8. Contingent Payments

6 Months Ended

Dec. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Contingent Payments

Contingent payments at December 31, 2014 and June 30, 2014 relate to AES asset purchase transactions completed in conjunction with the construction of water disposal facilities for the treatmentanddisposal of produced water generated by oil and natural gas producers in Western Colorado. Details of the contingent payments are as follows:

	December 31,			June 30,
	2014			2014
Contingent land payment	$	649,800		$	660,200
Contingent purchase price		535,600			528,100
		1,185,400			1,188,300
Less current portion		(50,000	)		(50,000	)
Contingent payments, long-term	$	1,135,400		$	1,138,300

Contingent land payment of $649,800 at December 31, 2014 represents the net present value of $800,000 of estimated contingent land payments due under an agreement whereby Alanco Energy Services, Inc. (“AES”) acquired 160 acres of land known as Indian Mesa. The payment is based upon 10% of any quarterly income (defined as gross revenues less operating expenses up to a maximum of $200,000 per quarter and $800,000 annually) for activity at both the Deer Creek and the Indian Mesa locations. The payments were projected considering current operating plans as approved by the Alanco Board of Directors, with the payments discounted at a rate of 3% per annum. Accretion expense is being imputed at 3% per annum, increasing the fair value of the contingent land payment during the six months ended December 31, 2014 by $9,300. During the six months ended December 31, 2014, approximately $19,800 was earned and payable under the contingency formula.

Contingent purchase priceof $535,600at December 31, 2014represents the net present value of projected payments to be made to TC Operating, LLC (“TCO”) pursuant to an Asset Purchase Agreement under which TC Operating transferred a land lease for approximately 24 acres of land known as Deer Creek and all related tangible and intangible assets. Per the agreement, the contingent payments are determined as 28% of the Cumulative EBITDA in excess of all of AES’s capital investment for the ten (10) year period commencing on January 1, 2014. AES’s Capital investment shall mean the aggregate amount incurred by AES in acquiring the Assets, the Indian Mesa Facility, and or improving either the Deer Creek Facility or the Indian Mesa Facility. Payments of said Contingent Purchase Price shall be payable quarterly. The projected payments consider current operating plans as approved by the Alanco Board of Directors, with payments discounted at a rate of 3% per annum to determine net present value. Accretion expense is being imputed at 3% per annum, increasing the fair value of the contingent land payment during the sixmonths ended December 31, 2014 by $7,500.