,000		196,000
Customer relationships	9/10 yrs.		357,000		215,800		141,200
Sublicense agreements	10 yrs.		294,000		77,200		216,800
Non-compete agreements	5 yrs.		384,000		126,300		257,700
IPR&D	3 yrs.		110,000		12,200		97,800
Other intangible assets	5 yrs.		157,400		140,900		16,500
		$	2,879,200	$	1,083,300	$	1,795,900

	Useful Lives		Cost		Accumulated Amortization		Net
At June 30, 2013:
Technology, trademarks	5/10 yrs.	$	865,400	$	402,100	$	463,300
Customer relationships	10 yrs.		237,000		203,200		33,800
Sublicense agreements	10 yrs.		294,000		47,800		246,200
Non-compete agreements	5 yrs.		114,000		105,900		8,100
Other intangible assets	5 yrs.		156,000		133,900		22,100
		$	1,666,400	$	892,900	$	773,500

Estimated future amortization expense of intangible assets

Estimated future amortization expense of intangible assets is as follows:

Fiscal Years
2015	$	348,300
2016		352,400
2017		337,100
2018		323,300
2019		244,800
Thereafter		190,000
	$	1,795,900

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12. Income Taxes (Details) (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Income Taxes Details
Computed "expected" income tax	$ (37,500)	$ 182,300
Research and development credits	(1,600)	(30,700)
Other, net	7,400	(27,200)
Income tax expense (benefit)	$ (31,700)	$ 124,400
Computed "expected" income tax, percent	(35.00%)	35.00%
Research and development credits, percent	(1.50%)	(5.90%)
Other, net, percent	6.90%	(5.20%)
Income tax expense (benefit), percent	(29.60%)	23.90%

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12. Income Taxes (Tables)

12 Months Ended

Jun. 30, 2014

Income Tax Disclosure [Abstract]

Income tax reconciliation

	2014					2013
		Amount		% of Pre-tax Income			Amount		% of Pre-tax Income
Computed “expected” income tax (benefit)	$	(37,500	)	(35.0	%)	$	182,300		35.0	%
Research and development credits		(1,600	)	(1.5	)		(30,700	)	(5.9	)
Other, net		7,400		6.9			(27,200	)	(5.2	)
Income tax expense (benefit)	$	(31,700	)	(29.6	%)	$	124,400		23.9	%

Deferred tax assets and liabilities

Deferred tax assets and liabilities consist of the following:

		2014		2013
Deferred tax assets:
Amortization of intangible assets	$	153,300	$	146,100
Various accruals		75,100		49,600
Other		48,100		53,400
		276,500		249,100

Deferred tax liability:
Depreciation of property and amortization of goodwill		(44,300	)		(56,300	)
Net deferred tax assets	$	232,200		$	192,800

Schedule of current and long-term deferred tax assets and liabilities

The breakdown between current and long-term deferred tax assets and liabilities is as follows:

		2014			2013
Current deferred tax assets	$	86,000		$	86,600
Long-term deferred tax assets		190,500			162,500
Long-term deferred tax liabilities		(44,300	)		(56,300	)
Net long-term deferred tax assets		146,200			106,200
Net deferred tax assets	$	232,200		$	192,800

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13. Stock Options (Tables)

12 Months Ended

Jun. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Option activity

Option activity is summarized as follows:

	Fiscal 2014					Fiscal 2013
					Weighted-					Weighted-
					Average					Average
					Exercise					Exercise
		Shares			Price		Shares			Price
Shares under option:
Outstanding, beginning of year		55,000		$	2.86		60,000		$	2.73
Granted		11,000			3.53		—			—
Exercised		(5,000	)		1.35		(5,000	)		1.25
Outstanding, end of year		61,000			3.11		55,000			2.86
Options exercisable at year-end		48,300		$	2.82		51,000		$	2.81
Weighted average fair value per share of options granted during fiscal 2014				$	1.78

Options Outstanding

		As of June 30, 2014 Options Outstanding					As of June 30, 2014 Exercisable
				Weighted-
				Average		Weighted-				Weighted-
	Range			Remaining		Average				Average
	Exercise		Number	Contractual		Exercise		Number		Exercise
	Prices		Outstanding	Life (Years)		Price		Outstanding		Price
$	1.88		10,000	.2	$	1.88		10,000	$	1.88
	$3.07-$3.71		51,000	4.17	$	3.35		38,300	$	3.28
			61,000					48,300

	As of June 30, 2013 Options Outstanding					As of June 30, 2013 Exercisable
			Weighted-
			Average		Weighted-				Weighted-
Range			Remaining		Average				Average
Exercise		Number	Contractual		Exercise		Number		Exercise
Prices		Outstanding	Life (Years)		Price		Outstanding		Price
$1.35-$1.88		15,000	.94	$	1.70		15,000	$	1.70
$3.07-$3.71		40,000	3.72	$	3.30		36,000	$	3.27
		55,000					51,000

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1. Summary of significant accounting policies

12 Months Ended

Jun. 30, 2014

Notes to Financial Statements

Summary of significant accounting policies

Nature of Operations

Scientific Industries, Inc. and its subsidiaries (the “Company”) design, manufacture, and market a variety of benchtop laboratory equipment, bioprocessing products and catalyst research instruments. The Company is headquartered in Bohemia, New York where it produces benchtop laboratory equipment for research and has another location in Pittsburgh, Pennsylvania, where it produces a variety of custom-made catalyst research instruments and designs bioprocessing products, and a small facility in Oradell, New Jersey related to benchtop laboratory equipment. The equipment sold by the Company includes mixers, shakers, stirrers, refrigerated incubators, pharmacy balances and scales, catalyst characterization instruments, reactor systems and high throughput systems. The Company also sublicenses certain patents and technology under a license with the University of Maryland, Baltimore County, and receives royalty fees from the sublicenses.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Scientific Industries, Inc., Scientific Packaging Industries, Inc., an inactive wholly-owned subsidiary, Altamira Instruments, Inc. (“Altamira”), a Delaware corporation and wholly-owned subsidiary, and Scientific Bioprocessing, Inc. (“SBI”), a Delaware corporation and wholly-owned subsidiary, (all collectively referred to as the “Company”). All material intercompany balances and transactions have been eliminated.

Revenue Recognition

Revenue from product sales is recognized when all the following criteria are met:

· Receipt of a written purchase order agreement which is binding on the customer.

· Goods are shipped and title passes.

· Prices are fixed.

· Collectability is reasonably assured.

· All material obligations under the agreement have been substantially performed.

Substantially all orders are F.O.B. shipping point, all sales are final without right of return or payment contingencies, and there are no special sales arrangements or agreements with any customers.

Royalty revenue received under the Company’s sublicenses is recorded net of payments due to its licensors.

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments purchased with a maturity of 90 days or less to be cash equivalents. At times, cash balances may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limit. As of June 30, 2014 and 2013, $52,800 and $256,200, respectively of cash balances were in excess of such limit.

Accounts Receivable

In order to record the Company’s accounts receivable at their net realizable value, the Company must assess their collectability. A considerable amount of judgment is required in order to make this assessment, including an analysis of historical bad debts and other adjustments, a review of the aging of the Company’s receivables, and the current creditworthiness of the Company’s customers. The Company has recorded allowances for receivables which it considered uncollectible, including amounts for the resolution of potential credit and other collection issues such as disputed invoices, customer satisfaction claims and pricing discrepancies. However, depending on how such potential issues are resolved, or if the financial condition of any of the Company’s customers was to deteriorate and its ability to make required payments became impaired, increases in these allowances may be required. The Company actively manages its accounts receivable to minimize credit risk. The Company does not obtain collateral for its accounts receivable.

Customer Advances

In the ordinary course of business, customers may make advance payments for purchase orders. Such amounts, when received, are categorized as liabilities under the caption customer advances.

Investment Securities

Securities available for sale are carried at fair value with unrealized gains or losses reported in a separate component of shareholders’ equity. Realized gains or losses are determined based on the specific identification method.

Inventories

Inventories are valued at the lower of cost (determined on a first-in, first-out basis) or market value, and have been reduced by an allowance for excess and obsolete inventories. The estimate is based on management’s review of inventories on hand compared to estimated future usage and sales. Cost of work-in-process and finished goods inventories include material, labor and manufacturing overhead.

Property and Equipment

Property and equipment are stated at cost. Depreciation of property and equipment is provided for primarily by the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized by the straight-line method over the term of the related lease or the estimated useful lives of the assets, whichever is shorter.

Intangible Assets

Intangible assets consist primarily of acquired technology, customer relationships, non-compete agreements, patents, licenses, websites, intellectual property and research and development (“IPR&D”), trademarks and trade names. All intangible assets are amortized on a straight-line basis over the estimated useful lives of the respective assets, generally 3 to 10 years. The Company continually evaluates the remaining estimated useful lives of intangible assets that are being amortized to determine whether events or circumstances warrant a revision to the remaining period of amortization.

Goodwill and Long-Lived Assets

Goodwill represents the excess of purchase price over the fair value of identifiable net assets acquired in a business combination. Goodwill and long-lived intangible assets are tested for impairment at least annually in accordance with the provisions of ASC No. 350, “Intangibles-Goodwill and Other” (“ASC No. 350”). ASC No. 350 requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. The Company tests goodwill and long-lived assets annually as of June 30, the last day of its fiscal year, unless an event occurs that would cause the Company to believe the value is impaired at an interim date.

Impairment of Long-Lived Assets

The Company follows the provisions of ASC No. 360-10, “Property, Plant and Equipment – Impairment or Disposal of Long-Lived Assets (“ASC No. 360-10”). ASC No. 360-10 which requires evaluation of the need for an impairment charge relating to long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If an evaluation for impairment is required, the estimated future undiscounted cash flows associated with the asset would be compared to the asset’s carrying amount to determine if a write down to a new depreciable basis is required. If required, an impairment charge is recorded based on an estimate of future discounted cash flows. No impairment change has been recorded for the years ended June 30, 2014 and 2013.

Income Taxes

The Company and its subsidiaries file a consolidated U.S. federal income tax return. Income taxes are accounted for under the asset and liability method. The Company provides for federal, and state income taxes currently payable, as well as for those deferred due to timing differences between reporting income and expenses for financial statement purposes versus tax purposes. Deferred tax assets and liabilities are recognized for the future tax consequences attributed to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in income tax rates is recognized as income or expense in the period that includes the enactment date.

The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

Advertising

Advertising costs are expensed as incurred. Advertising expense amounted to $53,200 and $30,000 for the years ended June 30, 2014 and 2013, respectively.

Shipping and Handling

The Company classifies costs associated with shipping and handling fees as a component of cost of goods sold.

Stock Compensation Plan

The Company has a ten-year stock option plan (the “2012 Plan”) which provides for the grant of options to purchase up to 100,000 shares of the Company’s Common Stock, par value $.05 per share (“Common Stock”), plus 57,000 shares under options previously granted under the 2002 Stock Option Plan of the Company (the “Prior Plan”). The 2012 Plan provides for the granting of incentive or non-incentive stock options as defined in the 2012 Plan and options under the 2012 Plan may be granted until 2022. Incentive stock options may be granted to employees at an exercise price equal to 100% (or 110% if the optionee owns directly or indirectly more than 10% of the outstanding voting stock) of the fair market value of the shares of Common Stock on the date of the grant which shall not be less than the book value per share of Common Stock as of the end of the most recent fiscal quarter. Non-incentive stock options shall not be granted at less than the fair market value of the shares of Common Stock on the date of grant, and the per share book value. At June 30, 2014 and 2013, 82,000 and 93,000 shares respectively, of Common Stock were available for grant of options under the 2012 Plan.

Stock-based compensation is accounted for in accordance with ASC No. 718 “Compensation-Stock Compensation” (“ASC No. 718”) which requires compensation costs related to stock-based payment transactions to be recognized. With limited exceptions, the amount of compensation cost is measured based on the grant-date fair value of the equity or liability instruments issued. In addition, liability awards are measured at each reporting period. Compensation costs are recognized over the period that an employee provides service in exchange for the award. During the year ended June 30, 2014, the Company granted 11,000 options to employees and the Chairman of the Board of Directors that had a fair value of $19,500. The fair value of the options granted during fiscal year 2014 was determined using the Black-Scholes-Merton option-pricing model. The weighted average assumptions used for fiscal 2014, was an expected life of 10 years; risk free interest rate of 2.75%; volatility of 62%, and dividend yield of 2.92%. The weighted-average value per share of the options granted in 2014 was $1.78, and stock-based compensation costs were $16,000 and $8,500 for the years ended June 30, 2014 and 2013. Stock-based compensation costs related to nonvested awards to be recognized in the future are $9,000 and $3,700 as of June 30, 2014 and 2013, respectively.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and judgments that affect the amounts reported in the financial statements and accompanying notes. The actual results experienced by the Company may differ materially from management’s estimates.

Earnings (Loss) Per Common Share

Basic earnings (loss) per common share is computed by dividing net income (loss) by the weighted-average number of shares outstanding. Diluted earnings per common share includes the dilutive effect of stock options.

New Accounting Pronouncements

In July 2013, the Financial Accounting Standards Board (“FASB”) issued ASU 2013-11, Income Taxes (Topic 740), which clarifies the presentation requirements of unrecognized tax benefits when a net operating loss carries forward, a similar tax loss, or a tax credit carry forward exists at the reporting date. The amendments in this ASU are effective for the fiscal years, and interim periods within those years, beginning after December 15, 2013 and should be applied prospectively. The adoption of this ASU did not have a material impact to the Company’s consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers amending revenue recognition requirements for multiple-deliverable revenue arrangements. This update provides guidance on how revenue is recognized 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 the goods or services. This determination is made in five steps: (i) identity the contract with the customer: (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The update is effective for the Company beginning July 1, 2017. Early adoption is not permitted. The Company is currently evaluating the impact this guidance may have on its financial condition and results of operations.

In June 2014, the FASB issued ASU 2014-12, Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide that a Performance Target Could be Achieved After the Requisite Service Period. This update affects reporting entities that grant their employee’s targets that affects vesting could be achieved after the requisite service period. The new standard requires that a performance target that affects vesting and that could be achieved after the requisite services priod be treated as a performance condition. The new standard will be effective for the Company beginning July 1, 2015, and early adoption is permitted. The Company expects the adoption will not have a material impact on its financial condition, results of operations or cash flows.

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14. Earnings per common share (Tables)

12 Months Ended

Jun. 30, 2014

Equity [Abstract]

Earnings per common share

		2014			2013
Net income (loss)	$	(75,300	)	$	396,400
Weighted average common shares outstanding		1,385,054			1,337,048
Effect of dilutive securities		—			5,164
Weighted average dilutive common shares outstanding		1,385,054			1,342,212
Basic earnings (loss) per common share	$	(.05	)	$	.30
Diluted earnings (loss) per common share	$	(.05	)	$	.30

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6. Property and Equipment (Details Narrative) (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Property And Equipment Details Narrative
Depreciation expense	$ 71,900	$ 61,700

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Jun. 30, 2014	Jun. 30, 2013
Current Assets:
Cash and cash equivalents	$ 493,700	$ 927,300
Investment securities	415,400	908,400
Trade accounts receivable, less allowance for doubtful accounts of $11,600 in 2014 and 2013	756,700	815,900
Inventories	2,309,200	1,705,600
Prepaid expenses and other current assets	123,100	59,000
Deferred taxes	86,000	86,600
Total current assets	4,184,100	4,502,800
Property and equipment, net	252,100	156,500
Intangible assets, net	1,795,900	773,500
Goodwill	705,300	589,900
Other assets	28,200	24,100
Deferred taxes	146,200	106,200
Total assets	7,111,800	6,153,000
Current Liabilities:
Accounts payable	373,700	156,800
Customer advances	89,500	15,900
Accrued expenses and taxes	442,800	407,700
Contingent consideration payable, current portion	109,000	19,000
Notes payable, current portion	26,700	78,300
Total current liabilities	1,041,700	677,700
Contingent consideration payable, less current portion	391,000	51,600
Notes payable, less current portion	0	26,700
Total liabilities	1,432,700	756,000
Shareholders' equity:
Common stock, $.05 par value; authorized 7,000,000 shares; issued 1,488,914 shares in 2014 and 1,357,465 in 2013	74,400	67,900
Additional paid-in capital	2,420,700	1,977,100
Accumulated other comprehensive gain (loss), unrealized holding gain (loss) on investment securities	1,100	(13,600)
Retained earnings	3,235,300	3,418,000
Total	5,731,500	5,449,400
Less common stock held in treasury, at cost, 19,802 shares	52,400	52,400
Total shareholders' equity	5,679,100	5,397,000
Total liabilities and shareholders' equity	$ 7,111,800	$ 6,153,000

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12. Income Taxes (Details 1) (USD $)	Jun. 30, 2014	Jun. 30, 2013
Deferred tax assets:
Amortization of intangibles	$ 153,300	$ 146,100
Various accruals	75,100	49,600
Other	48,100	53,400
Gross	276,500	249,100
Deferred tax liability:
Depreciation of property and amortization of goodwill	(44,300)	(56,300)
Net deferred tax assets	$ 232,200	$ 192,800

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY (USD $)	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income / Loss	Retained Earnings	Treasury Stock	Total
Balance beginning, Amount at Jun. 30, 2012	$ 67,800	$ 1,968,700	$ (12,600)	$ 3,061,700	$ 52,400	$ 5,033,200
Balance beginning, Shares at Jun. 30, 2012	1,355,514				19,802
Net income (loss)				396,400		396,400
Unrealized holding gain/ loss on investment securities,net of tax			(1,000)			(1,000)
Exercise of stock options, Shares	5,000
Exercise of stock options, Amount	250	(250)
Stock-based compensation		8,500				8,500
Cash dividend declared and paid				(40,100)		(40,100)
Tender of common stock, shares	(3,049)
Tender of common stock, amount	(150)	150
Balance ending, Amount at Jun. 30, 2013	67,900	1,977,100	(13,600)	3,418,000	52,400	5,397,000
Balance ending, Shares at Jun. 30, 2013	1,357,465				19,802
Net income (loss)				(75,300)		(75,300)
Unrealized holding gain/ loss on investment securities,net of tax			14,700			14,700
Exercise of stock options, Shares	5,000
Exercise of stock options, Amount	200	6,500				6,700
Stock-based compensation		16,000				16,000
Cash dividend declared and paid				(107,400)		(107,400)
Issuance of comon stock, shares	126,449
Issuance of comon stock, amount	6,300	421,100				427,400
Balance ending, Amount at Jun. 30, 2014	$ 74,400	$ 2,420,700	$ 1,100	$ 3,235,300	$ 52,400	$ 5,679,100
Balance ending, Shares at Jun. 30, 2014	1,488,914				19,802

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3. Segment Information and Concentrations (Details) (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Depreciation and Amortization	$ 262,800	$ 178,800
Benchtop Laboratory Equipment [Member]
Revenues	4,679,100	4,466,000
Foreign Sales	2,617,300	2,549,100
Income (Loss) from Operations	156,000	525,900
Assets	4,129,100	2,501,600
Long-lived Asset Expenditures	1,476,500	18,300
Depreciation and Amortization	130,900	43,300
Catalyst Research Instruments [Member]
Revenues	1,923,300	2,541,500
Foreign Sales	866,900	1,603,800
Income (Loss) from Operations	(145,700)	151,400
Assets	1,535,300	1,646,600
Long-lived Asset Expenditures	11,300	23,300
Depreciation and Amortization	35,000	35,300
Bioprocessing Systems [Member]
Revenues	190,800	127,000
Foreign Sales	2,000
Income (Loss) from Operations	(49,500)	(169,900)
Assets	799,800	903,600
Long-lived Asset Expenditures	8,500	9,200
Depreciation and Amortization	96,900	100,200
Corporate and Other [Member]
Revenues	0	0
Foreign Sales	0	0
Income (Loss) from Operations	(79,500)	0
Assets	647,600	1,101,200
Long-lived Asset Expenditures	0	0
Depreciation and Amortization	0	0
Consolidated [Member]
Revenues	6,793,200	7,134,500
Foreign Sales	3,486,200	4,152,900
Income (Loss) from Operations	(118,700)	507,400
Assets	7,111,800	6,153,000
Long-lived Asset Expenditures	1,496,300	50,800
Depreciation and Amortization	$ 262,800	$ 178,800

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1. Summary of significant accounting policies (Policies)

12 Months Ended

Jun. 30, 2014

Notes to Financial Statements

Principles of consolidation

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Scientific Industries, Inc., Scientific Packaging Industries, Inc., an inactive wholly-owned subsidiary, Altamira Instruments, Inc. (“Altamira”), a Delaware corporation and wholly-owned subsidiary, and Scientific Bioprocessing, Inc. (“SBI”), a Delaware corporation and wholly-owned subsidiary, (all collectively referred to as the “Company”). All material intercompany balances and transactions have been eliminated.

Revenue Recognition

Revenue Recognition

Revenue from product sales is recognized when all the following criteria are met:

· Receipt of a written purchase order agreement which is binding on the customer.

· Goods are shipped and title passes.

· Prices are fixed.

· Collectability is reasonably assured.

· All material obligations under the agreement have been substantially performed.

Substantially all orders are F.O.B. shipping point, all sales are final without right of return or payment contingencies, and there are no special sales arrangements or agreements with any customers.

Royalty revenue received under the Company’s sublicenses is recorded net of payments due to its licensors.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments purchased with a maturity of 90 days or less to be cash equivalents. At times, cash balances may be in excess of the Federal Deposit Insurance Corporation (“FDIC”) insurance limit. As of June 30, 2014 and 2013, $52,800 and $256,200, respectively of cash balances were in excess of such limit.

Accounts Receivable

Accounts Receivable

In order to record the Company’s accounts receivable at their net realizable value, the Company must assess their collectability. A considerable amount of judgment is required in order to make this assessment, including an analysis of historical bad debts and other adjustments, a review of the aging of the Company’s receivables, and the current creditworthiness of the Company’s customers. The Company has recorded allowances for receivables which it considered uncollectible, including amounts for the resolution of potential credit and other collection issues such as disputed invoices, customer satisfaction claims and pricing discrepancies. However, depending on how such potential issues are resolved, or if the financial condition of any of the Company’s customers was to deteriorate and its ability to make required payments became impaired, increases in these allowances may be required. The Company actively manages its accounts receivable to minimize credit risk. The Company does not obtain collateral for its accounts receivable.

Customer Advances

Customer Advances

In the ordinary course of business, customers may make advance payments for purchase orders. Such amounts, when received, are categorized as liabilities under the caption customer advances.

Investment Securities

Investment Securities

Securities available for sale are carried at fair value with unrealized gains or losses reported in a separate component of shareholders’ equity. Realized gains or losses are determined based on the specific identification method.

Inventories

Inventories

Inventories are valued at the lower of cost (determined on a first-in, first-out basis) or market value, and have been reduced by an allowance for excess and obsolete inventories. The estimate is based on management’s review of inventories on hand compared to estimated future usage and sales. Cost of work-in-process and finished goods inventories include material, labor and manufacturing overhead.

Property and Equipment

Property and Equipment

Property and equipment are stated at cost. Depreciation of property and equipment is provided for primarily by the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized by the straight-line method over the term of the related lease or the estimated useful lives of the assets, whichever is shorter.

Intangible Assets

Intangible Assets

Intangible assets consist primarily of acquired technology, customer relationships, non-compete agreements, patents, licenses, websites, intellectual property and research and development (“IPR&D”), trademarks and trade names. All intangible assets are amortized on a straight-line basis over the estimated useful lives of the respective assets, generally 3 to 10 years. The Company continually evaluates the remaining estimated useful lives of intangible assets that are being amortized to determine whether events or circumstances warrant a revision to the remaining period of amortization.

Goodwill and Long-Lived Assets

Goodwill and Long-Lived Assets

Goodwill represents the excess of purchase price over the fair value of identifiable net assets acquired in a business combination. Goodwill and long-lived intangible assets are tested for impairment at least annually in accordance with the provisions of ASC No. 350, “Intangibles-Goodwill and Other” (“ASC No. 350”). ASC No. 350 requires that goodwill be tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Application of the goodwill impairment test requires judgment, including the identification of reporting units, assignment of assets and liabilities to reporting units, assignment of goodwill to reporting units, and determination of the fair value of each reporting unit. The Company tests goodwill and long-lived assets annually as of June 30, the last day of its fiscal year, unless an event occurs that would cause the Company to believe the value is impaired at an interim date.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

The Company follows the provisions of ASC No. 360-10, “Property, Plant and Equipment – Impairment or Disposal of Long-Lived Assets (“ASC No. 360-10”). ASC No. 360-10 which requires evaluation of the need for an impairment charge relating to long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If an evaluation for impairment is required, the estimated future undiscounted cash flows associated with the asset would be compared to the asset’s carrying amount to determine if a write down to a new depreciable basis is required. If required, an impairment charge is recorded based on an estimate of future discounted cash flows. No impairment change has been recorded for the years ended June 30, 2014 and 2013.

Income Taxes

Income Taxes

The Company and its subsidiaries file a consolidated U.S. federal income tax return. Income taxes are accounted for under the asset and liability method. The Company provides for federal, and state income taxes currently payable, as well as for those deferred due to timing differences between reporting income and expenses for financial statement purposes versus tax purposes. Deferred tax assets and liabilities are recognized for the future tax consequences attributed to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in income tax rates is recognized as income or expense in the period that includes the enactment date.

The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

Advertising

Advertising

Advertising costs are expensed as incurred. Advertising expense amounted to $53,200 and $30,000 for the years ended June 30, 2014 and 2013, respectively.

Shipping and Handling

Shipping and Handling

The Company classifies costs associated with shipping and handling fees as a component of cost of goods sold.

Stock Compensation Plan

Stock Compensation Plan

The Company has a ten-year stock option plan (the “2012 Plan”) which provides for the grant of options to purchase up to 100,000 shares of the Company’s Common Stock, par value $.05 per share (“Common Stock”), plus 57,000 shares under options previously granted under the 2002 Stock Option Plan of the Company (the “Prior Plan”). The 2012 Plan provides for the granting of incentive or non-incentive stock options as defined in the 2012 Plan and options under the 2012 Plan may be granted until 2022. Incentive stock options may be granted to employees at an exercise price equal to 100% (or 110% if the optionee owns directly or indirectly more than 10% of the outstanding voting stock) of the fair market value of the shares of Common Stock on the date of the grant which shall not be less than the book value per share of Common Stock as of the end of the most recent fiscal quarter. Non-incentive stock options shall not be granted at less than the fair market value of the shares of Common Stock on the date of grant, and the per share book value. At June 30, 2014 and 2013, 82,000 and 93,000 shares respectively, of Common Stock were available for grant of options under the 2012 Plan.

Stock-based compensation is accounted for in accordance with ASC No. 718 “Compensation-Stock Compensation” (“ASC No. 718”) which requires compensation costs related to stock-based payment transactions to be recognized. With limited exceptions, the amount of compensation cost is measured based on the grant-date fair value of the equity or liability instruments issued. In addition, liability awards are measured at each reporting period. Compensation costs are recognized over the period that an employee provides service in exchange for the award. During the year ended June 30, 2014, the Company granted 11,000 options to employees and the Chairman of the Board of Directors that had a fair value of $19,500. The fair value of the options granted during fiscal year 2014 was determined using the Black-Scholes-Merton option-pricing model. The weighted average assumptions used for fiscal 2014, was an expected life of 10 years; risk free interest rate of 2.75%; volatility of 62%, and dividend yield of 2.92%. The weighted-average value per share of the options granted in 2014 was $1.78, and stock-based compensation costs were $16,000 and $8,500 for the years ended June 30, 2014 and 2013. Stock-based compensation costs related to nonvested awards to be recognized in the future are $9,000 and $3,700 as of June 30, 2014 and 2013, respectively.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and judgments that affect the amounts reported in the financial statements and accompanying notes. The actual results experienced by the Company may differ materially from management’s estimates.

Earnings Per Common Share

Earnings (Loss) Per Common Share

Basic earnings (loss) per common share is computed by dividing net income (loss) by the weighted-average number of shares outstanding. Diluted earnings per common share includes the dilutive effect of stock options.

New Accounting Pronouncements

New Accounting Pronouncements

In July 2013, the Financial Accounting Standards Board (“FASB”) issued ASU 2013-11, Income Taxes (Topic 740), which clarifies the presentation requirements of unrecognized tax benefits when a net operating loss carries forward, a similar tax loss, or a tax credit carry forward exists at the reporting date. The amendments in this ASU are effective for the fiscal years, and interim periods within those years, beginning after December 15, 2013 and should be applied prospectively. The adoption of this ASU did not have a material impact to the Company’s consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers amending revenue recognition requirements for multiple-deliverable revenue arrangements. This update provides guidance on how revenue is recognized 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 the goods or services. This determination is made in five steps: (i) identity the contract with the customer: (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The update is effective for the Company beginning July 1, 2017. Early adoption is not permitted. The Company is currently evaluating the impact this guidance may have on its financial condition and results of operations.

In June 2014, the FASB issued ASU 2014-12, Compensation – Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide that a Performance Target Could be Achieved After the Requisite Service Period. This update affects reporting entities that grant their employee’s targets that affects vesting could be achieved after the requisite service period. The new standard requires that a performance target that affects vesting and that could be achieved after the requisite services priod be treated as a performance condition. The new standard will be effective for the Company beginning July 1, 2015, and early adoption is permitted. The Company expects the adoption will not have a material impact on its financial condition, results of operations or cash flows.

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4. Fair Value of Financial Instruments (Details) (USD $)	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2012
Cash and cash equivalents	$ 493,700	$ 927,300	$ 769,300
Available for sale securities	415,400	908,400
Total	909,100	1,835,700
Liabilities:
Contingent consideration	500,000	70,600
Level 1
Cash and cash equivalents	493,700	927,300
Available for sale securities	415,400	908,400
Total	909,100	1,835,700
Liabilities:
Contingent consideration	0	0
Level 2
Cash and cash equivalents	0	0
Available for sale securities	0	0
Total	0	0
Liabilities:
Contingent consideration	0	0
Level 3
Cash and cash equivalents	0	0
Available for sale securities	0	0
Total	0	0
Liabilities:
Contingent consideration	$ 500,000	$ 70,600

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3. Segment Information and Concentrations (Tables)

12 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Segment Information

Segment information is reported as follows:

	Benchtop Laboratory Equipment		Catalyst Research Instruments			Bioprocessing Systems			Corporate and Other			Consolidated
June 30, 2014
Revenues	$	4,679,100	$	1,923,300		$	190,800		$	—		$	6,793,200
Foreign Sales		2,617,300		866,900			2,000			—			3,486,200
Income (Loss) from Opertions		156,000		(145,700	)		(49,500	)		(79,500	)		(118,700	)
Assets		4,129,100		1,535,300			799,800			647,600			7,111,800
Long-Lived Asset Expenditures		1,476,500		11,300			8,500			—			1,496,300
Depreciation and Amortization		130,900		35,000			96,900			—			262,800
		Benchtop Laboratory Equipment		Catalyst Research Instruments			Bioprocessing Systems			Corporate and Other			Consolidated
June 30, 2013
Revenues	$	4,466,000	$	2,541,500		$	127,000		$	—		$	7,134,500
Foreign Sales		2,549,100		1,603,800						—			4,152,900
Income (Loss) from Operations		525,900		151,400			(169,900	)		—			507,400
Assets		2,501,600		1,646,600			903,600			1,101,200			6,153,000
Long-Lived Asset Expenditures		18,300		23,300			9,200			—			50,800
Depreciation and Amortization		43,300		35,300			100,200			—			178,800

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Operating activities:
Net income (loss)	$ (75,300)	$ 396,400
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	262,800	178,800
Deferred income tax expense (benefit)	(32,100)	17,600
Loss on sale of investment securities	19,500	7,600
Stock-based compensation	16,000	8,500
Changes in operating assets and liabilities, net of effect of acquisition:
Trade accounts receivable	59,200	(192,400)
Inventories	(459,600)	(91,900)
Prepaid and other current assets	(64,100)	108,800
Other assets	(4,100)	1,600
Accounts payable	216,900	42,000
Customer advances	73,600	(82,600)
Accrued expenses and taxes	22,200	170,000
Total adjustments	110,300	168,000
Net cash provided by operating activities	35,000	564,400
Investing activities, net of effect of acquisition:
Payment for assets acquired in acquisition (Note 2)	(700,000)	0
Purchase of investment securities, available for sale	(25,000)	(920,500)
Redemption of investment securities, available-for-sale	518,800	717,600
Capital expenditures	(49,900)	(37,500)
Purchase of other intangible assets	(2,900)	(13,300)
Net cash used in investing activities	(259,000)	(253,700)
Financing activities:
Line of credit proceeds	150,000	0
Line of credit repayments	(150,000)	0
Payments of contingent consideration	(30,600)	(36,800)
Proceeds from exercise of stock options	6,700	0
Cash dividend declared and paid	(107,400)	(40,100)
Principal payments on note payable	(78,300)	(75,800)
Net cash used in financing activities	(209,600)	(152,700)
Net increase (decrease) in cash and cash equivalents	(433,600)	158,000
Cash and cash equivalents, beginning of year	927,300	769,300
Cash and cash equivalents, end of period	493,700	927,300
Cash paid during the period for:
Income Taxes	152,100	0
Interest	$ 3,100	$ 4,800

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Jun. 30, 2014	Jun. 30, 2013
Statement of Financial Position [Abstract]
Allowance doubtful accounts	$ 11,600	$ 11,600
Shareholders' equity:
Common stock,par value	$ 0.05	$ 0.05
Common stock, authorized shares	7,000,000	7,000,000
Common stock, issued shares	1,488,914	1,357,465
Common stock, outstanding shares	1,488,914	1,357,465
Stock held in treasury, shares	19,802	19,802

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10. Employee Benefit Plans

12 Months Ended

Jun. 30, 2014

Compensation and Retirement Disclosure [Abstract]

10. Employee Benefit Plans

During the fiscal year ended June 30, 2013, the Company adopted a single 401(k) profit sharing plan covering all its employees, which provides for voluntary employee salary contributions not to exceed the statutory limitations provided by the Internal Revenue Code. The plan provides for Company matching contribution equal to 100% of employee’s deferral up to 3% of pay, plus 50% of employee’s deferral over 3% of pay up to 5%. Previously, the Company had two separate plans. Total matching contributions amounted to $49,600 and $42,800 for the years ended June 30, 2014 and 2013, respectively.

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Document and Entity Information (USD $)	12 Months Ended
	Jun. 30, 2014	Apr. 25, 2014
Document And Entity Information
Entity Registrant Name	SCIENTIFIC INDUSTRIES INC
Entity Central Index Key	0000087802
Document Type	10-K
Document Period End Date	Jun. 30, 2014
Amendment Flag	false
Current Fiscal Year End Date	--06-30
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		1,469,112
Public Float		$ 2,558,100
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2014

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11. Commitments and Contingencies

12 Months Ended

Jun. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

11. Commitments and Contingencies

The Company’s current lease for its existing Bohemia, New York premises expires in January 2015, but will terminate upon the Company’s move to a smaller neighboring facility in the same vicinity from the same landlord, at a lower rental rate under a new lease through February 2025, which requires minimum annual rental payments plus other expenses, including real estate taxes and insurance. The future minimum annual rental expense, computed on a straight-line basis, is approximately $177,600 under the terms of the new lease. Rental expense for the Bohemia facility under its current lease amounted to approximately $239,800 in 2014 and $233,500 in 2013. Accrued rent, payable in future years, amounted to $18,700 and $44,200 at June 30, 2014 and 2013, respectively.

The Company is also obligated under an operating lease for its facility in Pittsburgh, Pennsylvania, through November 2017, which requires monthly minimum rental payments through November 2017, plus common area expenses. Total rental expenses for the Pittsburgh facility was $95,000 and $77,200 for the fiscal years ended June 30, 2014 and 2013.

In addition, the Company’s new Torbal division was operating from a Clifton, New Jersey facility and as of mid-July 2014 moved to a significantly smaller office facility in Oradell, New Jersey from which it performs its sales and marketing functions. The Company was obligated under a previous agreement to pay $24,000 for an early lease termination for the Clifton facility. Total rental expenses for the New Jersey facilities, including the fee, was $47,900 for the fiscal year ended June 30, 2014.

The Company’s approximate future minimum rental payments under all operating leases are as follows:

Fiscal Years
2015	$	251,700
2016		255,600
2017		264,000
2018		205,000
2019		174,000
Thereafter		841,600
	$	1,991,900

The Company has employment contracts with its President providing for an annual base salary of $154,000 and $150,000 for the fiscal years ending June 30, 2015 and 2014 and with its Executive Vice President providing for an annual base salary of $139,000 and $135,000 for the fiscal years ending June 30, 2015 and 2014. Both contracts also provide for discretionary performance bonuses. Bonuses of $10,000 and $5,000 were awarded to the President and Executive Vice President, respectively, for the year ended June 30, 2013. No bonuses were awarded for the fiscal year ended June 30, 2014 to either executive except for a stock option granted to the Executive Vice President during the year ended June 30, 2014, valued at $3,500 using the Black-Scholes-Merton option pricing model.

The Company has an employment contract with the President of Altamira through June 30, 2015, which may be extended by mutual consent for an additional year. The contract provides for an annual base salary of $140,000 and $135,000 for each of the fiscal years ending June 30, 2015 and 2014, respectively, plus discretionary bonuses. A bonus of $5,000 was awarded for the fiscal year ended June 30, 2013. No bonus was awarded for the fiscal year ended June 30, 2014, except for a stock option granted during the year ended June 30, 2014, valued at $3,500 using the Black-Scholes-Merton option pricing model.

The Company has a consulting agreement which expires on December 31, 2014 with an affiliate of the Chairman of the Board of Directors for marketing consulting services. The agreement provides that the consultant be paid a monthly fee of $3,600 for a certain number of consulting days as defined in the agreement. Stock options were granted to the Chairman of the Board of Directors valued at $8,700 during the year ended June 30, 2014. Consulting expense related to this agreement amounted to $50,100 and $44,600 for the years ended June 30, 2014 and 2013, respectively.

The Company has an employment agreement dated February 2014 with the President of its Torbal Division which expires in February 2017, which may be extended by mutual consent for another two years. The contract provides for an annual base salary of $140,000 subject to increases commencing with the second year based on percentage increases in the Consumer Price Index from the end of the immediately preceding year’s CPI plus discretionary bonuses. No bonuses were awarded during the fiscal year ended June 30, 2014, however as part of the employment agreement, he was awarded a 2,000 share stock option upon commencement of his employment with the Company valued at $3,900 using the Black-Scholes-Merton option pricing model. In addition, he is to be granted, subject to his continued employment in February 2015, 2016 and 2017 options for 4,000 shares, 5,000 shares and 6,000 shares, respectively.

The Company had a consulting agreement which expired March 31, 2014 with another member of its Board of Directors for administrative services providing that the consultant be paid at the rate of $85 per hour. Consulting expense related to this agreement amounted to $5,700 and $6,100 for the fiscal years ended June 30, 2014 and 2013, respectively.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Income Statement [Abstract]
Revenues	$ 6,793,200	$ 7,134,500
Cost of sales	4,178,900	4,175,800
Gross profit	2,614,300	2,958,700
Operating expenses:
General & administrative	1,513,400	1,277,700
Selling	792,900	723,100
Research & development	426,700	450,500
Total operating expenses	2,733,000	2,451,300
Income (loss) from operations	(118,700)	507,400
Other income (expense):
Interest income	0	6,800
Other	14,800	11,400
Interest expense	(3,100)	(4,800)
Total other income	11,700	13,400
Income (loss) before income tax expense (benefit)	(107,000)	520,800
Income tax expense (benefit): Current	400	106,800
Income tax expense (benefit): Deferred	(32,100)	17,600
Total income tax expense (benefit)	(31,700)	124,400
Net income (loss)	$ (75,300)	$ 396,400
Basic earnings (loss) per common share	$ (0.05)	$ 0.30
Diluted earnings (loss) per common share	$ (0.05)	$ 0.30
Weighted average common shares outstanding, basic	1,385,054	1,337,048
Weighted average common shares outstanding, assuming dilution	1,385,054	1,342,212

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5. Inventories

12 Months Ended

Jun. 30, 2014

Inventory Disclosure [Abstract]

Inventories

		2014		2013
Raw materials	$	1,617,100	$	1,336,800
Work-in-process		366,200		254,000
Finished goods		325,900		114,800
	$	2,309,200	$	1,705,600

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4. Fair Value of Financial Instruments

12 Months Ended

Jun. 30, 2014

Investments, All Other Investments [Abstract]

Fair Value of Financial Instruments

The Financial Accounting Standards Board defines the fair value of financial instruments as the amount 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. Fair value measurements do not include transaction costs.

The accounting guidance also expands the disclosure requirements around fair value and establishes a fair value hierarchy for valuation inputs. The hierarchy prioritizes the inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported in one of the three levels, which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are described below:

Level 1 Inputs that are based upon unadjusted quoted prices for identical instruments traded in active markets.

Level 2 Quoted prices in markets that are not considered to be active or financial instruments for which all significant inputs are observable, either directly or indirectly.

Level 3 Prices or valuation that require inputs that are both significant to the fair value measurement and unobservable.

The following tables set forth by level within the fair value hierarchy the Company’s financial assets that were accounted for at fair value on a recurring basis at June 30, 2014 and 2013 according to the valuation techniques the Company used to determine their fair values:

Assets:			Fair Value Measurements Using Inputs Considered as
	Fair Value at June 30, 2014		Level 1		Level 2		Level 3
Cash and cash equivalents	$	493,700	$	493,700	$	—	$	—
Available for sale securities		415,400		415,400		—		—
Total	$	909,100	$	909,100	$	—	$	—
Liabilities:
Contingent consideration	$	500,000	$	—	$	—	$	500,000

Assets:			Fair Value Measurements Using Inputs Considered as
	Fair Value at June 30, 2013		Level 1		Level 2		Level 3
Cash and cash equivalents	$	927,300	$	927,300	$	—	$	—
Available for sale securities		908,400		908,400		—		—
Total	$	1,835,700	$	1,835,700	$	—	$	—
Liabilities:
Contingent consideration	$	70,600	$	—	$	—	$	70,600

Investments in marketable securities classified as available-for-sale by security type at June 30, 2014 and 2013 consisted of the following:

	Cost		Fair Value		Unrealized Holding Gain (Loss)
At June 30, 2014:
Available for sale:
Equity securities	$	29,300	$	38,500	$	9,200
Mutual funds		385,000		376,900		(8,100	)
	$	414,300	$	415,400	$	1,100
		Cost		Fair Value		Unrealized Holding Gain (Loss)
At June 30, 2013:
Available for sale:
Equity securities	$	29,300	$	33,200	$	3,900
Mutual funds		892,700		875,200		(17,500	)
	$	922,000	$	908,400	$	(13,600	)

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2. Acquisition (Tables)

12 Months Ended

Jun. 30, 2014

Text Block [Abstract]

Business combination

Current assets	$	144,000
Property and equipment		118,100
Goodwill*		115,400
Other intangible assets		1,210,000
Total Purchase Price	$	1,587,500

Pro Forma Results

		2014			2013
Revenues	$	7,623,200		$	8,384,500
Net income (loss)	$	(69,300	)	$	307,600
Net income (loss) per share – basic	$	(.05	)	$	.21
Net income (loss) per share - diluted	$	(.05	)	$	.21

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12. Income Taxes

12 Months Ended

Jun. 30, 2014

Income Tax Disclosure [Abstract]

12. Income Taxes

The reconciliation of the provision for income taxes at the federal statutory rate of 35% to the actual tax expense or benefit for the applicable fiscal year was as follows:

	2014					2013
		Amount		% of Pre-tax Income			Amount		% of Pre-tax Income
Computed “expected” income tax (benefit)	$	(37,500	)	(35.0	%)	$	182,300		35.0	%
Research and development credits		(1,600	)	(1.5	)		(30,700	)	(5.9	)
Other, net		7,400		6.9			(27,200	)	(5.2	)
Income tax expense (benefit)	$	(31,700	)	(29.6	%)	$	124,400		23.9	%

Deferred tax assets and liabilities consist of the following:

		2014		2013
Deferred tax assets:
Amortization of intangible assets	$	153,300	$	146,100
Various accruals		75,100		49,600
Other		48,100		53,400
		276,500		249,100

Deferred tax liability:
Depreciation of property and amortization of goodwill		(44,300	)		(56,300	)
Net deferred tax assets	$	232,200		$	192,800

The breakdown between current and long-term deferred tax assets and liabilities is as follows:

		2014			2013
Current deferred tax assets	$	86,000		$	86,600
Long-term deferred tax assets		190,500			162,500
Long-term deferred tax liabilities		(44,300	)		(56,300	)
Net long-term deferred tax assets		146,200			106,200
Net deferred tax assets	$	232,200		$	192,800

ASC No. 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC No. 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. As of June 30, 2014 and 2013, the Company did not have any unrecognized tax benefits related to various federal and state income tax matters.

The Company’s policy is to recognize interest and penalties on any unrecognized tax benefits as a component of income tax expense. The Company does not have any accrued interest or penalties associated with any unrecognized tax benefits. The Company is subject to U.S. federal income tax, as well as various state jurisdictions. The Company is currently open to audit under the statute of limitations by the federal and state jurisdictions for the years ending June 30, 2011 through 2013. The Company does not anticipate any material amount of unrecognized tax benefits within the next 12 months.

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8. Loan Payable, Bank

12 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

8. Loan Payable, Bank

In June 2014, the Company obtained a line of credit with Bank of America Merrill Lynch which provides for maximum borrowings of up to $700,000, bearing interest currently at 3.155% per annum (based on 3.00 percentage points over the LIBOR Index) and secured by a pledge of collateral consisting of the inventory, accounts, chattel paper, and equipment and fixtures of the Company. Outstanding amounts are due and payable by November 30, 2015 with a requirement that the Company is to reduce the outstanding principal balance to zero during the 30 day period ending on the anniversary date of the Note. This line of credit replaced a $700,000 line of credit with JP Morgan Chase Bank, N.A. The Company did not have any amounts outstanding under the lines at June 30, 2014 and 2013.

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6. Property and Equipment

12 Months Ended

Jun. 30, 2014

Property, Plant and Equipment [Abstract]

6. Property and Equipment

	Useful Lives
	(Years)		2014		2013
Automobiles	5	$	14,900	$	14,900
Computer equipment	3 to 5		155,800		132,100
Machinery and equipment	3 to 7		744,800		627,500
Furniture and fixtures	4 to 10		206,900		181,000
Leasehold improvements	3 to 5		72,800		71,700
			1,195,200		1,027,200
Less accumulated depreciation and amortization			943,100		870,700
		$	252,100	$	156,500

Depreciation expense was $71,900 and $61,700 for the years ended June 30, 2014 and 2013, respectively.

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7. Goodwill and Other Intangible Assets

12 Months Ended

Jun. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

7. Goodwill and Other Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in connection with the Company’s acquisitions. Goodwill amounted to $705,300 and $589,900 at June 30, 2014 and 2013 respectively, all of which is expected to be deductible for tax purposes.

The components of other intangible assets are as follows:

	Useful Lives		Cost		Accumulated Amortization		Net
At June 30, 2014:
Technology, trademarks	5/10 yrs.	$	1,226,800	$	489,100	$	737,700
Trade names	6 yrs.		140,000		7,800		132,200
Websites	5 yrs.		210,000		14,000		196,000
Customer relationships	9/10 yrs.		357,000		215,800		141,200
Sublicense agreements	10 yrs.		294,000		77,200		216,800
Non-compete agreements	5 yrs.		384,000		126,300		257,700
IPR&D	3 yrs.		110,000		12,200		97,800
Other intangible assets	5 yrs.		157,400		140,900		16,500
		$	2,879,200	$	1,083,300	$	1,795,900

	Useful Lives		Cost		Accumulated Amortization		Net
At June 30, 2013:
Technology, trademarks	5/10 yrs.	$	865,400	$	402,100	$	463,300
Customer relationships	10 yrs.		237,000		203,200		33,800
Sublicense agreements	10 yrs.		294,000		47,800		246,200
Non-compete agreements	5 yrs.		114,000		105,900		8,100
Other intangible assets	5 yrs.		156,000		133,900		22,100
		$	1,666,400	$	892,900	$	773,500

Total amortization expense was $190,900 and $117,100 in 2014 and 2013, respectively.

Estimated future amortization expense of intangible assets is as follows:

Fiscal Years
2015	$	348,300
2016		352,400
2017		337,100
2018		323,300
2019		244,800
Thereafter		190,000
	$	1,795,900

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9. Notes Payable

12 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

9. Notes Payable

The Company has a $230,000 36-month note payable through October 2014, to University of Maryland, Baltimore County, which was part of the consideration paid for the acquisition of the bioprocessing products business in November 2011, with monthly payments of $6,714 bearing interest at 3.25%. Amounts due under the note was $26,700 and $105,000 at June 30, 2014 and 2013, respectively.

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2. Acquisition (Details 1) (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Text Block [Abstract]
Revenues	$ 7,623,200	$ 8,384,500
Net Income (loss)	$ (69,300)	$ 307,600
Net income (loss) per share - basic	$ (0.05)	$ 0.21
Net income (loss) per share - diluted	$ (0.05)	$ 0.21

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14. Earnings Per Common Share

12 Months Ended

Jun. 30, 2014

Equity [Abstract]

Earnings Per Common Share

Earnings (loss) per common share data was computed as follows:

		2014			2013
Net income (loss)	$	(75,300	)	$	396,400
Weighted average common shares outstanding		1,385,054			1,337,048
Effect of dilutive securities		—			5,164
Weighted average dilutive common shares outstanding		1,385,054			1,342,212
Basic earnings (loss) per common share	$	(.05	)	$	.30
Diluted earnings (loss) per common share	$	(.05	)	$	.30

Approximately 59,000 shares of the Company's common stock issuable upon the exercise of outstanding options were excluded from the calculation of diluted loss per common share, for the fiscal year ended June, 2014, because the effect would be anti-dilutive due to the loss for the period.

Approximately 40,000 shares of the Company's common stock issuable upon the exercise of outstanding options were excluded from the calculation of diluted earnings per common share for the year ended June 30, 2013, because the effect would be anti-dilutive.

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5. Inventories (Tables)

12 Months Ended

Jun. 30, 2014

Inventory Disclosure [Abstract]

Inventories

		2014		2013
Raw materials	$	1,617,100	$	1,336,800
Work-in-process		366,200		254,000
Finished goods		325,900		114,800
	$	2,309,200	$	1,705,600

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14. Earnings (Loss) per common share (Details) (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Earnings Loss Per Common Share Details
Net income (loss)	$ (75,300)	$ 396,400
Weighted average common shares outstanding	1,385,054	1,337,048
Effect of dilutive securities	0	5,164
Weighted average dilutive common shares outstanding	1,385,054	1,342,212
Basic earnings/(loss) per common share	$ (0.05)	$ 0.30
Diluted earnings/(loss) per common share	$ (0.05)	$ 0.30

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7. Goodwill and Other Intangible Assets (Details) (USD $)	12 Months Ended
	Jun. 30, 2014		Jun. 30, 2013
Cost	$ 2,879,200		$ 1,666,400
Accumulated Amortization	1,083,300		892,900
Net	1,795,900		773,500
Useful life	5 years
Technology, trademarks
Cost	1,226,800		865,400
Accumulated Amortization	489,100		402,100
Net	737,700		463,300
Useful life	5 years	[1]	5 years	[1]
Trade names [Member]
Cost	140,000
Accumulated Amortization	7,800
Net	132,200
Useful life	6 years
Websites [Member]
Cost	210,000
Accumulated Amortization	14,000
Net	196,000
Useful life	5 years
Customer relationships
Cost	357,000		237,000
Accumulated Amortization	215,800		203,200
Net	141,200		33,800
Useful life	9 years	[2]	10 years
Sublicense agreements
Cost	294,000		294,000
Accumulated Amortization	77,200		47,800
Net	216,800		246,200
Useful life	10 years		10 years
Non-compete agreements
Cost	384,000		114,000
Accumulated Amortization	126,300		105,900
Net	257,700		8,100
Useful life	5 years		5 years
IPR and D
Cost	110,000
Accumulated Amortization	12,200
Net	97,800
Other intangible assets
Cost	157,400		156,000
Accumulated Amortization	140,900		133,900
Net	$ 16,500		$ 22,100
Useful life	5 years		5 years

[1] 5 to 10 years

[2] 9 to 10 years

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $)	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Condensed Consolidated Statements Of Comprehensive Income Loss
Net income (loss)	$ (75,300)	$ 396,400
Other comprehensive income (loss):
Unrealized holding gain (loss) arising during period, net of tax	14,700	(1,000)
Comprehensive income (loss)	$ (60,600)	$ 395,400

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3. Segment Information and Concentrations

12 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Segment Information and Concentrations

The Company views its operations as three segments: the manufacture and marketing of standard benchtop laboratory equipment for research in university, hospital and industrial laboratories sold primarily through laboratory equipment distributors and laboratory and pharmacy balances and scales (“Benchtop Laboratory Equipment Operations”), the manufacture and marketing of custom-made catalyst research instruments for universities, government laboratories, and chemical and petrochemical companies sold on a direct basis (“Catalyst Research Instruments Operations”) and the design of bioprocessing systems and products and related royalty income (“Bioprocessing Systems”).

Segment information is reported as follows:

	Benchtop Laboratory Equipment		Catalyst Research Instruments			Bioprocessing Systems			Corporate and Other			Consolidated
June 30, 2014
Revenues	$	4,679,100	$	1,923,300		$	190,800		$	—		$	6,793,200
Foreign Sales		2,617,300		866,900			2,000			—			3,486,200
Income (Loss) from Opertions		156,000		(145,700	)		(49,500	)		(79,500	)		(118,700	)
Assets		4,129,100		1,535,300			799,800			647,600			7,111,800
Long-Lived Asset Expenditures		1,476,500		11,300			8,500			—			1,496,300
Depreciation and Amortization		130,900		35,000			96,900			—			262,800
		Benchtop Laboratory Equipment		Catalyst Research Instruments			Bioprocessing Systems			Corporate and Other			Consolidated
June 30, 2013
Revenues	$	4,466,000	$	2,541,500		$	127,000		$	—		$	7,134,500
Foreign Sales		2,549,100		1,603,800						—			4,152,900
Income (Loss) from Operations		525,900		151,400			(169,900	)		—			507,400
Assets		2,501,600		1,646,600			903,600			1,101,200			6,153,000
Long-Lived Asset Expenditures		18,300		23,300			9,200			—			50,800
Depreciation and Amortization		43,300		35,300			100,200			—			178,800

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6. Property and Equipment (Tables)

12 Months Ended

Jun. 30, 2014

Property And Equipment Tables

Schedule of property and equipment

	Useful Lives
	(Years)		2014		2013
Automobiles	5	$	14,900	$	14,900
Computer equipment	3 to 5		155,800		132,100
Machinery and equipment	3 to 7		744,800		627,500
Furniture and fixtures	4 to 10		206,900		181,000
Leasehold improvements	3 to 5		72,800		71,700
			1,195,200		1,027,200
Less accumulated depreciation and amortization			943,100		870,700
		$	252,100	$	156,500

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5. Inventories (Details) (USD $)	Jun. 30, 2014	Jun. 30, 2013
Inventories Details
Raw materials	$ 1,617,100	$ 1,336,800
Work-in-process	366,200	254,000
Finished goods	325,900	114,800
Inventory	$ 2,309,200	$ 1,705,600

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13. Stock Options

12 Months Ended

Jun. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

13. Stock Options

Option activity is summarized as follows:

	Fiscal 2014					Fiscal 2013
					Weighted-					Weighted-
					Average					Average
					Exercise					Exercise
		Shares			Price		Shares			Price
Shares under option:
Outstanding, beginning of year		55,000		$	2.86		60,000		$	2.73
Granted		11,000			3.53		—			—
Exercised		(5,000	)		1.35		(5,000	)		1.25
Outstanding, end of year		61,000			3.11		55,000			2.86
Options exercisable at year-end		48,300		$	2.82		51,000		$	2.81
Weighted average fair value per share of options granted during fiscal 2014				$	1.78

		As of June 30, 2014 Options Outstanding					As of June 30, 2014 Exercisable
				Weighted-
				Average		Weighted-				Weighted-
	Range			Remaining		Average				Average
	Exercise		Number	Contractual		Exercise		Number		Exercise
	Prices		Outstanding	Life (Years)		Price		Outstanding		Price
$	1.88		10,000	.2	$	1.88		10,000	$	1.88
	$3.07-$3.71		51,000	4.17	$	3.35		38,300	$	3.28
			61,000					48,300

	As of June 30, 2013 Options Outstanding					As of June 30, 2013 Exercisable
			Weighted-
			Average		Weighted-				Weighted-
Range			Remaining		Average				Average
Exercise		Number	Contractual		Exercise		Number		Exercise
Prices		Outstanding	Life (Years)		Price		Outstanding		Price
$1.35-$1.88		15,000	.94	$	1.70		15,000	$	1.70
$3.07-$3.71		40,000	3.72	$	3.30		36,000	$	3.27
		55,000					51,000