Annual and Transition Report (foreign Private Issuer) (20-f)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

(Mark One)

☐	Registration statement pursuant to section 12(b) or (g) of the Securities Exchange Act of 1934

☒	Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended June 30, 2015

☐	Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

☐	Shell company report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

Date of event requiring this shell company report

From the transition period from _________ to __________

Commission file number 001-36136

BlueNRGY Group Limited

(Exact Name of Registrant as specified in its charter)

Australia		Level 11 32 Martin Place Sydney NSW 2000 Australia
(Jurisdiction of Incorporation or Organization)		(Address of Principal Executive Offices)

Richard Pillinger

Chief Financial Officer

BlueNRGY Group Limited

Level 11

32 Martin Place

Sydney NSW 2000

Tel: +61 (0)2 8069 7970

E-mail: Richard.pillinger@bluenrgy.com

(Name, Telephone, E-mail and/or facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Ordinary Shares no par value		Not Applicable
(Title of Each Class)		(Name of Exchange On Which Registered)

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

As of June 30, 2015, 409,925,825 ordinary shares, no par value, were issued and outstanding.

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

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See the definitions of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐

Accelerated filer ☐

Non-accelerated filer ☒

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing

US GAAP ☐

International Financial Reporting Standards as issued by the
International Accounting Standards Board ☒

Other ☐

If “Other” has been checked in the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes ☐ No ☒

FORWARD-LOOKING STATEMENTS

PART I

	Item	1.	Identity of Directors, Senior Management and Advisers	1

	Item	2.	Offer Statistics and Expected Timetable	1

	Item	3.	Key Information	1

		3.A	Selected Financial Data	1

		3.B	Capitalization and Indebtedness	2

		3.C	Reasons for the offer and use of proceeds	2

		3.D	Risk Factors	2

	Item	4.	Information on the Company	30

		4.A	History and Development of the Company	30

		4.B	Our Business	33

		4.C	Organization Structure	58

		4.D	Property, Plants and Equipment	58

	Item	4A.	Unresolved Staff Comments	60

	Item	5.	Operating and Financial Review and Prospects	60

		5.A	Operating Results	60

		5.B	Liquidity and Capital Resources	79

		5.C	Research and Development	84

		5.D	Trend Information	84

		5.E	Off-Balance Sheet Arrangements	84

		5.F	Tabular Disclosure of Contractual Obligations	85

	Item	6.	Directors, Senior Management and Employees	85

		6.A	Directors and Senior Management	85

		6.B	Compensation	87

		6.C	Board Practices	90

		6.D	Employees	91

		6.E	Share Ownership	91

Item	7.	Major Shareholders and Related Party Transactions	93

	7.A	Major Shareholders	93

	7.B	Related Party Transactions	93

	7.C	Interests of Experts and Counsel	95

Item	8.	Financial Information	95

	8.A	Consolidated Statements and Other Financial Information	95

	8.B	Significant Changes	96

Item	9.	The Offer and Listing	99

	9.A	Offer and Listing Details	99

	9.B	Plan of Distribution	101

	9.C	Markets	101

	9.D	Selling Shareholders	101

	9.E	Dilution	101

	9.F	Expenses of the Issue	101

Item	10.	Additional Information	101

	10.A	Share Capital	101

	10.B	Memorandum and Articles of Association	101

	10.C	Material Contracts	102

	10.D	Exchange Controls	102

	10.E	Taxation	104

	10.F	Dividends and Paying Agents	110

	10.G	Statement by Experts	110

	10.H	Documents on Display	111

	10.I	Subsidiary Information	111

Item	11.	Quantitative and Qualitative Disclosures about Market Risk	111

Item	12.	Description of Securities Other than Equity Securities	112

	12.A	Debt Securities	112

	12.B	Warrants and Rights	112

	12.C	Other Securities	112

	12.D	American Depositary Shares	112

PART II

	Item	13.	Defaults, Dividend Arrearages and Delinquencies	113

	Item	14.	Material Modifications to the Rights of Security Holders and Use of Proceeds	113

	Item	15.	Controls and Procedures	115

	Item	16A.	Audit Committee Financial Expert	116

	Item	16B.	Code of Ethics	116

	Item	16C.	Principal Accountant Fees and Services	116

	Item	16D.	Exemptions from the Listing Standards for Audit Committees	117

	Item	16E.	Purchases of Equity Securities by the Issuer and Affiliated Purchasers	117

	Item	16F.	Change in Registrant’s Certifying Accountant	117

	Item	16G.	Corporate Governance	117

	Item	16H.	Mine Safety Disclosure	119

PART III

	Item	17.	Financial Statements	119

	Item	18.	Financial Statements

	Item	19.	Exhibits	120

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

The Securities and Exchange Commission (the “SEC”), encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. Except for the historical information contained in this annual report on Form 20-F (this “Report”), the statements contained in this Report are “forward-looking statements” which reflect our current view with respect to future events and financial results.

Words such as “may,” “anticipate,” “estimate,” “expects,” “projects,” “intends,” “plans,” “believes” and words and terms of similar substance used in connection with any discussion of future operating or financial performance, identify forward-looking statements. Forward-looking statements represent management’s present judgment regarding future events and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks include, but are not limited to, risks and uncertainties regarding enactment of the approved share consolidation and the Company’s ability to regain and maintain compliance with the NASDAQ listing rules, as well as risks and uncertainties relating to litigation, government regulation, economic conditions, markets, products, competition, intellectual property, services and prices, key employees, future capital needs, dependence on third parties and other factors. Please also see the discussion of risks and uncertainties under “Risk Factors” contained in Item 3.D. of this Report.

In light of these assumptions, risks and uncertainties, the results and events discussed in the forward-looking statements contained in this Report might not occur. Investors are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this Report. We are not under any obligation, and we expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise. All subsequent forward-looking statements attributable to us or to any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this document.

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

3.A. Selected Financial Data

The following consolidated statement of operations data as of June 30, 2015, 2014 and 2013 and for the three years ended June 30, 2015, 2014 and 2013 and summary consolidated balance sheet data as of June 30, 2015 and 2014 and for the two years ended June 30, 2015 and 2014 are derived from the audited consolidated financial statements of BlueNRGY Group Limited included elsewhere in this Report.

Our historical results are not necessarily indicative of the results that may be expected for any other future period. Unless otherwise specified, all amounts are presented in Australian Dollars (A$).

You should read the selected consolidated financial data set forth below in conjunction with Item 5 “Operating and Financial Review and Prospects” and our audited consolidated financial statements and notes thereto included elsewhere in this Report.

Consolidated Statements of Operations Data:

Amounts in A$(000) except as noted

			Consolidated
For the year ended June 30	2015 $’000			Restated 2014 $’000		Restated 2013 $’000

Revenues from continuing operations	16,866			13,732		43,473
Other income	1,972			655		2,609
Cost of raw materials, consumables used, and contractors	(8,525	)		(6,092	)	(21,926	)
Employee benefit expenses	(11,390	)		(9,323	)	(11,025	)
Amortisation and depreciation	(486	)		(420	)	(402	)
Impairment of asset	(6,217	)		(10,019	)	(590	)
Other expenses	(5,942	)		(6,688	)	(6,008	)
Net finance income/(costs)	85			(4,051	)	(8,325	)
Loss from continuing operations before income tax	(13,637	)		(22,206	)	(2,194	)
Income tax benefit/(expense)	—			—		65
Loss from continuing operations	(13,637	)		(22,206	)	(2,129	)

Profit/(loss) from discontinued operations	19,341			(3,224	)	(6,278	)

Net profit/(loss) for the period	5,704			(25,430	)	(8,407	)

Other comprehensive income
Items that may be reclassified to profit or loss
Changes in the fair value of available-for-sale financial assets	—			(800	)	800
Exchange differences on translation of foreign operations	(376	)		(68	)	33
Other comprehensive loss for the period, net of tax of $ Nil (2014- $ Nil)	(376	)		(868	)	833
Total comprehensive profit/(loss) for the period	5,328			(26,298	)	(7,574	)

	Dollars			Dollars
Earnings per share for profit from continuing operations attributable to the ordinary equity holders of the company:
Basic loss per share	(0.10	)		(11.37	)
Diluted loss per share	(0.10	)		(11.37	)
Earnings per share for profit attributable to the ordinary equity holders of the company:
Basic earnings/(loss) per share	0.04			(13.02	)
Diluted earnings/(loss) per share	0.04			(13.02	)

Consolidated Balance Sheet Data:

	2015		2014
Amounts in A$(000)			(restated)
Current assets		3,657		7,559
Non-current assets		16,442		11,169
Total Assets		20,099		18,728

Current liabilities		8,294		38,070
Non-current liabilities		4,659		329
Total liabilities		12,953		38,399

Shareholders’ equity		7,146		(19,671	)

Exchange Rates

The following tables set forth, for the periods and dates indicated, certain information regarding the rates of exchange of A$1.00 into US$ based on the 4pm market daily rate in Australia for cable transfers in Australian dollars as certified for customs purposes by the Reserve Bank of Australia. The exchange rate in effect on April 30, 2015, was AUD 1.00 = USD$0.8011.

A$1.00 = US$ amount shown
Fiscal Year ended June 30,	At Fiscal Year End		Average Rate (1)		High Rate		Low Rate
2011		1.0739		0.9881		1.0939		0.8366
2012		1.0191		1.0319		1.1055		0.9500
2013		0.9275		1.0271		1.0593		0.9202
2014		0.9420		0.9187		0.9672		0.8716
2015		0.7680		0.8382		0.9458		0.7590

	High Rate		Low Rate
2015 Month
June		0.7799		0.7649

2016 Month
July		0.7713		0.7289
August		0.7397		0.7114
September		0.7209		0.6924
October		0.7332		0.7038
November		0.7265		0.7047

(1) Averages are calculated using the average of the daily rates during the relevant period

3.B. Capitalization and Indebtedness

Not applicable.

3.C. Reason for the Offer and Use of Proceeds

Not Applicable.

3.D. Risk Factors

Our business faces significant risks. You should carefully consider the risks described below, as well as the other information contained in this Report, including our financial statements and related notes. If any of the following risks, as well as other risks and uncertainties that are not yet identified or that we currently think are immaterial, actually occur, our business, financial condition and results of operations could be materially and adversely affected. In that event, the trading price of our ordinary shares could decline, and you may lose part or all of your investment.

Risks Related to our Financial Condition

We experienced operating losses from continuing operations in fiscal years 2013, 2014 and 2015 and are continuing to experience operating losses in the current fiscal year that cannot be sustained by our liquidity and there is uncertainty that we can continue as a going concern.

All of our continuing business segments recorded a loss from operations and impairment of asset values for the fiscal years ended June 30, 2013 and June 30, 2014 and June 30, 2015 totaling A$2.1 million, A$22.2 million, and A$13.6 million, respectively. In November 2014 we filed for Voluntary Administration, or VA, in Australia. Pursuant to a deed of company arrangement, or DOCA, we shed various unprofitable businesses and compromised liabilities of approximately A$38.8 million and exited VA on January 27, 2015, referred to as the Emergence Date. Notwithstanding the restructuring of our business through the VA process, several of our operating units, including the monitoring business of BlueNRGY LLC acquired on the Emergence Date (as further described under Item 4.B.), have experienced operating losses and continue to do so. Moreover, there is no assurance that the losses affecting some of our businesses can be avoided in the future or that cash flow from our profitable businesses will be sufficient to offset such losses. In conjunction with our corporate overhead and our debt service obligations, operating losses have depleted our liquidity to the extent that we cannot continue as a going concern unless we can achieve one or more of the following: higher levels of operating profitably now and in the future, raising additional debt or equity capital, deferring payment to creditors and selling assets. There is no assurance that we will have access to sufficient funds from such initiatives on terms acceptable to our Board of Directors (the “Board”), or on any terms, to meet our future needs.

Some of our businesses are early in the commercialization stage and together with requirements to cover our corporate overhead will cause us to consume cash for the foreseeable future, further straining our liquidity.

Our business development and system development expenses for our monitoring line of business currently exceeds our revenues and it is uncertain when, if ever, growth in revenues from this line of business will generate cash flow in excess of costs. In addition we have re-launched our solar business in Australia and the U.S. under our own brand and will require additional working capital to fund growth to levels that would make a meaningful contribution to our profitability. We are expanding our operations and maintenance (O&M) services for renewable installations to cover new service territories and require investment to do so that must be recouped before these activities contribute to our overall cash flow. Together with meeting costs of our corporate overhead, these initiatives are likely to consume substantial cash for the foreseeable future. To the extent that our liquidity permits us to do so, our Board has determined to continue to pursue development of the monitoring, solar installations and renewable O&M businesses and cash will continue to be used for these purposes. Consequently, our liquidity may be depleted to the extent that we are unable to continue as a going concern.

Our financial results often vary significantly from period-to-period and year-to-year, and results for a particular interim period may not necessarily be indicative of the results for the following period or full year.

Certain of our businesses are subject to irregular revenues or seasonality that have led to, and in the future are likely to result in, significant fluctuations in profitability and cash flow from period to period. Our climate control and large-scale solar businesses are project driven and individual projects in either business segment can represent a meaningful percentage of our revenue, net income and cash flow in any single accounting period. Consequently, delays associated with any single project can lead to significant shortfalls in our expected financial performance. This volatile revenue pattern in our project-related businesses will be exacerbated by any projects that we choose to build, own (typically at least through the project commissioning phase) and transfer (to a third-party), referred to as BOT projects.

In addition, our Australian solar installation business has historically experienced seasonal peaks and declines that has exacerbated our quarter-to-quarter revenue and net income volatility. As a consequence of these dynamics, it is very difficult to identify trends in overall business activity or profitability for the consolidated company or to anticipate future profitability based on recent results. Moreover, the very short project implementation cycle and short lead time associated with most of our projects make other metrics of business trajectory, such as backlog, difficult to apply. Our current and future expense levels, internal operating plans and revenue forecasts, and operating costs are, to a large extent, fixed. As a result, we may not be able to sufficiently reduce our costs in any period to adequately compensate for an unexpected short-term shortfall in revenues, and even a small shortfall could disproportionately and adversely affect financial results for that period. Consequently, we could confront unanticipated liquidity shortfalls that would jeopardize our ability to continue as a going concern.

All of our lines of business are cash intensive, and operations have been, and in the future are likely to be, affected adversely if we fail to maintain sufficient levels of liquidity and working capital.

Our solar installation business requires continuing investment in marketing and advertising activities to generate leads to replenish or grow the sales pipeline. Consequently, our success depends heavily on the ability to fund marketing activity. The time taken for a lead generated from marketing and advertising activity to completion of the associated installation can vary from one month to over six months. Both the solar installation and Parmac project businesses require us to utilize our own working capital to fund operations between progress payments and, in the former case, through completion of projects if the projects are being constructed under the Build, Own, and Transfer, or BOT model. The monitoring business is a net consumer of cash due largely to the requirement to fund system development expenses necessary to provide a competitive product offering to our customers. Our O&M business requires that we invest in staff and other operational capability when we pursue expansion to new geographic areas. We currently lack the capital and liquidity to adequately fund all of these businesses. Additional cash will be needed to fund any growth. Consequently, our project activities, particularly in the large-scale solar sector have been constrained, leading to losses that are ongoing and an inability to fully capitalize on opportunities to generate revenue. We must raise additional capital, further curtail operations in some of our lines of business or divest some of our business units to achieve profitability. Failure to do so increases the likelihood that we will not be able to continue as a going concern and the value of our ordinary shares will decline or become worthless.

Our growth strategy and the future success of our company is based, in part, on pursuing acquisitions of operating companies and renewable energy projects. If we are not successful in completing such acquisitions, or realizing the anticipated benefits from such transactions, then it could have a material adverse effect on our results of operations and financial condition.

One of our growth strategies is to pursue targeted acquisitions of operating companies and renewable energy projects at various stages of development. If we are not successful in implementing such strategy and acquiring targeted companies or projects, it could have a material adverse effect on our results of operations and financial condition. Further, we will have devoted significant time and resources in such pursuits, without receiving commensurate benefit for our efforts. The likelihood of our acquisition strategy being successful is greatly diminished by our lack of liquidity. In addition, even if we are able to successfully complete targeted acquisitions, if we have misjudged the value to the Company or if we fail to successfully integrate any such assets or operations with ours, it could have a material adverse effect on our results of operations and financial condition, and you could lose some or all of your investment in the Company.

Applicable accounting rules may result in positive reported earnings when our actual cash flow is negative and we lack the funds to adequately operate the business or to grow.

International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB, such as those related to recognizing revenue on a percentage of completion basis or from projects when control and the risks of ownership have been substantially transferred to others, may require us to recognize revenue before payment is received. As a result, although our accounting earnings may be positive, our cash flow may be negative and we may not have sufficient working capital to meet our ongoing requirements or fund new business growth. Our management has not established reliable credit facilities or other mechanisms such as selling receivables that allow us to convert receivables on incomplete projects or long-term assets into cash to overcome this problem. Consequently, our reported earnings and financial statement net worth may not be indicative of our ability to meet contractual obligations or to sustain the Company as a going concern. There can be no assurance that we will have access to working capital from credit or equity markets that is sufficient to meet our needs as we grow.

Our indebtedness to lenders and other creditors in our operating subsidiaries that were not included in the VA is significant relative to our liquidity and we may encounter demands for payment that we cannot meet, which could have adverse consequences for our business and future prospects.

Our convertible notes, installment notes and other liabilities payable by our corporate parent and many of our subsidiaries as of the end of our fiscal year 2014 were extinguished pursuant to the DOCA. As of September 30, 2015, however, we had total outstanding debt (excluding current trade balances and accruals and Redeemable Preference Shares) at our operating subsidiaries of approximately A$1.6 million. At our corporate parent and operating subsidiaries where there is an excess of current liabilities over current assets, the excess is approximately A$5.4 million, including that portion of deferred trade obligations and debt classified as current. While we have negotiated to satisfy this indebtedness in the future, (as further discussed below in Item 5.B.), our ability to meet our obligations when payment is due will also depend on our cash reserves, available additional financing and ongoing operating performance, and there can be no assurance that we will possess or be able to secure the resources to meet these obligations when they become due.

Although we are not currently involved in litigation with any creditors, there can be no assurance that creditors who have agreed to payment terms will continue to forbear if we cannot meet those terms. In such case we may receive demands for immediate payment that exceed our ability to pay. Our failure to satisfy or refinance these obligations when due would have a material adverse impact on the indebted operating subsidiaries and could jeopardize our ability or that of the affected operating subsidiaries to continue in business and could cause us to liquidate, resulting in the total loss of value to our shareholders.

We require additional capital to execute on current and anticipated future business opportunities and may not be able to raise the necessary capital on acceptable terms, if at all, with the result that we may have to curtail some business activities or forego growth.

We do not have sufficient capital to operate all of our businesses in accordance with our business plans or to ensure that we can continue as a going concern. Consequently, we are likely to have to raise additional capital in the future through public or private debt or equity financings by issuing additional ordinary shares or other preferred financing shares, debt or equity securities convertible into ordinary or preferred shares, or rights to acquire these securities. We may need to raise this additional capital in order to (among other things):

	●	take advantage of expansion or acquisition opportunities;

	●	acquire, form joint ventures with or make investments in complementary businesses, technologies or products;

	●	develop new products or services;

	●	respond to competitive pressures;

	●	respond to a difficult market climate.

Our management expects us to issue additional debt securities to fund ongoing operations, including solar projects and related working capital. The associated debt agreements may contain restrictive covenants and we will be subject to additional costs related to originating such debt and for interest. Any scheduled principal amortization will place further burdens on our cash flow. Notwithstanding the expectations of our management, there is no assurance that debt can be raised on terms acceptable to our Board, if at all.

Our management also expects us to issue additional equity securities to fund operations of our existing businesses, the acquisition of additional businesses and pursuant to employee benefit plans, although our Board has not considered or approved any changes to our employee benefit plans that are not described in this Report. We may also issue additional equity securities for other purposes. These securities may have the same rights as our ordinary shares or, alternatively, may have dividend, liquidation, or other preferences to our ordinary shares. The issuance of additional equity securities will dilute the holdings of existing shareholders and may reduce the price of our ordinary shares. Because of our recent operating losses and capital deficiencies, it is likely that raising equity capital will be difficult and costly, with the result that dilution to existing shareholders could be high. There is no assurance that equity capital can be raised at a price acceptable to our Board or at all.

Notwithstanding write-offs of goodwill and intangibles in our 2014 and 2015 fiscal years, we continue to have recorded substantial goodwill and intangibles asset value as the result of prior acquisitions; these goodwill and intangible amounts are subject to periodic reviews of impairment that could result in future reported losses and that may limit our ability to raise capital.

We have previously acquired companies and assets that were retained through the VA process. The excess of the purchase price after allocation of fair values to tangible and identifiable intangible assets for those businesses is allocated to goodwill. We conduct periodic reviews of goodwill and intangible values for impairment. Any impairment would result in a non-cash charge against earnings in the period reviewed, which may or may not create a tax benefit, and would cause a corresponding decrease in shareholders’ equity.

Significant impairments of good will were recognized in conjunction with the effectiveness of the DOCA, with the result that we recorded impairments of goodwill of A$6.2 million for our fiscal year ending June 30, 2015. Nevertheless, our assets as of June 30, 2015 were comprised of A$14.0 million of goodwill and intangibles. In keeping with our accounting policies, the value of goodwill and intangibles will again be reviewed as of June 30, 2016, the end of our 2016 fiscal year in light of the circumstances at the time and a further impairment of goodwill and intangibles may be recorded if warranted by the circumstances. In the event that there is a prolonged economic downturn in our served markets, competitive conditions become more challenging or we fail to achieve expected financial performance in our solar PV business segment or our monitoring business in particular, we may be required to record further impairments of goodwill in the future. Such impairment could be material and lead to a significant reduction in our stock price or make it more difficult for us to raise needed capital.

Taxing authorities could reallocate our taxable income among our subsidiaries, which could increase our consolidated tax liability.

We intend to conduct operations worldwide through subsidiaries in various tax jurisdictions. If two or more affiliated companies are located in different countries, the tax laws or regulations of each country generally will require that transfer prices and other inter-company charges be the same as those between unrelated companies dealing at arm’s length and that contemporaneous documentation is maintained to support such transfer prices and charges. On that basis, tax authorities could require us to adjust our transfer prices and intercompany charges and thereby reallocate our income to reflect such revised terms, which may result in a higher tax liability to us or limit our ability to utilize loss carry forwards and similar tax assets that are available to only some of our operating subsidiaries and not others, and, possibly, result in two countries taxing the same income, any of which outcomes could adversely affect our financial condition, results of operations and cash flows.

Risks Related to Our Industry and Business

Our large-scale solar and air conditioning installation businesses often receive payments upon the achievement of contractual milestones, and any delay or cancellation of one or more large projects could interrupt our cash flow and adversely affect our overall business.

We recognize revenue for Parmac and a significant fraction of our large-scale solar business on a “percentage of completion” basis and, as a result, our revenue from these installations is tied to the performance of contractual obligations, which are generally driven by timelines for the installation of solar power and air conditioning systems at customer sites. This could result in unpredictability of revenue and, in the short term, revenue shortfalls or declines. As with any project-related business, there is the potential for delays within any particular customer project. Variation of project timelines and estimates may impact the amount of revenue recognized in a particular period. In addition, certain of our customer contracts may include payment milestones at specified points during a project. Because we must invest substantial time and incur significant expense in advance of achieving milestones and the receipt of payment, failure to achieve milestones could adversely affect our business and cash flows.

Our solar business in Australia accepts assignment of small-scale technology certificates, or STCs, in lieu of some cash payments from customers and is exposed to risk of significant changes in market value of STCs between the date the value of STCs is agreed with our customers and the date STCs are assigned to us.

Based on current government policy and the average size of our small-scale installations, an average of approximately 25% of the revenue from small-scale solar projects we sell is in the form of small-scale technology certificates, or STCs. The secondary market in which we typically sell registered STCs is thin, with few purchasers or market makers. When we quote a customer for the price of a residential installation, we agree to a value for the STC portion of the revenue with the customer. On completion of an installation and completion of STC registration, our practice is generally to assign registered STCs to one of our solar PV equipment suppliers at a negotiated value in lieu of cash payment. The value attributed to the STCs by our suppliers is based on market price at the time of assignment to them. There can be a delay of up to three months between agreeing to a value for STCs with our customers and completion of registration and assignment of STCs to one of our suppliers; during this time we are exposed to changes in the market price of STCs. The magnitude of this financial risk is affected by the volatility of STC prices and can be significant. Our management has determined that it is not cost effective to hedge the financial exposure to STCs that we hold and therefore we do not do so.

If solar projects developed under our BOT or BOO models are not sold to buyers quickly after completion and commissioning, we are exposed to significant risk of illiquidity and we may incur diminished profits or losses due to deterioration in market prices for such projects and the costs of the credit currently available to us to finance these projects.

We typically expect to complete projects initiated under the BOT model within one to three months from the commencement of construction. However, our limited experience in selling a 5MW portfolio of such projects in Europe in November 2012 demonstrates that closing a sale of commissioned projects can take six months or more. When we complete a project under the BOT model or the build, own, and operate, or BOO, model, we are fully exposed to changes in project value from the period between our commitment to undertake such a project and the time we reach an agreement to sell such project at a set price (for BOT projects) or the carrying value of the project is impaired (for BOO projects such as the Chatham Island Project).

Market conditions and value for completed large-scale solar projects are subject to significant fluctuations as a result of factors such as changes in relative currency values, market interest rates, institutional demand for projects generating fixed cash flows and idiosyncratic political and regulatory changes that affect investors’ perceptions of project risk. Moreover, based on our previous experience, the cost of capital needed to finance our BOT projects can significantly reduce our expected profitability if holding periods are protracted. The combination of exposures to changes in project values and the cost of financing BOT and BOO projects could cause us to incur significant losses on such projects in the future and the necessity to tie up capital in such projects between commitment and sale (or throughout the holding period for BOO projects) could strain the Company’s limited liquidity.

We are highly dependent on our senior management and technical personnel and if we are unable to retain key personnel and attract and train highly qualified personnel, particularly in regions or lines of business where we are expanding, the quality of our services may decline and we may not successfully execute our growth strategies or achieve sustained profitability.

Our success depends in large part upon our ability to continue to attract, train, motivate and retain highly skilled and experienced employees, including technical personnel and members of our executive management. Qualified senior executives and technical employees are generally in great demand and may be unavailable in the time frame required to satisfy the Company’s and customers’ requirements. All of our most senior executive managers, including William Morro - Executive Chairman and Managing Director, Richard Pillinger - Chief Financial Officer, Linton Coombs – Managing Director of Parmac, Peter Maros – Senior Vice President & Managing Director of U.S. Renewable Solutions and Emmanuel Cotrel – Senior Vice President and founder of our monitoring and data analytics business, are at-will employees. The absence of contractual financial incentives to continue their employment with the Company increases the chances that they could be successfully recruited for alternative employment. We have no internal successors for any of these executives and, if any of them departed, we would have to undertake a search for a replacement. There is no assurance that a qualified replacement could be timely found or engaged on terms acceptable to our Board. While we currently have available technical expertise sufficient to operate our business as currently configured, expanding into new jurisdictions, significantly increasing our scale and further developing our monitoring technology will necessitate employing additional highly skilled technical personnel. We expect competition for such personnel to increase as the market for solar and other renewable power systems and post-installation monitoring and management expands worldwide.

There can be no assurance that we will be able to attract and retain sufficient numbers of highly skilled executives or technical employees in the future. The loss of such personnel, and executive management in particular, or our inability to hire or retain sufficient personnel at competitive rates of compensation could impair our ability to secure and complete customer engagements and could harm our business.

We do not generally have long-term agreements or repeat business opportunities with our major project customers and if our management is unable to identify and win new customers and projects we cannot maintain or grow revenue in this line of business.

Our solar PV and Parmac projects are generally not sold pursuant to long-term agreements with customers, but instead are sold on a one-time contract basis often in a competitive bidding process. We typically contract to perform large projects with no assurance of repeat business from the same customers in the future. Our experience is that customers may cancel or reschedule awards for solar PV and Parmac projects on relatively short notice. Cancellations or rescheduling of customer orders could result in the delay or loss of anticipated sales without allowing sufficient time to reduce, or delay the incurrence of, our corresponding inventory and operating expenditures. In addition, changes in forecasts or the timing of orders from these or other customers expose us to the risks of supply shortages or excess purchase commitments for inventory. This, in addition to the non-repetition of larger projects and the possibility that we may fail to obtain new projects could cause our revenues to decline, and, in turn, our operating results to suffer. Our monitoring, operations and maintenance services provided to the renewable energy and climate control markets are generally delivered under annual or multi-year contracts that have the potential to mitigate volatility from our project businesses. However, the scale of our service businesses is not yet sufficient to have a significant impact on our overall revenue or profitability and there is no assurance that we will be successful in expanding these activities or realizing meaningful economic benefits from recurring revenue.

Unlike some of our competitors, we do not have established and reliable sources of financing on which our customers can rely to finance their solar and climate control projects and as a result we are at a competitive disadvantage and our sales and profits may suffer.

We do not have contractual relationships with financing sources in any of the jurisdictions in which we undertake contracts for solar PV or climate control installations that can be relied on to provide debt or equity financing for our prospective customers who require such financing in order to commit to projects or engage our services. In the small-scale solar business in Australia financing is now generally available in the market and to our customers, but we may be at a disadvantage relative to energy distribution companies and other large competitors who can offer prospective financing to a broader range of customers or on better terms than us. The availability of financing for large-scale solar systems and climate control systems in the markets we serve is specific to the particulars of the installation and customer financial strength and varies widely. In any case, the availability of financing for large-scale system installations is generally less than for residential systems. The consequence is that we are forced to compete for large-scale projects largely on price or from the limited universe of buyers who can self-finance or who have their own sources of financing for such projects. As a result, the growth of our large-scale solar and climate control business focused on the provision of engineering, procurement, and construction, or EPC, services has been slow and irregular in all of the markets we serve, and there is no assurance that this will change or that our large-scale EPC businesses will achieve consistent profitability.

Our large-scale solar, wind and major climate control projects are subject to lengthy sales cycles that adversely affect the predictability of results from sales and marketing efforts and make our financial forecasts unreliable and revenue recognition irregular.

Factors specific to our customers have an impact on our sales cycles. Our equity fund, commercial, and government customers may have longer sales cycles due to the timing of periodic budgeting requirements typical for projects requiring significant capital expenditures. Other customers may delay projects because of cyclical conditions in their industries or because of idiosyncratic liquidity or profitability issues. Lengthy and challenging sales cycles may mean that our sales and marketing efforts seldom result in rapid increases in revenue and delays may have adverse effects on our operating results, financial condition, cash flows, and stock price.

We sometimes act as general contractor for our customers in connection with the installation of solar power and HVAC systems and we are subject to risks associated with construction, bonding, cost overruns, delays, and other contingencies, which could have a material adverse effect on our business and results of operations.

When we act as a general contractor for our customers in connection with the installation of solar power and HVAC systems, costs are estimated at the time of entering into the sales contract for a particular project, and these costs are reflected in the overall price that charged to customers for the project. These cost estimates may not accurately reflect all costs incurred by subcontractors, suppliers and other parties engaged by us on our projects. In addition, qualified, licensed subcontractors are often required to install some of the systems. Shortages of such skilled labor could significantly delay a project or otherwise increase our costs. Should miscalculations in planning a project or defective or late execution occur, we may not achieve the expected margins necessary to cover our costs. Also, many systems customers require performance bonds issued by a bonding agency. Due to the general performance risk inherent in construction activities, it is sometimes difficult for us to secure suitable bonding agencies willing to provide performance bonding. In the event we are unable to obtain the requisite bonding, we will be unable to bid on, or enter into, sales contracts for the projects. Delays in receiving solar or climate control system components, other construction delays, unexpected performance problems or other events, including our own design and project management deficiencies, could cause us to fail to meet project schedule or performance criteria, resulting in unanticipated and severe revenue and earnings losses and financial penalties. We may be financially responsible for delays caused by factors outside of our control, including inclement weather, failure of suppliers to timely meet orders or transportation providers to make timely deliveries. We operate in multiple countries that have unique permitting requirements, which, if not met, may cause delays. The occurrence of any of these events could have a material adverse effect on our business and results of operations.

A portion of our revenues is generated by construction contracts for new or renovated buildings, and, thus, a decrease in construction activity could reduce our construction contract-related sales and, in turn, adversely affect our revenues.

Some of our solar-related revenues and most of our HVAC project revenues are generated from the design and installation of systems in newly constructed and renovated buildings, plants and residences. Our ability to generate revenues from such construction contracts depends on the number of new construction starts and renovations, which should correlate with the cyclical nature of the construction industry and be affected by general and local economic conditions, changes in interest rates, lending standards and other factors.

In our installation and EPC businesses, we are highly dependent upon suppliers for the components used in the systems and products we design and install and any increases in the price of components, including as a result of the imposition of duties or tariffs, or any interruptions to, or shortage or decline in, the quality of the components we purchase could adversely affect our business.

Key components used in all of our solar, wind and energy efficiency/climate control systems are purchased from third party manufacturers, many of which are located in countries other the system installation area. Market prices for these purchased components are subject to fluctuation. We cannot ensure that the prices charged by our suppliers will not increase because of changes in market conditions or other factors beyond our control. An increase in the price of components used in our systems could result in an increase in costs to our customers and could, as a result, have a material adverse effect on our revenues and demand for our products and services. Interruptions in our ability to procure needed components for our systems, whether due to discontinuance by suppliers, delays or failures in delivery, shortages caused by inadequate production capacity or unavailability, or for other reasons, would adversely affect or limit our sales and growth. There is no assurance that we will be effective in selecting qualified manufacturers on acceptable terms in the future and, if we are able to do so, there can be no assurance that product quality from those suppliers will continue to be acceptable, which could lead to a loss of sales and revenues.

Problems with product quality and performance on projects we develop or install may damage our market reputation and cause our revenue and operating results to decline, particularly in the small-scale solar market.

Our solar PV and climate control businesses involve the sale of systems that have long lifetimes (up to 20 years or more in the case of key components in solar PV systems). Our monitoring systems for those projects must work over similar time periods. In general, the manufacturers of components in the systems we sell are warranting those components and we offer limited warranties on system design and installation workmanship for such components; for example, up to 5 years on installation workmanship for small-scale solar systems we sell in Australia. Under real-world operating conditions, which may vary by location and design, as well as installation, air particulate, soiling and weather conditions, a typical system installation may perform in a different way than under standard test conditions or design assumptions. If the systems we have sold perform below expectations or have unexpected reliability problems, we may suffer reputational damage, even if the problems are caused by operating conditions or defects of components produced by other manufacturers. The significance of this would be magnified if those suppliers fail to fully meet their warranty obligations. We could suffer additional reputational damage, even though we bear no direct responsibility for the component performance. In such a situation, if it were to occur, we might be unable to gain new customers and our plans to grow and maintain the small-scale solar business at a profitable scale could be thwarted.

One of our former subsidiaries, divested in our VA process previously sold inverters produced by, or under license from, Oelmaier, a German company that is no longer in business. Our subsidiary discontinued sales of the Oelmaier inverters in 2012 due to problems with product design and licensor support, but many customers made warranty claims prior to our VA and more are likely to continue to do so. As a result of the VA process we no longer have any subsidiaries which have obligations to service any Oelmaier warranty claims and as such we have no provision for previously sold Oelmaier products recorded at June 30, 2015, however, there can be no assurance about when or whether we will be able to overcome the negative market impact associated with the Oelmaier-licensed products and it may continue to dampen our sales in Australia for the foreseeable future.

While our legal obligations to address future warranty claims was extinguished under the DOCAs that defined our Reorganization Plans (refer to Item 4.A. under the heading “Voluntary Administration and Deed of Company Arrangement”), and we structured the Draker acquisition to limit legal obligations related to warranties provided by Draker, Inc. (refer to Item 4.A. under the heading “Recent Acquisitions”) market pressures may require us to expend resources to address warranty claims related to the legacy solar customer base if we are going to grow the scale of our related businesses. Post VA, we do not have any reserves for addressing Oelmaier warranty claims and it is not possible to estimate the impact that acting or failing to act with respect to such claims may have on the growth or profitability of our small-scale solar PV or our monitoring businesses. The possibility exists, however, that the adverse impact on our results of operations could be significant and contribute to reducing the value of an investment in our ordinary shares.

Unanticipated warranty or service claims or the failure of suppliers to meet backstop warranty obligations could expose us to incur incremental expense that could significantly lower our profitability or threaten our viability.

Except for system design and installation workmanship deficiencies, the warranty obligations related to climate control and solar PV systems and many of the components used in the monitoring systems we sell are contractually borne directly by the system component suppliers. Our contractual obligations to our customers in the event of a third-party component failure are generally limited to fielding service requests and organizing the repair or replacement of the faulty unit with the original component’s manufacturer for a period of time specified in the contract. In our experience, other than the costs of warranty claims related to Oelmaier inverters that Oelmaier did not meet, the costs of such service obligations have not been material and we expense them as incurred.

Notwithstanding the limited contractual financial exposure that we have for system component failures, if the responsible component manufacturers fail to fully meet their warranty obligations, we may find it to be a practical necessity to incur the expense to correct the problem in order to preserve our market reputation for reliability and service and to maintain system sales. We have not reserved for such a possibility and may not have the financial or other resources to respond to such a problem if and when it occurs. The result could be adverse and unexpected profit volatility for our climate control and solar PV businesses or a loss of market acceptance that could threaten the financial viability of this business segment altogether.

If we fail to effectively manage our planned expansion, we may fail to meet our strategic objectives and our financial performance could be materially and adversely impacted.

The further expansion of our business into new jurisdictions is one of our strategies for growing revenues from solar system installations and renewable system monitoring and operations and maintenance, or O&M, services sales. Such expansion is also expected to mitigate the impact of downturns in renewable energy demand in countries in which we are currently developing solar projects, including the U.S. Undertaking further international expansion of our solar system installation businesses is a complex task that requires, among other things the identification of locations that are environmentally favorable for solar project development and that have suitable regulatory and tax policies, utility cost, tariff and interconnection structures that allow renewable energy to be cost competitive (after taking into account local subsidies) and access to cost-effective financing for project owners, among other considerations. Different but equally complex considerations affect the expansion opportunities for our monitoring and O&M services businesses. Even if we successfully identify suitable countries for expansion, we may be unable to extend our business into these new locations if competitors enter the market first or are already well established. In addition, we may not have the necessary management, local knowledge or financial resources to undertake the successful and timely development or integration of projects in additional countries. Additionally, our ability to generate cash from existing operations may be slower than expected, or may not occur at all, resulting in the requirement for further funding to achieve our expansion plans that exceeds our ability to raise additional capital on acceptable terms. Our expansion plans could also be affected by cost overruns, failures or delays in obtaining government approvals of necessary permits and our inability to establish supply chains to serve new markets and other factors.

There is no assurance that we can effectively manage our planned expansion or achieve any expansion plans at all. If we are unable to do so, we will not be able to take advantage of growth opportunities, execute our business strategy or respond to competitive or market pressure, any of which could materially and adversely affect our business, results of operations, financial condition and share value.

Although we have historically derived most of our revenues from Australia and a few other countries, we currently do business in several international jurisdictions whose political and regulatory environments and compliance regimes differ from those of our home territory (or the United States) and our planned expansion into new markets will subject us to additional business, financial and competitive risks.

A portion of our revenue has been attributable to operations in countries other than Australia and the United States, including Italy, Thailand and the United Kingdom and this is expected to extend to other countries in Europe, Asia and Latin America with the acquisition of BlueNRGY LLC in January 2015 and the assets of Draker, Inc. in September 2015 (refer to Item 4.A. under the heading “Recent Acquisitions”). Such activities accounted for approximately 13% and 2% of our consolidated revenue in fiscal years ended June 30, 2015 and June 30, 2014, respectively. Risks associated with our operations in foreign areas include, but are not limited to:

	●	political, social and economic instability, war and acts of terrorism;

	●	potential seizure, expropriation or nationalization of assets;

	●	damage to our equipment or violence directed at our employees, including kidnappings and piracy;

	●	increased operating costs;

	●	complications associated with repairing and replacing equipment in remote locations;

	●	repudiation, modification or renegotiation of contracts, disputes and legal proceedings in international jurisdictions;

	●	limitations on insurance coverage, such as war risk coverage in certain areas;

	●	import-export quotas;

	●	confiscatory taxation;

	●	work stoppages or strikes;

	●	unexpected changes in regulatory requirements;

	●	wage and price controls;

	●	imposition of trade barriers;

	●	imposition or changes in enforcement of local content laws;

	●	the inability to collect or repatriate currency, income, capital or assets;

	●	foreign currency fluctuations and devaluation; and

	●	other forms of government regulation and economic conditions that are beyond our control.

Part of our strategy is to prudently and opportunistically acquire businesses and assets that complement our existing products and services, and to expand our geographic footprint. If we make acquisitions of businesses or assets in other countries, we may increase our exposure to the risks discussed above. Governments in some foreign countries have become increasingly active in regulating and controlling the implementation of renewable energy projects, the sale of power generated from such projects in their countries and the processing of information from or about such generating assets. In some areas of the world, this governmental activity has adversely affected the amount of activity undertaken by renewable energy developers and may continue to do so. Some countries, such as China, restrict the storage or export outside their borders of data related to energy generation. Operations in developing countries can be subject to legal systems that are not as predictable as those in more developed countries, which can lead to greater risk and uncertainty in legal matters and proceedings. In some jurisdictions we are subject to foreign governmental regulations favoring or requiring the awarding of contracts to local contractors or requiring foreign contractors to employ citizens of, or purchase supplies from, a particular jurisdiction. These regulations may adversely affect our ability to compete. Additionally, our operations in some jurisdictions may be significantly affected by union activity and general labor unrest. There can be no assurance that we can avoid such factors having a material adverse effect on our results of operations or financial condition.

Our operations are subject to multiple tax regimes, and changes in legislation or regulations in any one of the countries in which we operate could negatively and adversely affect our operating results.

Our operations are carried out in several countries across the world, and our tax filings are therefore subject to the jurisdiction of a significant number of tax authorities and tax regimes, as well as cross-border tax treaties between governments. Furthermore, the nature of our operations means that we routinely have to deal with complex tax issues (such as transfer pricing, permanent establishment or similar issues) as well as competing and developing tax systems where tax treaties may not exist or where the legislative framework is unclear. In addition, our international operations are taxed on different bases that vary from country to country, including net profit, deemed net profit (generally based on turnover) and revenue-based withholding taxes based on turnover.

Our management determines our tax provision based on our interpretation of enacted local tax laws and existing practices and uses assumptions regarding the tax deductibility of items and recognition of revenue. Changes in these assumptions and practices could significantly impact the amount of income taxes that we provide for in any given year and could negatively and adversely affect the result of our operations.

We face common international trade and supply chain risks for our installation businesses, including delay or complete disruption of supply, logistics cost volatility, exchange rate fluctuations and changes in policies and tariffs, that could trigger an unexpected adverse impact on operational and financial performance.

Most of the components in our products are produced in places other than that where the products and systems are used or installed. For example, currently, all the solar modules for our solar PV systems are produced in China and must be shipped to installation sites in Australia, the United States, Europe and other jurisdictions where we operate. Key components for our energy efficiency businesses are manufactured in Europe, the United States or in Asia, even though we sell these systems primarily in Australia. Consequently, order lead times may be long and we and our customers are subject to substantial expense and delays that can accompany long-distance shipping, inventory management and design and specification of customized orders. Currency exchange rates can also shift between the time of ordering and delivery, sometimes resulting in us incurring higher costs. If mistakes in component order fulfillment occur, extended time can be required to remediate the problem and could lead to delays in completing projects, recognizing revenue or receiving cash flow. Sometimes we must rely on a single source of supply for key components and if a sole-source supplier fails to deliver on time it could impair our ability to perform and subject us to delays and penalties.

Licenses and permits are required to operate in some jurisdictions, and the loss of or failure to renew any or all of these licenses and permits or failure to comply with applicable laws and regulations could prevent us from either completing current projects or obtaining future projects and, thus, materially adversely affect our business.

We are subject to various national, state, and local laws and regulations in the various countries in which we operate and we may be required to make significant capital expenditures to comply with laws and the applicable regulations and standards of governmental authorities and organizations. Moreover, the cost of compliance could be higher than anticipated. In addition, we are subject to compliance with the U.S. Securities Act, Exchange Act and Foreign Corrupt Practices Act in addition to certain international conventions and the laws, regulations and standards of other foreign countries in which we operate. It is also possible that existing and proposed governmental conventions, laws, regulations and standards, including those related to climate and emissions of “greenhouse gases,” may in the future add significantly to our operating costs or limit our activities or the activities and levels of capital spending by our customers.

In addition, many aspects of our operations are subject to laws and regulations that relate, directly or indirectly, to the renewable industry or to public health and safety. Failure to comply with these laws and regulations may result in the assessment of administrative, civil and even criminal penalties, the imposition of remedial obligations, and the issuance of injunctions that may limit or prohibit our operations. The application of these requirements, the modification of existing laws or regulations or the adoption of new laws or regulations curtailing production activity could materially limit our future contract opportunities, materially increase our costs or both.

Our international growth strategy may prove to be disruptive and divert management resources with adverse effect on our financial condition or performance.

Our international growth strategy involves complex transactions and presents financial, managerial and operational challenges, including diversion of management attention from existing businesses, difficulty with integrating personnel and financial and other systems, increased expenses, including compensation expenses resulting from newly hired employees, the assumption of unknown liabilities and potential disputes. We could also experience financial or other setbacks if any growth strategies incur problems of which we are not presently aware.

We may incur significant costs and delays in our attempt to implement our international expansion strategy, particularly when we form joint ventures or make acquisitions.

We currently develop and install large-scale solar PV systems or offer performance monitoring and O&M services for such systems, targeting the markets in North America, the Eurozone, Thailand and various Pacific island nations. However, the Company intends to undertake and provide life-cycle services to project developments in other international markets. New geographic markets may have different characteristics from the markets in which we currently sell products, and our success will depend on our management’s ability to properly address these differences. These differences may include:

	●	differing regulatory requirements, including tax laws, trade laws, labor regulations, tariffs, export quotas, customs duties or other trade restrictions;

	●	limited or unfavorable intellectual property protection;

	●	risk of change in international political or economic conditions;

	●	fluctuations in the value of foreign currencies and interest rates;

	●	difficulties and increased expenses in complying with a variety of U.S. and foreign laws, regulations and trade standards, including the Foreign Corrupt Practices Act;

	●	potentially longer sales cycles;

	●	higher volume requirements;

	●	warranty expectations and statutory obligations; and

	●	cost, performance and compatibility requirements.

In addition, we have and will continue to pursue acquisitions and joint ventures to facilitate our expansion into new products and services and into new geographic markets. For example, we acquired Green Earth Developers, LLC (“GED”), a Georgia limited liability company, in July 2014 and BlueNRGY LLC, a Florida limited liability company in January 2015 and the assets of Draker, Inc. in September 2015. Whether the mechanism we use for expanding our business is through internal development or acquisition, failure to develop and introduce new products successfully, to generate sufficient revenue from these products to offset associated marketing and installation costs, or to otherwise effectively anticipate and manage the risks and challenges associated with expansion into new product and geographic markets, could adversely affect our revenues and our ability to achieve or sustain profitability.

The Company has experienced significant turnover of members of our Board and among members of our top management and we may lack sufficient continuity or experience in these key positions to ensure success of the business.

Subsequent to July 1, 2014 through the date of this Report, we have experienced the following changes among members of our Board and among members of our top management:

Effective July 18, 2014 Todd Barlow resigned from the Board. Prior to his resignation Mr. Barlow served as a non-executive director.

Effective August 5, 2014, Ms. Luisa Ingargiola was appointed as a non-executive member of the Board and resigned on October 23, 2014 due to concerns that she could not give adequate time to both her role with another publicly-traded company and her role with the Board.

Effective October 4, 2014, Mr. Jeffrey A. Tischler was appointed the Company’s Chief Financial Officer and resigned on November 12, 2014.

As of November 14, 2014, Mr. Gerard McGowan was: suspended as the Company’s Managing Director pursuant to Article 18 of the Company’s Constitution. Following the commencement of our VA process, the Administrator terminated the Contractor Agreement pursuant to which we procured the services of Mr. McGowan as our Chief Executive Officer and Mr. McGowan resigned as a member of our Board on December 30, 2014.

In December, 2014 our CEO of International Operations, James Greer, and our Senior Vice President of Wind and Off Grid Solutions, Patrick Lennon, was terminated by the Administrator.

Effective January 27, 2015, the two then-existing members of the Board, William C. Morro and Carlo Botto, by unanimous resolution, appointed John H. Chapple, Yves-Regis Cotrel, and John F. Donohue as members of the Board, subject to receipt of their written consent to serve in such capacity. The appointment of Mr. Cotrel and Mr. Donohue became effective on January 27, 2015 and that of Mr. Chapple on February 2, 2015. With the exception of Mr. Botto, who has been employed by companies serving the power generation and energy trading sectors throughout his career, our directors have limited experience in the renewable energy sector. Subsequently, on June 16, 2015 and July 31, 2015 respectively, John Chapple and John Donohue resigned due to concerns that they could not give adequate time to their other business commitments and to their role with the Board.

Effective June 5, 2015, Donald Reed, the senior executive officer and a former owner of GED resigned. Effective September 1, 2015 he was replaced by Peter Maros, who was also appointed a Senior Vice President and Managing Director of U.S. Renewable Solutions.

We anticipate that additional directors and executive managers with relevant experience and qualifications will be appointed in the future, however, our corporate history and weak financial condition may make it more difficult or impossible for us to attract suitable executives or independent directors. Consequently, there can be no assurance that we will be successful in making appointments to our management and Board that can ensure our success.

If we fail to retain and attract executives and Board members with the capabilities to meet the significant challenges we face in all of our markets and lines of business, we may not meet the requirements for listing on the NASDAQ Capital Market or any other national U.S. stock market, our stock price could decline or become completely illiquid and our shareholders could face a total loss of their investment.

We are subject to litigation that could have an adverse effect on our business and operating results.

In December 2014, a class action securities suit, referred to as the Texas Action, was filed in a federal court in the Eastern District of Texas against the Company and various current and past officers and directors, namely Mr. William Morro, Mr. Carlo Botto, Mr. Richard Pillinger, Mr. Todd Barlow, Mr. Gerard McGowan and Mr. James Greer. Mr. Morro, formerly a non-executive independent director currently serves as Chairman of the Company’s Board and its Managing Director (the Australian entity equivalent of a CEO); Mr. Botto continues as a non-executive member of the Board; and Mr. Pillinger is the Company’s CFO. The other parties to the lawsuit are no longer associated with the Company. On August 13, 2015 the Texas Action was amended to include the Company’s subsidiary, CBD Energy (USA) Limited.

In December 2014, a different lawsuit was filed in New York State Supreme Court, referred to as the New York Action, by one of the holders of Series B Preferred Shares against the Company and Messrs. Morro, Botto, and McGowan. A settlement with Mr. Botto and Mr. Morro was reached pursuant to which the New York Action was withdrawn. However, the settlement imposes no restrictions on the plaintiff with respect to reinstating the New York action against Mr. McGowan or other previously unnamed parties at any time in the future.

We believe that the claims against the Company related to the Texas and New York Actions are extinguished pursuant to the DOCA but litigation against our subsidiary, CBD Energy (USA) Limited, prior and current officers and directors may continue, causing us to incur expenses related to these matters. In addition, plaintiffs in the Texas and New York Actions, or other parties bringing a claim against us related to events arising prior to our VA, including, among others, the Administrator of Secured Energy Bonds Plc in the UK, may not recognize or accept the limitations on the Company’s liability imposed by the DOCA. Consequently, the Company may have to incur expenses to enforce the terms of the DOCA and such expenses could be significant. It is also possible that courts in jurisdictions where we do business or have assets, other than Australia, may not recognize or accept the limitations on our liability under the DOCA or may rule in favor of parties who assert claims against our subsidiaries domiciled or operating in such foreign jurisdictions. In such a case, we, or our foreign subsidiaries, could become burdened with liabilities for which we do not have a provision on our balance sheet and we may incur significant unforeseen defense costs.

In addition, the numerous operating hazards inherent in our business increase our exposure to litigation, which may involve, among other things, contract disputes, personal injury, environmental, employment, warranty and product liability claims, tax and securities litigation, patent infringement and other intellectual property claims and litigation that arises in the ordinary course of business.

Our management cannot predict with certainty the outcome or effect of any claim or other litigation matter. Litigation may have an adverse effect on us because of potential negative outcomes such as monetary damages or restrictions on future operations, the costs associated with defending the lawsuits, the diversion of management’s resources and other factors. Given our weak financial condition, a requirement to pay significant monetary damages or to restrict our business could jeopardize our viability as a going concern and could trigger illiquidity or a loss in value of our stock.

Our internal controls over financial reporting and other matters do not currently meet all of the standards contemplated by Section 404 of the Sarbanes-Oxley Act, and failure to achieve and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and investor’s willingness to buy or hold our stock.

Our internal controls over financial reporting do not currently meet all of the standards contemplated by Section 404 of the Sarbanes-Oxley Act that we will eventually be required to meet. As soon as practicable, we intend to address deficiencies in our internal controls over financial reporting and to establish enhanced formal policies, processes and practices related to financial reporting and to the identification of key financial reporting risks and assessment of their potential impact and linkage of those risks to specific areas and activities within our organization that are applicable to our business. Additionally, we will need to further document our internal control procedures to satisfy the requirements of Section 404, which requires annual management assessments of the effectiveness of our internal controls over financial reporting and, when available exemptions as an emerging growth company under the JOBS Act or other applicable exemption is no longer available, a report by our independent registered public accounting firm addressing these assessments. Although we have not yet tested our internal controls in accordance with Section 404, we have material weaknesses in our internal control over financial reporting. The material weaknesses include, but may not be limited to inadequate accounting oversight, policies, procedures, and controls specific to complex debt agreements, taxation computations and the application of accounting estimates for the recognition of impairment allowances for good will and intangibles and investments held by the company. We cannot conclude, in accordance with Section 404, that we do not have other material weaknesses in our internal controls or a combination of other significant weaknesses that could result in the conclusion that we have a material weakness in other aspects of our internal controls.

As a result of these material weaknesses and as a result of the concerns raised by the Company’s previous independent registered public accounting firm as described in the Company’s October 24, 2014 Report of Foreign Private Issuer on Form 6-K (the “October 6-K”), the Company’s financial statements for the fiscal years ended June 30, 2012 and June 30, 2013 have been restated. We have been implementing new accounting policies and procedures and review controls since Mr. Morro became our Managing Director following our emergence from VA. We acknowledge that additional resources, as well as the completion of a comprehensive review of the design and operating effectiveness of our controls relating to financial reporting, will be necessary in the future to fully remedy weaknesses in our financial reporting process. Further, if not fully remediated, these control deficiencies could continue to impact the reliability of our financial statements. As a public entity, we will be required to complete our initial assessment in a timely manner, subject to the exemption from auditor attestation requirements that is accorded to us as an emerging growth company under the JOBS Act. Until we cease to be an emerging growth company or our exemption from auditor attestation expires, we intend to avail ourselves of the exemption.

If we are not able to implement the requirements of Section 404 in a timely manner or with adequate compliance, we or our independent registered public accounting firm may not be able to certify as to the adequacy of our internal controls over financial reporting when we are required to have them do so. Matters impacting our internal controls may cause us to be unable to prevent fraud or report our financial information on a timely basis and thereby subject us to adverse regulatory consequences, including sanctions by the SEC or violations of applicable stock exchange listing rules. There could also be a negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our financial statements. Confidence in the reliability of our financial statements could also suffer if we and our independent registered public accounting firm were to report a material weakness in our internal controls over financial reporting. This could materially adversely affect the Company and lead to a decline in the price of our registered equity securities.

As a publicly-traded company in the United States, we incur significant costs, and our management is required to devote substantial management time and attention to our public reporting obligations.

As a publicly-traded company in the United States, we incur significant legal, accounting and other expenses. In addition, new and changing laws, regulations and standards relating to corporate governance and public disclosure, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations thereunder, as well as under the Sarbanes-Oxley Act, the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and the rules and regulations of the SEC, and the NASDAQ Stock Market, have resulted in a significant amount of time that our Board and management must devote to our compliance with these rules and regulations. We expect these rules and regulations to continue to divert management time and attention from our product development and other business activities and complying with them will require us to divert some of our limited management and financial resources from the execution of our business development strategy. This could slow our growth and delay our achievement of profitability and adversely impact our stock price.

We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to “emerging growth companies” will make our ordinary shares less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act, and we are taking advantage of certain exemptions and relief from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” In particular, while we are an “emerging growth company” (i) we will not be required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, (ii) we will be exempt from any rules that may be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotations or a supplement to the auditor’s report on financial statements, (iii) we will be subject to reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and (iv) we will not be required to hold nonbinding advisory votes on executive compensation or shareholder approval of any golden parachute payments not previously approved. In addition, the JOBS Act provides that an emerging growth company can delay its adoption of any new or revised accounting standards, but we have irrevocably elected not to avail ourselves of this exemption and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

We may remain an “emerging growth company” until as late as June 30, 2019 (the fiscal year-end following the fifth anniversary of the completion of our initial public offering), though we may cease to be an “emerging growth company” earlier under certain circumstances, including (i) if the market value of our ordinary shares that is held by non-affiliates exceeds $700 million as of any June 30, in which case we would cease to be an “emerging growth company” or (ii) if our gross revenue exceeds $1 billion in any fiscal year.

The exact implications of the JOBS Act are still subject to interpretations and guidance by the SEC and other regulatory agencies, and we cannot assure you that we will be able to take advantage of all of the benefits of the JOBS Act, particularly whether or not all of the exemptions will apply to foreign private issuers. In addition, investors may find our ordinary shares less attractive if we rely on the exemptions and relief granted by the JOBS Act. If some investors find our ordinary shares less attractive as a result, there may be a less active trading market for our ordinary shares and our share price may decline and/or become more volatile.

Deteriorations in global political, economic and market conditions could negatively impact our business.

The Company’s operations are affected by global political, economic and market conditions. The recent economic downturn generally reduced the availability of liquidity and credit to fund business operations worldwide. As regards the renewable energy sector in particular, this currently being acutely felt in Europe, where renewable developments are not growing at historical rates and the situation is likely to worsen if the downturn is prolonged. This dynamic has adversely affected our customers, suppliers and lenders and has caused us to largely withdraw from pursuing the solar PV business in Europe. Because of the large installed base of projects in Europe, however, we still consider this a promising, albeit mature and highly competitive, market for our monitoring and O&M services businesses.

Further, such conditions and uncertainty about future economic conditions may make it challenging for us to obtain equity and debt financing to meet our working capital requirements, forecast our operating results, make business decisions, and identify risks that may affect our business, financial condition and results of operations.

If we are unable to timely and appropriately adapt to changes resulting from the difficult macroeconomic environment, and declining levels of incentives available in countries where we continue to operate, then we are likely to experience a reduction in demand for our products and services and consequently will experience a material adverse effect on our operations and sales and on our financial condition generally.

The renewable energy sectors we serve depend on the availability of rebates, tax credits and other financial incentives and government policies, the reduction or elimination of which is imminent or already occurring and is likely to reduce the demand for our services in jurisdictions where we currently operate, including the U.S.

Many U.S. states, including California, Massachusetts, Nevada, New Jersey and North Carolina, and other countries such as the United Kingdom, Australia and Italy, offer substantial incentives to offset the cost of solar power or wind generation systems. These incentives can take many forms, including direct rebates, state tax credits, system performance payments and feed-in tariffs, and Renewable Energy Credits, referred to as RECs. However, there can be no assurance that these incentives will continue to be available in any or all of the jurisdictions in which we operate and, in many places, government policies and regulations will reduce or soon eliminate such incentives. For example, in Australia the number of RECs received per KW installed has been reduced continuously and the number of credits received for 5kW and smaller systems was reduced from a 5 multiplier in 2010 to a 1 multiplier beginning in January 2013. In North Carolina the state tax credit applicable to solar projects will no longer be available after 2015 and the U.S. federal tax credit applicable to solar projects is scheduled to be reduced from 30% to 10% effective December 31, 2016. It is possible, and should be considered likely that the surviving incentives in Australia and the U.S. will ultimately be phased out altogether. In Italy and other European countries, minimum user prices for solar electricity production and feed-in tariffs are subject to reduction annually for new applications and are subject to unannounced change; subsequent, unpredictable decrees will redefine rates for solar power plants commissioned thereafter. A reduction in or elimination of such incentives could substantially increase the cost or reduce the economic benefit to owners of renewable power generation projects, resulting in significant reductions in demand for new renewable installations. Our sales and margins could be disproportionally adversely affected because of our weak competitive position.

All sectors served by the Company are highly competitive, with low barriers to entry and intense price competition, which could negatively impact our results and may prevent us from achieving sustained profitability. In addition, the Company does not have significant market share in any sector we serve and we may lose business to larger companies that are better able to achieve cost efficiencies, respond to customer needs or weather a decline in market conditions.

In general, the industries in which our businesses operate are highly competitive and fragmented, subject to rapid change and have low barriers to entry. Most of our businesses have the attributes of general contracting businesses where projects are open to competitive bidding and new customer acquisition is a constant challenge because a low percentage of customers are repeat purchasers of our products and services. Even our services businesses, i.e. system performance monitoring and O&M services are often subject to a competitive bid process initially and then on an annual basis or after a short multi-year period. In particular, contracts for large projects are traditionally awarded on a competitive bid basis, with pricing often being the primary factor in determining which qualified contractor is awarded a job, although each contractor’s technical capability, safety performance record and reputation for quality also can be key factors in the determination. Small-scale solar and energy efficiency segments and the O&M services we offer do not generally require us to utilize proprietary technology and the capital required to undertake individual projects is small and available to many competitors. Many other renewable energy system developers / installers, providers of climate control and energy efficiency solutions and monitoring and O&M services providers are larger than us and have resources that are significantly greater than ours. These competitors may be able to better withstand industry downturns, compete on the basis of price, and acquire new equipment and technologies, all of which could affect our revenues and profitability. These competitors compete with us both for customers and for acquisitions of other businesses.

In particular, with respect to the solar PV segment, we may, in the future, compete for potential customers with solar system installers and servicers, electricians, roofers, utilities and other providers of solar power equipment or electric power. Also with respect to the performance monitoring business we are competing for potential customers with other data storage and software providers, manufacturers of components such as solar panels, inverters and wind turbines, large system integrators and providers of O&M services and utilities. Some of these competitors have significantly greater financial, technical and marketing resources and greater name recognition than we have. We believe that our ability to compete depends in part on a number of factors outside of our control, including:

	●	the ability of competitors to hire, retain and motivate qualified technical personnel;

	●	the ownership by competitors of proprietary tools to customize systems to the needs of a particular customer;

	●	the price at which others offer comparable services and equipment;

	●	the extent of our competitors’ responsiveness to client needs;

	●	risk of local economy decline; and

	●	the evolution of installation or monitoring technology.

Competition in the provision of O&M services to the renewable power industry may increase in the future, partly due to the low barriers to entry, as well as from other alternative energy resources now in existence or developed in the future. Increased competition could result in price reductions, reduced margins or loss of market share and greater competition for qualified technical personnel. There can be no assurance that we will be able to compete successfully against current and future competitors. If we are unable to compete effectively, or if competition results in a deterioration of market conditions, our business and results of operations would be adversely affected.

Our proprietary monitoring business, which we believe to have great strategic importance for the Company, is still immature and if it does not function as planned or rapidly gain more market acceptance, our ability to penetrate this market may be limited or foreclosed by our competitors, our liquidity will be strained and the value of our shares may be severely impaired.

The first commercial version of our monitoring system software was released in February 2015 and was deployed to only a few institutional customers on a trial basis when we acquired the monitoring platform of Draker, Inc. in September 2015. We are now in the process of harmonizing the BlueNRGY and Draker monitoring software to better serve the market and build on the more established base of U.S. customers served by the Draker system. Nevertheless, our software services are not mature and the roll-out of the system to a broad spectrum of users will require that we hire additional personnel to effectively and efficiently integrate the data feeds from a larger universe of sources than is currently possible. Because of the uncertainties about our ability to win customers and earn revenue, and the expectations that development and marketing costs will accelerate, we are unable to determine when, or if, the monitoring business will become cash positive. This uncertainty is magnified by the competitive dynamics of the monitoring services market. There are numerous competitors developing or marketing monitoring systems with at least some characteristics similar to ours. A few of these competitors currently offer robust systems with features and capabilities similar or superior to those we are able to provide. Despite the proliferation of renewable power generating systems worldwide, asset ownership is beginning to concentrate and we believe that the market for monitoring services may be largely locked up by a small number of competitors within a few years. Primarily for this reason, we are investing aggressively, within the limitations of our liquidity, to accelerate system development and deployments. If we cannot capture meaningful market share quickly, we may be foreclosed from pursuing much of the available revenue from this sector and we may not realize a return on investment in the development of our monitoring system or related acquisitions.

We do not carry business interruption insurance, and any unexpected business interruptions could adversely affect our business.

Our operations are vulnerable to interruption by earthquake, fire, power failure and power shortages, hardware and software failure, floods, computer viruses, and other events beyond our control. In addition, we do not carry business interruption insurance to compensate us for losses that may occur as a result of these kinds of events, and any such losses or damages incurred by us could disrupt our solar integration projects and other operations without reimbursement. Because of our limited financial resources, such an event could threaten our viability to continue as a going concern and lead to dramatic losses in the value of our ordinary shares.

The renewable energy sectors we serve are notable for the pace of technological change and our operations could be adversely affected if we fail to keep pace with such changes; and changes in technology could make it difficult for us to be competitive with our available technology and prevent us from achieving sustained profitability.

We develop renewable energy projects and are offering services to participants in the renewable energy markets. In part because of the large amounts of capital deployed in the sector and the global growth, the renewable energy sector is becoming increasingly competitive. To meet our clients’ needs, we must continually source, qualify and offer updated technology for the projects and services we provide. We are at a competitive disadvantage in doing so because of our small scale, weak financial condition and unprotected know-how and proprietary technology. In addition, rapid and frequent technology and market demand changes can render the existing technologies known and used by us obsolete, requiring substantial new capital expenditure or negatively impacting our market share. Any failure by us to anticipate or to respond adequately to changing technology, market demands and client requirements could adversely affect our business and financial results.

Solar and wind energy are, in some jurisdictions, more expensive sources of energy than the wholesale cost of conventional alternatives and recent drops in the price of conventional energy sources and other factors affecting energy costs may negatively impact demand for renewables and reduce our revenues and profitability.

We believe that an end customer’s decision to purchase or install renewable power generation systems is primarily driven by the cost and return on investment resulting from such installations. Fluctuations in economic and market conditions that affect the prices of conventional and non-solar alternative energy sources, such as decreases in the prices of oil and other fossil fuels, could cause the demand for solar power systems to decline, which would have a negative impact on our profitability. Other factors that could have a negative effect on our rapidly evolving business include, but are not limited to:

	●	changes in utility electric rates or net metering policies;

	●	increases in the installed costs of solar or wind power due to changes in tariffs, taxes and subsidies; and

	●	adverse customer experience with performance and reliability of renewable power installations as they age.

If demand for solar or wind power products fails to develop sufficiently or declines, we might not be able to generate enough revenue to sustain profitability. In addition, demand for solar power products in the markets and geographic regions we target may not develop or may develop more slowly than we anticipate.

Overcapacity and financial distress among manufacturers of wind and solar power generation equipment is commonplace and also occurs to a lesser extent among climate control equipment manufacturers; if OEM or component suppliers for systems we install fail to meet warranty obligations to our customers, or backstop warranty commitments to us, our business and profitability could be impaired.

Many large and well-known manufacturers of solar PV panels, wind turbines and related equipment necessary to implement functioning systems, such as inverters, have failed in recent years, including two of our significant past suppliers, Solon and Oelmaier. Others have been financially weakened, possibly including some of our current suppliers. The climate control sector is more mature and failures of equipment manufacturers are less common, but they do occur from time to time. Our solar PV, wind and climate-control installations are covered by warranties from these component suppliers, which they may not be able to meet. While, we do not generally have direct warranty obligations related to components produced by these suppliers we could suffer reputational damage if the component manufacturers default on their warranty obligations.

In all of our system installation businesses, if we fail to meet warranty obligations of our suppliers who fail to do so we may face precipitous declines in our sales. We believe this to be particularly the case in the residential solar segment in Australia and the U.S. (if we re-launch a residential business in the U.S.). In both markets we believe the importance of reputation as a provider of reliable systems is a critical factor in the sustainability the business. However, taking on warranty obligations for suppliers who default could place a financial burden on us that we are unable to meet. Either course of action could render our business non-viable.

Existing regulations, and changes to such regulations, may present technical, regulatory, and economic barriers to the purchase and use of wind and solar power products, which may significantly reduce demand for such systems and could harm our business.

Installations of solar power systems are subject to oversight and regulation in accordance with national and local ordinances, building codes, zoning, environmental protection regulation, utility interconnection requirements for metering, and other rules and regulations. In the jurisdictions in which we operate, we attempt to keep up-to-date with these requirements on a national, state, and local level, and must design, construct and connect systems to comply with varying standards. Some jurisdictions have ordinances that prevent or increase the cost of installation of our solar power systems. In addition, new government regulations or utility policies pertaining to solar and wind power systems are unpredictable and may result in significant additional expenses or delays and, as a result, could cause a significant reduction in demand for solar and wind generation systems and our post-installation services. For example, there currently exist metering caps in certain jurisdictions such as Queensland that effectively limit the aggregate amount of power that may be sold by solar power generators into the power grid. Certain jurisdictions have passed ordinances that limit noise or threats to wildlife to levels that would preclude installation of cost-effective wind generation capacity. Moreover, in certain markets, the process for obtaining the permits and rights necessary to construct and interconnect a power system to the grid requires significant lead time and may become prolonged, and the cost associated with acquiring such permits and project rights may be subject to fluctuation.

Our business benefits from the declining cost of solar panels and other components, and our financial results would be harmed if this trend reversed or did not continue.

The declining cost of solar panels and the raw materials necessary to manufacture them has been a key driver in the pricing of our solar energy systems and customer adoption of this form of renewable energy. If solar panel and raw materials prices do not continue to decline or increase, our growth could slow and our financial results would suffer. In a the past we have purchased a significant portion of the solar panels used in our solar energy systems from manufacturers based in China, some of whom benefit from favorable foreign regulatory regimes and governmental support, including subsidies. If this support were to decrease or be eliminated, if internal Chinese demand for panels increases to a level that exports are reduced, or if tariffs and import restrictions above current levels were to be imposed by U.S. or European governments, it could lead to higher prices for panels (or other components), reducing demand and margins. A similar adverse impact on our results would occur if our access to specialized technology from Chinese manufacturers is restricted or becomes more expensive.

If potential owners of solar PV systems are unable to secure financing on acceptable terms as a result of financial crisis, rising rates or other factors, we could experience a reduction in demand for installation of our solar PV systems and may be unable to sell projects developed under our BOT model or owned or operated under our BOO model.

Many owners of solar PV systems depend on financing to purchase their systems. Moreover, in the case of debt financed projects, even if lenders are willing to finance the purchase of these systems, an increase in interest rates or a change in tax incentives could make it difficult for owners to secure the financing necessary to purchase a solar PV system on favorable terms, or at all. In addition, we believe that a significant percentage of owners purchase solar PV systems as an investment, funding the initial capital expenditure through a combination of upfront cash and financing. Difficulties in obtaining financing for solar PV installations on favorable terms, or increases in interest rates or changes in tax incentives, could lower an investor’s return on investment in a solar PV installation, or make alternative power generation systems or other investments more attractive relative to solar PV systems based on our product platform. Any of these events could result in reduced demand for our systems, which could have a material adverse effect on our financial condition and results of operations.

Public opposition to development of solar and wind farms, particularly in the U.S., Europe and more recently in Australia, is expected to make it more difficult to obtain the necessary permits and authorizations for such projects and will reduce development opportunities available to us.

Over the last few years, public disfavor of solar and wind farms in certain European countries that have historically allowed such projects (e.g., Spain and Italy) has been manifested in changes in government policies. In the opinion of our management, the public opposition in Europe has been triggered by concerns that scarce farm land was being displaced by such solar and wind power installations and that the cost of the power supplied from ground-based systems was unjustified and not economically sustainable. Moreover, the significant displacement of farmland and the costs of power supplied from ground-mount projects appears to have been caused by excessively high feed-in tariff rates set by regulators. Key policy changes observed include reductions of subsidies applicable to ground-based solar installations relative to other types of projects and changes in permitting regulations that make ground-based installations difficult or practically impossible to start. Consequently, the number of economically feasible projects in these high-potential regions has declined and the near-term opportunities for us to pursue large-scale solar projects in these proven markets have diminished rapidly. If this occurs in other jurisdictions such as the U.S. and Australia where land is plentiful, it could significantly diminish project opportunities and our potential for growth.

Regulations applicable to the U.S. market may exacerbate competitive pressures for solar PV development and reduce margins, making it harder for us to grow profitably in the United States.

In certain U.S. jurisdictions government regulations or utility policies pertaining to solar power systems are unpredictable and have the potential to cause significant additional expenses or delays for projects of all sizes. Also, some jurisdictions have imposed regulations that effectively limit the aggregate amount of power that may be sold by solar power generators into the power grid. In addition, the United States has imposed tariffs on Chinese-manufactured solar panels that have disrupted established supply relationships and increased costs. Collectively, these and similar factors may constrain implementation of U.S. solar energy systems and opportunities to sell our monitoring and O&M services relative to expectations. Our management expects these dynamics to increase competitive pressures among system developers and service providers that could lead to reduced pricing and profits. Our solar development and servicing initiatives in the United States may not succeed or be profitable as a result.

In our solar PV and climate control businesses we depend on a small number of suppliers for key components used in our products and systems with the result that we risk disruption in supply and may be constrained in negotiating competitive prices, lead times and other trade terms.

Our businesses focused on system design and installation provide the preponderance of our revenue. Nevertheless, our small scale and weak financial condition have compelled us to obtain key components required by these businesses, and also our monitoring business, from a small number of suppliers who would offer us credit terms. We believe that our commercial relationship with our suppliers in each of our business segments is good, but prior to and during the period when we were operating under VA, we had difficulty making timely payments on a consistent basis to many of these suppliers. Our historical inability to make timely payments has led to curtailment of shipments to us by suppliers, even after our emergence from VA and has reduced our recent revenues and increased our supply costs. Because of our continuing weak financial condition and limited liquidity, we may face the same issue in the future. We do not maintain, or expect to be able to maintain, sufficient inventories to allow us to buffer the consequences of supply interruptions. Although alternative suppliers exist for most of the components we sell in our solar installation and climate control businesses, new suppliers may not be willing to ship to us on customary trade terms, or at all, due to our financial condition. Sometimes we are in a position of having only one source of component supply. The sudden loss of any of our current primary component supply relationships could cause a delay in order fulfillment and be disruptive to our operations and lead to financial losses.

It is critical to the growth of our revenue that our products be high quality while offered at competitive pricing. Any constraints that we face in being able to negotiate with our suppliers may prevent us from being able to offer systems to customers on competitive terms or to do so profitably.

In addition, we are currently subject to fluctuations in market prices for the components that we purchase. We cannot ensure that the prices charged by our suppliers will not increase because of changes in market conditions or other factors beyond our control. An increase in the price of components used in our systems could result in an increase in costs to our customers and could have a material adverse effect on our revenues and demand for our products.

Interruptions in our ability to procure needed components for our systems, whether due to discontinuance by our suppliers, delays or failures in delivery, shortages caused by inadequate production capacity or unavailability, financial failure, manufacturing quality, or for other reasons, would adversely affect or limit our sales and growth. There is no assurance that we will continue to be able to find qualified sources for components on acceptable terms and, if we do, there can be no assurance that product quality will continue to be satisfactory, which could lead to a loss of sales and revenues.

The termination of our right to use of the Westinghouse® brand to market solar installations was triggered by our VA and necessitates that we rebrand and re-launch our small-scale solar offerings in Australia and the U.S.; we have elected to do so under our own BlueNRGY brand and this process, if unsuccessful or more costly than we anticipate, could severely and adversely affect the viability of our solar business and the ability of the Company to continue as a going concern.

We began marketing PV solar systems solely under the Westinghouse® brand in Australia and New Zealand in April 2013 and in the U.S. in July 2014 and continued to do so until we received notice of termination of the license agreement with Westinghouse Electric Corporation in December 2014. This action forced us to immediately cease marketing and sales efforts for small-scale solar altogether and, following our emergence from VA, to develop a new website, marketing materials and business plans to re-launch this business under an alternative brand at great expense and with much lost time. We have determined to apply our own BlueNRGY brand to the small-scale solar business beginning in Australia. Unlike the Westinghouse brand, which has wide consumer recognition in both the U.S. and Australia, the BlueNRGY brand is substantially unknown. It is therefore unclear whether or not the BlueNRGY brand will gain enough market acceptance to drive sales as we expect at a cost that allows this line of business to be profitable. If not, our revenues and margins could be severely adversely affected to the potential detriment of our overall business. If the brand is accepted by consumers, our failure to effectively execute the roll-out of branded product or satisfy requirements of the initial orders may increase our costs or cause our re-launch to be scaled back or cancelled. Any of these adverse outcomes could create a window of opportunity for the continued growth of competitors utilizing similar technology and could foreclose us from reentering these markets with a small-scale solar offering altogether. Because the BlueNRGY brand is our own, any costs necessary to protect and defend our exclusive rights to the brand must be borne entirely by us and, if significant, could further impair our liquidity.

Risks Related to our Ordinary Shares

We have never paid a dividend on our ordinary shares and do not intend to do so in the foreseeable future, and consequently, investors’ only opportunity to realize a return on their investment in the Company is through the appreciation in the price of and sale of our ordinary shares.

We do not anticipate paying cash dividends on our ordinary shares in the foreseeable future and intend to retain all earnings, if any, for our operations. If we decided to pay dividends at some future time, we may not have sufficient funds legally available to do so. Even if funds are legally available for distribution, we may be unable to pay any dividends to our shareholders because of limitations imposed by our credit agreements or a lack of liquidity. Accordingly, our shareholders may have to sell some or all of their ordinary shares in order to generate cash flow from their investment. Our shareholders may not receive a gain on their investment when they sell their ordinary shares and may lose some or all of their investment. Any determination to pay dividends in the future on our ordinary shares will be made at the discretion of our Board and will depend on our results of operations, financial conditions, contractual restrictions, restrictions imposed by applicable law, capital requirements, and other factors that our Board deems relevant.

We require additional capital to fund our businesses, and the sale of additional shares or other equity securities would result in dilution to our shareholders; such sales, or the perception that such sales may occur, may also depress our share price.

We require additional cash resources to fund our business plan and to continue operating as a going concern. The Company may sell additional equity to obtain needed funds and the use of such funds could include:

	●	funding losses and paying existing creditors;

	●	expanding into new product markets and geographies;

	●	acquiring complementary businesses, products, services or technologies;

	●	hiring additional technical and other personnel for purposes of business development, research and other activities consistent with our strategy; or

	●	otherwise pursue strategic plans and respond to competitive pressures.

We may also issue additional equity securities for other purposes including for compensation of employees, directors consultants and for employment benefit plans. These securities may have the same rights as our ordinary shares or, alternatively, may have dividend, liquidation, or other preferences to our ordinary shares. The issuance of additional equity securities will dilute the holdings of existing shareholders and may reduce the price of our ordinary shares.

There are no assurances that equity financing will be available in amounts or on acceptable terms, if at all. If financing is not available to us on acceptable terms, if and when needed, we will be unable to fund our operations or expand our business. In any such event, our business, financial condition and results of operations could be materially harmed, and we may be unable to continue as a going.

Our financing needs may require us to obtain additional debt financing to fund losses, future capital expenditures and to meet working capital requirements, which may be obtained on terms that are unfavorable to the Company and/or our shareholders.

We will require additional financing in the future in connection with execution of our growth strategy, to fund future capital expenditures, working capital and losses. Additional debt financing may include conditions that would restrict our freedom to operate our business, such as conditions that:

	●	increase our vulnerability to general adverse economic and industry conditions;

	●	require us to dedicate a portion of our cash flow from operations to payments on our debt, thereby reducing the availability of our cash flow to fund capital expenditures, working capital, growth and other general corporate purposes; and

	●	limit our flexibility in planning for, or reacting to, changes in our business and our industry.

The incurrence of additional indebtedness could require acceptance of covenants that, if violated, could further restrict our operations or lead to acceleration of the indebtedness that would necessitate winding up or liquidation of the Company. In addition to the foregoing, our ability to obtain additional debt financing may be limited and there can be no assurance that we will be able to obtain any additional financing on terms that are acceptable, or at all.

Rule 144 may not be available for public resales of our securities.

Rule 144 under the Securities Act, permits the resale, subject to various terms and conditions, of limited amounts of restricted securities after they have been held for six months. The SEC prohibits the use of Rule 144 for resale of securities issued by issuers that have been at any time previously a shell company. It is our view that in 1999 we were a shell company. We were originally formed on August 18, 1989 in Australia as London Securities Limited, a corporation subject to the laws of Australia, specifically, the Australian Corporations Act. Our ordinary shares were first listed on the Australian Stock Exchange, or ASX, in 1989. Following our inception, we began acquiring energy generation assets and on December 19, 1996, changed our name to Asia Pacific Infrastructure Limited. We were, however, suspended from trading on ASX on October 8, 1998. In calendar year1999 we had nominal non-cash assets and we had nominal operations. We resumed trading on ASX on April 18, 2000.

The SEC prohibits the use of Rule 144 for resale of securities issued by shell companies (other than business transaction related shell companies) or issuers that have been at any time previously a shell company. The SEC has provided an important exception to this prohibition, however, if the following conditions are met: the issuer of the securities that was formerly a shell company has ceased to be a shell company; the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company. We believe that, upon the filing of this Report, we will have met all of these requirements. In our two most recent fiscal years, however, we have not filed our Annual Report on Form 20-F in a timely fashion. If we do not file our Annual Report for the fiscal year that will end on June 30, 2016 on time, Rule 144 would not be available for the resale of our restricted ordinary shares which would materially reduce the ability to sell such shares.

Our ordinary shares have only recently commenced trading in the United States on the OTC Markets, trading is thin and the market price of our shares is volatile, conditions that individually or in combination may render our shareholders unable to sell the ordinary shares at or near “ask” prices, or at all; consequently, if our shareholders need to sell their shares to raise money or otherwise desire to liquidate their shares they could incur substantial losses.

Although we have applied to list our ordinary shares on the NASDAQ Capital Market, there is no assurance that our NASDAQ listing application will be approved or that an active public market for our ordinary shares will develop or be sustained. Our ordinary shares have only began trading on the OTC Markets on September 10, 2015 following a nine-month suspension and delisting from the NASDAQ Capital Market and it is not clear if an active market for our shares will develop. Since trading recommenced on the OTC Markets, highest trading volume recorded in a single day through December 4, 2015 was 75,475 shares, representing a total value of shares traded on such day of $8,310. This lack of an active market means that the number of persons interested in purchasing ordinary shares at or near bid prices at any given time may be relatively small or nonexistent. This situation is attributable to a number of factors, including the fact that many of our shareholders are located in Australia and lack the capability or knowledge to trade in the U.S. markets, were issued unregistered shares, pursuant to the DOCA or in private placement transactions following our emergence from VA, that are not currently eligible to trade in the U.S. market, the Company’s history of losses and the fact that we are a small company that is relatively unknown to stock analysts, stock brokers, institutional investors and others in the U.S. investment community that generate or influence sales volume. Even if we came to the attention of such persons, they tend to be risk-adverse and may be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares until such time as our business has demonstrated viability and we become larger and more seasoned. As a consequence, there may continue to be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer that has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on our stock price. There are no assurances that a broader or more active public trading market for our ordinary shares will develop or be sustained, or even that current trading levels experienced on the OTC Markets will be sustained.

The market price and trading volume of our ordinary shares may be volatile and may be affected by variability in the Company’s performance from period to period and economic conditions beyond management’s control.

The market price of our ordinary shares may be highly volatile and could be subject to wide fluctuations. This means that our shareholders could experience a decrease in the value of their ordinary shares regardless of our operating performance or prospects. The market prices of securities of companies operating in the renewable energy sector have often experienced fluctuations that have been unrelated or disproportionate to the operating results of these companies. In addition, the trading volume of our ordinary shares may fluctuate and cause significant price variations to occur. If the market price of our ordinary shares declines significantly, our shareholders may be unable to resell our ordinary shares at or above their purchase price, if at all. There can be no assurance that the market price of our ordinary shares will not fluctuate or significantly decline in the future.

Some specific factors that could negatively affect the price of our ordinary shares or result in fluctuations in their price and trading volume include:

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actual or expected fluctuations in our operating results;

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actual or expected changes in our growth rates or our competitors’ growth rates;

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our inability to raise additional capital, limiting our ability to continue as a going concern;

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changes in market prices for our product or for our raw materials;

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changes in market valuations of similar companies;

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changes in key personnel for us or our competitors;

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speculation in the press or investment community;

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changes or proposed changes in laws and regulations affecting the renewable energy industry as a whole;

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conditions in the renewable energy industry generally; and

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conditions in the financial markets in general or changes in general economic conditions.

In the past, following periods of volatility in the market price of the securities of other companies, shareholders have often instituted securities class action litigation against such companies. If we were involved in a class action suit, it could divert the attention of senior management and, if adversely determined, could have a material adverse effect on our results of operations and financial condition.

If we do not meet the initial listing standards of the NASDAQ Capital Market (or, once listed, the continued listing standards in the future), the Company’s stock will not trade on a national exchange and liquidity and share price may suffer.

Our ordinary shares are currently only traded on the OTC Markets. Although we have applied for listing of our ordinary shares for trading on the NASDAQ Capital Market and believe that listing on NASDAQ will result in a more active public market and liquidity for our ordinary shares than is observed on the OTC Markets, there can be no assurance that this is will be the case or that our NASDAQ listing application will be approved. There may be significant consequences associated with our ordinary shares trading on the OTC Markets rather than a national exchange. The effects of not being able to list our ordinary shares on a national exchange include:

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limited release of the market price of our securities;

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limited news coverage;

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limited interest by investors in our securities;

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volatility of our ordinary share price due to low trading volume;

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increased difficulty in selling our securities in certain states due to “blue sky” restrictions; and

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limited ability to issue additional securities or to secure additional financing.

Even if our shares are approved for listing the NASDAQ Capital Market or any other national exchange, there is no assurance that the Company will be able to continue to meet all necessary requirements for such listing; therefore, there is no assurance that our ordinary shares will continue to trade on a national securities exchange. At any time when our shares do not trade on a national exchange, liquidity may be reduced and our stock price could decline.

We are in the process of effecting a 1-for-80 reverse share consolidation which could adversely affect the market liquidity of our ordinary shares, impair the value of your investment and harm our business.

Our shareholders and Board have approved a 1-for-80 share consolidation and, subject to receipt of requisite regulatory approval we expect this to be implemented shortly following the filing of this Annual Report on Form 20-F. There are a number of risks associated with the pending share consolidation. The history of similar share consolidation for companies in like circumstances is varied, and we cannot predict whether:

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the market price per share of our ordinary shares after the share consolidation will result in a sustained rise in proportion to the reduction in the number of shares of our ordinary shares outstanding before the share consolidation, i.e., that the post- consolidation market price of our ordinary shares will equal or exceed the pre-split price multiplied by the split ratio;

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the share consolidation will result in a per share price that will attract brokers and investors who do not trade in lower priced stocks;

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the share consolidation will result in a per share price that will increase our ability to attract and retain employees and other service providers;

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the market price per share will equal or exceed the price required to qualify for initial listing or remain in excess of the US$1.00 minimum bid price as required by NASDAQ following initial listing;

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or we will otherwise meet the requirements of NASDAQ for continued inclusion for trading on the NASDAQ Capital Market.

In addition, the share consolidation will reduce the number of shares available in the public float and this may impair the liquidity in the market for our ordinary shares on a sustained basis, which may in turn reduce the value of our ordinary shares. We may in the future undergo one or more additional share consolidations. If we issue additional shares in the future, it will likely result in the dilution of our existing shareholders.

As a foreign private issuer, we follow certain home-country corporate governance practices that afford less protection to holders of our ordinary shares than would be available to U.S. issuers listed on NASDAQ.

As a foreign private issuer, we follow certain home-country corporate governance practices and intend to continue to do so in lieu of certain NASDAQ requirements, even if we are successful in regaining our NASDAQ listing. Australian law does not require us to follow NASDAQ requirements, including with respect to the composition of our Board and nominations committee and executive sessions, having a majority of our Board be independent, establishing a nominations committee or holding regular executive sessions where only independent directors are present and the requirement to obtain shareholder approval in all circumstances where we issue shares constituting more than 20% of our outstanding shares. (Refer to Item 16G “Corporate Governance”.)

Such Australian home-country practices may afford less protection to holders of our ordinary shares than would be available to our shareholders if we were incorporated in the United States, governed by U.S. law and subject to all applicable NASDAQ regulations for U.S. issuers.

We are a “foreign private issuer” under the rules and regulations of the SEC and are thus exempt from a number of rules under the Exchange Act and will be permitted to file less information with the SEC than a company incorporated in the United States.

As a “foreign private issuer” under the Exchange Act, we are exempt from certain rules under the Exchange Act, and will not be required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act, or to comply with Regulation FD, which restricts the selective disclosure of material nonpublic information. In addition, we are exempt from certain disclosure and procedural requirements applicable to proxy solicitations under Section 14 of the Exchange Act. Our officers, directors and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act. Accordingly, there may be less publicly available information concerning us than there is for a company domiciled in the United States, and such information may not be provided as promptly as it is currently provided by companies domiciled in the United States. Although not anticipated, if we lose our status as a foreign private issuer, we will no longer be exempt from such rules and, among other things, will be required to file periodic reports and financial statements with the SEC as if we were a company incorporated in the United States. The costs incurred in complying with these additional requirements could be substantial.

Because we are organized under the laws of Australia, U.S. investors may face difficulties in protecting their interests, and their ability to protect their rights through the U.S. federal courts may be limited.

It may be difficult to bring and enforce suits against us because we are organized under the laws of Australia. Some or all of our directors will reside in various jurisdictions outside the United States. As a result, it may be difficult for investors to effect service of process within the United States upon our non-U.S. directors, or enforce judgments obtained in the United States courts against us or our non-U.S. directors. In addition, there is some doubt as to whether the courts of Australia and other countries would recognize or enforce judgments of U.S. courts obtained against us or our directors or officers based on the civil liabilities provisions of the federal or state securities laws of the United States or would hear actions against us or those persons based on those laws. We have been advised by our legal advisors in Australia that the United States and Australia do not currently have a bilateral arrangement providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters. Consequently, a party seeking to enforce a judgment of a U.S. court must rely on common law principles for recognition and enforcement. Some remedies available under the laws of U.S. jurisdictions, including some remedies available under the U.S. federal securities laws, may not be allowed in Australia courts as contrary to that jurisdiction’s public policy. Therefore, a final judgment for the payment of money rendered by any federal or state court in the United States based on civil liability, whether or not based solely on United States federal or state securities laws, would not automatically be enforceable in Australia. Similarly, those judgments may not be enforceable in countries other than the United States.

A large fraction of our shares are held by a few shareholders, some of whom are members of our Board and management. As these principal shareholders substantially control our corporate actions, our other shareholders may face difficulty in exerting influence over matters not supported by these principal shareholders.

Our principal shareholders include affiliates of W.H. Soul Pattinson and certain affiliates, referred to as WHSP, ESOL B.V., Mr. Y-R Cotrel, Mr. Emmanuel Cotrel, and Mr. Morro (the latter three are officers and/or directors of the Company) and they collectively control over 50.8% of our outstanding ordinary shares as of December 4, 2015.

These shareholders, acting individually or as a group, could exert control over matters such as electing directors, amending our certificate of incorporation or bylaws, and approving mergers or other business combinations or transactions. In addition, because of the percentage of ownership and voting concentration of these principal shareholders and their affiliated entities, elections of our Board may be within the control of these shareholders and their affiliated entities. While all of our shareholders are entitled to vote on matters submitted to our shareholders for approval, a concentration of shares and voting control presently lies with these principal shareholders and their affiliated entities. As such, it would be difficult for shareholders to propose and have approved proposals not supported by these principal shareholders and their affiliated entities. There can be no assurance that matters voted upon by our officers and directors in their capacity as shareholders will be viewed favorably by all shareholders of the Company. The stock ownership of our principal shareholders and their affiliated entities may discourage a potential acquirer from seeking to acquire our ordinary shares, which, in turn, could reduce our stock price or prevent our shareholders from realizing a premium over our stock price.

A significant portion of our total outstanding shares will become eligible to be sold into the market in the near future, which could cause the market price of our ordinary shares to drop significantly, even if our business is doing well.

Sales of a substantial number of our ordinary shares in the public market, or the perception in the market that the holders of a large number of our ordinary shares intend to sell shares, e.g. the preponderance of our shareholders who are located in Australia or holders of large blocks of previously restricted shares, including those issued in conjunction with the DOCA, could reduce the market price of our ordinary shares. While a significant portion of our outstanding shares are currently restricted as a result of securities laws, they will become eligible to be sold at various times shortly after the date of this Annual Report on Form 20-F or immediately following effectiveness of the resale registration statement that we are obligated to file within 30 days following the issuance of our audited financial statements for our fiscal year ending June 30, 2015 and included herein. Sales of such shares could cause the market price of our ordinary shares to drop significantly.

Our Constitution grants to our Board the authority to issue a preferred stock without further approval by our shareholders, which could adversely affect the rights of the holders of our ordinary shares

Our Board has the power to fix and determine the relative rights and preferences of preferred stock. Our Board also has the power to issue preferred stock without further shareholder approval, subject to the provisions of our Constitution and the Act. As a result, our Board could authorize the issuance of new series of preferred stock that would grant to holders thereof certain preferred rights to (i) our assets upon liquidation: (ii) receive dividend payments ahead of holders of ordinary shares; (iii) and the redemption of the shares, together with a premium, prior to the redemption of our ordinary shares. In addition, our Board could authorize the issuance of new series of preferred stock that is convertible into our ordinary shares, which could decrease the relative voting power of our ordinary shares or result in dilution to our existing shareholders

Research analysts do not currently publish research about our business, limiting information available to shareholders, and if this continues to be the case, or if analysts do publish unfavorable commentary or downgrade our ordinary shares, it could adversely affect our stock price and trading volume.

The trading market for our ordinary shares will depend, in part, on the research and reports that research analysts publish about us and our business and industry. The price of our ordinary shares could decline if one or more research analysts downgrade our stock or if those analysts issue other unfavorable commentary or cease publishing reports about us or our business. If one or more of the research analysts ceases coverage of the Company or fails to publish reports on us regularly, demand for our ordinary shares could decrease, which could cause our stock price or trading volume to decline.

We may be classified as a foreign investment company for U.S. federal income tax purposes, which could subject U.S. investors in our ordinary shares to significant adverse U.S. income tax consequences.

Depending upon the value of our assets, which may be determined based, in part, on the market value of our ordinary shares, and the nature of our assets and income over time, we could be classified as a “passive foreign investment company,” or “PFIC,” for U.S. federal income tax purposes. Based upon our current income and assets and projections as to the value of our ordinary shares, we do not presently expect to be a PFIC for the current taxable year or the future taxable years. While we do not expect to become a PFIC, if, among other matters, our market capitalization is less than anticipated or subsequently declines, we may be a PFIC for the current year or future taxable years. The determination of whether we are or will be a PFIC will also depend, in part, on the composition of our income and assets, which will be affected by how, and how quickly, we use our liquid assets. Because PFIC status is a factual determination made annually after the close of each taxable year, including ascertaining the fair market value of our assets on a quarterly basis and the character of each item of income we earn, we can provide no assurance that we will not be a PFIC for the current taxable year or any future taxable year.

If we are classified as a PFIC in any taxable year during which a U.S. holder holds our ordinary shares, a U.S. holder would be subject to special rules generally intended to reduce or eliminate any benefits from the deferral of U.S. federal income tax that a U.S. holder could derive from investing in a non-U.S. corporation that doses not distribute all of its earnings on a current basis. Further, if we are classified as a PFIC for any year during which a U.S. holder holds our ordinary shares, we generally will continue to be treated as a PFIC for all succeeding years during which such U.S. holder holds our ordinary shares.

Risks Related to Takeovers

Australian takeovers laws may discourage takeover offers being made for us or may discourage the acquisition of large numbers of our ordinary shares, which could constrain our share price and reduce investor returns.

We are incorporated in Australia and are subject to the takeovers laws of Australia, including the Australian Corporations Act 2001, or the Corporations Act. Subject to a range of exceptions, the Corporations Act prohibits the acquisition of a direct or indirect interest in a company’s issued voting shares if the acquisition of that interest will lead to a person’s voting power in such company increasing from 20% or below to more than 20%, or increasing from a starting point that is above 20% and below 90%. Australian takeovers laws may discourage takeover offers being made for us or may discourage the acquisition of large numbers of our ordinary shares. This may have the ancillary effect of entrenching our Board and may deprive, limit our shareholders’ strategic opportunities to sell their ordinary shares and may restrict the ability of our shareholders to obtain a premium from such transactions.

Our Constitution and applicable Australian laws and regulations may adversely affect our ability to take actions that could be beneficial to our shareholders.

As an Australian company we are subject to different corporate requirements than a corporation organized under the laws of the United States. Our Constitution, as well as the Corporations Act, set forth various rights and obligations that are unique to Australian companies. These requirements operate differently than from many U.S. companies and may limit or otherwise adversely affect our ability to take actions that could be beneficial to our shareholders.

ITEM 4. INFORMATION ON THE COMPANY

4.A. History and Development of the Company

We were originally formed on August 18, 1989 in Australia as London Securities Limited, a corporation subject to the laws of Australia, specifically, the Australian Corporations Act. Following our inception, we began acquiring energy generation assets. Subsequently, we undertook major adjustments in strategic focus and changed our name in 1996. We were suspended from trading on ASX on October 8, 1998. In calendar year1999 we had nominal non-cash assets and we had nominal operations. We resumed trading on ASX on April 18, 2000 (shortly after changing our name again). We adopted the name CBD Energy Limited on December 6, 2002. Operating as CBD Energy Limited, we reemphasized development of energy-related businesses and undertook new initiatives to acquire installation and service contractors delivering energy-efficient commercial-scale climate control systems. We entered VA on November 14, 2014 and our corporate organization and liabilities were restructured pursuant to the DOCA. As further described below under the heading “Voluntary Administration and Deed of Company Arrangement,” we emerged from the VA on January 27, 2015 having retained a strategic focus on delivering and managing renewable energy generation and energy-efficient climate-control systems. On March 20, 2015 the Company name was changed to BlueNRGY Group Limited.

Our ordinary shares were listed on the Australian Stock Exchange from 1989 through (other than the 18 months mentioned above) January 31, 2014, when we voluntarily delisted them in connection with our U.S. listing. Our ordinary shares traded on the OTC Markets from February 10, 2014 until June 13, 2014 under the ticker symbol CBDNF, and began trading on the NASDAQ Capital Market on June 13, 2014. However, trading in our ordinary shares was suspended on November 14, 2014 following commencement of the VA process. Our ordinary shares began trading again on September 10 2015 in the over-the-counter market under the ticker symbol CBDEF. We are endeavoring to complete the steps necessary to relist our ordinary shares on the NASDAQ Capital Market, but there is no assurance that we will be successful in doing so.

Voluntary Administration and Deed of Company Arrangement

On November 14, 2014, by unanimous resolution of those members of its Board permitted to consider the matter and to vote, it was determined that the Company and three of its Australian subsidiaries were (i) insolvent or likely to become insolvent in the future (ii) should be placed into voluntary administration under the Australian Corporations Act 2001 (the “Act”), and (iii) appoint Said Jahani and Trevor Pogroske from Grant Thornton as joint and several administrators, referred to in the singular as “Administrator”, pursuant to section 436A of the Act. Three of our Australian subsidiaries also entered VA contemporaneously, CBD Solar Labs Pty, Westinghouse Solar Pty Ltd and KI Solar Pty Ltd, which, together with the Company are referred to as the VA Companies. The Company’s other subsidiaries continued to operate or were liquidated outside the VA process.

On December 24, 2014, DOCAs approved by requisite vote of creditors were signed for two of the VA Companies, specifically the Company and one of its subsidiaries, Westinghouse Solar Pty Ltd; the DOCAs were amended by deed of variation on January 27, 2015 following another vote of creditors and, as amended, are sometimes referred to as the Reorganization Plans. Among other things, the Reorganization Plans stipulate that: (i) creditor claims and contingent liabilities of the reorganized companies were extinguished; (ii) executory contracts of the reorganized companies were terminated; (iii) through the operation of deeds managed by the Administrator, referred to as Deed Funds, creditors of the reorganized companies would receive from the Company US$1.0 million in cash and newly-issued Company ordinary shares; (iv) a secured creditor of the reorganized Companies, Washington H. Soul Pattinson and Company Ltd, referred to as WHSP, would retain the rights to proceeds derived from certain company assets or receivables and would receive convertible preferred shares issued by two Company subsidiaries; (v) the terms of our Series B Preferred Shares would be amended; (vi) we would consummate the acquisition of BlueNRGY LLC, referred to as the BN Acquisition, through new issuance of additional ordinary shares to the BlueNRGY LLC shareholders (further described below under the heading “Recent Acquisitions”) and (viii) we would sell newly issued ordinary shares to investors at a minimum issue price per share equal to or greater than US$0.03637 and having an aggregate value at least sufficient to make the US$1.0 million payment to the Deed Funds, and (ix) the Administrator would retain ownership of all subsidiaries (not previously liquidated) other than specified subsidiaries.

The Reorganization Plans became effective on January 27, 2015, when the required conditions of the DOCAs were satisfied. At that time, the Company and its subsidiary, Westinghouse Solar Pty Ltd, emerged from VA, supervision by the Administrator ceased and management of the Company by the Board resumed in accordance with its Constitution.

The foregoing summary description of the Reorganization Plans is qualified in its entirety by the copies of the DOCAs, and deeds of variation, that were filed with our report on Form 6-K/A dated January 29, 2015.

As a result of the Reorganization Plans, significant changes were made to the Group’s Net Asset/Equity position and to the number of ordinary shares on issue (refer to Item 8.B. under the heading “Issuance and Repurchase of Ordinary Shares and Other Equity-Linked Securities”).

Recent Acquisitions

In conjunction with our Reorganization Plans, we acquired 100% of the equity interests of BlueNRGY LLC, a U.S. company specializing in data acquisition, analysis and management related to the performance of geographically distributed energy generation systems and providing related operations and maintenance, or O&M, services. At the time of the BN Acquisition, BlueNRGY LLC was a development-stage company serving a small number of customers in Europe and Asia. Subsequently it has expanded the scope of its operations to include customers with U.S. and Australian generating assets. Consideration paid to the BlueNRGY LLC shareholders and shares issued to key executives and Directors of the Group as part of the transaction comprised in aggregate 150,162,640 of our ordinary shares. Based on the issuance of our ordinary shares to investors in a contemporaneous private placement at US$0.03785 per share, the value of our shares issued to the BlueNRGY LLC shareholders was US$5.7 million. BlueNRGY LLC has its principal offices in Fort Lauderdale, FL.

On September 16, 2015, we acquired, through a newly formed U.S. subsidiary, the monitoring platform, accounts receivable, inventory, plant, property and equipment and certain other assets of Draker, Inc. and Draker Laboratories, Inc. (together “Sellers”), including the Draker name, trademark, and all copyrights then owned by the Sellers. Immediately subsequent to the transaction, referred to as the Draker Transaction, our acquisition subsidiary changed its name to Draker Corporation and the names of the Sellers were changed to delete the “Draker” name. With the exception of the Seller’s secured indebtedness to the Vermont Economic Development Authority (“VEDA”), Draker Corporation did not assume Seller’s liabilities. As a result of the Draker Transaction, we are supplying monitoring services to Seller’s customers while we negotiate and document continuing service agreements at more than 2,000 sites in the Americas, Japan and Europe. As a result of the Draker transaction, we believe we are one of the leading independent companies providing equipment and monitoring services to measure the performance of solar PV generation installations in the U.S.

On July 3, 2014, through our wholly-owned subsidiary CBD Acquisition Holdings, Inc., we acquired all of the outstanding equity interests of Green Earth Developers LLC, referred to as GED, a solar and electrical EPC contractor based in North Carolina. The acquisition was intended to bolster our ability to capitalize on large-scale solar PV project opportunities in the U.S. market. At the time of the acquisition, GED had a track record of successfully completing projects of 1MW – 5MW in size and GED remains active in this market.

In December 2012 we acquired a 50% ownership interest in J Carpenter Electrical Services LTD (subsequently renamed Westinghouse Solar UK Limited) and in June 2013 we increased our ownership interest to 100%. Although this subsidiary continued to operate through the VA process, due to changes in market conditions and business prospects in the U.K. we discontinued operations of this subsidiary in October 2015 and we are currently in the process of completing its orderly wind-down.

Recent Divestitures/Liquidations

Pursuant to the VA process that commenced on November 14, 2014 and the Reorganization Plans effective on January 27, 2015, we divested or liquidated the following subsidiaries and they are no longer part of our corporate organization:

Subsidiary	Jurisdiction of Incorporation	Principal Activity	% Owned
Aso-Tech Pty Ltd	Australia	Inverter provider	67
Remote Area Power Systems Pty Ltd	Australia	Energy storage	100
CBD Labs Pty Ltd	Australia	Energy storage	100
KI Solar Pty Ltd	Australia	Solar	100
eco-Kinetics Group Pty Ltd	Australia	Solar	100
eco- Kinetics Pty Ltd	Australia	Solar	100
eco- Kinetics NSW Pty Ltd	Australia	Solar	100
eco- Kinetics Victoria Pty Ltd (ACN 135 159 527)	Australia	Solar	100
eco- Kinetics Northern Territory Pty Ltd	Australia	Solar	100
eco- Kinetics South Pacific Ltd	Fiji	Solar	100
eco- Kinetics New Zealand Ltd	New Zealand	Solar - Dormant	100
eco-Kinetics Energy Systems Pty Ltd	Australia	Solar - Dormant	100
eco-Kinetics Netherlands Cooperatief UA	Netherlands	Solar	100
eco-Kinetics Netherlands Holding BV	Netherlands	Solar	100
Greenway Pacific Pty Ltd	Australia	Dormant	70
CBD Solar Labs Pty Ltd	Australia	PV Plant	100
Eco-Kinetics Europe Limited	United Kingdom	Solar	100
CBD Solar Pty Ltd	Australia	Solar	100
National Solar Installations Pty Ltd	Australia	Solar	100
CBD Adjungbilly Pty Ltd	Australia	Special purpose vehicle	100
Energy Bonds Plc	United Kingdom	Single-purpose entity formed to raise funding through issue of retail bond	100
Secured Energy Bonds Plc	United Kingdom	Single-purpose entity formed to raise funding through issue of retail bond	100

In August 2013, we sold our subsidiary, Capacitor Technologies Pty Ltd. (“CapTech”), for total consideration of A$1.8 million.

On April 16, 2013, we sold our interests in Larkden Pty Ltd including the energy storage patents held by Larkden in a transaction that released approximately A$2.0 million of cash to us. The sale price of the patents was A$2.75 million of which A$0.25 million was received in cash at the time of sale. The first tranche of the balance of the payments of A$2.5 million was paid on the anniversary of the sale in 2015. The remaining two tranches are scheduled to be received in three tranches on the anniversaries of the sale in 2016 and 2017. All three tranches were assigned to WHSP pursuant to our Reorganization Plans.

Our principal office is located at Level 11, 32 Martin Place, Sydney, NSW 2000, Australia. Our telephone number is +61 (0)2 8069 7970. Our website address is bluenrgy.com Information on our website and websites linked to it do not constitute part of this Report. Process can be served in the United States at our United States office address – BlueNRGY Group Limited, 110 E Broward Ave, Suite 1900, Fort Lauderdale, FL 33301.

4.B. Our Business

Overview

We are an Australian corporation operating in the global renewable energy and energy-efficiency sectors. Our businesses provide technology and services that allow owners of renewable generation assets to maximize power production and return on investment throughout the lifecycle of this long-lived class of assets. In some regions where we operate, most notably in Australia and the U.S., this includes the application of our engineering know-how and extensive data resources to design and install efficient new renewable systems and to upgrade, retrofit and optimize existing facilities. In Australia, we also deliver differentiated products and services that are designed to allow electricity consumers to reduce power costs and increase efficiency of their climate control and other systems. In recent years we have expanded the scope of operations throughout Australia and to Asia, Europe and the United States. The scope of our activities was curtailed by the VA process described in Item 4.A.under the heading “Voluntary Administration and Deed of Company Arrangement”, but we continue to conduct business through multiple subsidiaries operating in the aforementioned regions. Our continuing activities are divided among the following lines of business:

●	Monitoring & Performance Analytics

●	Solar Photovoltaic (or PV) System Design & Installation

	●	Residential and small commercial solar, together sometimes referred to as small-scale solar.

	●	Large commercial and utility-scale solar, together sometimes referred to as large-scale solar.

●	O&M and Facilities Management for Renewable Systems (including our Chatham Island generating assets formerly included in our Remote Area Power Systems (“RAPS”) unit prior to emergence from VA)

●	Energy Efficiency/Technology Solutions (and RAPS prior to our emergence from VA)

Prior to the VA process, we were also actively developing wind projects, but our involvement with wind generation systems is now, and is expected to continue to be, limited to providing data management and maintenance services. We are no longer pursuing new project developments in this sub-sector of the renewable energy industry.

In conjunction with effecting our Reorganization Plans, we acquired BlueNRGY LLC, a company focused on the collection and application of performance data from distributed renewable power generation facilities. We augmented these capabilities with the Draker transaction establishing us one of the leading independent providers of solar monitoring and data analytics in North America. We currently receive and compile operating performance and other pertinent data from more than 2GW of solar PV installations in the Americas, Australia, Asia and Europe. Our system monitoring and control solutions, and those of Draker in particular, have gained wide acceptance for their reliability, durability and accuracy.

Over the past five years, we actively diversified our solar PV business geographically in order to capitalize on high expected demand for new renewable energy generation. Since emergence from the VA process, we have focused our expansion initiatives in specific U.S. states because we have limited resources to extend our services to multiple markets and we believe chosen markets have a combination of sustainable government policy framework and favorable renewable energy targets and incentives all of which create opportunity for an experienced solar development business to grow rapidly and profitably. Including the experience of our GED subsidiary, acquired in July 2014, we have completed or are currently constructing large-scale solar PV installations in the United States with nameplate capacity of more than 50MW and an additional 20MW in Australia and other international markets. We are actively pursuing additional projects and during our 2016 fiscal year we expect to re-launch sales of small-scale solar systems to consumers and to commercial customers under our BlueNRGY brand. In Australia we have designed and installed more than 17,000 small-scale systems.

BlueNRGY’s renewable O&M business is currently small, but profitable, and we intend to scale it rapidly, aided in part by demand from monitoring customers who want the benefit of applying our data-driven processes for maximizing the financial performance of their projects. In addition our O&M management unit now oversees our own small portfolio of renewable generation assets, including the Chatham Project, which is discussed further below.

In our energy efficiency and technology solutions business segment we are currently active only in the Australia region where strong incentives exist for end-users to employ energy efficiency measures to reduce cost and/or comply with government regulations. Included in this business segment is our Melbourne Australia based HVAC contracting subsidiary. Historically, this segment of our business also included our CapTech Division, which was divested in August 2013 and our RAPS division, which developed and operated wind and solar power generation systems on Chatham and King Island respectively and held interests in the Larkden energy storage technology. The Larkden Technology was divested in April 2013 and our interests in King Island were divested during the VA. Following our emergence from VA, management of our continuing interests in the Chatham Project is being handled in our O&M unit described above.

Our wind project development business was historically confined to Australia and was active during our 2012 to 2014 fiscal years when we believed the regulatory framework, our experience and the local presence of our executive management gave us an opportunity to compete successfully. We developed and, until we entered the VA process, managed the construction of a 107MW, approximately A$290 million wind farm at Taralga in New South Wales. As developer, we negotiated a long-term energy off-take agreement with Energy Australia, Australia’s largest energy retailer, and then sold the project to an affiliate of Banco Santander, who managed completion of the project following our emergence from VA and the commissioning of the Project during the second calendar quarter of 2015. While we retained a 10% interest in project equity returns, the proceeds payable from that ongoing participation were assigned to WHSP pursuant to the terms of the Reorganization Plans. New development activities in the wind segment were curtailed upon emergence from VA, but we retained core competencies in the wind sector that we believe will have application in our Data Management and Performance Analytics business.

Our Industry

The renewable energy industry, which includes energy derived from wind, solar and renewable biological resources, has grown rapidly throughout the world in recent years. This has been a result of the convergence of several factors including government policies favoring the use of renewable resources over carbon-based alternatives, technological advances that have reduced the cost of energy derived from renewable resources and increases in the costs of many fossil fuels in most countries. Evidencing these trends is the level of investment by renewable energy sector, as shown in the table below:

Figure 1 - Global Investment in Clean Energy by Calendar Quarter (Billions of US$)

Source: Bloomberg New Energy Finance, January 6, 2015

Although aggregate investment levels in renewable energy capacity have plateaued, installed generating capacity continues to grow rapidly because unit costs of installing renewable capacity are declining. According to the 2013 Clean Energy Race Report published by the Pew Charitable Trust in April 2014, the Pew Report, installed global capacity of wind and solar generation systems in G-20 countries reached 307GW and 144GW respectively at the end of 2013 and had year-over-year growth rates compared with 2012 of 27GW and 40GW respectively. The Pew report also illustrated that almost half of the clean energy investment in 2013 was in Asia and Oceana and the remainder was split almost evenly between the Americas and Europe/Middle East and Africa. Given the pattern of continuing investment in the renewable sector we expect the installed base of renewable assets to continue to cumulate rapidly

We are active in the solar, wind, and energy efficiency sectors in specific geographies. In the solar market we have historically focused primarily on small-scale residential and commercial installations in Australia, but we anticipate a shift in our revenue mix toward larger-scale commercial projects. In the U.S. and Europe our business mix has been concentrated on larger-scale commercial and small utility-scale installations and this continues to be our emphasis. Our activities in wind and energy efficiency have been principally in the Australian region; however, our experience and technology establish a base for applications in other international markets.

The Solar PV Segment

As reflected in Figure 1 the solar sector has become the largest recipient of investment capital among the renewable energy sectors. According to the Pew Report, investments in solar generating assets attracted $97 billion of investment in the G-20 countries in 2013, 52% of the total invested in clean energy for that year. The solar sector encompasses a wide variety of commercial activity ranging from PV solar to solar thermal concentrators, including the monitoring and management of data pertaining to installed capacity. Progress in each of these areas of the Solar PV sector has contributed to making solar power more cost effective over time and this trend is continuing.

Costs of energy delivered are declining to or below the level of energy derived from traditional sources in many markets

Figure 2, shown below, illustrates the Levelized Cost of Energy, or LCOE, for solar PV at year-end 2014 is at or below the cost of electricity in many major markets, including markets served by us.

Figure 2: Energy Cost vs LCOE in Selected Markets - 2014

Source: 2015 Solar Outlook - Deutsch Bank

Over the last several years, a dramatic reduction in the cost of solar PV systems, most notably in the modules that generate electricity, has led to reductions in the installed cost per watt of system capacity. In May 2012, Bloomberg New Energy Finance published a white paper, “Reconsidering the Economics of Photovoltaic Power” that reviewed the economics of solar PV in the United States. In that paper the authors concluded that solar PV costs have been declining, and have declined dramatically in recent years – by 75%. The trajectory of the decline between 2001 and 2013 for the U.S. was charted by the Solar Energy Industry Association, or SEIA and is shown in Figure 3 below:

Figure 3: Prices and installation rates of solar PV systems in the United States (2000 – 2013)

Source: Solar Energy Industry Association, “Solar Market Insight Report 2013 Year in Review”

Similar dynamics are evident in other markets we serve, as illustrated for an example system in Australia in Figure 4 below:

Figure 4: Reduction in solar PV modules Prices in Australia

Source: “Solar Choice,” Australian Solar PV Installation Brokers

As the unit costs of PV Solar continue to decline and it becomes more cost-competitive, we expect the market for solar installations to expand. We also believe that this trend will increase if and as storage technologies evolve to cost-effectively allow electricity from renewable generation to be used after sunset or when the wind isn’t blowing.

The convergence rate of solar energy cost with traditional energy costs has been accelerated by rising electric power rates in key markets we serve.

In Australia, the increase in retail electricity prices has been accelerating in recent years, more than doubling for both households and businesses since 2000, as illustrated in Figure 5.

Figure 5 Electricity price indices for households and businesses in Australia

Source: Australia Bureau of Statistics

In the United States, recent retail price increases have not been as rapid as in Australia, but, according to the U.S. Energy Information Administration, prices are more than 50% higher than in 2001 and the price trend continues to be rising, as illustrated in Figure 6 below:

Figure 6: Index of U.S. retail electricity prices

Source: U.S. Energy Information Administration

Regulatory structures that incentivize solar installations are prevalent, important to driving demand in our markets in the near-term, but declining in importance over the long-run.

Regulatory structures to incentivize renewable energy solar vary by jurisdiction, and can include tariffs, grants, and Renewable Energy Certificates, or RECs, as a traded commodity for the renewable energy markets.

Australia. Small-scale solar in Australia is incentivized primarily by the Small-scale Renewable Energy Scheme, or SRES, under which power generators and some industrial companies are obligated to purchase annually a number of small-scale technology certificates, or STCs, specified by the government agency responsible for administering the SRES program. Eligible installations, such as residential and small-commercial solar systems, are credited with a onetime allocation of STCs when completed. The regulator establishes the aggregate annual STC purchase obligation for power generators at a level approximately equal to the supply of STCs that it expects to be created from new installations, adjusted for over or under creation of STCs in prior years. STCs may be purchased by any person and freely traded. Consequently, an unregulated market for STCs has developed since the inception of the program. As the experience of the government agency responsible for balancing STC purchase obligations with supply has grown over time, market volatility, liquidity and predictability of pricing have decreased, but the market remains thin and the number of market makers is small. STC prices are effectively capped by the right of obligated purchasers to pay a fixed-rate penalty if they are unable to purchase sufficient STCs in the market to meet their obligations. As the costs of solar energy have declined and the market has matured, the number of STCs credited under the SRES program for each kW of solar capacity installed has been stepped down by the regulators and now represents less than 25% of the value of a system at market prices for STCs. The Australian government is expected to leave the SRES program unchanged through 2020, but there is no assurance that government policy will not change.

Large-scale renewable energy installations, which include both commercial- and utility-scale solar systems and wind systems, receive annual credit for the energy produced and this is reflected in the issuance of RECs. Power generators are obligated to meet targets for renewable energy generation and may do so by receiving credit in the form of RECs for the renewable power they generate, or they may buy RECs from others who are generating power from renewable sources in excess of their mandated requirements. Regulations recently adopted fix the large-scale renewable generation targets through 2020 at 33,000GWh, almost double the 17,000GWh of energy that is expected to be produced by large-scale renewable generation in 2015. This target creates ample opportunity for large-scale installations over the next five years that, according to the Australian Clean Energy Council, would represent investment of more than A$10 billion over the period. There can be no assurance, however, that government policy will remain stable and there is a possibility that renewable generation targets will be reduced.

United States. The regulatory incentives in the United States include a federal income tax credit that represents approximately 30% of the value of a project. In addition, a patchwork of state- and local-level programs exist that vary widely in structure and economic effect and may include tax credits or other deductions, outright grants, REC programs and mandated net metering or feed-in tariff arrangements that have the effect of further subsidizing solar installations. The magnitude of federal tax credits are due to be reduced in 2016 to 10% and the incentive programs of states that were early promoters of solar are generally also declining in significance. Our management expects that the impending reduction in the federal tax credit will produce a high level of activity in calendar year 2016, followed by a downturn in the pace of U.S. solar PV installations. In general, state level incentives tend to be more favorable to residential or small-scale solar installations and we expect this to continue to be the case.

As a result of market factors, the demand outlook for solar installation growth is favorable in our key markets.

Research funded by the Australia Renewable Energy Agency demonstrates the rapid and continuing growth of Solar PV in Australia.

Figure 7: Historical and projected residential capacity increases – 2001 to 2014

Source: Australia PV Institute (APVI) Solar Map

This data supports our management’s view that that there will be a sustainable long-term solar market in Australia, although the market is maturing and we believe that rooftop residential penetration is now in excess of 40% in some regions.

United States. We expect demand for residential solar installations to grow rapidly in the United States and for levels of large-scale installations to be sustained in line with the recent capacity installation trends reported by SEIA and shown in Figure 3 above. This market opportunity creates substantial overall growth potential for participants in the U.S. market, including us.

Competition among solar developers and installers is intense in all of our markets and they are highly fragmented, although market-share consolidation is occurring in some markets.

The residential and small commercial solar PV market in Australia is fragmented, with no large dominant competitors. The three major energy retailers (Origin Energy, AGL and Energy Australia) have active installation businesses, and there are a number of significant competitors focused on residential installations. An Australian consultancy, Sunwiz, determined the top 20 solar installation businesses in August 2012 as shown in Table 8 and we believe that the same companies continue to hold leading market share.

Table 8: Sunwiz Top 20 Residential Solar PV Installers in August 2012

Source: Reneweconomy, August 2012 on-line article (http://reneweconomy.com.au/2012/solar-insights-australias-top-20-solar-companies-52223)

The U.S. residential market has some large competitors as illustrated in Figure 9 below:

Figure 9: Market share distribution of leading U.S. residential installers

Source: GTM Research

While still fragmented, GTM Research reported in its Q-1 2015 report that the residential installer market is consolidating, with SolarCity and Vivint market share exceeding 50% for the first time. Other large installers include Verengo, Sungevity and Real Goods Solar. Notwithstanding the significance of the larger competitors and their momentum in consolidating market share, the low penetration rates for small-scale installations in the United States are still supporting smaller competitors serving niche markets.

We believe First Solar and SunEdison to be the largest U.S. installers of utility-scale systems. Other than Solar City, we are not aware of any installers serving the large-scale commercial sub-sector that have accumulated meaningful market share. In the U.S., as well as in Australia, we believe that this subsector is served by many regional companies in other industries such as roofing and general electrical contracting who have expanded their business scope to include solar installations.

Large-Scale Wind

Wind energy is currently the most economic source of large-scale renewable energy and can often be developed at scale in the regions where power is needed if the wind resource is strong. As with other renewable energy sectors, installation of wind power generation capacity has grown rapidly over the past decade, although wind energy investments globally have recently plateaued, as shown in Figure 1 above. As with solar, the wind sector encompasses the design and installation of the generating system (turbines & towers) and ongoing maintenance and management.

In the Australian market, wind capacity has grown steadily, driven by a government-mandated renewable energy target. . This target requires electricity retailers to source an annually increasing amount of their customers’ electricity consumption from renewable sources, the largest component of which is necessarily wind. This trend in Australia is illustrated by the figure below:

Figure 10 - Cumulative Installed Wind Capacity in Australia

Source: Calculated from data available at http://ramblingsdc.net/Australia/WindPower.html

To satisfy the recently adopted Australian renewable energy target, the Australian Clean Energy Council estimates growth in wind capacity averaging between 500MW and 750MW per year will be required through 2020 is required in Australia’s installed wind generation capacity. As shown in Table 11 below, there were 13 wind projects in the advanced stage of development at year-end 2014. These represented 1,945 MW of wind generation capacity, with 14,676MW of wind projects in a less advanced stage.

Table 11. Major renewable electricity generation projects - November 2014

Source: Australian Bureau of Resources and Energy Economics –

Electricity Generation Major Projects Report - 2014

To our knowledge, there are approximately 20 companies developing and/or operating wind farms in Australia. These include the three major nongovernment utilities – AGL, Origin Energy and Energy Australia. Within the top ten, we estimated that two companies have development pipelines of greater than 1,000MW, with the remaining eight having pipelines in the range of 500 to 1,000 MW.

Our understanding of the wind development markets in the US and Europe is less complete, but based on the Pew Report, we believe that there are expected to be numerous large-scale wind projects developed in both regions over the coming years.

Monitoring & Performance Analytics

The addressable market for services targeting the data management and operations and maintenance of renewable generation projects of any type and in any region is defined largely by the installed generation capacity, with adjustments for differences that exist in project sizes and vertical integration among regional markets. On a worldwide basis, as of end of 2014, we estimate that more than 640GW of renewable power generation systems are in operation, including 226GW for Solar PV and 413GW for Wind.

Solar PV:

Distributed solar projects come in a wide variety of sizes, roughly characterized as residential (typically rooftop), small-scale commercial (often located on rooftops or elevated structures) and utility- or megawatt-scale. Supervisory control systems for these projects are provided by numerous specialist firms, equipment OEMs such as the inverter companies, and a handful of large, vertically integrated organizations and utilities or independent power producers who have developed proprietary systems. Given our current capabilities to provide data management, operations and maintenance, the markets that are immediately relevant for our data management services and O&M services range from small-scale commercial installations, often involving fleets of systems and the megawatt-scale installations for both small- and large-fleet owners. Very large utility-scale projects with full-time operational personnel and project fleets owned by vertically integrated solar companies are less likely to be customers for our current systems and services offerings than other types of projects.

United States: GTM Research has estimated that the total addressable market for distributed solar generation O&M in the U.S., excluding utility scale project, is forecasted to be over 11GW by the end of 2015 and is estimated to represent an $803 million niche market by 2020. This includes the more than 1,100 commercial installations analyzed by SEIA and that we believe to be representative of the geographic concentration of U.S. installations. The ownership category and locations of these installations is illustrated in the chart below and provides perspective on the market for O&M services for less-than-utility-scale installations:

Figure 12: Representative Solar PV Installations

Source: GTM Research and SEIA- US Solar Market Insight Report - 2014

We believe that competition for O&M services in this less-than-megawatt market is highly fragmented and includes such regional firms as True South Renewables, Burke Electrical Solar, Petersen Dean, Verengo Solar and Trinity Solar. Notable competitors serving the U.S. market (both small-scale and utility-scale) with specialized data management systems for solar PV (both small-scale and mega-watt scale) include MeteoControl, Green Power Monitor and Also Energy.

We believe the U.S. utility-scale market includes many very large single-site power plants and a high concentration of ownership by vertically integrated companies such as First Solar, Sun Power and Sun Edison. While the solar installations run by these companies are currently within our addressable market and our market share in this sub-segment is insignificant, we have recently had success in winning projects of this scale. There are, however, many smaller megawatt-scale installations and geographically distributed fleets in the United States and the number is growing. In addition, there has recently been significant formation and growth of special-purpose funds and operating entities (both public and private) to invest in contracted renewable energy assets or the cash flows derived from such assets (referred to as YieldCos). YieldCos are providing the renewable energy industry with increased access to cost-effective capital, particularly in North America, that is driving market growth and consolidation of renewable assets into portfolios, or fleets. According to Kaye Scholer – Investment Financing Opportunities in Alternative Energy 2015 report, six publicly-listed North American YieldCos (NRG Yield, TransAlta Renewables, Pattern Energy, Abengoa Yield, NextEra Energy Partners and TerraForm Power) secured $3.8 billion in equity on the public markets in 2014, more than three times the $1.1 billion reported by Clean Energy Pipeline as having been raised in 2013. Clean Energy Pipeline also reported that the same YieldCos collectively acquired 3.8 GW of effective renewable energy capacity (defined as the capacity of the project multiplied by the stake acquired) in 2014, a 46 percent increase over the 2.6 GW of effective capacity acquired in 2013. The figures do not include acquisitions by other funds or independent power producers that we believe to be significant in number and to be amassing portfolios of renewable energy projects. YieldCos and similar aggregators of renewable generation assets, whether public or private, have requirements for enhanced data analytics delivered through a single platform and we believe they will form an important new category of customer for our data analytics and O&M services in North America. Our management also believes that the aggregation of renewable asset ownership by specialized owners will grow globally and will create new customers for our services.

Numerous competitors for O&M services serve our addressable utility-scale market, including True South, Suns Up Solar and Next Phase Solar, however, we are not aware that any of these companies has significant market share. We also believe that there is considerable overlap between O&M providers servicing megawatt-scale installations and small-scale systems.

Australia: We believe that the preponderance of solar PV installations in Australia have been residential or were constructed by the major vertically-integrated utilities. Neither of these categories of installation are currently addressable by us with our current capabilities to provide either monitoring or O&M services in Australia. As the market matures and financing becomes more readily available, we believe that fleets of commercial installations will grow and that a viable market for both our monitoring solutions and O&M services for solar PV will emerge.

Europe. Because of the evolution of policies favoring the construction of commercial and small-utility-scale solar PV installations in Europe, we believe that there is a large universe of solar PV installations in this region that could be targets for our data management and O&M services. However, the reduced and declining pace of large solar PV installations in Europe in recent years limits the points of entry for us into this relatively mature market. GTM Research has reported that the competitive framework for megawatt scale solar installations in Europe is highly fragmented, with an aggregate fleet of 24 GW being handled by approximately 60 vendors of O&M services. If and when asset aggregation by YieldCos or similar specialized entities accelerates in Europe, it could bolster our ability to access this market for data analytics and O&M services.

Wind. Because data management, asset management and maintenance contracts on wind projects typically extend for several years, we believe our best opportunities to win new business in the wind sector are in areas where new projects are likely to be commissioned over the next several years rather than endeavoring to displace established service providers at seasoned projects. Collectively, the pipeline projects in our targeted regions represent an attractive market opportunity for our maintenance and data management services, but there can be no assurance that we will be successful in garnering contracts with any of these prospective customers or projects. For Australia this opportunity is illustrated by the pipeline information in Figure 11 above. In the last several years there has been a considerable slowdown in the pace of new U.S. wind project construction, although, as illustrated in the chart below, many new projects were started in the fourth quarter of 2013 and are still under construction. The Pew Report indicates that investment levels for in wind projects in Europe will continue in line with current levels.

Figure 13 – Wind Capacity Under Construction

Source: American Wind Energy Association – U.S. Wind Industry 3^rd Quarter Market Report

Some of the projects still under construction may be candidates for our O&M services as they are completed and commissioned, but the pipeline of new starts is thin. In Europe, the UK represents a bright spot for wind installations due to the prevailing policy and current feed-in-tariff structure. However the pace of new wind installations that could represent targets for our O&M services have fallen dramatically from historical levels.

To our knowledge, most local supervisory control systems deployed throughout the world are generally proprietary to the turbine manufacturers although a few specialist independent companies do offer data management systems for wind installations. These companies include: Baze, BaxEnergy, Osisoft and their primary served markets are North America and Europe.

Energy Efficiency

Our business segment targeting energy efficiency is currently focused only on Australian businesses whose products and services have the potential to contribute to reducing the amount of energy and related services consumed by end-users for a given activity. In Australia, powerful incentives exist for end-users to employ energy efficiency measures to reduce cost and/or comply with government regulations. Australia has also experienced sharp increases in electricity charges in the last five years and these are expected to continue. The country’s power cost increases have been primarily driven by investment in regulated infrastructure and the introduction of carbon pricing and other government policy mandates that are intended to promote the use of energy resources deemed to be more sustainable. The range of products and services associated with energy efficiency is potentially broad, but our activity in this sector is currently limited to an HVAC contracting and servicing business serving the Melbourne, Australia market. The following industry discussion is tailored accordingly. Major new installations in the HVAC markets we serve are awarded primarily by competitive tender where price is a key determinate of success. Market participants often submit tenders as part of a syndicate of contractors and opportunities are sourced through long-standing relationships with construction general contractors. Service sales are generated from relationships with prior installation customers and through competition on service levels. Revenue growth in the region is bounded by and highly correlated to construction activity levels in and around Melbourne. Because of the favorable weather patterns in the region, the construction cycle is not seasonal in nature.

The Melbourne HVAC market is regional and highly fragmented, with the largest competitors having market shares between 5-10% (individually). These companies include AG Coombs, AE Smith, D & E Air Conditioning, Allstaff Air Conditioning and JL Williams. Other competitors with a similar or smaller market share include: RKH Air Conditioning, PJM Air Conditioning, Quadrant Air Conditioning and Proair Air Conditioning.

Our Competitive Strengths

We believe we demonstrate the following strengths that can differentiate us in a competitive and fragmented market and will allow us to participate effectively in the expected growth of the renewable energy sector:

Clear strategic focus – We have a singular focus on management and optimization of renewable energy and energy efficiency systems over their full life cycle informed by our database and related analytics technology. Specifically, we offer our customers post-commissioning performance system measurement, operations and maintenance services and, selectively, system design and technology integration for new projects and system upgrades and retrofits. This positioning allows the Company to partner effectively with a wide base of equipment and component suppliers, project owners and financing sources. Our customers look to us to help them achieve competitive costs for systems, optimize energy delivered or used, limit risks and maximize return on investment. We believe that our focus also positions us within the highest value-added segment of the renewable supply chain where we can distinguish ourselves through execution, branding and the development of proprietary technology in system data management and optimization.

Development track record - As the renewable energy industry matures, execution experience and prior project success are increasingly important to securing bidding opportunities and winning contract awards. Notwithstanding our restructuring in VA, we have retained core competencies in, and a solid track record successfully developing, designing and implementing large and small-scale renewable projects in both developed countries and remote and difficult geographies. We have also demonstrated that we can overcome the challenges of integrating renewable power into diverse local power grids. In Australia and through our foreign subsidiaries, we have successfully installed more than 78 MW of solar capacity worldwide through November 2015, including over 17,000 residential systems. Our wind project developments include completed systems in the Chatham Islands, off the coast of New Zealand, and the 107MW Taralga Wind Farm in Australia. In addition, we have handled numerous complex climate control system installations with total value of more than A$250 million.

Management skills, experience and local presence – Members of our Board and our managers have extensive knowledge of and experience in the utility and energy sectors. We believe such knowledge and experience gives us the credibility to effectively navigate complex contracts and power purchase agreement, or PPA, arrangements involving larger projects. We deem these larger projects to be a critical factor for our success in providing management tools and services to participants in the renewable energy asset management sector. We also have the relevant experience in operating and maintaining renewable systems to provide a foundation for development of this line of business from a small but growing revenue base. We intend to augment our executive ranks through direct hires and acquisitions to ensure we have the capabilities to fully capitalize on the market opportunities we in the growing sector we serve.

Diversified Revenue Streams – Within our strategic focus, we benefit from being diversified across:

	●	technologies, i.e. , solar / wind / biogas and energy efficiency/climate control;

	●	products and suppliers of sub-systems or components such as solar modules and inverters and control systems;

	●	geography, including Australia and the United States which have robust legal systems and currencies; independent regulatory bodies; and stable policy agendas; and

	●	types of revenue streams, ranging from recurring revenues from data management and O&M services with contracts that typically run for multi-year periods to project-related revenue, often with established customers who use our services repeatedly.

Over time, and as we build scale in our businesses, we expect this diversification to mitigate adverse impacts of volatility in exchange rates, government policy changes, technological evolution and other risks. The breadth of our business also opens a range of opportunities for us to extend the scope of our activities to capture new revenues and build profits in the future.

Our Business Strategies

To build, over time, a high-growth and profitable business that takes advantage of our strengths and the opportunities in our served markets, we intend to:

Create multiple revenue streams in different jurisdictions. We intend to continue to diversify our sources of revenue while remaining focused delivering technology and services for the renewable energy sector. In addition to further broadening our geographic reach, we are constantly evaluating new revenue generation opportunities in the countries and business lines in which we operate. We believe that this will make our business more resilient and help us build scale without sacrificing operating efficiency. Our strategy of accessing multiple complimentary markets limits risks arising from government policy changes in a single country or related to a single segment and offers the potential to access a larger overall market. Systems, marketing, and best practices developed in one market are tailored to other markets once they are proven.

Ensure customers access to best-in-class products and technologies. We do not have exclusive commitments to use any specific supplier of equipment or system components. This gives us the flexibility to shift suppliers as the relative costs, efficiency or effectiveness of products and components changes and to integrate components and technology to optimize system design and performance. Through our proprietary data management system, we have empirical perspectives on the performance of renewable generation system components and engineering that is generally unavailable to many service providers and system designers. With these insights, we are selectively nurturing strong direct relationships with leading manufacturers of best-in-class components and technology.

Deploy a flexible business development organization. We are striving to implement standardized project design methodologies, management processes and execution objectives across geographies and lines of business in which we operate. This allows cross utilization of our business development resources and facilitates using a small executive team to efficiently and rapidly respond to evolving demand for efficient generation and climate-control systems suitable for varying regulatory and business environments.

Capture high-margin opportunities not targeted by traditional installers and developers. We have developed expertise in solar, wind, energy storage and energy efficiency that gives us unique and complimentary capabilities to provide integrated sustainable and cost-effective generation and climate control solutions for the residential, commercial and utility markets. When possible, we try to sell systems and services directly to end-users, generally asset owners.. In such cases, we have the opportunity to price our installations based on the maximum economic benefit provided, thereby capture the highest available margins. Over time, where market conditions and regulations permit, we are positioning ourselves to be able to offer customers the opportunity to acquire energy from renewable sources at competitive pricing thorough so-called community or imbedded networks, without the necessity of customers having to be directly involved in system installation or ongoing management.

Monetize information derived from our proprietary data management system. We collect voluminous data on the performance of projects, components and systems in our proprietary data management system. From this data we are able to discern trends and correlate relationships affecting system and component performance that is not generally available in the market. Subject to our commitments regarding customer data confidentiality we anticipate being able to monetize this data resource by analyzing data and selling information to risk managers, asset managers, financial intermediaries manufacturers and project owners. Although we have not yet realized revenue from this strategy and there is no assurance that we will do so, our management expects the value of our database for renewable generation projects, together with the empirical information it can provide, to grow in value over time.

Selectively acquire or retain project ownership interests. Through our project development and proprietary data management activities we have visibility of expected project returns in many situations. Over time we expect to be able to invest opportunistically in commissioned generating projects that we believe will have high returns on our invested capital, generate O&M revenue or foster future business development. As capital cost and availability permit, we intend to invest in such projects.

Acquire complimentary businesses. We have grown and evolved the Company through acquisitions and intend to continue to do so (see “—Acquisitions” below). We recently completed the acquisition of GED, BlueNRGY LLC and the operating platform and certain assets of Draker and we are actively exploring other acquisitions and strategic partnerships that we believe would accelerate our entry into targeted markets and enhance the depth of our management team

Our Challenges

In spite of our competitive strengths and strategies to capitalize on them, we face significant challenges in executing our business plan that subject investors in our ordinary shares to a high degree of risk, notably:

With respect to our business:

Weak financial condition – We emerged from the VA process with a streamlined cost structure and no indebtedness at the corporate parent level. However, we remain thinly capitalized and are currently not profitable. Some of our operating subsidiaries that were not part of the VA process require cash infusions to meet working capital needs, including paying deferred trade creditors and funding for new projects. In addition, our data management business requires additional investment in the software to satisfy competitive requirements. Consequently, we may encounter demands for payment that we cannot meet and have limited access to trade credit, either of which could have adverse consequences for our business and future prospects. Our auditors have raised substantial doubts as to our ability to continue as a going concern. Nevertheless, we have raised sufficient equity and, at our subsidiaries, working capital loans, to fund our operations since emergence from VA. We believe we are positioned to grow profitably during our 2016 fiscal year if we have access to sufficient additional capital to fund business development opportunities in our pipeline.

Small scale and low market-share in highly competitive businesses – Competition is intense in all of our lines of business and we do not have significant market share in any of the businesses or regions where we operate. This places us at a disadvantage to larger competitors and limits our control over margins. We must work hard to originate new business leads and we expend significant resources doing so. With respect to obtaining financing to deliver projects for our customers, we believe we are operating at a disadvantage to larger competitors who can more easily build alliances with project financing resources and negotiate better rates. We may also be at a disadvantage with respect to purchasing components at the lowest cost, although we believe that the component markets for the systems we install are currently so competitive and commoditized that this is not a significant concern. We are seeking to overcome these disadvantages by: growing the scale of our business; differentiating ourselves through use of the BlueNRGY brand; and applying innovative technology.

Difficult to manage international growth strategy – We are seeking to grow in multiple jurisdictions, geographically dispersed from each other and from our Australian headquarters. The renewable energy projects with which we are involved are complex and present significant financial, managerial and operational challenges, including difficulties of coordinating the activities of scattered personnel, integrating and financial and control systems, high travel expenses, the assumption of unknown liabilities and risks of operating in unfamiliar legal and regulatory environments. These difficulties are exacerbated by our small size and the limited number of seasoned executives in our management ranks and on our Board. We are seeking to overcome these obstacles by employing the most capable personnel we can find and linking their compensation to our corporate performance, making efficient use of information technology, standardizing best practices across geographies, engaging specialized qualified resources when necessary to handle unique jurisdictional issues and, throughout each line of business, closely monitoring performance.

With respect to our industry:

Instability of renewable energy policies and market conditions – Changes to global political and economic conditions have negatively impacted our business in the past and are likely to do so in the future. The renewable energy sectors we serve depend, to a degree, on the availability of rebates, tax credits and other financial incentives and government policies affecting the purchase and use of energy generated from solar and wind resources, changes in which could reduce the demand for our services and impair our margins. Some changes can be anticipated, such as the reduction in the U.S. federal tax credit for renewable energy projects that is scheduled to step down from 30% to 10% at the end of 2016. But other changes can occur with little advance warning and opportunities to mitigate the consequences of policy changes in any single jurisdiction may be limited. Our strategy to diversify our operations across renewable energy technologies and geographies is intended to ameliorate this risk but cannot eliminate it.

Limited availability of cost-effective project financing – Renewable energy generation and energy efficiency installations are generally capital intensive and have long useful lives ranging up to 20 years or more. The availability of financing, and in the U.S., tax equity financing, is usually a key factor in determining project viability. Because renewable energy generation technology, particularly solar, is not mature, the legal and regulatory frameworks governing these installations are evolving and demands for financing have been high relative to availability. Consequently, costs vary widely depending on project-specific factors and availability of financing is not reliably predictable. Gaining access to financing for projects on acceptable terms is an important factor to our success. While financing constraints affect all renewable system developers and providers, some larger competitors have advantages in accessing financing that we are seeking to overcome by rapidly increasing our own scale of operations in key markets. If interest rates rise or other factors cause financing costs to increase, this could dampen growth in all of the markets we serve.

Description Of Our Business Segments

Monitoring & Performance Analytics

The integration of BlueNRGY LLC with the Company in conjunction with our emergence from VA and the subsequent acquisition of the Draker monitoring platform gives us capabilities that our management believes will allow us to access the growing market for data management and services related to operating and maintaining the large global pool of distributed renewable generating assets over their multi-decade life-cycles.

Data Management. - The proprietary BlueNRGY and Draker data management technology together comprise a powerful tool designed to provide asset owners and managers with the capability to cost-effectively collect, store and analyze performance data on their renewable power generation systems over time with a high degree of granularity and accuracy. Our system enables performance monitoring at the system component level and overall, and can be applied across a wide spectrum of component suppliers. Renewable system component performance and overall plant performance can be compared over time and across portfolios of projects, system performance can be compared across portfolios of assets and with design expectations, and correlations between performance and external factors can be evaluated. Data and information from the system is accessed by our customers through internet cloud-based applications, sometimes referred to as software as a service or SAAS. We believe that system data, once accumulated, will have alternative applications in validating billing and revenue collection, to support asset valuations and for financing providers, risk managers & insurers.

Our proprietary data management system is monitoring over 2,000 sites with a combined power generation capacity of more than 2GW. Although the substantial majority of the renewable systems for which we provide data and performance analytics are PV solar installations located in the U.S., we are providing similar services for asset owners and operators of systems located in Europe, throughout the Americas and in Japan, China and Australia. To meet local regulations regarding data security we have established server and storage capacity in the U.S., China and Europe. Typically, our customers for data management services subscribe to multi-year contracts and we expect to serve most of them over the useful lives of their systems.

We also integrate and sell to many of our SAAS customers, data logger, metrology and communications hardware supplied by third parties. Typically such equipment is installed at newly-built renewable power generation facilities and is configured with our proprietary firmware to interface with our cloud-based data management system to collect and transmit performance data from the equipment at each site. We also have the capability to collect and manage data gathered from third-party hardware and supervisory control and data acquisition or SCADA systems. In China, we have engaged a reseller on a non-exclusive basis to reach prospective customers and this group has been successful in placing our system with a few customers already and supporting its successful launch. We intend to continue and broaden our use resellers in markets where we do not have operations.

Operations & Maintenance, or O&M. - In our climate control business, further discussed below (under the heading “Energy Efficiency — Parmac Air Conditioning & Mechanical Services Pty Ltd, or Parmac”) we have, for many years, successfully offered post-installation maintenance servicing of systems. This service is offered to prospective clients whenever we install a system and we frequently win contracts to service systems installed by others. In our experience, post-installation maintenance servicing provides a steady stream of recurring revenue, often pursuant to multi-year contracts, at attractive margins. Beginning in the second half of our 2015 fiscal year we began offering similar services for operators of solar PV systems in those regions where we have operations.

We believe that our proprietary data management system greatly enhances our ability to cost-effectively provide targeted O&M services for renewable energy projects and an opportunity to differentiate our offerings from those of others. We have found that we can use the system to pinpoint maintenance requirements and to increase the efficiency of work scheduling. It also provides us with clear metrics to demonstrate to our O&M customers that they are getting results from our services. Since our emergence from VA and following our acquisition of the Draker monitoring platform, our O&M specialists based in the U.S. have developed a pipeline of prospects that we expect will lead to our growth in this line of business. We are also applying the BlueNRGY tools to enhance the O&M service offerings of our operations in Australia. There can be no assurance, however, that we will be successful expanding our O&M services business in the renewables sector to a level that is material to our overall business.

Solar PV- Residential and Small Commercial Solar

In addition to our data management and O&M services businesses, we design and install small-scale (typically roof-top) solar PV systems in Australia. Since 2010 we have installed over 17,000 residential systems in Australia and we expect, over time, to be able to apply our experience in our home market in other regions, although we are not currently selling small-scale solar PV systems in any other countries.

When we entered the solar PV sector our business was principally focused on residential installations, typically averaging about 3kW. However, we have also completed a substantial but much smaller number of commercial installations ranging in size up to about 100kW. After 2012, the policy environment in Australia became less favorable to our small-scale solar operations there and led us to adjust our business model to reduce fixed costs, lower inventory requirements, limit customer acquisition expense and shift most installation activities to qualified third parties. During our 2014 fiscal year we began the transition of our marketing focus to offer solar PV systems to Australian home owners under the Westinghouse® brand and we launched a small test of residential sales in the U.S. under the Westinghouse Solar name. However, as a result of the VA process, we lost our rights to use the Westinghouse® brand and in December we ceased all sales and marketing initiatives referring to Westinghouse® and we are in the process of winding up the U.S. subsidiary in which the U.S. residential trials were conducted. In April 2015, following our emergence from VA, we re-launched commercial sales in Australia under the BlueNRGY brand and are currently undertaking residential sales in Australia on an opportunistic basis while we develop plans for re-entering this market and addressing system upgrade opportunities for the large installed base of solar system owners.

As costs of solar PV systems dropped, reliance in Australia on the SRES Program and other subsidies for the sale of PV systems has declined. With the cost of solar PV approaching or having reached grid parity in most areas of Australia we and other solar installers have been successful attracting new customers without the need for significant reliance on subsidies or feed-in-tariffs. Continued increases in energy prices in the future, if they occur as our management expects, will serve to increase the attractiveness of small-scale solar installations to both residential and commercial customers. Consequently, our management’s expectation is that if we have adequate working capital availability we can rebuild our Australian small-scale installation business to a sustainable and stable contributor to our overall financial performance. If we can grow our rate of small-scale system installations to a level of approximately 10MW/year, it would represent approximately 2.5% - 5% market share for such systems based on the lower range of the ORER consultants’ forecasts of the sustainable pace of solar installations in the Australian market. Attaining this market share is consistent with our rank in August 2012, as reflected in Table 8 above in “Our Industry”, under the single reference to eco-Kinetics (the name under which our systems were then marketed), as the 15^th ranking Australian installer. There is no assurance, however, that we can regain this level of market share.

Going forward, we intend to market small-scale solar systems directly to Australian purchasers primarily through commission sales representatives, tenders (for small commercial installations) and through our website. Our experience is that direct marketing initiatives provide us with immediate feedback on customer reactions to price and product changes and will allow us to adapt to changing market requirements. It is not known how consumers will react to the BlueNRGY brand as we introduce it and an unfavorable response could constrain our ability to rebuild meaningful residential market share.

Following our emergence from VA, components for our residential and commercial solar systems, including solar panels, inverters and certain other elements, are currently being purchased on a non-exclusive basis from third-party distributors, some of which have offered us limited trade credit terms. We are actively working to expand the supply chain to include additional supply sources and direct purchasing arrangements with specific component manufacturers. Obtaining such direct supply arrangements will necessitate growing our PV solar revenues substantially. With our emergence from VA, we have abandoned past efforts to produce solar panels for our own use and for sales to others. The lease of the facility in Queensland secured for that purpose was terminated in the VA process and the equipment transferred to the Administrator for liquidation.

As discussed in the profile of our industry above, growth in small-scale installations in the United States is expected to be robust over the next few years in both the residential /consumer segment and commercial segment. We consider the opportunity to participate in this market to be attractive and we are currently developing plans to do so utilizing an approach similar to that employed in Australia and utilizing our BlueNRGY brand. We hope to be able to accelerate our entry into the U.S. residential market through acquisition of at least one company with strong customer origination capability and to exploit what our management believes will be a developing market for so-called community solar offerings. As of the date of this Report we are not currently selling small-scale solar systems in the USA.

Solar PV- Large Commercial and Utility Scale Solar

In 2011, we established a separate division to construct large-scale solar projects, which typically have a capacity of approximately 1MW or greater building on our experience in system design and project management. Our capabilities in these functions were further augmented with the acquisition of GED, a U.S. EPC contractor in 2014. The projects we have developed include both ground mount and large commercial rooftop solar projects in various geographic markets.

Since inception, our large-scale solar business has employed three different delivery models, depending on customer requirements, working capital availability and cost at the time project opportunities became available:

Engineering, Procurement and Construction (EPC)

Under the EPC model, the customer pays the EPC contractor on a milestone or percentage of completion basis as project construction progresses and ownership of project work-in-progress is turned over to the customer. The EPC contractor typically takes responsibility for:

	●	completing the project engineering, procuring components and materials for the project and performing the construction work; and

	●	paying vendors, subcontractors and its own staff for their respective contributions to the project.

The timing of project progress payments is generally negotiated to allow the EPC contractor to receive funds at approximately the same time it expects to have to pay for system components, materials and sub-contractor fees related to the project. Sometimes, however, contract terms dictate that the EPC contractor must defer receiving payment for 30 to 60 days. If the EPC contractor is effective in matching its payment obligations related to the project with cash receipts from the customer, low or limited capital resources are required by the EPC contractor to operate under this model. Consequently, many companies can qualify to bid for contracts under the EPC model, bidding is often highly competitive and our experience is that gross margins are consequently lower than those of alternative business models that we seek to utilize when circumstances permit and that are further described below. Working capital requirements can rise sharply if customers impose deferred payment terms in their contracts and, in such cases, competition can be less intense. All of GED’s business has been and continues to be carried out under the EPC model.

Build, Own and Transfer (BOT)

Under the BOT model, which we employed beginning in our 2013 fiscal year, we acquire site development rights, with permits and off-take agreements in place, from small or thinly capitalized developers and we complete the projects on a turnkey basis. The BOT model requires application of our EPC capabilities and that we provide the funding to acquire the site development rights, power generation equipment, complete construction and have the project connected to the grid. It also requires us to arrange the sale of completed projects, either individually or on a bundled basis, to third-party owners who are acquiring the long-term cash flow expected from projects following their commissioning. Such sale processes can be costly and protracted. Nevertheless, if construction financing is available, the BOT model can result in higher project margins than for EPC projects, although the benefits may be partially offset by the associated financing costs. We employed this model in Italy in FY 2013 at several sites aggregating to 5MW and referred to as the Italian Projects. These projects were sold during our 2014 fiscal year. Following our emergence from VA, we have not had sufficient capital available at a cost that allows us to employ the BOT model and there are no assurances that we will be able to do so in the foreseeable future. .

Build, Own and Operate (BOO)

The BOO model has been used successfully by us for only a few projects to date. It too requires application of our EPC capabilities and the provision of financing to fund construction. However, under the BOO model, we retain ownership of the project for an extended period of time, potentially through the useful life of the project assets and realize a revenue stream from the sale of power as long as we own the project. Our applications of this model included a construction of a solar array on King Island, Australia and, on New Zealand’s Chatham Islands, construction of a small wind farm. Our current policy is to undertake BOO projects only if the project has a long term PPA backed by a credit-rated utility on terms we deem favorable and if we can find and incorporate financing at an acceptable cost. While our management believes that the BOO model has the potential to yield the highest margins, utilizing it requires access to significant financial resources on terms that are not currently available to us following our emergence from VA.

Within Australia, our opportunities to bid on large-scale solar PV projects have been limited and the awards few. As the cost of solar PV approaches grid parity, our management expects the larger scale commercial and utility market within the Australia region to grow. With our capabilities in the Australia and, through GED in the USA, to undertake system design, engineering and installation, we believe we are positioned to participate actively in projects in Australia as well as internationally. This capability is enhanced by the insights we gain from observing system performance through our data management and O&M businesses.

As shown in the table below, we and our acquired subsidiaries have aggressively and more successfully pursued the large-scale solar projects business outside of Australia, primarily through the EPC model:

Our Large-Scale Solar PV Installations*

Country	Capacity Installed (MW)
United States**		23.0
Italy		5.0
United Kingdom***		0.9
Germany***		1.4
Fiji		1.0
Australia***		0.8
Thailand		8.0

	* Except as noted, excludes projects completed by companies we acquired prior to the dates of their acquisition
	** Includes 22 MW installed by GED prior to July 2014 when the Company acquired GED.
	***Aggregation of multiple small commercial installations

Although our large-scale solar experience is substantial, our projects generally represented less than 1% of the installations in our served markets at the time they were performed. Nevertheless, these experiences in designing and building large-scale solar PV projects have focused us on the potential opportunity for this line of business and our ability to win large-scale solar business is facilitated by the fact that competition is highly fragmented in the markets we serve.

Whenever we construct a large-scale solar project we generally tender or negotiate for post-commissioning operations and maintenance, or O&M, contracts if we have a permanent presence in the country and region where the project is located. Such contracts, if awarded, normally have a multi-year term and sometimes are in place for the life of these projects, but there is no assurance that an O&M contract will be awarded to the project constructor. Our historical track record of winning O&M awards has been poor and we believe the acquisition of BlueNRGY LLC and it’s O&M team together with the capabilities and processes available through the Draker platform will assist us to win a higher percentage of O&M awards.

While our large-scale solar installations are not tied to any particular manufacturer or technology, we do work with preferred component suppliers to ensure quality products are installed and that strong warranty support from large established equipment manufacturers is available to our customers. This strategy allows us to optimize total project costs to give us an advantage in some bidding situations. Our large-scale solar projects are generally of sufficient scale to permit us buy components directly from a diverse group of manufacturers if the project owner is not negotiating component procurement arrangements directly. We believe that, as a result, our procurement costs are competitive with other large installers/developers and that we have a competitive advantage over some smaller installers who must purchase system components through distributors.

Our staff members located in the key markets we serve are constantly soliciting and responding to bid and development opportunities sourced through a network of contacts in the industry. We do not believe that our large-scale solar business is subject to significant seasonality in any region where we are operating.

Wind

Our wind project business was substantially curtailed in January 2015, following the VA process. Prior to that, it functioned solely in Australia and the scope of activity included acting as a project developer, project manager, operator and, to a lesser extent, owner. We did not manufacture or distribute wind generation equipment. Our decision to withdraw from active pursuit of wind projects was driven largely by recent changes in Australian renewable energy policy that we believe will constrain new wind project developments in Australia for the foreseeable future.

Following our emergence from VA, we intend to confine our activities in the wind sector primarily to data management, operations and maintenance of commissioned facilities. We intend to emphasize regions where there are large concentrations of wind projects and we have established business operations and relationships, including Australia, the U.S. and Europe. However, we may opportunistically pursue smaller projects in remote locations on an opportunistic basis, particularly when they can be combined with PV solar and/or energy storage installations.

Our first wind project development was a 450kW installation on Chatham Island, completed in 2010 and referred to as the Chatham Project. The Chatham Islands are a remote part of New Zealand in the South Pacific where previously power was generated solely by diesel generation. The Chatham Project comprises two turbines that were installed with the goal of delivering approximately one-third of the island’s total electricity power.

Our only large utility-scale wind project was the Taralga Project, a development valued at about A$290 million with capacity of 107 MW and located in the state of New South Wales, Australia. Although we never held a control ownership stake in the Taralga Project, we did assume the primary role in the project’s development process and we managed critical design, financing offtake and construction functions. Our ongoing financial interest in the Taralga Project was conveyed to WHSP in January 2015 pursuant to our Reorganization Plans.

Energy Efficiency

Our business segment targeting energy efficiency comprises business units whose products and services reduce the amount of energy and related services consumed by end-users for a given activity. In Australia, powerful incentives exist for end-users to employ energy efficiency measures to reduce cost and/or comply with government regulations. Australia has experienced sharp increases in electricity charges in the last five years and these are expected to continue. The country’s power cost increases have been primarily driven by investment in regulated infrastructure and the introduction of carbon pricing and other government policy mandates that are intended to promote the use of energy resources deemed to be more sustainable. The range of products and services associated with energy efficiency is broad. We have chosen to serve this market in niche areas through separate subsidiaries focused on commercial and industrial customers in Australia. Our management believes these businesses provide the following strategic advantages to the Company as a whole:

●

We can provide our customers with access to a greater depth of technology and engineering resources than they would have otherwise.

●

The diversification provides additional pathways for growth in the rapidly evolving and uncertain renewable energy industry.

Parmac Air Conditioning & Mechanical Services Pty Ltd, or Parmac, is a contracting and servicing company, based in Blackburn, Victoria, Australia and primarily serving the Melbourne market for energy-efficient climate control systems (including heating, ventilation and air conditioning). As shown in the table below, the primary service provided by Parmac is: tendering of air conditioning systems and mechanical services to building owners, consulting engineers, project managers and architects:

Period	Installation/ Contracting			Other Services
Fiscal year 2014		84	%		16	%
Fiscal year 2015		81	%		19	%

Other capabilities include:

	●	Computer aided design, design checking facilities, project management, computerized drafting;

	●	Execution of installations as a project contractor; and

	●	Warranty and maintenance services to our constructed projects and maintenance and service work to other mechanical services installations.

Parmac competes in a regional market with a number of other contractors and holds approximately a 2% share of our addressable market. The principal competitors with larger market share between 5-10% (individually) are AG Coombs, AE Smith, D & E Air Conditioning, Allstaff Air Conditioning and JL Williams. Other competitors with a similar or smaller market share include: RKH Air Conditioning, PJM Air Conditioning, Quadrant Air Conditioning and Proair Air Conditioning.

Parmac is not positioned to grow significantly in our regional home market and thus revenue growth is bounded by and highly correlated to construction activity levels in and around Melbourne, Australia. Because of the favorable weather patterns in the region, the construction cycle is not seasonal in nature. Parmac’s business on major new installations is awarded primarily by competitive tender where price is a key determinate of success. Parmac often submits tenders as part of a syndicate of contractors and sources opportunities through long-standing relationships with construction general contractors. Parmac sources air conditioning system components through competitive bid processes involving multiple vendors and has no exclusive representation relationships with suppliers that constrain its procurement of the most cost-effective equipment. Service sales are generated by in-house sales personnel and from relationships with prior installation customers. In other areas of our business such as equipment and systems maintenance, Parmac seeks to distinguish itself by providing a high level of service and typically enjoys higher margins from providing post-installation services than it does when it functions a contractor on new installations.

Since the emergence from VA, our management has determined that Parmac should serve as an implementation arm for our PV solar business in the Melbourne region. Over time the scope of this activity is expected to encompass local sales, installations and project management and post-installation servicing / maintenance.

Remote Area Power Systems (RAPS). Our RAPS business segment historically includes generating assets we own and the Larkden energy storage technology that was divested in April 2013. Our interests in the solar installation on King Island and various solar installations owned by our subsidiary in the UK were eliminated with the divestiture of those assets and subsidiaries pursuant to the Reorganization Plans. The only remaining assets in our RAPS business segment after emergence from VA are related to the above-described Chatham (wind) Project we developed in 2010. The Chatham Project is not currently operating due to a dispute with the counterparty to the power purchase agreement, Chatham Islands Electricity Limited. Chatham Islands Electricity Limited is seeking to terminate its power purchase agreement with our subsidiary, Chatham Islands Wind Ltd (“CIWL”), and acquire the assets in accordance with contractual rights triggered by our VA. At this time it is not possible to predict how this matter will be resolved or what economic impact it will have on us.

As availability of capital permits, we will consider retaining future equity positions in other renewable generation assets, if we can:

	●	reasonably expect to generate a reliable and steady income stream above our cost of capital and we are able to exchange EPC profits and development fees for equity in the project on terms we deem favorable; or

	●	develop, construct and own projects with acceptable returns from inception, as was originally the case with the Chatham, King Island and UK projects.

Our capability to manage such assets, should we able to acquire them, is enhanced by our demonstrated capabilities in monitoring and analyzing operating performance of such systems and the provision of O&M services. Utilizing these core competencies, we also intend to purchase already-commissioned assets from third parties if we can do so on terms we consider favorable and if capital is available to do so. To date, this has not proven feasible and there is no assurance that we will be able to make such project purchases in the future.

Capacitor Technologies Pty. Ltd., referred to as CapTech, was acquired by us in 2003 and divested in August 2013. During the period of our ownership, CapTech specialized in the engineering, design, manufacturing and installation of energy saving and electric power quality solutions including power factor correction equipment, harmonic filters, capacitors and similar products. Notwithstanding our divestiture of CapTech, our management believes that we will have ongoing opportunities to utilize their products and technology in conjunction with our installations of renewable generation and energy-efficient climate control solutions and we have maintained amicable relations with CapTech’s management.

Seasonality

Our current business is not seasonal and neither demand for our services, nor supply of products used in connection with our business, is significantly impacted by seasonal factors.

Intellectual Property

Our intellectual property includes trade names and trademarks that we own. Commencing September 1, 2013 we entered into a License Agreement and Trade Name Agreement with Westinghouse Electric, collectively, referred to as the Westinghouse License. The Westinghouse License was terminated in January 2015 as a result of our VA process.

We also own numerous patents covering the Draker Corp and BlueNRGY LLC data collection and monitoring software systems used within our Monitoring & Performance Analytics business. The patent portfolio consists of 10 distinct applications in varying stages of patent prosecution, including six issued U.S. patents and three pending published U.S. applications, as well as similar international applications. The subject matter of the patents pertains primarily to optimization and monitoring of solar modules and wireless mesh network communications as applied to arrays of solar panels and the display of a graphical user interface for power plant monitoring. The Company may not prosecute all applications to issuance.

Research and Development

We did not conduct research and development through the end of our 2015 fiscal year.

OH&S and Environmental Regulations

Our operations are subject to laws and regulations of the jurisdictions in which we operate relating to the energy and construction/building industries. Occupational Health and Safety (OH&S) and Environmental laws have in recent years become more stringent and have generally sought to impose greater liability on a larger number of potentially responsible parties. Because we provide services that involve construction/manufacturing hazards or may be perceived to be unfavorable to the environment, we may become subject to sanctions or claims resulting from these activities.

We strive to conduct our business activities in a safe and environmentally sustainable manner and have appropriate corporate policies and procedures in place. In Australia, we have OH&S committees in place in our operating subsidiaries to ensure regulatory compliance. While our management is not currently aware of any situation involving environmental or OH&S matters that would likely have a material adverse effect on us, it is possible that situations could arise that could cause our business to suffer. Our management does not anticipate any material expenditure to comply with OH&S or environmental regulations affecting our operations.

Insurance

Our operating subsidiaries carry property and casualty and general liability insurance to mitigate the economic consequences of an adverse event affecting our assets. Our insurance currently meets the contractual and statutory requirements of our businesses. As we enter new markets, we assess the form of insurance required and procure such insurance through brokers that our management deems appropriate.

Currently, no material insurance claims are outstanding.

4.C. Organization Structure

The table below lists, as of December 4, 2015, our material direct and indirect subsidiaries and the jurisdictions in which they are registered:

Name	Country of Incorporation	Principal Activity	%
BlueNRGY Group Limited Ltd	Australia	Holding company		100
BlueNRGY LLC	USA	Data Management and O&M		100
Draker Corporation	USA	Data Management		100
Parmac Air Conditioning & Mechanical Services Pty Ltd	Australia	Energy efficiency		100
BlueNRGY Renewable Solutions Pty Ltd (f/k/a Westinghouse Solar Pty Ltd)	Australia	Solar		100
Chatham Island Wind Ltd	New Zealand	Special purpose vehicle		100
Green Earth Developers LLC	USA	Solar EPC		100

4.D. Property, Plants and Equipment

Our facilities, as of December 4, 2015, consist of stand-alone administrative offices and multi-purpose facilities incorporating office, warehouse and manufacturing activities for some of our businesses. Our administrative office facilities, located in various countries, are utilized by our various business units as necessary to support changing operational requirements. We believe that our administrative offices are adequate to support our current needs and all foreseeable growth and we have no current plans for expansion or improvements. All are occupied pursuant to short-term operating leases and are listed below:

Country	Address	Approximate size (sq-m)
Australia	Level 11, 32 Martin Place, Sydney, NSW 2000	250 sq-m
USA	110 E. Broward Blvd, 19^th Floor, Fort Lauderdale, FL 33301	350 sq-m
USA	547 W. Charles St., Suite 100, Matthews, NC 28105	180 sq-m
USA	431 Pine Street, Suite 114, Burlington, VT 05401	260 sq-m

All of our multi-purpose facilities are located in Australia and are leased. Their sizes, locations and our business units that they primarily serve are listed below as of December 4, 2015:

		Approximate Size (sq-m)		Primary Business Unit
Country	Address	Warehouse	Office	Affiliation
Australia	15 Terra Cotta Dr., Blackburn, VIC	180sq-m	290sq-m	Parmac
Australia	Unit 6, 806 Beaudesert Road, Coopers Plains QLD 4108	200sq-m	125 sq-m	Solar PV

The production and logistics activities at the above facilities generally operate on a single shift and thus have capacity available that would accommodate currently foreseeable growth. Accordingly, we have no plans for expanding or making material improvements to our production or logistics facilities or our complement of production equipment. We do not have any environmental issues or deficiencies at any of our production facilities.

As of December 4, 2015, we owned or held under leases assets in the categories shown in the following table having an aggregate value of A$2.3 million, which comprised an “at cost” total of A$4.3 million less depreciation and impairment of A$2.0 million

Amounts in A$’000
			Accumulated
Asset Category	Cost		Depreciation			Net Value
Plant & Equipment		2,612		(783	)		1,829
Office and Leasehold		916		(646	)		270
Motor Vehicles		759		(510	)		249
Total		4,287		(1,939	)		2,348

Capital Expenditures

Our capital expenditures for property, plant and equipment for the fiscal year ended June 30, 2015 and 2014 respectively were approximately A$0.2 million and A$0.4 million. In the year ended June 30, 2015 property, plant and equipment with a net value of A$0.2 million was acquired as part of the GED and BlueNRGY LLC acquisitions.

Our capital expenditures for the 2015 fiscal year mainly related to replacement of vehicles and office and leasehold assets which had reached the end of their useful lives. There were no significant one time asset purchases.

The capital expenditure total for fiscal year 2014 was primarily for essential upgrades to our motor vehicle fleet in Parmac and computer systems.

ITEM 4A. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements, including the accompanying notes, included in this Report. Unless otherwise specified, all dollar amounts are presented in Australian dollars and represented by the notation A$. Some of the information in the discussion and analysis set forth below and elsewhere in this Report includes forward-looking statements based on current expectations that involve risks and uncertainties. See “Special Note Regarding Forward-Looking Statements” and Item 3.D. under the heading, “Risk Factors” for a discussion of important factors that could cause actual results to differ materially from the results described in the forward-looking statements contained in this Report.

5.A. Operating Results

We are an Australian corporation operating in the renewable energy and energy-efficiency sectors. Our businesses provide technology and services that allow owners of renewable generation assets to maximize power production and return on investment throughout the lifecycle of this long-lived class of assets. In some regions where we operate, most notably in Australia and the USA, this includes the application of our engineering know-how and extensive data resources to design and install efficient new renewable systems and to upgrade, retrofit and optimize existing facilities. In Australia, we also deliver differentiated products and services that are designed to allow electricity consumers to reduce power costs and increase efficiency of their electricity consumption.

Our operations were unprofitable and we were unable to continue as a going concern without restructuring through VA in the period from November 14, 2014 through January 27, 2015 (refer to Item 4.A. under the heading “Voluntary Administration and Deed of Company Arrangement”). The scope of our activities was curtailed by the VA process, but we continue to conduct business through multiple subsidiaries operating in the aforementioned regions. In the months following our emergence from VA, we continued to operate at a loss, but several of our operating units are profitable and we are taking active steps to grow revenue and attain profitability on a consolidated basis. Our activities are currently divided among the following lines of business:

	●	Monitoring & Performance Analytics

	●	Solar Photovoltaic (or PV) – ranging from small scale residential up to megawatt-scale scale installations

	●	Energy Efficiency/Technology Solutions

Prior to the VA process, we were also actively developing large-scale wind projects, but our involvement with wind generation systems is now, and is expected to continue to be, limited to providing data management and system management services.

In keeping with customary practice in Australia, our fiscal years end on June 30. During the fiscal years ended June 30, 2015 (fiscal year 2015); June 30, 2014 (fiscal year 2014) and June 30, 2013 (fiscal year 2013), we incurred a net loss from continuing operations of A$13.6 million, A$22.2 million and A$2.1 million respectively, of which A$6.2 million, A$10.0 million and A$0.6 million for fiscal years 2015, 2014 and 2013 respectively were attributable to asset impairments and non-recurring expenses, as further described below. However, as a result of the Reorganization Plans coupled with our initiatives to reduce costs and increase our capitalization, our management expects that we will return to profitability in the future, although there is no assurance that we will be able to do so. If we are unable to achieve our business growth strategies and objectives or to obtain sufficient financing on acceptable terms in order to meet our future operational needs, there is a substantial doubt as to whether we will be able to continue as a going concern.

The breakdown of our revenues by segment is shown below for fiscal years ended June 30, 2015, 2014 and 2013:

	Fiscal Year Ended June 30,
	2015					2014					2013
Amounts in A$(000) except as noted	Revenue (A$ millions)		Revenue Percentage			Revenue (A$ millions)		Revenue Percentage			Revenue (A$ millions)		Revenue Percentage
Solar PV		3.1		18	%		1.9		14	%		7.6		17	%
Large-scale Wind		1.3		8	%		1.3		9	%		18.4		42	%
Monitoring & Performance Analytics		0.2		1	%		—		0	%		—		0	%
Energy Efficiency/Technology Solutions
Parmac		12.2		73	%		10.2		74	%		17.4		40	%
RAPS / Technology Solutions		0.1		1	%		0.3		2	%		0.1		0	%
Total reported revenue		16.9		100	%		13.7		100	%		43.5		100	%

Monitoring & Performance Analytics

Data Management and Related Products and Services. We entered the business of data management and the provision of O&M services for renewable generation assets in January 2015 with our acquisition of BlueNRGY LLC. For our fiscal years 2013 – 2014 we were not in either of these lines of business, other than as minimally required to service assets that we owned and operated. At the time we acquired BlueNRGY LLC, the BlueNRGY data management business was in the early stages of commercialization. Therefore it did not contribute materially to revenues during our 2015 fiscal year.

In September 2015 we acquired the Draker data management platform. The Draker Transaction substantially boosted our U.S. market position to being, in the judgment of our management, one of the leading independent providers of monitoring and data management services for solar PV facilities. Despite Draker’s market standing and broad customer base, numerous customers suffered delivery or service interruptions prior to our consummation of the Draker Transaction. Consequently, we expect to experience some short-term customer attrition and interruption of the historical growth pattern for this business. Nevertheless, we expect our Data Management and related revenues to grow strongly during our 2016 fiscal year due to positive industry growth dynamics, particularly in the USA, and our ability to broaden the served market base for Draker data collection systems and software services to other countries where we operate.

Subsequent to our consummation of the Draker Transaction we have made, and continue to make, substantial expenditures to upgrade and integrate the Draker and BlueNRGY software platforms. We are also expending resources to deploy the combined data management capability throughout our primary markets and in Europe and emerging markets where there is substantial growth in solar PV deployments. Consequently our data monitoring business will sustain losses through the first half of our 2015 fiscal year. We expect a turnaround to positive profitability for this line of business in the second half of our 2016 fiscal year, however, there can be no assurances about when, if ever, the data management business will become profitable.

O&M Services. Since the acquisition of BlueNRGY LLC our O&M business has made a positive contribution to profits, but the revenues in this line of business are not yet material to our overall operations. Although we are working actively to accelerate the growth of O&M services, there can be no assurance as to when or whether this line of business will be large enough to significantly affect our financial performance.

Solar PV.

Our revenue in the solar PV segment declined during our 2013 – 2014 fiscal years due in part to reductions in the cost of components, most notably solar panels. (Refer to Item 4.B. under the headings “Our Industry –The Solar PV Segment” and “Description Of Our Business Segments — Solar PV Residential and Small Commercial Solar”). The cost reductions were largely passed through to customers by us and other PV solar developers and installers throughout the industry with the result that we needed to continually increase the amount of capacity installed to maintain stable revenues and contributions to profits. When development or installation unit volumes declined due to other factors, as they did in all sub-segments of our solar business between fiscal years 2013 and 2015 the adverse impact on revenue and profitability was amplified as further discussed below. The increase in revenue in the solar PV segment from our 2014 to 2015 fiscal years was attributable to the acquisition of GED in July 2014.

Small-scale. Our small-scale solar business has been concentrated in Australia and focused on residential or small-commercial customers who are typically installing solar PV generating capacity on their rooftops to offset the costs of their own electricity purchases. The market for small-scale systems is fragmented, highly competitive and commoditized. Consequently, installers, such as the Company, are compelled to sell systems at market prices, which can be volatile as a result of short-term fluctuations in supply and demand. Our individual transactions have been relatively small, averaging less than A$8,000 during fiscal 2014 fiscal year and thereafter. The market demands rapid fulfillment of orders, with installation times typically being between 20 and 30 days from order date. Most customer purchases are paid for at or prior to installation in the form of a combination of small-scale technology certificates, or STCs, issued under the Small-scale Renewable Energy Scheme, or SRES, and cash.

During our fiscal years ended June 30, 2012 and 2013, government policies related to small-scale solar were broadly adjusted throughout Australia, moderating growth in overall installation rates, stabilizing the market and, substantially eliminating the seasonal dynamics and significance of swings in STC prices. The percentage of payment that we receive in the form of cash is now and, we expect, will continue to be, approximately 70% if policies affecting SRECs remain stable.

During our fiscal years 2013, 2014 and 2015 we experienced cash constraints that limited inventory availability to levels that were inadequate to satisfy order flow and constrained our ability to advertise and acquire new customers at levels that would maintain historical installation bookings. This led to a significant and persistent decline in our unit volume of small-scale installations and, due to the prevailing trend of falling system prices, a disproportionate reduction in our revenues and losses in this line of business in our 2012 – 2015 fiscal years. Consequently, we have further reduced fixed costs in our Australian solar PV units during and following the VA to a level that we believe will allow our Solar PV line of business to contribute to profits in the future. Our success in achieving profitability in the small-scale solar PV segment will depend heavily on sustaining transaction flow to exceed the break-even level. Since emerging from VA we have terminated this line of business in the UK and focused our sales and marketing efforts in Australia on commercial installations sized above 10kW. Our management believes that the commercial market for small-scale installations to be less commoditized and less saturated than the residential segment. With the limited trade credit available to us following our emergence from VA, the working capital required to grow this business from current levels cannot be internally funded by us. Supply agreements negotiated with wholesale distributors of PV components since our emergence from VA are now allowing us to operate without holding significant levels of inventory, albeit leading to lower-than-targeted gross margins, and the short operating cycle of our small-scale solar PV business is expected to require us to maintain a net working capital level for this business unit of only about one times monthly revenue in the near term.

In April 2013, we began selling, under license, small-scale solar systems using the Westinghouse® brand. Our rights to use this brand were terminated in January 2015 and we are in the process of relaunching our small-scale solar PV marketing under the BlueNRGY brand.

Large-scale. Our large-scale solar business is a project-based business focused on installations of solar PV generating capacity that generally range in size from approximately 500KW to 8MW. We have constructed such large-scale, or megawatt-scale, solar projects in geographically diverse locations, usually outside of Australia, although management is exploring opportunities to increase the level of activity in Australia as component costs have declined and system costs are now at or approaching grid parity in most states. The intense nature of the competition in this business line has caused the number and installation rate of large-scale projects awarded to us to be irregular. Consequently, subsequent to our emergence from VA we have evolved our cost structure for this segment to be scalable, both up and down. Other than a core team of staff members based in Australia and the USA who handle project engineering and overall project management, we rely heavily on outsourcing and sub-contractors working in markets where projects are constructed. As a consequence of these initiatives, we reversed the historical pattern of losses in this line of business that extended through our 2015 fiscal year and our large-scale solar business has made a positive contribution to operating profit in the first half of our 2016 fiscal year. Our management expects this dynamic to continue, but there can be no assurance that such expectations will be borne out or that this segment of our business will avoid losses in the future.

Generally we undertake large-scale solar projects as an EPC contractor working for customer owners. In this role we remain subject to competitive bidding processes, with the number of projects awarded being small and the timing uncertain. With a few exceptions, project fulfillment cycles have been short, typically less than 6 months, and we are paid on a progress-payment basis. In general, the timing of payments to suppliers has been closely linked to progress payments, where applicable, thereby limiting the net working capital requirements the company needs to support these projects. In cases where we construct projects and on-sell the project at completion, construction financing has been sourced to meet working capital requirements. Because of the short execution cycle, we have not historically tracked backlog for our large-scale solar business but it is our intention to begin to do so as new projects are awarded. As of December 4, 2015 our backlog of large-scale solar projects was approximately 44MW, mostly at our GED unit. Because of uncertainties in the contract bidding process, there can be no assurance about when we will win a new contract. The bidding effectiveness of our subsidiaries involved with the installation of large-scale solar PV projects was impaired during the VA process and this may create ongoing challenges to winning bids in the near future.

In the latter half of fiscal year 2012, we initiated direct development of large-scale solar projects with the intent of reselling them to third-party owners under the BOT model. The first 5MW, referred to as the Italian Projects, was constructed in Italy and completed in June 2012. These projects were sold in December 2012 (during our 2103 fiscal year) for A$15.1 million, A$1.1 million above the site acquisition and construction costs (but excluding finance costs). During our 2012 and 2013 fiscal years we expended funds to establish and maintain a four-person organization in Europe intended to allow us to transact future projects Following our emergence from VA, this team has been wound down with the shift of our business development focus to the Americas and Australia.

Energy Efficiency/Technology Solutions/RAPS. The business activities encompassed in our Energy Efficiency and Remote Area Power businesses, i.e. Parmac, RAPS and, until its divestiture in August 2013, CapTech, were collectively unprofitable in our 2013, 2014 and 2015 fiscal years as described below in the year-to-year and period-to-period comparisons of operating results. As a result of management changes and focused attention to financial performance, our management expects that the ongoing businesses of Parmac will contribute positively to profits in the current fiscal year and beyond, although there is no assurance that this will be the case.

Parmac. Our Parmac business unit typically receives deposits or progress payments for its work on new projects and bills for service work monthly as incurred, so it has an average net working capital requirement of about 15% of revenues. We also have a low fixed cost structure typical of construction general contractors and have achieved average pre-tax operating margins in the range of 7% - 8% in some fiscal years prior to fiscal year 2012. We believe this level of profitability is sufficient to sustain available growth opportunities from operating cash flow. However, Parmac experienced adverse performance on several contracts entered into in the latter half of fiscal year 2013 that resulted in a loss in the 2013 and 2014 fiscal years as those contracts were completed. These losses are believed by our management to be contract-specific and are not necessarily indicative of the Parmac’s expected future performance. During the 2015 fiscal year, Parmac’s net profit was impacted by one-time expenses totaling A$1.1million relating to a parent entity loan extinguishment in the VA process and a bad debt arising from a major customer entering voluntary administration.

Parmac’s business depends heavily on the level of activity for commercial and industrial development in the region around Melbourne. The pace of general construction is cyclical in this market and is related to factors such as the general economic conditions in Australia, the strength of the commodities markets that underpin large segments of the Australian economy, demographic and other trends affecting growth in the state of Victoria and the bidding success of construction general contractors with which Parmac is aligned. The overall market is small enough that the flow of bidding opportunities can be irregular and work load from awarded projects can be volatile. Low utilization of project personnel and staff can lead to future losses, notwithstanding improved performance on individual contracts.

RAPS. During our 2013 – 2015 fiscal years, the RAPS division derived revenue from projects and activities for the generation or storage of power to off-grid (typically remote) customers. Revenue from the King Island project averaged A$26,000 per annum since the beginning of fiscal year 2010 until it was divested in our VA. Prior to or as a result of the VA, we have either disposed of all assets in the RAPS unit or have taken 100% valuation allowances for assets that we still legally own except the Chatham Island Project. The Chatham Island Project, which was completed in 2010 and is 100% owned by us as a power generating asset. Chatham Islands revenue has averaged A$305,000 per annum since it was commissioned in July 2010, but there is currently a dispute regarding the status of the Chatham Island contract arising out of our entry into VA. Consequently, no revenue was received or recognized from this project from November 2014 to June 2015, however, we have received revenue from the project since June 2015. At present we are unable to project the outcome of this dispute or whether we will realize continuing value from the Chatham Island Project Assets that are recorded in our financial statements without provision for impairment.

Having concluded that we lacked the financial resources to fully exploit the Larkden Technology, we sold the license together with our Larkden subsidiary in April 2013 and recognized a loss of A$0.6 million based on the total consideration of A$2.75 million. Most of the consideration for the sale the Larkden Technology is payable by the acquirer in future periods and, while A$1.0 million of this was been received subsequent to June 30, 2014 and our management believes that the specified amount will be paid in full, there can be no assurances that we will receive the full A$2.75 million. Our rights to the unpaid consideration were assigned to a third party under the Reorganization Plans and consequently the receivable asset was de-recognized in our Financial Statements.

CapTech. We divested CapTech in August 2013 and it will therefore does not factor in our financial performance after our 2014 fiscal year.

Large-scale wind. During our 2013 fiscal year and until we entered VA, we were active in the sourcing of opportunities for the development of large-scale wind projects in Australia and the associated costs were reflected in our expenses. Our active pursuit of new large-scale wind opportunities was curtailed in the VA process and we are no longer incurring expenses related to this line of business and we do not expect to realize additional revenues from this segment of our business related to our prior activities. When we were active in the Large-scale wind development arena, we typically incurred costs on early-stage development of projects with a view to sourcing the equity and/or debt funding required to take it through to construction and operation. Such expenses were undertaken with no assurance of being able to realize a recover of the development expense. The Taralga Project is an example of a project for which equity funding to complete construction was secured and we were able to recover our costs and profit from the activity.

In our 2012 fiscal year we earned a development fee in connection with the Taralga project and reinvested this fee as equity into the project. As a result we retained a residual equity ownership of the completed project. During the 2014 financial year, the timeline for the completion of the Taralga project was delayed as a result of design changes and the subsequent requirement to amend Development Approvals. The impact of these delays, coupled with cost overruns has negatively impacted the value of our residual equity interest in the project, and our holding was fully impaired at June 30, 2014, resulting in an impairment charge being recognized in the Statement of Comprehensive income for our 2014 fiscal year of A$10.8 million. We also entered into a separate project management agreement for the Taralga Project, but this was terminated in the VA process and we will not realize any management fee revenue in our 2016 fiscal year or beyond.

Other Factors Materially Affecting Our Businesses and Results of Operations

Although the trajectory and dynamics of each of our lines of business vary substantially from segment to segment as described above, our management believes that a few external forces will have a major influence on all of our business segments other than Parmac.

The cost competitiveness of renewable versus conventional power generation is improving and parity has been or is expected to be reached in most targeted markets within the next two to three years, favorably affecting growth prospects for our solar PV businesses.

This situation is due to a confluence of factors:

	●	Average energy costs have been and are widely projected to continue to rise in most markets over time due to increasing global demand and limited availability of reliable low-cost supplies.

	●	Capital costs are at historical lows in many markets we serve (especially senior debt for infrastructure projects).

	●	The costs of renewable power systems and PV solar systems in particular have been declining as a result of scale efficiencies in manufacturing, some overcapacity for the production of certain components such as PV cells and continuing technological innovations.

Consequently, our management anticipates that the trend of increasing demand for renewable energy developments, both large and small-scale, will continue for several years, stimulating strong growth and profit opportunities for downstream industry participants and those providing services applicable to the large and growing base of renewable assets, such as the Company.

Government policies and mandates favoring energy efficiency and the use of renewable energy are further adding to near-term demand for renewable energy capacity in both developed and emerging markets.

Many government policies in place including those applicable to the largest markets, such as Europe and the United States, call for increasing levels of renewable energy usage over time and impose mandates or incentives for purchases of renewable power even though such power may cost more than conventionally generated power. This pressure tends to add to the pace of renewable power adoption in specific countries, states and municipalities where the mandates apply. Favorable tax incentives in the USA, most notably the 30% federal investment tax credit (ITC) applicable to renewable energy projects, that are set to reduce at the end of 2016 and beyond, are expected to create a bubble of growth in the 2016 calendar year that may be followed by a tail-off in activity subsequently.

The complexity and inconsistency of the regulatory and legislative frameworks can create localized barriers to entry in some markets, which we anticipate will be favorable in limiting competition or increasing pricing and margins in the near-term in markets such as the USA, where we have already established operations.

Pressure on government budgets and liquidity constraints are expected to serve as a partial offset to otherwise favorable growth trends for the renewable energy sector and will lead to volatility in some countries and regional markets.

As individual governments experience fiscal constraints that make direct subsidies impractical or are forced to adjust mandates because their constituents demand limits on premium payments for renewable energy, some of the demand for new renewable energy capacity will abate. This impact will fall unevenly across countries and regions as corrections are made to compensate for policies that were not sustainable or sound when implemented. Our management expects the effect of this trend will most greatly affect our large-scale solar business, which operates internationally and is already seeing supply-demand imbalances corrected in served markets such as Italy and anticipates corrections in the USA after December 31, 2016.

The broad acceptance and implementation of renewable energy generation capacity globally has attracted new entrants in most markets and increased competitive pressures.

To date growth in competition has had the greatest adverse effect on capital-intensive equipment and component manufacturers with high fixed costs, e.g., manufacturers of PV solar panels and wind turbines, both of which are experiencing reduced profitability and consolidation. We expect that the impact on downstream participants will be muted because of market fragmentation and robust prospects for near-term growth. However, we expect to nevertheless be required to continuously improve service levels and efficiency and apply new technologies to create barriers to new entrants, attain profitability and grow market share across all of our energy-related business segments.

In addition, access to incremental capital is essential to the successful pursuit of our business strategies (see “—Liquidity and Capital Resources”).

●

Without the necessary additional working capital, which we estimate to be at least A$1.0 million and as much as $3.0 million if we are successful in securing larger megawatt-scale contract awards , our solar PV businesses cannot grow to management’s targeted revenue run-rate in our 2016 fiscal year and beyond.

●

Obtaining significant penetration of our data management business in new geographic markets and in renewable sub-segments such as wind, micro-hydro and bio-technologies can only be funded in the near term from new capital infusions to the Company.

●

The net working capital deficit and deferred creditor balances in some of our operating subsidiaries can only be relieved with an infusion of new debt or equity capital, or an exchange of indebtedness for equity or a compromise of creditor claims.

●

We cannot complete and integrate beneficial acquisitions, without supplementary liquidity such as that raised to fund the Draker Transaction.

Acquisitions

We have developed our current business in part through several strategic acquisitions and we expect to pursue additional acquisitions in the future. Summary descriptions of the material acquisitions we completed during fiscal year 2013 through the date of this Report are as follows:

Draker Transaction

On September 16, 2015, we acquired, through a newly formed U.S. subsidiary, the monitoring platform, accounts receivable, inventory, plant, property and equipment and certain other assets of Draker, Inc. and Draker Laboratories, Inc. (together “Sellers”), including the Draker name, trademark, and all copyrights then owned by the Sellers. Immediately subsequent to the transaction, referred to as the Draker Transaction, our acquisition subsidiary changed its name to Draker Corporation and the names of the Sellers were changed to delete the “Draker” name. With the exception of the Seller’s secured indebtedness to the VEDA amounting to approximately US$0.2 million, Draker Corporation did not assume Seller’s liabilities. As a result of the Draker Transaction, we are supplying monitoring services to Seller’s customers while we negotiate and document continuing service agreements at more than 2,000 sites in the Americas, Japan and Europe. Cash consideration paid to Sellers, including interim operating loans that we do not believe to be recoverable, totaled approximately US$2.4 million.

BlueNRGY LLC

On January 27, 2015 we acquired 100% of the equity interests of BlueNRGY LLC, a U.S. company specializing in managing data related to geographically distributed energy generation systems and providing related operations and maintenance, or O&M, services. At the time of its acquisition, BlueNRGY LLC was serving customers in Europe and Asia. Subsequently we have expanded the scope of its operations to include customers with U.S. and Australian assets. Consideration paid to the BlueNRGY LLC shareholders and shares issued to key executives and Directors of the Group as part of the transaction comprised in aggregate 150,162,640 of our ordinary shares. Based on the issuance of our ordinary shares to investors in a contemporaneous private placement at US$0.03785 per share, the value of our shares issued to the BlueNRGY LLC shareholders was US$5.7 million.

Green Earth Developers LLC (GED)

On July 1, 2014 we acquired Green Earth Developers LLC, a solar and electrical EPC contractor in the Southeastern U.S. that has bolstered our ability to capitalize on commercial project opportunities in this market. The target company has a track record of successfully completing projects of 1MW – 5MW in size. The purchase price was USD$1,500,000 cash, $500,000 of which was deferred, plus 500,000 restricted shares in BlueNRGY valued at US$1.675 million at the time of the transaction. Of the deferred cash component of the purchase price, $100,000 was paid in cash and the remainder was exchanged for our ordinary shares at an exchange price of US$0.03785 per share following the effectiveness of the Reorganization Plans in January 2015.

Results of Operations

Fiscal Year Ended June 30, 2015 Compared to Fiscal Year Ended June 30, 2014 —Consolidated Results

Amounts in A$(000) except as noted	Year Ended June 30,
	2015			2014
Revenues from continuing operations		16,866			13,732
Operating Expenses
Cost of raw materials, consumables and contractors		(8,525	)		(6,092	)
Employee benefit expenses		(11,390	)		(9,323	)
Compliance & consultants		(2,111	)		(3,515	)
Travel costs		(639	)		(751	)
Occupancy expenses		(651	)		(559	)
Provision for impairment of receivables and bad debts written off		(829	)		(25	)
Other expenses		(1,712	)		(1,838	)
Depreciation and amortization expenses		(486	)		(420	)
Sub-total - operating costs		(26,343	)		(22,523	)
Other income		1,972			655
Finance costs		85			(4,051	)
Impairments		(6,217	)		(10,019	)
(Loss) / Profit before income tax		(13,637	)		(22,206	)
Income tax (expense) / benefit		—			—
Net (Loss)/profit from continuing operations		(13,637	)		(22,206	)
Net profit / (loss) from discontinued operations		19,341			(3,224	)
Net (Loss) / Profit for the period		5,704			(25,430	)
Other comprehensive income		(376	)		(868	)
Total comprehensive income/(loss)		5,328			(26,298	)

Operating revenue

Total operating revenues from continuing operations increased from A$13.7 million for the year ended June 30, 2014 to A$16.9 million for the year ended June 30, 2015. The revenues increases were mainly attributable to the acquisition of GED and an increase in revenue for Parmac.

	Revenue for Year Ended June 30,
Amounts in A$(000) except as noted	2015		2014
Solar PV		3,062		1,924
Large-scale Wind		1,294		1,292
Monitoring & Performance Analytics		167		—
Energy Efficiency/Technology Solutions
Parmac		12,242		10,188
RAPS / Technology Solutions		101		328
Total reported revenue		16,866		13,732

Solar PV revenue increased by 59% from A$1.9 million for the year ended June 30, 2014 to A$3.1 million for the year ended June 30, 2015, due to the revenue contribution of A$0.9 million from GED which was acquired in July 2014. In May 2015, GED commenced the design and construction of part of its contracted backlog resulting in the recognition of revenue for these projects in line with the percentage completed by June 30, 2015. The balance of the revenue was generated from the sale of residential and small scale commercial solar PV projects in our Australian and USA businesses.

Revenue from our Large-scale Wind segment recognized during our fiscal year 2014 and 2015 was from the provision of project management services to the Taralga project. The project management agreement was terminated in January 2015.

The Monitoring & Performance Analytics business was acquired in January 2015 when it was in its early stages of commercialization so it did not contribute significantly to revenues in 2015 and there are no comparative revenues for 2014.

Parmac recorded an increase in revenue of A$2.0 million from A$10.2 million for the year ended June 30, 2014 to A$12.2 million for the year ended June 30, 2015. The 2014 revenues had been negatively impacted by a change in our focus from larger greenfield developments to smaller retro-fitting and service opportunities, which are considered more in line with the Parmac team’s capabilities to manage profitably. In 2015, this focus lead to improvements in our success at securing and retaining customers for these revenue streams. RAPS revenue decreased by A$0.2m from 2014 to 2015 primarily as a result of a contract dispute regarding the Chatham Island wind project triggered by the VA process.

Operating costs

For the year ended June 30, 2015 and 2014, respectively, total operating costs including the cost of raw materials, consumables and contractors are presented in the table below for our various business segments:

	Year Ended June 30,
Amounts in A$(000) except as noted	2015			2014
Solar PV		7,535			3,221
Large-scale Wind		709			585
Monitoring & Performance Analytics		891			—
Energy Efficiency/Technology Solutions
Parmac		12,419			11,025
RAPS / Technology Solutions		(123	)		90
Corporate		4,912			7,602
Total reported operating costs		26,343			22,523

The 134% increase in solar PV operating costs from A$3.2 million for the year ended June 30, 2014 to A$7.5 million for the year ended June 30, 2015 is due to the costs of GED for a twelve month period in fiscal year 2015 and other costs incurred in establishing further solar operations within the USA outside of GED. The increase in costs is disproportionate to the increase in solar PV revenues in the same time frame due to the interruption to sales and marketing activity during the VA process. A core base of personnel was maintained over this period in order to enable the re-establishment of operations upon conclusion of the VA process.

Large-scale wind operating costs increased by A$0.1 million to A$0.7 million for fiscal year 2015 as compared with A$0.6 million for fiscal year 2014 due to hiring additional resources to fulfill our obligations under the project management agreement for the Taralga project.

Parmac operating costs were A$12.4 million for the year ended June 30, 2015 as compared to A$11.0 million for the year ended June 30, 2014. The 13% increase in operating costs for Parmac was less than the 20% increase in revenue reflecting the margin improvements being realized from our change in customer focus to smaller retro-fit projects and service clients. RAPS operating costs were fully offset by an unrealized foreign currency gain of A$0.2 million on liabilities of the segment. Other operating costs of RAPS were consistent between 2014 and 2015 fiscal years.

The Monitoring & Performance Analytics business was acquired in January 2015 so there are no comparative operating costs for 2014.

Changes in the categories of operating expenditure are discussed in more detail below.

The cost of raw materials, consumables and contractors used increased from A$6.1 million for the year ended June 30, 2014 to A$8.5 million for the year ended June 30, 2015 as a result of the increase in revenue levels between the two periods. The percentage increase in this category of expense for the fiscal year ended June 30, 2015 as compared with the year ended June 30, 2014 was 40%, which exceeds the increase in revenue of 23% in that period which reflects the fact that revenue growth was largely from the sale of equipment in our projects-based businesses.

Employee benefit expense has increased by 22% from A$9.3 million for the year ended June 30, 2014 to A$11.4 million for the year ended June 30, 2015 through the acquisition of GED and BlueNRGY LLC. These increases were to some level offset by a reduction in headcount across many of our continuing operations during the VA process.

Total compliance and consultant’s expense decreased by 40% from A$3.5 million for the year ended June 30, 2014 to A$2.1 million for the year ended June 30, 2015. The most significant contributor to the cost reductions were lower professional fees in relation to capital raising activities, auditor fees and costs associated with the preparation for registration of our securities in the United States in 2014 which were not repeated in 2015.

Travel costs reduced by 15% from A$0.7 million to A$0.6 million as the level of expenditure to allow senior operational executives to travel to the United Kingdom and United States of America to oversee our businesses there was reduced.

Occupancy expenses increased by A$0.1 million from A$0.6 million for the year ended June 30, 2014 to A$0.7 million for the year ended June 30, 2015 as a result of the acquisition of the GED and BlueNRGY LLC. These increases were largely offset by reductions following the VA process, whereby a number of leases were disclaimed by our Australian operations.

Our provision for impairment of receivables and bad debts expense was A$0.8 million for the year ended June 30, 2015 compared to a negligible expense for the same period in 2014. This resulted from a major customer of Parmac entering voluntary administration, difficulties in recovering some debts during the VA process and provisions against some debtors in GED.

Total depreciation and amortization expense remained consistent between the 2014 and 2015 years as it relates to RAPS, Parmac and corporate assets largely unaffected by the VA process.

Other Income

We recognized A$1.8 million of other income in the year ended June 30, 2015 as compared to A$0.7 million for the year ended June 30, 2014. The other income in the year ended June 30, 2014 was attributable to gains from the extinguishment of debt from creditors and lenders as a result of the VA process. The other income in 2014 was from the reversal of contingent consideration payable in relation to the acquisition of eco-Kinetics in 2010 of A$0.6 million.

Finance Costs

Finance costs comprise interest expenses, debt restructuring fees, share option expenses directly related to financing activities and foreign exchange differences on loan balances. We reported a gain in the finance costs category of A$0.1 million in 2015 resulting from foreign currency gains on borrowings of A$0.9 million which exceeded interest charges of A$0.8 million. In 2014 net interest expense was A$3.8 million, share option expensesA$0.1 million and foreign exchange losses A$0.2 million. Net interest expense reduced significantly between the 2014 and 2015 fiscal years as a result of the extinguishment of borrowings following the VA process.

Impairments

The impairment loss in the 2015 fiscal year of A$6.2 million was due to an impairment charge of that amount relating to the goodwill carrying value of our Solar CGU. The impairment loss of A$10.0 million for the year ended June 30, 2014, was due to a decline in the value of our investment in the Taralga wind farm project to $ Nil as a result of construction delays and cost overruns during the year.

Income taxes

No income tax expense was recorded for the years ended June 30, 2015 and 2014.

Fiscal Year Ended June 30, 2014 Compared to Fiscal Year Ended June 30, 2013 —Consolidated Results

Amounts in A$(000) except as noted	Year Ended June 30,
	2014			2013
Revenues from continuing operations		13,732			43,473
Operating Expenses
Cost of raw materials, consumables and contractors		(6,092	)		(21,926	)
Employee benefit expenses		(9,323	)		(11,025	)
Compliance & consultants		(3,515	)		(2,473	)
Travel costs		(751	)		(567	)
Occupancy expenses		(559	)		(556	)
Provision for impairment of receivables and bad debts written off		(25	)		(60	)
Other expenses		(1,838	)		(2,352	)
Depreciation and amortization expenses		(420	)		(402	)
Sub-total - operating costs		(22,523	)		(39,361	)
Other income		655			2,609
Finance costs		(4,051	)		(8,325	)
Impairments		(10,019	)		(590	)
(Loss) / Profit before income tax		(22,206	)		(2,194	)
Income tax (expense) / benefit		—			65
Net (Loss)/profit from continuing operations		(22,206	)		(2,129	)
Net profit / (loss) from discontinued operations		(3,224	)		(6,278	)
Net (Loss) / Profit for the period		(25,430	)		(8,407	)
Other comprehensive income		(868	)		833
Total comprehensive loss		(26,298	)		(7,574	)

Operating revenue

Total operating revenues from continuing operations decreased from A$43.5 million for the year ended June 30, 2013 to A$13.7 million for the year ended June 30, 2014. The revenues for the year ended June 30, 2013 included A$18.2 million of revenue related to the Taralga Project and A$3.4 million related to large scale solar projects developed in the USA. No wind farm developments were sold in the year ended June 30, 2014.

	Revenue for Year Ended June 30,
Amounts in A$(000) except as noted	2014		2013
Solar PV		1,924		7,571
Large-scale Wind		1,292		18,240
Energy Efficiency/Technology Solutions
Parmac		10,188		17,363
RAPS / Technology Solutions		328		299
Total		13,732		43,473

Solar PV revenue declined by 75% from A$7.6 million for the year ended June 30, 2013 to A$1.9 million for the year ended June 30, 2014, due to the absence of any large scale solar projects in our 2014 fiscal year, a reduction in our level of residential installations due to our continued lack of working capital and inability to sustain sales and marketing expenditures to generate new customers and revenues. A$3.4 million of the solar PV revenue for the year ended June 30, 2013 was in relation to an EPC contract for a solar project in New Jersey. In the year ended June 30, 2014 we sold two commercial solar projects in the United Kingdom for a combined A$0.3 million.

Revenue from our Large-scale Wind segment recognized during our fiscal year 2013 was the result of the sale of the Taralga Project, which had been under development by us beginning in the prior fiscal year. Further details about the Taralga Project and the sale are included above under the heading “—Large-scale Wind.” In our fiscal year 2014, we earned $1.3 million from the provision of project management services to the Taralga project.

Parmac recorded a decrease in revenue of A$7.2 million from A$17.4 million for the year ended June 30, 2013 to A$10.2 million for the year ended June 30, 2014, which was largely the result of a change in our focus from larger greenfield developments to smaller retro-fitting and service opportunities, which are considered more in line with the Parmac team’s capabilities to manage profitably. RAPS revenue remained consistent at A$0.3 million between the two periods reflecting the stable nature of the revenue generated from the Chatham Island Wind project.

Operating costs

For the year ended June 30, 2014 and 2013, respectively, total operating costs including the cost of raw materials, consumables and contractors are presented in the table below for our various business segments:

	Year Ended June 30,
Amounts in A$(000) except as noted	2014		2013
Solar PV		3,221		8,518
Large-scale Wind		585		4,492
Energy Efficiency/Technology Solutions
Parmac		11,025		18,698
RAPS / Technology Solutions		90		219
Corporate		7,602		7,434
Total		22,523		39,361

The 62% reduction in solar PV operating costs from A$8.5 million for the year ended June 30, 2013 to A$3.2 million for the year ended June 30, 2014 is lower than the reduction we recognized in revenues for this division over the same period, reflecting the fixed element of some of the operating costs in this division.

Large-scale wind operating costs decreased by A$3.9 million to A$0.6 million for fiscal year 2014 as compared with A$4.5 million for fiscal year 2014 due to our expensing of capitalized early stage development costs upon sale of the Taralga Project in fiscal year 2013, which was not repeated in the year to June 30, 2014.

Parmac operating costs were A$11.0 million for the year ended June 30, 2014 as compared to A$18.7 million for the year ended June 30, 2013. The changes in operating costs for Parmac were closely linked to direct costs of delivery, which fluctuate in line with changes in revenue and the mix of products and services delivered. RAPS operating costs of A$0.1 million for the year ended June 30, 2014 were largely comprised of depreciation related to the Chatham Island assets and are fixed in nature. In the year ended 30 June 2013 the RAPS division also included $0.1m of maintenance and other one-off costs.

Changes in the categories of operating expenditure are discussed in more detail below.

The cost of raw materials, consumables and contractors used decreased from A$21.9 million for the year ended June 30, 2013 to A$6.1 million for the year ended June 30, 2014 as a result of the reduction in revenue levels between the two periods. The percentage decrease in this category of expense for the fiscal year ended June 30, 2014 as compared with the year ended June 30, 2014 was 72%, which correlates closely with the decrease in revenue of 68%.

Employee benefit expense has been reduced by 15% from A$11.0 million for the year ended June 30, 2013 to A$9.3 million for the year ended June 30, 2014 through headcount reductions primarily in the solar PV division. A significant proportion of employee costs relate to corporate and executive management; these were maintained at the levels considered necessary to implement the diversification strategies we are pursuing. The wind division was heavily supported by the senior corporate executive team to manage the construction progress of the Taralga Project.

Total compliance and consultant’s expense increased from A$2.5 million for the year ended June 30, 2013 to A$3.5 million for the year ended June 30, 2014. The most significant contributor to costs in this area were professional fees in relation to capital raising activities and preparation for registration of our securities in the United States and costs for two senior executives employed under consultants agreements.

Travel costs were A$0.6 million and A$0.7 million for fiscal years 2013 and 2014 respectively. This level of expenditure was incurred largely to allow senior operational executives to travel to the United Kingdom and United States of America to oversee our businesses there.

Occupancy expenses remained consistent at A$0.6 million in both years.

Our provision for impairment of receivables and bad debts expense was A$0.1 million for the year ended June 30, 2013 compared to an expense of $0.02 million for the same period in 2014. This resulted from a lower debtors balance against which customary provisions were applied.

Total depreciation and amortization expense remained consistent at A$0.4 million for both years reflecting the stable property, plant and equipment balance.

Other Income

We recognized A$0.7 million of other income in the year ended June 30, 2014 as compared to A$2.6 million for the year ended June 30, 2013. The other income in the year ended June 30, 2014 was attributable to the reversal of contingent consideration payable in relation to the acquisition of eco-Kinetics in 2010. The other income in the year ended June 30, 2013 was attributable to a gain of A$2.6 million on the revaluation of financial liabilities, being derivatives embedded in the secured convertible notes we issued in May 2012 and gains on STCs and a recovery of bad debt previously written off.

Finance Costs

We reported finance costs of A$4.1 million and A$8.3 million for the years ended June 30, 2014 and 2013, respectively. Finance costs comprise interest expenses, debt restructuring fees, share option expenses directly related to financing activities and foreign exchange differences on loan balances. The $4.2 million decrease was made up of A$0.4 million of foreign exchange losses on foreign currency denominated debt and A$3.8 million of penalties incurred (classified in interest expense) and extinguishment costs relating to the defaults on and subsequent restructure of our then-outstanding Series 1 convertible notes.

Impairments

The impairment loss of A$10.0 million for the year ended June 30, 2014, was due to a decline in the value of our investment in the Taralga wind farm project to $ Nil as a result of construction delays and cost overruns during the year. The impairment loss in the 2013 fiscal year of A$0.6 million was due to a decrease in the market value of our investment in common shares of Andalay Solar.

Income taxes

No income tax expense was recorded for the year ended June 30, 2014. An income tax benefit of $0.1 million was recognized in the year ended June 30, 2013 from the reversal of a prior year deferred tax liability.

Application of Critical Accounting Policies, Estimates and Judgments

Our accounting policies form the basis for preparation of our financial statements and our financial statements in turn are an essential factor in understanding our operations. Our accounting policies are in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and are fully described in the notes to our audited financial statements as of and for the three years ended June 30, 2013, 2014 and 2015. The preparation of our financial statements required management to make judgments, estimates, assumptions and judgments that affect the reported amounts of revenue, assets, liabilities and expenses. Our management re-evaluates estimates on an on-going basis and such estimates are based on historical experience and on various other assumptions that management believes to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. Unless otherwise stated, all dollar amounts stated in our financial statements are expressed in the currency of the Commonwealth of Australia.

Critical accounting policies

Critical accounting policies that reflect our industry and activity specific accounting treatments used in preparing our financial statements as of and for the fiscal years ended June 30, 2013, 2014 and 2015 or that have significant potential to result in a material adjustment to the carrying amounts of assets and liabilities during such fiscal years.

(a) Basis of preparation - going concern

The consolidated financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty. As further discussed below in “—Liquidity and Capital Resources,” our current liabilities exceeded our current assets by A$4.6 million as of June 30, 2015. We remain dependent upon receiving continuing support from existing lenders, raising additional funds in new financings, and monetizing long-term assets to fund the business and to continue as a going concern.

(b) Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to us and the revenue can be reliably measured, regardless of when payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty. The specific recognition criteria described below are applicable to the primary sources of our revenue:

(i) Sale of products, materials and parts

Revenue from the sale of products, material and parts is recognized upon the delivery of goods to customers.

(ii) Construction contracts

Contract revenue and expenses, such as those related to large-scale solar and air conditioning projects where we are acting as a general contractor, are recognized in accordance with the percentage of completion method unless the outcome of the contract cannot be reliably estimated. Revenue is matched with the contract costs incurred in reaching the stage of completion, resulting in reporting revenue, expenses and profit, which can be attributed to the work completed. When it is probable that a loss will arise from a construction contract, the excess of total costs over revenue is recognized immediately as an expense. Where the outcome cannot be measured reliably, revenue is recognized only to the extent that related expenditure is deemed recoverable. The stage of completion of a contract is measured by reference to the recoverable costs incurred to date as a percentage of estimated total costs for the contract.

(iii) Project development revenue

Revenue from large-scale solar and wind projects that we undertake as principal is recognized when the project is commissioned and rents or revenues from the power sales are received, or if control of the project is sold to a third party, when the risks and rewards of ownership have been transferred. The timing and amount of revenue recognized depends on the specifics of each such project and the arrangements that we have with our customers.

Costs incurred for project development are expensed in the period in which incurred unless we determine that it is probable the project will be completed and generate future economic benefit equal to or in excess of such costs and that can be measured reliably in which case the costs are recorded in inventory until a development fee is recognized.

(c) Work-in-progress

Project work in progress includes both work in progress on construction contracts, such as those performed for customers of our large-scale solar and air conditioning systems customers and projects in progress in which we are a principal such as certain large-scale solar projects, or in which we are investing in project development for a fee such as large-scale wind projects.

Project Work in Progress

As further described in Note 2(q) (iii) to our audited financial statements included elsewhere in this Report, costs incurred for developing projects for which we are acting as a principal or earning a developer fee is valued at the lower of cost and estimated net realizable value when it is probable that the project will be completed, will generate future economic benefits and the costs can be measured reliably. Cost comprises staff salary costs and direct expenses including direct material costs and contractor costs together with an appropriate proportion of overheads. Net realizable value is based on estimated selling prices less further costs expected to be incurred to completion. At June 30, 2015 the carrying amount of capitalized project work in progress was A$0.1 million as compared to A$0.3 at June 30, 2014.

Other development expenditures that do not meet these criteria are recognized as an expense as incurred. Development costs previously recognized as an expense are not recognized as an asset in a subsequent period.

Significant Accounting Judgments, Estimates and Assumptions

Significant accounting judgments, estimates and assumptions that have been used in the preparation of our financial statements are set out below. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.

We make estimates and assumptions concerning the future in determining accounting treatments and quantifying amounts for transactions and balances in certain circumstances. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a) Recovery of deferred tax assets

Deferred tax assets are recognized for deductible temporary differences as management considers that it is probable that future taxable profits will be available to utilize those temporary differences.

Judgment is required in assessing whether deferred tax assets are recognized in the statement of financial position. Deferred tax assets, including those arising from un-recouped tax losses, capital losses and temporary differences, are recognized only where it is considered more likely than not that they will be recovered, which is dependent on the generation of sufficient future taxable profits.

Assumptions about the generation of future taxable profits depend on management’s estimates of future cash flows. These depend on estimates of future sales, operating costs, capital expenditure and other capital management transactions. Judgments are also required about the application of income tax legislation. These judgments and assumptions are subject to risk and uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which may impact the amount of deferred tax assets and deferred tax liabilities recognized on the balance sheet and the amount of other tax losses and temporary differences not yet recognized. In such circumstances, some or all of the carrying amounts of recognized deferred tax assets and liabilities may require adjustment, resulting in a corresponding credit or charge to the income statement. Should operating performance and prospects improve in the future, then deferred tax assets may be recognized in future on prior year operating losses. As of June 30, 2015, we had A$16.6 million of derecognized deferred tax assets and A$19.9 million at June 30, 2014.

(b) Share-based payment transactions

We measure the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using a Black-Scholes model, with the assumptions detailed in Note 26 to our audited financial statements included elsewhere in this Report. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period.

The Group measures the cost of equity-settled transactions with regards warrants using an un-modified binominal lattice model giving consideration to the dilution impact of the shares issued upon conversion of the warrants as well as other options on issue.

(c) Impairment of goodwill and other intangibles other than Patents

We determine whether goodwill and other intangibles other than patents are impaired at least on an annual basis (as of June 30, the end of our fiscal year) and when circumstances indicate the carrying value may be impaired. The Group’s impairment test for goodwill and intangible assets with indefinite lives is based on value-in-use calculations that use a discounted cash flow model using assumptions believed by management to be reasonable. These valuations would not reflect unanticipated events and circumstances that may occur. However, as detailed in the notes to our statements under the heading “Goodwill Impairment” (see Note 16 to our audited financial statements included elsewhere in this Report) indicators of potential impairment exist and there can be no assurance that we will avoid a downward revision in the carrying value of goodwill in the future and any such revision in value will also result in the recording of a charge in the Statement of Comprehensive Income.

(d) Wind development projects

The investment of 10% of the Taralga Wind Farm project is by way of investment in two entities, Taralga Holding Nominees 1 Pty Ltd and Taralga Holding Nominees 2 Pty Ltd. This investment was funded by us from the re-investment of part of our development fee generated on equity close of the project. This investment is classified as an “Available-for-sale financial asset”. It has always been expected that we, along with the majority equity holder, would exit this investment within a three year period. The investment in Taralga was initially recognized at fair value at the date of the equity transaction on October 9, 2012. Fair value was determined by reference to the present value of net cash inflows projected to be received by us from exiting this investment based on the financial model of the project and the contractually defined distributions from any sales profits due to us on exit. Due to the requirement for judgment over variables within the financial model to determine future returns and profit achievable on exit, the fair value calculations were based on a net present value of a risk adjusted, probability weighted average return from different sales Internal Rate of Return (IRR) expectations.

The range of IRR assumptions used in these calculations was from 9.0% to 13.0%, which are considered the high and low points between which arm’s length sales transactions of wind farm projects may occur in Australia. A discount rate of 17.0% was applied to the calculated amount to reflect the risk to deliver the project as per the model associated with construction risk and the time value of money based on return premiums specific to the project. The range of outcomes of the fair value calculations was from A$9,500,000 to A$10,900,000 and the adopted value was A$10,000,000. Variances between actual results and the estimated results from the valuation methodology may result in higher or lower profits being achieved on exit of this project. After initial recognition the investment in the Taralga Wind Farm project is accounted for as an available-for-sale investment, which is measured at fair value with gains or losses being recognized as a separate component of equity until the investment is derecognized or until the investment is determined to be impaired. At June 30, 2013 and December 31, 2013 this available-for-sale asset had been revalued to $10,800,000. This revaluation was based on an indicative offer to acquire the asset which was received by CBD during 2013.

At 30 June 2014, the fair value calculations were re-performed using the same methodology as on initial recognition. Based on actual events and expected changes to future outcomes arising from events during the 2014 financial year, the investment was fully impaired at 30 June 2014. This impairment resulted in the recognition of a charge to the Statement of Financial performance of $10,800,000.

5.B. Liquidity and Capital Resources

Analysis of financial condition, liquidity and capital resources

The following table presents a comparison of our cash flows and beginning and ending cash balances during the fiscal years ended June 30, 2015, 2014 and 2013 as reflected in our audited financial statements presented elsewhere in this document.

	Year Ended June 30,
Amounts in A$(000) except as noted	2015			2014			2013
Net cash flows used in operating activities		(5,551	)		(20,163	)		9,821
Net cash flows used in investing activities		(1,963	)		1,305			759
Net cash flows from financing activities		6,615			19,770			(12,633	)
Net (decrease) / increase in cash and cash equivalents		(899	)		912			(2,053	)
Cash and cash equivalents at beginning of period		1,381			469			2,522
Cash and cash equivalents at end of period		482			1,381			469

At June 30, 2015 our cash and cash equivalents had decreased to A$0.5 million from A$1.4 million at June 30, 2014 primarily as a result of the application to operating activities of funds raised from the issuance of ordinary shares in June 2014 in conjunction with an offering pursuant to our prospectus effective as of June 12 2014, referred to as the June 2014 Offering. During each of the last three fiscal years ended June 30, 2015, 2014 and 2013 and subsequently through the date of this Report, our liquidity has been generated primarily from borrowings and sales of equity securities. Cumulative funding from financing activities of A$13.8 million and funding from investing activities of A$0.1 million over this period was insufficient to fund cumulative losses from operations during fiscal years 2015, 2014 and 2013 and provide any further working capital. Consequently, our cash availability and liquidity remained constant at A$0.5 million at the beginning of fiscal year 2013 to June 30, 2015, a level too low to sustain our operating outflows and continuance as a going concern, as further discussed below. Our liquidity deficiencies were exacerbated by our acquisition in July 2014 of GED to which we allocated US$1.5 million within 60 days following the 2014 Offering for purposes of consummating transaction and addressing GED’s working capital deficit. In June 2014, we were successful in negotiating exchange agreements with convertible note holders to exchange notes with a face value of A$7.8 million into ordinary share capital, but this was insufficient to overcome our working capital deficit. We have classified the remaining indebtedness we had incurred during the two prior fiscal years and which was not converted into equity prior to June 30, 2014 became current liabilities as of June 30, 2014 as a result of default events that occurred with respect to bonds issued by our subsidiaries and the acceleration of other obligations. Consequently, we had a working capital deficit on June 30, 2014 of A$30.5 million, payments to many trade creditors were substantially deferred, liquidity was severely constrained and we were unable to continue as a going concern without voluntarily placing the Company and three of our subsidiaries into Administration. See – Reorganization in Note 5 in our audited June 30, 2015 financial statements included elsewhere in this document.

On November 14, 2014 as a result of our constrained liquidity and inability to raise sufficient additional financing after June 30, 2014 to meet our obligations the Company and three of its Australian subsidiaries were determined by the Board to be insolvent or likely to become insolvent in the future and were placed into voluntary administration (VA). The three Australian subsidiaries of the Company that entered VA were CBD Solar Labs Pty, Westinghouse Solar Pty Ltd and KI Solar Pty Ltd, which, referred to collectively as the VA Companies. Our other subsidiaries continued to operate outside the VA process.

On December 24, 2014, deeds of company arrangement under the Act were signed for the Company and Westinghouse Solar Pty Ltd, referred to as the Reorganized Companies. The DOCAs for the Reorganized Companies became effective on January 27, 2015 and we exited VA (refer to Item 4.A. under the heading “Voluntary Administration and Deed of Company Arrangement”).

In accordance with the DOCAs for the Reorganized Companies, creditor claims and contingent liabilities for those Companies were extinguished and, since exiting VA through the date of this Report, investors have infused US$5.9 million into the Company pursuant to equity private placement. Of this US$1 million was used to pay the Deed Funds as a condition to effectiveness of the DOCAs and US$2.4 million was used to acquire the assets of Draker Inc. The remainder of the funds raised have been used for working capital purposes and to fund operating losses following our emergence from VA.

In connection with effectuating the Reorganization Plans on January 27, 2015, we acquired 100% the issued and outstanding membership interests of BlueNRGY LLC. The acquisition was settled through the issuance of an aggregate of 150,162,640 of our ordinary shares.

Our ability to continue as a going concern and to achieve our business objectives over the next 12 months depends on our ability to accomplish some or all of the following:

●

Attain profitability: Not all of our subsidiaries are contributing cash flow to cover our corporate costs and we are not operating profitably overall. However, we are continually reviewing costs structures in our operating subsidiaries and making the appropriate changes to maximize cash flow and profitability of our businesses. New business opportunities are carefully assessed with a view to ensuring their potential to contribute to profits without undue consumption of working capital. Specifically, since effectiveness of the Reorganization Plans we have reduced the number of employees in our Solar PV business units and corporate units to lower costs and better match the current scope of our activities. In addition, we have implemented operational changes and new controls at Parmac that we anticipate will allow us to avoid losses on projects such as we experienced in fiscal year 2013 and 2014 and that we believe will allow this business unit to sustain profitability.

●

Raise new debt and/or equity capital: BlueNRGY continues to discuss opportunities for further investment with current equity holders. In addition, as of the date of this Report we have been successful in establishing a working capital facility for our Parmac subsidiary of US$0.5 million and there is a likelihood, but no assurance, that the current lender or a substitute lender will increase the amount of this facility, if required. In addition, we have structured long term payment arrangements with legacy trade creditors of our GED subsidiary in the amount of approximately US$0.5 million. We had a positive cash balance of approximately A$0.8 million as of December 4, 2015.

Our management and Board have determined that there is a risk that our funding requirements may not be successfully met through the foregoing initiatives and that some of our initiatives may not be successful. However, as previously mentioned, we have achieved some operating and financing objectives and our management and board believe that we have a reasonable prospect of achieving others; consequently, we have no intention to liquidate or cease trading, except with respect to our U.S. subsidiary, Westinghouse Solar Inc., which is dormant and ceased operating prior to the effectiveness of our Reorganization Plans as a result of the termination of the license agreement with Westinghouse Electric Corporation.

Operating activities

As shown in the table below, although our operating activities generated positive cash flow for fiscal year 2013, the cumulative utilization of cash over the last three fiscal years has been A$15.9 million.

	Year Ended June 30,
Amounts in A$(000) except as noted	2015			2014			2013
Cash flow from operating activities
Receipts from customers (inclusive of GST)		16,863			20,680			69,635
Payments to suppliers and employees (inclusive of GST)		(21,974	)		(39,493	)		(53,828	)
Payments for development costs		—			—			(3,535	)
Finance costs		(449	)		(1,350	)		(2,464	)
Interest received		9			—			13
Net cash flows used in operating activities		(5,551	)		(20,163	)		9,821

For the year ended June 30, 2015, net cash used in operating activities was A$5.6 million as compared with an outflow of A$20.2 million for the year ended June 30, 2014. The excess of disbursements to suppliers and employees over receipts in the year ended June 30, 2015 was A$5.1 million and was largely driven by funding of ongoing operating losses.

For the year ended June 30, 2014, net cash used in operating activities was A$20.2 million as compared with an inflow of A$9.8 million for the year ended June 30, 2013. The excess of disbursements to suppliers and employees over receipts in the year ended June 30, 2014 was A$18.8 million and was largely driven by the catch up of payments to overdue creditors and funding ongoing operating losses.

The excess of receipts over disbursements to suppliers and employees the year ended June 30, 2013 was A$15.8 million, largely driven by the receipt of sale proceeds of A$15.1 million from the Italian Solar Projects and cash proceeds of A$7.3 million from the sale of the Taralga project (after recognizing related development costs of A$3.5 million), offset by net losses from the remainder of our operations and finance costs of A$2.5 million. The excess of finance costs over interest income of A$2.5 million further contributed to the net use of cash for operations in fiscal year 2013.

Investing activities

In two out of the last three fiscal years, we divested assets in part to fund operating losses and pay down debt as detailed in the table below.

	Year Ended June 30,
Amounts in A$(000) except as noted	2015			2014			2013
Cash flow from investing activities
Proceeds from sale of property, plant and equipment		—			188			10
Proceeds from the sale of intangible assets		—			—			1,000
Purchase of property, plant and equipment		(252	)		(672	)		(275	)
Cash forfeited during reorganisation		(362	)		—			—
Proceeds from sale of investments		—			1,789			—
Payment for the purchase of controlled entities, net of cash acquired		(1,349	)		—			24
Net cash flows used in investing activities		(1,963	)		1,305			759

Net cash used in investing activities was A$2.0 million for the year ended June 30, 2015, as opposed to A$1.3 million cash generated in investing activities for the year ended June 30, 2014 Payment for the purchase of controlled entities, net of cash acquired of A$1.3 million in the year ended June 30, 2015 related to the purchase of GED and cash of A$0.4 million held at the time of entering VA was forfeited. For the year ended June 30, 2014, A$1.8 million was received following the sale of CapTech and net investments of A$0.7 million were made for purchases of plant, property and equipment predominantly for the construction of solar PV assets owned by one of our UK subsidiaries. In 2013, A$1.0 million was received from the sale of Larkden.

Financing activities

As shown in the table below, we generated the cash used in operating and investment activities during fiscal years 2015 and 2014, with net contributions from financing activities during those years. In fiscal year 2013, the flows were reversed with cash generated from operations and investments being used to repay borrowings. Nevertheless, over the three-year period ended in June 2015 we generated A$13.8 million cumulatively from financing activities:

	Year Ended June 30,
Amounts in A$(000) except as noted	2015			2014			2013
Cash flow from financing activities
Proceeds from share issues		4,521			7,706			207
Proceeds from issue of convertible notes		—			1,013			103
Convertible note and share issue costs		—			(1,320	)		—
Proceeds from borrowings		2,171			16,282			474
Repayment of borrowings		—			(3,699	)		(13,255	)
Payment of finance lease liabilities		(77	)		(212	)		(162	)
Net cash flows from financing activities		6,615			19,770			(12,633	)

For the year ended June 30, 2015, net cash inflows from our financing activities was A$6.6 million as compared with net cash inflows from our financing activities of A$19.8 million for the year ended June 30, 2014. In the year ended June 30, 2015 we raised $4.5 million from the issuance of ordinary and preference shares and our parent company and operating subsidiaries borrowed A$2.2 million as follows: Parmac (A$0.7 million), GED (A$0.5 million) and BlueNRGY Group Limited (A$1.0 million). In the year ended June 30, 2014, A$14.1 million of borrowings were from the issuance of bonds in the United Kingdom by (our then-subsidiaries) Secured Energy Bonds Plc and Energy Bonds plc, A$2.1 million from a working capital loan facility and A$1.1 million from the issuance of further Series 1 Notes (defined below and referred to in the table as convertible notes) which were subscribed to in September 2013. During the year ended June 30, 2014 we repaid an inventory financing facility of A$0.5 million and A$1.7 million of secured convertible notes, referred to as Series 1 Notes from the proceeds of the sale of CapTech as well as A$1.5 million of our other non-equity linked loan balance. In June 2014 we raised A$7.7 million from the issuance of 1,810,000 of our ordinary shares at an issue price of US$4.00 per share (equivalent to A$4.25 per share). Issue costs of A$1.3 million were incurred in relation to this share issue for broker fees and other professional services incurred in connection with the offer.

Indebtedness

As a result of the Reorganization Plans, we emerged from VA with no outstanding debt at the level of our parent company. Subsequent to our emergence from VA we have obtained corporate debt financing of A$ 2.0 million from shareholders and affiliates of management and accumulated trade creditor balances amounting to approximately A$0.2 million as of November 30, 2015, some of which are past due. Our direct trade creditors with deferred payment balances are cooperating to defer payments until we can realize subscriptions receivable or arrange other financing. However, there is no assurance that their cooperation will continue and we could be faced, without notice, with immediate payment obligations that we cannot meet. As of December 4, 2015, three of our subsidiaries, Parmac, GED and BlueNRGY LLC have obligations that are non-recourse to our Parent Company under separate secured credit facilities or deferred payment plans with trade creditors or both and, in the case of Parmac, finance leases undertaken for the purchase of motor vehicles, equipment and machinery as further described below. As part of the Reorganization Plans, our subsidiaries Parmac and Chatham Island Wind Limited issued Redeemable Preference shares with a face value of US$3,600,000 which are classified as non-current borrowings on our balance sheet (refer to Interest-bearing loans and borrowings – Note 18 in our audited financial statement at June 30, 2015).

Parmac

Working Capital Facility - secured: In April 2015 one of our subsidiaries, Parmac, secured a line of credit with an affiliate of our Managing Director (refer to Item 7.B. under the heading “Related Party Transactions”), for up to US$0.5 million, referred to as the Parmac Liquidity Facility, against which Parmac has drawn the maximum amount of funds available to meet its working capital needs. The Liquidity Facility had a term of four months and reverted to being a demand note in July 2015. The facility has a commitment fee of 7.5% of the principal amount and interest is charged at 1.0% per month on the outstanding balance for the first 90 days (or duration of the facility if shorter), 1.25% per month on the outstanding balance during the next month and 2.0% per month on any outstanding exposure thereafter (a default rate) until the loan is repaid. The Parmac Liquidity Facility is currently secured by a lien on all of the assets of Parmac except statutory liens and liens under finance leases, as described below.

Deferred Trade Obligations (unsecured): As of December 4, 2015, Parmac had outstanding A$0.2 million of significantly overdue trade accounts payable. These deferred payables are being paid down on an informal deferred payment arrangement. Our direct trade creditors with deferred payment balances are cooperating to defer payments until we can arrange other financing or generate sufficient operating cash flows to pay the outstanding balances. However, there is no assurance that their cooperation will continue and we could be faced, without notice, with immediate payment obligations that we cannot meet. In aggregate, Parmac maintained a positive working capital balance as of October 31, 2015 after giving effect to the Parmac Liquidity Facility.

Finance Leases (secured): We have obligations under various financing leases for equipment and motor vehicles aggregating A$0.2 million as of October 30, 2015. The lessors have a perfected senior security interest in the equipment or vehicles covered by the leases. The terms of the leases vary, with the longest scheduled to be retired in approximately 3 years. Required payments under our financing leases are generally monthly or quarterly. We recognize these financing lease obligations as debt on our balance sheet. As of June 30, 2015 A$0.1 million of the financing leases were recorded as current obligations and the remaining A$0.2 million finance lease balance was classified as non-current.

Redeemable Preference Shares (unsecured): On execution of the Reorganization Plans, Parmac issued 2,200,000 US$1.00 non-voting, redeemable preference shares (“RPS”). The Parmac RPS are convertible in into parent company Ordinary Shares in whole or in part at any time after June 30, 2015 at a price of US$0.03785 per share and are restricted to the extent that such conversion would result in any holder having more than 20% of the outstanding ordinary shares in the Company. RPS receive an annual dividend of 4% per annum payable on December 31 each year. If dividends cannot be paid in cash, further RPS will be issued to satisfy the dividend amount. RPS are redeemable by Parmac, in whole or in part, at our sole election. The holder of the RPS may, at its discretion, force redemption through the sale of Parmac if the RPS have not been converted or redeemed by December 31, 2017. The RPS are classified as a liability on the Statement of Financial Position as there exists an obligation for Parmac to deliver either cash or another financial asset to the holder at some point in the future. The face value of the Parmac RPS at December 4, 2015 is US$2,200,000.

GED

Working Capital Facility (secured): In November 2014 Washington H. Soul Pattinson & Co. Ltd. (WHSP) extended to one of our subsidiaries – Green Earth Developers LLC (GED) a secured line of credit for up to US$0.36 million, referred to as the GED Liquidity Facility, against which we drew funds to fund operations and working capital for GED during the VA process. As of April 30, 2015, the Company had drawn the maximum amount available under the GED Liquidity Facility. The Liquidity Facility is repayable within 10 days of a repayment demand. No demand for repayment has been made at the date of this report. The interest rate applicable to funds drawn under the Liquidity Facility is 6.00 percent per annum calculated on any drawn amounts. The GED Liquidity Facility is secured by a first lien on the assets of GED.

Deferred Trade Obligations (unsecured): As of April 30, 2015, our GED subsidiary had past due balances with a number of large trade creditors who were collectively owed US$0.5 million. We entered into Payment Plan Agreements with these trade creditors whereby GED committed to make 18 monthly payments to these creditors to satisfy the indebtedness. No interest or other charges are payable on the Payment Plan Agreements. As of December 4, 2015 GED was current on its payment obligations under the Payment Plan Agreements and balances had been reduced to US$0.3 million.

BlueNRGY LLC

Deferred Trade Obligations (unsecured): As of December 4, 2015, our BlueNRGY LLC subsidiary had past due balances with a number of trade creditors who were collectively owed US$0.2 million. We have entered into deferred payment arrangements with a number of these creditors and are in discussions with the largest creditor to settle the balance owing through the issuance of our shares.

Chatham Island Wind Limited (CIWL)

Redeemable Preference Shares (unsecured): On execution of the Reorganization Plans, CIWL issued 1,400,000 RPS. The RPS are convertible in into parent company Ordinary Shares whole or in part at any time after June 30, 2015 at a price of US$0.03785 per share and are restricted to the extent that such conversion would result in any holder having more than 20% of the outstanding ordinary shares in the Company; provided however, if the CIWL contract with CIEL is terminated, the CIWL RPS cannot be converted. The CIWL RPS receive an annual dividend of 4% per annum payable on December 31 each year. If dividends cannot be paid in cash, further RPS will be issued to satisfy the dividend amount. RPS are redeemable by Parmac, in whole or in part, at our sole election. The holder of the RPS may, at its discretion, force redemption through the sale of CIWL if the RPS have not been converted or redeemed by December 31, 2017. The RPS are classified as a liability on the Statement of Financial Position as there exists an obligation for CIWL to deliver either cash or another financial asset to the holder at some point in the future. The face value of the CIWL RPS at December 4, 2015 is US$1,200,000.

5.C. Research and Development

For our fiscal years 2013-2015 we did not conduct research and development.

5.D. Trend Information

Other than as disclosed elsewhere in this Report, we are not aware of any trends affecting our businesses. Refer to Item 4.B. under the heading “Our Industry”.

5.E. Off-Balance Sheet Arrangements

Except for amounts due under operating lease commitments disclosed below in Section F of this Item 5 we do not have any material off-balance sheet commitments or arrangements.

5.F. Tabular Disclosure of Contractual Obligations

As of December 4 2015 our contractual, obligations, excluding trade creditors, were as set forth below:

			Payments Due By Period
(Amount in A$ 000)	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Obligations under:
Operating leases		525		507		18		—		—
Financing leases		228		94		134		—		—
Borrowings and interest *		3,539		3,539		—		—		—
		4,292		4,140		152		—		—

* Excludes Redeemable Preference Shares as at December 4, 2015 there is no cash obligation associated with them

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

6.A. Directors and Senior Management

The following table presents our directors, executive officers and key employees as of the date of this Report.

Name	Age	Position
Executive Officers
William Morro	61	Managing Director (the equivalent of an American company’s chief executive officer) and Director
Richard Pillinger	41	Chief Financial Officer and Secretary
Emmanuel Cotrel	34	Senior Vice President
Peter Maros	28	Senior Vice President
Non-Executive Directors
Carlo Botto	54
Yves-Regis Cotrel	62

Executive Officers

William Morro. Mr. Morro was appointed to our Board in February 2014 and has served continuously in that capacity since then except for a brief interruption during the VA process when the Administrator assumed all governance responsibilities. Mr. Morro was appointed our Managing Director and Chairman on February 9, 2015. Mr. Morro is also a Managing Partner of the InterAmerican Group, a U.S. investment and advisory firm focused primarily on middle-market businesses with cross-border operations in North America and/or Latin America. He also currently serves as a member of the board of supervisors of JSC “Capital Bank” of Georgia and is Chairman of the Board of CNC Development Limited, a company with interests in the civil infrastructure sector in China, Prior to joining InterAmerican in 2001, Mr. Morro headed private equity business units for BMO Group and Heller Financial and was a Principal and shareholder of the international management consulting firm, Cresap, McCormick & Paget until shortly after its acquisition by Towers, Perrin. He holds an undergraduate degree from Dartmouth College and a Masters degree from the Kellogg Graduate School of Management at Northwestern University. Mr. Morro has three decades of senior executive and board experience with more than 20 companies, both public and private, in which he has been a direct investor.

Richard Pillinger. Mr. Pillinger is our Chief Financial Officer, having been appointed to this role in October 2011, and also served as our Corporate Secretary since May 2010. Immediately prior to joining the Company, Mr. Pillinger held positions with a number of WHSP affiliates, including portfolio Chief Financial Officer for Pitt Capital Partners Limited, BKI Investment Company and Souls Private Equity Limited and Chief Executive Officer of Corporate and Administrative Services Pty Ltd. WHSP is currently our second largest shareholder. Mr. Pillinger’s previous roles within other ASX listed companies include Group Finance Manager and Commercial Manager for Volante Group Limited and Commander Communications Limited, respectively. Mr. Pillinger has significant international business experience, having worked in accounting audit and advisory positions in London before relocating to Australia. Mr. Pillinger is a Fellow of the Institute of Chartered Accountants England & Wales and has a Bachelor of Science Degree from the University of Nottingham.

Emmanuel Cotrel. Since January 27, 2015, Emmanuel Cotrel has been a Senior Vice President and responsible for strategy and corporate development as well as serving as the senior executive officer of BlueNRGY LLC, one of the subsidiaries comprising our Monitoring & Performance Analytics business. Mr. Cotrel founded BlueNRGY LLC in 2012 and prior to that he was a co-founder and principal of an investment fund, L14 FCP SIF, affiliated with the Edmond de Rothschild Bank; the fund targeted investments in or acquisition of renewable energy infrastructure projects across Europe, specifically wind and solar power generation systems. Before co-founding BlueNRGY and L14, Mr. Cotrel was a co-founder of SeaMobile, Inc. (USA), currently an industry leader in global maritime telecommunications where he was active in acquisitions and other development matters until 2006. Prior to his involvement with SeaMobile, Mr. Cotrel worked in the International Private Banking division at HSBC Private Bank in New York. He is an active member of the US-based Cotrel Spinal Research Foundation and the France-based Yves Cotrel Foundation affiliated with the Institut de France. Mr. Cotrel graduated from IMIP MBA Institute (INSEEC business school in Paris, France) in 2004.

Peter J. Maros. Since September 1, 2015, Mr. Maros has been a Senior Vice President and responsible for our solar PV design and installation business in North America. In this capacity he also serves as the senior executive officer of GED. Prior to joining the Company, Mr. Maros was Executive Director of Shoals Technologies Group, a leading U.S. supplier of balance-of-system components for solar PV systems. Before that he co-founded the renewables group for Future Energy Solutions, a leading global distributor of electronics, including components for solar installations and served as the Renewable Energy Director. Previously he worked in investment banking for Merrill Lynch. Mr. Maros is a graduate of the Kelly School of Business at Indiana University.

Directors

Carlo Botto. Mr. Botto is a non-executive member of our Board. His affiliation with the Company began in 2011 when he served as a consultant. In 2012, he was appointed Senior Vice President of Strategy & Development and continued in an executive role until his resignation as an executive in 2014. In 2013, he was appointed as a Board member and has been a director continuously since then, with a brief interruption during our VA process when the Administrator assumed all governance responsibilities. Mr. Botto has extensive energy industry experience, having worked in various roles in the energy supply industry in Australia and North America over 30 years. These roles have included senior executive positions responsible for wholesale energy trading, retail marketing, corporate strategy, risk management and regulatory/corporate affairs. Immediately prior to joining the Company, Mr. Botto was a senior executive with CLP (0002.HK) working in Melbourne, Australia from 2004 to 2010. Mr. Botto has a Bachelor of Engineering (Electrical) from University of NSW and a Graduate Diploma in Engineering (Asset Management) from Monash University.

Yves-Regis Cotrel. Yves-Regis Cotrel has been a non-executive member of the Board since January 27, 2015. He is the Founder and, until his retirement in 2008, was President of Group Quietude, a real estate investment and operations firm with properties in Europe. From 1976 through his retirement in 2000 to form Group Quietude, Mr. Cotrel held senior executive positions first with the Sofamor Group, a world leader in manufacturing devices, equipment and biomaterials used in the treatment of spinal and cranial disorders, and then with its successor companies through various business combinations. In this capacity he developed distribution networks in more than 20 countries in Europe, the Middle East and Asia. Successor businesses to Sofamor Group included the Sofamor-Danek Group, which was formed through business combination with Danek USA and then Medtronic (NYSE: MDT) which merged with Sofamor-Danek Group in 1999. Mr. Cotrel holds a MSc in Management from IAE Lille and a Bachelor of Law degree from L’Ecole de Notariat de Paris.

Family Relationships

Mr. Yves-Regis Cotrel is the father of Mr. Emmanuel Cotrel. Aside from this, there are no family relationships between any of our directors or executive officers.

Arrangements

There are no known arrangements or understanding with any major shareholders, customers, suppliers or others pursuant to which any of our officers or directors were selected in their capacity as such.

Arrangements Concerning Election of Directors; Family Relationships

6.B. Compensation

The following table sets forth all of the compensation awarded to, earned by or paid to each individual who served as directors and executive officers in the fiscal year ended June 30, 2015.

	Short-term Benefits				Post- employment Benefits		Value of Share- based Payments
Amounts in A$	Salary and Fees		Other		Superannuation		Shares		Options		Total

Gerard McGowan – CEO and Chairman (until November 14, 2015) (i)		275,013		—		—		—		—		275,013
Todd Barlow – Director (ii)		—		—		—		—		—		—
William Morro – Director; CEO from January 28, 2015 (iii)		189,999		—		—		—		—		189,999
Carlo Botto - Director (iv)		34,390		—		3,610		—		—		38,000
John Chapple – Director (v)		—		—		—		—		—		—
John Donohue - Director(vi)		—		—		—		—		—		—
Yves-Regis Cotrel - Director (vii)		38,000		—		—		—		—		38,000
Richard Pillinger - Chief Financial Officer		246,975		—		23,446		—		—		270,241
Emmanuel Cotrel - Senior Vice President - Data Analytics and Monitoring (viii)		147,878		—		—		—		—		147,878

Patrick Lennon - Senior Vice President, Wind and Off Grid Solutions (ix)		172,694		5,762		16,039		—		—		194,495
James Greer - CEO of International Operations (x)		114,035		—		—		—		—		114,035
Total		1,218,984		5,762		43,095		—		—		1,267,841

Notes:

Voluntary leave of absence as of October 23, 2014, suspended as of November 14, 2015 and subsequently terminated as Managing Director by the Administrator; resigned as a director effective December 30, 2015.

ii.

Resigned effective July 18, 2014.

iii.

Stood down effective November 14, 2014 pursuant to the VA process; reinstated as a director effective January 27, 2015; appointed as Managing Director and Chairman of the Board effective February, 2015; salary amount includes accrued compensation that has been deferred and was not paid in our 2015 fiscal year.

iv.

Stood down effective November 14, 2015 pursuant to the VA process; reinstated as a director on January 27, 2015. Salary amount includes accrued compensation that has been deferred and was not paid in our 2015 fiscal year.

Director February 2 to June 16, 2015. Mr. Chapple did not receive any Director fees for the period of his tenure.

vi.

Director January 27 to July 31, 2015. Mr. Donohue did not receive any Director fees for the period of his tenure.

vii.

Director since January 27, 2015. Salary amount includes accrued compensation that has been deferred and was not paid in our 2015 fiscal year.

viii.

Executive since January 27, 2015. Salary amount includes accrued compensation that has been deferred and was not paid in our 2015 fiscal year.

ix.

Terminated January 27, 2015.

Terminated December 1, 2014.

Remuneration Policy

All key executives are eligible to receive a base salary, post-employment benefits (including superannuation), fringe benefits (including provision of a motor vehicle or the payment of a car allowance where necessary) and performance incentives, including equity-linked compensation. Performance incentives are generally only paid once predetermined key performance indicators have been met. Our executives and members of our Board based in Australia receive a superannuation guarantee contribution required by the government, which is currently 9.25% of base salary, and do not receive any other retirement benefits. Some individuals, however, have chosen to allocate part of their annual compensation to increase payments towards superannuation.

The employment terms and conditions for our executives and directors have historically been formalized in contracts of employment or service contracts. This has not typically been the case subsequent to the effectiveness of our Reorganization Plans, however, we expect to put in place formalized agreements with our key managers following reconstitution of our Board Compensation Committee. In those cases where employment agreements are applicable, termination payments are not payable upon resignation or under the circumstances of unsatisfactory performance.

The remuneration of directors and key executives is determined by the Compensation Committee or the full Board. It is our objective to review and adjust executive compensation and performance incentives on an annual basis, however, this was not achieved during our 2015 fiscal year or subsequently following the effectiveness of our Reorganization Plans. The Board’s policy is to remunerate non-executive directors at market rates for time, commitment and responsibilities. All remuneration paid to key management personnel is valued at the cost to the company and expensed.

Service Agreements

The following key executives have service agreements as follows:

Richard Pillinger is employed by BlueNRGY Group Limited as a permanent, full- time employee. Mr. Pillinger commenced his position with us in October 2011, with a base salary of A$272,500, inclusive of superannuation. He has a notice period of 3 months. The contract provides for a bonus upon meeting defined performance objectives mutually established by the executive and the Managing Director.

Emmanuel Cotrel is employed by BlueNRGY LLC as a permanent, full-time employee pursuant to an employment agreement that commenced June 14, 2014. Under his agreement, Mr. Cotrel is an at-will employee, however, if employment is terminated without cause, Mr. Cotrel would be entitled to six months of severance at his base salary. Base salary under the contract is $250,000 subject to a 6-month severance, which severance is increased to 12 months if the employer requires compliance with non-compete provisions of the contract which extend for a 12-month period. The contract provides for bonus payments of up to 100% of base compensation, subject to meeting targets set by the board.

Employee Equity Plan

On May 8, 2014, the Board adopted the 2014 Equity Plan that will serve as our primary employee share incentive plan. We have reserved 400,000 ordinary shares for issuance under the 2014 Equity Plan. The number of ordinary shares reserved under the 2014 Equity Plan is subject to adjustment in the event of a share split, share dividend or other change in our capitalization. Any other increase in the number of ordinary shares reserved under the 2014 Equity Plan must be approved by the Board and shareholders. If an outstanding award for any reason expires or is terminated or canceled without having been exercised or settled in full, or if the ordinary shares acquired pursuant to an award that are subject to forfeiture are forfeited without cost by the company, the ordinary shares allocable to the terminated portion of such awards or such forfeited ordinary shares shall again be available for issuance under the 2014 Equity Plan.

As long as we are a publicly held corporation within the meaning of Section 162(m) of the Code, no individual may be granted awards under our 2014 Equity Plan of more than 50,000 of our ordinary shares in any full fiscal year of the Company and for our fiscal year ending June 2014, no individual may be granted awards having a value of more than $200,000 at the time of grant.

The 2014 Equity Plan will be administered by the Compensation Committee of the Board. The Compensation Committee will have full power to select, from among the individuals eligible for awards, the individuals to whom awards will be granted, to make any combination of awards, and to determine the specific terms and conditions of each award, subject to the provisions of the 2014 Equity Plan.

The following types of awards may be granted under the 2014 Equity Plan:

Share Options. A share option is a right to acquire our ordinary shares. The Compensation Committee may grant non-qualified share options or “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). Incentive stock options only may be granted to our employees. If a share option intended to qualify as an incentive stock option does not so qualify it will be treated as a non-qualified share option.

The Compensation Committee will determine the terms of each share option. The exercise price of each share option may not be less than the fair market value of our ordinary shares on the date of grant. The term of each share option will be fixed by the Compensation Committee and may not exceed 10 years from the date of grant. Share options may vest and become exercisable upon continued service to the company or upon the achievement of certain performance criteria. The Compensation Committee will determine when each option may be exercised and other conditions applicable to the share option.

Share Appreciation Rights. A share appreciation right (SAR) is an award based upon a specified number of our ordinary shares that entitles the participant to receive a payment equal to the excess of the fair market value of our ordinary shares when the SAR is exercised over the exercise price of the SAR. The exercise price for each SAR will be determined by the Compensation Committee but may not be less than the fair market value of our ordinary shares on the date of grant. SARs may vest and become exercisable upon continued service to the company or upon the achievement of certain performance criteria. The Compensation Committee will determine when each SAR may be exercised, any other conditions applicable to it, and whether it will be settled in cash or our ordinary shares.

Restricted Share Awards. A restricted share award entitles the participant to subscribe for our ordinary shares, upon payment of no less than their nominal value, but the ordinary shares are subject to restrictions, which may include restrictions on transfer or forfeiture provisions. The Compensation Committee will determine whether such restrictions will lapse upon continued service to the company or upon the achievement of certain performance factors, and any other conditions applicable to the restricted shares.

Restricted Share Units. A restricted share unit represents the right to acquire one ordinary share on a specified date, subject to such conditions and restrictions as the Compensation Committee may determine, including continued service to the company or service with us through a specified vesting period or the attainment of certain performance criteria.

Performance Awards. Performance awards may be granted in the form of performance shares or performance units. A performance award is an award of a cash payment or an award denominated in our ordinary shares that is subject to the achievement of certain performance criteria. Our Compensation Committee will determine the performance criteria and any other conditions applicable to the award, and whether the award will be settled in cash or in our ordinary shares. For participants in the United States, the performance awards are intended to qualify as “performance-based remuneration” under Section 162(m) of the Code.

Other Share Awards. In addition to the awards described above, the Compensation Committee may carry out the purpose of the 2014 Equity Plan by awarding share-based awards as it determines to be in the best interests of the company and subject to such other terms and conditions as it deems necessary and appropriate.

Awards lapse upon the participant ceasing to be employed or engaged by us, with the exception that share options and share appreciation rights, to the extent vested and exercisable, may be exercised during a limited period of time after the participant leaves.

Awards granted under our 2014 Equity Plan may not be transferred in any manner other than by will or by the laws of descent and distribution, or as determined by our Compensation Committee.

The Compensation Committee may award dividend equivalent rights in respect of awards made under the 2014 Equity Plan, other than share options and share appreciation rights, but rights granted in respect of an award that is subject to vesting conditions will be subject to those vesting conditions.

Our Compensation Committee may not, without shareholder approval, re-price our outstanding share options or share appreciation rights.

In the event of a change in control of the Company, the outstanding awards may be treated as described below. For share options and share appreciation rights, the Compensation Committee may provide in any award agreement or, in the event of a change in control, may take such actions as it deems appropriate to provide for the acceleration of the vesting and exercisability of the share option or share appreciation rights in connection with the change in control. In addition, the surviving, continuing, successor, or purchasing corporation, as the case may be (the “Acquiring Corporation”), may, without the consent of the participant, either assume the company’s rights and obligations under the outstanding share options and share appreciation rights and substitute for the outstanding share options and share appreciation rights substantially equivalent share options or share appreciation rights for the Acquiring Corporation’s shares. Any share options or share appreciation rights which are neither assumed or substituted for by the Acquiring Corporation in connection with the change in control nor exercised as of the date of the change in control shall terminate as of the date of the change in control.

With regard to awards other than share options and share appreciation rights, the Compensation Committee may provide in any award agreement or, in the event of a change in control, may take such actions as it deems appropriate to provide for the acceleration or waiver of any applicable vesting condition, restriction period or performance criteria applicable to the award held by participant, whose service to the Company has not terminated prior to the change in control, effective immediately prior to the consummation of the change in control; provided, however, that such acceleration or waiver shall not occur to the extent such award is assumed or substituted with a substantially equivalent award by the Acquiring Corporation in connection with the change in control.

Our Board may suspend, amend or terminate the 2014 Equity Plan and our Compensation Committee may amend or cancel outstanding awards for purposes of satisfying changes in law or any other lawful purpose, but no such action may adversely affect rights under an award without the participant’s consent. Certain amendments to the 2014 Equity Plan may require the approval of our shareholders.

We anticipate that our 2014 Equity Plan will terminate ten years from the date our shareholders approve our 2014 Plan, unless earlier terminated by our Board as described above.

6.C. Board Practices

Independence

The Company defines director independence in accordance with the NASDAQ Listing Rules. The NASDAQ Listing Rules in turn allow the Company, as a foreign private issuer, to follow its home country practice in lieu of the requirements of the NASDAQ Listing Rules.

In Australia there are no mandatory corporate governance structures and practices that must be observed by any company. The ASX Corporate Governance Council (the “Council”) publishes the Corporate Governance Principles and Recommendations (the “Guidelines”) for those companies listed on the ASX. The Guidelines contain recommendations of eight core principles which are intended to be a reference point for companies in respect of corporate governance structures and practices. While it is not mandatory to follow the recommendations, companies listed on the ASX are required to disclose to shareholders in their annual report the extent to which the company has followed the recommendations and, if the recommendations have not been followed, the reasons for not following them.

As the Company is not listed on the ASX, this Report does not contain the corporate governance statement required by the Guidelines disclosing the extent to which the Company has followed each recommendation set by the Council. Rather, this Report only contains references to the recommendations the Company considered when setting its corporate governance policies.

Under the Guidelines, if an executive has been an executive of a Company within the last three years, it is a factor that indicates such person is not independent. However, the Guidelines also give the Board express latitude to assess the relationship of each Board member to the Company and to make a determination about whether such Board member is independent, most notably in respect of audit committee service.

The Board has assessed Mr. Botto's relationship with the Company and determined him to be independent, having considered that:

●

Executive management in place during Mr. Botto's tenure as an employee is no longer associated with the Company.

●

Much of Mr. Botto's activity was related to the Company's Wind Development business, which has been discontinued as a result of the VA.

●

Mr. Botto's role during 2013 and 2014 was not full time and was a functional one involving objective assessment of industry and competitive dynamics; he had no association with preparation of Company financial statements.

●

Historical and contractual ties between the Company and material vendors that originated during Mr. Botto's executive tenure were terminated as a result of the VA.

●

Mr. Botto has no identifiable vested interests in Company affairs that would affect his independence.

Audit Committee

On February 9, 2015, Mr. Donohue and Mr. Botto were appointed to the Audit Committee, Mr. Morro resigned as a member of the Audit Committee, and Mr. Donohue was appointed as the Audit Committee Chairman. However, due to Mr. Donohue’s resignation from the Board on July 31, 2015, Mr. Botto is the only member of the Audit Committee as of the date of this Report.

Compensation Committee

On February 9, 2015, Mr. Chapple and Mr. Donohue were appointed to the Compensation Committee and Mr. Morro resigned as a member of the Compensation Committee. However, Mr. Chapple resigned from the Board on June 16, 2015 and Mr. Donohue resigned from the Board on July 31, 2015. Until replacement members of the Committee can be appointed, matters previously delegated to the Compensation Committee are being considered by the full Board.

6.D. Employees

As of December 4, 2015, we employed approximately 102 employees world-wide being predominantly full-time, permanent employees. Our employees are supported from time-to-time by consultants and contractors, the number of which varies. The breakdown of employees at the end of each of our last three fiscal years and as of December 4, 2015 per division is:

	Number of Employees
	As of June 30,						As of December 4,
Business Segment	2015		2014		2013		2015
Head office		6		11		12		5
Solar PV		15		26		30		9
Large-scale wind		1		5		4		1
CapTech		—		18		18		—
Parmac		60		50		63		62
Data Monitoring/O&M		5		—		—		25
Total		87		127		130		102

Of our 102 employees as of December 4, 2015, 71 were located in Australia and 31 were in the United States. In addition, we engage specialist consultant and temporary personnel from time to time as required to meet the needs of our businesses.

We believe that our relations with employees are good and we have not experienced any significant labor stoppages or disputes. Except for approximately 35 employees of Parmac, our employees are not represented by labor unions or covered by collective bargaining agreements

6.E. Share Ownership

Beneficial Ownership of Senior Management and Directors

Beneficial ownership is determined in accordance with the rules of the U.S. Securities and Exchange Commission, and generally includes voting or investment power with respect to securities. Ordinary shares relating to options currently exercisable or exercisable within 60 days of the date of the table below are deemed outstanding for computing the percentage of the person holding such securities but are not deemed outstanding for computing the percentage of any other person. Except as indicated by footnote, and subject to community property laws where applicable, the persons named in the table below have sole voting and investment power with respect to all shares shown as beneficially owned by them.

The following table presents certain information regarding the beneficial ownership of our ordinary shares as of December 4, 2015 by:

●

each person known by us to be the beneficial owner of more than five percent (5%) of our ordinary shares;

●

each of our directors;

●

each of our named executive officers; and

●

all of our current directors and executive officers as a group.

Name and Address of Beneficial Owner (1)	Shares
	Number		Percentage (2)
Washington H. Soul Pattinson & Company Limited (3)		82,266,543		17.83	%
ESOL B.V. (4)		42,272,127		9.16	%
Alpha Capital Anstalt (5)		36,329,822		7.87	%
Directors and Executive Officers
Mr. Carlo Botto (6)		1,575,219		0.34	%

Mr. Emmanuel Cotrel (7)		32,561,336		7.064	%

Mr. Yves-Regis Cotrel (7)(8)		61,440,622		13.31	%

Mr. William Morro (9)		23,382,496		5.07	%

Mr. Richard Pillinger		5,000,000		1.08	%

Executive officer (as defined by Rule 3b-7 of the Securities and Exchange Act of 1934) and directors as a group (5 persons, including the executive officer and directors names above) (10)		116,529,292		25.25	%

(1)

Unless otherwise indicated, the address for each of the shareholders is c/o BlueNRGY Group Limited, 32 Martin Place, 11^th Floor Sydney, NSW 2000.

(2)

The applicable percentage of ownership for each beneficial owner is based on 461,444,980 ordinary shares outstanding as of December 4, 2015. In calculating the number of shares beneficially owned by a shareholder and the percentage of ownership of that shareholder, ordinary shares issuable upon the exercise of options or warrants, or the conversion of other securities held by that shareholder, that are exercisable within 60 days, are deemed outstanding for that holder; however, such shares are not deemed outstanding for computing the percentage ownership of any other shareholder.

(3)

Address of the shareholder is GPO BOX 479, Sydney, NSW 2001

(4)

Address of the shareholder is c/o Zala Group LLC (U.S. Agent), 110 E. Broward Blvd Suite 1900, Fort Lauderdale, FL 33301; number of shares includes all shares owned by G. Armenta, an affiliate of shareholder.

(5)

Address of the shareholder is Pradefant 7, 9490 Furstentums, Faduz, Lichtenstein

(6)

Includes all shares owned by Mr. Botto’s spouse, the beneficial ownership of which is disclaimed.

(7)

Includes all shares owned by Ryames Investment Company LLC (7,430,381 ordinary shares). Ryames Investment Company LLC is an affiliate of both Mr. Emmanuel Cotrel and Mr. Yves-Regis Cotrel.

(8)

Includes shares owned by Mr. Yves-Regis Cotrel’s spouse, the beneficial ownership of which is disclaimed.

(9)

Includes shares owned by WHI, Inc Retirement Savings Plan Trust, of which Mr. Morro is the beneficial owner.

(10)

Shares owned by Ryames Investment Company LLC are counted only once in the total for our executive officers and directors as a group.

ITEM 7 MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

7.A. Major Shareholders

Six shareholders known to us owned beneficially more than 5% of our ordinary shares as of December 4, 2015. See Item 6.E under the heading “Beneficial Ownership of Senior Management and Directors”.

As of December 4, 2015, we estimate that 27.0% of our ordinary shares were held in the United States by 80 holders of record, and 73.0% of our ordinary shares were held in various foreign jurisdictions by 2,565 holders of record. None of the holders of our ordinary shares has different rights from other shareholders.

7.B. Related Party Transactions

Other than direct payments of compensation and reimbursement of out-of-pocket expenses incurred in the ordinary course and in accordance with our policies, during our 2015 fiscal year and subsequently through the date of this Report, other than as disclosed below, we have not entered into any transactions or loans between us and any (a) enterprises that directly or indirectly through one or more intermediaries, control or are controlled by, or are under common control with us; (b) associates; (c) individuals owning, directly or indirectly, an interest in our voting power that give them significant influence over us, and close members of any such individual’s family; (d) our key management personnel and directors and close members of such individuals’ families; or (e) enterprises in which a substantial interest in the voting power is owned, directly or indirectly, by any person described in (c) or (d) or over which such person is able to exercise significant influence. The value of the consideration ascribed to these transactions, including the exchange value for our ordinary shares at the time the transactions occurred was at the amounts agreed to by parties and approved by our Board. We believe that all of these transactions were conducted on terms substantially equivalent to, or no less favorable to the Company, than those that would have been established for similar transactions with non-affiliated parties.

During the period from July 1, 2015 through December 4, 2015:

●	Between July 1, 2015 and the date of this report, affiliates of our Managing Director, Mr. Morro, have made cash advances to us in the aggregate amount of $619,991 to pay certain of our operations expenses. The amounts advanced have not been repaid as of the date of this Report and are included in the amounts payable under the MD Affiliate Note described in Item 8.B. under the heading “(b) – Financing”.

●	On November 30, 2015, our Managing Director, Mr. Morro, agreed to accept, and our Board unanimously approved, the issuance of our ordinary shares, at price per share of $0.03785, subject to adjustment for share splits and consolidations, in exchange for the following amounts accrued by us: (i) $148,656 , representing 100% of the compensation payable to him by the Company from the effective date of our Reorganization Plans through June 30, 2015 plus (ii) $43,750, representing 50% of the compensation payable to him by the Company from July 1, 2015 through September 30, 2015. Our commitments to pay the remainder of Mr. Morro’s unpaid compensation have been documented in a separate agreement, the MD Deferred Compensation Agreement, effective November 30, 2015. Pursuant to the MD Deferred Compensation Agreement, until his deferred compensation is paid, Mr. Morro has also been granted the right to exchange any or all of such amounts for our ordinary shares at a price per share of $0.03785, subject to adjustment for share splits and consolidations. A tax-gross-up applies to compensation paid in the form of our ordinary shares.

●	Affiliates of William Morro, our Managing Director, acted as escrow agent, without compensation, for the collection of equity offering participations totaling $3,000,000 in connection with purchases of our equity securities by investors who are not affiliates of Mr. Morro.

●	Between July 1, 2015 and the date of this Report, Mr. Morro has incurred expenses for travel and made disbursements for operating expenses incurred on our behalf. In aggregate, we have accrued an aggregate of A$30,000 for such expenses incurred by Mr. Morro thus far during our 2016 fiscal year. Through the date of this Report, we have reimbursed A$Nil to Mr. Morro for such expenses and expect to reimburse the remainder as soon as practicable, subject to completion of our internal review procedures. Amounts actually reimbursed to Mr. Morro may differ from the amounts accrued.

●	On November 30, 2015, our Senior Vice President Emmanuel Cotrel, agreed to accept, and our Board unanimously approved, the issuance of our ordinary shares, at price per share of $0.03785, subject to adjustment for share splits and consolidations, in exchange for $145,883, representing 100% of the compensation payable to him by BlueNRGY through December 31, 2014. His compensation for calendar year 2015 has been deferred and, unless previously paid by the Company may be exchanged by Mr. Cotrel for our ordinary shares at a price per share of $0.03785, subject to adjustment for share splits and consolidations. Our commitments to pay the remainder of Mr. Cotrel’s unpaid compensation and his right to exchange such amount for our ordinary shares is documented in an agreement, the EC Deferred Compensation Agreement, effective November 30, 2015.

During the fiscal year ended June 30, 2015:

●

Between July 1, 2014 and his voluntary leave of absence on October 23, 2014, the Company and its subsidiaries made a series of payments to a Director, Mr. McGowan, totaling $121,900 and that were outside of the Company’s customary approval processes. Such payments were purported by Mr. McGowan to be for reimbursement of costs incurred on behalf of the company and paid by himself. The Company has not been provided with adequate documentation by Mr. McGowan to determine whether or not these costs represent bona fide costs incurred on behalf of the Company. These payments have been recognized as an expense in our fiscal year 2015.

●

In April 2015 one of our subsidiaries, Parmac, secured a line of credit with an affiliate of our Managing Director, Mr. William Morro, for up to US$0.5 million, referred to as the Parmac Liquidity Facility, against which we have drawn funds to meet working capital needs of Parmac. As of May 29, 2015, the Company had drawn $499,000 under the Parmac Liquidity Facility. The Liquidity Facility has matured and is repayable on demand, although no demand has been issued as of the date of this Report. . The facility included a commitment fee payable by the Parmac of 7.5% of the principal amount and interest was charged at 1.0% per month on the outstanding balance for the first 90 days, 1.25% per month on the outstanding balance during the next month and 2.0% per month on any outstanding amount due thereafter (a default rate) until the loan is repaid. The Parmac Liquidity Facility is secured over the trade receivables of Parmac.

●

Some of our Directors, or their related entities, subscribed to purchase our ordinary shares under a Securities Purchase Agreement as follows:

Director	Subscription Amount US$		Subscription PricePerShare US$		Number of Ordinary Shares Issued
Mr. John Chapple	$	500,000	$	0.03785		13,210,040
Mr. Yves-Regis Cotrel	$	450,000	$	0.03785		11,889,036
Mr. William Morro	$	600,000	$	0.03785		15,852,048

●

Some of our Directors, Associate Directors and Executives, or their related entities, who were shareholders in BlueNRGY LLC at the time we acquired it, were issued our ordinary shares under the Purchase Agreement as shown in the table immediately below. This transaction occurred before these individuals were appointed to the Board or became Executives of the Company:

Director	Number of Ordinary Shares Issued
Mr. Yves-Regis Cotrel *		36,285,377
Mr. John F. Donohue		7,722,918
Mr. Emmanuel Cotrel		19,130,955
Mr. William Marks		12,951,743

* Included in the shares issued to Mr. Yves-Regis Cotrel were 7,965,997 shares issued in exchange for a loan of US$301,513 Mr. Cotrel had provided to BlueNRGY LLC prior to its acquisition by us. The exchange price was US$0.03785 per share.

●

Pursuant to the BlueNRGY LLC share purchase agreement the following shares were allocated to some of our Directors and Executives in January 2015 (or upon their appointment if later) as follows:

	Number of Ordinary Shares Issued
Directors
William Morro		7,500,000
Carlo Botto		1,500,000
John Chapple		850,000
John Donohue		850,000
Yves-Regis Cotrel		850,000

Executive
Richard Pillinger		5,000,000
Emmanuel Cotrel		6,000,000

●

In March 2015, Mr. Emmanuel Cotrel was paid $36,203 for amounts owed to him by BlueNRGY LLC at the time of its acquisition by us.

●

In March 2015, an affiliate of Mr. Emmanuel Cotrel and Mr. Yves-Regis Cotrel was paid $25,419 for amounts owed to their affiliate by BlueNRGY LLC prior to its acquisition by us.

●

In March 2015, an affiliate of Mr. Morro was paid $10,553 in repayment of a loan made to BlueNRGY LLC prior to its acquisition by us.

●

In December 2014 and January 2015, an affiliate of our Managing Director, Mr. Morro, made cash advances to the Administrator on our behalf in the total amount of $58,590. These amounts were advanced to pay certain of our expenses in connection with the preparation of the DOCA and interim operations thereunder. The amounts advanced have not been repaid as of the date of this Report and are included in the amounts payable under the MD Affiliate Note described in Item 8.B. under the heading “(b) – Financing”.

●

Between our exit from VA and June 30, 2015, affiliates of our Managing Director, Mr. Morro, made cash advances to us in the total amount of $284,000 to pay certain of our operations expenses. The amounts advanced have not been repaid as of the date of this Report and are included in the amounts payable under the MD Affiliate Note described in Item 8.B. under the heading “(b) – Financing”.

●

Affiliates of William Morro, our Managing Director, acted as escrow agent, without compensation, for the collection of equity offering participations totaling $1,500,000 in connection with the consummation of our Reorganization Plans and subsequent purchases of our equity securities by investors who are not affiliates of Mr. Morro.

●

During our 2015 fiscal year, Mr. Morro incurred expenses for travel and made disbursements for operating expenses incurred on our behalf. In aggregate, we accrued an aggregate of A$90,000 for such expenses incurred by Mr. Morro for our 2015 fiscal year. Through the date of this Report, we have reimbursed A$Nil to Mr. Morro for such expenses and expect to reimburse the remainder as soon as practicable, subject to completion of our internal review procedures. Amounts actually reimbursed to Mr. Morro may differ from the amounts accrued.

7.C. Interests of Experts and Counsel

Not applicable

ITEM 8. FINANCIAL INFORMATION

8.A. Consolidated Statements and Other Financial Information

Financial Statements

Our financial statements are stated in Australian Dollars (A$) and are prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

See our audited financial statements for the fiscal years ended June 30, 2015 and June 30, 2014 included under Item 18 of this annual report.

Legal Proceedings

In December 2014, a class action securities suit was filed in a federal court in the Eastern District of Texas against the Company and various current and past officers and directors, namely Mr. William Morro, Mr. Carlo Botto, Mr. Richard Pillinger, Mr. Todd Barlow, Mr. Gerard McGowan and Mr. James Greer, as well as various third parties. The lawsuit was subsequently amended to include as a defendant CBD Energy USA Limited, one of our U.S. subsidiaries. Mr. Morro, formerly a non-executive independent director currently serves as Chairman of the Company’s Board and its Managing Director (the Australian entity equivalent of a CEO); Mr. Botto continues as a non-executive member of the Board; and Mr. Pillinger is the Company’s CFO. The other individuals named as parties to the lawsuit are no longer associated with the Company. This lawsuit is still pending with respect to the former officers and directors and our U.S. subsidiary and we believe that those parties intend to defend themselves vigorously. The DOCA had the effect of extinguishing the direct claims against the Company in this action, however, the possibility remains that the plaintiffs will endeavor to press their claims in jurisdictions outside Australia. It is impossible to estimate the outcome or the costs to us of such an action if it were to occur.

In December 2014, a different lawsuit was filed in New York State Supreme Court by one of the holders of Series B Preferred Shares against the Company and Messrs. Morro, Botto, and McGowan. This action was withdrawn without prejudice in April 2015, but prior thereto Mr. Morro and Mr. Botto entered into a settlement with respect only to themselves in their capacity as directors that precludes the plaintiff reasserting the suit against them except in the case that plaintiff is itself sued in connection with losses suffered on the investment. The suit can be reasserted again at any time against Mr. McGowan or other competent officers or directors or against us. Although the DOCA had the effect of extinguishing the claims against us in this action, the possibility remains that the plaintiffs could endeavor to press their claims in jurisdictions outside Australia. It is impossible to estimate the outcome or cost to us of such an action were it to occur.

We are not currently a party to any other material legal proceedings. We are from time to time subject to claims and litigation arising in the ordinary course of business. We intend to defend vigorously against any future claims and litigation.

8.B. Significant Changes

The following material events have occurred subsequent to June 30, 2015 on the dates indicated:

(a) Transactions

On September 16, 2015, in a transaction referred to as the Draker Transaction, we acquired the monitoring platform, accounts receivable, inventory, plant, property and equipment and certain other assets of Draker, Inc. and Draker Laboratories, Inc. (together “Sellers”), including the Draker name, trademark, and all copyrights then owned by the Sellers. Refer to Item 4.A. under the heading “Recent Acquisitions”.

(b) Financing

During our reorganization process and subsequent to the effectiveness of the Reorganization Plans, affiliates of William Morro, our Managing Director, have made cash advances to us to fund our operations (refer to Item 7.B. under the heading “Related Party Transactions”). Effective November 30, 2015 we entered into an agreement unanimously approved by our Board, referred to as the MD Affiliate Note, regarding the terms for such advances and, subject to Board approval, future advances from Mr. Morro and his affiliates. The MD Affiliate Note establishes an outside repayment date for the funds advanced of July 30, 2016, sets the rate of interest at 15% per annum from the date of any advance through the repayment date, provides for the Company to repay any or all of the outstanding principal at any time and, until repaid by the Company, grants our Managing Director the right to exchange any or all of the outstanding amounts payable under the note for our ordinary shares at a price per share of $0.03785, subject to adjustment for share splits and consolidations. The foregoing summary description is qualified in its entirety by the terms of the MD Affiliate Note filed with this Report as an Exhibit.

In addition to the MD Affiliate Note, Mr. Morro’s agreement to accept our ordinary shares in exchange for $192,406 of compensation due to him was conditioned on the Company agreeing to (i) make an incremental cash payment to him prior to April 15, 2016, referred to as a Gross-up Payment, sufficient to pay the cash taxes he would expect to incur as a result of the arrangement to compensate him in shares instead of cash and (ii) terms under which we would pay, on a deferred basis, the remainder of the compensation due to him through December 31, 2015, subject to a right, until the deferred compensation amounts are paid, for him to elect to receive ordinary shares in lieu of cash. The foregoing arrangements related to Mr. Morro’s compensation are documented in the MD Deferred Compensation Agreement, unanimously approved by our Board, and a copy of which is filed with this Report as an Exhibit.

The compensation due to Mr. Emmanuel Cotrel under his employment agreement (refer to Item 6.B. under the heading “Compensation”) and for a brief period prior to the inception of the employment agreement has been deferred. As of June 30, 2015 our financial statements reflected an accrual of $270,883 pertaining to compensation payable to Mr. Cotrel. Effective November 30, 2015 we entered into the EC Deferred Compensation Agreement with Mr. Cotrel (refer to Item 7.B. under the heading “Related Party Transactions”) pursuant to which we committed to (i) issue ordinary shares at a price per share of $0.03785 in exchange for 100% of the unpaid compensation due to him from BlueNRGY LLC through December 31, 2014 ($145,883) and (ii) pay, on a deferred basis, the remainder of the compensation due to him through December 31, 2015, subject to a right, until the deferred compensation amounts are paid, for him to elect to receive ordinary shares in lieu of cash.

(c) Other

Listed Status and Trading

Our ordinary shares were delisted from The NASDAQ Capital Market with effect from August 3, 2015.

On September 9, 2015, FINRA, the Financial Industry Regulatory Authority approved our shares for trading in the over-the-counter market (OTC Markets) under the ticker symbol CBDEF.

(d) Issuance and Repurchases of Ordinary Shares and Other Equity-Linked Securities

As of June 30, 2015 we had outstanding 409,925,825 ordinary shares. Subsequent thereto, through the date of this Report, we issued 51,519,155 ordinary shares pursuant to applicable exemptions from registration: all such shares were issued through subscription agreements having terms substantially equivalent to that filed in connection with capital raised to consummate the DOCA, including a price of $0.03785 per ordinary share.

In addition to ordinary shares issued at the Offering Price, certain holders of our Series B Preferred shares elected to convert 2,484 Series B Preferred Shares plus dividends accrued thereon into our ordinary shares at the stated conversion price of $0.05015125 per ordinary share. In satisfaction of the foregoing Series B Preferred Share conversions we have issued 51,448,606 ordinary shares. 600 Series B Preferred Shares remained outstanding as of this Report.

As of the date of this Report, we had 461,444,980 ordinary shares outstanding.

In addition to the issued and outstanding ordinary shares our Board has approved the issuance of 13,286,972 additional shares as follows and expects to issue them as soon as practicable following our pending share consolidation, if not before:

5,083,382 ordinary shares to Mr. Morro in lieu of cash compensation due to him for his services between January 27, 2015 and September 30, 2015 (Refer to Item 7.B. under the heading “Related Party Transactions”);

ii.

3,854,240 ordinary shares to Mr. Emmanuel Cotrel in lieu of cash compensation due to him for his services to BlueNRGY LLC and us through June 30, 2015. (Refer to Item 7.B. under the heading “Related Party Transactions”);

iii.

3,849,350 ordinary shares to be issued to 84 of our employees, some of which are expected to be issued under our 2014 Equity Plan and will be subject to vesting; and

iv.

500,000 ordinary shares to vendors in consideration for services rendered or in exchange for indebtedness.

In conjunction with the Draker Transaction we also (i) issued convertible preferred shares in our subsidiary, Draker Corporation, referred to as Draker Preferred and (ii) issued warrants, to acquire our ordinary shares, referred to as Draker Warrants. The Draker Preferred issued in conjunction with the Transaction has a face value of $1,000,000 and is convertible by the holder at any time into our ordinary shares at a conversion price of $0.03785 per ordinary share. The holder of the Draker Preferred was granted an incremental investment right to purchase an additional $1,000,000 of Draker Preferred at any time prior to December 31, 2015 and as of the date of this Report has exercised such right with respect to $500,000, bringing the total face value of the Draker Preferred to $1.5 million. There are 26,420,079 Draker Warrants outstanding and each allows the holder to acquire one of our ordinary shares for $0.05678 per ordinary share through the warrant expiration date of December 31, 2018, subject to the Company’s right to repurchase each warrant for $0.001 once the 60-day VWAP of our ordinary shares exceeds 175% of the exercise price and the average daily trading volume during such period exceeds $100,000. This summary description of the warrant terms is qualified in its entirety by the terms of the warrant agreement, a copy of which is filed as an exhibit to this Report.

(e) Entry into Other Material Definitive Agreements

As noted above in (a) – Transactions, we entered into a definitive agreement on September 16, 2015 pursuant to which we acquired the monitoring platform, accounts receivable, inventory, plant, property and equipment and certain other assets of Draker, Inc. and Draker Laboratories, Inc. (together “Sellers”), including the Draker name, trademark, and all copyrights then owned by the Sellers. For additional information regarding the Draker Transaction, refer to Item 4.A. under the heading “Recent Acquisitions”.

As further described in Item 10.C. “Material Contracts”, in July 2015 and October 2015 we entered into executory contracts with PESCO to design and install solar PV generating systems having an aggregate capacity of approximately 45MW – DC.

(f) Board and Executive Changes

Mr. John H. Chapple and Mr. John F. Donohue resigned as members of the Board on June 16, 2015 and July 31, 2015 respectively.

Effective June 5, 2015, Mr. Donald Reed, the senior executive at GED resigned. On September 1, 2015, Peter Maros was hired as a Senior Vice President of the Company overseeing our Solar PV design and installation business in North America. In this capacity he also serves as the senior executive officer of GED.

ITEM 9. THE OFFER AND LISTING

9.A. Offer and Listing Details

Australian Securities Exchange

Our ordinary shares traded on the ASX under the symbol CBD from 1989 through January 31, 2014. We were, however, suspended from trading on ASX on October 8, 1998. In calendar year1999 we had nominal non-cash assets and we had nominal operations. We resumed trading on ASX on April 18, 2000.The following table sets forth, for the periods indicated, the high and low market quotations for our ordinary shares as quoted on the ASX.

	CBD Ordinary Share Closing Prices
	A$
	High		Low
Fiscal Year
2010		0.1950		0.0750
2011		0.2000		0.0960
2012		0.1450		0.0400
2013		0.0460		0.0060
2014		0.0160		0.0080

Fiscal Year 2013
First Quarter		0.0460		0.0310
Second Quarter		0.0300		0.0150
Third Quarter		0.0330		0.0160
Fourth Quarter		0.0180		0.0060
Fiscal Year 2014
First Quarter		No market activity – trading suspended
Second Quarter		0.0160		0.0080
Third Quarter		0.0160		0.0110

OTC Markets

As further described below under Item 9.C. “Markets”, our ordinary shares traded on the OTC Markets from February 10, 2014 until June 13, 2014 under the ticker symbol CBDNF and from September 9, 2015 through the date of this Report under the ticker symbol CBDEF. The following table sets forth, for the periods indicated, the high and low market quotations for our ordinary shares as quoted on the OTC Markets.

	CBD Ordinary Share Closing Prices
	US$
	High		Low
Fiscal Year 2014
Third Quarter		10.00		4.00
Fourth Quarter		18.00		3.00

Month (2015)
September		0.8000		0.0601
October		0.1998		0.0600
November		0.1400		0.0800

The NASDAQ Capital Market

Our ordinary shares began trading on The NASDAQ Capital Market on June 13, 2014. Trading was suspended on November 13, 2014 following commencement of the VA process. As further described below under Item 9.C “Markets”, our shares were delisted from the NASDAQ Capital Market effective August 3, 2015. The following table sets forth, for the periods indicated, the high and low market closing price for our ordinary shares as quoted on The NASDAQ Capital Market.

	CBD Ordinary Share Closing Prices
	US$
	High		Low
Fiscal Year 2014
Fourth Quarter		4.00		3.40

Fiscal Year 2015
First Quarter		4.00		2.19
Second Quarter		2.56		0.84
Third Quarter		No market activity – trading suspended

Month (2014 and 2015)
December – August		No market activity – trading suspended

100

9.B. Plan of Distribution

Not applicable.

9.C. Markets

Our ordinary shares were listed on the Australian Stock Exchange, or ASX, from 1989 through January 31, 2014, when we voluntarily delisted them in connection with our U.S. listing. Our ordinary shares traded on the OTC Markets from February 10, 2014 until June 13, 2014 under the ticker symbol CBDNF, and began trading on The NASDAQ Capital Market on June 13, 2014 but trading was suspended on November 13, 2014 following commencement of the VA process. Due to concerns of The NASDAQ about whether we met and continue to meet the listing requirements, our shares were delisted from the NASDAQ Capital Market with effect from August 3, 2015. On September 9, 2015 our ordinary shares resumed trading in the over-the-counter market (OTC Markets) under the ticker CBDEF. We have an application pending with the NASDAQ Capital Market to relist our shares on that exchange and we are endeavoring to complete the steps necessary to demonstrate that we have regained compliance with the applicable NASDAQ listing requirements. However, there can be no assurance that our ordinary shares will be approved to trade on The NASDAQ Capital Market.

9.D. Selling Shareholders

Not applicable.

9.E. Dilution

Not applicable.

9.F. Expense of the Issue

Not applicable.

ITEM 10. ADDITIONAL INFORMATION

10.A. Share Capital

Not applicable.

10.B. Memorandum and Articles of Association

Information relating to our Constitution is incorporated by reference to the Registration Statement on Form F-1 (File No. 333-194780), as filed with the SEC on March 25, 2014.

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10.C. Material Contracts

Substantially all of the material executory contracts of our parent company were terminated in the VA process, including the license and trademark agreements with Westinghouse Electric Corporation for use of the Westinghouse brand in connection with our solar sales. In conjunction with our emergence from VA, we entered into an acquisition agreement with the shareholders of BlueNRGY LLC and subscription agreements with various investors who provided funds for our recapitalization (refer to Item 4.A. under the heading “Voluntary Administration and Deed of Company Arrangement” and Item 8.B. under the heading “Issuance and Repurchase of Ordinary Shares and Other Equity-Linked Securities” and the exhibits to our reports on Form 6-K/A filed on January 29, 2015 and Form 6-K on November 12, 2015). We retained the rights to collect installment payments related to our Larkden Technology (refer to Item 4.B. under the heading “Description of our Business Segments -- Energy Efficiency -- Remote Area Power Systems (RAPS)”), although we are obligated under the DOCA to remit payments received to WHSP. Following the Draker Transaction, our parent company guaranteed certain obligations of our subsidiary, Draker Corporation, under a contract manufacturing agreement entered into with Kalow Technologies LLC that require Draker Corporation to make setup payments of approximately $0.3 million prior to December 31, 2015.

Our operating subsidiaries routinely enter into contracts and purchase orders with customers for the performance of solar and climate installations and data management and O&M services. With the exception of contracts between GED and Panasonic Enterprise Solutions Company, or PESCO, pursuant to which GED has agreed to install seven solar PV power plants having a nameplate capacity of approximately 45MW DC, these contracts are not individually material. The form of master contract with PESCO is attached as an exhibit to this Report. In addition, the CIWL contract is material to us but termination may have been triggered by the VA process (refer to “Description of our Business Segments -- Energy Efficiency -- Remote Area Power Systems (RAPS)”).

10.D. Exchange Controls

Australia has largely abolished exchange controls on investment transactions. The Australian dollar is freely convertible into U.S. dollars or other currencies. In addition, there are currently no specific rules or limitations regarding the export from Australia of profits, dividends, capital or similar funds belonging to foreign investors, except that certain payments to non-residents must be reported to the Australian Cash Transaction Reports Agency, which monitors such transaction, and amounts on account of potential Australian tax liabilities may be required to be withheld unless a relevant taxation treaty can be shown to apply and under such there are either exemptions or limitations on the level of tax to be withheld.

The Foreign Acquisitions and Takeovers Act 1975 and Corporations Act 2001

Under Australian law, in certain circumstances foreign persons are prohibited from acquiring more than a limited percentage of the shares in an Australian company without approval from the Australian Treasurer. These limitations are set forth in the Australian Foreign Acquisitions and Takeovers Act 1975, or the Foreign Takeovers Act. Australia’s Foreign Investment Policy (Policy) operates alongside the Foreign Takeovers Act and places further limitations on foreign acquisitions. Although the Policy does not have the force of law, the Treasurer will refer to it in making decisions under the Foreign Takeovers Act. Further, non-compliance can lead to negative impacts such as negative views on future FIRB applications and strained relations between the company and the government.

Under the Foreign Takeovers Act, as currently in effect, any foreign person, together with associates, or parties acting in concert, is prohibited from acquiring 15% or more of the shares in any company having total assets of A$248 million or more (or A$1,078 million or more in case of U.S. investors in non-sensitive sectors) without the Australian Treasurer’s prior approval. “Associates” is a broadly defined term under the Foreign Takeovers Act and includes:

●		spouses, lineal ancestors and descendants, and siblings;

●		partners, officers of companies, the company, employers and employees, and corporations;

●		their shareholders related through substantial shareholdings or voting power;

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●		corporations whose directors are controlled by the person, or who control a person; and

●		associations between trustees and substantial beneficiaries of trust estates.

In addition, if a foreign person acquires shares in a company having total assets of A$248 million or more (or A$1,078 million or more in case of U.S. investors) and, as a result of that acquisition, the total holdings of all foreign persons and their associates will exceed 40% in aggregate, seeking approval for the transaction would be advisable. It is not an offence to complete such a transaction, however if such a transaction proceeded unapproved, the Treasurer would retain residual transaction blocking and divestment rights if he forms the view that such a transaction is against the “national interest.” Effectively this means that if the approval was not obtained, the Treasurer may make an order requiring the acquirer to dispose of the shares it has acquired within a specified period of time. The same rule applies if the total holdings of all foreign persons and their associates already exceeds 40% and a foreign person (or its associate) acquires any further shares, including in the course of trading in the secondary market of the ordinary shares. At present, we do not have total assets of A$248 million or more. At this time, our total assets do not exceed any of the above thresholds and therefore no approval would be required from the Australian Treasurer. Nonetheless, should our total assets exceed the threshold in the future, we will need to be mindful of the number of ordinary shares that can be made available, and monitor the 40% aggregate shareholding threshold for foreign persons (together with their associates) to ensure that it will not be exceeded without an application to the Australian Treasurer’s for approval having been contemplated and submitted if considered necessary.

Each foreign person seeking to acquire holdings in excess of the above caps (including their associates, as the case may be) would need to complete an application form setting out the proposal and relevant particulars of the acquisition/shareholding. The Australian Treasurer then has 30 days to consider the application and make a decision. However, the Australian Treasurer may extend the period by up to a further 90 days by publishing an interim order. As for the risk associated with seeking approval, the Policy provides that the Australian Treasurer may reject an application if it is contrary to the national interest.

If the level of foreign ownership exceeds 40% at any time, we would be considered a foreign person under the Foreign Takeovers Act. In such event, we would be required to obtain the approval of the Australian Treasurer for the Company, together with our associates, to acquire (i) more than 15% of an Australian company or business with assets totaling over A$248 million; or (ii) any direct or indirect ownership in Australian residential real estate and certain non-residential real estate.

The percentage of foreign ownership in the Company would also be included in determining the foreign ownership of any Australian company or business in which it may choose to invest. Because we have no current plans for any such acquisition and do not own any property, any such approvals required to be obtained by us as a foreign person under the Foreign Takeovers Act will not affect our current or future ownership or lease of property in Australia.

Subject to certain exceptions under the Corporations Act, acquisitions of interests in voting shares of the Company will be prohibited where, as a result of the acquisition, the acquirer’s or someone else’s voting power (as defined in the Corporations Act) in the Company increases to more than 20.0% or from a starting point that is above 20.0% and below 90.0%. The definition of voting power in the Corporations Act is broad, and includes control by persons or their associates over voting or disposal of voting shares. There are a number of exceptions to the prohibition, the most important of which permit: (i) acquisitions under a formal takeover bid made in accordance with the Corporations Act in which all shareholders can participate; (ii) acquisitions resulting from a court-approved scheme of arrangement; (iii) acquisitions made with specified shareholder approvals (where no votes are cast in favor by the parties to the transaction or their associates); and (iv) acquisitions of no more than 3.0% of voting power (as defined in the Corporations Act) every six months. Australian law requires all holders of a class of shares to be treated equally under a takeover bid and prescribes various aspects of the conduct of a takeover bid, including timing and disclosure requirements.

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In addition, on application by a person, the Australian Takeovers Panel may declare that unacceptable circumstances exist in relation to the affairs of the Company. Such a declaration may be made where it appears to the Panel that, among other things, circumstances are unacceptable having regard to the effect the circumstances have had, are having, will have or are likely to have on the control, or potential control, of the Company or the acquisition, or proposed acquisition, by a person of a substantial interest in the Company. A declaration can be made whether or not the circumstances constitute a contravention of the Corporations Act. If a declaration is made, the Panel may make a wide range of remedial orders.

Our Constitution does not contain any additional limitations on a non-resident’s right to hold or vote our securities.

Australian law requires the transfer of shares in the Company to be made in writing if the company’s shares are not quoted on the Australian Securities Exchange. Under current stamp duty legislation no stamp duty will be payable in Australia on the transfer of ordinary shares.

10.E. Taxation

The following is a discussion of the material Australian and U.S. federal income tax consequences of an investment in our ordinary shares based upon laws and relevant interpretations thereof in effect as of the date of this Report, all of which are subject to change. This discussion does not address all possible tax consequences relating to an investment in our ordinary shares, such as the tax consequences under state, local and other tax laws. To the extent that the discussion is based on tax legislation that has not been subject to judicial or administrative interpretation, the views expressed in the discussion might not be accepted by the tax authorities in question or by court. The discussion is not intended, and should not be construed, as legal or professional tax advice and does not exhaust all possible tax considerations.

Holders of our ordinary shares should consult their own tax advisors as to the United States, Australian or other tax consequences of the purchase, ownership and disposition of ordinary shares, including, in particular, the effect of any foreign, state or local taxes.

Australian Tax Considerations

In this section we discuss the material Australian tax considerations that apply to non-Australian tax residents with respect to the acquisition, ownership and disposal of the absolute beneficial ownership of ordinary shares. This discussion is based upon existing Australian tax law as of the date of this Report, which is subject to change, possibly retrospectively. This discussion does not address all aspects of Australian income tax law that may be important to particular investors in light of their individual investment circumstances, such as shares held by investors subject to special tax rules (for example, financial institutions, insurance companies or tax exempt organizations). In addition, this summary does not discuss any foreign or state tax considerations, other than stamp duty. Prospective investors are urged to consult their tax advisors regarding the Australian and foreign income and other tax considerations of the purchase, ownership and disposition of shares.

Taxation of Dividends

Australia operates a dividend imputation system under which dividends may be declared to be “franked” to the extent of tax paid on company profits. Fully franked dividends are not subject to dividend withholding tax. Dividends payable to non-Australian resident shareholders that are not operating from an Australian permanent establishment (“Foreign Shareholders”) will be subject to dividend withholding tax, to the extent the dividends are not foreign sourced and declared to be conduit foreign income (“CFI”) and are unfranked. Dividend withholding tax will be imposed at 30%, unless a shareholder is a resident of a country with which Australia has a double taxation agreement and qualifies for the benefits of the treaty. Under the provisions of the current Double Taxation Convention between Australia and the United States, the Australian tax withheld on unfranked dividends that are not CFI paid by us to which a resident of the United States is beneficially entitled is limited to 15%.

If a company that is a Foreign Shareholder owns a 10% or more interest, the Australian tax withheld on dividends paid by us to which a resident of the United States is beneficially entitled is limited to 5%. In limited circumstances the rate of withholding can be reduced to nil.

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Tax on Sales or other Dispositions of Shares - Capital Gains Tax

Foreign Shareholders will not be subject to Australian capital gains tax on the gain made on a sale or other disposal of our shares, unless they, together with associates, hold 10% or more of our issued capital, at the time of disposal or for 12 months of the last 2 years.

Foreign Shareholders who, together with associates, own a 10% or more interest would be subject to Australian capital gains tax if more than 50% of our direct or indirect assets determined by reference to market value, consists of Australian land, leasehold interests or Australian mining, quarrying or prospecting rights. Double Taxation Convention between the United States and Australia is unlikely to limit the amount of this taxable gain. Australian capital gains tax applies to net capital gains at a taxpayer’s marginal tax rate. Net capital gains are calculated after reduction of capital losses, which may only be offset against capital gains.

Tax on Sales or other Dispositions of Shares - Shareholders Holding Shares on Revenue Account

Some Foreign Shareholders may hold shares on revenue rather than on capital account, for example, share traders. These shareholders may have the gains made on the sale or other disposal of the shares included in their assessable income under the ordinary income provisions of the income tax law, if the gains are sourced in Australia.

Foreign Shareholders assessable under these ordinary income provisions in respect of gains made on shares held on revenue account would be assessed for such gains at the Australian tax rates for non-Australian residents, which start at a marginal rate of 32.5%. For Foreign Shareholders that are corporations, the tax rate would be 30%. Some relief from Australian income tax may be available to such non-Australian resident shareholders under the Double Taxation Convention between the United States and Australia.

To the extent an amount would be included in a Foreign Shareholder’s assessable income under both the capital gains tax provisions and the ordinary income provisions, the capital gain amount would generally be reduced, so that the shareholder would not be subject to double tax on any part of the income gain or capital gain.

Dual Residency

If a shareholder were a resident of both Australia and the United States under those countries’ domestic taxation laws, that shareholder may be subject to tax as an Australian resident. If, however, the shareholder is determined to be a U.S. resident for the purposes of the Double Taxation Convention between the United States and Australia, the Australian tax applicable would be limited by the Double Taxation Convention. Shareholders should obtain specialist taxation advice in these circumstances.

Stamp Duty

No transfer duty is payable by Australian residents or foreign residents on the trading of shares that are quoted on the NASDAQ or OTCBB Markets.

Australian Death Duty

Australia does not have estate or death duties. As a general matter, no capital gains tax liability is realized upon the inheritance of a deceased person’s shares. The disposal of inherited shares by beneficiaries, may, however, give rise to a capital gains tax liability if the gain falls within the scope of Australia’s jurisdiction to tax (as discussed above).

Goods and Services Tax

The issue or transfer of shares will not incur Australian goods and services tax.

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United States Federal Income Tax Considerations

The following is a discussion of the material U.S. federal income tax considerations applicable to an investment in ordinary shares by a U.S. holder, as defined below, that will hold the ordinary shares as capital assets within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”). This summary is based upon existing U.S. federal tax law, which is subject to differing interpretations or change, possibly with retroactive effect. No ruling has been sought from the Internal Revenue Service (the “IRS”) with respect to any U.S. federal income tax consequences described below, and there can be no assurance that the IRS or a court will not take a contrary position. This discussion does not address the tax consequences to any particular holder nor any tax considerations that may apply to holders subject to special tax rules, such as banks, insurance companies, individual retirement and other tax-deferred accounts, regulated investment companies, individuals who are former U.S. citizens or former long-term U.S. residents, dealers in securities or currencies, tax-exempt entities, persons subject to the alternative minimum tax, persons that hold ordinary shares as a position in a straddle or as part of a hedging, constructive sale or conversion transaction for U.S. federal income tax purposes, persons that have a functional currency other than the U.S. dollar, persons that own (directly, indirectly or constructively) 10% or more of our equity or persons that are not U.S. holders.

In addition, this discussion does not address any state, local or non-U.S. tax considerations (other than the discussion below relating to certain withholding rules and the United States — Australian income tax treaty). Each U.S. holder is urged to consult its tax advisor regarding the U.S. federal, state, local, and non-U.S. income and other tax considerations of an investment in our ordinary shares.

In this section, a “U.S. holder” means a beneficial owner of ordinary shares that is, for U.S. federal income tax purposes:

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an individual who is a citizen or resident of the United States;

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a corporation (or other entity treated as a corporation) created or organized (or treated as created or organized) in or under the laws of the United States, any state thereof or the District of Columbia;

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an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

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a trust (i) the administration of which is subject to the primary supervision of a court in the United States and for which one or more U.S. persons have the authority to control all substantial decisions or (ii) that has an election in effect under applicable income tax regulations to be treated as a U.S. person.

As used in this section, a “non-U.S. holder” is a beneficial owner of ordinary shares that is not a U.S. holder or an entity or arrangement treated as a partnership for U.S. federal income tax purposes.

If an entity or arrangement treated as a partnership for U.S. federal income tax purposes holds ordinary shares, the U.S. federal income tax treatment of a partner generally will depend on the status of the partner and the activities of the partnership. Partners of partnerships that will hold ordinary shares should consult their tax advisors.

You are urged to consult your own tax advisor with respect to the U.S. federal, as well as state, local and non-U.S., tax consequences to you of acquiring, owning and disposing of ordinary shares in light of your particular circumstances, including the possible effects of changes in U.S. federal and other tax laws.

Dividends

Subject to the passive foreign investment company rules, discussed below, U.S. holders will include as dividend income the U.S. dollar value of the gross amount of any distributions of cash or property (without deduction for any withholding tax), other than certain pro rata distributions of ordinary shares, with respect to ordinary shares to the extent the distributions are made from our current or accumulated earnings and profits, as determined for U.S. federal income tax purposes. A U.S. holder will include the dividend income at the time of receipt. To the extent, if any, that the amount of any distribution by us exceeds our current and accumulated earnings and profits, as so determined, the excess will be treated first as a tax-free return of the U.S. holder’s tax basis in the ordinary shares and thereafter as capital gain. Notwithstanding the foregoing, we do not intend to maintain calculations of earnings and profits, as determined for U.S. federal income tax purposes. Consequently, any distributions generally will be reported as dividend income for U.S. information reporting purposes. See “Backup Withholding Tax and Information Reporting” below. Dividends paid by us will not be eligible for the dividends-received deduction generally allowed to U.S. corporate shareholders.

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Subject to certain exceptions for short-term and hedged positions, the U.S. dollar amount of dividends received by an individual, trust or estate with respect to the ordinary shares will be subject to taxation at a maximum rate of 20% if the dividends are “qualified dividends.” Dividends paid on ordinary shares will be treated as qualified dividends if either (i) we are eligible for the benefits of a comprehensive income tax treaty with the United States that the IRS has approved for the purposes of the qualified dividend rules, (ii) the dividends are, with respect to ordinary shares, readily tradable on a U.S. securities market, provided that we are not, in the year prior to the year in which the dividend was paid, and are not, in the year which the dividend is paid, a PFIC and (iii) certain holding period requirements are met. The Agreement between the Government of the United States of America and the Government of Australia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (the “Treaty”) has been approved for the purposes of the qualified dividend rules, and we expect to qualify for benefits under the Treaty. Our ordinary shares currently trade irregularly in the U.S. over-the-counter market and thus may not meet condition (ii) described above allowing dividends we pay to be deemed “qualified dividends”. We have applied to list the ordinary shares on The NASDAQ Capital Market, but there is no assurance that our application will be approved. Provided that the listing is approved, U.S. Treasury Department guidance indicates that the ordinary shares will be readily tradable on an established securities market in the United States. Thus, we believe that dividends we pay on ordinary shares will meet conditions (i) and (ii), described above. Accordingly, dividends we pay generally should be eligible for the reduced income tax rate. However, the determination of whether a dividend qualifies for the preferential tax rates must be made at the time the dividend is paid. U.S. holders should consult their own tax advisers.

Includible distributions paid in Australian dollars, including any Australian withholding taxes, will be included in the gross income of a U.S. holder in a U.S. dollar amount calculated by reference to the exchange rate in effect on the date of actual or constructive receipt, regardless of whether the Australian dollars are converted into U.S. dollars at that time. If Australian dollars are converted into U.S. dollars on the date of actual or constructive receipt, the tax basis of the U.S. holder in those Australian dollars will be equal to their U.S. dollar value on that date and, as a result, a U.S. holder generally should not be required to recognize any foreign exchange gain or loss.

If Australian dollars so received are not converted into U.S. dollars on the date of receipt, the U.S. holder will have a basis in the Australian dollars equal to their U.S. dollar value on the date of receipt. Any gain or loss on a subsequent conversion or other disposition of the Australian dollars generally will be treated as ordinary income or loss to such U.S. holder and generally such gain or loss will be income or loss from sources within the United States for foreign tax credit limitation purposes.

Dividends received by a U.S. holder with respect to ordinary shares will be treated as foreign source income, which may be relevant in calculating the holder’s foreign tax credit limitation. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For these purposes, dividends will be categorized as “passive” or “general” income depending on a U.S. holder’s circumstance.

Subject to certain complex limitations, a U.S. holder generally will be entitled, at its option, to claim either a credit against its U.S. federal income tax liability or a deduction in computing its U.S. federal taxable income in respect of any Australian taxes withheld by us. If a U.S. holder elects to claim a deduction, rather than a foreign tax credit, for Australian taxes withheld by us for a particular taxable year, the election will apply to all foreign taxes paid or accrued by or on behalf of the U.S. holder in the particular taxable year.

You may not be able to claim a foreign tax credit (and instead may claim a deduction) for non-U.S. taxes imposed on dividends paid on the ordinary shares if you (i) have held the ordinary shares for less than a specified minimum period during which you are not protected from risk of loss with respect to such shares, or (ii) are obligated to make payments related to the dividends (for example, pursuant to a short sale).

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The availability of the foreign tax credit and the application of the limitations on its availability are fact specific. You are urged to consult your own tax advisor as to the consequences of Australian withholding taxes and the availability of a foreign tax credit or deduction. See “Australian Tax Considerations — Taxation of Dividends.”

Sale or Exchange of Ordinary Shares

Subject to the passive foreign investment company rules, discussed below, a U.S. holder generally will, for U.S. federal income tax purposes, recognize capital gain or loss on a sale, exchange or other disposition of ordinary shares equal to the difference between the amount realized on the disposition and the U.S. holder’s adjusted tax basis in the ordinary shares. Any gain or loss recognized on a sale, exchange or other disposition of ordinary shares will generally be long-term capital gain or loss if the U.S. holder has held the ordinary shares for more than one year. Generally, for U.S. holders who are individuals (as well as certain trusts and estates), long-term capital gains are subject to U.S. federal income tax at preferential rates. For foreign tax credit limitation purposes, gain or loss recognized upon a disposition generally will be treated as from sources within the United States. The deductibility of capital losses is subject to limitations for U.S. federal income tax purposes.

You should consult your own tax advisor regarding the availability of a foreign tax credit or deduction in respect of any Australian tax imposed on a sale or other disposition of ordinary shares. See “Australian Tax Considerations — Tax on Sales or other Dispositions of Shares.”

Passive Foreign Investment Company Considerations

A non-U.S. corporation will be treated as a passive foreign investment company (a “PFIC”) for any taxable year if either (a) at least 75% of its gross income for such taxable year consists of certain types of passive income or (b) at least 50% of gross assets during the taxable year, based on a quarterly average and generally by value, produce or are held for the production of passive income. For this purpose, cash and assets readily convertible into cash are categorized as passive assets and our unbooked intangibles associated with active business activities may generally be classified as active assets. Passive income for this purpose generally includes, among other things, dividends, interest, rents, royalties, gains from commodities and securities transactions and gains from assets that produce passive income. The average percentage of a corporation’s assets that produce or are held for the production of passive income generally is determined on the basis of the fair market value of the corporation’s assets at the end of each quarter. This determination is based on the adjusted tax basis of the corporation’s assets, however, if the corporation is a controlled foreign corporation, or CFC, that is not a publicly traded corporation for the taxable year. We would be treated as a CFC for any year on any day in which U.S. holders each own (directly, indirectly or by attribution) at least 10% of our voting shares and together own more than 50% of the total combined voting power of all classes of our voting shares or more than 50% of the total value of all of our shares. If we are treated as a CFC for U.S. federal income tax purposes for any portion of our taxable year that includes this offering, we would likely be classified as a PFIC for the current taxable year. The CFC determination involves a highly complex and technical factual analysis and, in certain cases such as our own, potentially cannot be made with complete certainty. However, although no assurances can be made in this regard because of these complexities, based on our current shareholder composition, we believe that we are not a CFC.

Additionally, in determining whether a foreign corporation is a PFIC, a pro-rata portion of the income and assets of each corporation in which it owns, directly or indirectly, at least a 25% interest (by value) is taken into account.

The determination of whether or not we are a PFIC is a factual determination that must be determined annually at the close of each taxable year. Based on our business results for the last fiscal year and composition of our assets, we do not believe that we were a PFIC for U.S. federal income tax purposes for the taxable year ended June 30, 2014. Similarly, based on our business projections and the anticipated composition of our assets for the current and future years, we do not expect that we will be a PFIC for the taxable year ended June 30, 2015. If our actual business results do not match our projections, it is possible that we may become a PFIC in the current or any future taxable year.

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If we are a PFIC for any taxable year during which a U.S. holder holds ordinary shares, any “excess distribution” that the holder receives and any gain realized from a sale or other disposition (including a pledge) of such ordinary shares will be subject to special tax rules, unless the holder makes a mark-to-market election or qualified electing fund election as discussed below. Any distribution in a taxable year that is greater than 125% of the average annual distribution received by a U.S. holder during the shorter of the three preceding taxable years or such holder’s holding period for the ordinary shares will be treated as an excess distribution. Under these special tax rules:

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the excess distribution or gain will be allocated ratably over the U.S. holder’s holding period for the ordinary shares;

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the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we were classified as a PFIC, will be treated as ordinary income; and

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the amount allocated to each other year, other than a pre-PFIC year, will be subject to income tax at the highest rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year (other than a pre-PFIC year).

The tax liability for amounts allocated to years prior to the year of disposition or excess distribution cannot be offset by any net operating loss, and gains (but not losses) realized on the transfer of the ordinary shares cannot be treated as capital gains, even if the ordinary shares are held as capital assets. In addition, non-corporate U.S. holders will not be eligible for reduced rates of taxation on any dividends received from us if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year.

If we are a PFIC for any taxable year during which any of our non-U.S. subsidiaries is also a PFIC (i.e., a lower-tier PFIC), a U.S. holder of ordinary shares during such year would be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC and would be subject to the rules described above on certain distributions by a lower-tier PFIC and a disposition of shares of a lower-tier PFIC even though such U.S. holder would not receive the proceeds of those distributions or dispositions. You should consult your tax advisors regarding the tax consequences if the PFIC rules apply to any of our subsidiaries.

If a U.S. holder owns ordinary shares during any year in which we are a PFIC and the U.S. holder recognizes gain on a disposition of our ordinary shares or receives distributions with respect to our ordinary shares, the U.S. holder generally will be required to file an IRS Form 8621 (Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund) with respect to the company, generally with the U.S. holder’s federal income tax return for that year. Additionally, recently enacted legislation creates an additional annual filing requirement for U.S. persons who are shareholders of a PFIC. However, pursuant to recently issued guidance, this additional filing obligation is suspended until the IRS releases the relevant final form. If the Company were a PFIC for a given taxable year, then you should consult your tax advisor concerning your annual filing requirements.

A U.S. holder may avoid some of the adverse tax consequences of owning shares in a PFIC by making a “qualified electing fund” election. The availability of this election with respect to our ordinary shares requires that we provide information to shareholders making the election. We do not intend to provide you with the information you would need to make or maintain a qualified electing fund election and you will, therefore, not be able to make such an election with respect to your ordinary shares.

As an alternative to the foregoing rules, a U.S. holder of “marketable stock” in a PFIC may make a mark-to-market election with respect to our ordinary shares, provided that the listing of the ordinary shares on applicable exchange is approved and that the ordinary shares are regularly traded. We anticipate that our ordinary shares should qualify as being regularly traded, but no assurances may be given in this regard. If a U.S. Holder makes a valid mark-to-market election for the ordinary shares, the electing U.S. holder will include in income each taxable year that we are a PFIC, an amount equal to the excess, if any, of the fair market value of the ordinary shares as of the close of the holder’s taxable year over the adjusted basis in such ordinary shares. The U.S. holder is allowed a deduction for the excess, if any, of the adjusted basis of the ordinary shares over their fair market value as of the close of the holder’s taxable year. Deductions are allowable, however, only to the extent of any net mark-to-market gains on the ordinary shares included in the U.S. holder’s income for prior taxable years. Amounts included in the U.S. holder’s income under a mark-to-market election, as well as gain on the actual sale or other disposition of the ordinary shares, are treated as ordinary income. Ordinary loss treatment also applies to the deductible portion of any mark-to-market loss on the ordinary shares, as well as to any loss realized on the actual sale or disposition of the ordinary shares, to the extent the amount of such loss does not exceed the net mark-to-market gains previously included for such ordinary shares. The tax basis in the ordinary shares will be adjusted to reflect any such income or loss amounts. A mark-to-market election will be effective for the taxable year for which the election is made and all subsequent taxable years unless the ordinary shares are no longer regularly traded on an applicable exchange or the IRS consents to the revocation of the election.

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Because, as a technical matter, a mark-to-market election cannot be made for any lower-tier PFICs that we may own, a U.S. holder may continue to be subject to the general PFIC rules described above with respect to such U.S. holder’s indirect interest in any investments held by us that are treated as an equity interest in a PFIC for U.S. federal income tax purposes.

U.S. holders are urged to contact their own tax advisors regarding the determination of whether we are a PFIC and the tax consequences of such status.

Medicare Tax

An additional 3.8% tax is imposed on a portion or all of the net investment income of certain individuals with a modified adjusted gross income of over US$200,000 (or US$250,000 in the case of joint filers or US$125,000 in the case of married individuals filing separately) and on the undistributed net investment income of certain estates and trusts. For these purposes, “net investment income” generally includes interest, dividends (including dividends paid with respect to our ordinary shares), annuities, royalties, rents, net gain attributable to the disposition of property not held in a trade or business (including net gain from the sale, exchange or other taxable disposition of an ordinary share) and certain other income, reduced by any deductions properly allocable to such income or net gain. U.S. holders are urged to consult their tax advisors regarding the applicability of this tax to their income and gains in respect of an investment in the ordinary shares.

Backup Withholding Tax and Information Reporting Requirements

Dividend payments with respect to ordinary shares and proceeds from the sale, exchange or redemption of ordinary shares may be subject to information reporting to the IRS and possible U.S. backup withholding at a current rate of 28%. Backup withholding will not apply, however, to a U.S. holder who furnishes a correct taxpayer identification number and makes any other required certification or who is otherwise exempt from backup withholding and establishes such exempt status. Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a U.S. holder’s U.S. federal income tax liability. A U.S. holder may obtain a refund of any amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the IRS in a timely manner and furnishing any required information. U.S. holders are urged to contact their own tax advisors as to their qualification for an exemption from backup withholding tax and the procedure for obtaining this exemption.

Foreign asset reporting

Certain U.S. holders who are individuals are required to report information relating to an interest in our ordinary shares, subject to certain exceptions (including an exception for shares held in accounts maintained by financial institutions) by filing IRS Form 8938 (Statement of Specified Foreign Financial Assets) with their federal income tax return. U.S. holders are urged to consult their tax advisors regarding their information reporting obligations, if any, with respect to their ownership and disposition of our ordinary shares.

The discussion above is not intended to constitute a complete analysis of all tax considerations applicable to an investment in ordinary shares. You should consult with your own tax advisor concerning the tax consequences to you in your particular situation.

10.F. Dividends and Paying Agents

Not applicable.

10.G. Statement by Experts

Not applicable.

110

10.H. Documents on Display

Publicly filed documents concerning the Company which are referred to in this Annual Report may be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. Copies of these materials can also be obtained from the Public Reference Room at the SEC’s principal office, 100 F Street, N.E., Washington D.C. 20549, after payment of fees at prescribed rates.

The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements and other information regarding registrants that make electronic filings through its Electronic Data Gathering, Analysis, and Retrieval or EDGAR, system. We have made all our filings with SEC using the EDGAR system.

For further information on the Public Reference Room, please call the SEC at 1-800-SEC-0330. Our SEC filings, including the Annual Report, are also available to you on the SEC’s website at http://www.sec.gov.

Information may also be found on the Investor Relations section of our website at http://bluenrgy.com/ir/filings.html

10.I. Subsidiary Information

Not applicable.

PART II

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to various market risks, including foreign currency fluctuations, changes in interest rates, equity and credit risk. The main risks to which we are exposed are discussed below. Refer to Note 22 to the audited financial statements in Item 18 for more detailed analysis of the potential financial impact of these risks.

Market risk

Our activities expose us primarily to the financial risks of changes in foreign currency exchange rates and interest rates and fluctuations in the value of equity securities as described below.

Foreign currency risk management

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Our exposure to the risk of changes in foreign exchange rates relates primarily to our operating activities, borrowings, and financial assets.

Our parent company and a number of our subsidiaries use the Australian dollar as their functional currency because the majority of their revenues and expenses are denominated in Australian dollars. Accordingly, our reporting currency is also the Australian dollar. We did, however, earn revenue and incur expenses in other currencies and there is thus a risk that currency fluctuations could have an adverse effect on the value of our cash flows.

Our foreign currency risk arises from the measurement of purchased components, debt, preferred stock, and other monetary assets and liabilities denominated in foreign currencies converted to Australian dollars, with the resulting gain or loss recorded as “Other income” or “Other expenses” and the impact of fluctuations in exchange rates on the reported amounts of our revenues and expenses which are contracted in foreign currencies. In the future this exposure may be reduced as the Company strives to develop and sell assets and project in the same currency in which it borrows and/or purchases inventory and components for those assets and projects.

111

Foreign currency sensitivity

We are party to derivative financial instruments in the normal course of business in order to hedge exposure to fluctuations in foreign exchange rates. Our Parmac and GED Working Capital Facilities (as described in Item 5.B. “Liquidity and Capital Resources”) are denominated in U.S. dollars. In addition, the face value of our Series B Preferred Stock and the face value of the preferred stock of our Parmac and CIWL subsidiaries, the Subsidiary Preferred, is denominated in U.S. dollars.

We do not apply hedge accounting. At June 30, 2015 and subsequently through the date of this Report, there was no contract hedging in place.

Interest rate risk

Our main interest rate risk arises from borrowings. Borrowings issued at variable rates expose us to cash flow interest rate risk. Borrowings issued at fixed rates expose us to fair value interest rate risk only if the borrowings are carried at fair value, which is not our policy.

During fiscal years 2013 and 2014, our borrowings at variable rate were denominated in Australian Dollars. At June 30, 2015 all of our borrowings are fixed rate (subject to penalty rates which may be applied under default events).

We regularly analyze our interest rate exposure. Within this analysis consideration is given to potential renewals of existing positions, alternative financing, and the mix of fixed and variable interest rates.

At June 30, 2015 we had no significant interest bearing assets other than cash and cash equivalents, therefore our income and operating cash flows are substantially independent of changes in market interest rates.

Liquidity and capital risk management

Our objective is to maintain a balance between continuity of funding and flexibility through the use of variety of equity and debt instruments.

As discussed in Item 5.B. under the heading “Liquidity and Capital Resources”, there is a material uncertainty that may cast significant doubt on whether we will be able to continue as a going concern and therefore whether it will realize our assets and settle our liabilities and commitments in the normal course of business and at the amounts stated in the financial report.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

A. Debt Securities

Not required in annual report

B. Warrants and Rights

Not required in annual report

C. Other Securities

Not required in annual report

D. American Depositary Shares

Not applicable.

112

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

Some of our debt obligations outstanding as of fiscal year-end 2013 were extinguished in conjunction with exchange agreements entered into prior to our public offering in June 2014 and, upon the consummation of that offering and commencement of trading of our shares on The NASDAQ Capital Market, we had no indebtedness in default. However, circumstances encountered subsequent to that offering resulted in defaults under our outstanding bonds issued by our subsidiaries, Energy Bonds Plc and Secured Energy Bonds Plc and our remaining convertible note obligations. Consequently, A$26.9 million of our $27.2 million interest-bearing loans and borrowings were shown as current as of June 30, 2014.

In part because of the defaults or imminent defaults under our debt obligations, we entered VA on November 14, 2014. The placement of our company into VA triggered defaults under our agreements with Westinghouse Electric Corporation and CIWL that ultimately resulted in the termination of our licensing agreement with Westinghouse Electric and an ongoing dispute with CIWL. When we emerged from VA, our indebtedness was extinguished pursuant to the DOCAs, together with most of our executory contracts and we were not in default under any material contracts or loan agreements and, with the exception of the CIWL agreement that Chatham Islands Electricity Limited is seeking to terminate and loan agreements described in Item 5.B. that have matured and become demand notes, we are not in default under any agreements as of the date of this report on Form 20-F. Refer also to Item 4.A. under the heading “Voluntary Administration and Deed of Company Arrangement”.

We have never paid dividends and there are no dividend arrearages or delinquencies.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Share Issuances and Modifications Under Our Reorganization Plans

In accordance with and upon effectiveness of the DOCAs:

●

we issued additional ordinary shares to the Deed Fund, our secured creditor, WHSP and to shareholders and designees of BlueNRGY LLC.

●

our CIWL and Parmac subsidiaries issued convertible preferred shares to WHSP with face values respectively of US$1.4 million and US$2.2 million, collectively referred to as the Subsidiary Preferred. The Subsidiary Preferred accrues a dividend of 4% per annum on the face value and is convertible at any time into our ordinary shares at US$0.3785 per share. The Subsidiary Preferred issued by CIWL may not be converted if the Chatham Island Project contract with Chatham Islands Electricity Limited is terminated (refer to Item 4.B. under the heading “Description of Our Business Segments -- Energy Efficiency -- Remote Area Power Systems (RAPS)”) This summary description of the terms of the Subsidiary Preferred is qualified in its entirety by the terms set forth in the Exhibits to the DOCA for our Company and filed as an exhibit to our Form 6-K/A filed on January 29, 2015.

●

we modified the terms of our outstanding Series B Preferred.

Private Placements of Unregistered Securities After Emergence From VA

On or subsequent to January 27, 2015 after emerging from VA we have issued ordinary shares in a private placement for US$0.03785 per share pursuant to a securities purchase agreement filed with our Form 6-K/A on January 29, 2015. Net proceeds from the private placements were used to pay US$1.0 million ($A1.247 million) to the Deed Funds and the remainder was used for working capital and to fund losses since emergence from VA. There were no brokerage or placement fees paid in conjunction with the private placements.

113

Use of Proceeds

Registered Securities Offering Effective June 12, 2014

Details of the Offering

The registration statement on Form F-1 (File No. 333-194780) for the offering was declared effective by the SEC on June 12, 2014.We sold 1,810,000 ordinary shares, at an offering price of US$4.00 per share (“Offering”). The Offering closed on June 18, 2014 and generated gross proceeds of US$7.24 million. Northland Capital Markets, the trade name for certain equity capital markets and investment banking activities of Northland Securities, Inc., acted as co-manager for the offering.

Use of Proceeds

Net proceeds to us were approximately $6.00 million after deducting underwriting discounts and commissions and other offering expenses. As disclosed in the prospectus for the Offering, a total of US$1.83 million was repaid from net proceeds to lenders including WHSP, one of our shareholders holding in excess of 10% of our outstanding ordinary shares, and Gerard McGowan our Managing Director. After giving effect to the repayment of the loans, net proceeds to us were US$4.27 million. National Securities Corporation acted as lead manager for the offering.

As disclosed in the Offering Prospectus, CBD used $1.0 million of the net proceeds from the Offering after giving effect to the loan payment to acquire GED. Consistent with the uses of proceeds set forth in the Offering prospectus, the remaining $3.27 million of net proceeds was used for working capital, including the payment of deferred trade debt, and to fund operating losses.

Private Placement of Series B Preferred Shares And Conversion of Series B Preferred Shares

As disclosed in our filings on Form 6-K on July 30, 2014 and August 20, 2014, In a series of private placement offerings in July and August 2014, we issued US$4.5 million face value of our Series B Convertible Preferred Shares, referred to as Series B Preferred. US$2.0 million of the proceeds from the private placement offerings was used to redeem $2.0 million face value of our Series A convertible preferred shares (all of our then outstanding Series A preferred shares). The Series B Preferred accrued a dividend at an annual rate of 8% of face value and had an initial conversion price of US$4.00 per share and imposed restrictions on our ability to issue equity or equity-linked securities below a price of US$2.00 per share. In the private placement of Series B Preferred that occurred in August 2014, the conversion price was subsequently reduced to US$3.00 per share for all Series B Preferred, including those Series B Preferred Shares previously issued. In conjunction with the issuance of Series B Preferred we issued 150,000 ordinary shares as a placement fee and warrants for 416,667 ordinary shares with an exercise price of $3.2916 per share. This summary of terms of the private placement offerings and Series B Preferred and warrants is qualified in its entirety by the securities purchase agreement and related exhibits filed with the referenced forms 6-K. Net proceeds from the sale of Series B Preferred was used for working capital, to pay interest on our debt and to fund our losses.

As disclosed in a Form 6-K filed on November 12, 2015, certain holders of our Series B Preferred shares elected to convert 2,484 Series B Preferred Shares plus dividends accrued thereon into our ordinary shares at the stated conversion price of $0.05015125 per ordinary share. In satisfaction of the foregoing Series B Preferred Share conversions we have issued 51,448,606 ordinary shares. 600 Series B Preferred Shares remained outstanding as of this Report.

114

ITEM 15. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated, as of the end of the period covered by this Report, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective at the reasonable assurance level as of June 30, 2015.

Management’s Annual Report on Internal Control Over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting for the Company, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS as issued by the IASB. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of financial statements in accordance with IFRS as issued by the IASB and that receipts and expenditures of the company are being made only in accordance with authorizations of our Board; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements

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. In particular, the design of a control system must be considered relative to their costs. Additionally, the design of a control system 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 objectives under all potential future conditions. Due to its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements to the financial statements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of June 30, 2015 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) Internal Control-Integrated Framework. Based on this assessment, management concluded that the Company’s internal control over financial reporting was not effective as of June 30, 2015 under the 2013 Framework due to the following material weaknesses:

	●	There is insufficient specificity in and separation of the authorities delegated to line of business and corporate personnel with the effect that unintended or unauthorized financial commitments could be made on behalf of the Company or one of its subsidiaries and incorrect amounts could be paid to vendors.
	●	Procedures are not in place to adequately control and annual leave of employees with the effect that unauthorized annual leave could be taken and leave accruals could be misstated.
	●	Secretarial and corporate records filed with ASIC are not consistently up to date with the effect that we could fail to be remain in compliance with the Corporations Act.
	●	Interim closings of account records are not consistently completed in a time frame that would allow adverse unforeseen financial consequences of business operations to be detected and managed.

This 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 amendments made by the enactment of the Dodd-Frank bill that permit the Company to provide only management’s annual report on internal control over financial reporting in this Annual Report.

Changes in Internal Control Over Financial Reporting

There was no change in our internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) identified in connection with the evaluation of our internal control over financial reporting performed during the fiscal year ended June 30, 2015 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

115

Subsequent to communications to our Audit Committee from our then-auditor, PricewaterhouseCoopers, in September 2014 that identified significant control weaknesses, our board enacted emergency measures that continue following our emergence from VA to:

	●	Ensure that bank account signatory authority was imposed on all bank accounts and that our finance team has visibility over and reviews all account activity;

	●	Effect segregation of duties, particularly with respect to approval and payment of disbursements;

	●	Ensure all members of management support proper recordkeeping, including with respect to executive and director compensation and expense reimbursement, and that there is an appropriate and frequent review of accounts of the Group;

	●	Ensure related-party transactions involving executives and directors are visible to and receive requisite Board approval and are implemented in accordance with approved agreements;

	●	Ensure that our executives and directors are aware of and follow our Code of Conduct and Ethics.

As soon as practicable we intend to develop and implement a revised authority matrix and updated budgets for our 2016 fiscal year that are approved by our Board.

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

The composition of our Audit Committee currently and for fiscal years June 30, 2015 and 2014 were:

Currently: - Mr. Carlo Botto* June 2015 – Mr. John Donohue *

June 2014 – Mr. William Morro* and Mr. Todd Barlow

(*) denotes designated Audit Committee Financial Expert. Each Audit Committee Financial Expert has been an independent director.

ITEM 16B. CODE OF ETHICS

We have adopted a code of conduct and ethics for employees, officers and directors, which fully complies with the requirements of NASDAQ Rule 5610 and the requirements of Section 406(c) of the Sarbanes-Oxley Act applicable to chief executive officers, principal financial officers, and principal accounting officers or controllers or persons performing similar functions.

Our Code of Conduct and Ethics was filed as an as exhibit to our FY2014 Annual Report.

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The auditor of BlueNRGY Group Limited is HLB Mann Judd of Level 19, 207 Kent St, Sydney NSW 2000, Australia.

Prior to the appointment of HLB Mann Judd, our auditor was PricewaterhouseCoopers of Darling Park 201 Sussex Street Sydney NSW 2000, Australia.

Remuneration of Auditors

Consolidated

2015
$’000

2014
$’000

2013
$’000

Amounts paid or payable to the Company’s auditors

- an audit or review of the financial statements of the entity

300,000

340,000

—

116

The following amounts were paid to the previous auditor of BlueNRGY Group Limited, PricewaterhouseCoopers

	Consolidated
	2015 $’000		2014 $’000		2013 $’000
Amounts paid or payable to the Company’s auditors
- an audit or review of the financial statements of the entity		—		1,256,512		958,000
- other consulting and advisory services		—		—		2,000
- tax compliance		—		—		62,687
		—		1,256,512		1,022,687

Pre-Approval Policies and Procedures

All services to be performed by our auditor must be approved in advance by the Audit Committee. The Audit Committee has considered whether the provision of services other than audit services is compatible with maintaining the auditors’ independence and has adopted a policy governing these services. This policy requires pre-approval by the Audit Committee of all audit and non-audit services provided by the external auditor.

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

ITEM 16E. PURCHASES OF SECURITIES BY THE ISSUER AND AFFILIATED PURCHASES

Not applicable.

ITEM 16F. CHANGES IN THE REGISTRANT’S CERTIFYING ACCOUNTANT

Previously disclosed in a Report of Foreign Private Issuer on Form 6-K filed on December 2, 2014.

On January 29, 2015, the Audit Committee of the Board appointed HLB Mann Judd as the Company’s new independent registered public accounting firm.

ITEM 16G. CORPORATE GOVERNANCE

Implications of Being an Emerging Growth Company

Pursuant to JOBS Act, we are classified as an “Emerging Growth Company.” Under the JOBS Act, Emerging Growth Companies are exempt from certain reporting requirements, including the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act. Under this exemption, our auditor will not be required to attest to and report on management’s assessment of our internal controls over financial reporting during a five-year transition period.

Pursuant to the JOBS Act, we will remain an Emerging Growth Company until the earliest of:

●	the last day of our fiscal year following the fifth anniversary of the date of our initial public offering of ordinary shares;

●	the last day of our fiscal year in which we have annual gross revenue of USD$1.0 billion or more;

●	the date on which we have, during the previous three-year period, issued more than USD$1.0 billion in non-convertible debt; and

●

the date on which we are deemed to be a “large accelerated filer,” which will occur at such time as we (a) have an aggregate worldwide market value of ordinary shares held by non-affiliates of USD$700.0 million or more as of the last business day of our most recently completed second fiscal quarter, (b) have been required to file annual and quarterly reports under the Exchange Act for a period of at least 12 months, and (c) have filed at least one annual report pursuant to the Exchange Act.

117

Implications of Being a Foreign Private Issuer

We are also considered a “foreign private issuer.” In our capacity as a foreign private issuer, we are exempt from certain rules under the Exchange Act, that impose certain disclosure obligations and procedural requirements for proxy solicitations under Section 14 of the Exchange Act. In addition, our officers, directors and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and the rules under the Exchange Act with respect to their purchases and sales of our ordinary shares. Moreover, we are not required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. In addition, we are not required to comply with Regulation FD, which restricts the selective disclosure of material information.

In addition, as a “foreign private issuer”, we follow certain home-country corporate governance practices and intend to continue to do so in lieu of certain NASDAQ requirements, even if we are successful in regaining our NASDAQ listing. The exception to the election to follow Australian practices is those rules which are required to be followed pursuant to the provisions of Listing Rule 5615(a)(3). That is, the Notification of Noncompliance requirement (Rule 5625), the Voting Rights requirement (Rule 5640), an audit committee that satisfies Rule 5605(c)(3) (audit committee responsibilities and authorities), and the audit committee’s members meet the independence requirement in Rule 5605(c)(2)(A)(ii) (the criteria for independence).

The following practices are not prohibited under any Australian laws (including ASX listing rules).

(1) Audit Committee Composition (Rule 5605)(c)(2)(A): The Company’s Audit Committee is comprised of one director, Mr. Botto, who is an independent non-executive director. The Guidelines include recommendations that companies should have at least three members, members should be non-executive directors and a majority of the audit committee should be independent directors and chaired by an independent director. Due to the small size of the Board the audit committee will consists of two directors once we appoint another independent non-executive to the Board.

(2) Independent Director Oversight of Director Nominations (Rule 5605(e)(1)): There is no requirement under Australian laws or ASX listing rules which requires director nominees to be selected to the board or recommended for election by a majority of independent directors or a nominations committee comprised solely of independent directors.

(3) Nominations Charter or Board Resolution (Rule 5605(e)(2)): The Company does not have a Nominations Committee. The Guidelines includes a recommendation that companies should establish a nomination committee. Given the small size of the Company and the Board, the directors consider that establishing a committee would contribute little to the effective management of the company.

(4) Independent Director Oversight of Executive Officer Compensation (Rule 5605(d)): On February 9, 2015, Mr. Chapple and Mr. Donohue were appointed to the Compensation Committee and Mr. Morro resigned as a member of the Compensation Committee. However, Mr. Chapple resigned from the Board on June 16, 2015 and Mr. Donohue resigned from the Board on July 31, 2015. Until replacement members of the Committee can be appointed, matters previously delegated to the Compensation Committee are being considered by the full Board. The Guidelines include Recommendations that a compensation committees should have at least three members, members should be non-executive directors and a majority of the committee should be independent directors and chaired by an independent director. Due to the small size of the Board, the compensation committee, once reconstituted, will consist of two independent non-executive directors.

(5) Executive Sessions (Rule 5605(b)(2)): There is no requirement under Australian laws or ASX listing rules which require the Company to schedule meetings at which only the independent directors are present.

(6) Quorum (Rule 5620(c)): There is no requirement under Australian laws or ASX listing rules which require the Company to have a quorum of a particular number of outstanding ordinary shareholders, rather, each company is able to determine its own quorum requirements. The current quorum for the Company is two shareholders entitled to vote. This is consistent with typical Australian business practices.

118

(7) Shareholder Approval (Rule 5635) The Company’s practices with regard to the requirements of Listing Rule 5635(a),(b) and (d) are not prohibited by Australian law applicable to the Company as a public company not listed on the ASX, except that under the Australian Corporations Act 2001 (Cth) there is a restriction on a single person being issued shares which would result in a person’s voting power in a company increasing from 20% or below to more than 20% or from a starting point above 20% and below 90%. The concept of voting power takes account of shares owned or controlled by a person and its associates (in summary, associates includes body corporates controlled by a person, persons with whom a person is acting in concert with in respect of the company issuing the stock or persons with whom a person has a relevant agreement with for the purpose of controlling the conduct of the company’s affairs.

ITEM 16H. MINE SAFETY DISCLOSURE

Not applicable.

PART III

ITEM 17. FINANCIAL STATEMENTS

See “Item 18 – Financial Statements”

ITEM 18. FINANCIAL STATEMENTS

The following financial statements are filed as part of this Annual Report, together with the report of the independent registered public accounting firm:

●	Report of Independent Registered Public Accounting Firm
●	Consolidated statement of comprehensive income
●	Consolidated statement of financial position
●	Consolidated statement of changes in equity
●	Consolidated statement of cash flows
●	Notes to the financial statements

119

BlueNRGY Group Limited

(Formerly CBD Energy Limited)

(A.C.N. 010 966 793)

Annual Financial Report

for the year ended 30 June 2015

Table of contents

Report of independent registered accounting firm	F-1

Consolidated statement of comprehensive income	F-2

Consolidated statement of financial position	F-3

Consolidated statement of changes in equity	F-4

Consolidated statement of cash flows	F-6

Notes to the financial statements	F-7

Report of Independent Registered Accounting Firm

To the Board of Directors and shareholders of BlueNRGY Group Limited

We have audited the accompanying consolidated statements of financial position of BlueNRGY Group Limited (‘the Company’) and its controlled entities (collectively ‘the Group’) as at 30 June 2015 and 2014, and the related consolidated statements of comprehensive income, changes in equity and cash flows each of the three years in the period ended 30 June 2015. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits of these financial statements 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 financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of BlueNRGY Group Limited and its subsidiaries at 30 June 2015 and 2014 and the consolidated results of their operations and their consolidated cash flows for each of the three years in the period ended 30 June 2015 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 5 to the financial statements, the Company appointed Administrators on 14 November 2014, and following two Deeds of Company Arrangement was subsequently released from Administration on 27 January 2015. The consolidated balance sheet at 30 June 2015 discloses a deficit of current assets in relation to current liabilities of $4,637.000. Note 2 also advises that the ability of the Group to continue as a going concern and meet its debts and commitments as and when they fall due requires that the Group meets or exceeds its operational budgets in the future and raises funds from new loans and securities issuances. These uncertainties raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

HLB Mann Judd

Sydney, Australia

December 9, 2015

F-1

Statement of comprehensive income

				Consolidated
For the year ended June 30	Note	2015 $’000			Restated 2014 $’000		Restated 2013 $’000

Revenues from continuing operations	6	16,866			13,732		43,473
Other income	6	1,972			655		2,609
Cost of raw materials, consumables used, and contractors		(8,525	)		(6,092	)	(21,926	)
Employee benefit expenses	7	(11,390	)		(9,323	)	(11,025	)
Amortisation and depreciation	7	(486	)		(420	)	(402	)
Impairment of asset	7	(6,217	)		(10,019	)	(590	)
Other expenses	7	(5,942	)		(6,688	)	(6,008	)
Net finance income/(costs)	7	85			(4,051	)	(8,325	)
Loss from continuing operations before income tax		(13,637	)		(22,206	)	(2,194	)
Income tax benefit/(expense)	8	—			—		65
Loss from continuing operations		(13,637	)		(22,206	)	(2,129	)

Profit/(loss) from discontinued operations	14	19,341			(3,224	)	(6,278	)

Net profit/(loss) for the period		5,704			(25,430	)	(8,407	)

Other comprehensive income
Items that may be reclassified to profit or loss
Changes in the fair value of available-for-sale financial assets		—			(800	)	800
Exchange differences on translation of foreign operations		(376	)		(68	)	33
Other comprehensive loss for the period, net of tax of $ Nil (2014- $ Nil)		(376	)		(868	)	833
Total comprehensive profit/(loss) for the period		5,328			(26,298	)	(7,574	)

		Dollars			Dollars
Earnings per share for profit from continuing operations attributable to the ordinary equity holders of the company:
Basic loss per share	9	(0.10	)		(11.37	)
Diluted loss per share	9	(0.10	)		(11.37	)
Earnings per share for profit attributable to the ordinary equity holders of the company:
Basic earnings/(loss) per share	9	0.04			(13.02	)
Diluted earnings/(loss) per share	9	0.04			(13.02	)

The above statement of comprehensive income should be read in conjunction with the accompanying notes.

F-2

Statement of financial position

		Consolidated
As at June 30	Note		2015 $’000		Restated 2014 $’000
ASSETS
Current Assets
Cash and cash equivalents	10		482		1,356
Trade and other receivables	11		2,801		3,093
Inventories	12		223		1,082
Other current assets	13		151		331
Assets classified as discontinued operations	14		—		1,697
Total Current Assets			3,657		7,559

Non-Current Assets
Available-for-sale and other financial assets	14		—		39
Plant and equipment	15		2,356		2,842
Goodwill and intangible assets	16		14,016		7,666
Other non-current assets	13		70		622
Total Non-Current Assets			16,442		11,169
TOTAL ASSETS			20,099		18,728

LIABILITIES
Current Liabilities
Trade and other payables	17		5,551		8,403
Interest-bearing loans and borrowings	18		2,408		12,266
Provisions	19		335		332
Liabilities directly associated with assets classified as discontinued operations	14		—		17,069
Total Current Liabilities			8,294		38,070

Non-Current Liabilities
Interest-bearing loans and borrowings	18		4,592		270
Provisions	19		67		59
Total Non-Current Liabilities			4,659		329
TOTAL LIABILITIES			12,953		38,399
NET ASSETS			7,146		(19,671	)

EQUITY
Contributed equity	20		145,119		125,540
Retained earnings (Accumulated losses)			(139,666	)	(148,512	)
Reserves	21		1,693		3,301
TOTAL EQUITY			7,146		(19,671	)

The above statement of financial position should be read in conjunction with the accompanying notes.

F-3

Statement of changes in equity

For the year ended June 30	Ordinary shares $’000			Preference shares $’000			Convertible Notes $’000			Share options reserve $’000			Available- for-sale reserve $’000			Translation reserve $’000			Retained earnings (Accumulated Losses) $’000			Total $’000

At July 1, 2014 (restated)		120,323			4,643			574			3,336			—			(35	)		(148,512	)		(19,671	)
Profit/(loss) for period		—			—			—			—			—			—			5,704			5,704
Other comprehensive income		—			—			—			—			—			(376	)		—			(376	)
Total comprehensive income for the year		—			—			—			—			—			(376	)		5,704			5,328

Transactions with owners in their capacity as owners								—
Shares issued		18,025			2,775			—			—			—			—			—			20,800
Share issue costs		(444	)		—			—			—			—			—			—			(444	)
Unissued shares		1,133			—			—			—			—			—			—			1,133
Preference shares converted		5,301			(5,301	)		—			—			—			—			—			—
Forfeited on Administration		—			(1,593	)		—			—			—			—			1,593			—
Cancellation of convertible note		—			—			(574	)		—			—			—			574			—
Reclassified expired options		—			—			—			(1,232	)		—			—			1,232			—
Dividends reinvested		—			257			—			—			—			—			(257	)		—
Balance at June 30, 2015		144,338			781			—			2,104			—			(411	)		(139,666	)		7,146

At July 1, 2013 (restated)		109,046			—			574			3,189			800			33			(123,082	)		(9,440	)
Profit/(loss) for period		—			—			—			—			—			—			(25,430	)		(25,430	)
Other comprehensive income		—			—			—			—			(800	)		(68	)		—			(868	)
Total comprehensive income for the year		—			—			—			—			(800	)		(68	)		(25,430	)		(26,298	)

Transactions with owners in their capacity as owners
Shares issued		12,597			4,643			—			—			—			—			—			17,240
Share issue costs		(1,320	)		—			—			—			—			—			—			(1,320	)
Share-based payments for convertible notes		—			—			—			147			—			—			—			147
Balance at June 30, 2014		120,323			4,643			574			3,336			—			(35	)		(148,512	)		(19,671	)

F-4

Statement of changes in equity (continued)

For the year ended June 30	Ordinary shares $’000			Preference shares $’000		Convertible Notes $’000		Share options reserve $’000		Available- for-sale reserve $’000		Translation reserve $’000		Retained earnings (Accumulated Losses) $’000			Total $’000
At July 1, 2012 (restated)		108,509			—		574		2,689		—		—		(114,675	)		(2,903	)
Profit/(loss) for period		—			—				—		—		—		(8,407	)		(8,407	)
Other comprehensive income		—			—				—		800		33		—			833
Total comprehensive income for the year		—			—				—		800		33		(8,407	)		(7,574	)

Transactions with owners in their capacity as owners
Shares issued		626			—				—		—		—		—			626
Share issue costs		(89	)		—				—		—		—		—			(89	)
Share-based payments for convertible notes		—			—				500		—		—		—			500
Balance at June 30, 2013		109,046			—		574		3,189		800		33		(123,082	)		(9,440	)

The above statement of changes in equity should be read in conjunction with the accompanying notes.

F-5

Statement of cash flows

			Consolidated
For the year ended June 30	Note			2015 $’000		2014 $’000		2013 $’000
Cash flow from operating activities
Receipts from customers (inclusive of GST)				16,863		20,680		69,635
Payments to suppliers and employees (inclusive of GST)				(21,974	)	(39,493	)	(53,828	)
Payments for development costs				—		—		(3,535	)
Finance costs				(449	)	(1,350	)	(2,464	)
Interest received				9		—		13
Net cash flows (used)/provided in operating activities		10		(5,551	)	(20,163	)	9,821

Cash flow from investing activities
Proceeds from sale of property, plant and equipment				—		188		10
Purchase of property, plant and equipment				(252	)	(672	)	(275	)
Proceeds from the sale of intangible assets				—		—		1,000
Cash forfeited during reorganisation				(362	)	—		—
Proceeds from sale of investments				—		1,789		—
Payment for the purchase of controlled entities, net of cash acquired				(1,349	)	—		24
Net cash flows (used) / provided in investing activities				(1,963	)	1,305		759

Cash flow from financing activities
Proceeds from share issues				4,521		7,706		207
Proceeds from issue of convertible notes				—		1,013		103
Convertible note issue costs				—		(1,320	)	—
Proceeds from borrowings				2,171		16,282		474
Repayment of borrowings				—		(3,699	)	(13,255	)
Payment of finance lease liabilities				(77	)	(212	)	(162	)
Net cash flows provided/(used) in financing activities				6,615		19,770		(12,633	)

Net (decrease) / increase in cash and cash equivalents				(899	)	912		(2,053	)
Cash and cash equivalents at beginning of period				1,381		469		2,522
Cash and cash equivalents at end of period		10		482		1,381		469

The above statement of cash flows should be read in conjunction with the accompanying notes.

F-6

Notes to the financial statements

Note
1	Corporate information
2	Summary of significant accounting policies
3	Significant accounting judgements, estimates and assumptions
4	Operating Segments
5	Reorganisation
6	Revenues from continuing operations and other income
7	Expenses
8	Income tax
9	Earnings per share
10	Cash and cash equivalents
11	Trade and other receivables
12	Inventories
13	Other assets
14	Available-for-sale, other financial assets and discontinued operations
15	Non-current assets – plant and equipment
16	Non-current assets – intangible assets and goodwill
17	Trade and other payables
18	Interest-bearing loans and borrowings
19	Provisions
20	Contributed equity
21	Reserves
22	Business Combinations
23	Financial risk management objectives and policies
24	Related party disclosure
25	Key management personnel
26	Share-based payments
27	Commitments
28	Events after the balance sheet date
29	Parent entity Information
30	Auditors’ remuneration

F-7

Notes to the financial statements

Corporate information

The consolidated financial statements of BlueNRGY Group Limited (“BlueNRGY”, “the Parent” or “the Company”) (formerly CBD Energy Limited) for the year ended June 30, 2015 were authorised for issue in accordance with a resolution of the Directors on December 2, 2015. The Directors have the power to amend and reissue the financial statements.

BlueNRGY is a company limited by shares, incorporated in Australia, whose shares are publicly listed on the OTC Pink Current marketplace.

Summary of significant accounting policies

The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements are for the consolidated entity consisting of BlueNRGY and its subsidiaries. BlueNRGY and its subsidiaries together are referred to in this financial report as the ‘Group’ or the ‘Consolidated Entity’.

(a)

Basis of preparation

The financial report is a general purpose financial report, which has been prepared in accordance with Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board. The financial report has also been prepared on a historical cost basis, modified by the revaluation of available for sale financial assets, financial assets at fair value through profit or loss and liabilities (including derivative instruments). BlueNRGY is a for-profit entity for the purpose of preparing the financial statements.

Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards.

The financial report is presented in Australian dollars and all values are rounded to the nearest thousand dollars ($’000) unless otherwise stated.

Going concern

The financial statements have been prepared on the basis of going concern which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business. Key financial data for the Group for the years ended June 30, 2015 and 2014 is disclosed below:

Consolidated	Year ended June 30, 2015 $’000			Year ended June 30, 2014 $’000

Cash at bank and in hand less overdraft		482			1,356
Net profit/(loss) for the year		5,704			(25,430	)
Net cash inflow/(outflow) from operating activities for the year		(5,551	)		(20,163	)
Net current assets/(liabilities)		(4,637	)		(30,511	)

The Group incurred net operating cash outflows for the year ended June 30, 2014 and continued operating losses. These losses continued in the period after June 30, 2014 and on November 14, 2014, by unanimous resolution of those members of its Board permitted to consider the matter and to vote, it was determined that the Company and three of its Australian subsidiaries should be placed into voluntary administration (‘VA’) under the Australian Corporations Act 2001 (the ‘Act’). Refer to Note 5 for further information. The VA process was concluded on 27 January 2015.

The ability of the Group to continue as a going concern and meet its debts and commitments as and when they fall due requires that it meets or exceeds operational budgets in the future and raises funds from new loans and securities issues. Therefore, there is substantial doubt with regards to the Group’s ability to continue as a going concern and therefore whether the Group will realise its assets and settle its liabilities at amounts stated in the financial statements. In order to reduce or eliminate this doubt and continue operating, the Group is taking steps to:

F-8

Notes to the financial statements

Summary of significant accounting policies (continued)

(a)

Basis of preparation (continued)

Going concern (continued)

●

Sustain net operating profits: BlueNRGY is continually reviewing costs structures of its businesses and making the appropriate changes to maximise return on revenues generated. New business opportunities are assessed in order to identify opportunities for growth and increased profitability.

●

Raise new debt and/or equity capital: BlueNRGY continues to discuss opportunities for further investment with current equity holders.

The Directors note that there is a risk that some or all of the above activities may not be successful, however they believe that the Group has reasonable prospects of achieving the above plans and as a consequence they have no intention to liquidate or cease trading.

The Directors have a responsibility to prepare the financial statements in accordance with Accounting Standards, which requires entities to prepare financial statements on a going concern basis unless the Directors intend to liquidate the entity, cease trading or have no realistic alternative but to do so. No adjustments have been made to the financial statements relating to the recoverability and classification of the asset carrying amounts or classification of liabilities that might be necessary should the Group not continue as a going concern.

(b)

Critical accounting estimates

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 3.

(c)

Changes in accounting policies and new standards and interpretations not yet adopted

The Group has adopted new and amended Australian Accounting Standards and AASB Interpretations as of 1 July 2014. There has been no material impact on the financial statements of the Group from these new and amended Standards and Interpretations.

A number of new Standards, amendments to Standards and Interpretations are effective for annual periods beginning after 1 July 2015, and have not been applied in preparing these consolidated financial statements. None of these are expected to have a significant effect on the consolidated financial statements of the Group, except for:

●

AASB 9 Financial Instruments which becomes mandatory for the Group’s 2016 consolidated financial statements and could change the classification and measurement of financial instruments.

●

AASB 15 Revenue which becomes mandatory for the Group’s 2018 consolidated financial statements and could change the timing of revenue recognition by the Group.

The Group does not plan to adopt these Standards early, and the extent of the impact of adopting these Standards has not been determined.

(d)

Basis of consolidation

The consolidated financial statements comprise the financial statements of BlueNRGY Group Limited and its subsidiaries as outlined in Note 24.

Subsidiaries are all those entities controlled by the Group i.e. where the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies. In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profits and losses resulting from intra-group transactions have been eliminated in full.

F-9

Notes to the financial statements

Summary of significant accounting policies (continued)

(d)

Basis of consolidation (continued)

Subsidiaries are fully consolidated from the date on which the Group obtains control and cease to be consolidated from the date on which control is transferred out of the Group.

The acquisition method of accounting is used to account for business combinations by the Group (refer to Note 2(e)).

A change in the ownership interest of a subsidiary that does not result in a loss of control is accounted for as an equity transaction.

(e)

Business combinations

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value, and the amount of any non-controlling interest in the acquiree. Acquisition costs incurred are expensed and included in administrative expenses.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic conditions, the Group’s operating or accounting policies and other pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured at fair value as at the acquisition date through profit or loss.

Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Contingent consideration is accounted for as a provision in accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets and subsequent changes to the fair value of the contingent consideration is recognised in profit or loss. If the contingent consideration is classified as equity, it will not be re-measured. Subsequent settlement is accounted for within equity.

All transaction costs incurred in relation to a business combination are expensed to profit or loss.

(f)

Operating segments

Operating segments are reported in a manner that is consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as the Board of Directors who ultimately make strategic decisions. Refer to Note 4 for details of segments in which the Group operates.

(g)

Foreign currency translation

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Australian dollars which is BlueNRGY Group Limited’s functional and presentation currency.

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the reporting date.

All exchange differences in the consolidated financial statements are taken to profit or loss except when they are deferred in equity when they are attributable to part of the net investment in a foreign operation.

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss.

F-10

Notes to the financial statements

Summary of significant accounting policies (continued)

(h)

Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty. The Group assesses its revenue arrangements against specific criteria to determine if it is acting as principal or agent. The Group has concluded that it is acting as a principal in all of its revenue arrangements. The specific recognition criteria described below must also be met before revenue is recognised:

Domestic and commercial solar installation fees

Installation fees are recognised once installation is completed. Domestic and commercial solar installation revenues are derived from solar PV system sales to third parties. Part of the consideration the Group receives in respect of a solar installation is generally in the form of a Small-scale Technology Certificates (‘STCs’) that our customers assign to the Group. STCs assigned to the Group are initially measured as an inventory asset at cost. When STCs are ultimately sold by the Group, incremental revenue might arise, being the difference between the cost at which the STCs were recorded and the final price at which STCs have been traded by the Group. This incremental revenue is reported as other income. Similarly, when STCs are sold at less than cost, the loss is reported within the cost of raw materials in profit or loss, as it represents, in effect, a write down of the STCs inventory balance to its net realisable value.

Sale of products, materials and parts

Revenue from the sale of products, material and parts is recognised upon the delivery of goods to customers.

Services

Revenue from the rendering of service is recognised upon delivery of the service to the customers.

Construction contracts

Contract revenue and expenses are recognised in accordance with the percentage of completion method unless the outcome of the contract cannot be reliably estimated. Under this method, contract revenue is matched with the contract costs incurred in reaching the stage of completion.

When it is probable that a loss will arise from a construction contract, the excess of expected total costs over expected total revenue is recognised immediately in profit or loss. Where the outcome cannot be measured reliably, revenue is recognised only to the extent that related expenditure is recoverable. The stage of completion of a contract is measured by reference to the recoverable costs incurred to date as a percentage of estimated total costs for the contract.

Project revenue

Revenue from commercial and utility scale solar projects and wind development projects is recognised when the risks and rewards have been transferred, which can vary depending on the specifics of each arrangement that the Group has with its customers, and when revenue can be reliably measured.

Interest income

Interest income is recognised using the effective interest method.

Other revenues

Other operating revenues are recognised as they are earned and goods or services provided.

(i)

Income tax and other taxes

The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities based on the current period’s taxable income. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

F-11

Notes to the financial statements

Summary of significant accounting policies (continued)

(i)

Income tax and other taxes (continued)

Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences except:

●

when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or

●

in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carried forward unused tax credits and unused tax losses can be utilised, except:

●

when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or

●

in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.

Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, would be recognised subsequently if new information about facts and circumstances changed. The adjustment would either be treated as a reduction of goodwill (as long as it does not exceed goodwill) if it was incurred during the measurement period or in profit or loss.

Tax consolidation legislation

BlueNRGY Group Limited and its wholly owned Australian controlled entities implemented the tax consolidation legislation as of 1 July 2003.

In addition to its own current and deferred tax amounts, BlueNRGY Group Limited also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the tax-consolidated group.

Other taxes

Revenues, expenses and assets are recognised net of the amount of GST except:

●

when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

●

receivables and payables, which are stated with the amount of GST included.

F-12

Notes to the financial statements

Summary of significant accounting policies (continued)

(i)

Income tax and other taxes (continued)

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as part of operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

(j)

Impairment of assets

Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (‘cash generating units’). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

(k)

Cash and cash equivalents

Cash and cash equivalents in the statement of financial position comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. Bank overdrafts are included within interest-bearing loans and borrowings in current liabilities on the statement of financial position.

(l)

Trade and other receivables

Trade receivables are recognised initially at original invoiced amounts, less an allowance for any uncollectible amounts. Settlement terms for trade receivables vary between the business units and are generally in line with standard industry practice within each industry. They are presented as current assets unless collection is not expected for more than 12 months after the reporting date.

Collectability of trade receivables is reviewed on an ongoing basis. Individual debts that are known to be uncollectible are written off when identified by reducing the carrying amount directly. An allowance account (provision for impairment of trade receivables) is used when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is impaired. The amount of the impairment allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows. Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial.

The amount of any impairment loss is recognised in profit or loss as a separate expense category. When a trade receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against other expenses in profit or loss.

(m)

Inventories

Raw materials and stores

Inventories, which mainly comprise solar panels and inverters, which are used in the residential solar businesses of the Group, are measured at the lower of cost and net realisable value. Costs are assigned to individual items of inventory on the basis of weighted average costs. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs necessary to make the sale.

F-13

Notes to the financial statements

Summary of significant accounting policies (continued)

(m)

Inventories (continued)

Small-scale Technology Certificates (‘STCs’)

As indicated in Note 2(h), STCs are initially recognised at cost following the installation of a solar panel and the assignment of the STCs to the Group. STCs are subsequently measured at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale.

Project work in progress

Project work in progress comprises commercial solar scale projects and is valued at the lower of cost and net realisable value. Cost comprises staff salary costs and direct expenses including direct material costs and contractor costs together with an appropriate proportion of overheads. Net realisable value is based on estimated selling prices less further costs expected to be incurred to completion.

Construction contracts work in progress

Construction work in progress is valued at cost, plus profit recognised to date, less provision for anticipated future losses and progress billings made under the contract. Cost includes both variable and fixed costs relating to specific contracts, and those costs that are attributable to the contract activity in general and that can be allocated on a reasonable basis.

(n)

Investments and other financial assets

Investments and financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are categorised as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Designation is re-evaluated at each reporting date, but there are restrictions on reclassifying to other categories.

When financial assets are recognised initially, they are measured at fair value, plus, in the case of assets not at fair value through profit or loss, directly attributable transaction costs.

Recognition and derecognition

All regular way purchases and sales of financial assets are recognised on the trade date i.e. the date that the Group commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets under contracts that require delivery of the assets within the period established generally by regulation or convention in the market place. Financial assets are derecognised when the right to receive cash flows from the financial assets has expired or when the entity transfers substantially all the risks and rewards of the financial assets. If the entity neither retains nor transfers substantially all of the risks and rewards, it derecognises the asset if it has transferred control of the asset.

Loans and receivables

Loans and receivables including loan notes are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired. These are included in current assets, except for those with maturities greater than 12 months after balance date, which are classified as non-current.

Available-for-Sale investments

Available-for-sale investments are those non-derivative financial assets, principally equity securities, that are designated as available-for-sale or are not classified as either financial assets at fair value through profit or loss, loans and receivables, or held-to-maturity investments. After initial recognition available-for-sale investments are measured at fair value with gains or losses being recognised as a separate component of equity until the investment is derecognised or until the investment is determined to be impaired. If there is objective evidence of impairment for available-for-sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss – is removed from equity and recognised in profit or loss.

F-14

Notes to the financial statements

Summary of significant accounting policies (continued)

(n)

Investments and other financial assets (continued)

The fair values of investments that are actively traded in organised financial markets are determined by reference to quoted market bid prices at the close of business on the reporting date. For investments with no active market, fair values are determined using valuation techniques. Such techniques include: using recent arm’s length market transactions; reference to the current market value of another instrument that is substantially the same; discounted cash flow analysis and option pricing models making as much use of available and supportable market data as possible and keeping judgemental inputs to a minimum.

(o)

Plant and equipment

Plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment losses.

The cost of fixed assets constructed within the economic entity includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance are recognised in profit or loss as incurred.

Depreciation is calculated on a straight-line basis over the estimated useful life of the specific assets as follows:

Computer hardware and software - 2 to 5 years

Motor vehicles - 5 years

Plant and equipment – 1 to 20 years

Furniture, fittings and office equipment – 2 to 5 years

Leased motor vehicles – 5 years

Leasehold improvements – 3 years

The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end.

Impairment

The carrying values of plant and equipment are reviewed for impairment at each reporting date, with recoverable amount being estimated when events or changes in circumstances indicate that the carrying value may be impaired.

The recoverable amount of plant and equipment is the higher of fair value less costs to sell, and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

For an asset that does not generate largely independent cash inflows, recoverable amount is determined for the cash-generating unit to which the asset belongs, unless the asset’s value in use can be estimated to be close to its fair value.

An impairment exists when the carrying value of an asset or cash-generating unit exceeds its estimated recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount.

For plant and equipment, impairment losses are recognised in profit or loss.

Derecognition

An item of plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.

Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.

F-15

Notes to the financial statements

Summary of significant accounting policies (continued)

(p)

Leases

The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset

Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised as an expense in profit or loss.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term.

Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term.

(q)

Goodwill and other intangibles

Goodwill

Goodwill acquired in a business combination is initially measured at cost of the business combination, being the excess of the consideration transferred over the fair value of the net identifiable assets acquired and liabilities assumed.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses.

Goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired.

For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units.

Impairment is determined by assessing the recoverable amount of the cash-generating unit or group of cash-generating units, to which the goodwill relates.

BlueNRGY Group Limited performs its impairment testing as at 30 June each year or more frequently where there are indicators of impairment. Further details on the methodology and assumptions used are outlined in Note 16.

When the recoverable amount of the cash-generating unit or group of cash-generating units is less than the carrying amount, an impairment loss is recognised. When goodwill forms part of a cash-generating unit or group of cash-generating units and an operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this manner is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained.

Impairment losses recognised for goodwill are not subsequently reversed.

Intangibles other than Goodwill

Intangible assets acquired separately or in a business combination are initially measured at cost. The cost of an intangible asset acquired in a business combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is recognised in profit or loss in the year in which the expenditure is incurred.

The useful lives of intangible assets other than goodwill are assessed to be finite. Intangible assets with finite lives are amortised over the useful life and tested for impairment whenever there is an indication that the intangible asset may be impaired.

F-16

Notes to the financial statements

Summary of significant accounting policies (continued)

(q)

Goodwill and other intangibles (continued)

The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least once each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for prospectively by changing the amortisation period or method, as appropriate, which is a change in accounting estimate. The amortisation expense on intangible assets with finite lives is recognised in profit or loss in the expense category consistent with the function of the intangible asset.

Development Costs

Research costs and costs that do not meet the definition of development costs for the purpose of Accounting Standards are expensed as incurred. An intangible asset arising from development expenditure on an internal project is recognised only when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the development and the ability to measure reliably the expenditure attributable to the intangible asset during its development. Following the initial recognition of the development expenditure, the cost model is applied requiring the asset to be carried at cost less any accumulated amortisation and accumulated impairment losses. Any expenditure so capitalised is amortised over the period of expected benefit from the related project.

Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in profit or loss when the asset is derecognised.

(r)

Pensions and other post-employment benefits

The company contributes to defined contribution superannuation funds on behalf of employees at the required statutory rates.

(s)

Trade and other payables

Trade and other payables are carried at amortised cost. Due to their short-term nature they are not discounted. They represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within terms negotiated with suppliers.

(t)

Interest-bearing loans and borrowings

All interest bearing loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs.

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Fees paid on the establishment of loan facilities that are yield related are included as part of the carrying amount of the loans and borrowings.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance date.

(u)

Convertible notes

On issuance of convertible notes, an assessment is made as to whether the convertible notes contain an equity instrument or whether the whole instrument should be classified as a financial liability.

When it is determined that the whole instrument is a financial liability and no equity instrument is identified (for example for foreign-currency-denominated convertible notes), the conversion option is separated from the host debt and classified as a derivative liability. The carrying value of the host contract (a contract denominated in a foreign currency) at initial recognition is determined as the difference between the consideration received and the fair value of the embedded derivative. The host contract is subsequently measured at amortised cost using the effective interest rate method. The embedded derivative is subsequently measured at fair value at the end of each reporting period through profit or loss. The convertible note and the derivative are presented as a single number on the statement of financial position within interest-bearing loans and borrowings.

F-17

Notes to the financial statements

Summary of significant accounting policies (continued)

(u)

Convertible notes (continued)

When it is determined that the instrument contains an equity component based on the terms of the contract, on issuance of the convertible notes the fair value of the liability component is determined using a market rate for an equivalent non-convertible bond. This amount is classified as a financial liability, measured at amortised cost (net of transaction costs) until it is extinguished on conversion or redemption. The remainder of the proceeds is allocated to the conversion option that is recognised and included in equity. Transaction costs are deducted from equity, net of associated income tax. The carrying amount of the conversion option is not re-measured in subsequent years.

(v)

Provisions and employee benefits

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Employee entitlements - wages, salaries, and annual leave

Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months of the reporting date, are recognised in respect of employees’ services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled.

Employee entitlements - long service leave

The liability for long service leave is recognised and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures, and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows.

(w)

Share-based payment transactions

The Group provides benefits to its employees (including senior executives) in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares (‘equity-settled transactions’).

The cost of these equity-settled transactions with employees is measured by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using a Black-Scholes or Binomial model, further details of which are given in Note 26.

In valuing equity-settled transactions, no account is taken of any vesting conditions, other than conditions linked to the price of the shares of BlueNRGY Group Limited (‘market conditions’) if applicable.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled (the vesting period), ending on the date on which the relevant employees become fully entitled to the award (the vesting date).

At each subsequent reporting date until vesting, the cumulative charge to profit or loss is the product of:

(i) the grant date fair value of the award;

(ii) the current best estimate of the number of awards that will vest, taking into account such factors as the likelihood of employee turnover during the vesting period and the likelihood of non-market performance conditions being met; and

(iii) the expired portion of the vesting period.

The charge to profit or loss for the period is the cumulative amount as calculated above less the amounts already charged in previous periods. There is a corresponding entry to equity.

Until an award has vested, any amounts recorded are contingent and will be adjusted if more or fewer awards vest than were originally anticipated to do so. Any award subject to a market condition is considered to vest irrespective of whether or not that market condition is fulfilled, provided that all other conditions are satisfied. No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a market condition.

F-18

Notes to the financial statements

Summary of significant accounting policies (continued)

(w)

Share-based payment transactions (continued)

If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. An additional expense is recognised for any modification that increases the total fair value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.

If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised at that date. However, if a new award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph.

The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share (see Note 9).

(x)

Contributed equity

Ordinary shares and preference shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

(y)

Earnings per share

Basic earnings per share is calculated as net profit or loss attributable to shareholders, adjusted to exclude costs of servicing equity (other than dividends), divided by the weighted average number of ordinary shares.

Diluted earnings per share adjusts the figure used in the determination of basic earnings per share to take into account:

●

the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and

●

the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.

(z)

Parent entity financial information

The financial information for the parent entity, BlueNRGY Group Limited, disclosed in Note 29 has been prepared on the same basis as the consolidated financial statements, except as set out below.

Investments in subsidiaries

Investments in subsidiaries are accounted for at cost less any impairment charge.

Tax consolidation legislation

BlueNRGY Group Limited and its wholly owned Australian controlled entities have implemented the tax consolidation legislation.

The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate BlueNRGY Group Limited for any current tax payable assumed and are compensated by BlueNRGY Group Limited for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to BlueNRGY Group Limited under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in the wholly-owned entities’ financial statements.

The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head entity, which is issued as soon as practicable after the end of each financial year. Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as current amounts receivable from or payable to other entities in the group.

(aa)

Rounding of amounts

The company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission, relating to the ‘rounding off’ of amounts in the financial statements. Amounts in the financial statements have been rounded off in accordance with that Class Order to the nearest thousand dollars, or, in certain cases, the nearest dollar.

F-19

Notes to the financial statements

Summary of significant accounting policies (continued)

(ab)

Prior Years Restated

The information in these financial statements in relation to 2014 and 2013 has been restated in relation to operations that were reclassified as “discontinued operations” in 2015.

Significant accounting judgements, estimates and assumptions

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

(a)

Critical accounting estimates and assumptions

Recovery of deferred tax assets

During the year ended June 30, 2015, pursuant to AASB 112 Income Taxes, the Company reassessed its estimate of the probability that future taxable profits will be available against which the Group can utilise its unused tax losses and deductible temporary differences in future periods and deferred tax assets recognised at that date were derecognised.

Impairment of goodwill and other intangibles

The Group determines whether goodwill and other intangibles are impaired at least on an annual basis. This requires an estimation of the recoverable amount of the cash-generating unit(s) to which the goodwill or other intangible assets are allocated. The assumptions used in this estimation of recoverable amount and the carrying amount of goodwill and other intangibles including a sensitivity analysis are shown in Note 16.

Project work in progress

Project work in progress is capitalised in accordance with the accounting policy in Note 2(m). Initial capitalisation of costs is based on management’s judgment that technological and economical feasibility is confirmed, usually when a project has reached a defined milestone. Determination of the amounts to be capitalised is made on a case-by-case basis giving regard to previous experience of the Group in similar projects and contractual arrangements. At June 30, 2015 the carrying amount of capitalised project work in progress was $110,000 (2014: $325,000).

Share-based payment transactions

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using a Black-Scholes or Binominal model, with the assumptions detailed in Note 26.

The Group measures the cost of equity-settled transactions with regards to warrants issued to lenders using an un-modified binominal lattice model giving consideration to the dilution impact of the shares issued upon conversion of the warrants as well as other options on issue.

Contingent consideration

Under the terms of the Membership Interest Purchase Agreement between the Group and its subsidiary, BlueNRGY LLC, the Group was obligated to create a management incentive pool of ordinary shares and, subject to vesting conditions, issue all such shares to the named parties. Identified within this pool of ordinary shares were 4,011,324 shares ($191,000) unallocated staff incentive shares to be issued to beneficiaries as directed by parties to the Agreement.

F-20

Notes to the financial statements

Operating segments

The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (the chief operating decision makers) in assessing performance and in determining the allocation of resources.

The consolidated entity’s operating companies are organised and managed separately according to the nature of the products and services they provide, with each segment offering different products and serving different markets.

The principal activities of segments within the consolidated entity were:

●

Solar PV provides engineering design, supply and installation services to retail, commercial and utility-scale domestic and international customers with professional engineering solutions to make effective use of solar power. Domestic products and services are generally small-scale solar power solutions suited to residential and small to medium enterprise applications. International products and services are generally focused on utility-scale solar generation system projects.

●

Parmac provides a full range of mechanical services and air-conditioning services in support of developers, builders and commercial tenants at the mid-tier level. Their specialty is working within existing mechanical services infrastructure and tight deadlines to deliver high-quality commercial grade air-conditioning solutions.

●

Monitoring & Performance Analytics provide an integrated, device-agnostic energy monitoring solution to maximize profitability for any solar PV or wind installation. An all-in-one monitoring portal, users are provided with the most comprehensive suite of tools to remotely configure and track energy production.

●

RAPS/Technology Solutions includes operating remote area power systems (‘RAPS’) as well as the inclusion of other operations that utilise the Group’s patents relating to carbon block energy storage technology and other intellectual property. The Chatham Island wind project is included in the RAPS segment.

●

Corporate provides administrative and other services required to support the BlueNRGY group. This includes the Corporate Executive Team, Finance, Human Resources and Legal departments.

Primary reporting – business segments

2015

Solar PV
$’000

Parmac
$’000

Monitoring & Performance Analytics
$’000

RAPS
$’000

Corporate
$’000

Consoli-
dated
$’000

Revenue outside the economic entity

3,062

12,242

167

101

1,294

16,866

Other income

2,148

(892

)

—

(464

)

1,180

1,972

Total income from continuing operations

5,210

11,350

167

(363

)

2,474

18,838

Total income from discontinued operations

20,347

Total income

39,185

Segment loss before tax from continuing operations

(8,525

)

(1,069

)

(724

)

(240

)

(3,079

)

(13,637

)

Income tax (expense)/benefit

—

Net loss after tax from continuing operations

(8,525

)

(1,069

)

(724

)

(240

)

(3,079

)

(13,637

)

Net profit from discontinued operations

19,341

Net profit after tax

5,704

Depreciation and Amortisation

(46

)

(138

)

(57

)

—

(245

)

(486

)

Impairment of asset

(6,200

)

—

(17

)

(6,217

)

Total Assets

719

3,066

338

1,797

14,179

20,099

Total Liabilities

1,772

3,028

909

147

7,097

12,953

F-21

Notes to the financial statements

Primary reporting – business segments (continued)

2014
Revenue outside the economic entity	1,924		10,188		—	328	1,292		13,732
Other income	1,560		14		—	—	(919	)	655
Total income from continuing operations	3,484		10,202		—	328	373		14,387
Total income from discontinued operations									4,556
Total income									18,943

Segment profit/(loss) before tax from continuing operations	263		(823	)	—	238	(21,884	)	(22,206	)
Income tax (expense)/benefit	—		—		—	—	—		—
Net profit/(loss) after tax from continuing operations	263		(823	)	—	238	(21,884	)	(22,206	)
Net loss from discontinued operations									(3,224	)
Net loss after tax									(25,430	)

Depreciation and Amortisation	(70	)	(80	)	—	—	(270	)	(420	)
Impairment of asset	—		—		—	—	(10,019	)	(10,019	)

Segment assets of continuing operations	1,180		2,234		—	1,975	11,642		17,031
Segment assets of discontinued operations									1,697
Total Assets									18,728
Segment liabilities of continuing operations	1,350		2,332		—	83	17,565		21,330
Segment liabilities of discontinued operations									17,069
Total Liabilities									38,399

Reorganisation

(i)

insolvent or likely to become insolvent in the future;

(ii)

should be placed into voluntary administration (‘VA’) under the Australian Corporations Act 2001 (the ‘Act’), and

(iii)

Said Jahani and Trevor Pogroske from Grant Thornton be appointed as joint and several administrators (referred to hereinafter in the singular as ‘Administrator’) pursuant to section 436A of the Act.

The three Australian subsidiaries of the Company that entered VA were CBD Solar Labs Pty Ltd, Westinghouse Solar Pty Ltd and KI Solar Pty Ltd, which, together with the Company are referred to as the VA Companies. As a result of the Administrator’s appointment, the powers of the directors of the VA Companies were suspended and the Administrator took control of the affairs of the companies subject to the appointment.

On December 24, 2014 two deeds of company arrangement under the Act (collectively, the ‘Reorganisation Plans’) were signed. The Reorganisation Plans became effective on January 27, 2015 along with a variation to the Reorganisation Plans.

The Reorganisation Plans provided, among other things, that:

(i)

creditor claims and contingent liabilities of the VA Companies were extinguished and creditors received newly issued ordinary shares of the Company; and

(ii)

investors infused US$1 million ($1,064,000) into the Company in order to meet the requirements of the Deed Funds set forth in the Reorganisation Plans.

The Deed Funds were used to pay creditor claims. Creditors of the Company received US$610,000 ($649,000) and creditors of the Company’s subsidiary, Westinghouse Solar Pty Ltd, US$390,000 ($415,000).

As a consequence of the Reorganisation Plans, the Company and its subsidiary, Westinghouse Solar Pty Ltd, exited voluntary administration and resumed management by their Boards of Directors (the ‘Board’). The following subsidiaries were directly impacted as a result of the Reorganisation Plans and were deconsolidated: CBD Labs Pty Ltd, Energy Bonds Plc, Secured Energy Bonds Plc, Secured Energy Bonds II Plc, KI Solar Pty Ltd, SEB Mercury Limited and SEB Venus Limited.

F-22

Notes to the financial statements

Reorganisation (continued)

On December 12, 2014, by unanimous resolution of those members of the Company’s Board permitted to consider the matter and to vote, it was determined that a further eight Australian subsidiaries of the Company and their respective subsidiaries be voluntary liquidated. These companies were CBD Solar Pty Ltd, eco-Kinetics Group Pty Ltd, eco-Kinetics Pty Ltd, eco-Kinetics

NSW Pty Ltd, eco-Kinetics Victoria Pty Ltd, eco-Kinetics Northern Territory Pty Ltd, eco-Kinetics Energy Systems Pty Ltd, National Solar Installations Pty Ltd, Remote Area Power Systems Pty Ltd, eco-Kinetics Netherlands Cooperatief UA, eco-Kinetics Netherlands Holding BV and eco-Kinetics South Pacific Ltd. These subsidiaries have been classified as “discontinued operations”.

The Company’s other subsidiaries continued to operate outside the VA process.

The impact of the VA process is disclosed in these financial statements as follows:

	Note	2015 $’000

1. Included in Net profit (loss) for the period
(i) Other income	6	1,981
(ii) Profit (loss) from discontinued operations	14	20,227

Total impact on net assets at 30 June 2015		22,208

2. Included as transactions with owners in their capacity as owners in the Statement of Changes in Equity
(i) Preference shares forfeited		1,593
(ii) Cancellation of equity portion of convertible note		574

Total impact on Retained Earnings (Accumulated losses)		24,375

Revenues from continuing operations and other income

	Consolidated
		2015 $’000		Restated 2014 $’000	Restated 2013 $’000

Revenue from sales and services		16,866		13,732	43,473

Other income
Gain on financial liabilities measured at fair value		—		—	2,555
Debt extinguishment ¹		1,981		—	—
Other income		(9	)	655	54
		1,972		655	2,609

¹Refer to Note 5.

F-23

Notes to the financial statements

Expenses

	Consolidated
		2015 $’000	Restated 2014 $’000	Restated 2013 S’000
Employee benefits expense
Salaries and wages		9,378	8,402	9,727
Defined contribution superannuation expense		590	285	296
Other employee benefits expense		1,422	636	1,002
		11,390	9,323	11,025

Amortisation and depreciation
Depreciation – property, plant & equipment		438	420	402
Amortisation – development costs		48	—	—
		486	420	402
Impairment of assets
Investment in wind projects ¹		—	10,000	—
Investment in Barefoot Power		—	15	—
Investment in Solar		6,200	—	590
Other ²		17	4	—
		6,217	10,019	590

¹ The investment in the Taralga Wind Farm was fully impaired to $Nil in 2014.

² The investment in Andalay Solar, a US listed company, has been written down to $Nil in the current year.

	Consolidated
		2015 $’000		Restated 2014 $’000		Restated 2013 $’000
Other expenses
Bad and doubtful debts		829		25		60
Compliance and consultants		2,111		3,515		2,473
Loss/(gain) on disposal of assets		171		(1,063	)	168
Insurance		457		430		321
Occupancy expenses		651		559		556
Travel costs		639		751		567
Other expenses		1,084		2,471		1,863
		5,942		6,688		6,008

Net finance costs
Interest income		(9	)	(28	)	(36	)
Interest expense		766		3,770		7,583
Dividends on Preference shares classified as liabilities		96		—		—
Share option expenses		—		148		267
Foreign exchange (gain)/loss		(938	)	161		511
		(85	)	4,051		8,325

F-24

Notes to the financial statements

Income tax

	Consolidated
		2015 $’000		Restated 2014 $’000		Restated 2013 $’000

(a) Income tax benefit/(expense)
Current tax expense		—		—		—
Deferred tax benefit/(expense)		—		—		65
Income tax benefit/(expense)		—		—		65

Income tax expense is attributable to:
Loss from continuing operations		—		—		65
Profit/(loss) from discontinuing operations		—		—		—
		—		—		65

(b) Numerical reconciliation of income tax expense to prima facie tax payable
Loss before income tax from continuing operations		(13,637	)	(22,206	)	(2,194	)
Profit/(loss) before income tax from discontinuing operations		19,341		(3,224	)	(6,278	)
		5,704		(25,430	)	(8,472	)
Tax at the Australian tax rate of 30%		1,711		(7,629	)	(2,542	)

Tax effect of amounts which are not deductible/(taxable) in calculating taxable income:
Expenditure not allowable for income tax purposes		1,597		4,095		610
Tax benefit (not recognised) now recognised		(3,308	)	3,534		1,997
Income tax expense		—		—		65

The Group offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority.

(c)

Tax losses

The Group generated revenue tax profits totalling $11,027,000 (reduction to deferred asset of $3,308,000). Deferred tax assets relating to tax losses totalling $16,613,000 (2014: $19,921,000) are available to the Group for offset against future taxable income. In addition, the Group has carried forward capital tax losses totalling $4,867,000 (2014: $4,867,000).

(d)

Unrecognised temporary differences

The temporary differences not recognised at June 30, 2015 and 2014 relate primarily to tax losses referred to in (c). There are no other material temporary differences.

(e)

Franking credits

At June 30, 2015 the Group has $834,000 of available franking credits (2014: $834,000).

F-25

Notes to the financial statements

Earnings per share

The following reflects the income used in the basic and diluted earnings per share computations:

	Consolidated
		2015 $’000		Restated 2014 $’000		Restated 2013 $’000

(a) Earnings used in calculating earnings per share
Net loss from continuing operations attributable to ordinary equity holders of the parent		(13,637	)	(22,206	)	(2,129	)
Net profit/(loss) from discontinued operations attributable to ordinary equity holders of the parent		19,341		(3,224	)	(6,278	)
Net profit/(loss) attributable to ordinary equity holders of the parent		5,704		(25,430	)	(8,407	)


(b) Weighted average number of shares		2015 Number of shares		2014 Number of shares		2013 Number of shares
Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share		140,686,995		1,953,691		1,596,246
Weighted average number of ordinary shares used as the denominator in calculating diluted earnings per share		140,686,995		1,953,691		1,596,246

		2015		2014		2013
(c) Earnings per share		$		$		$
Basic earnings per share from continuing operations		(0.10	)	(11.37	)	1.33
Basic earnings per share from discontinued operations		0.14		(1.65	)	3.93
Basic earnings per share		0.04		(13.02	)	5.26

Diluted loss per share from continuing operations		(0.10	)	(11.37	)	1.33
Diluted earnings/(loss) per share from discontinued operations		0.14		(1.65	)	3.93
Diluted earnings/(loss) per share		0.04		(13.02	)	5.26

Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

F-26

Notes to the financial statements

Earnings per share (continued)

All share options on issue at 30 June 2014 and 30 June 2015 were anti-dilutive and were excluded from the calculation of diluted earnings per share:

All the convertible notes issued in 2014 were anti-dilutive. Refer to Note 18 for details of convertible notes issued.

10.

Cash and cash equivalents

	Consolidated
		2015 $’000		Restated 2014 $’000

Cash at bank and in hand		482		1,381
Cash at bank and in hand for continuing operations		482		1,356

(a) Reconciliation of net loss to net cash flow from operations
Profit (loss) after tax		5,704		(25,430	)
Adjustment for non-cash items:
Depreciation and amortisation		597		632
Impairment of intangibles		6,200		—
Impairment of financial assets and joint venture assets		17		10,015
Gain on debt extinguishment		(22,342	)	—
Share-based payments expense		369		147
Non-cash items relating to convertible notes		270		3,256
Loss on sale of property, plant and equipment and intangible assets		140		909
Unrealised losses/(gains) on foreign exchange		81		474
Bad debts written off and provision for impairment of receivable		827		75
Changes in assets and liabilities:
Trade and other receivables		(1,643	)	2,862
Inventories		1,461		(1,038	)
Other assets		21		(801	)
Other non-current assets		61		—
Trade and other payables		2,700		(10,735	)
Provisions		(14	)	(529	)
Net cash from/(used in) operating activities		(5,551	)	(20,163	)

(b) Non-cash financing and investing activities
Share-based payments		369		147
Equity settled – payables and borrowings		367		4,891
Acquisition of plant and equipment by means of finance leases		—		167

The Group’s exposure to interest rate risk is discussed in Note 23. The maximum exposure to credit risk at the end of the reporting period is the carrying amount.

F-27

Notes to the financial statements

11.

Trade and other receivables

	Consolidated
		2015 $’000	Restated 2014 $’000
Current
Trade receivables		2,494	1,493
Other receivables		307	1,600
		2,801	3,093

(a)

Past due but not impaired

As at June 30, 2015, trade receivables past due but not considered impaired are: $255,000 (2014: $234,000). Payment terms on these amounts have not been re-negotiated. Direct contact with the relevant debtor has been made and the Group is satisfied that payment will be received in full. Since balance date $167,977 of these past due amounts have been received.

Other balances within trade and other receivables do not contain impaired assets and are not past due. It is expected that these other balances will be received when due.

Total
$’000

0-30 Days $’000

30-60 Days $’000

> 60 Days $’000

At June 30, the ageing analysis of trade receivables past due is as follows:

2015 Consolidated

255

—

127

128

2014 Consolidated

234

—

177

12.

Inventories

	Consolidated
		2015 $’000	Restated 2014 $’000
Raw materials and stores		113	740
Work in progress		110	325
STCs		—	17
		223	1,082

F-28

Notes to the financial statements

13.

Other assets

	Consolidated
		2015 $’000	Restated 2014 $’000
Current
Prepayments		110	329
Deposits		41	—
Other		—	2
		151	331

Non-current
Deposits		70	622

14.

Available-for-sale, other financial assets and discontinued operations

Available-for-sale and other financial assets

	Consolidated
		2015 $’000	Restated 2014 $’000
Non-current
Andalay Solar		—	39
		—	39

The investment in Andalay Solar, a US listed company, has been written down to $Nil at balance date.

Discontinued operations

On August 30, 2013, BlueNRGY’s 100% owned subsidiary Capacitor Technologies Pty Ltd (‘Captech’) was disposed of for $1,788,000 resulting in a loss on sale of $8,000.

As disclosed in Note 5, a number of subsidiaries were deconsolidated in the VA process.

	Consolidated
		2015 $’000		Restated 2014 $’000
Current
Revenue		120		1,391
Other income ¹		20,227		3,165
Expenses		(1,006	)	(7,780	)
Profit/(loss) before income tax		19,341		(3,224	)
Income tax expense		—		—
Profit/(loss) after income tax of discontinued operation		19,341		(3,224	)

Assets classified as held for sale		—		1,697
Liabilities directly associated with assets classified as held for sale		—		17,069

¹ Other income in 2015 comprises debt forgiveness and extinguishment.

F-29

Notes to the financial statements

15.

Plant and equipment

	Consolidated
		2015 $’000		Restated 2014 $’000
Computer hardware & software
At cost		465		586
Accumulated depreciation		(315	)	(258	)
Total computer hardware & software		150		328

Motor vehicles
At cost		350		309
Accumulated depreciation		(257	)	(304	)
Total motor vehicles		93		5

Plant and equipment
At cost		2,558		2,512
Accumulated depreciation		(735	)	(600	)
Total plant and equipment		1,823		1,912

Furniture, fittings & office equipment
At cost		270		346
Accumulated depreciation		(213	)	(186	)
Total furniture, fittings & office equipment		57		160

Leased motor vehicles
At cost		411		515
Accumulated amortisation		(219	)	(179	)
Total leased motor vehicles		192		336

Leasehold improvements
At cost		114		378
Accumulated amortisation		(73	)	(277	)
Total leasehold improvements		41		101

Total property, plant and equipment
At cost		4,168		4,646
Accumulated amortisation/depreciation		(1,812	)	(1,804	)
Total property, plant and equipment		2,356		2,842

F-30

Notes to the financial statements

15.

Plant and equipment (continued)

Reconciliation of carrying amounts at the beginning and end of the year

	Computer hardware & software $’000		Motor vehicles $’000		Plant & equipment $’000		Furniture, fittings & office equipment $’000		Leased motor vehicles $’000		Leasehold improve- ments $’000		Total $’000
Year Ended June 30, 2015
At July 1, 2014 net of accumulated depreciation and impairment	328		5		1,912		160		336		101		2,842
Additions through Business Combination	2		101		18		27		—		7		155
Additions	4		26		29		9		—		43		111
Disposals	(90	)	(1	)	(2	)	(98	)	(60	)	(63	)	(314	)
Transfers	—		—		—		4		—		(4	)	—
Depreciation charge for the year	(94	)	(38	)	(134	)	(45	)	(84	)	(43	)	(438	)
At June 30, 2015 net of accumulated depreciation and impairment	150		93		1,823		57		192		41		2,356

Year ended June 30, 2014
At July 1, 2013 net of accumulated depreciation and impairment	304		13		2,074		127		333		109		2,960
Additions	131		—		—		73		167		35		406
Disposals	(1	)	—		(26	)	—		(67	)	(10	)	(104	)
Transfers	—		5		—		—		(5	)	—		—
Depreciation charge for the year	(106	)	(13	)	(136	)	(40	)	(92	)	(33	)	(420	)
At June 30, 2014 net of accumulated depreciation and impairment	328		5		1,912		160		336		101		2,842

F-31

Notes to the financial statements

16.

Goodwill and intangible assets

Reconciliation of carrying amounts at the beginning and end of the year

	Develop- ment Costs $’000		Goodwill $’000		Total $’000
Year ended June 30, 2015
At July 1, 2014 net of impairment	—		7,666		7,666
Additions through Business Combination ¹	260		12,338		12,598
Impairment charge	—		(6,200	)	(6,200	)
Amortisation	(48	)	—		(48	)
At June 30, 2015 net of accumulated amortisation and impairment	212		13,804		14,016

At June 30, 2015
Cost (gross carrying amount)	350		25,261		25,611
Accumulated amortisation	(138	)	(11,457	)	(11,595	)
Net carrying amount	212		13,804		14,016

Year ended June 30, 2014
At July 1, 2013 net of impairment	—		7,666		7,666
At June 30, 2014 net of accumulated amortisation and impairment	—		7,666		7,666

At June 30, 2014
Cost (gross carrying amount)	—		19,123		19,123
Accumulated amortisation	—		(11,457	)	(11,457	)
Net carrying amount	—		7,666		7,666

¹Refer to Note 22 for the details of business combinations.

Goodwill

Goodwill is allocated to the Group’s cash-generating units (‘CGUs’) identified to the operating segments. A segment-level summary of the goodwill is presented below:

	Consolidated
		2015 $’000	Restated 2014 $’000

Solar PV		4,654	6,500
Monitoring &
Performance Analytics		7,984	—
Parmac		1,166	1,166
		13,804	7,666

The Group performs its impairment testing as at 30 June each year or more frequently where there are indicators of impairment. In conducting this review of goodwill, the Group has considered the results of two valuation approaches: 1) value-in-use calculations; and 2) the relationship between the Company’s market capitalisation (based on the implied capitalisation from the most recent equity issues from January 2015 to the date of this report) and its book value.

At 30 June 2015, an impairment charge of $6,200,000 was recorded against the Solar PV CGU goodwill based on the value in use calculations performed.

F-32

Notes to the financial statements

16.

Goodwill and intangible assets (continued)

Key assumptions used in value in use calculations

The recoverable amount of the CGUs based on a value in use calculation uses cash flow projections as at 30 June of the reporting period based on financial budgets.

The calculation of value-in-use relies upon the following assumptions:

	Monitoring & Performance Analytics		Solar		Parmac
Pre-tax discount rate	24.5	%	24.5	%	24.5	%
Perpetuity growth rate	3	%	0	%	3	%

The calculation of value in use is most sensitive to the following assumptions:

●

earnings before interest, tax, depreciation & amortisation (EBITDA);

●

discount rates; and

●

growth rate used to extrapolate cash flows beyond the budget period.

Earnings before interest, tax, depreciation & amortisation (EBITDA) – EBITDA forecasts are based on projections for the forthcoming 2 year period, then extrapolated for a further 3 years. The basis for these projections is the recent historical performance of the CGU’s adjusted for any non-recurring revenue or cost items. This is then overlaid with the impact of changes to revenue streams, gross margins and cost structures which have either now been put in place or are underway.

Discount rates - discount rates reflect an estimate of the Group’s time value of money. This is the benchmark used by the Group to assess operating performance and to evaluate future investment proposals. In determining appropriate discount rates, regard has been given to the weighted average cost of capital of the entity as a whole. The business risks specific to each unit are reflected in their individual cash flow estimates rather than the discount rate.

Growth rate estimates - these are based on published industry research such as IbisWorld for Electricity Generation in the case of the Solar CGU and Industrial Building Construction for Parmac and independent research publications for monitoring and performance analytics.

Sensitivity to changes in value-in-use assumptions

The implications of the key assumptions on the recoverable amount are discussed below:

Input	Sensitivity Applied	Revised Goodwill Valuation
		Solar PV $000		Parmac $000		Monitoring & Performance Analytics $000
EBITDA	25% shortfall in EBITDA achievement		3,490		1,166		7,045
Growth rate	Long term growth rate of 0%		4,654		1,166		7,984
Discount rate	3% increase to discount rate applied		4,388		1,166		7,984

F-33

Notes to the financial statements

17.

Trade and other payables

	Consolidated
		2015 $’000	Restated 2014 $’000
Current
Trade payables		3,178	5,787
Accruals and other payables		2,373	2,616
		5,551	8,403

Fair value

Due to the short-term nature of these payables, their carrying value is assumed to approximate their fair value.

18.

Interest-bearing loans and borrowings

Note

Consolidated

2015
$’000

Restated
2014
$’000

Current - secured

Other loans ¹

1,229

7,570

Convertible notes ²

—

4,489

Finance leases

Current – unsecured

Other loans ³

1,102

117

2,408

12,266

Non-current – secured

Finance leases

156

270

Preference shares⁴

4,436

—

4,592

270

¹ Other loans - secured

The other loans balance as at June 30, 2015 consists of two third-party loans, provided to subsidiaries within the Group.

An amount of $521,000 (US$360,000) is secured by the borrower’s right, title and interest in and to all of the tangible and intangible property of Green Earth Developers LLC. Interest is payable on this loan at the rate of 6% per annum. The loan is repayable on the tenth business day following receipt of written notice from the lender of such a demand. As at the date of this report, no such demand had been received from the lender.

An amount of $708,000 (US$493,000) is secured by the borrower’s right, title and interest to all its receivables. Interest is payable on this loan at 2% per month. The loan is repayable on the tenth business day following receipt of written notice from the lender of such a demand. As at the date of this report, no such demand had been received from the lender.

The other loans balance as at June 30, 2014 is secured by a 2nd ranking fixed and floating charge over all otherwise unencumbered assets of the Group. Interest was payable on this loan at the penalty rate of 15%. On execution of the Deed of Company Arrangement on December 24, 2014 the loan balance was fully extinguished.

² Convertible notes

BlueNRGY issued 635 9.75% convertible notes for US$6,350,000 ($6,756,000) in May 30, 2012 and August 2012, referred to as the Series 1 notes. The equity portion of the convertible notes has been accounted for in equity. The maturity date of these notes was 36 months after the date of issue. The notes were transferable by the note holders and were convertible into ordinary shares of the Company at the option of the holder. The conversion price when issued was $15.90. The notes were secured by a first ranking fixed and floating charge over the assets of BlueNRGY, subject to the priority liens previously granted under the trade finance facility.

F-34

Notes to the financial statements

18.

Interest-bearing loans and borrowings (continued)

In February 2013, the Company entered into an amended and restated agreement with the secured convertible note holders. From an accounting point of view, this renegotiation amounted to an extinguishment of the previously issued notes and the recognition of a new debt which resulted in an additional expense of $1,168,000 that was recognised in profit or loss at June 30, 2013.

As a result of a default event at June 30, 2013, at maturity the notes became subject to a redemption premium equal to 20% of the principal which was reflected in the carrying value of the notes at June 30, 2013.

On September 30, 2013 BlueNRGY issued 95 additional Series 1 convertible notes with a total face value of US$950,000 ($1,010,000).

During the 2014 financial year a total of $6,190,000 reductions were made to the Series 1 convertible note balances as follows:

●

cash repayment of $1,840,000 from the proceeds of the sale of Captech

●

exchange of $2,135,000 of notes into Series A Preference Shares

●

exchange of notes with a face value and accrued interest and fees of $2,215,000 into ordinary shares of the Company

On execution of the Deed of Company Arrangement on December 24, 2014, the convertible notes were fully extinguished.

The convertible notes are presented on the balance sheet as follows:

	Consolidated
		2015 $’000	Restated 2014 $’000

Face value of convertible note (equivalent to cash redemption amount)		—	4,460
Derivative on convertible note (Conversion options and associated warrants) – at fair value		—	52
Borrowing costs - amortised balance		—	(23	)
Carrying Value		—	4,489

³ Other loans - unsecured

The other loans balances as at June 30, 2015 are unsecured, repayable on demand and interest free. As at the date of this report, no demand for repayment had been received from the lender.

⁴Preference Shares

On execution of the Deed of Company Arrangement on December 24, 2015, two of the Group’s subsidiaries Parmac Air-Conditioning and Mechanical Services Pty Limited (Parmac) and Chatham Island Wind Limited (CIWL) issued 3,600,000 US$1.00 non-voting, redeemable preference shares (‘RPS’). The RPS are convertible in into Company Ordinary Shares whole or in part at any time after June 30, 2015 at a price of US$0.03785 per share and are restricted to the extent that such conversion would result in any holder having more than 20% of the outstanding ordinary shares in the Company. RPS will receive an annual dividend of 4% per annum payable on December 31 each year. If dividends cannot be paid in cash, further RPS will be issued to satisfy the dividend amount. Subsidiary Preference Shares are redeemable by the Company, in whole or in part, at the Company’s sole election. The holder of the RPS may, at its discretion, force redemption through the sale of Parmac or CIWL if the RPS have not been converted or redeemed by that date. The RPS are classified as a liability on the Statement of Financial Position as there exists an obligation for the issuer to deliver either cash or another financial asset to the holder

Fair values

With the exception of the convertible notes in 2014, the carrying amount of the Group’s current and non-current borrowings approximates their fair values.

Risk exposures

Details of the Group’s exposure to risks arising from the current and non-current borrowings relating to interest rate and foreign exchange risk are set out in Note 23.

F-35

Notes to the financial statements

19.

Provisions

	Consolidated
		2015 $’000	Restated 2014 $’000

Current
Employee entitlements		335	332

Non-current
Employee entitlements		67	59

20.

Contributed equity

	Consolidated
		2015 $’000	Restated 2014 $’000

Ordinary share capital, issued and fully paid		144,338	120,323
Class A Preferred shares, issued and fully paid		—	4,643
Class B Preferred shares, issued and fully paid		781	—
Value of conversion rights – convertible notes		—	574
		145,119	125,540

F-36

Notes to the financial statements

20.

Contributed equity (continued)

	2015					2014
		Number of shares		$’000			Number of shares		$’000
Movement in ordinary shares
Balance at the beginning of the year		4,718,133		120,323			1,742,825		109,046
Issue of shares under share purchase agreements		65,323,647		3,135			2,976,489		12,597
Issue as consideration or business combinations		161,147,338		9,135
Reorganisation – shares issued		96,028,937		4,577
Issue in exchange for debt or services		8,240,997		1,178
Issue from conversion of preference A shares		587,500		2,509			—		—
Issue from conversion of preference B shares		50,101,202		2,792			—		—
Forfeiture on consolidation		—		—			(1,181	)	—
Reorganisation – shares not yet issued		23,778,071		1,133			—		—
Transaction costs		—		(444	)		—		(1,320	)
Balance at the end of the year		409,925,825		144,338			4,718,133		120,323

Movement in preference A shares on issue
Balance at the beginning of the year		435		4,643			—		—
Issue of preference A shares		—		—			435		4,643
Conversion to ordinary shares		(235	)	(2,509	)		—		—
Conversion to preference B shares		(200	)	(2,134	)		—		—
Balance at the end of the year		—		—			435		4,643

Movement in preference B shares on issue
Balance at the beginning of the year		—		—			—		—
Issue of preference B shares		4,285		2,775			—		—
Conversion from preference A shares		200		2,134
Conversion to ordinary shares		(2,484	)	(2,792	)		—		—
Dividends reinvested		99		257			—		—
Forfeiture on Administration		(1,500	)	(1,593	)		—		—
Balance at the end of the year		600		781			—		—

Movements in Convertible notes
Balance at beginning of the year		—		574			—		574
Cancellation of convertible note		—		(574	)		—		—
Balance at the end of the year		—		—			—		574

Terms and conditions of contributed equity

Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Covenants contained within the Preferred Shares on issue prevent BlueNRGY Group Limited from making dividend payments without the prior approval of the Preference Shareholders.

Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.

Class A Preferred Shares

Class A Preferred Shares have a liquidation preference over the Company’s Ordinary shares, are non-voting (except with respect to any Class A Preferred Stock matters) and are convertible at any time into Ordinary shares, in whole or in part, at each holder’s option. The number of Ordinary shares into which each Class A Preferred Share is convertible is determined by dividing the face value of each Class A Preferred Share by US$4.00. There are no dividend rights attached to the Class A Preferred Shares. The Class A Preferred Shares are redeemable by the Company, in whole or in part, at the Company’s sole election.

F-37

Notes to the financial statements

20.

Contributed equity (continued)

Class B Preferred Shares

Class B Preferred Shares have a liquidation preference over the Company’s Ordinary shares, are non-voting (except with respect to any Class B Preferred Stock matters) and are convertible at any time into Ordinary shares, in whole or in part, at each holder’s option. The number of Ordinary shares into which each Class B Preferred Share is convertible is determined by dividing the face value of each Class B Preferred Share plus accrued but unpaid dividends by US$0.05. Class B Preferred Shares have a right to receive dividends on March 31, June 30, September 30 and December 31 each year at an annual rate calculated on the face value of 8% from the date of issuance through January 31, 2015, after which date no dividends shall accrue. Dividends may be paid, at the Company’s option, in cash or ordinary shares. The Class B Preferred Shares are redeemable by the Company, in whole or in part, at the Company’s sole election.

Unissued Ordinary Shares

Subsequent to balance date these Ordinary Shares have been issued.

Convertible Notes

Refer Note 18.

Share options

Options over ordinary shares: The following options (including conversion rights on convertible notes) to purchase fully paid ordinary shares in the Company were outstanding at June 30:

Grant Date

Expiry Date

Exercise
Price ($)

Balance at beginning of the year
No.

Granted during the year
No.

Exercised during the year
No.

Forfeited during the year
No.

Vested and exercisable at end of the year
No.

2015

01/11/11

31/12/14

75.00

1,167

—

(1,167

)

—

28/05/12

28/05/15

8.25

66,667

—

(66,667

)

—

31/0.5/12

30/05/17

3.90

117,705

—

117,705

12/12/12

12/12/17

15.90

3,930

—

3,930

12/12/12

12/12/17

3.902

11,792

—

11,792

30/12/12

30/12/17

15.90

43,164

—

43,164

13/02/13

30/05/17

3.90

153,939

—

153,939

18/06/14

15/12/19

5.34

72,400

—

72,400

Total

470,764

—

(67,834

)

402,930

Weighted average exercise price $

6.11

—

9.40

5.56

Share options (continued)

Grant Date			Expiry Date		Exercise Price ($)		Balance at beginning of the year No.		Granted during the year No.		Exercised during the year No.		Forfeited during the year No.			Vested and exercisable at end of the year No.
	2014
	28/11/08			27/11/13		60.00		30,667		—		—		(30,667	)		—
	21/12/10			19/12/13		60.00		40,000		—		—		(40,000	)		—
	01/11/11			31/12/14		75.00		1,167		—		—		—			1,167
	28/05/12			28/05/15		8.251		66,667		—		—		—			66,667
	31/05/12			30/05/17		3.90		117,705		—		—		—			117,705
	12/12/12			12/12/17		15.90		3,930		—		—		—			3,930
	12/12/12			12/12/17		3.902		11,792		—		—		—			11,792
	30/12/12	/		30/12/17		15.90		43,164		—		—		—			43,164
	13/02/13			30/05/17		3.90		153,939		—		—		—			153,939
	18/06/14			15/12/19		5.34		—		72,400		—		—			72,400
	Total							469,031		72,400		—		(70,667	)		470,764
								14.35		5.34				60.00			6.11

F-38

Notes to the financial statements

20.

Contributed equity (continued)

¹These options were repriced down from $15.90 to $8.25 following the restructuring of the series 1 convertible notes.

²These options contain a feature whereby their exercise price is reduced to match the price of any subsequent equity issues at a lower price than their exercise price. During the year, 117,705 options were repriced down from $15.90 to $8.25 and subsequently from $8.25 to $3.90. 153,939 options were repriced down from $8.25 to $3.90.

Capital management

When managing capital, management’s objective is to ensure that the entity continues as a going concern as well as to maintain optimal returns to shareholders and benefits for other stakeholders. Management also aims to maintain a capital structure that ensures the lowest cost of capital available to the entity.

The Group’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.

Management adjusts the capital structure to take advantage of favourable costs of capital or high returns on assets. As the market is constantly changing, management may change the amount of dividends to be paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. As at June 30, 2015, the company had negative net equity.

21.

Reserves

	Consolidated
	Share options reserve $’000			Available-for-sale reserve $’000			Translation reserve $’000			Total $’000
At July 1, 2014		3,336			—			(35	)		3,301
Current year translation		—			—			(376	)		(376	)
Transfer to Retained profits (Accumulated losses) on expiration of options		(1,232	)		—			—			(1,232	)
At June 30, 2015		2,104			—			(411	)		1,693

At July 1, 2013 (restated)		3,189			800			33			4,022
Share based payments - borrowing & underwriting agreements		147			—			—			147
Impairment of available for sale asset		—			(800	)		—			(800	)
Current year translation		—			—			(68	)		(68	)
At June 30, 2014		3,336			—			(35	)		3,301

Share options reserve

The share options reserve is used to record the value of share based payments provided to employees and directors as part of their remuneration and options granted as part of borrowing agreements. No options were granted during 2015 (2014: 72,400 options as remuneration to underwriters). The reserve also records the re-pricing of options previously issued. Refer Note 20.

Available-for-sale reserve

Changes in the fair value and exchange differences arising on translation of investments, such as equities, classified as available for sale financial assets are recognised in other comprehensive income, and accumulated in a separate reserve within equity. Amounts are reclassified to profit or loss when the associated assets are sold or impaired.

Translation reserve

Exchange differences arising on translation of a foreign controlled entity are recognised in other comprehensive income as described in Note 2(g) and accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit or loss when the net investment is disposed of.

F-39

Notes to the financial statements

22.

Business Combinations

(a)

Acquisition of Green Earth Developers LLC (GED)

On July 7 2014, the Company completed the acquisition of 100% of shares issued by Green Earth Developers LLC (“GED”) through a wholly owned US subsidiary CBD Acquisition Holdings Inc. GED is US based and is recognised for delivering high-quality, turnkey renewable energy projects, with a focus on large commercial and utility-scale solar projects. GED forms part of the Solar CGU.

Details of purchase consideration, net liability acquired and goodwill at acquisition date are as follows:

Purchase consideration	Quantity			Price		Total			Total
				(US$)		$’000 (US$)			$’000 (AUD$)

Cash							1,500			1,603
Shares – restricted		416,666			3.35		1,396			1,492
Total purchase consideration							2,896			3,095

Assets and liabilities acquired		Cost					Fair value
		$’000 US$					$’000 US$
Cash & cash equivalents		255					255			273
Trade & trade receivables		345					345			368
Work in progress		374					374			399
Fixed assets		79					79			85
Other receivables		144					—			—
Total assets		1,197					1,053			1,125

Accounts payable		1,499					1,499			1,602
Net liability		(302	)				(446	)		(477	)

Goodwill on acquisition							3,342			3,572
Translation adjustment at balance date										332
Goodwill at balance date										3,904

(b)

Acquisition of BlueNRGY LLC

On January 27, 2015 the Company completed the acquisition of 100% of shares issued by BlueNRGY LLC, a US based provider of performance monitoring, data analytics and operations and maintenance services for renewable energy projects. BlueNRGY LLC forms part of the Monitoring and Performance Management CGU.

Details of purchase consideration, net liability acquired and goodwill at acquisition date are as follows:

F-40

Notes to the financial statements

22.

Business Combinations (continued)

(b)

Acquisition of BlueNRGY LLC (continued)

Purchase consideration	Quantity			Price		Total			Total
				(US$)		$’000 (US$)			$’000 (AUD$)

Shares – restricted		154,173,964			0.03785		5,835			7,349
Total purchase consideration							5,835			7,349

Assets and liabilities acquired		Cost					Fair value
		$’000 US$					$’000 US$
Cash & cash equivalents		54					54			68
Trade & other receivables		49					49			62
Inventory		20					20			25
Development costs, patents and fixed assets		265					265			335
Other receivables		5					5			4
Total assets		393					393			494

Accounts payable		533					533			671
Borrowings		53					353			445
Net liability		(193	)				(493	)		(622	)

Goodwill on acquisition							6,328			7,971
Translation adjustment at balance date										13
Goodwill at balance date										7,984
Total Goodwill at balance date for acquired entities										11,888

23.

Financial risk management objectives and policies

The Group’s principal financial instruments comprise receivables, payables, loans, convertible notes, finance leases, available-for-sale investments and cash and short-term deposits.

Risk exposures and responses

The Group manages its exposure to key financial risks in accordance with the Group’s financial risk management policy. The objective of the policy is to support the delivery of the Group’s financial targets whilst protecting future financial security.

The main risks arising from the Group’s financial instruments are interest rate risk, foreign currency risk, credit risk, price risk, and liquidity risk. Primary responsibility for identification and control of financial risks rests with the Audit Committee under the authority of the Board. The Board reviews and agrees policies for managing each of the risks identified below.

(a)

Interest rate risk

The Group’s main interest rate risk arises from borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk only if the borrowings are carried at fair value, which is not the Group’s policy. There were no variable rate borrowings in 2015 and 2014.

At reporting date, the Group had the following net exposure to Australian variable interest rate risk:

	Consolidated
	2015 $’000		Restated 2014 $’000
Cash and cash equivalents		482		1,356

F-41

Notes to the financial statements

23.

Financial risk management objectives and policies (continued)

The Group’s policy is to manage its finance costs using a mix of fixed and variable rate debt. At June 30, 2015, the Group had borrowings of $7,000,000 (2014: $12,853,000). Where applicable, borrowings which attract interest do so at a fixed interest rate. The Group constantly analyses its interest rate exposure. Within this analysis, consideration is given to potential renewals of existing positions, alternative financing, and the mix of fixed and variable interest rates. The Group’s fixed rate borrowings comprising the other loans and the convertible notes are carried at amortised cost.

Given the levels of cash holdings in both 2015 and 2014, a 1% movement in interest rates, with all other variables held constant, would have an immaterial impact

(b)

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating activities, borrowings, and financial assets.

(b)

Foreign currency risk (continued)

The Group’s exposure to foreign currency risk at the end of the reporting period, expressed in Australian dollars was as follows:

	USD $’000			GBP $’000			EUR $’000			NZD $’000			AUD $’000			Total $’000
2015
Cash and cash equivalents		142			36			—			—			304			482
Trade and other receivables		68			—			2			—			2,801			2,871
Trade and other payables		(2,456	)		62			(59	)		(91	)		(3,007	)		(5,551	)
Borrowings		(6,767	)		—			—			—			(233	)		(7,000	)

2014
Cash and cash equivalents		1,134			82			2			—			138			1,356
Trade and other receivables		—			—			—			58			3,657			3,715
Financial assets		39			—			—			—			—			39
Trade and other payables		(782	)		(14	)		(825	)		(42	)		(6,740	)		(8,403	)
Borrowings		(4,489	)		—			—			—			(8,041	)		(12,530	)

Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in the US dollar, the British pound and the Euro against the AUD exchange rate, with all other variables held constant. The impact on the Group’s profit before tax is due to changes in the fair value of monetary assets and liabilities. The Group’s exposure to foreign currency changes for all other currencies is not material.

				USD						GBP						EUR
	Change in rate			Effect on profit before tax			Effect on equity			Effect on profit before tax			Effect on equity			Effect on profit before tax			Effect on equity
				$’000			$’000			$’000			$’000			$’000			$’000
2015		+10	%		444			311			(18	)		(13	)		7			5
		-10	%		(543	)		(380	)		22			16			(9	)		(6	)

2014		+10	%		396			277			(10	)		(7	)		109			76
		-10	%		(484	)		(339	)		12			9			(133	)		(93	)

The Group does not apply hedge accounting. At June 30, 2015 and 2014, no forward contracts were in place.

(c)

Price risk

The Group has no significant exposure to price risk.

F-42

Notes to the financial statements

23.

Financial risk management objectives and policies (continued)

(d)

Credit risk

Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents, and trade and other receivables. The Group’s exposure to credit risk arises from potential default of the counter party, with a maximum exposure equal to the carrying amount of these instruments. Exposure at balance date is addressed in each applicable Note.

The Group does not hold any credit derivatives to offset its credit exposure. The Group trades only with recognised, creditworthy third parties, and as such collateral is not requested, nor is it the Group’s policy to securitise its trade and other receivables. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures including an assessment of their independent credit rating, financial position, past experience and industry reputation. In addition, receivable balances are monitored on an ongoing basis.

There are no significant concentrations of credit risk within the Group and financial instruments are spread amongst a number of organisations to minimise the risk of default of counterparties.

(e)

Liquidity risk

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of a variety of equity and debt instruments.

The table below analyses the Group’s financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

The remaining contractual maturities of the Group’s financial liabilities are:

	Less than 6 months $’000		6-12 months $’000		Between 1-2 years $’000		Between 2-5 years $’000		Total contractual cash flows $’000		Carrying amount of liability $’000
2015
Trade and other payables		5,551		—		—		—		5,551		5,551
Borrowings		6,767		—		—		—		6,767		6,767
Finance leases		45		49		82		91		267		233

2014
Trade and other payables		8,403		—		—		—		8,403		8,403
Borrowings		12,059		—		—		—		12,059		12,059
Finance leases		59		50		151		170		430		360

Fair value

The methods for estimating fair value are outlined in the relevant notes to the financial statements.

The Group uses various methods in estimating the fair value of financial instruments. The methods comprise:

Level 1 – the fair value is calculated using quoted prices in active markets.

Level 2 – the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices).

Level 3 – the fair value is estimated using inputs for the asset or liability that are not based on observable market data.

F-43

Notes to the financial statements

23.

Financial risk management objectives and policies (continued)

(e)

Liquidity risk (continued)

The fair value of the financial instruments as well as the methods used to estimate the fair value are summarised in the table below.

	2015								2014
Consolidated	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	$’000		$’000		$’000		$’000		$’000		$’000		$’000		$’000
Financial assets
Available-for-sale investments		—		—		—		—		39		—		—		39

Financial liabilities
Derivatives on convertible notes		—		—		—		—		—		—		52		52

Quoted market price represents the fair value determined based on quoted prices on active markets as at the reporting date. If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.This is the case for the embedded derivatives for the convertible notes which are valued based on a valuation techniques which are disclosed in Note 18 and for available for sale financial assets disclosed in Note 14

The following table presents the changes in level 3 instruments for the years ended June 30, 2015 and 2014:

	Unlisted equity securities (asset)			Embedded derivatives on convertible notes (liabilities)

Opening balance July 1, 2013		10,815			(296	)
Impairment of available-for-sale investment in profit or loss		(10,000	)		—
Impairment of available-for-sale investment in other comprehensive income		(800	)		—
Gains recognised in profit or loss		24			244
Closing balance June 30, 2014		39			(52	)
(Losses) / Gains recognised in profit or loss		(39	)		52
Closing balance June 30, 2015		—			—

24.

Related party disclosures

(a)

Subsidiaries

The consolidated financial statements include the financial statements of BlueNRGY Group Limited and the material subsidiaries listed in the following table.

					% Equity Interest
Name	Country of Incorporation	Principal Activity	2015		2014		2013

BlueNRGY Group Limited	Australia	Holding company		100		100		100
Parmac Air Conditioning & Mechanical Services Pty Ltd	Australia	Energy efficiency		100		100		100
BlueNRGY Renewable Solutions Pty Ltd ¹	Australia	Solar		100		100		100
Westinghouse Solar Limited	United Kingdom	Solar		100		100		100
BlueNRGY LLC ²	USA	Performance Analytics		100		—		—
Green Earth Developers LLC ³	USA	Solar		100		—		—
Chatham Island Wind Ltd	New Zealand	Special purpose vehicle		100		100		100

F-44

Notes to the financial statements

24.

Related party disclosures (continued)

¹formerly known as Westinghouse Solar Pty Ltd

²acquired 27 January 2015

³acquired 1 July 2014

Transactions between the Company and its subsidiaries principally arise from the granting of loans and the provision of management and administration services. All transactions undertaken during the financial year with subsidiaries are eliminated in the consolidated financial statements.

(b)

Ultimate parent

BlueNRGY Group Limited is the ultimate Australian parent entity and the ultimate parent of the Group.

(c)

Key management personnel

Details relating to key management personnel, including transactions with key management personnel and remuneration paid, are included in Note 25.

(d)

Terms and conditions of transactions with related parties

Sales to and purchases from related parties are made in arm’s length transactions both at normal market prices and on normal commercial terms unless otherwise stated.

25.

Key management personnel

(a)

Compensation for key management personnel

	Consolidated
	2015 $		2014 $		2013 $

Short-term employee benefits		1,479,344		1,823,534		2,090,045
Post-employment benefits		43,095		75,355		139,714
Total compensation		1,522,439		1,898,889		2,229,759

(b)

Option holdings of key management personnel

												Vested at June 30
	Balance at July 1		Granted as remune- ration		Options exercised		Net other change			Balance at June 30		Total		Exercisable		Not exercisable
2015
Executives
J Greer		1,000		—		—		(1,000	)		—		—		—		—

2014
Directors
G. McGowan		20,000		—		—		(20,000	)		—		—		—		—
Sub-total		20,000		—		—		(20,000	)		—		—		—		—

Executives
Y. Brodsky ¹		667		—		—		(667	)		—		—		—		—
J. Greer		—		1,000		—		—			1,000		1,000		1,000		—
Sub-total		667		1,000		—		(667	)		1,000		1,000		1,000		—

Total		20,667		1,000		—		(20,667	)		1,000		1,000		1,000		—

F-45

Notes to the financial statements

25.

Key management personnel (continued)

												Vested at June 30
	Balance at July 1		Granted as remune- ration		Options exercised		Net other change			Balance at June 30		Total		Exercisable		Not exercisable
2013
Directors
M. Vaile²		20,000		—		—		(20,000	)		—		—		—		—
G. McGowan		20,000		—		—		—			20,000		20,000		20,000		—
Sub-total		40,000		—		—		(20,000	)		20,000		20,000		20,000		—

Executives
Y. Brodsky		667		—		—		—			667		667		667		—
A. McClaren²		333		—		—		(333	)		—		—		—		—
E. Cywinski²		20,000						(20,000	)
Sub-total		21,000		—		—		(20,333	)		667		667		667		—

Total		61,000		—		—		(40,333	)		20,667		20,667		20,667		—

¹Changes for Mr Brodsky in 2014 are in relation to the disposal of Captech.

²Changes for M. Vaile, A. McClaren and E. Cywinski in 2013 relate to resignations.

(c)

Shareholdings of key management personnel

Shares held in BlueNRGY Group Limited (number)

	Balance at July 1		Granted as remuneration		On exercise of Options		Net other change			Balance at June 30
2015
Directors
G. McGowan ¹		275,377		—		—		(275,377	)		—
C. Botto		14,947		—		—		1,560,272			1,575,219
W. Morro		30,448		—		—		23,352,048			23,382,496
T. Barlow ¹		15,107		—		—		(15,107	)		—
Y. Cotrel		—		—		—		49,024,413			49,024,413
J. Chapple ²		—		—		—		—			—
J Donohue ³		—		—		—		1,560,889			1,560,889

Executives
J. Greer ¹		18,508		—		—		(18,508	)		—
E. Cotrel		—		—		—		25,130,955			25,130,955
R. Pillinger		—		—		—		5,000,000			5,000,000
Total		354,387		—		—		105,319,585			105,673,972

2014
Directors
G. McGowan⁴		59,665		—		—		215,712			275,377
C. Botto		1,667		—		—		13,280			14,947
W. Morro		—		—		—		30,448			30,448
T. Barlow ⁵		—		—		—		15,107			15,107

Executives
Y. Brodsky ⁶		707		—		—		(707	)		—
J. Greer ⁵		—		—		—		18,508			18,508
Total		62,039		—				292,348			354,387

F-46

Notes to the financial statements

25.

Key management personnel (continued)

¹Changes for Messrs McGowan, Barlow and Greer relate to their respective resignations.

²Mr. Chapple was appointed and resigned as a Director during the course of the year to June 30, 2015. At the time of his resignation, Mr. Chapple held 850,000 ordinary shares in BlueNRGY directly and an entity in which he has a beneficial interest held 15,852,048 ordinary shares.

³Excludes 7,722,918 ordinary shares held by an entity in which Mr. Donohue has a beneficial interest.

⁴Includes shares held directly by Mr. McGowan and shares held by entities in which Mr. McGowan has disclosed to the Company that he holds an interest in.

⁵Changes for Mr. Barlow and Mr. Greer in 2014 relate to the issue of 15,107 and 18,508 ordinary shares in BlueNRGY in lieu of outstanding director’s fees and services rendered respectively.

⁶Changes for Mr Brodsky in 2014 are in relation to the disposal of Captech.

(d)

Loans to key management personnel

There were no loans to directors or key management personnel during the year ending June 30, 2015 (2014: None).

(e)

Loans from key management personnel

Related Parties

During the year ended June 30, 2015 an entity related to Mr. William Morro loaned US$284,000 to the Group. The loan, unanimously approved by the Company’s Board, matures on July 15, 2016 and may be repaid earlier at the Company’s sole discretion. The loan is convertible into Ordinary Shares at a conversion price of US$0.03785 per share and interest is payable at a rate of 15% per annum. The loan may be assigned to another qualified party at the lender’s discretion. At June 30, 2015 interest of US$6,814 had accrued, but not been paid, on the loan.

In 2014 TRW Pty Limited, an entity in which a former Director, Mr. Gerry McGowan has a direct interest, loaned $500,000 to the Company. The loan was repaid to TRW Pty Ltd on June 23, 2014. TRW Pty Ltd was paid a $25,000 transaction fee for the provision of this loan. No interest was charged on the loan.

(f)

Transactions with Sligo Investments Limited

During the year ended June 30, 2014 the Company entered into a series of transactions with Sligo Investments Limited. These transactions were all conducted with Mr McGowan acting as the sole intermediary between the Company and Sligo. The Company and its Board of Directors have been unable to determine the identity of the parties who either own or control Sligo and have also been unable to determine the incorporation status of Sligo. Despite attempts to determine the facts surrounding Sligo, the Company cannot be assured that it is not a related entity to Mr McGowan.

In October 2013, Sligo loaned the Company $900,000 for working capital purposes under a loan agreement between Sligo and the Company. An arrangement fee of $70,000 and interest of $6,410 was charged on the loan prior to its repayment in December 2013. Under the sole direction of Mr McGowan, the repayment was made to TRW Pty Limited in satisfaction of this loan, as confirmed by documentation received from Sligo subsequent to the repayment.

(g)

Transactions with Solon AG

An amount of $676,000 was paid to Solon AG in December 2013 which was solely initiated by Mr Gerry McGowan outside of the customary approval processes of the Company. Mr McGowan represented to the Company that the payment was a deposit for a future order of Solar PV panels from Solon, however the Company has been unable to confirm that such an order was placed or accepted. Despite attempts to independently verify the nature of this transaction and the validity of the supporting documentation, the Company has been unable to do so and cannot be assured that it was not made for the personal benefit of Mr McGowan. A payment was received by the Company in October 2014 for $680,000 from a third party. Documentation was provided to the Company in relation to this transaction which stated that this payment was consideration for the assignment of the alleged deposit by Solon to the party remitting the payment. In absence of definitive information to the contrary the amount of $676,000 is recorded within Other Assets in the Statement of Financial Position at June 30, 2014. The funds received in October 2014 were credited against Other Assets in the absence of additional information to contradict this accounting treatment.

F-47

Notes to the financial statements

25.

Key management personnel (continued)

(h)

Other transactions and balances with key management personnel and their related parties

During the current and previous financial year, the Group transacted with related entities of directors, other than in their capacity as director, as follows:

(i)

In April 2015 one of the Group’s subsidiaries, Parmac, secured a line of credit with an affiliate of William Morro for up to US$0.5 million. As of June 30, 2015, the facility was fully drawn. Refer Note 18¹

(ii)

During the year ended June 30, 2015 the following Directors, or their related entities, subscribed to purchase ordinary shares under a Securities Purchase Agreement as follows:

Director	Subscription Amount US$	Subscription Price Per Share US$	Number of Ordinary Shares Issued
Mr Yves-Regis Cotrel	450,000	0.03785	11,889,036
Mr William Morro	600,000	0.03785	15,852,048

(iii)

The following Directors and Executives, or their related entities, who were shareholders in BlueNRGY LLC at the time of its acquisition by the Company were issued ordinary shares under the Purchase Agreement as follows. This transaction occurred before these individuals were appointed the Board of Directors or as Executives of the Company:

Director			Number of Ordinary Shares Issued
Mr Yves-Regis Cotrel ⁽¹⁾⁽²⁾			36,285,377
Mr Emmanuel Cotrel⁽²⁾			19,130,955
Jack Donohue⁽³⁾			2,463,896

⁽¹⁾Included in the shares issued to Mr. Yves-Regis Cotrel were 7,965,997 shares issued in exchange for a loan of US$301,513 Mr. Cotrel had provided to BlueNRGY LLC prior to its acquisition by the Company. The exchange price was US$0.03785 per share.

⁽²⁾Excludes 7,430,381 shares owned by Rymes Investment Company in which both Yves-Regis Cotrel and Emmanuel Cotrel share an ownership.

⁽³⁾Includes allocation of 7,012,029 shares owned by Coastalview Partners in which Mr. Donohue holds a 25% interest.

(iv)

The share purchase agreement with BlueNRGY LLC included provisions whereby 24,050,000 ordinary shares were allocated upon consummation of the acquisition to company executives, key employees and advisors and nominated directors (subsequently confirmed) as a performance incentive. Those allocations are as follows:

Director or KMP			Number of Ordinary Shares Issued
Directors
William Morro			7,500,000
Carlo Botto			1,500,000
John Chapple			850,000
John Donohue			850,000
Yves-Regis Cotrel			850,000

KMP
Richard Pillinger			5,000,000
Emmanuel Cotrel			6,000,000

F-48

Notes to the financial statements

25.

Key management personnel (continued)

(v)

During the financial year ending June 30, 2015 TRW Holdings Pty Ltd, an entity in which Mr Gerry McGowan has a direct interest, received payments for executive services provided by Mr. McGowan and for reimbursement of travel expenses and other operating disbursements incurred on behalf of the company. The total amount paid or payable to TRW Holdings Pty Ltd including GST for services other than the services of Mr. McGowan acting as Managing Director was $121,300 (2014: $560,920). All the payments made in 2015 and $346,965 of the payments made in 2014 were made outside of the Company’s customary approval processes and were purported by Mr McGowan to be for reimbursement of costs incurred on behalf of the company paid by TRW Holdings Pty Ltd. The Company has not been provided with adequate documentation by Mr McGowan or TRW Holdings Pty Limited to determine whether or not these costs represent bona fide costs incurred on behalf of the Company. These payments have been recognised as an expense in profit or loss for the year ended June 30, 2014.

(vi)

During the year ended June 30, 2014 a payment deferral and debt forgiveness agreement required that a creditor balance be assigned to TRW Holdings Pty Ltd, under the tri-party arrangement with the creditor and TRW Holdings. TRW Holdings neither gained nor lost from the transaction and the Company made all payments that were obligated to be made under that agreement to satisfy the original creditor claim in full. The Company received a Deed of Release and Forgiveness for the full amount of this debt from TRW Holdings Pty Ltd dated as of December 20, 2013.

(vii)

During the year ended June 30, 2014 the Company paid Pitt Capital Partners Limited, an entity in which a former director, Todd Barlow, has a direct interest, fees for corporate services of $180,290.

(viii)

During the year ended June 30, 2014 CapTech paid Brodpower Pty Ltd A$58,025 for contract maintenance and repair services. Mr Yuri Brodsky was the Managing Director of CapTech prior to its sale and had an ownership interest in Brodpower Pty Ltd.

F-49

Notes to the financial statements

26.

Share-based payments

(a)

Recognised share-based payment expenses

The expense relating to options is shown in the table below:

	Consolidated
		2015 $’000	Restated 2014 $’000

Expense arising from equity-settled share-based payment financing transactions		—	148

(b)

Types of share-based payments

There were no options issued during the year ended June 30, 2015. The options issued during the year ended June 30, 2014 relate to options/warrants that have been issued as part of the remuneration to underwriters during the Group’s first capital raise on Nasdaq. 72,400 options with an exercise price of $US5.00 were issued. The weighted average remaining contractual life of issued options outstanding at year-end was 3.2 years.

(c)

Summaries of options granted as share based payments

The following table illustrates the number (“No.”) and weighted average exercise prices (“WAEP”) of, and movements in, share options issued during the year:

	2015 No.			2015 WAEP $	2014 No.		2014 WAEP $

Outstanding at the beginning of the year		316,824		7.19	315,091		19.46
Granted during the year ¹		—		—	72,400		5.34
Expired during the year		(67,834	)	9.40	(70,667	)	60.00
Outstanding at the end of the year		248,990		6.59	316,824		7.19

(d)

Option pricing model

The fair value of the equity-settled share options granted for the year ended June 30, 2014 were estimated as at the date of grant using a binomial model taking into account the terms and conditions upon which the options were granted. The fair value was derived from the binomial model using the closing share price of BlueNRGY Group Limited ordinary shares on grant date, Australian Government Long-term bond interest rates as published by the Reserve Bank of Australia as a proxy for the risk-free interest rate, having regard for the bond maturity that is most closely aligned to the period of time remaining until the options expiry date, and the option exercise prices and quantities as noted above.

The model inputs for options granted during the year ended June 30, 2014 included:

	As part of remuneration to underwriters

Number of options granted		72,400
Consideration for options granted		Nil
Exercise price	$	5.34
Grant date		Dec 18 2014
Expiry date		Dec 15 2019
Share price at grant date	$	3.83
Expected price volatility of the Company’s shares		70	%
Expected dividend yield		0	%
Risk-free interest rate		3.0	%

The expected price volatility is based on the historical five-year volatility of the Company’s share price.

F-50

Notes to the financial statements

26.

Share-based payments (continued)

The model inputs for options granted during that year were:

		Unsecured loan, refer Note 18			Convertible notes, refer Note 18			Convertible notes, refer Note 18

Number of options granted		11,793			43,164			3,931
Consideration for options granted		Nil			Nil			Nil
Exercise price	$	15.90		$	15.90		$	15.90
Grant date		24 Dec 2012			30 Dec 12			24 Dec 2012
Expiry date		12 Dec 2017			30 Dec 17			12 Dec 2017
Share price at grant date	$	6.00		$	6.00		$	6.00
Expected price volatility of the Company’s shares		131	%		131	%		131	%
Expected dividend yield		0	%		0	%		0	%
Risk-free interest rate		3.0	%		3.0	%		3.0	%

27.

Commitments and Contingent Liabilities

Operating lease commitments – Group as lessee

Operating leases are entered into as a means of acquiring access to office premises and office equipment. Rental payments are generally fixed, but with inflation escalation clauses on which contingent rentals are determined. No purchase options exist in relation to operating leases and no operating leases contain restrictions on financing or other leasing activities. A renewal option in connection with the office leases exists.

Future minimum rentals payable under non-cancellable operating leases as at 30 June are as follows:

	Consolidated
		2015 $’000	Restated 2014 $’000

Within one year		502	535
After one year but not more than five years		128	606
Total minimum lease payments		630	1,141

Finance lease commitments - Group as lessee

The finance leases relate to the leasing of motor vehicles. Future minimum lease payments under finance leases together with the present value of the net minimum lease payments are as follows:

	Consolidated
		2015 $’000		Restated 2014 $’000

Within one year		94		130
After one year but not more than five years		173		327
Total minimum lease payments		267		457
Less amounts representing finance charges		(34	)	(71	)
Present value of minimum lease payments		233		386

Current liability		77		90
Non-current liability		156		270
Total		233		360

Contingent Liabilities

In December 2014 a class action securities suit was filed in a US federal court against BlueNGRY Group Limited (“BGL”, formerly CBD Energy Limited), various current and former officers and directors, the underwriters of an equity raising conducted by the Group in 2014 and the previous auditors of the Group. In August 2015, the Complaint was amended to include one of the Group’s continuing subsidiaries, CBD Energy (USA) Limited. The Complaint is in relation to shares issued by the Group to the public in October 2014, and the lodgment and later withdrawal of the financial reports for the years ended 30 June 2012 and 2013 signed by Directors on 2 November 2012 and 27 November 2013 respectively due to errors identified by Directors and the previous auditors. A claim has not been quantified in the Complaint. The Complaint against BGL was extinguished pursuant to the terms of the DOCA (refer Note 5). CBD Energy (USA) Limited and the relevant current and former Directors and Officers of BGL are covered by an insurance policy for such claims, however, the policy includes an excess and a maximum insured amount. Further legal costs and any amount determined as being payable in relation to the Complaint against CBD Energy (USA) Limited and the relevant current and former Directors and Officers of BGL, may need to be funded in part or in whole by the Group. The outcome of the potential action cannot be determined at this time, and a liability has not been recognised in these financial statements in relation to the Complaint.

F-51

Notes to the financial statements

28.

Events after the balance sheet date

Transactions

On September 14, 2015 the Company formed a new U.S. subsidiary that entered into a material definitive agreement pursuant to which it acquired, on September 16, 2015 (the “Draker Transaction”) the monitoring platform, accounts receivable, inventory, plant, property and equipment and certain other assets of Draker, Inc. and Draker Laboratories, Inc. (together “Sellers”), including the Draker name, trademark, and all copyrights then owned by the Sellers. Immediately subsequent to the Draker Transaction, the Company’s acquisition subsidiary changed its name to Draker Corporation and the names of the Sellers were changed to delete the Draker name. Draker Corporation paid approximately US$2.24m to the sellers and assured the seller’s secured indebtedness of approximately US$0.18m.

Financing

In conjunction with the Draker Transaction, the Company issued 39,630,119 ordinary shares, issued Subsidiary Preferred Shares having a face value of $1.0 million and a conversion price of US$0.03785, provided the holder of Subsidiary Preferred Shares an additional investment right expiring December 31, 2015 to purchase up to an additional $1.0 million of Subsidiary Preferred Shares on the same terms, and issued warrants having a term of three years to acquire 26,420,080 ordinary shares at an exercise price of $0.056775 per share.

On October 10, 2015 the Board set the previously approved share consolidation ratio at 80:1.

Listed status

On July 23, 2015 the Company was notified of its delisting from the NASDAQ Stock exchange.

On September 9, 2015 the Company recommenced trading on the OTC Market.

Board and Executive Changes

On July 31, 2015 Mr John F. Donohue resigned from the Board of Directors and related Committees he had been appointed to.

F-52

Notes to the financial statements

29.

Parent entity information

(a)

Summary financial information

The individual financial statements for the parent entity show the following aggregate amounts:

	2015 $’000		2014 $’000
Current assets	219		1,317
Total assets	10,774		4,623
Current liabilities	(2,526	)	(17,775	)
Total liabilities	(2,551	)	(27,030	)
Net assets/(liabilities)	8,223		(22,407	)

Issued capital	145,119		125,540
Accumulated losses	(139,000	)	(151,283	)
Reserves	2,104		3,336
Total shareholders’ equity	8,223		(22,407	)

Profit/(loss) of the parent entity	12,539		(26,262	)

(b)

Guarantees entered into by the parent entity

The parent entity provided a financial guarantee to bond holders of Energy Bonds and Secured Energy Bonds for any amounts that remain outstanding on due payment dates. This guarantee was extinguished on execution of the Deed of Company Arrangement on December 24, 2014.

(c)

Contractual commitments for the acquisition of property, plant or equipment

As at June 30, 2015, the parent entity had no contractual commitments for the acquisition of property, plant or equipment (2014: Nil).

F-53

Notes to the financial statements

30.

Auditors’ remuneration

The auditor of BlueNRGY Group Limited is HLB Mann Judd.

	Consolidated
		2015 $	Restated 2014 $
Amounts paid or payable to the Company’s auditors
- an audit or review of the financial statements of the entity (2014: for the years ended June 30, 2014, 2013 and 2012)		300,000	340,000

The following amounts were paid or payable to the previous auditor of BlueNRGY Group Limited, PricewaterhouseCoopers.

	Consolidated
		2015 $	Restated 2014 $
Amounts paid or payable to the Company’s auditors
- an audit or review of the financial statements of the entity		—	1,256,512

F-54

ITEM 19. EXHIBITS

Exhibit Number		Incorporated by Reference			Filed or Furnished Herewith
Exhibit Number	Exhibit Description	Form	Exhibit	Filing Date	Filed or Furnished Herewith
1.1	Constitution, as amended, dated December 20, 2000	20-F	1.1	1/30/2014
1.2	Certificate of Registration dated March 11, 2010.	20-F	1.2	1/30/2014
1.3	Certificate of Registration on Change of Name dated March 20, 2015.	20-F	1.3	6/1/2015
4.1	CBD Energy Limited 2014 Equity Plan	F-1/A	10.25	05/09/2014
4.2	Form of Securities Purchase Agreement, dated as of July 25, 2014	6-K	99.1	7/30/2014
4.3	Form of Warrant, dated as of July 25, 2014	6-K	99.2	7/30/2014
4.4	First Amendment to Securities Purchase Agreement, made as of August 19, 2014.	6-K	99.1	8/30/2014
4.5	Deed of Company Arrangement of CBD Energy Limited, dated December 24, 2014.	6-K/A	10.1	1/29/2015
4.6	Deed of Variation of the Deed of Company Arrangement of CBD Energy Limited, dated January 27, 2015.	6-K/A	10.2	1/29/2015
4.7	Deed of Company Arrangement of Westinghouse Solar Pty Limited, dated December 24, 2014.	6-K/A	10.3	1/29/2015
4.8	Deed of Variation of the Deed of Company Arrangement of Westinghouse Solar Pty Limited, dated January 27, 2015.	6-K/A	10.4	1/29/2015
4.9	Amended and Restated Membership Interest Purchase Agreement, dated January 27, 2015	6-K/A	10.5	1/29/2015
4.10	Form of Subscription Agreement, dated January 27, 2015	6-K/A	10.6	1/29/2015
4.11	Rights and Preferences of CBD Series B Preferred Shares as amended January 27, 2015	6-K/A	10.7	1/29/2015
4.12	Acquisition Agreement dated September 16, 2015 between BlueD Acquisition Corporation (now known as Draker Corporation) and Draker, Inc. and Draker Laboratories, Inc.	6-K	4.1	11/12/2015
4.13	Form of Engineering, Procurement, and Construction Agreement between Panasonic Enterprise Solutions Company and Green Earth Developers				X
4.14	Exchange and Compensation Deferral Agreement with Emmanuel Cotrel, dated November 30, 2015.				X
4.15	Exchange and Compensation Deferral Agreement with William Morro, dated November 30, 2015.				X
4.16	Unsecured Convertible Promissory Note with WHI Retirement Savings Plan Trust and WHIRSP – Columbus LLC, dated November 30, 2015 (William Morro).				X
4.17	Warrant held by ESOL, B.V. with Initial Exercise Date of December 31, 2015 (Draker Transaction).				X
8.1	For a list of all of our subsidiaries, see Item 4.C., Organization Structure.				X
11.1	Code of Conduct and Ethics.	20-F	11.1	6/1/2015
12.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a).				X
12.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a).				X
13.1*	Certification of Principal Executive Officer pursuant to 18 U. S. C. Section 1350.				X
13.2*	Certification of Principal Financial Officer pursuant to 18 U. S. C. Section 1350.				X

* In accordance with SEC Release 33-8238, Exhibits 13.1 and 13.2 are being furnished and not filed.

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

		BlueNRGY Group Limited

	By:	/s/ William Morro
		Name: William Morro
		Title: Managing Director
		(Principal Executive Officer)


	By:	/s/ Richard Pillinger
		Name: Richard Pillinger
		Title: Chief Financial Officer
		(Principal Financial Officer)

Date: December 9, 2015

EXHIBIT 4.13

ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT

Dated as of ____, 2015

by and between

PANASONIC CORPORATION OF NORTH AMERICA,
ACTING THROUGH ITS DIVISION
PANASONIC ENTERPRISE SOLUTIONS COMPANY
(Contractor)

and

Green Earth Developers LLC

(Subcontractor)

NORTH CAROLINA

For Projects Specified in Exhibit G

TABLE OF CONTENTS

		Page

Article 1 DEFINED TERMS; CONTRACT INTERPRETATION		5
1.1	Definitions	5
1.2	Rules of interpretation	13
1.3	Contract Documents	13
1.4	Conflicting Provisions	13
Article 2 THE WORK		14
2.1	Scope of Work	14
2.2	Design	14
2.3	Project Schedule	16
2.4	Progress Meetings	16
2.5	Standard of Performance	16
2.6	Subsidies; Incentives; Tax Credits	16
2.7	Change Orders	17
2.8	Work Site Supervision; Safety; Maintenance of Site	21
2.9	Delay	21
2.10	Hazardous Materials	22
2.11	Force Majeure Events	23
2.12	Subcontractors	23
2.13	Security and Background Screening	23
Article 3 COMMISSIONING; PERFORMANCE TESTING		24
3.1	System Commissioning Tests	24
3.2	System Performance Tests	24
Article 4 COMPLETION AND ACCEPTANCE OF THE WORK		24
4.1	Notices of Substantial Completion and Final Completion	24
4.2	Punch List	25
4.3	Mechanical Completion	26
4.4	Substantial Completion	27
4.5	Final Completion	28
Article 5 CONTRACT PRICE; PAYMENTS		29
5.1	Contract Price	29
5.2	Payments of the Contract Price	29
5.3	Invoices	30
5.4	Disputed Invoices	30
5.5	Payment to Subcontractors and Suppliers	30
5.6	Title	31
5.7	Risk of Loss	31
5.8	Customer Credit Support	31
5.9	Liquidated Damages	31
5.10	Adjustment to Contract Price for Cost Savings
Article 6 TERM		33
6.1	Generally	33
6.2	Termination for Cause by Customer	33
6.3	Contractor’s Rights and Remedies	34
6.4	Termination for Cause by Contractor	35
6.5	Contractor’s Rights and Remedies	35

Article 7 INDEMNITY		36
7.1	Indemnification by Contractor	36
7.2	Indemnification by Customer	36
7.3	LIMITATION OF LIABILITY	37
Article 8 INSURANCE		37
8.1	Customer’s Insurance	37
8.2	Contractor’s Insurance	37
Article 9 REPRESENTATIONS AND WARRANTIES		40
9.1	Organization and Qualification	40
9.2	Power and Authority	40
9.3	No Conflict	40
9.4	Validity and Binding Effect	40
9.5	Contractor Licensed	40
9.6	Contractor Patents	40
9.7	Site Control	40
Article 10 CUSTOMER’S RESPONSIBILITIES		41
10.1	Access to Site	41
10.2	Information Regarding the Site	41
10.3	Permits	41
10.4	Compliance with Laws and Agreements	41
10.5	Cooperation	41
10.6	Data Transmission	41
Article 11 CONTRACTOR WARRANTIES		42
11.1	Warranty of Title	42
11.2	Defect Warranty	42
11.3	Design Warranty	42
11.4	Exclusions	42
11.5	Pass-Through Manufacturers’ Warranties	43
11.6	Warranty Claim Process; Repair or Replace	43
Article 12 CONFIDENTIALITY AND PUBLICITY		44
12.1	Confidentiality	44
12.2	Publicity	45
Article 13 MISCELLANEOUS		45
13.1	Notices	45
13.2	Independent Contractor	45
13.3	Authorized Representatives	45
13.4	Entire Agreement; Amendment	45
13.5	Assignment	45
13.6	No Waiver	46
13.7	Survival	46
13.8	Governing Law	46
13.9	Dispute Resolution	46
13.10	WAIVER OF JURY TRIAL	47
13.11	Execution in Counterparts	47
13.12	Ownership of Designs	47
13.13	Final Drawings	47
13.14	Customer’s Limited License Upon Payment in Full	47

EXHIBITS:

Exhibit A -	Pricing Structure
Exhibit B -	Liquidated Damages Schedule
Exhibit C -	Design Materials Listed Pre-Approved Suppliers and Subcontractors
Exhibit D -	Spare Parts
Exhibit E -	Applicable Permits
Exhibit F -	Subcontractor Scope of Work
Exhibit G -	Project Description
Exhibit H -	Project Schedule
Exhibit I -	System Commissioning and Performance Tests

ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT

This ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT (“Agreement”), dated as of __________ (“Effective Date”), is entered into by and between Panasonic Corporation of North America, acting through its division Panasonic Enterprise Solutions Company, a Delaware corporation, with offices at Two Riverfront Plaza, 5^th Floor, Newark, NJ 07102 (“Contractor”) and Green Earth Developers LLC, with main offices located at 547 W. Charles St. Suite 100 Matthews, North Carolina 28105 (“Subcontractor”), (each a “Party” and collectively, the “Parties”).

RECITALS:

WHEREAS, Contractor is developing photovoltaic solar power generating plants (each a “System” and together “Systems”), as more fully described in the Contract Documents (as such term is defined herein) to be located at the Site (as such term is defined herein);

WHEREAS, Contractor wishes to engage Subcontractor to design, construct and install the System at the Site; and

WHEREAS, Subcontractor wishes to provide such design, construction and installation services, all in accordance with the terms and conditions set forth in this Agreement.

NOW THEREFORE, in consideration of the mutual promises set forth below, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties hereby agree as follows:

ARTICLE 1
DEFINED TERMS; CONTRACT INTERPRETATION

1.0 Definitions.

“Agreement” has the meaning given to such term in the preamble hereto.

“Applicable Law” means any applicable federal, state or local act, law, statute, ordinance, building code, rule, regulation, Permit, order, judgment, consent or approval of any Governmental Authority having jurisdiction over the Site, the System, or the performance of the Work.

“Applicable NC Tax Credit Statute and Guidance” means North Carolina statute G.S. § 105-129.16A, as amended, and the guidance published by the North Carolina Department of Revenue on September 29, 2015 with respect thereto (entitled “Important Notice Regarding the Delayed Sunset Date for Renewable Energy Projects that are Substantially Completed on or Before January 1, 2016”). Without limiting the generality of the foregoing, the percentage completion of the System shall be determined by the independent engineer that is providing the report with respect to the percentage completion of the System, as required under the foregoing statute, reflecting the following project construction weightings:

*Phases of Construction*	*Percentage of Project*
Design, Engineering & Site Preparation		5	%
Posts Installed		20	%
Rack Mounted on Posts		15	%
Panels Mounted		20	%
Inverters/Transformers Set		30	%
Underground cables, DC & Med. Voltage		5	%
Combiner Boxes and String Wiring		5	%
Total		100	%

“Authorized Representative” has the meaning set forth in Section 2.7(c).

“Business Day” means any day other than a Saturday, Sunday or a legal holiday in the State in which the Site is located. In the event a time period set forth in this Agreement or the Scope of Work expires on a Day that is not a Business Day, such period shall be deemed to expire on the next Business Day thereafter.

“Change Order” has the meaning set forth in Section 2.7(a).

“Change Order Request” has the meaning set forth in Section 2.7(a).

“Close-out Documents” has the meaning set forth in Section 4.2.

“Commencement Date” means the first date on which Subcontractor commences performance of the Work at any Site.

“Confidential Information” has the meaning set forth in Section 12.1.

“Contract Documents” has the meaning set forth in Section 1.3.

“Contract Price” has the meaning set forth in Section 5.1.

“Contractor” has the meaning set forth in the preamble hereto.

“Contractor Hazardous Materials” has the meaning set forth in Section 2.10.

“Contractor Parties” has the meaning set forth in subsection (a) of Section 1.1

“Contractor Taxes” means any and all Taxes imposed under Applicable Law in respect of the income or gross income of Contractor, the Contractor’s office location or Contractor’s employment of its employees.

“Contractor Caused Delay” means any delay caused by any breach by Contractor of the terms and conditions of this Agreement, the unexcused failure by Contractor to perform its obligations hereunder or Contractor’s negligence or willful misconduct.

“Contractor Financing Parties” means (a) any and all third party lenders (that is, unaffiliated with Contractor) providing senior or subordinated construction, interim or long-term debt financing or refinancing to Contractor, including without limitation, pursuant to a sale- leaseback financing; and/or (b) any and all third party equity investors (that is, unaffiliated with Contractor), directly or indirectly, in Contractor providing tax equity investment or leveraged lease-financing or refinancing; in each case in connection with the System, and, in each case, any trustee or agent acting on behalf of such lenders or investors

“Contractor Indemnified Parties” has the meaning set forth in Section 7.1(a).

“Contractor Permits” means the Permits for which Contractor is responsible, as specified in the Scope of Work in addition to any other permits not specified in the Scope of Work that may be required for the siting, ownership, operation or maintenance of the System

“Contractor Person” has the meaning set forth in Section 2.7(c).

“Customer” for each System has the meaning set forth in the respective Project Agreements and listed in Exhibit G.

“Day” means a calendar day unless it is specified that it means a Business Day.”

“Defect Warranty” means the warranty provided by Subcontractor pursuant to Section 11.2.

“Design Materials” means the System and System component description, mechanical and electrical drawings, detailed Project Schedule and related documents attached as Exhibit C and submitted or to be submitted, including any amendment/modification made thereto pursuant to Section 2.7, in connection with any System after the Effective Date as contemplated in Section 2.2.

“Design Warranty” means the warranty provided by Subcontractor pursuant to Section 11.3

“Disclosing Party” has the meaning set forth in Section 12.1

“80% Completion Condition” has the meaning set forth in Section 4.3(j).

“Effective Date” means the date set forth in the preamble hereto

“Environmental Laws” means any and all Applicable Laws and Permits issued, promulgated or entered into by any Governmental Authority relating to the environment or the treatment, storage, disposal, management, release or threatened release of Hazardous Materials, in each case as in effect on the date hereof and as may be issued, promulgated or amended from time to time.

“Environmental Reports” means the Phase I environmental site assessment(s) with respect to the Site or any other written materials addressing environmental conditions at the Site listed in Schedule 10.2 attached to this Agreement.

“Expected Capacity” means the monthly AC generation values set forth in Table 1 of Exhibit I attached hereto

“Final Completion” means satisfaction by Contractor or waiver by Contractor of all of the conditions for Final Completion set forth in Section 4.4

“Final Completion Date” has the meaning set forth in Section 4.1

“Final Completion Deadline” has the meaning set forth in Section 2.3.

“Final Completion Notice” means the notice that shall be issued by Contractor upon Final Completion as provided in Section 4.1.

“Final Designs” has the meaning set forth in Section 2.2 (c).

“Force Majeure Event” means any event, condition or circumstance or combination thereof that adversely affects or causes delay in or failure of performance by either Party of its obligations under this Agreement or, in the case of Subcontractor, increases its costs to complete the Work to an extent that causes material harm, such event, condition or circumstance:

(a) is beyond the reasonable control of the affected Party;

(b) is not the result of any willful misconduct, negligent acts, omissions or fault of the affected Party (or any third party over whom the affected Party has control, including, in the case of Subcontractor, any Sub- subcontractor or vendor, except to the extent that the performance by such Sub-Subcontractor or vendor would itself be excused as a result of Force Majeure Event if such performance were undertaken directly by Subcontractor); and

(c) the effects of which cannot reasonably be prevented, overcome or avoided by the exercise of due diligence in observance of Industry Standards by the affected Party. The following (to the extent consistent with the foregoing) are examples of Force Majeure Events: Unforeseen Site Conditions; acts of God; act of war, rebellion, sabotage or terrorism; fires, floods, explosions, hurricanes, typhoons, winds in excess of ninety (90) mph, tsunamis, volcano eruptions, earthquakes, tornados excessive rain that makes work on the site impractical, or other extreme unanticipated natural conditions; industry-wide or non-Site specific strikes; and compliance with an order or request of any Governmental Authority and acts or omissions of any Governmental Authority after the Effective Date (including the adoption or change in any Applicable Law and, despite such Party’s reasonable and diligent efforts to obtain Permits, delays in permitting).

Notwithstanding the foregoing, the following shall not constitute a “Force Majeure Event” for the purposes of this Agreement:

	(i)	inability or failure by a Party to make payment for any reason, including economic hardship or lack of funds,
	(ii)	failure by a third party to perform, except to the extent that the performance by such third party would itself be excused as a result of Force Majeure Event,
	(iii)	non-industry- wide strikes or other labor actions, and
	(iv)	labor, materials, supplies or equipment shortages or late deliveries, except to the extent that the shortage or late delivery is itself caused by a Force Majeure Event.

“Geotech Report” means the geotechnical report or reports of the sites furnished by Contractor to Subcontractor.

“Governmental Authority” means any federal, state, local or other governmental, regulatory or judicial agency, authority, public utility, or other entity having legal jurisdiction over the Site or the System.

“Hazardous Material” means all pollutants, contaminants and chemicals and any other carcinogenic, ignitable, corrosive, reactive, toxic or otherwise hazardous substances (and materials and substances containing or contained by the foregoing) subject to regulation, control or remediation under applicable Environmental Laws.

“Industry Standards” shall mean those standards of care and diligence normally practiced by an experienced solar engineering, construction and installation firms in performing services of a similar nature in the United States of America and in accordance with good engineering design practices, applicable Permits, and other standards established for the Work. Industry Standards are not intended to be limited to the optimum method to the exclusion of all others, but rather to include a spectrum of reasonable and prudent methods. In the event of any conflict between the terms of this Agreement and Industry Standards, the terms of this Agreement shall control over any inconsistent Industry Standards.

“Insolvency Event” with respect to a Person means such Person becomes insolvent, or institutes or has instituted against it a case under Title 11 of the United States Code, is unable to pay its debts as they mature or makes a general assignment for the benefit of its creditors, or if a receiver is appointed for the benefit of its creditors, or if a receiver is appointed on account of insolvency.

“Limited Notice to Proceed” has the meaning set forth in Section 2.3.

“Liquidated Damages Schedule” means the schedule of liquidated damages attached hereto as Exhibit B.

“Measured Capacity” means the actual AC generation capacity for each System or the Systems, as defined in Section 5.3 of Exhibit I.

“Mechanical Completion” means satisfaction by Contractor or waiver by Customer of all of the conditions for Mechanical Completion set forth in Section 4.3.

“Mechanical Completion” shall have the meaning as set forth in Section 4.3.

“Mechanical Completion Date” has the meaning set forth in Section 2.3.

“Mechanical Completion Notice” means the notice that shall be issued by Contractor upon Mechanical Completion as provided in Section 4.1.

“Notice to proceed” has the meaning set forth in Section 2.3.

“O&M Agreement” means the Operations and Maintenance Agreement between Customer and Contractor entered into on or about the date hereof.

“Parties” means Contractor and Subcontractor collectively, and each of them may be referred to as a “Party.”

“Performance Target” for each System means 100% of the Expected Capacity, as defined herein and more fully described in Table 1 of Exhibit I attached hereto; in connection therewith, “Acceptable Performance Target” shall mean 97% of the Performance Target, and (y) “Minimum Performance Target” shall mean 94% of the Performance Target.

“Permit“ means any federal, state, regional or local license, authorization, certification, filing, recording, permit or other approval with or of any Governmental Authority, including any environmental, construction or operating permit that is required by Applicable Law or that is otherwise necessary for the performance of the Work.

“Person” means any individual, corporation, partnership, company, joint venture, association, trust, unincorporated organization or Governmental Authority.

“Progress Billing” means an invoice submitted to Contractor by Subcontractor on the 15^th or 30^th day of each calendar month (or, if such a date is a holiday, then the first Business Day thereafter) (each a “Billing Date”) for Work performed hereunder and not previously invoiced through the Billing Date.

“Progress Payment” means payment for any Progress Billing rendered in accordance with this Agreement. All Progress Payments shall be made on or prior to the 30^th day following the Billing Date (or the first Business Day thereafter if such date is not a Business Day) to which it pertains. 10% retention will be held on such billings. Retention will be released no later than fifteen (15) days after Final Completion as defined in Section 4.5 of this agreement.

“Project” means those certain Systems to be installed at the sites described in Exhibit G, each a “Site” and collectively “Sites”..

“Project Agreements” means

	(a)	the power purchase agreement (or similar arrangement) with the off-taker to which Customer or the Project Company, as applicable, is a party;
	(b)	the lease(s), easement(s), access agreements, crossing agreements or other similar real property arrangements with respect to the Sites to which Customer or Project Company, as applicable, is a party, in each case in connection with the System and that has been provided to Contractor prior to the Effective Date (or if not in place as of the Effective Date, reasonably in advance of the Notice to Proceed);
	(c)	the Environmental Report(s) (or similar agreement) with respect to the Sites to which Customer or Project Company, as applicable, is a party, in each case in connection with the Systems;
	(d)	Interconnection Agreement for the Systems between applicable public utility to which Customer or the Project Company, as applicable, is a party;
	(e)	any Conditional Use Permit (or similar agreement) with respect to the Sites to which Customer or Project Company, as applicable, is a party, in each case in connection with the System

“Project Company” means each of companies set forth in Exhibit G.

“Project Schedule” means the schedule for the performance of the Work by Subcontractor, set forth in Exhibit H, as related to the Scope of Work, and further defined and read in conjunction with Section 2.3 hereunder.

“Punch List” has the meaning set forth in Section 4.2.

“Receiving Party” has the meaning set forth in Section 12.1.

“Scope of Work” means the scope of work attached as Exhibit F, which comprises the layout, specifications, description, Work, materials, Project Schedule, Permits, Contract Price and all other information necessary to design, engineer and construct the Systems at the Sites and perform all of the Work with respect thereto compliant with Exhibit I, and the Design Materials.

“Specifications” means the specifications with respect to each System, as set forth in the Scope of Work and as provided in the Design Materials.

“Subcontractor” has the meaning given to such term in the preamble hereto.

“Subcontractor Indemnified Parties” has the meaning set forth in Section 7.2.

“Subcontractor Permits” means the Permits for which Subcontractor is responsible, as specified in the Scope of Work in addition to any other permits not specified in the Scope of Work that may be required for the construction of the System.

“Subcontractor Taxes” means any and all Taxes imposed under Applicable Law in respect of the income or gross income of Subcontractor, the Subcontractor’s office location or Subcontractor’s employment of its employees.

“Subcontractor Warranty” means the Defect Warranty and the Design Warranty.

“Sub-Subcontractor” means any Person retained, directly or indirectly, by Subcontractor in each case as an independent contractor to perform services for Subcontractor in discharge of a portion of the Work, excluding Suppliers.

“Substantial Completion” means satisfaction by Subcontractor & Contractor or waiver by Customer of all of the conditions for Substantial Completion set forth in Section 4.4.

“Substantial Completion Date” has the meaning set forth in Section 4.1.

“Substantial Completion Deadline” has the meaning set forth in Section 2.3.

“Substantial Completion Notice” means that notice provided by Subcontractor certifying that the System has achieved Substantial Completion as provided in Section 4.1.

“Supplier” means a Person of any tier of supply that supplies equipment or materials and is not supplying services to Subcontractor at the Site in discharge of a portion of the Work.

“System” means any solar photovoltaic system identified in the Scope of Work compliant with Exhibit I (together “Systems”).

“System Commissioning Tests” means the tests described in Exhibit I attached to this Agreement, conducted with respect to the commissioning of any System in accordance with Exhibit I attached to this Agreement.

“System Performance” means the actual performance and reliability, including without limitation the Measured Capacity, of any System.

“System Performance Tests” means the tests procedures and methods described in Exhibit I attached to this Agreement, conducted with respect to the determination of performance Measured Capacity and reliability of any System, in accordance with Exhibit I attached to this Agreement.

“Taxes” means any and all taxes, charges, duties, imposts, levies and withholdings imposed by any Governmental Authority, including sales tax, use tax, income tax, withholding taxes, corporation tax, franchise taxes, margin tax, capital gains tax, capital transfer tax, inheritance tax, value added tax, customs duties, capital duty, excise duties, betterment levy, stamp duty, stamp duty reserve tax, national insurance, social security or other similar contributions, and any interest, penalty, fine or other amount due in connection therewith, but not including costs payable to a Governmental Authority incurred in connection with the application for and issuance of any applicable Permit.

“Unforeseen Site Conditions” means

	(a)	any geological or geotechnical conditions at the Site that are not disclosed in the Geotech Report(s) or
	(b)	any other special conditions at the Site that are not disclosed in any other report(s) or account(s) that are made available by Contractor or Customer to this Subcontractor in connection thereto, or that a reasonably prudent contractor undertaking construction of a solar facility similar to the Work would not have discovered in the course of a reasonable investigation of the Site prior to commencement of construction,

“Work” has the meaning set forth in Section 2.1.

“Work Product” has the meaning set forth in Section 13.11.

1.2 Rules of interpretation. Unless otherwise manifestly required by the context in which any term appears:

(a) Capitalized terms used in this Agreement shall have the respective meanings set forth in this Section 1;

(b) The singular shall include the plural and vice versa;

(d) Reference’s to “Sections”, “Schedules” and “Exhibits” shall be to sections, schedules and exhibits of this Agreement;

(e) The words “herein”, “hereof” and “hereunder” shall refer to this Agreement (or the certificate or other document in which they are used) as a whole and not to any particular section or subsection hereof (or such certificate or document); and

(f) Reference’s to this Agreement shall include a reference to all schedules and exhibits hereto, as the same may be amended, modified or supplemented from time to time,

(g) Word’s “shall” and “will” have the same meaning;

(h) Reference’s to any Person include that Person’s successors and assigns (without affecting any limitations, restrictions or prohibitions on assignment);

(i) “or” is used in the inclusive sense of “and/or”; and

(j) Headings are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof.

1.3 Contract Documents. The “Contract Documents” consist of the following documents:

(a) All written, executed and effective modifications, amendments, including without limitation the Final Designs, and all written and effective Change Orders to this Agreement;

(b) this Agreement;

(d) the Design Materials after the same have been approved pursuant to Section 2.2.

1.4 Conflicting Provisions. In the event of any conflict or inconsistency between any of the Contract Documents, the document appearing higher in the list of Contract Documents set forth in Section 1.3 (where applicable) will prevail and be given priority. Subject to the foregoing, the several documents and instruments forming part of this Agreement are to be taken as mutually explanatory of one another and in the case of ambiguities or discrepancies within or between such parts the same will be explained and interpreted, if possible, in a manner which gives effect to each part and which avoids or minimizes conflicts among such parts. No oral representations or other agreements have been made by the Parties except as specifically stated in the Contract Documents.

ARTICLE 2
THE WORK

2.1 Scope of Work / Price.

(a) Subcontractor shall provide, on a turnkey basis and at the price set forth in Section 5.1(a) of this Agreement, all professional design and engineering services, equipment procurement not furnished by owner, supervision, labor, materials, supplies, equipment, tools, construction equipment and machinery, utilities, transportation, and procurement of Subcontractor Permits in conformity with the Scope of Work compliant with Exhibit I, and other facilities, items and services, in each case to the extent necessary to design, install, procure, construct and complete the System in accordance with the Specifications and the Contract Documents (the “Work”).

(b) Subcontractor shall have the responsibility for and sole control over the engineering, design and construction means, methods, techniques, sequences, and procedures and for coordination of all portions of the Work unless and to the extent otherwise provided herein. Subcontractor and its Sub-Subcontractors will perform all Work efficiently and with the requisite expertise, skill, competence, resources and care to satisfy the requirements of the Contract Documents, the Project Agreements, Industry Standards and all Applicable Law in effect at the time the Work is performed.

(c) While performing the Work at the Site, Subcontractor will comply with the safety, access and operational restrictions established by the Customer, or if Customer leases the Site from a third party, by the owner of the Site pursuant to the applicable Project Agreement (or any other applicable offtake agreement, lease or similar agreement), a copy of which is attached hereto as Exhibit F and any other requirements imposed by Applicable Law.

2.2 Design.

(a) Subcontractor shall perform design and engineering services, using qualified architects, engineers and other professionals approved by Contractor.

(b) Subcontractor shall prepare and submit to Contractor all designs, drawings and specifications for each System and other work required to prepare the Sites as necessary for completion of the Work, in accordance with the Scope of Work set forth in Exhibit F attached hereto.

(c) Contractor shall promptly review the documents so submitted and provide any comments in writing to Subcontractor within ten (10) Business Days after receipt of the documents. If Subcontractor determines, in its reasonable judgment, that one or more of Contractor’s comments are not consistent with the Scope of Work or that incorporating such comments in the Specifications would increase the Contract Price or adversely (from Subcontractor’s standpoint) affect the Project Schedule or affects Subcontractor’s ability to provide the Warranties or to comply with any other provision of this Agreement, Subcontractor shall promptly (but in any event within ten (10) Business Days) notify Contractor of Subcontractor’s objections or concerns regarding such comments. Contractor and Subcontractor shall use commercially reasonable efforts to resolve their differences at the earliest possible date (but in any event within ten (10) business days) as to the comments not agreed to by the Parties. Subcontractor shall incorporate Contractor’s comments, to the extent agreed upon by the Parties or such comments are determined to be reasonable following resolution of the dispute, into the final designs, drawings and specifications, as applicable. Such final designs, drawings, and specifications, provided they are acceptable to Contractor (the “Final Designs”), shall be part of the Contract Documents used for the Work and, if and to the degree that such Final Designs are inconsistent with the Specifications, the Final Designs shall constitute an amendment to the Specifications. Subcontractor shall make best efforts to inform Contractor in writing of material deviations from the original Contract Documents that are included in the Final Designs prior to Contractor’s approval thereof. If Contractor fails to provide comment on designs, drawings and specifications within ten (10) Business Days of submission by Subcontractor, documents shall be deemed accepted.

(d) Subcontractor shall not be relieved of responsibility for deviations from requirements of the Contract Documents by Contractor’s approval of the designs, drawings, specifications, or similar submittals unless Subcontractor has specifically informed Contractor, in writing or in the submittal(s), of such deviation at the time of the submittal and Contractor has given written approval of the deviation or failed, within ten (10) Business Days after such submittal, to provide a written objection to such deviation by Subcontractor.

(e) Subcontractor will maintain a current, complete set of drawings and Specifications at the Site;

(f) Subcontractor represents and warrants to Contractor that all design services performed by Subcontractor and its Sub-subcontractors will be performed in accordance with the standard of care and skill accepted for the design of solar power generation facilities in the state where the Site is located during the relevant period of time. Any professional services to be performed as part of the Work for which Applicable Law requires a license or registration will be performed by duly licensed or registered personnel; and

(g) Subject to Section 2.2(c) and 2.2 (d) above, with respect to design and engineering, no review of, approval of, or comments on, any information provided to Contractor by Subcontractor or any Sub-subcontractor, and no failure by Contractor to review or comment on any such information, shall be deemed to be an acceptance of the Work or any portion thereof by Contractor, nor to cause a transfer of responsibility for such information to Contractor. Failure of Contractor or its representatives to discover errors or omissions in information that it has reviewed, or to inform Subcontractor that Sub-subcontractors or others are not in compliance with the information, or to direct or enforce procedures for complying with such information, shall not relieve Subcontractor from its sole responsibility to perform and complete the Work in accordance with the Contract Documents.

2.3 Project Schedule. Without affecting the right of Subcontractor to enter or access the Site for the purpose of conducting diligence activities, and without affecting design or engineering activities to be performed off Site prior to the commencement of physical work at the Site, Subcontractor shall not commence performance of the Work at the Site until Contractor gives written notice to Subcontractor authorizing it to commence (the “Notice to Proceed” or “NTP”). At any time following the Effective Date and before issuance of the NTP, Contractor may at Contractor’s sole discretion, issue to Subcontractor a limited notice to proceed (“Limited Notice to Proceed” or “LNTP”). Subcontractor shall perform its obligations under this Agreement in a diligent and expeditious manner and use its commercially reasonable efforts to perform the Work in conformity with the Project Schedule. Subcontractor shall promptly notify Contractor in writing of any event or circumstance that may materially adversely impact the Project Schedule and, to the extent the impact is not due to a Force Majeure Event, Unforeseen Site Condition or a Contractor Caused Delay, Subcontractor shall, at its expense, be responsible for taking all commercially reasonable actions, including the addition of manpower or extended work schedules or the procurement of additional equipment, supplies or manpower, necessary to alleviate adverse impacts therefrom, including without limitation a failure to meet the respective deadlines for Mechanical and Substantial Completion of each System. Subject to a Force Majeure Event or Contractor Caused Delay, the Mechanical Completion Dates for each System shall be no later than the dates shown in Item 11 of Exhibit F (each a “Mechanical Completion Deadline”); provided that the 80% Completion Condition shall have been achieved no later than December 31, 2015, the Substantial Completion Dates for each System shall be no later than the dates shown in Item 11 of Exhibit F (each, a “Substantial Completion Deadline”); and the Final Completion Dates shall be no later than the dates shown in Item 11 of Exhibit F (each, a “Final Completion Deadline”).

2.4 Progress Meetings. Subcontractor shall arrange and conduct progress meetings with Customer and Contractor at least every two weeks following the Commencement Date or otherwise as agreed between the Parties.

2.5 Standard of Performance. Subcontractor shall cause the Work to be performed in compliance with the Contract Documents, the Project Agreements, Industry Standards, and Applicable Law. Work that is required under Applicable Law to be performed by licensed personnel shall be performed by duly licensed personnel.

2.6 Subsidies; Incentives; Tax Credits.

(a) Subcontractor shall provide reasonable assistance and cooperation to Contractor in the preparation and submittal of all necessary applications or other documentation necessary for Contractor to participate in any subsidy, rebate or other incentive program offered with respect to the System by any public utility or Governmental Authority, including by providing to the Contractor for use by the Contractor or its designee, to the extent such information is reasonably available to Subcontractor without incurring undue cost or burden the following: (i) a written confirmation of the nameplate capacity of the System, and (ii) a cost breakdown of all charges of Subcontractor’s actual construction and procurement costs (provided that Subcontractor shall submit such cost breakdowns in good faith but shall bear no responsibility for the calculation of cost basis). Subcontractor shall attend all Site verification visits conducted by the applicable public utility or Governmental Authority and shall provide reasonable assistance and cooperation to Contractor in satisfying the requirements of any subsidy, rebate or other incentive program offered with respect to the System. Subcontractor’s obligations under this Section shall expire on the first anniversary of Substantial Completion of the System unless this Agreement is terminated earlier in accordance with the terms hereof.

(b) The Parties acknowledge and agree that any benefits payable under any Subsidy, rebate or other incentive program offered with respect to the System by any public utility or Governmental Authority or any tax credits associated with the ownership of the System will be paid directly to, or shall be retained by, Contractor. Subcontractor makes no representation or warranty as to the amount or availability of any subsidy, rebate or other incentive with respect to the System or tax credit or tax benefit or any other incentives or credits available or perceived or believed to be available from any utility, Governmental Authority or any other Person, and assumes no responsibility or liability in connection therewith. Contractor shall be solely responsible for determining the availability of any such subsidy, rebate or other incentive or tax credit or tax benefit (or other incentive) related to the System and negotiating with, or obtaining payment in respect thereof from, any utility or Governmental Authority.

2.7 Change Orders.

(a) Generally. Each Party may, upon Notice to the other Party, request a Change to the Specifications, the Work, or the System by issuing a written request (the “Change Order Request”) which shall include:

	(i)	A reference to this Agreement,
	(ii)	The requested change to the Work, including the particular portion of the Work or Specification to be modified and
	(iii)	The effects (if any) of the Change Order Request, if agreed and implemented, on the Project Schedule, the Contract Price or, in the case of a Change Order Request by Contractor, other Subcontractor obligations under this Agreement. A “Change Order” means a written change to the Specifications, the Work, or the System that has been executed by both Contractor and Subcontractor in accordance with this Agreement (or that is required to be so executed pursuant to the terms hereof).

(b) Change Order Costs and Pricing.

(i)

If a Change Order Request contemplates a change in Contract Price, but no change in the size (in MW) of the System, such changes shall be calculated using the methodology consistent with the Parties’ determination of the Lump Sum.

	(ii)	If a Change Order Request contemplates a change in Contract Price due to an increase in size (in MW) of the System, the Contract Price shall be proposed by Subcontractor and agreed to by the Parties in accordance with this Section 2.7.

	(iii)	If a Change Order Request contemplates a change in Contract Price due to a decrease in size (in MW) of the System, the Contract Price shall be proposed by Contractor and agreed to by the Parties in accordance with this Section 2.7.

(c) Subcontractor Change Order Request. Subject to the limitations set forth, herein, Subcontractor shall be entitled to a Change Order to the extent of any actual and demonstrable impact to Subcontractor regarding the Work only upon the occurrence of any of the following:

	(i)	any or all of the Work is delayed, suspended or accelerated by Contractor or any Person acting for or on behalf of Contractor (not including Subcontractor and any of its Sub-subcontractors or suppliers) (such Persons, together with Contractor, “Contractor Persons”), including Contractor’s failure to issue the Commencement Notice on or before the date specified for the Commencement Notice on the Project Schedule, other than by Contractor’s proper exercise of its rights under this Agreement related to default or failure to perform by Subcontractor, such as the exercise by Contractor of the right to have defective or non-conforming work corrected or re-executed;

	(ii)	any breach by Contractor or any Contractor Person of the terms and conditions of this Agreement or the unexcused failure by any Contractor Person to perform its obligations hereunder;

	(iii)	Subcontractor is not permitted access to the Site, including pursuant to the Project Agreements, except where Site access is prohibited due to Subcontractor’s breach of this Agreement;

	(iv)	a change in Applicable Law occurring after the Effective Date that materially affects Subcontractor’s performance hereunder and the Scope of Work other than a change in Applicable Law which generally affects all of Subcontractor’s or its Subcontractors’ operations

	(v)	the occurrence or effect of a Force Majeure Event (including the discovery of any Unforeseen Site Condition), as provided in Section 2.11 below, including Work required or expenses or costs incurred in connection with mitigating the effect of a Force Majeure Event; or to the extent it has the effect of delaying Work or increasing Subcontractor’s costs, or both, (i) breach by Contractor, Customer or the Project Company, as applicable, of its obligations under any of the Project Agreements, or (ii) amendment, modification or waiver of any Project Agreement (not expressly consented to by Subcontractor in writing); provided, that, in all cases, Subcontractor shall use commercially reasonable efforts, at no cost to Subcontractor, to overcome or mitigate the effects of such occurrence, including through reasonable reallocation of its personnel and resequencing of the Work. Notwithstanding anything to the contrary in this Section 2.7(c), the Subcontractor shall be entitled to an increase in the Contract Price pursuant to a Change Order resulting from the occurrence of events or circumstances provided for in clause (iv) or clause (v) of Section 2.7(c) only to the extent of the excess of the amount by which the Contract Price would, but for this paragraph, be increased as a result of the occurrence of events or circumstances provided for in clause (iv) or clause (v) of this Section 2.7.

(d) Procedure.

(i)

If Subcontractor is entitled to a Change Order pursuant to clause (c) above, Subcontractor shall submit a Change Order Request to Contractor for its review and approval within seven (7) Days of the date Subcontractor becomes aware of the facts and circumstances that permit Subcontractor to request a Change Order. Within five (5) Business Days after receipt of a Change Order Request and all accompanying information necessary to support and evaluate the Change Order Request from Subcontractor, Contractor shall either (i) execute and deliver such Change Order as provided by Subcontractor or (ii) request that certain amendments or modifications be made to such Change Order Request or request additional information required by Contractor for evaluation of the Change Order Request. Any Change Order Request that proposes an increase in the Contract Price must be accompanied by documentation supporting the amount of the proposed increase. Except in the case of an emergency, Work related to any Change Order Request shall not be performed until a Change Order is executed by both Parties (provided that any delay in executing a Change Order to which Subcontractor is entitled hereunder beyond the five (5) Business Day period referenced above may itself give rise to additional compensation or schedule relief for Contractor). If Contractor timely requests amendments or modifications to the Change Order Request, the Parties shall negotiate in good faith in an attempt to agree on the terms of a Change Order. All executed Change Orders are hereby incorporated by reference into this Agreement and the Scope of Work.

(ii)

If Contractor is entitled to a Change Order pursuant to clause (b)(iii) above, Contractor shall submit a Change Order Request to Subcontractor for its review and approval within seven (7) Days of the date Contractor becomes aware of the facts and circumstances that permit Contractor to request a Change Order. Within five (5) Business Days after receipt of a Change Order Request and all accompanying information necessary to support and evaluate the Change Order Request from Contractor, Subcontractor shall either (i) execute and deliver such Change Order as provided by Contractor or (ii) request that certain amendments or modifications be made to such Change Order Request or (iii) request additional information required by Subcontractor for evaluation of the Change Order Request. Any Change Order Request that proposes a decrease in the Contract Price must be accompanied by documentation supporting the amount of the proposed decrease. Except in the case of an emergency, Work related to any Change Order Request shall not be performed until a Change Order is executed by both Parties (provided that any delay in executing a Change Order to which Contractor is entitled hereunder beyond the five (5) Business Day period referenced above may itself give rise to additional compensation or schedule relief for Contractor). If Subcontractor timely requests amendments or modifications to the Change Order Request, the Parties shall negotiate in good faith in an attempt to agree on the terms of a Change Order. All executed Change Orders are hereby incorporated by reference into this Agreement and the Scope of Work.

(e) Equitable Adjustment. If the Parties cannot agree on the cost or any other term or condition of a Change Order Request, Subcontractor shall have no obligation to implement the Change Order if such Change Order Request was requested by Contractor. Subcontractor shall provide all documentation reasonably requested by Contractor for the review of any Change Order Request and, to the extent Contractor determines Subcontractor is entitled to such Change Order Request, it shall pay such additional amounts to Subcontractor. In the event the Parties disagree on Subcontractor’s right or Contractor’s right to such a Change Order or the amount of such Change Order, the Parties shall meet and discuss such equitable adjustment Change Order in good faith; provided, however, Subcontractor shall not be eligible to claim or receive a Change Order if based on any fault, error or omission of Subcontractor or Subcontractor’s breach of this Agreement.

(f) Emergencies. In any emergency affecting the safety of persons or property, Subcontractor will take commercially reasonable steps to prevent threatened damage, injury or loss. Subcontractor will notify Contractor of the emergency as soon as practicable and in any event within 48 hours after Subcontractor becomes aware of the emergency. The notice to Contractor will describe the emergency in detail, including a reasonable estimation of its expected duration and impact, if any, on the performance of Subcontractor’s obligations hereunder. Any change in the Contract Price or the Project Schedule on account of the emergency work will be determined as provided in this Section 2.7.

(g) Change Order Disputes. If the Parties are unable to reach agreement on a Change Order, or the effects (if any) on the Project Schedule, Contract Price or, in the case of a Change Order Request by Contractor, other Subcontractor obligations under this Agreement, then either Party may submit the matter to dispute resolution pursuant to Section 13.9. Subcontractor shall not suspend, in whole or in part, performance of this Agreement during any dispute over any Change Order other than with respect to the Work that is the subject of the Change Order. Contractor shall continue to pay undisputed amounts.

2.8 Work Site Supervision; Safety; Maintenance of Site.

(a) Subcontractor shall supervise and direct all Work performed hereunder, and shall be solely responsible for and have exclusive control over the means, methods, techniques, sequences and procedures employed, subject to the terms and conditions of the Contract Documents.

(b) Subcontractor will, in accordance with Industry Standards, undertake security measures at the Site at all times during the term of this Agreement to prevent vandalism, theft and danger to the Site and personnel working at the Site. Subcontractor will, in accordance with Industry Standards, conduct its operations in a manner so as to minimize the risk of loss, theft or damage to the Site and the System, and shall repair or replace any damage or loss to the Site or the System arising from its failure to comply with this Section 2.8(b).

(c) Subcontractor shall keep each Site reasonably free of materials and accumulation of waste caused by the Work (to the extent generated by Subcontractor or anyone under Subcontractor’s direct control) to permit Subcontractor to perform the Work efficiently, safely and without interfering with the use of adjacent portions of the Site or adjacent properties. Reasonably promptly after Substantial Completion of the System, Subcontractor shall remove from the Site all waste, tools and equipment introduced to the Site by Subcontractor (other than tools and equipment required for achievement of Final Completion).

(d) Subcontractor shall comply with all Site rules and regulations and shall maintain the Site and conduct the Work in a manner that does not violated the Project Agreements or adversely affect or interfere in any material respect with the operations of any adjacent or nearby business or property.

2.9 Delay. If Subcontractor’s performance hereunder is delayed by any event or circumstance described in clause (c) of Section 2.7, Subcontractor shall not be deemed in breach of this Agreement and shall be entitled to a Change Order in accordance with Section 2.7. Subcontractor shall use reasonable diligence to avoid or minimize the cause of such delay and shall, as soon as practicable, notify Contractor thereof.

2.10 Hazardous Materials.

(a) Subcontractor Hazardous Materials. Subcontractor shall have no responsibility for detection, abatement, remediation, removal or disposal of any Hazardous Material, except for (i) any release, disturbance or discharge of any Hazardous Materials existing at the Site on, prior to, or after the Effective Date to the extent Subcontractor (or Subcontractor’s Sub subcontractors, Suppliers, agents or other parties acting on behalf of Subcontractor) negligently or willfully causes them to be released, disturbed or discharged, or (ii) all Hazardous Materials brought onto, created at or introduced to the Site by Subcontractor (or Subcontractor’s Sub- subcontractors, Suppliers, agents, or other parties acting on behalf of Subcontractor) (clauses (i) and (ii) collectively, “Subcontractor Hazardous Materials”). In the event that Subcontractor becomes aware of the presence of, or exposure of persons to, any Hazardous Material at the Site, Subcontractor shall inform Contractor by Notice as soon as practicable. Contractor shall not be responsible for, and Subcontractor shall bear full responsibility and remediation costs relating to Subcontractor Hazardous Materials.

(b) Hazardous Materials Indemnification by Contractor. Contractor hereby specifically agrees to indemnify, defend and hold Subcontractor and its Sub-subcontractors, and its and their present and future direct or indirect parents, subsidiaries, affiliates, divisions, and their respective directors, officers, employees, shareholders, agents, representatives, successors and assigns harmless from and against any and all losses, liabilities, claims, demands, damages, causes of action, fines, penalties, costs and expenses (including all reasonable consulting, engineering, attorneys’ or other professional fees, whether or not a lawsuit or an administrative enforcement action is brought), that they may incur or suffer by reason of: (i) the existence, uncovering or unveiling, or any release of a Hazardous Material on, to or from the Site (except for Subcontractor Hazardous Materials); (ii) any enforcement or compliance proceeding commenced by or in the name of any Governmental Authority because of an alleged, threatened or actual violation of any Applicable Law by Contractor or because of the presence on the Site of Hazardous Materials (except for Subcontractor Hazardous Materials); and (iii) any action reasonably necessary to abate, remediate or prevent a violation or threatened violation of any Applicable Law by Contractor or any other Person, other than Subcontractor (or Subcontractor’s Sub-subcontractors, Suppliers, agents, or other parties acting on behalf of Subcontractor), in connection with the foregoing.

(c) Subcontractor Hazardous Materials Indemnification by Subcontractor. Subcontractor hereby specifically agrees to indemnify, defend and hold Contractor, its present and future direct or indirect parents, subsidiaries, affiliates, divisions, and their respective directors, officers, employees, shareholders, agents, representatives, successors and assigns harmless from and against any and all losses, liabilities, claims, demands, damages, causes of action, fines, penalties, costs and expenses (including, but not limited to, all reasonable consulting, engineering, attorneys’ or other professional fees), that they may incur or suffer by reason of: (i) the existence, uncovering or unveiling, or any release of a Subcontractor Hazardous Material on, to or from the Site; (ii) any enforcement or compliance proceeding commenced by or in the name of any Governmental Authority because of an alleged, threatened or actual violation of any Applicable Law by Subcontractor (or its Sub-subcontractors, Suppliers, agents, or other parties acting on behalf of Subcontractor) or because of the presence on the Site of Subcontractor Hazardous Materials; and (iii) any action reasonably necessary to abate, remediate or prevent a violation or threatened violation of any Applicable Law by Subcontractor (or its Sub- subcontractors, Suppliers, agents, or other parties acting on behalf of Subcontractor) in connection with the foregoing.

2.11 Force Majeure Events.

(a) Subject to the terms hereof, a Party claiming a Force Majeure Event shall be excused from the performance of its obligations under this Agreement to the extent that such Party cannot, using commercially reasonable efforts, perform such obligations by reason of the occurrence of the Force Majeure Event; provided that the Party claiming a Force Majeure Event exercises reasonable efforts to minimize and mitigate the effects of any delay caused by such Force Majeure Event. Subcontractor shall be entitled to an adjustment to the Contract Price and/or Project Schedule caused by a Force Majeure Event properly notified to Contractor by Subcontractor pursuant to this Section 2.11, pursuant to a Change Order as provided in Section 2.7. However, any Force Majeure Event that prevents performance under this Agreement for more than three hundred sixty-five (365) days shall entitle the Subcontractor or Contractor to terminate this Agreement by written notice to the other Party. Any adjustment of the Contract Price and/or the Project Schedule pursuant to this Section 2.11 shall be documented by a written Change Order to this Agreement.

(b) A Party claiming a Force Majeure Event shall notify the other Party in writing as soon as practicable, but in any event not later seven (7) Days after the Party becomes aware of either the occurrence or the effect of the Force Majeure Event (it being recognized herein that the occurrence or existence of an event, condition or circumstance constituting a Force Majeure Event may not be known until after the effects thereof are experienced).

2.12 Sub-subcontractors.

(a) Subcontractor may subcontract portions of the Work subject only to the restrictions on subcontracting expressly provided in this Agreement. Subcontractor assumes responsibility to Contractor for the proper performance of the Work of Sub-subcontractors and any acts and omissions in connection with such performance. Nothing in the Contract Documents is intended or deemed to create any legal or contractual relationship between Contractor and any Sub-subcontractor, including any third-party beneficiary rights; provided, that Subcontractor shall ensure that all agreements with Sub-subcontractors shall be assignable to Contractor and the Contractor Financing Parties in the event that this Agreement is terminated by Contractor.

(b) Subcontractor will coordinate the activities of all of Subcontractor’s Sub-subcontractors. If Contractor performs other work on or at the Site with separate contractors under Contractor’s control, Subcontractor agrees to reasonably cooperate and coordinate its activities with those separate contractors so that the System can be completed in an orderly and coordinated manner without unreasonable disruption.

2.13 Security and Background Screening. Subcontractor and its Sub-subcontractors shall comply with the security and background screening requirements and criteria set forth in the Contract Documents and the Project Agreements.

ARTICLE 3
COMMISSIONING; PERFORMANCE TESTING

3.1 System Commissioning Tests. After the System is functionally complete, Subcontractor shall perform the System Commissioning Tests in accordance with Exhibit I attached to this Agreement, and shall thereafter compile and submit to Contractor a written notice setting forth the raw data and results of the System Commissioning Tests.

3.2 System Performance Tests. Subcontractor may begin System Performance Tests at any time after the successful completion of the System Commissioning Tests, the System components are substantially complete and the System can be operated safely and without voiding the manufacturer’s warranty, including prior to achieving Substantial Completion. Subcontractor shall give Contractor at least seven (7) Days’ written notice of the projected date for the commencement of the System Performance Tests and will afford Contractor and any Contractor Financing Parties’ representatives the opportunity to attend and observe all such tests. In the event Subcontractor fails to provide such notice of the System Performance Tests to Contractor, Contractor shall have the right to require Subcontractor to re-perform the System Performance Tests at Subcontractor’s sole cost. The System Performance Tests shall be performed in accordance with the procedures set forth in Exhibit I attached to this Agreement. Subcontractor shall compile, determine and submit to Contractor (i) the raw data and results of the System Performance Tests, and (ii) (a) flash test data provided by the manufacturer for modules supplied to the Site and/or (b) in the case of Contractor-purchased modules, if such flash test data is supplied to Subcontractor.

ARTICLE 4
COMPLETION AND ACCEPTANCE OF THE WORK

4.1 Notices of Mechanical, Substantial, and Final Completion. If Subcontractor believes it has achieved Mechanical Completion (other than Section 4.3(l)), Substantial Completion (other than Section 4.4(j)) or Final Completion (other than Section 4.5(f)) with respect to any System, Subcontractor shall deliver to Contractor a Mechanical Completion Notice, Substantial Completion Notice or Final Completion Notice, as applicable, stating that Subcontractor believes the System has achieved Mechanical Completion, Substantial Completion or Final Completion, as applicable, and (in cases other than a request that Contractor merely accept/approve such notice) delivering all supporting documentation of achievement, including any required test results not previously accepted by Contractor. Within ten (10) Business Days from receipt of the Mechanical Completion Notice, Substantial Completion Notice or Final Completion Notice, as applicable, Contractor and Subcontractor shall participate in a joint inspection of the Work subject to such Notice and Contractor shall either:

(a) deliver to Subcontractor the Mechanical Completion Notice, Substantial Completion Notice or Final Completion Notice, as applicable, countersigned by a duly authorized officer of Contractor confirming Mechanical Completion, Substantial Completion or Final Completion, as applicable, has been achieved with respect to the applicable System; or

(b) notify Subcontractor in writing that Mechanical Completion, Substantial Completion or Final Completion, as applicable, has not been achieved with respect to the applicable System, and stating in detail the reasons why Contractor believes so, provided that the failure to meet the condition set forth in Section 4.3(l) (with respect to Mechanical Completion), the failure to meet the condition set forth in Section 4.4(j) (with respect to Substantial Completion), or the failure to meet the condition set forth in Section 4.5(f) (with respect to Final Completion) shall not be a reason for Contractor to reject a Mechanical Completion Notice, a Substantial Completion Notice or a Final Completion Notice, as applicable If Contractor does not respond to a Mechanical Completion Notice or Substantial Completion Notice within such 10 Business-Day period, without limiting any other remedies Subcontractor may have, the Mechanical Completion Deadline and Substantial Completion Deadline shall be extended day-for-day for each day after such 10-Business Day period. The “Mechanical Completion Date” for a System shall be the date that Contractor countersigns the Mechanical Completion Notice for such System pursuant to Section 4.1(a). The Date” for a System shall be the date that Contractor countersigns the Substantial Completion Notice for such System pursuant to Section 4.1(a). The Final Completion Date” for a System shall be the date that Contractor countersigns the Final Completion Notice for such System pursuant to Section 4.1(a). If Contractor timely notifies Subcontractor in writing that Mechanical Completion, Substantial Completion or Final Completion has not been achieved with respect to any System, Subcontractor shall take action to achieve Mechanical Completion, Substantial Completion or Final Completion for such System and shall deliver to Contractor another Mechanical Completion Notice, Substantial Completion Notice or Final Completion Notice, as applicable, and the “Mechanical Completion Date”, “Substantial Completion Date” or “Final Completion Date”, as applicable, for such System shall be the date Contractor delivered such replacement notice for such System; provided that if Contractor was incorrect in determining that Mechanical Completion, Substantial Completion or Final Completion, as applicable, had not been achieved, the “Mechanical Completion Date”, “Substantial Completion Date” or “Final Completion Date”, as applicable, shall be the date of the original applicable notice. This procedure shall be repeated until Contractor confirms or is deemed to have confirmed Mechanical Completion, Substantial Completion or Final Completion, as applicable.

4.2 Punch List. In accordance with Sections 4.3 and 4.4 hereof, when any System is substantially completed, Subcontractor shall provide Contractor with a list of items still outstanding which are necessary to complete such System in accordance with the Specifications (the “Punch List”). For removal of doubt, each item identified on the Punch List shall not, individually or in the aggregate, impede the ability of Contractor to safely operate such System in accordance with Industry Standards, manufacturer’s warranties, or utility requirements. The Punch List shall include a schedule of values assigned to each item on the Punch List and shall also attach or incorporate by reference an agreed list of required documents to be provided to Contractor by Subcontractor prior to Final Completion “Close-out Documents”.). Within five (5) Business Days after receipt of a proposed Punch List, Contractor and Subcontractor shall jointly inspect the applicable System at a mutually agreeable time. Within ten (10) Business Days after such inspection, Contractor shall either (a) approve the Punch List; or (b) request that certain amendments or modifications be made to the Punch List. If Contractor does not request any amendments or modifications to the Punch List provided by Subcontractor within such ten (10)-Business Day Period, Contractor shall be deemed to have accepted, executed and delivered such Punch List and Contractor hereby expressly agrees to be bound therewith (provided, that the items proposed on the Punch List by Subcontractor do not, individually or in the aggregate, impede the ability of Contractor to safely operate such System in accordance with Industry Standards, manufacturer’s warranties, or utility requirements). If Contractor timely requests amendments or modifications to the Punch List, the Parties shall negotiate in good faith and shall promptly (but in any event within ten (10) Business Days) agree on and execute an amended Punch List. The Parties’ agreement on the Punch List shall not affect the Subcontractor Warranty and Subcontractor’s other obligations under this Agreement.

4.3 Mechanical Completion, with respect to each System shall occur when:

(a) the System is mechanically, electrically, and structurally constructed in accordance with this Agreement and the Scope of Work, and all Work has been completed other than the Work required for Substantial Completion;

(b) all inspections, safety and quality checks required under Applicable Law or this Agreement have been performed and the results are satisfactory, and accepted by Contractor, except for such checks as pertain to or cannot be performed without grid connection;

(c) other than interconnection to the grid, the System is functionally complete, operational and capable of safe delivery of electrical energy to the interconnection point identified in the Contract Documents;

(d) the System Commissioning Tests shall have been successfully completed in accordance with Section 3.1 – System Commissioning Test and Exhibit I, other than such tests as require completion of the grid connection to perform;

(e) Subcontractor and Contractor shall have agreed on the Punch List in accordance with Section 4.2, subject to completion of tests required herein ;

(f) Contractor shall have received conditional lien waivers in the form provided for by applicable law (conditional only on receipt of the payment of the Contract Price due hereunder) from Subcontractor and all material first-tier subcontractors waiving any lien in connection with the Work;

(g) Subcontractor shall have delivered to Contractor copies of all operation and maintenance manuals with respect to the System;

(h) Subcontractor shall have delivered to Contractor copies of all manufacturer’s warranties and any required documents required to ensure that all manufacturer’s warranties are in effect and properly assigned as provided in Section 11.5;

(i) all applicable Contractor and Subcontractor Permits shall have been received (and are in full force and effect), and copies thereof shall have been delivered to Contractor;

(j) as of December 31, 2015, both (i) not less than 80% of the total cost to perform and complete the Scope of Work has been incurred and (ii) not less than 80% of the physical construction of the System has been completed as certified by the designated independent party engaged by Contractor to assess the extent of such completion, in each case, in accordance with the Applicable NC Tax Credit Statute and Guidance (this condition, as set forth in this clause (j), the “80% Completion Condition”);

(k) Subcontractor shall have delivered the Mechanical Completion Notice to Contractor pursuant to Section 4.1; and

(l) Contractor shall have approved the Mechanical Completion in accordance with Section 4.1.

4.4 Substantial Completion. Substantial Completion shall occur when:

(a) Mechanical Completion shall have been achieved in accordance to Section 4.3;

(b) the grid connection for the System is mechanically, electrically and functionally complete and interconnected with the local utility;

(c) revenue grade meters (as identified in the Scope of Work) furnished by the utility pursuant to the applicable interconnection agreement have been installed and are operational;

(d) all inspections, safety and quality checks (other than System Commissioning Checks Tests conducted in accordance with Exhibit I attached hereto) required under Applicable Law or this Agreement that required grid connection to be performed have been performed and the results are satisfactory;

(e) the System Commissioning Tests that require completion of the grid connection shall have been successfully completed in accordance with Section 3.1 and Exhibit I;

(f) the System Performance Tests have been completed in accordance with Exhibit I attached to this Agreement and demonstrate that the System has either

i. achieved the Minimum Performance Target but not the Performance Target and Subcontractor has paid to Contractor the Performance Liquidated Damages as provided in Section 5.9(b) and Exhibit B or arrangements for payment thereof satisfactory to Contractor shall have been made, or

ii. achieved the Performance Target;

(g) Subcontractor shall have paid to Contractor all delay liquidated damages as provided in Section 5.9(a) or arrangements for payment thereof satisfactory to Contractor shall have been made;

(h) Subcontractor and Contractor shall have agreed on amendments to the Punch List in accordance with Section 4.2

(i) Approval to operate has been given by the local utility;

(j) Subcontractor shall have delivered the Substantial Completion Notice to Contractor pursuant to Section 4.1; and

4.5 Final Completion. Final Completion shall occur when:

(a) Substantial Completion shall have been achieved in accordance to Section 4.4;

(b) The Punch List items have been completed to Contractor’s reasonable satisfaction;

(c) Subcontractor has provided to Contractor the Close-out Documents, including all final as-built drawings of the System;

(d) Provided Contractor has paid any amounts subject to any outstanding liens, no liens for any part of the Work shall be outstanding against the System, and Contractor shall have received (i) unconditional lien waivers in the form provided for by applicable law with respect to Work and materials for which payment was previously made hereunder from Subcontractor and all material first-tier Subcontractors and (ii) final conditional lien waivers in the form provided for by applicable law (conditional only on receipt of the final payment due hereunder) from Subcontractor and all material first-tier subcontractors waiving any lien in connection with the Work; to the extent not already paid, all liquidated damages owed by Subcontractor under this Agreement shall have been paid or arrangements for payments thereof satisfactory to Contractor shall have been made

(e) Subcontractor shall have delivered the Final Completion Notice to Contractor pursuant to Section 4.1; and

(f) Contractor shall have approved Final Completion in accordance with Section 4.1.

4.6 Punch List. The Punch List created in accordance with Section 4.2, and the Punch List items shall be completed in a mutually agreed time period not to exceed two (2) months after Substantial Completion of the System. If Subcontractor fails to complete the Punch List items on or before the expiration of such two (2) month period (or such longer or shorter period as may be agreed upon by the Parties in writing), Contractor may complete such remaining Punch List items on its own and charge Subcontractor for the duly justified and reasonable costs, not to exceed the costs agreed by the Parties pursuant to Section 4.2.

ARTICLE 5
CONTRACT PRICE; PAYMENTS

5.1 Contract Price.

(a) Contract Price. The price for each System contemplated to be constructed

hereunder is set forth in Exhibit A hereto (each a “System Price”). The aggregate price for all of the Systems (the “Contract Price”) shall be as set forth in Exhibit A per installed DC Watt), subject to adjustments as follows:

(i) As noted on Exhibit A, certain elements of each System Price are based on price per unit and quantity assumptions set forth in Exhibit F hereto and the Contract Price for each such element shall be adjusted ratably for changes in aggregate units pertaining to the Systems actually constructed pursuant to this Agreement;

(ii) Fixed contract price of [Insert Revised Total From Exhibit A].00 Dollars, subject to adjustments as set forth under “Allowance” in Exhibit A, based on the scope of work in Exhibit F.

(iii) The fixed Contract Price may be subject to further adjustment only pursuant to one or more Change Orders in accordance with Section 2.7; and

(iv) The Contract Price is thus guaranteed by Subcontractor to be a lump sum price, subject only to additions and deductions as mentioned in the above. Other than the foregoing adjustments, any other costs which would cause the Contract Price to be exceeded shall be paid by Subcontractor without reimbursement by Contractor.

(b) Contractor Taxes. The Contract Price excludes any and all Taxes and Property Taxes, other than Subcontractor Taxes, which shall be the sole responsibility of Contractor, and Contractor shall fully indemnify Subcontractor against any and all such Taxes and Property Taxes. Customer shall timely pay all Taxes and Property Taxes due for which it is responsible under Applicable Law, including any Taxes included on invoices provided by Contractor. Subcontractor and Contractor shall cooperate with each other to minimize the tax liability of both Parties to the extent legally permissible.

(c) Subcontractor Taxes. Contractor shall be solely responsible for any and all Subcontractor Taxes, and Subcontractor shall fully indemnify Contractor against any and all such Subcontractor Taxes. Subcontractor shall timely pay all Subcontractor Taxes assessed against it under Applicable Law in connection with Work under this Agreement and shall make any and all payroll deductions required by Applicable Law.

5.2 Payments of the Contract Price. Subject to the other provisions of this Agreement, payments to Subcontractor for constructing each System shall be paid for progress achieved, pursuant to the Progress Billing method defined above and set forth in Section 5.3 hereof, based on the System Prices set forth in Exhibit A. Notwithstanding any other provision of the contract, however, Contractor shall pay to Subcontractor no later than December 15, 2015 30% of the Contract price, which amounts shall be applied to invoices as rendered.

5.3 Invoices. On each Billing Date, Subcontractor shall submit an invoice for each System in accordance with Section 5.2 hereof, together with reasonable documentation in support of such invoice demonstrating achievement of the relevant monthly progress criteria set forth on Exhibit A., and signed conditional lien waivers received from Sub-subcontractors and a signed conditional lien waiver from Subcontractor for the Work included in the invoice and signed unconditional lien waivers for the Work included in the invoice submitted for the immediately preceding Monthly Progress Payment and for which payment was received by Subcontractor. Each lien waiver shall be in the form prescribed by applicable law in the State in which the Site is located or, if no such form is prescribed, in a form reasonably satisfactory to Contractor. The invoice for Final Completion shall include a statement as to whether the Contract Price adjustment described in Section 5.10 applies and, if so, a calculation of the amount of such adjustment (including the calculation, if any, required for Change Orders pursuant to the last paragraph of Section 2.7(c)) and statement of Subcontractor’s actual costs incurred through Final Completion compared to the cost estimate through Substantial Completion used to establish the Contract Price. Contractor shall pay each invoice within thirty (30) Days from the receipt by Contractor of such invoice, together with reasonable supporting documentation and the required lien waivers, subject to the dispute provisions of Section 5.4.

5.4 Disputed Invoices. If Contractor reasonably and in good faith disputes any invoice or any portion thereof, Contractor shall give Subcontractor Notice of such dispute within fifteen (15) Business Days after receipt of such invoice, reasonable documentation, and the required lien waivers and shall nevertheless timely pay the undisputed portion of such invoice in accordance with Section 5.3. If Contractor fails to dispute an invoice within such fifteen (15) Business Day period, Contractor shall be deemed to have accepted such invoice in full. Upon receipt by Subcontractor of a timely dispute Notice, the Parties shall meet and attempt to resolve such dispute amicably. Upon resolution of any disputed amount, the agreed- upon amount shall be paid within fifteen (15) Business Days after resolution of the dispute. Contractor shall not be deemed to be in default of this Agreement by reason of withholding payment with respect to any portion of an invoice disputed reasonably and in good faith; provided, that if such dispute is resolved in Subcontractor’s favor, Contractor shall pay interest (as provided in the next sentence) on such unpaid amounts dating back to the original due date set forth in the applicable invoice. Any payment not received on or before the due date for such payment, shall bear interest at the rate of two percent (2%) above the rate per annum quoted in the Wall Street Journal as the prime rate for corporate loans (or the arithmetic mean if there is more than one such rate), or the highest rate allowable by law, whichever is lower, commencing on the first Day after such payment is due and continuing until paid.

5.5 Payment to Sub-subcontractors and Suppliers. Provided and to the extent Contractor has paid amounts due Subcontractor, Subcontractor shall be responsible to keep the Site clear and free from all liens placed on the Site by any Sub-subcontractor or Supplier or Subcontractor with respect to Work paid for by Contractor, and to defend, discharge or bond any such liens as soon as reasonably practicable.

5.6 Title. Title to all or any portion of the Work (including materials, equipment and other items that are to be incorporated in or become part of the System) shall pass to Contractor upon the earlier of (i) payment for such Work and (ii) incorporation of such Work into the System. Transfer of title to Work shall be without prejudice to Contractor’s right to reject defective Work, or any other right in this Agreement.

5.7 Risk of Loss. From the Effective Date and until the Substantial Completion Date of the System, notwithstanding Section 5.6, Subcontractor assumes risk of loss and full responsibility for the cost of replacing or repairing any damage to the System and all materials, equipment, supplies and maintenance equipment (including temporary materials, equipment and supplies) that are purchased by Subcontractor for permanent installation in or for use during construction of the System or that are purchased by Contractor and approved by Subcontractor for permanent installation in or for use during construction of the System. Contractor shall bear the risk of loss and full responsibility in respect of the System from and after the Substantial Completion Date of the System. Notwithstanding the foregoing:

(a) Subcontractor shall not be obligated to restore or rebuild any such loss or damage that would have been covered by insurance that Subcontractor is required to maintain pursuant to Section 8.1 unless Contractor has obtained and maintained such insurance and Subcontractor has received reasonable assurances from Contractor that Contractor will prosecute such claim in a commercially reasonable manner and Subcontractor will receive the insurance proceeds, if any, paid under such Contractor-maintained insurance policy;

(b) Contractor shall bear the risk of loss and full responsibility for the cost of replacing or repairing any damage to the System and all materials, equipment, supplies and maintenance equipment (including temporary materials, equipment and supplies) that are purchased by Subcontractor or Contractor for permanent installation in or for use during construction of the System to the extent caused by the negligent, grossly negligent or willful acts of Contractor or its agents, employees or representatives; and

(c) The transfer of risk of loss to Contractor from and after the Substantial Completion Date of the System shall not affect the Subcontractor Warranty and Subcontractor’s other obligations under this Agreement.

5.8 Contractor Credit Support. Notwithstanding anything to the contrary herein, Contractor shall provide on the Effective Date and shall maintain until final payment upon Final Completion such credit support with respect to its obligations under this Agreement as may be required under Applicable Law in the State in which the Site is located.

5.9 Liquidated Damages.

(a) Delay Liquidated Damages. Subcontractor agrees that, if either (i) Mechanical Completion for any of the Systems is not achieved by the Mechanical Completion Deadline for such System, or if the 80% Completion Condition is not achieved for any of the Systems by December 31, 2015then Subcontractor shall pay Contractor the liquidated damages for such delay designated in the Liquidated Damages Schedule in Exhibit B for each day that, with respect to each delayed System, Subcontractor fails to achieve Mechanical Completion after the Mechanical Completion Deadline, subject to the cap set forth on the Liquidated Damages Schedule. If any delay liquidated damages are payable under this Section 5.9(a), then the aggregate amount of such liquidated damages shall become payable upon the date that any amount of the Contract Price becomes payable to Subcontractor upon achievement of Substantial Completion and shall be set-off against such payment due to Subcontractor upon achievement of Substantial Completion. Notwithstanding the above, if delay is caused in achieving Substantial Completion within the stipulated Substantial Completion Deadline for reasons attributed solely to Subcontractor’s acts or omissions, Subcontractor shall be liable to pay Contractor liquidated damages pursuant to Exhibit B in a similar manner as delay in achieving Mechanical Completion within the Mechanical Completion Deadline.

(b) System Performance Liquidated Damages. Subcontractor shall cause each System to meet the Acceptable Performance Target (97% or above). If System Performance Tests results in a determination that System Performance of any System, meets the Minimum Performance Target of 94%, but not the Acceptable Performance Target, then Subcontractor may, during a 90-day period after the initial System Performance Test, take any action it deems appropriate to modify the Systems and continue to perform the System Performance Tests until such System meets the Acceptable Performance Target of 97% or above. If the System has achieved the Minimum Performance Target of 94%, but has not achieved the Acceptable Performance Target of 97%, Subcontractor may elect to pay to Contractor the liquidated damages for the shortfall in performance below the Performance Target designated in the Liquidated Damages Schedule in Exhibit B and, so long as the other conditions to Substantial Completion are satisfied, deliver the Substantial Completion Notice as provided in Section 4.3. The amount of such system performance liquidated damages shall become payable upon achievement of Substantial Completion and be set-off against the payment due to Subcontractor upon achievement of Substantial Completion.

(c) Liquidated Damages Not a Penalty. The Parties agree that Contractor’s actual damages in the event of any such delays or system performance failure would be extremely difficult or impracticable to determine. After negotiation, the Parties have agreed that the damages set forth in the Liquidated Damages Schedule are in the nature of liquidated damages and are a reasonable and appropriate measure of the damages that Contractor would incur as a result of such delays or failure, and do not represent a penalty. Liquidated Damages are Contractor’s sole and complete remedy for Delay Damages and Performance Liquidated Damages.

(d) Nothing contained in the above shall limit Contractor’s right to indemnification (as set forth in Section 7.1), or reduce the insurance coverage (under Section 8.2) in any manner.

ARTICLE 6
TERM

6.1 Generally. This Agreement shall commence on the Effective Date and shall continue until the full performance of all obligations hereunder, unless this Agreement is earlier terminated as provided in this Article 6. Contractor shall not be entitled to terminate this Agreement for convenience, but shall be entitled to terminate this Agreement as provided in Section 2.11 or if any of the Project Agreements are terminated (other than as a result of the Contractor’s acts or omissions) and one or more of the System can no longer be implemented at the respective Sites. If Contractor terminates this Agreement as provided in Section 2.11 or, if any Project Agreement is terminated (other than as a result of the Subcontractor’s acts or omissions) and one or more Systems is no longer permitted to be sited at the applicable Site(s) (each a “Site Termination”), Subcontractor shall be entitled (with respect to any System affected by a Site Termination) to payment within ten (10) Business Days after such Site Termination of (i) all amounts due from Contractor for Work provided and materials purchased in connection with such System through the date of such Site Termination (including, for avoidance of doubt, with respect to any Milestone that has not been achieved, for the portion of Work with respect to that Milestone that has been completed), plus (ii) interest on the amount calculated for clause (i) at a rate of the Prime Rate (on the date such payment is due as published in the Wall Street Journal) plus 5%, plus (iii) all documented costs of winding down the System, removing materials and supplies from the Site and terminating Sub-subcontractors and any material purchase orders, plus (iv) a financing fee equal to 1% of the unpaid portion of the Contract Price. Termination or expiration of this Agreement shall not relieve the Parties from their respective obligations that survive in accordance with this Agreement, including, after Substantial Completion, obligations under the Subcontractor Warranty and obligations with respect to indemnification.

6.2 Termination for Cause by Contractor. Contractor shall be entitled to terminate this Agreement by written notice to Subcontractor stating that it is a notice of termination pursuant to this Section 6.2, upon the occurrence of any of the following circumstances:

(a) Provided Contractor has paid all undisputed amounts due hereunder to Subcontractor, Subcontractor fails to pay any amount owing under this Agreement that remains outstanding for a period of twenty (20) Days or more which is not the subject of a good faith dispute; or

(b) an Insolvency Event occurs with respect to Subcontractor; or

(c) Subcontractor materially breaches this Agreement and does not take action to cure such breach within fifteen (15) Business Days after Notice thereof; provided, that if the relevant material breach cannot reasonably be cured within the time period set forth above, such fifteen (15) Business Day period shall be extended as may reasonably be required so long as Subcontractor promptly commences to cure such breach and continues to diligently pursue such cure to completion; provided further, that if any such breach also caused a breach or default by Contractor under the Project Agreements, then no cure period hereunder shall be permitted beyond the applicable cure period provided for in the applicable Project Agreements; or

(d) a representation made by Subcontractor in or pursuant to this Agreement is proven to have been false in any material respect as of the date on which it was made and, if such misrepresentation is of a nature that Subcontractor can mitigate in all material respects any adverse consequences of such misrepresentation to Contractor, the System or the Site, such misrepresentation has not so mitigated within sixty (60) Days after written notice from Contractor; or

(e) Subcontractor fails to maintain the insurance required by Section 8.2 and such failure is not remedied within five (5) Business Days after Notice thereof.

6.3 Contractor’s Rights and Remedies.

(a) Upon termination of this Agreement for cause by Contractor under Section 6.2:

	(i)	Contractor may instruct Subcontractor to immediately discontinue all or any part of the Work, and Subcontractor shall thereupon discontinue the Work or such parts thereof;

	(ii)	Contractor shall pay Subcontractor the outstanding portion of the Contract Price due for all Work performed and equipment supplied by Subcontractor up to and including the date of termination;

	(iii)	Subcontractor shall deliver to Contractor (i) all drawings, designs, plans and manuals relating to the System, and (ii) all other materials and equipment paid for by Contractor as part of Contract Price;

	(iv)	Contractor may continue and complete the Work or any part thereof, by contract or otherwise and, upon Contractor’s written request Subcontractor shall deliver and assign to Contractor, and Contractor may at its discretion assume, any and all subcontracts, supply agreements and purchase orders entered into by Subcontractor in order to undertake the Work; provided that such subcontracts, supply agreements and purchase orders are (i) assignable by their terms; and (ii) necessary to complete the Work;

	(v)	Subcontractor shall be liable to Contractor for the difference between the outstanding balance of the Contract Price and Contractor’s actual, reasonable and documented cost to complete the System in accordance with the Contract Documents; and Contractor may exclude Subcontractor from the Site but must provide a reasonable opportunity to remove Subcontractor’s or its Sub- subcontractors’ equipment or other property from the Site, within a period of ten (10) Days from notice of such termination

(b) If Subcontractor is in default of this Agreement, Contractor may exercise any or all other remedies available at law or at equity, all of which shall be cumulative.

6.4 Termination for Cause by Subcontractor. Subcontractor shall be entitled to terminate this Agreement by written notice to Contractor stating that it is a notice of termination pursuant to this Section 6.4, upon the occurrence of any of the following circumstances:

(a) Contractor fails to pay any amount of the Contract Price owing under this Agreement that remains outstanding for a period of twenty (20) Days or more which is not the subject of a good faith dispute; or

(b) an Insolvency Event occurs with respect to Contractor or any person(s) providing credit support referred to in Section 5.8; or

(c) Contractor materially breaches this Agreement and does not take action to cure such breach within fifteen (15) Business Days after Notice thereof; provided that if the relevant material breach cannot reasonably be cured within the time period set forth above, such fifteen (15) Business Day period shall be extended as may reasonably be required so long as Subcontractor promptly commences to cure such breach and continues to diligently pursue such cure to completion; or

(d) a representation made by Contractor in or pursuant to this Agreement is proven to have been false in any material respect as of the date on which it was made and, if such misrepresentation is of a nature that Contractor can mitigate in all material respects any adverse consequences of such misrepresentation to Subcontractor, such misrepresentation has not so mitigated within sixty (60) Days after written notice from Subcontractor.

6.5 Subcontractor’s Rights and Remedies.

(a) If (i) Contractor fails to pay any amount payable to Subcontractor which is not subject to a bona fide dispute after it becomes due and payable to Subcontractor under this Agreement, or (ii) an Insolvency Event occurs with respect to Contractor or any person(s) providing credit support referred to in Section 5.8, then, Subcontractor may, upon ten (10) Days’ written Notice to Contractor, suspend all Work until any such payment is made or such other default is cured.

(b) Upon termination of this Agreement by Subcontractor under Section 6.4, Subcontractor may recover from Contractor (i) all amounts due from Contractor for Work, including services provided and materials purchased, through the date of termination (including, for avoidance of doubt, with respect to any Milestone that has not been achieved, for the portion of Work with respect to that Milestone that has been completed), (ii) all reasonable, documented costs of winding down the System, removing materials and supplies from the Site and terminating Sub-subcontractors and any material purchase orders, and unwinding any bonding arrangements, and (iii) a 10% markup to the foregoing to cover administration, overhead and profit. The remedies provided in this Section shall be Subcontractor’s sole and exclusive remedies against Contractor with respect to Subcontractor’s termination of this Agreement for cause.

ARTICLE 7
INDEMNITY

7.1 Indemnification by Subcontractor.

(a) Subcontractor shall defend, indemnify and hold harmless Contractor, its affiliates, Contractor Financing Parties (if any), and their respective officers, directors, employees and agents (“Contractor Indemnified Parties”) from and against any claims, demands, damages, losses, fees, expenses, liabilities and penalties (including reasonable attorneys’ and expert witnesses’ fees) of any third parties, including employees of Subcontractor Parties, arising out of death, personal injury, or property damage to the extent caused by negligence or willful misconduct of Subcontractor or its Sub-subcontractors or Suppliers or their respective directors, officers, employees, agents or representatives (“Subcontractor Parties”) or by Subcontractor’s breach of its obligations under this Agreement; provided, however, in no event will Subcontractor be responsible for any such third-party claims, demands, damages, losses, fees, expenses, liabilities and penalties (including reasonable attorneys’ and expert witnesses’ fees) to the extent caused by negligent or other wrongful acts or omissions of such Contractor Indemnified Parties; provided, further, that to the extent Contractor recovers such claims, demands, damages, losses, fees, expenses, liabilities and penalties (including reasonable attorneys’ and expert witnesses’ fees) under any insurance policy, Contractor shall reimburse any payment made by Subcontractor under this indemnity up to the amount recovered under any insurance policy.

(b) To the extent Subcontractor has received payment for the Work, Subcontractor will indemnify, defend and hold harmless Contractor Indemnified Parties from any claims or mechanic’s liens brought or filed in connection with the Work. After receiving notice from Contractor that such a claim or mechanic’s lien has been filed, Subcontractor shall either discharge such claim or lien or provide a bond or other security reasonably satisfactory to the Contractor Indemnified Parties securing the amount owed that gave rise to such lien. If the Subcontractor has not discharged such claims or mechanic’s liens within 30 Days after receiving notice from Contractor, then Contractor may pay such claim or lien and seek reimbursement from Subcontractor for the amount paid to discharge claim or lien, or set-off the amount paid against amounts owed to Contractor hereunder.

7.2 Indemnification by Contractor. Contractor shall defend, indemnify and hold harmless Subcontractor, its officers, directors, employees and agents (“Subcontractor Indemnified Parties”) from and against any third party claims, demands, damages, losses, fees, expenses, liabilities and penalties (including reasonable attorneys’ and expert witnesses’ fees), arising out of or relating to death, personal injury, or property damage claims to the extent caused by negligent or other wrongful acts or omissions of Contractor or its contractors or suppliers (other than the Subcontractor or any other Subcontractor Parties) or by Contractor’s breach of its obligations under this Agreement; provided, however, in no event will Contractor be responsible for any such third-party claims, demands, damages, losses, fees, expenses, liabilities and penalties (including reasonable attorneys’ and expert witnesses’ fees) to the extent caused by negligent or other wrongful acts or omissions of such Subcontractor Indemnified Parties; provided, further, that to the extent Subcontractor recovers such claims, demands, damages, losses, fees, expenses, liabilities and penalties (including reasonable attorneys’ and expert witnesses’ fees) under any insurance policy, Subcontractor shall reimburse any payment made by Contractor under this indemnity up to the amount recovered under any insurance policy.

7.3 LIMITATION OF LIABILITY. IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY UNDER THIS AGREEMENT OR OTHERWISE FOR INDIRECT, SPECIAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO LOST PROFITS, COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, BUSINESS INTERRUPTION, EVEN IF THE PARTIES HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN ADDITION, WHETHER ANY ACTION OR CLAIM IS BASED ON WARRANTY, CONTRACT, AND TORT OR OTHERWISE, UNDER NO CIRCUMSTANCES SHALL SUBCONTRACTOR’S TOTAL LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT EXCEED THE CONTRACT PRICE. NOTWITHSTANDING THE FOREGOING, THE LIMITATIONS OF LIABILITY SET FORTH IN THIS SECTION SHALL NOT APPLY TO (I) SUBCONTRACTOR’S LIABILITY ARISING FROM THE LAST SENTENCE OF SECTION 8.2, (II) ANY OBLIGATION OF A PARTY TO INDEMNIFY THE OTHER PARTY (OR THE CONTRACTOR INDEMNIFIED PARTIES OR THE SUBCONTRACTOR INDEMNIFIED PARTIES, AS APPLICABLE) PURSUANT TO THE INDEMNIFICATION PROVISIONS OF THIS AGREEMENT OR (III) ANY CLAIMS BASED ON ALLEGATIONS OF FRAUD OR WILLFUL MISCONDUCT TO THE EXTENT THE SAME IS DETERMINED PURSUANT TO A FINAL DECISION OF A COURT OF COMPETENT JURISDICTION. THE LIMITATIONS OF LIABILITY SET FORTH IN THIS SECTION SHALL NOT APPLY TO REDUCE THE PROCEEDS OF INSURANCE OTHERWISE PAYABLE.

ARTICLE 8
INSURANCE

8.1 Contractor’s Insurance. Contractor shall procure and maintain general liability Insurance. Limits of liability will be maintained at $1,000,000 per occurrence/$2,000,000 annual aggregate. Coverage will include Products Completed Operations, Personal/Advertising Injury, and medical expense of $10,000. Contractor shall provide Subcontractor a certificate of insurance evidencing the insurance required in this Section upon request.

8.2 Subcontractor’s Insurance. Subcontractor shall maintain the types and levels of Insurance set forth in this Section 8.2 through the Substantial Completion Date or any greater time period if and to the extent required by Applicable Law. Subcontractor shall provide Contractor a certificate of insurance evidencing the insurance required in this Section 8.2 upon request. All insurance policies shall be underwritten by companies rated in the latest A.M. Best’s Insurance Rating Guide with a rating of at least A- and financial category of at least IX.

(a) Commercial General Liability: Limits of liability will be maintained at $1,000,000 per occurrence/$2,000,000 annual aggregate (on a per project basis). Coverage will include Premises/Operations, Products Completed Operations, Contractual Liability, Property Damage, and Personal Injury. Coverage provided is primary and is not in excess to or contributing with any insurance maintained by Customer; and contain a severability of interest clause or cross-liability clause. For three (3) years following the final completion date for the project, Contractor shall maintain products/completed operation insurance applicable solely to its operations under the Contract. The policy deductibles shall not be more than $25,000 per occurrence and any required payment of the deductible shall be the responsibility of the Contractor.

(b) Excess/Umbrella Liability (follow form): Limits of liability in excess of those required in subsections (a), (d) (employer’s liability only) and (e) will be maintained at least $5,000,000 per occurrence /$5,000,000 annual aggregate and written on an occurrence basis.

(c) Installation or Builders’ Risk Insurance: Will cover the System and all materials after delivery to the Site for their full replacement cost value on an all risk or special cause of loss form from the Commencement Date through the Substantial Completion Date or any greater time period if and to the extent required by Applicable Law. Insurance shall be in a form and include deductible levels typically found in the insurance market for similar solar projects.

(d) Workers’ Compensation: Statutory as described by law and employers’ liability at limits of not less than $1,000,000.

(e) Automobile Liability: Limits will be maintained at $1,000,000 combined single limit per occurrence for bodily injury and property damage. Insurance shall cover owned, non-owned, and hired autos.

(f) Professional Liability: Limits will be maintained at $1,000,000 per occurrence. Contractor shall maintain this policy for a minimum of two (2) years after Substantial Completion or shall arrange for a two-year extended coverage provision if the policy is not renewed. If Subcontractor fails to secure and maintain the required insurance, Contractor shall have the right (without any obligation to do so, however) to secure the same in the name and for the account of Subcontractor, in which event Subcontractor shall pay the reasonable cost thereof (or Contractor may deduct the same from amounts otherwise due Contractor hereunder) and Subcontractor shall furnish upon demand all information that may be required in connection therewith. Insurance for 8.2.(a), and 8.2.(e) will name Contractor, its parent, associated and affiliate companies and their respective directors, officers, agents, servants, employees and Contractor Financing Parties, [________] as additional insureds, by way of the blanket vendors additional insured endorsement. 8.2 (c) will name Contractor, its parent, associated and affiliate companies and their respective directors, officers, agents, servants, employees and Contractor Financing Parties, [_________]as loss payee. Notice regarding cancellation, termination or material change in coverage or condition will be provided in accordance with the policy terms. Contractor and Contractor’s Financing Parties will be provided with 30 days written notice if any policy listed on the certificate is cancelled prior to the expiration date. Contractor and Subcontractor shall to waive all rights of subrogation against both each Parties and against Contractor Financing Parties, any right of setoff and counterclaim, and any right to deduction due to outstanding premiums. Subcontractor shall cause Sub-subcontractors to carry commercial general liability insurance as described in subsection (a), workers compensation insurance as described in subsection (d), and automobile liability described in subsection (e). If Subcontractor fails to secure and maintain the required insurance and during such time period, a casualty or other otherwise insurable event occurs, Subcontractor shall bear full responsibility for costs associated with repairing or replacing the System as a result of such event.

Certificates of Insurance to be issued to the following parties;

Subcontractor:	GED
	547 W. Charles St. Suite 100
	Matthews, North Carolina 28105
	Attn: Manager

Contractor:	Panasonic Corporation of North America
	acting through its division
	Panasonic Enterprise Solutions
	Company Two Riverfront Plaza, 12th
	Floor
	Newark, NJ 07102
	Attn: General Counsel

Customer:	Coronal HS, LLC
	c/o Coronal Group
	LLC
	330 N. Brand
	Blvd. Suite 1170
	Glendale, CA 91203
	Attn: General
	Counsel

ARTICLE 9

REPRESENTATIONS AND

WARRANTIES

Except as otherwise indicated below, each Party hereby represents and warrants to the other Party as follows:

9.1 Organization and Qualification. It is duly formed, validly existing and in good standing under the laws of the jurisdiction of its organization and has the lawful power to engage in the business it presently conducts and contemplates conducting.

9.2 Power and Authority. It has the power to make and carry out this Agreement and to perform its obligations hereunder and under the Scope of Work and all such actions have been duly authorized by all necessary proceedings on its part.

9.3 No Conflict. The execution, delivery and performance of this Agreement will not conflict with, result in the breach of, constitute a default under or accelerate performance required by any of the terms of its certificate of incorporation, by-laws, certificate of organization or operating agreement, as applicable, or any Applicable Law or any covenant, agreement, understanding, decree or order to which it is a party or by which it or any of its properties or assets is bound or affected.

9.4 Validity and Binding Effect. This Agreement has been duly and validly executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable in accordance with its terms, except to the extent that its enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of creditors generally or by general principles of equity.

9.5 Licenses. Subcontractor and Contractor represent and warrant that each is duly licensed as a contractor in the State in which the Site is located, to the extent required under Applicable Law to be so licensed in connection with the Work or any part thereof.

9.6 Subcontractor Patents. Subcontractor represents and warrants to Contractor that Subcontractor owns or has the right to use, or will be able to secure from its Sub-subcontractors or Suppliers the right to use, all intellectual property rights necessary to perform the Work without conflict with the rights of others and to enable Contractor to operate, maintain and repair the System without infringement thereof; and Subcontractor shall defend, indemnify and hold Contractor harmless from any and all claims relating to Contractor’s use of such intellectual property, so long as such use is consistent with the license provided in Section 13.14.

9.7 Site Control. Contractor represents and warrants to Subcontractor that, to the best of Contractor’s knowledge, other than as set forth in the Contract Documents and the Project Agreements, there are no restrictions on use of the Site, or any other property adjacent to or near the Site that would interfere with the performance of Subcontractor’s obligations under this Agreement.

ARTICLE 10

CONTRACTOR’S
RESPONSIBILITIES

10.1 Access to Site. To the maximum extent permitted under and subject to the requirements of the Project Agreements, on the Commencement Date and for so long as any Work (including any Work related to the Subcontractor Warranty) is to be provided by Subcontractor or its Sub-subcontractors hereunder, Contractor shall enable Subcontractor or any of its Sub- subcontractors or agents to gain commercially reasonable access to the Site for the purpose of performing the Work hereunder. Contractor shall keep the Site free and clear from any Hazardous Materials introduced to the Site by Contractor. In addition to the foregoing, to the maximum extent permitted under and subject to the requirements of the Project Agreements, Contractor shall allow Subcontractor to have access to the Site to: (a) inspect the Site to verify conditions and to construct and install the System on the Site; (b) to access and maintain a data acquisition system (“DAS”) on the System and collect data from such DAS, independent of any DAS owned by Customer; and (c) to perform (or cause to be performed) all tasks necessary or appropriate, as reasonably determined by Subcontractor, to carry out the activities and enjoy the rights set forth in this Agreement. To the maximum extent permitted under and subject to the requirements of the Project Agreements, Contractor shall ensure that Subcontractor has access to and use of lighting, power, and water while performing Work hereunder at no cost to Subcontractor.

10.2 Information Regarding the Site. Contractor shall provide to Subcontractor such documents, information and materials as are in Contractor’s possession or reasonably available to Contractor with respect to the Site, including, to the extent reasonably available to Contractor, surveys describing the property, boundaries, topography and reference points for use during construction, including existing service and utility lines; if all or a portion of the System is to be ground-mounted, the Geotech Report, any zoning or other requirements and encumbrances affecting land use, or necessary to permit the proper design and construction of the System and enable Subcontractor to perform the Work; a legal description of the Site and as-built and record drawings of any existing structures at the Site; and environmental studies, reports and impact statements describing the environmental conditions, including Hazardous Materials, including the Environmental Reports. Subcontractor will be entitled to rely on the accuracy of the information provided by Contractor pursuant to this Section and listed on Schedule 10.2.

10.3 Permits. Contractor shall obtain and maintain any and all Contractor Permits, at its sole cost and expense.

10.4 Compliance with Laws and Agreements. Contractor shall comply with any obligation required at law or in equity or under any Permits, financing documents, or other agreements or understandings to which Contractor or any Contractor Person is a party or under which any of them is bound, to the extent failure to comply with any such obligation would have an adverse effect on the ability of the Contractor or Subcontractor to perform its respective obligations hereunder.

10.5 Cooperation. The Parties shall fully and timely cooperate with each other in the performance of their respective obligations under this Agreement and the Contract Documents, including, (a) timely delivery and review and, where applicable, approval of drawings, specifications, Change Order Requests and other communications requirements and (b) timely provision of all information and consents necessary for Subcontractor to apply for the Subcontractor Permits and fulfill its obligations hereunder and for Contractor to apply for the Contractor Permits and fulfill its obligations hereunder.

10.6 Data Transmission. Contractor shall cause to be installed within the System or within twenty (20) feet of the System a broadband internet connection for data transmission and shall maintain such connection throughout the period when any Contractor Warranty remains in effect.

ARTICLE 11

SUBCONTRACTOR WARRANTIES

11.1 Warranty of Title. Subcontractor warrants good title, free and clear of all liens and other encumbrances to all equipment and other items furnished by it or any of its Sub- subcontractors or Suppliers that become part of the System; provided that such warranty is (i) conditioned upon Contractor making payments in accordance with the terms of this Agreement, and (ii) excludes liens or other encumbrances created by or through Contractor including those imposed or claimed as a result of acts or omissions of Contractor.

11.2 Defect Warranty. Commencing on the Substantial Completion Date and for a period thereafter that is the greater of (x) two (2) years and (y) such longer period as required by Applicable Law, Subcontractor warrants that the System will (i) be free from defects in materials, construction, fabrication and workmanship; (ii) be new and unused at the time of installation; and (iii) be of good quality and in good condition. For the purposes hereof, “defect” means failure of the System or the applicable component thereof to conform to Specifications therefor set forth in the Contract Documents.

11.3 Design Warranty. Commencing on the Substantial Completion Date and for a period thereafter that is the greater of (x) two (2) years and (y) such longer period as required by Applicable Law, Subcontractor warrants that the design services included as part of the Work furnished by Subcontractor or any Sub-subcontractors hereunder shall conform to the design specifications set forth in the Specifications, subject to amendment/modification pursuant to Change Orders subsequent to the Final Designs.

11.4 Exclusions. The Subcontractor Warranty shall be subject to the following exclusions, and Subcontractor shall not be responsible for:

(a) any defect or damage or malfunction to the extent caused by (1) the failure to properly operate or maintain the System in accordance with manuals or printed instructions provided with the System or in accordance with Industry Standards, other than any such failure by Subcontractor or any of its affiliates, or any Sub-subcontractors that are performing operating or maintenance services to the System, (2) any repair or replacement using a part or service not listed in the operation and maintenance manual or Contract Documents, or not provided or authorized in writing by Contractor, (3) improper use, vandalism, or theft, or (4) Force Majeure Events;

(b) normal wear and tear;

(d) any modifications or enhancement to the System, or alterations, repairs or replacements performed by the Contractor or any Contractor’s contractor (other than the Subcontractor, any Subcontractor affiliate, or any of Subcontractor’s Sub-subcontractors) or Customer after the Mechanical Completion made without prior written approval of Subcontractor and not executed in accordance with the manuals or printed instructions provided with the System, Applicable Law or Industry Practices; provided, however, that the foregoing exclusions shall not apply, to the extent caused by any act or omission of Subcontractor, or any failure by Subcontractor to perform, as operator under the O&M Agreement. For avoidance of doubt, the Subcontractor Warranty does not include and Subcontractor is not responsible for defects in those photovoltaic modules or inverters or other components (if any) that have not been supplied by Subcontractor (or, if so specified in the Scope of Work, other components of the System with respect to which the original manufacturer’s warranties are assigned to Customer as provided in Section 11.5 below), and shall exclude any warranty claims to the extent caused by defects in design, materials, construction and workmanship of the photovoltaic modules, inverters and racking of the System (or, if so specified in the Scope of Work, such other components of the System). The warranties provided herein are not a warranty or guarantee of any specific level of output of energy from the System.

11.5 Pass-Through Manufacturers’ Warranties. Subcontractor shall assign to Customer, upon Substantial Completion of the System, all applicable pass-through warranties from Subcontractor’s manufacturers and suppliers, including, if applicable, the manufacturer of the inverters and, if so specified in the Scope of Work, other components of the System with respect to which the original manufacturer’s warranties are assigned to Contractor by Subcontractor. Such manufacturers shall be stated in Contract Documents. Subcontractor will provide Contractor with copies of all such pass-through warranties. In the event that any inverters are provided by Contractor or any entity affiliated with Contractor for use in the System, Subcontractor shall have no obligation to assign the applicable warranty for such inverters.

11.6 Warranty Claim Process; Repair or Replace. Contractor shall provide to Subcontractor written notice of a claim under the Subcontractor Warranty reasonably promptly after discovery of the conditions or circumstances upon which such claim is made, and shall provide to Subcontractor an opportunity to investigate such a claim. Subcontractor shall, at Subcontractor’s own cost and expense, as promptly as practicable and on a reasonably expedited basis while minimizing any impact of the failure on the availability and functionality of the System, repair or replace or re-perform, at its option, the non-conforming or defective part of the System or Work. Subcontractor shall pay the cost of removing any defective component and the cost of re- performing, repairing, replacing or testing such item as shall be necessary to cause conformance with the Subcontractor Warranty. The timing of the work to be completed with respect to any such remediation or repair shall be subject to Contractor’s reasonable approval (but must not prejudice Subcontractor’s ability to repair or replace the defective part or re-perform the defective Work or materially increase the Subcontractor’s costs with respect thereto). Such remediation or repair shall be considered complete when the applicable defect or Work has been corrected by the affected equipment or parts being restored to Specifications. With respect to the Defect Warranty, all repaired or replaced parts shall have an additional warranty equal to the longer of (a) the unexpired term of the warranty period with respect to the Defect Warranty specified in this Section 11 or (b) one (1) year.

ARTICLE 12
CONFIDENTIALITY AND PUBLICITY

12.1 Confidentiality. The Parties hereby agree that neither Party receiving Confidential Information (the “Receiving Party”) disclosed by the other Party (the “Disclosing Party”) shall use for any purpose, other than the performance of the Work under this Agreement and the use and operation of the System or any part thereof, or divulge, disclose, produce, publish, or permit access to, without the prior written consent of the Disclosing Party, any Confidential Information of the Disclosing Party. “Confidential Information” includes, without limitation, this Agreement and exhibits hereto, all information or materials prepared in connection with the Work performed under this or any related subsequent agreement, designs, drawings, specifications, techniques, models, data, documentation, source code, object code, diagrams, flow charts, research, development, processes, procedures, know how, manufacturing, development or marketing techniques and materials, development or marketing timetables, strategies and development plans, customer, supplier or personnel names and other information related to customers, suppliers or other personnel, pricing policies and financial information, and other information of a similar nature, whether or not reduced to writing or other tangible form, and any other trade secrets. Confidential Information does not include (a) information known to the Receiving Party prior to obtaining the same from the Disclosing Party; (b) information in the public domain at the time of disclosure by the Receiving Party or any time thereafter; or (c) information obtained by the Receiving Party from a third party who to the Receiving Party’s knowledge did not receive same, directly or indirectly, from the Disclosing Party. The Receiving Party shall use the higher of the standard of care that the Receiving Party uses to preserve its own confidential information or a reasonable standard of care to prevent unauthorized use or disclosure of such Confidential Information. Notwithstanding anything herein to the contrary, the Receiving Party has the right to disclose Confidential Information without the prior written consent of the Disclosing Party: (i) as required by any court or other Governmental Authority, or by any stock exchange the shares of any Party are listed on; (ii) as otherwise required by Applicable Law; (iii) as advisable or required in connection with any government or regulatory filings, including filings with any regulating authorities covering the relevant financial markets and applications and other filings under Section 2.6; (iv) to its attorneys, accountants, financial advisors or other agents, in each case bound by confidentiality obligations; (v) to banks, investors and other financing sources (including potential financing sources) and their advisors, in each case bound by confidentiality obligations; or (vi) in connection with an actual or prospective merger or acquisition or similar transaction where the party receiving the Confidential Information is bound by the same or similar confidentiality obligations. If a Receiving Party believes that it will be compelled by a court or other Governmental Authority to disclose Confidential Information of the Disclosing Party, it shall give the Disclosing Party prompt written notice to the extent legally permissible so that the Disclosing Party may determine whether to take steps to oppose such disclosure.

12.2 Publicity. The Parties shall jointly agree upon the necessity and content of any press release in connection with the matters contemplated by this Agreement. Subcontractor shall coordinate with Contractor with respect to, and provide Contractor advance copies of the text of, any proposed announcement or publication that may include any non-public information concerning the Work prior to the dissemination thereof to the public or to any Person other than Subcontractors, Suppliers or advisors of Subcontractor, in each case, who agree to keep such information confidential.

ARTICLE 13
MISCELLANEOUS

13.1 Notices. All Notices required or permitted under the Contract Documents shall be in writing and shall be deemed given: (a) when delivered in person; (b) the next Business Day after deposit with a commercial overnight delivery service for next Business Day delivery; or (c) upon receipt if sent by United States mail, postage prepaid, registered or certified mail, return receipt requested. All Notices shall be addressed to the recipient party at the address set forth on the first page to this Agreement or other address a party may designate in writing from time to time.

13.2 Independent Contractor. Subcontractor shall at all times be and remain an independent contractor and not an agent of Contractor for any purpose whatsoever and shall have no authority to create or assume any obligation, express or implied, in the name of or on behalf of Contractor or to bind Contractor in any manner whatsoever.

13.3 Authorized Representatives. Each Party shall designate one or more representatives authorized to act on behalf of the designating Party. If a Party designates more than one authorized representative, it shall specify the nature of the communications for which each representative is authorized to act on the designating Party’s behalf.

13.4 Entire Agreement; Amendment. This Agreement, including the Exhibits hereto, represents the entire and integrated agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior negotiations, representations or agreements, either written or oral. No Amendment, modification or waiver in respect of this Agreement will be effective unless in writing and executed by both Parties.

13.5 Assignment. Neither Party shall assign or delegate its rights or obligations under this Agreement without the prior written consent of the other Party, such consent to be in its sole discretion; provided, however, that either Party may assign this Agreement to an affiliate with the prior written consent of the other Party, such consent not to be unreasonably withheld or delayed (but any such assignment shall not relieve Subcontractor or Contractor of any of its obligations hereunder). In no event shall either Party assign this Agreement without also assigning the O&M Agreement in the same manner and to the same assignee. In determining whether to consent to any assignment, each Party shall be entitled to consider the experience, reputation and creditworthiness of the proposed assignee or other transferee. Subject to the foregoing, this Agreement shall be binding on and shall inure to the benefit of the Parties and their respective successors and assigns. The subcontracting of any part of the Work by Subcontractor shall not be deemed an assignment of this Agreement. In addition, Contractor may, without the consent of Subcontractor, collaterally assign its rights, title and interest under this Agreement to any Contractor Financing Party, who, subject to any consent entered into by Subcontractor with the Contractor Financing Party, may further assign such rights, title and interest under this Agreement upon exercise of foreclosure or similar remedies by the Contractor Financing Party following a default by Contractor under the financing arrangements entered into between Contractor and the Contractor Financing Party. Any Party assigning this Agreement as set forth in this Section 13.5 shall deliver notice of such assignment to the other Party as soon as reasonably practicable. Subcontractor agrees to execute and deliver a reasonable estoppel certificate or consent to collateral assignment of the Agreement requested by any Contractor Financing Party on reasonably acceptable terms.

13.6 No Waiver. No failure on the part of either Party to exercise or enforce any term hereof or any right hereunder shall operate as a waiver, release or relinquishment of any right or power conferred under this Agreement.

13.7 Survival. Cancellation, expiration, or earlier termination of this Agreement shall not relieve the Parties of obligations that by their nature should survive such cancellation, expiration, or termination (including any representations or warranties).

13.8 Governing Law. The formation, interpretation and performance of this Agreement shall be governed by and construed in accordance with the laws of the State of North Carolina.

13.9 Dispute Resolution.

(a) Good Faith Negotiations. In the event that any question, dispute, difference or claim arises out of or in connection with this Agreement, including any question regarding its existence, validity, performance or termination (a “Dispute”), which either Party has notified to the other, senior management personnel from both Subcontractor and Contractor shall meet and diligently attempt in good faith to resolve the Dispute for a period of thirty (30) days following one Party’s written request to the other Party for such a meeting. If, however, either Party refuses or fails to so meet, or the Dispute is not resolved by negotiation, the provisions of Section 13.9(b) shall apply.

(b) Arbitration. If the parties fail to resolve the Dispute in accordance with Section 13.9(a) above, the Parties shall try in good faith to settle the Dispute by mediation. If the mediation is unsuccessful, such dispute shall be resolved by binding arbitration administered by the AAA under its Construction Industry Arbitration Rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. There shall be a single neutral arbitrator selected as follows: within twenty (20) days after the AAA serves the confirmation of notice of filing of the arbitration demand, the Parties shall agree on the appointment of a single neutral arbitrator and so notify the AAA. If the Parties fail to agree on the appointment of a single neutral arbitrator within that time period, and have not otherwise mutually agreed to extend that time period, then the AAA shall make the appointment. The arbitration hearing shall be held in any venue per mutual decision between the parties hereto.

(c) Venue. The Parties agree that the federal courts of the United States of America or the courts of the State of North Carolina shall have jurisdiction to hear any action to compel arbitration or any other judicial proceedings with respect to this Agreement.

(d) Continuance of Work. During the pendency of any dispute arising under this Agreement, unless otherwise agreed between the Parties, Subcontractor shall continue to perform the Work and its other obligations in accordance with this Agreement. Contractor shall continue to pay undisputed amounts to Subcontractor.

13.10 WAIVER OF JURY TRIAL. EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY PROCEEDING BROUGHT TO ENFORCE OR INTERPRET THIS AGREEMENT. Each Party (i) certifies that no representative of the other Party has represented, expressly or otherwise, that such other Party would not, in the event of litigation, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other Party has been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Section 13.10.

13.11 Execution in Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.

13.12 Ownership of Designs. All drawings, specifications, calculations, data, notes and other materials and documents, including electronic data prepared by or furnished by Subcontractor to Contractor under this Agreement (“Work Product”) are the instruments of service of Subcontractor and Contractor will retain all common law, statutory and other reserved rights, including copyrights and remain the property of Subcontractor. Subcontractor grants a license to Contract, as set forth below in Section 13.14

13.13 Final Drawings. Upon Final Completion and Contractor’s payment in full for all Work performed under this Agreement, Subcontractor shall deliver to Contractor a copy of the final record drawings for the System.

13.14 Contractor’s Limited License upon Payment in Full. Subcontractor hereby grants Contractor, and its successors and assigns, a paid-up, irrevocable, perpetual, royalty-free limited license to use the Work Product in connection with Contractor’s operation, maintenance and repair of the System (assignable to Owner’s successors in interest). The Parties agree that the limited license to use the Work Product granted hereunder will provide Contractor sufficient rights in and to the Work Product as will be necessary for Contractor to operate, maintain and repair the System. The license granted under this Section is only valid for use in relation to the System at the Site and this provision does not permit Contractor to use subcontractor’s intellectual property in relation to any other project or photovoltaic system. No other license in the Work Product is granted pursuant to this Agreement. Subcontractor agrees that Contractor may collaterally assign the license granted to Contractor in this Section 13.14 to Contractor Financing Parties as security for financial accommodations provided to Contractor.

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the Effective Date by their duly authorized representatives.

PANASONIC ENTERPRISE SOLUTIONS
COMPANY, DIVISION OF PANASONIC		GREEN EARTH DEVELOPERS LLC.
CORPORATION OF NORTH AMERICA

By:		By:

Name:	Ruben Dagstanyan	Name:	William Morro

Title:	Vice President	Title:	Manager

EXHIBIT 4.14

THIS EXCHANGE AND COMPENSATION DEFERRAL AGREEMENT (the “Agreement”) is made as of the 30^th of November, 2015 (the “Effective Date”), by and between BlueNRGY Group Limited, an Australian corporation (the “Company”), and Emmanuel Cotrel (“Executive”).

WHEREAS, Executive is a party to that certain employment agreement (the “Employment Agreement”) with BlueNRGY, LLC, a Florida limited liability company (“BNLLC”), dated as of June 1, 2014 pursuant to which he is entitled to base compensation of US$250,000 per annum (“Base Compensation”; and

WHEREAS BNLLC was acquired by the Company on January 27, 2015 and Executive has subsequently performed and is continuing to perform services for the Company as well as for BNLLC that the Company deems to be valuable; and

WHEREAS, BNLLC has had insufficient funds to pay any of Executive’s compensation prior to the commencement date of the Employment Agreement or his Base Compensation under the Employment Agreement through the Effective Date, and the Company does not foresee BNLLC being able to do so prior to December 31, 2015; and

WHEREAS, in light of the inability of BNLLC to pay Executive’s compensation, Executive has accrued unpaid compensation through December 31, 2014 of $145,883 (the “Pre-Acquisition Compensation”) and has accrued or will accrue additional unpaid base compensation of $62,500 for each of the calendar quarters of 2015; and

WHEREAS, Executive is willing to exchange 100% of the Pre-Acquisition Compensation referred to hereinafter as the “Exchange Amount”) for Company ordinary shares, subject to the terms hereof and to defer the payment of his Base Compensation for calendar year 2015 (being $250,000 and referred to hereinafter as the “Deferred Amount”) until a date in calendar year 2016 that the Company is more likely to be in a position to pay Executive’s accrued base compensation; and

WHEREAS, the Company is willing to exchange any amount of Executive’s accrued and unpaid compensation for Company ordinary shares at a price of US$0.03785 per ordinary share (the “Exchange Price”) and would benefit from the deferral of the remainder of Executive’s calendar year 2015 base salary; and

WHEREAS, the Company’s Board of Directors has duly authorized the issuance to Executive (or such Executive’s designee) of a number of ordinary shares (the “Exchange Securities”) as determined by the following formula:

Exchange Securities =	Exchange Amount
	Exchange Price*

* subject to proportional adjustment for share splits and consolidations

WHEREAS, the exchange of the Exchange Amount for the Exchange Securities would be made in reliance upon an exemption from registration as set forth in Section 3.3 of this Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in consideration of the premises and the mutual agreements, representations and warranties, provisions and covenants contained herein, the parties hereto, intending to be legally bound hereby, agree as follows:

1. Exchange. On December 1, 2015 (the “Exchange Date”), subject to the terms and conditions of this Agreement, the Executive shall exchange his right to receive base compensation equal to the Exchange Amount for the Exchange Securities and, in reliance upon an applicable exemption (as set forth in Section 3.3 hereof) from registration provided under the Securities Act of 1933, as amended (the “Securities Act”), the Company shall issue the Exchange Securities. On the Exchange Date, the following transactions shall occur (such transactions in this Section 1, the “Exchange”):

(a) Upon consummation of the Exchange, an amount of the Company’s accrued base compensation obligation to Executive equal to the Exchange Amount shall be deemed to be satisfied and extinguished.

(c) On the Exchange Date, or as soon thereafter as practicable, the Company shall cause the transfer agent for the Company ordinary shares (the “Transfer Agent”) to issue the Exchange Securities to the Executive and or Executive’s designee.

(d) The Company and the Executive shall execute and/or deliver such other documents and agreements as are customary and reasonably necessary to effectuate the Exchange.

2. Deferral of Compensation.

2.1 Executive hereby agrees that the Company may defer payment of his Base Compensation in an amount equal to the Deferred Amount until the earliest date in calendar year 2016 as the Company is able to pay the Deferred Amount in cash without jeopardizing Company operations, but in no case later than March 31, 2016.

2.2 Until such time as the Company has actually paid the Deferred Amount to Executive, Executive shall have the right to elect to exchange all or any part of the Deferred Amount for additional Exchange Securities at the Exchange Price (adjusted proportionally for stock splits or consolidations) in one or multiple exchanges. Executive may exercise such exchange right by giving written notice to the Company.

2.3 Any exchange of the Deferred Amount (or fraction thereof) for additional Exchange Securities shall be handled in a manner consistent with the exchange process set forth in Section 1 hereof.

2.3. Upon consummation of any exchange of the Deferred Amount or any fraction thereof, the corresponding amount of Company’s accrued Base Compensation obligation to Executive shall be deemed to be satisfied and extinguished.

3. Representations and Warranties of the Company. The Company hereby represents and warrants to Executive that:

3.1 Organization, Good Standing and Qualification. The Company is duly qualified to transact business generally and to effect the Exchange.

3.2 Authorization. All corporate action on the part of the Company, its Administrators, officers, directors and stockholders necessary for the authorization, execution and delivery of this Agreement and the performance of all obligations of the Company hereunder and thereunder, including, without limitation, the authorization of the Exchange, and the issuance (or reservation for issuance) of the Exchange Securities shall have been taken on or prior to the Exchange Date.

3.3 Securities Law Exemptions. Assuming the accuracy of the representations and warranties of the Executive contained herein, the offer and issuance by the Company of the Exchange Securities are exempt from registration under the Securities Act and all applicable state securities laws. The offer and issuance of the Exchange Securities are exempt from registration under the Securities Act pursuant to the exemption provided by Section 3(a)(9) or other applicable exemption thereof.

3.4 Valid Issuance of the Securities. The Exchange Securities when issued and delivered in accordance with the terms of this Agreement, for the consideration expressed herein, will be duly and validly issued, fully paid and non-assessable.

3.5 No Consideration Paid. No commission or other remuneration has been paid by the Company for soliciting the exchange of the Exchange Amount or the Deferred Amount of Executive’s Base Compensation as contemplated hereby.

4. Registration Rights

4.1. Unless Executive is otherwise permitted to sell the Exchange Securities pursuant to Rule 144 or any successor rule or another applicable exemption, Executive shall be entitled to the same registration rights for the Exchange Securities as purchasers of Securities in the Offering referenced in the Company’s November 12, 2015 filing with the U.S. Securities and Exchange Commission on Form 6-K.

5. Representations and Warranties of Executive. Executive hereby represents, warrants and covenants that:

5.1 Organization; Authority. Executive has the power and authority to enter into and to consummate the transactions contemplated hereby and otherwise to carry out its obligations hereunder. This Agreement has been duly executed by Executive, and when delivered by Executive in accordance with the terms hereof, will constitute the valid and legally binding obligation of Executive.

5.2 Restricted Securities. Executive understands that the Exchange Securities are “restricted securities” as that term is used in Rule 144(a)(3) and have not been registered under the Securities Act or any applicable state securities law.

5.3 Status. At the time the Executive was offered the Exchange Securities, it was, and as of the date hereof it is either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.

5.4 Experience of Executive. The Executive, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the investment in the Exchange Securities, and has so evaluated the merits and risks of such investment. The Executive is able to bear the economic risk of an investment in the Exchange Securities and, at the present time, is able to afford a complete loss of such investment.

5.5 Reliance on Exemptions. The Executive understands that the Exchange Securities are being offered and issued to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and the Company and its outside counsel and the Company’s transfer agent are authorized to rely upon the truth and accuracy of, and the Executive’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Executive set forth herein in order to determine the availability of such exemptions, the eligibility of the Executive to acquire the Exchange Securities and in connection with the other matters set forth herein.

5.6 Rule 144 Representations.

(a) No commission or other remuneration has been paid by the Executive to the Company in connection with the exchange of the Exchange Amount or will be paid in connection with the exchange of the Deferred Amount for the Exchange Securities as contemplated hereby.

6. Intentionally Blank.

7. Indemnification.

7.1 Indemnification by the Company. The Company agrees to indemnify, hold harmless, reimburse and defend the Executive and his agents and affiliates against any claim, cost, expense, liability, obligation, loss or damage (including reasonable legal fees) of any nature, incurred by or imposed upon the Executive or any such person which results, arises out of or is based upon (i) any material misrepresentation by Company or breach of any representation or warranty by Company in this Agreement or in any exhibits or schedules attached hereto, or other agreement delivered pursuant hereto; or (ii) after any applicable notice and/or cure periods, any breach or default in performance by the Company of any covenant or undertaking to be performed by the Company hereunder, or any other agreement entered into by the Company and Executive relating hereto.

7.2 Indemnification by the Executive. The Executive agrees to indemnify, hold harmless, reimburse and defend the Company and any of its officers, directors, agents, affiliates, members, managers, control persons, and principal shareholders, against any claim, cost, expense, liability, obligation, loss or damage of any nature (including without limitation claims relating to the failure to include a restrictive legend on the Exchange Securities, if applicable) and reasonable legal fees related thereto, incurred by or imposed upon the Company or any such person which results, arises out of or is based upon (i) any material misrepresentation or misstatements of facts or the delivery of misleading or false information by the Executive or breach of any representation or warranty by the Executive in this Agreement or other agreement delivered pursuant hereto; or (ii) after any applicable notice and/or cure periods, any breach or default in performance by the Executive of any covenant or undertaking to be performed by the Executive hereunder, or any other agreement entered into by the Company and the Executive relating hereto.

8. Miscellaneous

8.1 Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the parties hereto and the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto or their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

8.2 Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the laws of Australia, without giving effect to any choice of law or conflict of law provision or rule that would cause the application of the laws of any jurisdictions other than Australia.

8.3 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

8.4 Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient; if not, then on the next business day, (c) five (5) business days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to (a) in the case of the Company to BlueNRGY Group Limited, 11^th Floor, 32 Martin Place, Sydney, NSW 2000, Australia, Attention: Corporate Secretary e-mail: Richard.pillinger@bluenrgy.com or (b) in the case of the Executive, to the address as set forth on the signature page or exhibit pages hereof or, in either case, at such other address as such party may designate by TEN (10) business days advance written notice to the other parties hereto.

8.5 Intentionally Blank.

8.6 Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Executive.

8.7 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

8.8 Entire Agreement. This Agreement represents the entire agreement and understandings between the parties concerning the Exchange and the other matters described herein and therein and supersedes and replaces any and all prior agreements and understandings solely with respect to the subject matter hereof and thereof.

8.9 Counterparts. This Agreement may be executed in counterparts, (including facsimile or .pdf counterparts transmitted digitally), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

8.10 Interpretation. Unless the context of this Agreement clearly requires otherwise, (a) references to the plural include the singular, the singular the plural, the part the whole, (b) references to any gender include all genders, (c) “including” has the inclusive meaning frequently identified with the phrase “but not limited to” and (d) references to “hereunder” or “herein” relate to this Agreement.

[SIGNATURES ON THE FOLLOWING PAGE]

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date provided above.

		THE COMPANY

		BLUENRGY GROUP LIMITED

		By:	/s/ Richard Pillinger
			Name: Richard Pillinger
			Title: Chief Financial Officer and authorized signatory

	EXECUTIVE:

	By:	/s/ Emmanuel Cotrel
		Name: Emmanuel Cotrel
Address For Notices Under This Agreement:		110 E. Broward Boulevard, Suite 1900
		Fort Lauderdale, FL 33301
		USA
		e-mail: Emmanuel.cotrel@14cp.com
		Tel: +1 (954) 736-6992

[Signature Page to E. Cotrel Exchange & Deferred Compensation Agreement]

EXHIBIT 4.15

WHEREAS, Executive was appointed as Managing Director of the Company effective January 27, 2015 (the “Commencement Date”) with a base compensation of US$350,000 per annum (the “Base Compensation”; and

WHEREAS, the Company has had insufficient funds to pay any of Executive’s Base Compensation through the Effective Date and does not foresee being able to do so prior to December 31, 2015; and

WHEREAS, in light of the Company’s inability to pay Executive’s Base Compensation, Executive has accrued unpaid base compensation from the Commencement Date through June 30, 2015 of $148,655.91 (the “H-1 Compensation”) and has accrued or will accrue additional unpaid base compensation of $87,500 for each of the calendar quarters ended September 30, 2015 and December 31, 2015 (respectively the “Q-3 Compensation” and “Q-4 Compensation”); and

WHEREAS, Executive is willing to exchange 100% of the H-1 Compensation plus 50% of the Q-3 Compensation (together being $192,405.91 and referred to hereinafter as the “Exchange Amount”) for Company ordinary shares, subject to the terms hereof and to defer the payment of a remainder of his base salary for calendar year 2015 (being $131,250 and referred to hereinafter as the “Deferred Amount”) until a date in calendar year 2016 that the Company is more likely to be in a position to pay Executive’s accrued base compensation; and

WHEREAS, the Company is willing to exchange any amount of Executive’s unpaid base compensation accrued during the 2015 calendar year for Company ordinary shares at a price of US$0.03785 per ordinary share (the “Exchange Price”) and would benefit from the deferral of the remainder of Executive’s calendar year 2015 base salary; and

WHEREAS, the Company’s Board of Directors has duly authorized the issuance to Executive of a number of ordinary shares (the “Exchange Securities”) as determined by the following formula:

Exchange Securities =	Exchange Amount
	Exchange Price*

* subject to proportional adjustment for share splits and consolidations

WHEREAS, the exchange of the Exchange Amount for the Exchange Securities would be made in reliance upon an exemption from registration as set forth in Section 3.3 of this Agreement.

(a) Upon consummation of the Exchange, an amount of the Company’s accrued base compensation obligation to Executive equal to the Exchange Amount shall be deemed to be satisfied and extinguished, subject to the provisions of Section 1(b) below.

(b) In recognition of the fact that Executive will be obligated to pay taxes on the value of the Exchange Securities received in lieu of cash compensation and will not have funds to do so, the Company shall, prior to April 2016, pay to Executive a cash amount (the “Tax Gross-Up”) calculated as follows:

Gross-up Amount =	Executive Tax Rate * Exchange Amount
	(1-Executive Tax Rate)

For purposes hereof, the Executive Tax Rate shall be calculated based on the highest combined marginal Illinois (5.0%) and U.S. federal (39.6%) tax rate for individuals, that is, 42.6%.

(d) The Company and the Executive shall execute and/or deliver such other documents and agreements as are customary and reasonably necessary to effectuate the Exchange.

(e) The Company shall pay all applicable payroll and similar taxes that it would have been obligated to pay if the Exchange Amount were paid to Executive as a cash payroll payment in the ordinary course.

2. Deferral of Compensation.

2.1 Executive hereby agrees that the Company may defer payment of his Base Compensation in an amount equal to the Deferred Amount until the earlier of March 31, 2016 or such date in calendar year 2016 as the Company’s Board of Directors determines, in its sole discretion, that the Company is able to pay the Deferred Amount in cash without jeopardizing Company operations.

2.3 Any exchange of the Deferred Amount (or fraction thereof) for additional Exchange Securities shall be handled in a manner consistent with the exchange process set forth in Section 1 hereof, except that no Tax Gross-up shall apply or be paid to Executive in connection with an exchange of the Deferred Amount.

2.3 Upon consummation of any exchange of the Deferred Amount or any fraction thereof, the corresponding amount of Company’s accrued Base Compensation obligation to Executive shall be deemed to be satisfied and extinguished.

3. Representations and Warranties of the Company. The Company hereby represents and warrants to Executive that:

3.1 Organization, Good Standing and Qualification. The Company is duly qualified to transact business generally and to effect the Exchange.

4. Registration Rights

4.1 Unless Executive is otherwise permitted to sell the Exchange Securities pursuant to Rule 144 or any successor rule or another applicable exemption, Executive shall be entitled to the same registration rights for the Exchange Securities as purchasers of Securities in the Offering referenced in the Company’s November 12, 2015 filing with the U.S. Securities and Exchange Commission on Form 6-K.

5. Representations and Warranties of the Executive. Executive hereby represents, warrants and covenants that:

5.3 Executive Status. At the time the Executive was offered the Exchange Securities, it was, and as of the date hereof it is either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.

5.4 Experience of the Executive. The Executive, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the investment in the Exchange Securities, and has so evaluated the merits and risks of such investment. The Executive is able to bear the economic risk of an investment in the Exchange Securities and, at the present time, is able to afford a complete loss of such investment.

5.6 Rule 144 Representations.

6. Intentionally Blank.

7. Indemnification.

8. Miscellaneous

8.3 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

8.5 Intentionally Blank.

[SIGNATURES ON THE FOLLOWING PAGE]

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date provided above.

		THE COMPANY

		BLUENRGY GROUP LIMITED

		By:	/s/ Richard Pillinger
			Name: Richard Pillinger
			Title: Chief Financial Officer and authorized signatory

	EXECUTIVE:

	By:	/s/ William C. Morro
		Name: William C. Morro
Address For Notices Under This Agreement:		410 South Michigan Ave., Suite 620
		Chicago, IL 60605
		USA
		e-mail: w_morro@yahoo.com
		Fax: +1
		Tel: +1 312-957-4172

[Signature Page to Morro Exchange & Deferred Compensation Agreement]

EXHIBIT 4.16

THIS UNSECURED CONVERTIBLE PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL OR OTHER EVIDENCE REASONABLY SATISFACTORY TO BLUENRGY GROUP LIMITED THAT SUCH REGISTRATION IS NOT REQUIRED.

UNSECURED CONVERTIBLE PROMISSORY NOTE

	Issue Date: November 30, 2015
Maximum Principal Amount
	Maturity Date: July 31, 2016
$1,200,000.00
	Sydney, Australia

FOR VALUE RECEIVED, BlueNRGY Group Limited an Australian Company (the “Payor”), hereby promises to pay, on or prior to the Due Date, to the order of WHI, Inc., for itself and as agent for its affiliates, WHI Retirement Savings Plan Trust and WHIRSP – Columbus LLC, (collectively the “Lender”), at such place as the Lender may designate, in lawful money of the United States, the principal amount of One Million Two Hundred Thousand U.S. Dollars ($1,200,000.00), or such lesser amounts as may be outstanding under this Note as evidenced by the Draw Certificate, together with interest thereon calculated from the earlier of the date hereof or the date of funding of each Draw (as applicable) plus all other Note Obligations, payable in accordance with the provisions of this Note.

1. Definitions.

1.1 “Change of Control Event” means that a person or group of Persons acting in concert acquires or gains the right to vote 20% or more of the Payor’s ordinary shares or obtains the right to appoint two or more members to Payor’s Board of Directors.

1.2 “Conversion Date” shall mean the date on which the Lender delivers the Exercise Notice together with the original Note or the date on which an automatic conversion is triggered under this Section 4.

1.3 “Conversion Price” means $0.03785, which amount shall be automatically adjusted proportionally for any share split or share consolidation effected by Payor.

1.4 “Draw Amount” means the initial funding by Lender hereunder or any subsequent funding, each such occurrence a “Draw”.

1.5 “Draw Cap” means the maximum principal amount that may be funded under this Note. The Draw Cap is not a commitment from Lender. Lender may, in its sole discretion, elect not to fund any Draw request for any reason or no reason.

1.6 “Draw Certificate” means that certain schedule, updated from time to time and signed by Lender and Payor, evidencing the initial amount funded by Lender and the amount funded under each subsequent draw (if any), as well as any repayments of principal or interest that have occurred subsequent to the initial funding hereunder.

1.7 “Due Date” means the latest permitted Repayment Date and is the date on which all outstanding Note Obligations become payable in full.

1.8 “Exercise Notice” means a written notice delivered to Payor in accordance with Section 7 hereof specifying the dollar amount of Note Obligations that Lender has determined to exchange for Payor’s ordinary shares (“Conversion Amount”) in accordance with Section 3 hereof.

1.9 “Note” means this Note as originally executed or if later amended, modified, supplemented or replaced then, as so amended, modified, supplemented or replaced.

1.10 “Note Obligations” means all principal aggregated from all Draws, interest (including interest which accrues after the commencement of any case or proceeding in bankruptcy of the Payor), fees (including the Commitment Fee, if any), charges, expenses and any other sum chargeable to the Payor pursuant to the terms of this Note.

1.11 “Person” means an individual, partnership, corporation, limited liability company, association, joint stock company, trust, joint venture, unincorporated organization or governmental entity or any department, agency or political subdivision thereof.

1.12 “Repayment Date” means the earlier of (a) July 31, 2016 (the “Maturity Date”), (b) the date on which there is an occurrence of a default pursuant to Section 5 hereof or (c) the date on which there is a Change of Control Event. If the Payor’s Board of Directors determines in good faith within 30 days of the Maturity Date that Payor cannot reasonably repay the Note Obligations without jeopardizing the viability of Payor’s business Payor may extend the Maturity Date for up to 6 months (the “Extension Period), subject to reaching mutual agreement with Lender on a revised interest rate, representative of a market rate, to be applicable during the Extension Period.

2. Draws; Funding.

2.1 Any authorized representative of Payor may request a Draw at any time prior to the Maturity Date in such amount as would not cause the Draw Cap to be exceeded.

2.2 Lender, in its sole discretion, shall determine whether and when to fund any Draw request of Payor and may decline to do so for any reason or no reason.

2.3 Lender is not obligated to provide funding up to the Draw Cap or in any specific amount.

2.4 Funding may be made by Lender in any manner convenient, including wire transfer, check or ACH or other means of electronic transfer to any account of Payor or its subsidiaries.

2.5 Upon receipt of funding of any Draw, the Draw amount shall be promptly reflected in an updated Draw Certificate signed by a representative of Payor.

3. Payments; Prepayments.

3.1 Interest. In the absence of an event of default, interest shall accrue at an annual rate of fifteen percent (15%) on the unpaid principal amount of this Note outstanding from time-to-time from the funding date or dates shown on the Draw Certificate until the principal and interest amount of this Note is paid in full. Interest shall accrue on the basis of a 365 day year and shall compound monthly. Upon an event of default, interest on the unpaid balance of any outstanding Note Obligations shall accrue at a default rate that is 500 basis points per annum higher than the interest rate until paid or the default is cured (if cure is possible).

3.2 Payment Date. Unless this Note is converted into ordinary shares (the “Conversion Shares”) in accordance with the terms hereof, or is otherwise sooner paid, the principal amount evidenced by this Note together with accrued interest thereon and all Other Note Obligations shall be due and payable on the Repayment Date. All payments hereunder shall be made in lawful money of the United States at such address as the Lender shall specify from time to time in writing to the Payor.

3.3 Pre-Payments. The principal indebtedness of this Note, or any portion thereof, together with interest and all other Note Obligations related thereto, may be prepaid prior to the Repayment Date upon 5 business days written notice by the Payor. Each and all such prepayments shall be reflected on an updated Draw Certificate.

3.4 Null and Void. This Note shall become null and void upon repayment of all Note Obligations (i) in accordance with Section 2.2 hereof; (ii) through conversion in accordance with Section 3 hereof; or (iii) through a combination of repayments and conversions.

4. Conversion.

4.1 Lender Conversion Option. At the option of the Lender, this Note or any fractional amount thereof is convertible into ordinary shares of BlueNRGY Group Limited at any time or at multiple times prior to the Repayment Date by delivery of an Exercise Notice to Payor.

4.2 Mechanics of Conversion. Upon delivery of an Exercise Notice, the Payor shall promptly issue to Lender a number of ordinary shares (“Conversion Shares”) determined by dividing the Conversion Amount by the Conversion Price (as adjusted). The “Conversion Date” shall be the date on which the Lender is deemed to have delivered the Exercise Notice in accordance with Section 7 hereof. As promptly as reasonably practicable on or after the Conversion Date, but in no case longer than 10 business days following the Conversion Date, the Company shall issue all Conversion Shares to which Lender is entitled as a result of delivery of any Exercise Notice. For purposes of Payor’s rights under Section 2.3 hereof, any conversion of the Note shall be deemed to have been effected immediately prior to the close of business on the Conversion Date.

4.3 At such time Conversion Shares are actually issued to Lender or Lender’s designee, the Conversion Amount shall be reflected on an updated Draw Certificate as a reduction in outstanding Note Obligations and the rights of the Lender under the Note shall cease with respect to the applicable Conversion Amount. The failure of the Company to make the deliveries as aforesaid shall not impair or delay Lender’s right to effect conversion of any Conversion Amount pursuant to this Section 4.

5. Assignment.

5.1 Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the parties hereto and the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto or their respective successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

5.2 Lender may unilaterally assign this Note in whole or in part only if the assignee represents and warrants to Lender and Payor that assignee: (i) is an accredited investor within the meaning of the Securities Act; (ii) is aware of and can tolerate the risk of loss applicable to the Note and Conversion Shares; (iii) is acquiring the Note for assignee’s own account for investment purposes only and not with a view to resale or distribution.

5.3 If Lender elects to make a unilateral assignment of the Note in whole or in part, Payor shall issue a new Note reflecting the Note Obligations payable to Lender and assignee respectively.

6. Default.

6.1. Payor’s failure to pay principal or any interest or other Note Obligation on this Note within five (5) days after the Due Date shall be deemed an event of default.

6.2. Payor shall fail to issue any Conversion Shares required to be issued pursuant to Section 3 hereof within 10 business days following the delivery of an Exercise Notice shall be deemed an event of default.

6.3. If:

(i) the Payor shall commence any voluntary proceeding under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, receivership, voluntary or involuntary appointment of an administrator, dissolution, or liquidation law or statute of any jurisdiction, whether now or hereafter in effect; or the Payor shall be adjudicated insolvent or bankrupt by a decree of a court of competent jurisdiction; or the Payor shall petition or apply for, acquiesce in, or consent to, the appointment of any receiver or trustee of the Payor or for all or a substantial part of the property of the Payor; or the Payor shall make an assignment for the benefit of creditors; or the Payor shall admit in writing its inability to pay its debts as they mature; or

(ii) there shall be commenced against the Payor any proceeding relating to the Payor under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt receivership, dissolution, or liquidation law or statute of any jurisdiction, whether now or hereafter in effect, and any such proceeding shall remain undischarged for a period of sixty (60) days or the Payor by any act indicates its consent to, approval of, or acquiescence in, any such proceeding; or a receiver or trustee shall be appointed for the Payor or for all or a substantial part of the property of the Payor and any such receivership or trusteeship shall remain undischarged for a period of sixty (60) days; or a warrant of attachment, execution, or similar process shall be issued against any substantial part of the property of the Payor and the same shall not be dismissed or bonded within sixty (60) days after levy;

then in the event of (i) or (ii) above, the Lender may, by written notice to the Payor declare an event of default, and the same shall, unless such default shall be cured within five (5) days after such notice, be deemed an event of default for purposes hereof.

7. Limited Recourse. No recourse shall be had for payment of any part of the Note Obligations against any present or future officer or director of the Payor by virtue of any law, or by enforcement of any assessment, or otherwise, or against any present or future manager, agent, officer or director of the Payor, all such liability being, by the acceptance hereof and as a part of the consideration for the issue hereof, expressly released, it being agreed by the Lender to limit its recourse for collection of the Note Obligations to the Payor and its assets.

8. Notices. Except as may be otherwise provided herein, all notices and other communications required or permitted hereunder shall be in writing and shall be conclusively deemed to have been duly given (a) when hand delivered to the party; (b) when received when sent by electronic mail or facsimile on a business day at the address and number set forth below, subject to digital or electronic receipt of acknowledgement from recipient; (c) five (5) business days after deposit in the U.S. or Australian mail with first class or certified mail (receipt requested) postage prepaid and addressed to the party as set forth below; or (d) if deposit with a national overnight delivery service, delivery charges prepaid, addressed to the party as set forth below with the delivery guaranteed, on such date as provided that the sending party receives a confirmation of delivery from the delivery service provider.

If to Lender:
		c/o WHI Inc.
		410 S. Michigan Ave.; Suite 620
		Chicago, IL 60605
		USA
		Attn: William Morro
		Facsimile: 312-
		E-mail: westernheadinvestments@yahoo.com

If to Payor:
		BlueNRGY Group Limited
		32 Martin Place, 11^th Floor
		Sydney, 2000, NSW
		AUSTRALIA
		Attn: Chief Financial Officer
		e-mail:

Each Person making a communication hereunder by facsimile or e-mail shall promptly confirm by telephone to the Person to whom such communication was addressed each communication made by it by facsimile pursuant hereto, but the absence of such confirmation shall not affect the validity of any such communication. A party may change or supplement the addresses given above, or designate additional addresses, for purposes of this Section 8 by giving the other party written notice of the new address in the manner set forth above.

9. Registration Rights.

9.1 Unless Noteholder is otherwise permitted to sell the Conversion Shares pursuant to Rule 144 or any successor rule or another applicable exemption, Noteholder shall be entitled to the same registration rights for the Conversion Shares as purchasers of Securities in the Offering referenced in the Company’s November 12, 2015 filing with the U.S. Securities and Exchange Commission on Form 6-K.

10. Miscellaneous.

10.1 Lost or Destroyed Note. Upon receipt by the Payor of evidence reasonably satisfactory to the Payor of the loss, theft, destruction or mutilation of this Note, and in the case of any such loss, theft or destruction, upon delivery of an indemnity reasonably satisfactory to the Payor or, in case of any such mutilation, upon surrender and cancellation of this Note, the Payor will issue a replacement Note of like tenor in lieu of this Note.

10.2 Severability. Wherever possible, each provision of this Note shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Note shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Note.

10.3 Waiver. The Payor hereby waives presentment, demand, protest, notice of dishonor, diligence and all other notices, any release or discharge arising from any extension of time, discharge of a prior party, or other cause of release or discharge other than actual payment in full hereof.

10.4 Rights. Lender shall not be deemed, by any act or omission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by Lender and then only to the extent specifically set forth in such writing. A waiver with reference to one event shall not be construed as continuing or as a bar to or waiver of any right or remedy as to a subsequent event. No delay or omission of Lender to exercise any right, whether before or after a Default hereunder, shall impair any such right or shall be construed to be a waiver of any right or Default, and the acceptance at any time by Lender of any past-due amount shall not be deemed to be a waiver of the right to require prompt payment when due of any other amounts then or thereafter due and payable.

10.5 Amendment. No amendment of this Note (either generally or in a particular instance and either retroactively or prospectively) may be made other than by written consent of the Payor and the Lender.

10.6 Remedies. The remedies of Lender as provided herein shall be cumulative and concurrent, and may be pursued singularly, successively or together at Lender’s sole discretion, and may be exercised as often as occasion therefor shall occur.

10.7 Interest. If any provisions of this Note would require the Payor to pay interest hereon at a rate exceeding the highest rate allowed by applicable law, the Payor shall instead pay interest under this Note at the highest rate permitted by applicable law.

10.8 Governing Law. This Note shall be governed by and construed in accordance with the laws of Australia, without giving effect to any choice or conflict of law provision or law that would cause the application of the laws of any jurisdiction other than Australia.

--------- Signature Page Follows ---------

IN WITNESS WHEREOF, the Payor has caused this Note to be executed on its behalf by its duly authorized signatory.

BLUENRGY GROUP LIMITED

By:	/s/ Richard Pillinger
	Richard Pillinger

Its:	Chief Financial Officer and authorized Representative

By:	/s/ Carlo Botto
	Carlo Botto

Its:	Director

EXHIBIT 4.17

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

ORDINARY SHARE PURCHASE WARRANT

BLUENRGY GROUP LIMITED

WarrantShares: 26,420,079

Initial Exercise Date: December 31, 2015

THIS ORDINARY SHARE PURCHASE WARRANT (this “Warrant”) certifies that, for value received, ESOL, B.V. (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after December 31, 2015 (the “Initial Exercise Date”) and on or prior to the close of business on the Three (3) year anniversary of the Initial Exercise Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from BlueNRGY Group Limited, an Australian corporation (the “Company”), up to 26,470,079 shares (the “Warrant Shares”) of the Company’s ordinary shares (the “Ordinary Shares”). The purchase price of one Ordinary Share under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Purchase Agreement”), dated September __, 2015, among the Company and the signatories thereto.

“Ordinary Shares Equivalents” means any securities of the Company which would entitle the holder thereof to acquire at any time Ordinary Shares, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Ordinary Shares.

“Trading Day” means a day on which the principal Trading Market is open for trading.

“Trading Market” means any of the following markets or exchanges on which the Ordinary Shares are listed or quoted for trading on the date in question: the NYSE Amex, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York Stock Exchange (or any successors to any of the foregoing).

Section 2. Exercise.

a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the persons designated by the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Company) of a duly executed facsimile copy of the Notice of Exercise form annexed hereto. Within five (5) Business Days following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank. Notwithstanding anything herein to the contrary, (i) such Warrant Shares (A) may not be issued to persons in Australia other than persons who fall within section 708(8) (Sophisticated Investors) or section 708(11) (Professional Investors) (“Sophisticated or Professional Investors”) of the Australian Corporations Act 2001 (Cth) (“Corporations Act”), and (B) may not be transferred to persons in Australia other than to Sophisticated or Professional Investors before the date that is twelve (12) months following their respective dates of issue; and (ii) the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and this Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within five (5) Business Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise form within five (5) Business Days of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

b) Exercise Price. The exercise price per share of the Ordinary Shares under this Warrant shall be $0.056775, subject to adjustment hereunder (the “Exercise Price”).

c) Mechanics of Exercise.

i. Delivery of Certificates Upon Exercise. Certificates for shares purchased hereunder shall be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s prime broker with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder, (B) surrender of this Warrant (if required) or (C) the shares are eligible for resale by the Holder pursuant to Rule 144, and otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise by the date that is five (5) Trading Days after the latest of (x) the delivery to the Company of the Notice of Exercise Form, and (y) payment of the aggregate Exercise Price as set forth above (such date, the “Warrant Share Delivery Date”). The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the date this Warrant has been exercised, with payment to the Company of the Exercise Price and all taxes required to be paid by the Holder, if any, pursuant to Section 2(c)(vi) prior to the issuance of such shares, having been paid.

ii. Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the certificate or certificates representing Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

iii. Rescission Rights. If the Company fails to transmit to the Holder a certificate or the certificates representing the Warrant Shares pursuant to Section 2(c)(i) by the Warrant Share Delivery Date, then, the Holder will have the right to rescind such exercise.

iv. Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder a certificate or the certificates representing the Warrant Shares pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, Ordinary Shares to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the Ordinary Shares so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of Ordinary Shares that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Ordinary Shares having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Ordinary Shares with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing Ordinary Shares upon exercise of this Warrant as required pursuant to the terms hereof.

v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

vi. Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.

vii. Closing of Books. The Company will not close its shareholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

d) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of Ordinary Shares beneficially owned by the Holder and its Affiliates shall include the number of Ordinary Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of Ordinary Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Ordinary Shares Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 2(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(d) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(d), in determining the number of outstanding Ordinary Shares, a Holder may rely on the number of outstanding Ordinary Shares as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of Ordinary Shares outstanding. Upon the written or oral request of a Holder, the Company shall within three (3) Trading Days confirm orally and in writing to the Holder the number of Ordinary Shares then outstanding. In any case, the number of outstanding Ordinary Shares shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates since the date as of which such number of outstanding Ordinary Shares was reported. The “Beneficial Ownership Limitation” shall be 9.99% of the number of Ordinary Shares outstanding immediately after giving effect to the issuance of Ordinary Shares issuable upon exercise of this Warrant. The Holder, upon not less than 61 days’ prior written notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of Ordinary Shares outstanding immediately after giving effect to the issuance of Ordinary Shares upon exercise of this Warrant held by the Holder and the provisions of this Section 2(d) shall continue to apply. Any such increase or decrease will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(d) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

Section 3. Company Repurchase Rights. The Company shall have the right to purchase some or all of the Holder’s Warrant Shares at the price and upon the terms set forth below if the VWAP of the Ordinary Shares exceeds 175% of the Exercise Price for sixty (60) consecutive days and the average daily trading volume of the Ordinary Shares during such period exceeds $100,000.00.

a) Payment of Purchase Price. The closing of the purchase of the Warrant Shares under this Section 3 shall occur within thirty (30) days following the date the Company exercises its option to purchase the Warrant Shares.

b) Purchase Price. Except as provided herein, the purchase price for the Warrant Shares under this Section 3 shall equal $0.001 per Warrant Share.

Section 4. Certain Adjustments.

a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on Ordinary Shares or any other equity or equity equivalent securities payable in Ordinary Shares (which, for avoidance of doubt, shall not include any Ordinary Shares issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding Ordinary Shares into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding Ordinary Shares into a smaller number of shares, or (iv) issues by reclassification of Ordinary Shares any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of Ordinary Shares (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of Ordinary Shares outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 4(a) shall become effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

b) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Ordinary Shares are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Ordinary Shares, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Ordinary Shares or any compulsory share exchange pursuant to which the Ordinary Shares are effectively converted into or exchanged for other securities, cash or property, (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding Ordinary Shares (not including any Ordinary Shares held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in Section 2(d) on the exercise of this Warrant), the number of shares of capital stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of Ordinary Shares for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(d) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one Ordinary Share in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Ordinary Shares are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.

c) The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 4(c) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the holder of this Warrant, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the Ordinary Shares acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the Ordinary Shares pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.

d) Calculations. All calculations under this Section 4 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 4, the number of Ordinary Shares deemed to be issued and outstanding as of a given date shall be the sum of the number of Ordinary Shares (excluding treasury shares, if any) issued and outstanding.

e) Notice to Holder.

i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 4, the Company shall promptly mail to the Holder a notice setting forth the Exercise Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Ordinary Shares, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Ordinary Shares, (C) the Company shall authorize the granting to all holders of the Ordinary Shares rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification of the Ordinary Shares, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Ordinary Shares are converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed to the Holder at its last address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Ordinary Shares of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Ordinary Shares of record shall be entitled to exchange their Ordinary Shares for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

Section 5. Transfer of Warrant.

a) Transferability. Subject to Section 5(d), this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer; provided that upon transfer the transferee is reasonably acceptable to the Company and agrees to be bound by the terms of this Warrant. Additionally, upon transfer of this Warrant, the Holder shall notify the Company in writing of the Beneficial Ownership Limitation assigned to the transferee of this Warrant. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. This Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 5(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date set forth on the first page of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

c) Warrant Register. The Company shall create and maintain a Warrant register in accordance with the Corporations Act (the “Warrant Register”) and update the Warrant Register on the exercise or transfer of a Warrant in accordance with the terms of this Warrant. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

d) Transfer Restrictions. This Warrant may not be transferred to any persons in Australia other than to Sophisticated or Professional Investors, and provided that the transfer otherwise complies with all applicable laws and regulations. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered pursuant to the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (collectively, the “Securities Act”) will have restrictions upon resale imposed by the U.S. state and federal securities laws.

e) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act, the Corporations Act or any applicable U.S. and Australian securities law, except pursuant to sales registered or exempted under the Securities Act, or pursuant to an offer made with disclosure to investors under Part 6D.2 of the Corporations Act (or a relevant exemption).

Section 6. Registration Rights. The Holder has been granted certain registration rights in connection with this Warrant which are memorialized in the Purchase Agreement, and incorporated herein by this reference.

Section 7. Miscellaneous.

a) No Rights as Shareholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2(c)(i).

b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of this Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day.

d) Authorized Shares. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the stock exchange upon which the Ordinary Shares may be listed. The Company covenants that all Warrant Shares issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all liens and charges in each case that are created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue). Before taking any action that would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Waiver Agreement.

f) Restrictions. The Holder agrees and acknowledges that the issue of this Warrant is made without disclosure under the Corporations Act and that this Warrant may only be transferred in Australia to Sophisticated or Professional Investors. In no circumstances will the Company prepare and/or lodge a prospectus, offering circular or similar disclosure document with any Australian regulator or Australian securities exchange upon the issue of the Warrant Shares. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if (i) not registered or obtained through cashless exercise and an exemption from registration is applicable or (ii) issued without disclosure under Part 6D.2 of the Corporations Act, will have restrictions upon resale imposed by the U.S. state and federal securities laws and upon on-sale offers under Australian law, respectively.

g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies.

h) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.

i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase price of any Ordinary Shares or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.

l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and Holders holding Warrants at least equal to 67% of the Warrant Shares issuable upon exercise of all then outstanding Warrants.

m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

o) Currency. References to currency and money in this Warrant shall mean United States currency and money. All payments to be made hereunder must be made in United States currency and money.

********************

(Signature Page Follows)

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

Executed as a deed in accordance with
section 127 of the Corporations Act 2001 by
BlueNRGY Group Limited:


Director Signature		Director/Secretary Signature

/s/ William C. Morro		/s/ Richard Pillinger
William C. Morro		Richard Pillinger

Address:

BlueNRGY Group Limited
11^th Floor
32 Martin Street
Sydney NSW 2000
AUSTRALIA
Attention: Richard Pillinger, Corporate Secretary
Email: Richard.pillinger@blueNRGY.com

AGREED AND ACCEPTED:

ESOL B.V.
the “Holder”

By:	/s/ G. Armenta
Name:	G. Armenta
Title:	Authorized Signatory

NOTICE OF EXERCISE

TO: BlueNRGY Group Limited

(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any. The undersigned hereby certifies that, if it is in Australia, it is a person who falls within section 708(8) (Sophisticated Investors) or section 708(11) (Professional Investors) of the Australian Corporations Act 2001 (Cth).

(2) Payment shall be in lawful money of the United States of America.

(3) Please issue a certificate or certificates representing said Warrant Shares in the name of the undersigned or in such other name as is specified below: _______________________________

The Warrant Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to:

_______________________________

[SIGNATURE OF HOLDER]

Name of Investing Entity:


Signature of Authorized Signatory of Investing Entity:


Name of Authorized Signatory:


Title of Authorized Signatory:



Date:

ASSIGNMENT FORM

(To assign the foregoing warrant, execute

this form and supply required information.

Do not use this form to exercise the warrant.)

FOR VALUE RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to

_______________________________________________ whose address is

_______________________________________________________________.

In the case of a proposed transfer to a person in Australia, the undersigned hereby represents, warrants and certifies that the transfer is being made to a person who falls within section 708(8) (Sophisticated Investors) or section 708(11) (Professional Investors) of the Australian Corporations Act 2001 (Cth).



Dated: ____________________, ____________________

Holder’s Signature: _______________________________

Holder’s Address: ________________________________

______________________________________________

Signature Guaranteed: _____________________________

NOTE: The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.

EXHIBIT 12.1

CERTIFICATION

I, William Morro, certify that:

1. I have reviewed this annual report on Form 20-F of BlueNRGY Group Limited;

	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 company as of, and for, the periods presented in this report;

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

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

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

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

	d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’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 company’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 company’s internal control over financial reporting.

Date: December 9, 2015


By:	/s/ William Morro
	William Morro
	Managing Director
	(Principal Executive Officer)

EXHIBIT 12.2

CERTIFICATION

I, Richard Pillinger, certify that:

	1. I have reviewed this annual report on Form 20-F of BlueNRGY Group Limited;

	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 company as of, and for, the periods presented in this report;

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

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

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

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

	d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

	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 company’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 company’s internal control over financial reporting.

Date: December 9, 2015

By:	/s/ Richard Pillinger
	Richard Pillinger
	Chief Financial Officer
	(Principal Financial Officer)

EXHIBIT 13.1

CERTIFICATION OF WILLIAM MORRO, MANAGING DIRECTOR OF

BLUENRGY GROUP LIMITED PURSUANT TO SECTION 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of BlueNRGY Group Limited (the “Company”) on Form 20-F for the period ending June 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned hereby certifies that to the best of his knowledge:

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

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

Date: December 9, 2015

By:	/s/ William Morro
	Name: William Morro
	Title: Managing Director
	(Principal Executive Officer)

EXHIBIT 13.2

CERTIFICATION OF RICHARD PILLINGER, CHIEF FINANCIAL OFFICER OF

BLUENRGY GROUP LIMITED PURSUANT TO SECTION 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

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

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

Date: December 9, 2015