Quarterly Report (10-q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2015

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 000-53875

Eco Building Products, Inc.

(Exact name of registrant as specified in its charter)

Colorado		20-8677788
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

11568 Sorrento Valley Road

San Diego CA 92121

(Address of principal executive offices)(Zip Code)

858-222-0955

(Registrant’s telephone number, including area code)

909 West Vista Way Vista Ca 92083

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

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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. xYes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

x Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company; as defined within Rule 12b-2 of the Exchange Act.

¨ Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer x Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

¨ Yes x No

The number of shares outstanding of each of the issuer's classes of common equity as of February 22, 2016:

3,489,745,293 shares of common stock

Eco Building Products, Inc.

Contents

		Page
		Number

PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements.

	Condensed Consolidated Balance Sheets as of December 31, 2015 (unaudited) and June 30, 2015	3

	Condensed Consolidated Statements of Operations for the three months and six months ended December 31, 2015 and 2014 (unaudited)	4

	Condensed Consolidated Statements of Cash Flows for the six months ended December 31, 2015 and 2014 (unaudited)	5

	Notes to the Condensed Consolidated Financial Statements	6

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations.	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	22

Item 4.	Controls and Procedures.	22

Part II - OTHER INFORMATION

Item 1.	Legal Proceedings.	23

Item 1A.	Risk Factors.	24

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	24

Item 3.	Defaults Upon Senior Securities.	24

Item 4.	Mine Safety Disclosures.	24

Item 5.	Other Information.	24

Item 6.	Exhibits.	24

SIGNATURES		25

ECO BUILDING PRODUCTS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	Dec 31			June 30
	2015			2015
	(unaudited)
ASSETS
CURRENT ASSETS
Cash	$	967		$	40,306
Accounts receivable, net of allowance for doubtful accounts of $1,607 and $1,607, respectively		24,819			14,042
Inventories, net		158,778			171,631
Prepaid expenses		3,000			3,000
Other current assets		43,887			58,089
Total current assets		231,451			287,068

PROPERTY AND EQUIPMENT, net		706,615			592,679

TOTAL ASSETS	$	938,066		$	879,747

LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable	$	1,454,484		$	1,256,160
Payroll and taxes payable		1,517,550			1,571,783
Accrued interest		407,807			237,907
Other payables and accrued expenses		146,041			167,565
Derivative Liability		31,050,647			14,198,848
Convertible notes payable, net of debt discount		987,691			759,956
Current maturities of notes payable		23,916			23,916
Loans payable - other		1,378,070			838,245
Loans payable - related parties		2,000			45,000
Total current liabilities		36,968,206			19,099,380

LONG TERM LIABILITIES
Notes payable, less current maturities		63,410			69,778
Total long term liabilities		63,410			69,778

TOTAL LIABILITIES	$	37,031,616		$	19,169,158

LIABILITIES RELATED TO DISCONTINUED OPERATIONS		1,148,229			1,148,229

COMMITMENTS AND CONTINGENCIES	$	-		$	-

STOCKHOLDERS' DEFICIT
Preferred stock, Series A, $0.001 par value, 30,000 shares authorized, -0- and 30,000 shares issued and outstanding at December 31, 2015 and at June 30, 2015	$	-		$	-
Preferred stock, Series B, $0.001 par value, 9,250 shares authorized, -0- shares issued and outstanding at December 31, 2015 and June 30, 2015		-			-
Preferred stock, Series C, $0.001 par value, 120,000 shares authorized, 101,099 and 104,440 shares issued and outstanding at December 31, 2015 and June 30, 2015 respectively		101			104
Preferred stock, Series D, $0.001 par value, 20,000 shares authorized, 17,114 and 9,979 shares issued and outstanding at December 31, 2015 and June 30, 2015, respectively		17			10
Common stock, $0.001 par value, 10,000,000,000 shares authorized, 3,223,078,626 and 608,622,815 shares issued and 3,221,645,579 and 607,189,768 outstanding at December 31, 2015 and June 30, 2015 respectively		3,223,079			608,623
Treasury Stock		(1,434	)		(1,434	)
Additional paid-in capital		53,051,023			54,831,568
Accumulated deficit		(93,514,564	)		(74,876,514	)
Total stockholders' deficit		(37,241,779	)		(19,437,643	)

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	938,066		$	879,747

See accompanying notes to condensed consolidated financial statements

ECO BUILDING PRODUCTS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	6 months ended Dec 31,						3 months ended Dec 31,
	2015			2014			2015			2014
REVENUE
Product sales	$	387,125		$	1,653,115		$	111,374		$	777,366


TOTAL REVENUE		387,125			1,653,115			111,374			777,366

COST OF SALES
Cost of sales - product		610,576			2,003,244			259,389			878,629
		-			-						-

TOTAL COST OF SALES		610,576			2,003,244			259,389			878,629

GROSS LOSS		(223,452	)		(350,129	)		(148,015	)		(101,263	)

OPERATING EXPENSES
Research and development		159,564			39,816			79,591			5,618
Marketing		60,366			48,267			28,442			18,543
Compensation and related expenses		290,533			1,104,928			180,172			533,927
Rent - facilities		42,360			112,235			23,187			60,054
Professional and consulting fees		228,763			390,832			99,188			206,301
Other general and administrative expenses		293,413			301,252			127,141			147,491

Total operating expenses		1,074,998			1,997,331			537,721			971,935

LOSS FROM OPERATIONS		(1,298,449	)		(2,347,459	)		(685,735	)		(1,073,198	)

OTHER INCOME (EXPENSE)
Interest expense		(508,171	)		(2,039,981	)		(74,080	)		(1,013,524	)
Gain (loss) on derivative liability		(16,007,731	)		5,748,916			(9,372,884	)		686,710
Impairment expense		-			88,985						-
Other Income		-			(243,496	)		-			-
Gain (loss) on settlement of debt		-									18,000
Derivative expense		(823,699	)		(2,080,117	)		(540,096	)		(23,201	)

Total other income		(17,339,601	)		1,474,307			(9,987,060	)		(332,015	)

NET INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES		(18,638,051	)		(656,989	)		(10,672,795	)		(1,334,596	)
											-
NET LOSS FROM DISCONTINUED OPERATIONS		-			(216,164	)		-			(70,617	)

NET INCOME (LOSS)	$	(18,638,050	)	$	(873,153	)	$	(10,672,795	)	$	(1,405,213	)

NET INCOME (LOSS) PER COMMON SHARE, FROM CONTINUING OPERATIONS - Basic & Diluted	$	(0.01	)	$	(0.02	)	$	(0.01	)	$	(0.00	)
NET INCOME (LOSS) PER COMMON SHARE, FROM DISCONTINUED OPERATIONS - Basic & Diluted	$	(0.00	)	$	(0.02	)	$	(0.01	)		(0.00	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic -		1,731,591,534			4,974,301,318			938,360,716			6,363,429,751
Diluted -		106,540,675,435			4,974,301,318			938,360,116			6,363,429,751

See accompanying notes to condensed consolidated financial statements

ECO BUILDING PRODUCTS, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)

	6 months ended Dec 31,
Cash flows from operating activities	2015			2014
Net Income (Loss)	$	(18,638,050	)	$	(873,152	)
Adjustments to reconcile net income (loss) to net cash used by operating activities:
Depreciation and amortization expense		64,863			138,340
Amortization of debt discount & deferred financing costs		288,062			795,900
Initial interest expense on value of derivative (excess)		-			1,232,464
Derivative expense		823,699			2,080,117
Stock Based Compensation		-			27,292
Common Stock issuance for interest and OID		11,750			-
Financing costs		39,165			-
Loss on derivative liability fair value adjustment		16,007,731			(5,748,916	)
Loss on extinguishment of Convertible Notes and Accounts Payable		-			243,496
Gain on settlement of notes payable		-			(88,985	)
Expense paid on behalf of the Company		-			1,221,457
Assignment of accounts receivable to note payable holder		-			(473,703.00	)
Changes in assets and liabilities:
Accounts receivable		10,777			(97,869	)
Inventory		12,853			(65,299	)
Other current assets and prepaid expenses		14,201			-
Accounts payable		198,324			224,588
Payroll and taxes payable		(54,245	)		(26,801	)
Deferred Revenue		-			-
Other payable and accrued expenses		(21,491	)		20,900
Accrued interest		169,900			38,280
Net cash from continuing operations		(1,072,461	)		(1,351,891	)
Net cash from discontinued operations		-			-
Net cash from operating activities		(1,072,461	)		(1,351,891	)

Cash flows from investing activities
Purchase of property and equipment		(176,209	)		(28,953	)
Notes receivable payments		-			-
Net cash used by investing activities		(176,209	)		(28,953	)

Cash flows from financing activities
Payments on related party notes		(43,000	)		(60,158	)
Proceeds from issuance of common stock		-			100,000
Proceeds from issuances of series C convertible preferred stock		-			975,000
Proceeds from issuances of series D convertible preferred stock		738,749			-
Proceeds from convertible notes payable		855,250			180,000
Proceeds from notes payable - related parties		-			-
Payments on notes payable		(335,300	)		(95,855	)
Payments on notes payable - vehicles loan		(6,368	)		(17,666	)
Proceeds from related party line of credit advances		-			-
Payments on accrued interest					-
Net cash provided by financing activities		1,209,331			1,081,321

Net change in cash and cash equivalent		(39,339	)		(299,523	)
Cash and cash equivalent at the beginning of year		40,306			375,066

Cash and cash equivalent at the end of year	$	967		$	75,542

Supplemental disclosures of cash flow Information:
Cash Paid for Interest	$	8,333			8,333

Supplemental disclosure of non-cash investing and financing activities:
Common shares issued for conversion of notes payable	$	60,077		$	168,024
Shares issued for conversion of notes payable	$	643,901		$	-
Preferred shares issued for extinguishment of convertible notes payable & A/P	$	-		$	2,199,315
Shares issued for conversion of Pref C convertible preferred stock	$	2,406,388		$	1,064,676
Convertible notes issued for assumption of notes payable	$	-		$	410,000
Declared dividends	$	-		$	25,851
Purchase of property & equipment with loans payable	$	-		$	105,284
Debt Discount on convertible notes	$	42,222		$	696,085

See accompanying notes to condensed consolidated financial statements

Eco Building Products, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited) DECEMBER 31, 2015

1. Organization and Basis of Presentation

Basis of Presentation

The accompanying condensed consolidated financial statements as of December 31, 2015, and for the three and six months ended December 31, 2015 and 2014 have been prepared by Eco Building Products, Inc (or “the Company”), without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2015. In the opinion of management, all adjustments (primarily consisting of normal recurring adjustments) considered necessary for a fair statement have been included.

The condensed consolidated balance sheet at December 31, 2015 has been derived from the unaudited consolidated financial statements as of that date but does not include all of the information and footnotes included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2015. The results of operations for the three and six months ended December 31, 2015 are not necessarily indicative of the operating results to be expected for the full fiscal year or any future periods.

Going Concern

The Company’s financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. To date the Company has recorded an accumulated deficit of $93,514,564, recurring losses from operations and significant cash used in operating activities over the last two years, and is dependent upon its ability to obtain future financing and successful operations.

Our continuation as a going concern is dependent upon obtaining the additional working capital necessary to sustain our operations. Our future is dependent upon our ability to obtain financing and upon future profitable operations. The Company estimates the current operational expenses of approximately one hundred fifty thousand dollars a month is required to continue to operate. This is achieved either through profit from sales; or by management seeking additional financing through the sale of its common stock, and/or through private placements. The minimum operational expenses must be met in order to relive the threat of the company’s ability to continue as a going concern. There is no assurance that our current operations will be profitable or that we will raise sufficient funds to continue operating. The Company continues to trim overhead expenses to meet revenues. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event we cannot continue in existence. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

2. Summary of Significant Accounting Policies

Loss Per Share

Basic net loss per share is determined by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share is determined by dividing net loss by the weighted average number of common shares used in the basic loss per share calculation plus the number of common shares that would be issued assuming conversion of all potentially dilutive securities outstanding under the treasury stock method. Potential common shares at December 31, 2015 from preferred C shares convertible into 178.3 billion shares of common stock, preferred D shares convertible into 2.7 billion shares of common stock, and convertible notes convertible into 22 billion shares of common stock (December 31, 2014 – 12.6 billion). Accordingly, total common share equivalents of 203 billion were excluded in the computation of diluted net loss per share for the six months ended December 31, 2015, because the effect would be anti-dilutive.

Eco Building Products, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited) DECEMBER 31, 2015

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affects the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements

Management has determined that no new accounting pronouncements during the period that would affect the condensed consolidated financial statements.

3. Balance Sheet details

As of December 31, 2015, inventories consisted of the following:

Chemicals	$	126,970
Lumber	$	31,808
	$	158,778

All of the Company’s inventories are pledged as collateral for the Company’s Senior Secured Notes (see Note 4). In addition, inventory is considered finished goods as the Company sells and markets the chemical and treated and untreated lumber. The chemicals and lumber include a $47,264 reserve for obsolete inventory.

Property and Equipment

Property and equipment is stated at cost. Property and equipment-related expenditures for items with useful lives exceeding one year and major renewals and improvements are recorded as assets, while replacements and maintenance and repairs that do not improve or extend the lives of the respective assets are expensed. At the time property and equipment are retired or otherwise disposed of, the asset and related accumulated depreciation accounts are relieved of the applicable amounts. Gains or losses from retirements or sales are credited or charged to income. Depreciation expense is recorded on a straight-line basis over the estimated useful lives of the assets, ranging from (3) to seven (7) years. Leasehold improvements are depreciated over their useful life or the term of the related lease, whichever is shorter. Depreciation expense is not recorded on idle property and equipment until such time as it is placed into service. Depreciation expense for the six months ending December 31, 2015 was $64,863.

Accrued Liabilities

As of December 31, 2015, the Company owed $825,578 in past due payroll taxes and accrued penalties. The Company has made an arrangement with the IRS for monthly payments for a $651,999 portion of the liability. However, the Company is in default with this agreement. These amounts are recorded within payroll and taxes payable on the accompanying consolidated balance sheet.

Derivative Liabilities

During the six months ended December 31, 2015, the Company issued convertible preferred stock that can be converted to common stock in connection with raising equity and debt financing. As of December 31, 2015, the Company’s number of potential common shares plus the number of actual common shares outstanding (“Committed Shares”) exceeded the number of common shares authorized to issue in accordance with ASC 815-40-19 “Contracts in Entity’s Own Equity”. The number of outstanding common shares plus the potential common share liability has exceeded the amount of authorized shares, therefore the Company has to employ ASC 815-40-19 (“ASC 815”) to value common share equivalents potentially issuable to settle conversions of convertible notes, convertible preferred shares and exercise of warrants and options.

The Company values its derivative financial instruments, consisting primarily of embedded conversion features for convertible debt, convertible preferred stock, stock options and warrants, at issuance at fair value and revalues its derivative financial instruments at the end of each reporting period or in the case of any conversion or modification of terms, at the date of any such modification or conversion. Any change in fair value is charged to earnings of the period where the derivative financial instrument is modified or converted. The fair value of these derivative financial instruments was determined using a path-dependent Monte Carlo simulation. The ranges of inputs (or assumptions) the Company used to value the derivative liabilities at respective issuances, conversion or exercise dates, and at period end during the period ended December 31, 2015 were as follows:

Eco Building Products, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited) DECEMBER 31, 2015

(1) dividend yield of 0%

(2) expected annual volatility of 203.47% to 263.89%

(3) risk-free interest rate of 0.28% 1.47%

(4) expected life of 0.53 days to 3.24 years, and

(5) estimated fair value of the Company’s common stock of $0.0001 to $0.0002 per share.

For the six months ended December 31, 2015, the Company issued an aggregate of $738,749 convertible preferred D series shares with a stated value of $100 per share as further described below in Note 7 and recorded additional derivative liabilities of $1,474,141 for the conversion features included therein. The Preferred D shares are convertible into the Company’s common shares, at the holder’s option, at conversion prices equal to 60% of the lowest VWAP closing price for the previous 30 days.

For all convertible notes described in the following paragraphs and for the options, warrants, and convertible preferred Series C and Series D shares described in Note 7, the fair value of the resulting derivative liability was $31,050,647 and $14,198,848 at December 31, 2015 and June 30, 2015 and, respectively.

A reconciliation of the derivative liabilities from June 30, 2015 to December 31, 2015 is:

	Derivative Liabilities

Balance as of June 30, 2015		14,198,848
Additions related to embedded conversion features Preferred Series D issued		1,474,141
Conversion of convertible debt and Preferred Series C to common stock		(760,602	)
Additions related to embedded conversion features of Convertible Debt		130,529
Loss on increase in value of derivative liabilities		16,007,731
Balance as of December 31, 2015	$	31,050,647

4. Notes Payable

The following table summarizes the notes payable as of December 31 2015.

	As of December 31, 2015
Description	Short term			Long term

					—
Convertible notes		1,042,674			—
Less discount to notes payable		(54,983	)		—
Convertible notes, net		987,691			—
					—

Auto notes payable		23,916			63,410
Loans payable – other		1,357,388			—

	$	2,368,995		$	63,410

Eco Building Products, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited) DECEMBER 31, 2015

Convertible notes

Inventory Note Payable - $833,333

On September 16, 2014, the Company entered into a Securities Purchase Agreement with Dominion Capital, LLC, whereby Dominion agreed to fund the Company with an aggregate of up to $750,000 in Subscription Amount corresponding to an aggregate of up to $833,333 in the form of a 10% Original Issue Discount Senior Secured Convertible Promissory Note due September 16, 2015 and a Common Stock Purchase Warrant for up to 20,000,000 shares. This funding will be used exclusively to purchase lumber and chemicals and is to be dispersed from an escrow account. On September 29, 2014, Dominion transferred and assigned the Note and the Warrant to M2B Funding Corporation. The Note has a fixed conversion price of $0.20 subject to certain adjustments. The Company is scheduled to repay the Note in monthly installments, the final payment was due on October 16, 2015. The Company is in default on this note. The Company plans on using the receivables from the sale of lumber and chemicals to comply with the terms of the repayment schedule. In the event of default, the Note is subject to an increase in the interest rate to eighteen percent (18%) per annum. In accordance with the Agreement, the Company issued a Common stock Purchase Warrant, allowing M2B Funding Corporation the right to purchase up to 20,000,000 shares of Common Stock on September 16, 2015 and expiring on September 16, 2019. The Company purchased all of the 20,000,000 available warrants under this agreement. The exercise price per share of the Common Stock under this Warrant is $0.02 subject to certain adjustments. The Warrant may be exercised in whole or in part, at such time by means of a cashless exercise (see Note 7). The Common Shares cannot be sold and or assigned for a period of one year from the original Warrant issue date. The Company initially recorded discounts totaling $1,001,326 representing the fair value of the warrants issued. During the six months ended December 31, 2015 the Company amortized the remaining discount balance of $230,905. During the six months ended December 31, 2015 this investor converted $35,877 into 219,321,375 shares of common stock. The balance of this note at December 31, 2015 is $944,902, inclusive of original issue discount of $76,515. Accrued interest at December 31, 2015 is $250,980.

Note Payable - $100,000

On November 12, 2014, the Company entered into, with a private investor, a Promissory Note for $100,000, with an original issue discount of $20,000, for net proceeds to the Company of $80,000 for the purpose of funding operations and for general working capital. In addition the Company issued 12,500,000 restricted common shares. On May 14, 2015, the holder converted $20,000 of this note into 10,000,000 shares of common stock. The conversion represented a substantial modification of the note’s original terms and as a result the Company recognized a loss of $47,000. The note was in default on May 15, 2015. Default provisions included additional interest at 18%. During the six months ended December 31, 2015 this investor converted $24,200 into 154,000,000 shares of common stock. The Company recorded amortization of discounts totaling $53,937 during the six months ended December 31, 2015 and the discount balance is $15,981 at December 31, 2015. The balance of this note at December 31, 2015 is $55,800 plus accrued interest of $7,575.

Senior Convertible Note - $14,167

On November 10, 2015, the Company entered into, with a private investor, a Senior Convertible Note for $14,167, with an original issue discount of $1,417, for net proceeds to the Company of $12,750 for the purpose of funding operations and for general working capital. The maturity date is one year from the issuance date. In the event of default, the Note is subject to an increase in the interest rate to twenty-two percent (22%) per annum. The holder can convert at a 40% discount to the lowest volume weighted average price in the previous twenty-five trading day period. In the event of default the conversion price is equal to 55% of the lowest traded price in the prior thirty trading days. The Company recorded amortization of discounts totaling $1,979 during the six months ended December 31, 2015 and the discount balance is $12,188 at December 31, 2015. The balance of this note at December 31, 2015 is $14,167 plus accrued interest of $435.

Senior Convertible Note - $14,167

On November 30, 2015, the Company entered into, with a private investor, a Senior Convertible Note for $14,167, with an original issue discount of $1,417, for net proceeds to the Company of $12,750 for the purpose of funding operations and for general working capital. The maturity date is one year from the issuance date. In the event of default, the Note is subject to an increase in the interest rate to twenty-two percent (22%) per annum. The holder can convert at a 40% discount to the lowest volume weighted average price in the previous twenty-five trading day period. In the event of default the conversion price is equal to 51% of the lowest traded price in the prior thirty trading days. The Company recorded amortization of discounts totaling $1,203 during the six months ended December 31, 2015 and the discount balance is $12,964 at December 31, 2015. The balance of this note at December 31, 2015 is $14,167 plus accrued interest of $265.

Eco Building Products, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited) DECEMBER 31, 2015

Senior Convertible Note - $14,167

On December 30, 2015, the Company entered into, with a private investor, a Senior Convertible Note for $13,889, with an original issue discount of $1,389, for net proceeds to the Company of $12,500 for the purpose of funding operations and for general working capital. The maturity date is one year from the issuance date. In the event of default, the Note is subject to an increase in the interest rate to twenty-two percent (22%) per annum. The holder can convert at a 40% discount to the lowest volume weighted average price in the previous twenty-five trading day period. In the event of default the conversion price is equal to 51% of the lowest traded price in the prior thirty trading days. The Company recorded amortization of discounts totaling $38 during the six months ended December 31, 2015 and the discount balance is $13,851 at December 31, 2015. The balance of this note at December 31, 2015 is $13,889 plus accrued interest of $8.

Loans Payable – Other

Auto Loan

The Company entered in an auto loan agreement on July 21, 2014 to purchase a vehicle. The principal amount of the loan is $83,821 and the interest rate 5.49%. The loan is due on November 13, 2019. The Company is currently paying auto payments of $1,671 per month. Future short term minimum payments due total $27,064 and future long term minimum payments total $60,262 for fiscal years 2016 through 2020.

Secured Promissory Note - $44,500

At June 30, 2012, the Company was indebted for $44,500 for amounts received in prior years for operating expenses in exchange for a secured promissory note from a third party entered into during 2010. This amount was due on demand and non-interest bearing. No payments were made on this note during the six months ending December 31, 2015, leaving a balance due of $44,500 at December 31, 2015. The lender is claiming the amount owed is $360,000, which the Company disputes.

Inventory Note Payable – up to $1,200,000

On July 18, 2014, the Company signed a Secured Revolving Promissory Note for up to One Million Two Hundred Thousand Dollars ($1,200,000) with an investor to facilitate purchase of inventory for orders from the Company’s material customer. The note is secured by the inventory. Repayment of the note is facilitated by the assignment of the accounts receivable directly from the Company’s material customer to the investor. The initial term of the note is for six months with an option to extend for an additional six month period. The note will bear an 18% interest rate per annum with a maximum default interest of 24% per annum. Within three (3) Business Days after the date of this Note, the Company shall deliver to Payee a Warrant, in a form acceptable to Payee, exercisable for 900,000 shares of the Company’s Common Stock at a price per share equal to the closing price of the Common Stock on the trading day prior to the date of such Warrant. Upon receipt of such Warrant, Payee shall execute a 12-month lock-up agreement in customary form and reasonably acceptable to Payee; currently no warrant or lock-up agreements have been issued or executed. The Company made no additional borrowings or payments on this note during the three months ended September 30, 2015. The balance of the note as of December 31, 2015 is $183,456 plus accrued default interest of $37,892. This note has not been renewed at the six month anniversary. No payments have been made after December 31, 2015.

Lease in Default - $151,275

Effective April 1, 2015 and up through September 30, 2015, the Company has incurred $151,275 in a default on their facilities lease. The default rate on the lease is 10%. No repayments have been made during the six months from June 30, 2015 to December 31, 2015, leaving a balance of $151,275 due at December 31, 2015 plus accrued default interest of $7,626.

Note Payable-$500,000

On February 14, 2014 the Company entered into a Note agreement in the amount of $500,000 for the purpose of purchasing inventory. The note is secured by the Company’s inventory and is to be repaid out of the proceeds of the subsequent inventory sales. The note was due May 14, 2014 and was extended until March 31, 2015. The Note carries minimum interest of $45,000 for the initial term and an additional $45,000 of interest for the extension of the due date. The balance due is $85,911 at December 31, 2015 plus the additional $45,000 as accrued interest. No payments have been made after December 31, 2015.

Eco Building Products, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited) DECEMBER 31, 2015

Note Payable-$250,000

On April 11, 2014, the Company entered into a Note agreement in the amount of $250,000 for the purpose of funding operations and for general working capital. The Note carries minimum interest of $22,500 and the note was due July 1, 2014 and was extended until March 31, 2015. The Company made no draw-downs or payments on this note during the six months ended December 31, 2015. The balance due is $150,000 at September 30, 2015 plus the additional $36,300 as accrued interest. No payments have been made after December 31, 2015.

Note Payable-$20,000

On March 25, 2015, the Company entered into a Promissory Note agreement in the amount of $20,000 with annual interest of 6% for the purpose of funding operations and for general working capital. The note was due on April 24, 2015. Default interest of an additional 10% per annum on the original loan amount accrues if the repayment term goes beyond 30 days. The balance due is $20,000 at December 31, 2015 plus $1,474 of accrued interest. No payments have been made after September 30, 2015. Additionally, the Company borrowed an additional $3,000 from this same party at 0% and no terms of repayment.

Note Payable-$60,000

On April 2, 2015, a shareholder loaned the company $60,000 on a secured promissory note with a 6% per annum interest rate and a 30 day maturity date. Default interest of an additional 10% per annum is incurred on this note if repayment is not made by July 2, 2015. The balance due is $60,000 at December 31, 2015 plus $4,291 of accrued interest. No payments have been made after December 31, 2015.

Promissory Note-$275,000

On December 15, 2015, a shareholder loaned the company $275,000 on a promissory note with a 24% per annum interest rate with monthly payments of $25,000 commencing in April 2016 until paid in full. The balance due is $275,000 at December 31, 2015.

Future Receivables Sale Agreement

Effective March 6, 2015, the Company entered into an agreement whereby it sold a percentage of its future receivables in exchange for $75,000. Per the terms of this agreement, the Company would repay a total of $102,750 via daily remittance of twelve percent (12%) of its accounts receivable collections and other receipts from the sale of its products and services. Alternatively, the Company could elect to repay $120,750 total via a flat daily remittance of $1,038 (“Alternative Daily Amount”) until that amount is repaid in full. The Company elected to repay $120,750 at the Alternative Daily Amount of $1,038, which gives the agreement the character of a $73,500 note. The interest rate was imputed at 184.23% and the $102,750 purchase price was paid off in July 2015.

Future Receivables Sale Agreement - $225,000

Effective July 29, 2015, the Company entered into an agreement whereby it sold a percentage of its future receivables in exchange for $220,500 ($225,000 less a $4,500 setup fee). The Company is to repay $309,375 via daily remittance of a percentage of its accounts receivable collections and other receipts from the sale of its products and services. Per the terms of the agreement, the Company made an alternative election to repay the $309,375 via a flat daily remittance of $2,163 until that amount is repaid in full. The Company has accounted for this agreement as a note payable with a maturity date of March 9, 2016 and an imputed interest rate of 123%. The balance of the note is $87,164 at December 31, 2015.

Future Receivables Sale Agreement - $70,000

Effective September 16, 2015, the Company entered into a second similar agreement whereby it sold a percentage of its future receivables in exchange for $70,000. Per the terms of the agreement, the Company elected to repay $96,250 via a flat daily remittance of $1,019 until that amount is repaid in full. The Company has accounted for this agreement as a note payable with a maturity date of February 18, 2016 and an imputed interest rate of 177%. The balance of the note is $11,917 at December 31, 2015.

Future Receivables Sale Agreement - $120,000

Effective September 28, 2015, the Company entered into a third similar agreement whereby it sold a percentage of its future receivables in exchange for $120,000. Per the terms of the agreement, the Company is to repay $153,000 via a flat daily remittance of $1,196 until that amount is repaid in in full. The Company has accounted for this agreement as a note payable with a maturity date of April 5, 2016 and an imputed interest rate of 98%. The balance of the note is $78,165 at December 31, 2015.

Eco Building Products, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited) DECEMBER 31, 2015

Settlement and Release Agreement - $100,000

In July 2015, the Company entered into a Settlement and Release Agreement (the “Settlement Agreement”) with Eco Prime, LLC. The Settlement Agreement resolves any disputes arising from the Limited Asset Purchase Agreement entered into between the parties on March 19, 2014. Pursuant to the terms of the Settlement Agreement, the Company paid One Hundred Thousand Dollars ($100,000) to acquire the assets from EcoPrime and released each party from any liability under the March 2014 agreement. In order to fund the $100,000 payment, the Company entered into a Promissory Note with a private investor dated July 14, 2015. Pursuant to the terms of the note, it had a 60-day maturity and a flat 25% interest rate. The note was due on September 14, 2015 but, to date, has not been paid off and is currently in default. The note incurs additional default interest of 6%. The balance of the note at December 31, 2015 is $85,000 plus accrued interest of $10,182.

In connection with this agreement, the Company borrowed an additional $32,000 from this same party at 0% in a short-term bridge financing arrangement which has been repaid.

On November 19, 2014, the Company entered into a Promissory Note for $100,000 with annual interest of 6% for the purpose of funding operations and for general working capital. In addition the Company issued 12,500,000 restricted common shares. The note was due on February 19, 2015. As of May 18, 2015 the Company has extended the note to August 21, 2015 with the agreement to issue, prior to the new maturity date, an additional 25,000,000 common shares. Pursuant to the default provisions of the note, the Company issued an additional 15,000,000 common shares during the six months ended December 31, 2015. The balance due is $100,000 at December 31, 2015 plus $11,852 of accrued interest. No payments have been made after December 31, 2015.

On January 16, 2015 the Company entered into an additional promissory note for $20,000 with annual interest of 6%. This note was due on July 16, 2015. In addition the Company issued 30,000,000 restricted common shares. The balance due is $20,000 at December 31, 2015 plus $2,147 of accrued interest. No payments have been made after December 31, 2015.

Loans Payable – Related Party

At December 31, 2015, the Company had interest bearing notes payable due to its Chief Technical Officer with a balance of $2,000. During the six months ending December 31, 2015, the Company made payments totaling $43,000 under this note.

Eco Building Products, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited) DECEMBER 31, 2015

5. Related Party Transactions

See Note 4 for Loans payable – related parties and equity issuances in Note 7.

6. Fair Value of Assets and Liabilities

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal market (or most advantageous market, in the absence of a principal market) for the asset or liability in an orderly transaction between market participants at the measurement date. Further, entities are required to maximize the use of observable inputs and minimize the use of unobservable inputs in measuring fair value, and to utilize a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The three levels of inputs used to measure fair value are as follows:

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Observable inputs other than quoted prices included within Level 1, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs other than quoted prices that are observable or are derived principally from, or corroborated by, observable market data by correlation or other means.

Level 3 — Unobservable inputs that are supported by little or no market activity, are significant to the fair value of the assets or liabilities, and reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

Application of Valuation Hierarchy

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following is a description of the valuation methodology used to measure fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy.

Advances from Related Party. The Company assessed that the fair value of this liability approximates its carrying value due to its short-term nature.

Notes Payable – Related Party. The Company assessed that the fair value of this liability to approximate its carrying value based on the effective yields of similar obligations.

Convertible Notes Payable.

The Company assessed that the fair value of this liability approximates its carrying value due to its short-term nature.

Loans Payable - Related Party. The Company assessed that the fair value of this liability approximates its carrying value due to its short-term nature.

Eco Building Products, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited) DECEMBER 31, 2015

Loans Payable - Other. The Company assessed that the fair value of this liability approximates its carrying value due to its short-term nature.

Derivative Liabilities. The Company assessed that the fair value of these liabilities using observable inputs described in level 2 above. The methodology described above may produce a current fair value calculation that may not be indicative of net realizable value or reflective of future fair values. If readily determined market values became available or if actual performance were to vary appreciably from assumptions used, assumptions may need to be adjusted, which could result in material differences from the recorded carrying amounts. The Company believes its method of determining fair value is appropriate and consistent with other market participants. However, the use of different methodologies or different assumptions to value certain financial instruments could result in a different estimate of fair value

7. Stockholders' Deficit

Preferred Stock

The Company is authorized to issue 500,000,000 shares of redeemable convertible preferred stock with a par value of $0.001 per share. During the year, the Company issued three series of Preferred Stock:

Series A Preferred Stocks:

On January 27, 2014 the Board of Directors authorized 30,000 shares of Class A Preferred Stock with a par value of $0.001.

The terms of the preferred series A shares are as follows:

Series A Preferred stock is not convertible.

Each share of Series A Preferred stock is entitled to 100,000 votes on matters that the holders of the Company's common stock may vote.

The Series A Preferred stock is redeemable by the company for no consideration at any time.

The Series A Preferred stock cannot vote on election or removal of directors.

The Series A Preferred stock has no stated dividend rate and has no liquidation preference.

Effective with the Chief Executive Officer’s termination on June 15, 2015, all 30,000 Series A preferred shares were cancelled. There were no issuances of Series Preferred A stock during the six months ended December 31, 2015. There were no Series preferred A shares outstanding at December 31, 2015.

Series B 12% Convertible Preferred Stock:

$925,000 Series B Preferred Stock Financing

On February 26, 2014 the Board of Directors authorized 6,750 shares of Class B Preferred Stock (“Preferred B Stock”) with a par value of $0.001. On April 17, 2014, an additional 2,500 shares of Preferred B Stock was authorized with a par value of $0.001, for a total authorized amount of 9,250.

The terms of the Series B Preferred Stock (“Preferred B”) are as follows:

	●	The Preferred B Stock shall have no voting rights.
	●	The Preferred B Stock is convertible at any time at 60% of the lowest VWAP of the 20 days leading up to conversion multiplied by the stated value of $100.
	●	The Preferred B Stock has a 12% per annum stated dividend rate, which is calculated daily on a 360 day year.
	●	The Preferred B Stock shall have a liquidation preference equal to the stated value of each share of Preferred Stock or $100 per share.

On June 3, 2014, all shares of the Preferred B Stock were converted into an equal number of shares of the Company’s Series C Convertible Preferred Stock as described below. There were no Preferred B shares outstanding at December 31, 2015 or June 30, 2015.

Series C 12% Convertible Preferred Stock:

On May 30, 2014, the Company authorized 120,000 shares of a newly-created Series C 12% Convertible Preferred Stock, par value $0.001 per share (the “Preferred C Stock”).

The terms of the Preferred C Stock are as follows:

Eco Building Products, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited) DECEMBER 31, 2015

	●	The Preferred C Stock shall have no voting rights.
	●	The Preferred C Stock is convertible at any time at 60% of the lowest VWAP of the 20 days leading up to conversion multiplied by the stated value of $100.
	●	The Preferred C Stock has a 12% per annum stated dividend rate, which is calculated daily on a 360 day year. Any dividends, whether paid in cash or shares of Common Stock, that are not paid within five trading days following a dividend payment date shall continue to accrue and shall entail a late fee at 18% per annum. In addition, the dividend rate of 12% is subject to an adjustment up to 18% if at any time the Company does not have an amount equal to or greater than 150% of the authorized but unissued common shares that would be required (on an “if converted” basis) to settle the conversion of Preferred C Stock outstanding. As of December 31, 2015, the Company has accrued dividends on Preferred C Stock in the amount of $588,961. The amount of dividends has not yet been determined by the Company and the holders whether to be payable in cash, common stock or additional shares of Preferred C Stock.
	●	The Preferred C Stock shall have a liquidation preference equal to the stated value of each share of Preferred Stock or $100 per share.

The following table provides the activity of the Company’s Preferred C stock for the six months ended December 31, 2015:

Balance as of June 30, 2015	104,440
Preferred C Stock issued for cash	—
Preferred C Stock converted into Common Stock	(3,341	)
Balance as of December 31, 2015	101,099

Preferred C Stock converted to Common Stock

During the six months ended December 31, 2015, according to the conversion terms described above, the investors converted 3,341 shares of Preferred C Stock representing value of $334,042 into 2,226,134,436 shares of the Company’s Common Stock.

Series D 12% Convertible Preferred Stock:

On March 31, 2015, the Company authorized 10,000 shares of a newly-created Series D 12% Convertible Preferred Stock, par value $0.001 per share (the “Preferred D Stock”). Effective July 2, 2015, the Company increased the number of authorized shares to 20,000.

	●	The Preferred D Stock shall have no voting rights.
	●	The Preferred D Stock is convertible at any time at 60% of the lowest VWAP of the 30 days leading up to conversion multiplied by the stated value of $100.
	●	The Preferred D Stock has a 12% per annum stated dividend rate, which is calculated daily on a 360 day year. Any dividends, whether paid in cash or shares of Common Stock, that not paid within five trading days following a dividend payment date shall continue to accrue and shall entail a late fee at 18% per annum. In addition, the dividend rate of 12% is subject to an adjustment up to 18% if at any time the Company does not have an amount equal to or greater than 150% of the authorized but unissued common shares that would be required (on an “if converted” basis) to settle the conversion of Preferred C Stock outstanding. As of December 31, 2015, the Company has accrued dividends on Preferred D Stock in the amount of $158,251. The amount of dividends has not yet been determined by the Company and the holders whether to be payable in cash, common stock or additional shares of Preferred D Stock.
	●	The Preferred D Stock shall have a liquidation preference equal to the stated value of each share of Preferred Stock or $100 per share.

Preferred D Stock issued for cash

During the six months ended December 31, 2015, investors purchased 7,387 shares of Preferred D Stock for $738,749 of cash.

Common Stock Issuances

During the six months ended December 31, 2015, the Company issued a total of 2,614,455,811 shares of its common stock as follows:

373,321,375 shares were issued for conversion of convertible debt and accrued interest with an aggregate value of $60,077;

Eco Building Products, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited) DECEMBER 31, 2015

15,000,000 shares were issued pursuant to default provisions of a note payable with an aggregate value of $11,750; and

2,226,134,436 shares were issued for conversion of 3,341 shares of convertible Preferred C stock as described above.

Treasury Stock

There were no treasury stock transactions during the six months ended December 31, 2015. The Company held 1,433,047 shares of common stock as treasury stock at December 31, 2015.

Warrants

As discussed in Note 4, the Company issued a Common Stock Purchase Warrant, allowing M2B Funding Corporation the right to purchase up to 20,000,000 shares of Common Stock on September 16, 2014 and expiring on September 16, 2019. The exercise price per share of the Common Stock under these warrants is $0.02 subject to certain adjustments. The 20,000,000 warrants were valued at $438,590 using the Black-Scholes Option Model with a risk free interest rate of 1.47%, volatility of 203.47%, and trading price of $0.0001 per share.

The following is a schedule of warrants outstanding as of December 31, 2015:

	Warrants Outstanding		Weighted Average Exercise Price		Weighted Average Remaining Life

Balance, June 30, 2015		20,000,000	$	0.02		4.21 Years
Warrants issued		-		-
Warrants expired		-		-
Warrants cancelled		-		-		-
Balance, December 31, 2015		20,000,000	$	0.02		3.71 Years

Options

In April 2011, the Company granted options to its Chief Technical Officer to purchase 400,000 shares of its common stock. The 400,000 options have an exercise price of $0.10 per share and expire in five years.

In November 2013, the Company granted options to its Chief Technical Officer to purchase 800,000 shares of its common stock. The 800,000 options have an exercise price of $0.10 per share and expire in 5 years.

The Company granted options to its former Chief Executive Officer as in connection with his termination agreement that was effective June 15, 2015. A total of 5,786,227 options were granted based on the number of shares of Common Stock equal to one percent (1%) of the total number of shares outstanding on the date of grant. The options have an exercise price equal to the closing bid price on the date of grant ($0.0038 per share) and an expiration date of ten (10) years from the date of issuance. A total of 5,786,227 options were granted under these terms. The options vest fifty percent (50%) on the effective date of the agreement, with the remaining fifty percent (50%) vesting six (6) months after the effective date of the agreement. The options were valued at $21,987, as determined using the Black-Scholes option-pricing model using a risk free rate of 2.35%, volatility of 257% and a trading price of the underlying shares of $0.038.

The following is a schedule of options outstanding as of December 31, 2015:

Eco Building Products, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited) DECEMBER 31, 2015

	Options Outstanding		Weighted Average Exercise Price		Weighted Average Remaining Life		Aggregate Intrinsic Value

Balance, June 30, 2015		6,986,227	$	0.02		9.98 Years	$	-
Options granted		-		-				-
Options cancellation/expired		-		-		-		-
Balance, December 31, 2015		6,986,227	$	0.02		8.37 Years	$	-

As of December 31, 2015, 4,093,114 of the 6,986,227 options are exercisable. Compensation expense of $10,994 remaining, will be recognized over the remaining vesting period.

8. Commitments and Contingencies

Purchase commitments

On January 18, 2011, the Company entered into an AF21 Product, Purchase, Sales, Distribution & Service Agreement, (the “Agreement”), with Newstar Holdings Pte Ltd inventors and owners of technical data and intellectual property for a protective coating in order to obtain an exclusive supply, marketing and distribution rights of the coating product. The product is a non-toxic non-corrosive fire inhibitor. Pursuant to the Agreement, the Company guaranteed it will purchase a minimum of nine hundred fifty (650) gallon totes of product in the first two-year period at a cost of $1,815,450 for the first two years. The Company is required to increase the minimum quantities in the third year to 842 totes making the total purchase commitment $2,351,706 for year three. In the fourth year the Company is required to increase the minimum quantities to 1,264 totes making the total purchase commitment $3,530,352 for year four. There are no penalty clauses other than cancellation of the agreement if the minimum purchase commitments are not met. The Company and Newstar Holdings are currently in negotiations to modify the current contract to accurately reflect the anticipated future business volumes. Both parties have engaged in the efforts to manufacture additional product to optimize supply chain and meet Company demands. Albeit the Company has not met the stated quantity purchases both parties have reaffirmed their intent to continue the business relationship and confirm the current contract is still in effect and a default situation does not exist. If the agreement were to be cancelled it would have a significant impact on the Company’s operations until a replacement product could be arranged.

On March 5, 2014, the Company entered into a first amendment to the AF21 Product, Purchase, Sales, Distribution & Service Agreement, (the “Agreement”), with Newstar Holdings Pte Ltd inventors and owners of technical data. The amendment modified the current agreement in the following manner;

All parties agree;

The “Buyer” has changed their corporate name from EcoBlu Products, Inc. to Eco Building Products, Inc. and this change has no impact on the validity or assignment of the contract other than a corporate name change.

To modify section 1.3 Rights to use Product Technology - sub section (A) to substitute the sentence defining “of and rights within the USA and Canada to use the Product as a component of the Enhanced Products” to now state “of and rights within the Entire World to use the Product as a component of the Enhanced Products” the change from USA and Canada to Entire World or Worldwide also effects language in section D.

All parties agree that the original agreement referenced hereto and the modifications as defined in this Amendment are in good standing.

Eco Building Products, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited) DECEMBER 31, 2015

Legal Proceedings

On June 4, 2013, Trical Construction, Inc. filed a complaint against the Company in Superior Court of California, County of Los Angeles. The nature of the litigation involved Trical’s claim that it suffered various construction delays and other damages from Eco Building Products in connection with the construction of a 77 unit apartment building. The matter was ultimately resolved by settlement on August 1, 2014 in the amount of $180,564.50, with payment of $30,000.00 by Eco Building Products to Trical on that date and scheduled payments of $10,000 each month beginning on November 1, 2014 through February 1, 2016. This was amended on April 15, 2015, extending payments to October 2016 and reducing the payment amount to $2,500 per month. The balance on this settlement is $123,065 at June 30, 2015 and no payments have been made since June 15, 2015. The Company is in default on this settlement agreement.

On October 6, 2015, the landlord for the former Vista, CA location filed a complaint against us in the Superior Court of California, County of San Diego for a Breach of Contract for a Promissory Note that we issued to him in connection with unpaid lease payments that we owed in the amount of $151,272.65 under the terms of the lease that we entered into for our Vista, CA location.

The Company is a co-defendant in a legal action filed October 22, 2015 for past-due fees for professional services in the amount of $194,569. Due to the early stage of this suit, the outcome cannot be determined at this time.

From time to time the Company may be named in claims arising in the ordinary course of business. Currently, no legal proceedings or claims, other than those disclosed above, are pending against or involve the Company that, in the opinion of management, could reasonably be expected to have a material adverse effect on its business and financial condition.

9. Subsequent Events

From December 31, 2015 to February 22, 2016, the Company issued to investors a total of 3,083 Preferred D shares for total cash of $308,333.

From December 31, 2015 to February 22, 2016, the Company issued to investors a total of 116,666,667 common shares converted from 70 preferred C shares.

From December 31, 2015 to February 22, 2016, the Company issued 150,000,000 of common shares from conversions of debt amounting $7,500.

In February, 2016, the Company consolidated its coating services only (CSO) operations in Augusta, GA, closing the Tacoma WA and Fair Lawn NJ plants.

In February, 2016, the Company moved its headquarters from Vista CA to San Diego CA.

10. Discontinued Operations

On April 15, 2015, the Company completed the sale of E Build & Truss to former employees of the Company. In exchange for certain assets, the purchaser accepted $112,102 of liabilities related to E Build and Truss. As such, this has been accounted for as a discontinued operation in the June 30, 2015 financial statements. The Company has recorded a loss from discontinued operations of $216,164 as a result of this transaction, which is comprised of $363,500 in revenues, $44,702 in gain on asset sale and $624,366 in costs and expense. Included in the $1,148,229 of liabilities from discontinued operations in 2015 are $205,113 in accounts payable and $943,116 in accrued expenses related to E Build and Truss.

Item 2.

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

The following management's discussion and analysis should be read in connection with the information presented in our unaudited condensed consolidated financial statements and related notes for the three and six months ended December 31, 2015 included in this report and our audited consolidated financial statements and related notes for the year ended June 30, 2015 included in our Annual Report on Form 10-K filed on November 16, 2015 with the Securities and Exchange Commission.

Forward-Looking Statements

Certain statements concerning our plans and intentions included herein may constitute forward-looking statements. There are a number of factors that may affect our future results, including, but not limited to, (a) our ability to obtain additional funding for operations, (b) the continued availability of management to develop the business plan and (c) on ramping the supply side which yields higher profits (d) successful development and market acceptance of our products.

This quarterly report may contain both historical facts and forward-looking statements. Any forward-looking statements involve risks and uncertainties, including, but not limited to, those mentioned above. Moreover, future revenue and margin trends cannot be reliably predicted.

Overview

Eco Building Products, Inc., or "ECOB", has developed a line of eco-friendly protective wood coatings, Eco Red Shield ^TM and Eco Clear Shield ^TM , that extend the lifecycle of framing lumber and other wood products used in the construction of single-family homes and multi-story buildings. The Company has expanded its’ product offering to include Eco Fire Break ^TM , Eco Disaster Break ^TM , Eco Armor Paint ^TM , Eco D-Fence ^TM , Eco Disaster Cleaner ^TM , Eco Flood Caulk ^TM , Eco Trim ^TM , and Eco Christmas Tree Protection ^TM .

Eco Building Products wood coatings are topically applied to a wide range of lumber products providing protection from mold, mildew, fungus, decay, wood rot, wood ingesting insects, including Formosan termites. Eco Red Shield™ also serves as a fire inhibitor; significantly increasing treated lumber’s resistance to fire, by way of decreasing the smoke (fire gases) index, slowing ignition time and flame spread.

The ECOB system of coatings is eco-friendly and remains chemically stable over time. The coatings emit virtually zero volatile organic compounds (VOCs), do not leech heavy metals or toxins into groundwater, and do not allow for the growth and propagation of various molds on the cured film surface, that have the potential to contaminate occupant indoor air quality. More importantly, ECOB coatings prevent the degradation of structural lumber that potentially requires existing homes to be periodically renovated resultant of rot and/or insect damage, thereby indirectly preserving our forests.

In 2015, the Company changed its business model to focus on coating services only and chemical sales. The Company no longer purchases lumber for coating and resells the treated lumber. Customers have their lumber shipped to one of three facilities: (i) Fair Lawn, New Jersey (consolidated with Augusta GA in February 2016), (ii) Tacoma, Washington (consolidated with Augusta GA in February 2016); or (iii) Augusta, Georgia.

Critical Accounting Policies

The preparation of our financial statements and related disclosures in conformity with generally accepted accounting principles in the United States of America, or GAAP, requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. These estimates and assumptions are based on historical experience and various other factors that we believe are reasonable under the circumstances. We consider our accounting policies related to revenue recognition, stock-based compensation, goodwill and purchased-intangible assets and accounting for income taxes to be critical accounting policies. A number of significant estimates, assumptions, and judgments are inherent in our determination of when to recognize revenue, how to estimate the best evidence of selling price for revenue recognition, the calculation of stock-based compensation expense, evaluation of the potential impairment of goodwill and purchased-intangible assets and the income tax related balances. We base our estimates and judgments on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates.

Fair Value Policy

Management believes there have been no significant changes during the six months ended December 31, 2015 to the items that we disclosed as our critical accounting policies and estimates in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2015 Annual Report on Form 10-K filed with the Securities and Exchange Commission. For a description of those accounting policies, please refer to our 2014 Annual Report on Form 10-K.

Going Concern

The Company's financial statements are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States of America and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. To date the Company has generated minimal operating revenues, losses from operations, significant cash used in operating activities, and is dependent upon its ability to obtain future financing and successful operations.

Our continuation as a going concern is dependent upon obtaining the additional working capital necessary to sustain our operations. Our future is dependent upon our ability to obtain financing and upon future profitable operations. The Company estimates the current operational expenses of approximately one hundred fifty thousand dollars a month is required to continue to operate. This is achieved either through profit from sales; or by management seeking additional financing through the sale of its common stock, and/or through private placements; the minimum operational expenses must be met in order to relieve the threat of the company’s ability to continue as a going concern. There is no assurance that our current operations will be profitable or we will raise sufficient funds to continue operating. The Company continues to trim overhead expenses to meet revenues. Utilization of the credit facilities secured in the period have allowed the company to increase sales of finished goods resulting in higher gross revenues and increasing profits. We expect the company will continue to gain market share having an inventory of finished goods ready for immediate sales resulting in a continued trend towards profitability. The Company has focused primarily on the direct sales of coating services and chemical sales to affiliates. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event we cannot continue in existence. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

Financial Condition and Results of Operations

Results of Operations for the Three and Six Months Ended December 31, 2015 as Compared to the Three and Six Months Ended December 31, 2014

Revenues - For the three months ended December 31, 2015, the Company had total revenues of $111,374 from product sales, as compared to $777,366 in revenues of product sales for three month period ended December 31, 2014. The decrease in revenue is mainly attributed to the loss of a large, unprofitable customer and the discontinuance of lumber sales as a product line.

For the six months ended December 31, 2015, the Company had total revenues of $387,125 of product sales as compared to $1,653,115 for the six months ended December 31, 2014. The decrease was also due to the loss of a large, unprofitable customer and the discontinuance of lumber sales as a product line.

Cost of Sales and Gross Loss - The gross loss for the three months ended December 31, 2015 and December 31, 2014 was $148,015 and $101,263, respectively. The gross loss for both years can be attributed to plant consolidation and closing costs and excess capacity in all of our production facilities

The gross loss for the six months ended December 31, 2015 and December 31, 2014 was $223,452 and $350,129, respectively. The gross loss for both years can also be attributed to plant consolidation and closing costs and excess capacity in all of our production facilities

Operating Expenses - For the three months ended December 31, 2015, our total operating expenses were $537,721 or $434,214 below the three months ended December 31, 2014 of $971,935. The significant reduction in expenses year over year can be attributed to a reduction in head count and other expense reductions by new management. Included in our operating expenses for the three months ended December 31, 2015 were general and administration compensation and related costs of $180,172. Professional fees included in our operating expenses for the three months ended December 31, 2015 amounted to $99,188. Other significant operating costs we incurred during the three months ended December 31, 2015 included rent of $23,187, sales and marketing of $28,442, research and development of $79,591, and other general and administrative costs of $127,141.

For the six months ended December 31, 2015, our total operating expenses were $1,074,998 or $922,333 below the six months ended December 31, 2014 of $1,997,331. The significant reduction in expenses year over year can also be attributed to a reduction in head count and other expense reductions by new management. Included in our operating expenses for the six months ended December 31, 2015 were general and administration compensation and related costs of $290,533. Professional fees included in our operating expenses for the six months ended December 31, 2015 amounted to $228,763. Other significant operating costs we incurred during the six months ended December 31, 2015 included rent of $42,360, sales and marketing of $60,366, research and development of $159,564, and other general and administrative costs of $293,413.

Operating Loss - As a result of the aforementioned, the operating loss for the three months ended December 31, 2015 was reduced to $685,735 or $434,214 below the three months ended December 31, 2014 operating loss of $1,073,198.

For the six months ended December 31, 2015, the operating loss was $1,298,449 or $1,049,010 below the six months ended December 31, 2014 operating loss of $2,347,459.

Other Income and Expenses - For the three months ended December 31, 2015 we had other expenses that included interest expense of $74,080. We incurred $9,372,884 for the loss on derivative of our convertible notes payable significantly due to the conversion to common shares and the decrease in the stock price. This is compared to the three months ended December 31, 2014, in which our other income and expenses included interest expense of $1,013,524 and gain on derivative liability of $686,710.

For the six months ended December 31, 2015 we had other expenses that included interest expense of $508,171. We incurred $16,007,731 for the loss on derivative of our convertible notes payable and Preferred C and D shares. This is compared to the six months ended December 31, 2014, in which our other expenses that included interest expense of $2,039,981. We incurred $5,748,916 for the gain on derivative of our convertible notes payable.

Net Loss

The net loss of $10,672,795 and $18,638,050 for the three months and six months ended December 31, 2015, respectively, were primarily a result of derivative expense.

Liquidity and Capital Resources

On December 31, 2015, we had $967 cash on hand. During the six months ended December 31, 2015, net cash used in our operating activities amounted to $1,072,461, which included $288,062 amortization of debt discount, $16,007,731 loss on derivative liability fair value adjustment significantly due to the conversion to common shares and the decrease in stock price. Cash of $1,204,331 was provided by financing activities during the same period, $738,449 proceeds from issuance of preferred D stock and $855,250 proceeds from notes payable.

If current and projected revenue growth does not meet management estimates and proceeds received from future financing are insufficient, we may choose to raise additional capital through debt and/or equity transactions, reduce certain overhead costs through the deferral of salaries and other means, and settle liabilities through negotiation. Currently, we do not have any commitments or assurances for additional capital, nor can we provide assurance that such financing will be available to us on favorable terms, or at all. If, after utilizing the existing sources of capital available to us, further capital needs are identified and we are not successful in obtaining the financing, we may be forced to curtail our existing or planned future operations.

We may continue to incur operating losses over the next three months. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in our stage of development. Such risks include, but are not limited to, an evolving and unpredictable business model and the management of growth. To address these risks we must, among other things, continue to grow our customer base, implement and successfully execute our business and marketing strategy, continue to develop and upgrade technology and products, respond to competitive developments, and attract, retain and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so can have a material adverse effect on our business prospects, financial condition and results of operations.

Off Balance Sheet Arrangements

We have no off-balance sheet arrangements or financing activities with special purpose entities.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Item 4.

Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and our principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, or “disclosure controls,” pursuant to Exchange Act Rule 13a-15(e) as of December 31, 2015 and all interim subsequent periods. Disclosure controls are controls and procedures designed to reasonably ensure that information required to be disclosed in our reports filed under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms. Disclosure controls include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the company in accordance with as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the (i) effectiveness and efficiency of operations, (ii) reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and (iii) compliance with applicable laws and regulations. Our internal controls framework is based on the criteria set forth in the Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on that evaluation, our principal executive officer and our principal financial officer has concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are not effective in ensuring that information required to be disclosed in our Exchange Act reports is recorded, processed, and summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms to allow timely decisions regarding required disclosure. The material weakness and significant deficiency identified by our management as of December 31, 2015 and all interim subsequent periods relates to the ability of the Company to record transactions and provide disclosures in accordance with U.S. GAAP. We did not have sufficient and skilled accounting personnel with an appropriate level of technical accounting knowledge and experience in the application of U.S. GAAP commensurate with our financial reporting requirements. Our staff needs substantial training to meet the demands of a U.S. public company and our staff’s understanding of the requirements of U.S. GAAP-based reporting are inadequate.

Material Weaknesses

During the period ended December 31, 2015, we determined that because of the limited personnel, lack of segregation of duties and manual process related to the tracking and valuation of our inventory, management determined that a material weakness existed in the processes, procedures and controls related to the preparation of our financial statements. This material weakness could result in the reporting of financial information and disclosures in future consolidated annual and interim financial statements that are not in accordance with generally accepted accounting principles.

The Company expects to take the following steps to remedy these weaknesses:

1. Continue the implementation and training of an ERP system in which will improve the segregation of duties issues and automate the tracking of costs related to inventory

2. Hire additional staff to assist the Controller to implement procedures improving the transaction processing, reconciliation and reporting process of inventory.

The Company expects to remediate these weaknesses prior to the completion of the quarter ended March 31, 2015.

The Company deemed that the internal control over financial reporting for the Company as of December 31, 2014 is not effective.

Remediation Initiative

We intend to provide U.S. GAAP training sessions to our accounting team and intend to increase the amount of training that each member of our accounting team receives. The training sessions will be organized to help our corporate accounting team gain experience in U.S. GAAP reporting and to enhance their awareness of new and emerging pronouncements with potential impact over our financial reporting.

Changes in Internal Controls

During the period covered by this report, there was no significant change in our internal controls over financial reporting or in other factors that materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

Except as disclosed below, we are currently not involved in any litigation that we believe could have a materially adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our company’s or our company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

The only litigation during the current period was the case of Trical Construction, Inc. v. Eco Building Products. The nature of the litigation involved Trical’s claim that it suffered various construction delays and other damages from Eco Building Products in connection with the construction of a 77 unit apartment building. The matter was ultimately resolved by settlement on August 1, 2014 in the amount of $180,564.50, with payment of $30,000 by Eco Building Products to Trical on that date and scheduled payments of $10,000 each month beginning on November 1, 2014 through February 1, 2016.

Item 1A. Risk Factors.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

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

See comments on Note 7, Common Stock Issuances -

During the six months ended December 31, 2015, the Company issued a total of 2,599455811 shares of its common stock as follows:

According to the conversion terms described under Note 7 of the Financial Footnotes, investors converted 3,290 shares of Preferred C Stock representing value of $329,042 into 2,142,801,108 shares of the Company’s Common Stock.

Common shares totaling 456,654,708 were issued in exchange for $65,077 of convertible notes.

The securities described above were issued to investors in reliance upon the exemption from the registration requirements of the Securities Act, as set forth in Section 4(2) under the Securities Act and Regulation D promulgated thereunder, as applicable, relative to sales by an issuer not involving any public offering, to the extent an exemption from such registration was required.

All of the foregoing securities are deemed restricted securities for purposes of the Securities Act. All certificates representing the issued shares of common stock, warrants and options described in this Item 2 included appropriate legends setting forth that the securities had not been registered and the applicable restrictions on transfer.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other information

None.

Item 6. Exhibits.

Number	Exhibit Title	Filing Method

3.1	Articles of Incorporation, filed as exhibit 3.1.1 with the registrant’s Registration Statement on Form SB-2, as amended; filed with the Securities and Exchange Commission on August 23, 2007.	Incorporated by Reference

3.2	Bylaws, filed as exhibit 3.2 with the registrant’s Registration Statement on Form SB-2, as amended; filed with the Securities and Exchange Commission on August 23, 2007.	Incorporated by Reference

3.3	Amended Articles of Incorporation ; filed as exhibit 3.1 with the registrant’s Current Report on Form 8-K; filed with the Securities and Exchange Commission on October 22, 2009	Incorporated by Reference

3.4	Amended Articles of Incorporation ; filed as exhibit 3.3 with the registrant’s Annual Report on Form 10-K; filed with the Securities and Exchange Commission on September 28, 2011	Incorporated by Reference

31.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed herewith

31.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	Filed herewith

32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Furnished herewith

32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	Furnished herewith

101.INS	XBRL Instance Document	Filed herewith

101.SCH	XBRL Taxonomy Schema	Filed herewith

101.CAL	XBRL Taxonomy Calculation Linkbase	Filed herewith

101.DEF	XBRL Taxonomy Definition Linkbase	Filed herewith

101.LAB	XBRL Taxonomy Label Linkbase	Filed herewith

101.PRE	XBRL Taxonomy Presentation Linkbase	Filed herewith

*In accordance with SEC Release 33-8238, Exhibit 32.1 is being furnished and not filed.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this reported to be signed on its behalf by the undersigned thereunto duly authorized.

	ECO BUILDING PRODUCTS, INC.

Date: February 24, 2016	By:	/s/ Tom Comery
		Tom Comery, President, Chief Executive Officer and Director
		(Principal Executive Officer)

Date: February 24, 2016	By:	/s/ Randall Smith
		Randall Smith, Chief Financial Officer
		(Principal Financial and Accounting Officer)

Exhibit 31.1

CERTIFICATION

OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Tom Comery, certify that:

I have reviewed this quarterly report on Form 10-Q of ECO BUILDING PRODUCTS, INC.;

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;

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

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

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

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;

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

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

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

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

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

Date: February 24, 2016

/s/ Tom Comery
Tom Comery
(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION

OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Randall Smith, certify that:

1.	I have reviewed this Form 10-Q of Eco Building Products, Inc.;

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

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

4.	The registrant’s other certifying officer(s) 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 13-a-15(f) and 15d-15(f)) for the registrant and have:

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

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

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

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

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

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

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

Date: February 24, 2016

/s/ Randall Smith
Randall Smith (Principal Financial Officer)

Exhibit 32.1

CERTIFICATION OF

PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report of Eco Building Products, Inc. (the “Company”) on Form 10-Q for the quarter ended December 31, 2015, as filed with the Securities and Exchange Commission on the date hereof, I, Tom Comery, Chief Executive Officer of the Company, certifies to the best of his knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

1. Such Quarterly Report on Form 10-Q for the quarter ended December 31, 2015, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in such Quarterly Report on Form 10-Q for the quarter ended December 31, 2015, fairly presents, in all material respects, the financial condition and results of operations of Eco Building Products, Inc.

Date: February 24, 2016

/s/ Tom Comery
Tom Comery
(Principal Executive Officer)

Exhibit 32.2

CERTIFICATION OF

PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report of Eco Building Products, Inc. (the “Company”) on Form 10-Q for the quarter ended December 31, 2015, as filed with the Securities and Exchange Commission on the date hereof, I, Randall Smith, Chief Financial Officer of the Company, certifies to the best of his knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

1. Such Quarterly Report on Form 10-Q for the quarter ended December 31, 2015, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

Date: February 24, 2016

/s/ Randall Smith
Randall Smith
(Principal Financial Officer)

Document And Entity Information - shares	6 Months Ended
Document And Entity Information - shares	Dec. 31, 2015	Feb. 22, 2016
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 31, 2015
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Entity Registrant Name	ECO Building Products, Inc.
Entity Central Index Key	0001409885
Current Fiscal Year End Date	--06-30
Entity Filer Category	Smaller Reporting Company
Trading Symbol	ECOB
Entity Common Stock, Shares Outstanding		3,489,745,293

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Dec. 31, 2015	Jun. 30, 2015
CURRENT ASSETS
Cash	$ 967	$ 40,306
Accounts receivable, net of allowance for doubtful accounts of $1,607 and $1,607, respectively	24,819	14,042
Inventories, net	158,778	171,631
Prepaid expenses	3,000	3,000
Other current assets	43,887	58,089
Total current assets	231,451	287,068
PROPERTY AND EQUIPMENT, net	706,615	592,679
TOTAL ASSETS	938,066	879,747
CURRENT LIABILITIES
Accounts payable	1,454,484	1,256,160
Payroll and taxes payable	1,517,550	1,571,783
Accrued interest	407,807	237,907
Other payables and accrued expenses	146,041	167,565
Derivative Liability	31,050,647	14,198,848
Convertible notes payable, net of debt discount	987,691	759,956
Current maturities of notes payable	23,916	23,916
Loans payable - other	1,378,070	838,245
Loans payable - related parties	2,000	45,000
Total current liabilities	36,968,206	19,099,380
LONG TERM LIABILITIES
Notes payable, less current maturities	63,410	69,778
Total long term liabilities	63,410	69,778
TOTAL LIABILITIES	37,031,616	19,169,158
LIABILITIES RELATED TO DISCONTINUED OPERATIONS	$ 1,148,229	$ 1,148,229
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT
Common stock, $0.001 par value, 10,000,000,000 shares authorized, 3,474,745,293 and 608,622,815 shares issued and 3,473,312,246 and 607,189,768 outstanding at December 31, 2015 and June 30, 2015 respectively	$ 3,223,079	$ 608,623
Treasury Stock	(1,434)	(1,434)
Additional paid-in capital	53,051,023	54,831,568
Accumulated deficit	(93,514,564)	(74,876,514)
Total stockholders' deficit	(37,241,779)	(19,437,643)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	938,066	879,747
Series A Preferred Stock [Member]
STOCKHOLDERS' DEFICIT
Preferred Stock, Value	0	0
Series B Preferred Stock [Member]
STOCKHOLDERS' DEFICIT
Preferred Stock, Value	0	0
Series C Preferred Stock [Member]
STOCKHOLDERS' DEFICIT
Preferred Stock, Value	101	104
Series D Preferred Stock [Member]
STOCKHOLDERS' DEFICIT
Preferred Stock, Value	$ 17	$ 10

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Allowance for Doubtful Accounts Receivable, Current	$ 1,607	$ 1,607
Common Stock, Par Value	$ 0.001	$ 0.001
Common Stock, Shares Authorized	10,000,000,000	10,000,000,000
Common Stock, Shares, Issued	3,223,078,626	608,622,815
Common Stock, Shares, Outstanding	3,221,645,579	607,189,768
Series A Preferred Stock [Member]
Preferred Stock, Par Value	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	30,000	30,000
Preferred Stock, Shares Issued	0	30,000
Preferred Stock, Shares Outstanding	0	30,000
Series B Preferred Stock [Member]
Preferred Stock, Par Value	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	9,250	9,250
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Series C Preferred Stock [Member]
Preferred Stock, Par Value	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	120,000	120,000
Preferred Stock, Shares Issued	101,099	104,440
Preferred Stock, Shares Outstanding	101,099	104,440
Series D Preferred Stock [Member]
Preferred Stock, Par Value	$ 0.001	$ 0.001
Preferred Stock, Shares Authorized	20,000	20,000
Preferred Stock, Shares Issued	17,114	9,979
Preferred Stock, Shares Outstanding	17,114	9,979

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2015	Dec. 31, 2014
REVENUE
Product sales	$ 111,374	$ 777,366	$ 387,125	$ 1,653,115
TOTAL REVENUE	111,374	777,366	387,125	1,653,115
COST OF SALES
Cost of sales - product	$ 259,389	878,629	610,576	2,003,244
Cost of sales - Labor		0	0	0
TOTAL COST OF SALES	$ 259,389	878,629	610,576	2,003,244
GROSS LOSS	(148,015)	(101,263)	(223,452)	(350,129)
OPERATING EXPENSES
Research and development	79,591	5,618	159,564	39,816
Marketing	28,442	18,543	60,366	48,267
Compensation and related expenses	180,172	533,927	290,533	1,104,928
Rent - facilities	23,187	60,054	42,360	112,235
Professional and consulting fees	99,188	206,301	228,763	390,832
Other general and administrative expenses	127,141	147,491	293,413	301,252
Total operating expenses	537,721	971,935	1,074,998	1,997,331
LOSS FROM OPERATIONS	(685,735)	(1,073,198)	(1,298,449)	(2,347,459)
OTHER INCOME (EXPENSE)
Interest expense	(74,080)	(1,013,524)	(508,171)	(2,039,981)
Gain (loss) on derivative liability	(9,372,884)	686,710	(16,007,731)	5,748,916
Impairment expense		0	0	88,985
Other Income	0	0	0	(243,496)
Gain (loss) on settlement of debt		18,000	0
Derivative expense	(540,096)	(23,201)	(823,699)	(2,080,117)
Total other income	(9,987,060)	(332,015)	(17,339,601)	1,474,307
NET INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES	(10,672,795)	(1,334,596)	(18,638,051)	(656,989)
NET LOSS FROM DISCONTINUED OPERATIONS	0	(70,617)	0	(216,164)
NET INCOME (LOSS)	$ (10,672,795)	$ (1,405,213)	$ (18,638,050)	$ (873,153)
NET INCOME (LOSS) PER COMMON SHARE, FROM CONTINUING OPERATIONS - Basic & Diluted	$ (0.01)	$ (0.00)	$ (0.01)	$ (0.02)
NET INCOME (LOSS) PER COMMON SHARE, FROM DISCONTINUED OPERATIONS - Basic & Diluted	$ (0.01)	$ (0.00)	$ 0.00	$ (0.02)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic -	938,360,716	6,363,429,751	1,731,591,534	4,974,301,318
Diluted -	938,360,116	6,363,429,751	106,540,675,435	4,974,301,318

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($)	6 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Cash flows from operating activities
Net Income (Loss)	$ (18,638,050)	$ (873,153)
Adjustments to reconcile net income (loss) to net cash used by operating activities:
Depreciation and amortization expense	64,863	138,340
Amortization of debt discount & deferred financing costs	288,062	795,900
Initial interest expense on value of derivative (excess)	0	1,232,464
Derivative expense	823,699	2,080,117
Stock Based Compensation	0	27,292
Common Stock issuance for interest and OID	11,750	0
Financing costs	39,165	0
Loss on derivative liability fair value adjustment	16,007,731	(5,748,916)
Loss on extinguishment of Convertible Notes and Accounts Payable	0	243,496
Gain on settlement of notes payable	0	(88,985)
Expense paid on behalf of the Company	0	1,221,457
Assignment of accounts receivable to note payable holder	0	(473,703)
Changes in assets and liabilities:
Accounts receivable	10,777	(97,869)
Inventory	12,853	(65,299)
Other current assets and prepaid expenses	14,201	0
Accounts payable	198,324	224,588
Payroll and taxes payable	(54,245)	(26,801)
Deferred Revenue	0	0
Other payable and accrued expenses	(21,491)	20,900
Accrued interest	169,900	38,280
Net cash from continuing operations	(1,072,461)	(1,351,891)
Net cash from discontinued operations	0	0
Net cash from operating activities	(1,072,461)	(1,351,891)
Cash flows from investing activities
Purchase of property and equipment	(176,209)	(28,953)
Notes receivable payments	0	0
Net cash used by investing activities	(176,209)	(28,953)
Cash flows from financing activities
Payments on related party notes	(43,000)	(60,158)
Proceeds from issuance of common stock	0	100,000
Proceeds from issuances of series C convertible preferred stock	0	975,000
Proceeds from issuances of series D convertible preferred stock	738,749	0
Proceeds from convertible notes payable	855,250	180,000
Proceeds from notes payable - related parties	0	0
Payments on notes payable	(335,300)	(95,855)
Payments on notes payable - vehicles loan	(6,368)	(17,666)
Proceeds from related party line of credit advances	0	0
Payments on accrued interest		0
Net cash provided by financing activities	1,209,331	1,081,321
Net change in cash and cash equivalent	(39,339)	(299,523)
Cash and cash equivalent at the beginning of year	40,306	375,066
Cash and cash equivalent at the end of year	967	75,542
Supplemental disclosures of cash flow Information:
Cash Paid for Interest	8,333	8,333
Supplemental disclosure of non-cash investing and financing activities:
Common shares issued for conversion of notes payable	60,077	168,024
Shares issued for conversion of notes payable	643,901	0
Preferred shares issued for extinguishment of convertible notes payable & A/P	0	2,199,315
Shares issued for conversion of Pref C convertible preferred stock	2,406,388	1,064,676
Convertible notes issued for assumption of notes payable	0	410,000
Declared dividends	0	25,851
Purchase of property & equipment with loans payable	0	105,284
Debt Discount on convertible notes	$ 42,222	$ 696,085

Organization and Basis of Presentation

6 Months Ended

Dec. 31, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

1. Organization and Basis of Presentation

Basis of Presentation

Going Concern

Summary of Significant Accounting Policies

6 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

2. Summary of Significant Accounting Policies

Loss Per Share

Use of Estimates

Recent Accounting Pronouncements

Management has determined that no new accounting pronouncements during the period that would affect the condensed consolidated financial statements.

Balance Sheet details

6 Months Ended

Dec. 31, 2015

Balance Sheet Components [Abstract]

Balance Sheet Details [Text Block]

3. Balance Sheet details

As of December 31, 2015, inventories consisted of the following:

Chemicals	$	126,970
Lumber	$	31,808
	$	158,778

Property and Equipment

Accrued Liabilities

Derivative Liabilities

(1) dividend yield of 0%

(2) expected annual volatility of 203.47% to 263.89%

(3) risk-free interest rate of 0.28% 1.47%

(4) expected life of 0.53 days to 3.24 years, and

(5) estimated fair value of the Company’s common stock of $0.0001 to $0.0002 per share.

A reconciliation of the derivative liabilities from June 30, 2015 to December 31, 2015 is:

	Derivative Liabilities

Balance as of June 30, 2015		14,198,848
Additions related to embedded conversion features Preferred Series D issued		1,474,141
Conversion of convertible debt and Preferred Series C to common stock		(760,602)
Additions related to embedded conversion features of Convertible Debt		130,529
Loss on increase in value of derivative liabilities		16,007,731
Balance as of December 31, 2015	$	31,050,647

Notes Payable

6 Months Ended

Dec. 31, 2015

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

4. Notes Payable

The following table summarizes the notes payable as of December 31 2015.

	As of December 31, 2015
Description	Short term		Long term

				—
Convertible notes		1,042,674		—
Less discount to notes payable		(54,983)		—
Convertible notes, net		987,691		—
				—

Auto notes payable		23,916		63,410
Loans payable – other		1,357,388		—

	$	2,368,995	$	63,410

Convertible notes

Inventory Note Payable - $833,333

Note Payable - $100,000

Senior Convertible Note - $14,167

Loans Payable – Other

Auto Loan

Secured Promissory Note - $44,500

Inventory Note Payable – up to $1,200,000

Lease in Default - $151,275

Note Payable-$500,000

Note Payable-$250,000

Note Payable-$20,000

Note Payable-$60,000

Promissory Note-$275,000

Future Receivables Sale Agreement

Future Receivables Sale Agreement - $225,000

Future Receivables Sale Agreement - $70,000

Future Receivables Sale Agreement - $120,000

Settlement and Release Agreement - $100,000

In connection with this agreement, the Company borrowed an additional $32,000 from this same party at 0% in a short-term bridge financing arrangement which has been repaid.

Loans Payable – Related Party

Related Party Transactions

6 Months Ended

Dec. 31, 2015

5. Related Party Transactions

See Note 4 for Loans payable – related parties and equity issuances in Note 7.

Fair Value of Assets and Liabilities

6 Months Ended

Dec. 31, 2015

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

6. Fair Value of Assets and Liabilities

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Application of Valuation Hierarchy

Advances from Related Party. The Company assessed that the fair value of this liability approximates its carrying value due to its short-term nature.

Notes Payable – Related Party. The Company assessed that the fair value of this liability to approximate its carrying value based on the effective yields of similar obligations.

Convertible Notes Payable.

The Company assessed that the fair value of this liability approximates its carrying value due to its short-term nature.

Loans Payable - Related Party. The Company assessed that the fair value of this liability approximates its carrying value due to its short-term nature.

Loans Payable - Other. The Company assessed that the fair value of this liability approximates its carrying value due to its short-term nature.

Stockholders' Deficit

6 Months Ended

Dec. 31, 2015

Equity [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

7. Stockholders' Deficit

Preferred Stock

Series A Preferred Stocks:

On January 27, 2014 the Board of Directors authorized 30,000 shares of Class A Preferred Stock with a par value of $0.001.

The terms of the preferred series A shares are as follows:

⋅

Series A Preferred stock is not convertible.

⋅

Each share of Series A Preferred stock is entitled to 100,000 votes on matters that the holders of the Company's common stock may vote.

⋅

The Series A Preferred stock is redeemable by the company for no consideration at any time.

⋅

The Series A Preferred stock cannot vote on election or removal of directors.

⋅

The Series A Preferred stock has no stated dividend rate and has no liquidation preference.

Series B 12% Convertible Preferred Stock:

$925,000 Series B Preferred Stock Financing

T he terms of the Series B Preferred Stock (“Preferred B”) are as follows:

	⋅	The Preferred B Stock shall have no voting rights.
	⋅	The Preferred B Stock is convertible at any time at 60% of the lowest VWAP of the 20 days leading up to conversion multiplied by the stated value of $100.
	⋅	The Preferred B Stock has a 12% per annum stated dividend rate, which is calculated daily on a 360 day year.
	⋅	The Preferred B Stock shall have a liquidation preference equal to the stated value of each share of Preferred Stock or $100 per share.

Series C 12% Convertible Preferred Stock:

On May 30, 2014, the Company authorized 120,000 shares of a newly-created Series C 12% Convertible Preferred Stock, par value $0.001 per share (the “Preferred C Stock”).

The terms of the Preferred C Stock are as follows:

	⋅	The Preferred C Stock shall have no voting rights.
	⋅	The Preferred C Stock is convertible at any time at 60% of the lowest VWAP of the 20 days leading up to conversion multiplied by the stated value of $100.
	⋅	The Preferred C Stock has a 12% per annum stated dividend rate, which is calculated daily on a 360 day year. Any dividends, whether paid in cash or shares of Common Stock, that are not paid within five trading days following a dividend payment date shall continue to accrue and shall entail a late fee at 18% per annum. In addition, the dividend rate of 12% is subject to an adjustment up to 18% if at any time the Company does not have an amount equal to or greater than 150% of the authorized but unissued common shares that would be required (on an “if converted” basis) to settle the conversion of Preferred C Stock outstanding. As of December 31, 2015, the Company has accrued dividends on Preferred C Stock in the amount of $588,961. The amount of dividends has not yet been determined by the Company and the holders whether to be payable in cash, common stock or additional shares of Preferred C Stock.
	⋅	The Preferred C Stock shall have a liquidation preference equal to the stated value of each share of Preferred Stock or $100 per share.

The following table provides the activity of the Company’s Preferred C stock for the six months ended December 31, 2015:

Balance as of June 30, 2015		104,440
Preferred C Stock issued for cash		—
Preferred C Stock converted into Common Stock		(3,341)
Balance as of December 31, 2015		101,099

Preferred C Stock converted to Common Stock

Series D 12% Convertible Preferred Stock:

	⋅	The Preferred D Stock shall have no voting rights.
	⋅	The Preferred D Stock is convertible at any time at 60% of the lowest VWAP of the 30 days leading up to conversion multiplied by the stated value of $100.
	⋅	The Preferred D Stock has a 12% per annum stated dividend rate, which is calculated daily on a 360 day year. Any dividends, whether paid in cash or shares of Common Stock, that not paid within five trading days following a dividend payment date shall continue to accrue and shall entail a late fee at 18% per annum. In addition, the dividend rate of 12% is subject to an adjustment up to 18% if at any time the Company does not have an amount equal to or greater than 150% of the authorized but unissued common shares that would be required (on an “if converted” basis) to settle the conversion of Preferred C Stock outstanding. As of December 31, 2015, the Company has accrued dividends on Preferred D Stock in the amount of $158,251. The amount of dividends has not yet been determined by the Company and the holders whether to be payable in cash, common stock or additional shares of Preferred D Stock.
	⋅	The Preferred D Stock shall have a liquidation preference equal to the stated value of each share of Preferred Stock or $100 per share.

Preferred D Stock issued for cash

During the six months ended December 31, 2015, investors purchased 7,387 shares of Preferred D Stock for $738,749 of cash.

Common Stock Issuances

During the six months ended December 31, 2015, the Company issued a total of 2,614,455,811 shares of its common stock as follows:

373,321,375 shares were issued for conversion of convertible debt and accrued interest with an aggregate value of $60,077;

15,000,000 shares were issued pursuant to default provisions of a note payable with an aggregate value of $11,750; and

2,226,134,436 shares were issued for conversion of 3,341 shares of convertible Preferred C stock as described above.

Treasury Stock

There were no treasury stock transactions during the six months ended December 31, 2015. The Company held 1,433,047 shares of common stock as treasury stock at December 31, 2015.

Warrants

The following is a schedule of warrants outstanding as of December 31, 2015:

	Warrants Outstanding		Weighted Average Exercise Price		Weighted Average Remaining Life

Balance, June 30, 2015		20,000,000	$	0.02		4.21 Years
Warrants issued		-		-
Warrants expired		-		-
Warrants cancelled		-		-		-
Balance, December 31, 2015		20,000,000	$	0.02		3.71 Years

Options

The following is a schedule of options outstanding as of December 31, 2015:

	Options Outstanding		Weighted Average Exercise Price		Weighted Average Remaining Life		Aggregate Intrinsic Value

Balance, June 30, 2015		6,986,227	$	0.02		9.98 Years	$	-
Options granted		-		-				-
Options cancellation/expired		-		-		-		-
Balance, December 31, 2015		6,986,227	$	0.02		8.37 Years	$	-

As of December 31, 2015, 4,093,114 of the 6,986,227 options are exercisable. Compensation expense of $10,994 remaining, will be recognized over the remaining vesting period.

Commitments and Contingencies

6 Months Ended

Dec. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

8. Commitments and Contingencies

Purchase commitments

All parties agree;

All parties agree that the original agreement referenced hereto and the modifications as defined in this Amendment are in good standing.

Legal Proceedings

Subsequent Events

6 Months Ended

Dec. 31, 2015

Subsequent Events [Abstract]

Subsequent Events [Text Block]

9. Subsequent Events

From December 31, 2015 to February 22, 2016, the Company issued to investors a total of 3,083 Preferred D shares for total cash of $308,333.

From December 31, 2015 to February 22, 2016, the Company issued to investors a total of 116,666,667 common shares converted from 70 preferred C shares.

From December 31, 2015 to February 22, 2016, the Company issued 150,000,000 of common shares from conversions of debt amounting $7,500.

In February, 2016, the Company consolidated its coating services only (CSO) operations in Augusta, GA, closing the Tacoma WA and Fair Lawn NJ plants.

In February, 2016, the Company moved its headquarters from Vista CA to San Diego CA.

Discontinued Operations

6 Months Ended

Dec. 31, 2015

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

10. Discontinued Operations

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

Earnings Per Share, Policy [Policy Text Block]

Loss Per Share

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

Management has determined that no new accounting pronouncements during the period that would affect the condensed consolidated financial statements.

Balance Sheet details (Tables)

6 Months Ended

Dec. 31, 2015

Balance Sheet Components [Abstract]

Schedule of Inventory, Current [Table Text Block]

As of December 31, 2015, inventories consisted of the following:

Chemicals	$	126,970
Lumber	$	31,808
	$	158,778

Schedule of Derivative Liabilities at Fair Value [Table Text Block]

A reconciliation of the derivative liabilities from June 30, 2015 to December 31, 2015 is:

	Derivative Liabilities

Balance as of June 30, 2015		14,198,848
Additions related to embedded conversion features Preferred Series D issued		1,474,141
Conversion of convertible debt and Preferred Series C to common stock		(760,602)
Additions related to embedded conversion features of Convertible Debt		130,529
Loss on increase in value of derivative liabilities		16,007,731
Balance as of December 31, 2015	$	31,050,647

Notes Payable (Tables)

6 Months Ended

Dec. 31, 2015

Debt Disclosure [Abstract]

Schedule of Debt [Table Text Block]

The following table summarizes the notes payable as of December 31 2015.

	As of December 31, 2015
Description	Short term		Long term

				—
Convertible notes		1,042,674		—
Less discount to notes payable		(54,983)		—
Convertible notes, net		987,691		—
				—

Auto notes payable		23,916		63,410
Loans payable – other		1,357,388		—

	$	2,368,995	$	63,410

Stockholders' Deficit (Tables)

6 Months Ended

Dec. 31, 2015

Warrant [Member]

Stockholders Equity [Line Items]

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

The following is a schedule of warrants outstanding as of December 31, 2015:

	Warrants Outstanding		Weighted Average Exercise Price		Weighted Average Remaining Life

Balance, June 30, 2015		20,000,000	$	0.02		4.21 Years
Warrants issued		-		-
Warrants expired		-		-
Warrants cancelled		-		-		-
Balance, December 31, 2015		20,000,000	$	0.02		3.71 Years

Employee Stock Option [Member]

Stockholders Equity [Line Items]

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

The following is a schedule of options outstanding as of December 31, 2015:

	Options Outstanding		Weighted Average Exercise Price		Weighted Average Remaining Life		Aggregate Intrinsic Value

Balance, June 30, 2015		6,986,227	$	0.02		9.98 Years	$	-
Options granted		-		-				-
Options cancellation/expired		-		-		-		-
Balance, December 31, 2015		6,986,227	$	0.02		8.37 Years	$	-

Series C Preferred Stock [Member]

Stockholders Equity [Line Items]

Schedule of Stockholders Equity [Table Text Block]

The following table provides the activity of the Company’s Preferred C stock for the six months ended December 31, 2015:

Balance as of June 30, 2015		104,440
Preferred C Stock issued for cash		—
Preferred C Stock converted into Common Stock		(3,341)
Balance as of December 31, 2015		101,099

Organization and Basis of Presentation (Details Textual) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Retained Earnings (Accumulated Deficit), Total	$ (93,514,564)	$ (74,876,514)

Summary of Significant Accounting Policies (Details Textual) - shares shares in Billions	6 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	203.0
Convertible Preferred Stock [Member]
Weighted Average Number Diluted Shares Outstanding Adjustment		12.6
Convertible Notes [Member]
Weighted Average Number Diluted Shares Outstanding Adjustment	22.0
Series C Preferred Stock [Member]
Conversion of Stock, Shares Converted	178.3
Series D Preferred Stock [Member]
Conversion of Stock, Shares Converted	2.7

Balance Sheet details (Details) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Inventory [Line Items]
Inventory, Net, Total	$ 158,778	$ 171,631
Chemicals [Member]
Inventory [Line Items]
Inventory, Net, Total	126,970
Lumber [Member]
Inventory [Line Items]
Inventory, Net, Total	$ 31,808

Balance Sheet details (Details 1)	6 Months Ended
Balance Sheet details (Details 1)	Dec. 31, 2015 USD ($)
Balance	$ 14,198,848
Additions related to embedded conversion features Preferred Series D issued	1,474,141
Conversion of convertible debt and Preferred Series C to common stock	(760,602)
Additions related to embedded conversion features of Convertible Debt	130,529
Loss on increase in value of derivative liabilities	16,007,731
Balance	$ 31,050,647

Balance Sheet details (Details Textual) - USD ($)	6 Months Ended
Balance Sheet details (Details Textual) - USD ($)	Dec. 31, 2015	Jun. 30, 2015
Accrued Payroll Taxes And Accrued Penalties	$ 825,578
Liability for Uncertain Tax Positions, Current	651,999
Inventory, Work in Process, Net of Reserves	47,264
Accumulated Depreciation, Depletion and Amortization, Reclassifications from Property, Plant and Equipment	$ 64,863
Share Price	$ 100
Stock Issued During Period, Shares, Conversion of Convertible Securities	738,749
Stock Issued During Period, Value, Conversion of Convertible Securities	$ 1,474,141
Derivative Liability, Current	$ 31,050,647	$ 14,198,848
Warrant [Member]
Fair Value Assumptions, Expected Volatility Rate	203.47%
Fair Value Assumptions, Risk Free Interest Rate	1.47%
Convertible Debt [Member] \| Warrant [Member]
Fair Value Assumptions, Expected Dividend Rate	0.00%
Convertible Debt [Member] \| Warrant [Member] \| Maximum [Member]
Fair Value Assumptions, Expected Volatility Rate	263.89%
Fair Value Assumptions, Risk Free Interest Rate	1.47%
Fair Value Assumptions, Expected Term	3 years 2 months 26 days
Share Price	$ 0.0002
Convertible Debt [Member] \| Warrant [Member] \| Minimum [Member]
Fair Value Assumptions, Expected Volatility Rate	203.47%
Fair Value Assumptions, Risk Free Interest Rate	0.28%
Fair Value Assumptions, Expected Term	15 days
Share Price	$ 0.0001

Notes Payable (Details)	Dec. 31, 2015 USD ($)
Debt Instrument [Line Items]
Long-term Debt, Gross	$ 987,691
Long-term Debt, Excluding Current Maturities, Total	2,368,995
Long-term Debt, Total	63,410
Convertible Debt [Member]
Debt Instrument [Line Items]
Long-term Debt, Gross	1,042,674
Debt Instrument, Unamortized Discount	(54,983)
Auto Notes Payable [Member]
Debt Instrument [Line Items]
Long-term Debt, Current Maturities, Total	23,916
Long-term Debt, Excluding Current Maturities, Total	63,410
Loans Payable [Member] \| Non-Related Party [Member]
Debt Instrument [Line Items]
Long-term Debt, Current Maturities, Total	$ 1,357,388

Notes Payable (Details Textual) - USD ($)							1 Months Ended											6 Months Ended
Notes Payable (Details Textual) - USD ($)	Dec. 15, 2015	Nov. 10, 2015	May. 14, 2015	Mar. 06, 2015	Nov. 12, 2014	May. 14, 2014	Dec. 30, 2015	Nov. 30, 2015	Sep. 30, 2015	Sep. 28, 2015	Sep. 16, 2015	Aug. 31, 2015	Jul. 29, 2015	Apr. 30, 2015	Mar. 31, 2015	Nov. 30, 2014	Sep. 16, 2014	Dec. 31, 2015	Dec. 31, 2014	Jul. 14, 2015	Jun. 30, 2015	Apr. 02, 2015	Mar. 25, 2015	Jan. 16, 2015	Nov. 19, 2014	Jul. 21, 2014	Jul. 18, 2014	Apr. 11, 2014	Mar. 31, 2014	Feb. 14, 2014
Notes Payable [Line Items]
Stock Issued During Period, Value, Conversion of Convertible Securities																		$ 1,474,141
Preferred Stock converted into Common Stock																		738,749
Interest Payable, Current																		$ 407,807			$ 237,907
Lease Obligation Defaulted																		151,275
Capital Lease Obligations									$ 151,275
Repayments of Related Party Debt																		43,000	$ 60,158
Promissory Notes [Member]
Notes Payable [Line Items]
Proceeds from Issuance of Long Term Debt for purchasing Inventory														$ 60,000
Debt Instrument, Interest Rate, Stated Percentage																						6.00%
Senior Convertible Note [Member]
Notes Payable [Line Items]
Amortization of Debt Discount (Premium)		$ 1,979
Debt Instrument, Unamortized Discount		1,417
Debt Instrument, Increase, Accrued Interest							$ 435
Convertible Notes Payable		14,167
Proceeds from Issuance of Debt		$ 12,750
Debt Instrument, Interest Rate, Increase (Decrease)		22.00%
Debt Instrument, Convertible, Weighted Average Discount Price		40.00%
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger		55.00%
Other Short-term Borrowings																		12,188
Senior Convertible Note One [Member]
Notes Payable [Line Items]
Amortization of Debt Discount (Premium)								$ 1,203
Debt Instrument, Unamortized Discount								1,417
Debt Instrument, Increase, Accrued Interest							265
Convertible Notes Payable								14,167
Proceeds from Issuance of Debt								$ 12,750
Debt Instrument, Interest Rate, Increase (Decrease)								22.00%
Debt Instrument, Convertible, Weighted Average Discount Price								40.00%
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger								51.00%
Other Short-term Borrowings																		12,964
Senior Convertible Note Two [Member]
Notes Payable [Line Items]
Amortization of Debt Discount (Premium)							38
Debt Instrument, Unamortized Discount							1,389
Debt Instrument, Increase, Accrued Interest							8
Convertible Notes Payable							13,889
Proceeds from Issuance of Debt							$ 12,500
Debt Instrument, Interest Rate, Increase (Decrease)							22.00%
Debt Instrument, Convertible, Weighted Average Discount Price							40.00%
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger							51.00%
Other Short-term Borrowings							$ 13,851
Promissory Note [Member]
Notes Payable [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	24.00%
Short-term Debt, Total	$ 275,000
Debt Instrument, Periodic Payment, Total	$ 25,000
Convertible Debt [Member]
Notes Payable [Line Items]
Debt Instrument, Unamortized Discount																		54,983
Convertible Debt [Member] \| Inventory Note Payable [Member] \| Related Party [Member]
Notes Payable [Line Items]
Debt Instrument, Face Amount																	$ 750,000
Debt Instrument, Interest Rate During Period																	10.00%
Original Issue Discounts																		76,515
Debt Instrument, Convertible, Conversion Price																	$ 0.20
Amortization of Debt Discount (Premium)																		230,905
Interest Payable, Current																		250,980
Interest Rate Debt in Default																	18.00%		18.00%
Discount on Debt Instrument																	$ 1,001,326
Convertible Notes Payable																		944,902
Convertible Debt [Member] \| Inventory Note Payable [Member] \| Related Party [Member] \| Pre Stock Split [Member]
Notes Payable [Line Items]
Debt Conversion, Converted Instrument, Warrants or Options Issued																	20,000,000
Convertible Debt [Member] \| Inventory Note Payable [Member] \| Related Party [Member] \| Post Stock Split [Member]
Notes Payable [Line Items]
Debt Conversion, Converted Instrument, Warrants or Options Issued																	20,000,000
Class of Warrant or Right, Exercise Price of Warrants or Rights																	$ 0.02
Convertible Debt [Member] \| Inventory Note Payable [Member] \| Non-Related Party [Member]
Notes Payable [Line Items]
Debt Instrument, Face Amount																											$ 1,200,000
Long-term Debt, Current Maturities, Total																		183,456
Interest Payable, Current																		37,892
Debt Instrument, Unamortized Discount																		$ 15,981
Interest Rate Debt in Default																		24.00%
Discount on Debt Instrument																		$ 53,937
Convertible Debt [Member] \| Inventory Note Payable [Member] \| Non-Related Party [Member] \| Post Stock Split [Member]
Notes Payable [Line Items]
Debt Conversion, Converted Instrument, Warrants or Options Issued																		900,000
Convertible Debt [Member] \| Promissory Notes [Member]
Notes Payable [Line Items]
Proceeds from Issuance of Long-term Debt, Total																	$ 833,333
Debt Instrument, Face Amount					$ 100,000													$ 3,000				$ 60,000	$ 20,000		$ 100,000
Long-term Debt, Current Maturities, Total																		55,800
Proceeds From Issuance of Long Term Debt Gross					80,000
Original Issue Discounts					$ 20,000
Stock Issued During Period, Value, Conversion of Convertible Securities			$ 20,000
Preferred Stock converted into Common Stock			10,000,000
Interest Payable, Current																		$ 7,575
Gains (Losses) on Extinguishment of Debt			$ 47,000
Debt Instrument, Interest Rate, Stated Percentage																		0.00%					6.00%		6.00%
Debt Instrument, Increase, Accrued Interest																		$ 1,474
Convertible Notes Payable																		20,000
Debt Default Percentage Of Interest Rate														10.00%	10.00%
Debt Instrument, Term														30 days	30 days
Convertible Debt [Member] \| Promissory Notes [Member] \| Post Stock Split [Member]
Notes Payable [Line Items]
Preferred Stock converted into Common Stock												25,000,000				12,500,000
Stock Issued During Period, Shares, Restricted Stock Award, Gross					12,500,000
Debt Instrument, Increase, Accrued Interest																		11,852
Convertible Notes Payable																		100,000
Convertible Debt [Member] \| Additional Promissory Notes [Member]
Notes Payable [Line Items]
Debt Instrument, Face Amount																								$ 20,000
Debt Instrument, Interest Rate, Stated Percentage																								6.00%
Convertible Debt [Member] \| Promissory Note [Member]
Notes Payable [Line Items]
Interest Payable, Current																		7,626
Convertible Debt [Member] \| Common Stock [Member] \| Inventory Note Payable [Member] \| Related Party [Member]
Notes Payable [Line Items]
Stock Issued During Period, Value, Conversion of Convertible Securities																		$ 35,877
Preferred Stock converted into Common Stock																		219,321,375
Convertible Debt [Member] \| Common Stock [Member] \| Additional Promissory Notes [Member]
Notes Payable [Line Items]
Stock Issued During Period, Shares, Restricted Stock Award, Gross																		30,000,000
Debt Instrument, Increase, Accrued Interest																		$ 2,147
Convertible Notes Payable																		20,000
Convertible Debt [Member] \| Minimum [Member] \| Common Stock [Member] \| Inventory Note Payable [Member] \| Non-Related Party [Member]
Notes Payable [Line Items]
Stock Issued During Period, Value, Conversion of Convertible Securities																		$ 24,200
Convertible Debt [Member] \| Maximum [Member] \| Common Stock [Member] \| Inventory Note Payable [Member] \| Non-Related Party [Member]
Notes Payable [Line Items]
Preferred Stock converted into Common Stock																		154,000,000
Auto Loan Payable [Member]
Notes Payable [Line Items]
Long-term Debt, Current Maturities, Total																		$ 23,916
Auto Loan Payable [Member] \| Long Term Debt, Issue One [Member]
Notes Payable [Line Items]
Debt Instrument, Face Amount																										$ 83,821
Debt Instrument, Interest Rate, Stated Percentage																										5.49%
Monthly Installment of Loan Repayment																										$ 1,671
Contractual Obligation, Future Minimum Payments Due, Remainder of Fiscal Year																										27,064
Contractual Obligation, Due in Fifth Year																										$ 60,262
Secured Debt [Member]
Notes Payable [Line Items]
Long-term Debt, Current Maturities, Total																		44,500			$ 44,500
Other Loans Payable							$ 360,000
Secured Debt [Member] \| Majority Shareholder [Member]
Notes Payable [Line Items]
Debt Instrument, Face Amount																														$ 500,000
Interest Expense, Debt						$ 45,000									$ 45,000
Long-term Debt, Current Maturities, Total																		85,911
Product Financing Arrangement [Member]
Notes Payable [Line Items]
Debt Instrument, Face Amount				$ 75,000						$ 120,000	$ 70,000		$ 220,500
Long-term Debt, Current Maturities, Total																		87,164
Debt Instrument, Agreed Repayment Amount				120,750						153,000	96,250		309,375
Debt Instrument, Agreed Repayment, Alternative Daily Amount				$ 1,038						$ 1,196	$ 1,019		$ 2,163
Debt Instrument, Imputed Interest Rate				184.23%						98.00%	177.00%		123.00%
Convertible Notes Payable				$ 73,500
Product Financing Arrangement [Member] \| Accounts Receivable [Member]
Notes Payable [Line Items]
Long-term Debt, Current Maturities, Total																		78,165
Debt Instrument, Interest Rate, Stated Percentage				12.00%
Debt Instrument, Agreed Repayment Amount				$ 102,750
Product Financing Arrangement [Member] \| Maximum [Member]
Notes Payable [Line Items]
Long-term Debt, Current Maturities, Total																		11,917
Notes Payable, Other Payables [Member] \| Chief Technical Officer [Member]
Notes Payable [Line Items]
Long-term Debt, Current Maturities, Total																		2,000
Repayments of Related Party Debt																		$ 43,000
Notes Payable, Other Payables [Member] \| Majority Shareholder [Member]
Notes Payable [Line Items]
Debt Instrument, Face Amount																												$ 250,000
Interest Expense, Debt															$ 22,500
Debt Instrument, Increase, Accrued Interest									36,300
Due to Related Parties									$ 150,000
Settlement and Release Agreement [Member] \| Promissory Notes [Member]
Notes Payable [Line Items]
Debt Instrument, Face Amount																													$ 100,000
Debt Instrument, Interest Rate, Stated Percentage																		0.00%		25.00%
Debt Instrument, Increase, Accrued Interest																		$ 10,182
Convertible Notes Payable																		$ 85,000
Debt Default Percentage Of Interest Rate																		6.00%
Proceeds from Issuance of Debt																		$ 32,000

Stockholders' Deficit (Details)	6 Months Ended
Stockholders' Deficit (Details)	Dec. 31, 2015 shares
Stockholders Equity [Line Items]
Preferred C Stock converted into Common Stock	(738,749)
Series C Preferred Stock [Member]
Stockholders Equity [Line Items]
Balance	104,440
Preferred C Stock issued for cash	0
Preferred C Stock converted into Common Stock	(3,341)
Balance	101,099

Stockholders' Deficit (Details 1) - $ / shares	6 Months Ended	12 Months Ended
Stockholders' Deficit (Details 1) - $ / shares	Dec. 31, 2015	Jun. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Balance at the end	6,986,227
Warrant [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Balance at the beginning	20,000,000
Warrants Outstanding, Warrants issued	0
Warrants Outstanding, Warrants expired	0
Warrants Outstanding, Warrants cancelled	0
Balance at the end	20,000,000	20,000,000
Balance at the beginning	$ 0.02
Weighted Average Exercise Price, Warrants issued	0
Weighted Average Exercise Price, Warrants expired	0
Weighted Average Exercise Price, Warrants cancelled	0
Balance at the end	$ 0.02	$ 0.02
Weighted Average Remaining Life	3 years 8 months 16 days	4 years 2 months 16 days

Stockholders' Deficit (Details 2) - USD ($)	1 Months Ended		6 Months Ended	12 Months Ended
Stockholders' Deficit (Details 2) - USD ($)	Nov. 30, 2013	Apr. 30, 2011	Dec. 31, 2015	Jun. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Balance at the end			6,986,227
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Balance at the beginning			6,986,227
Options Outstanding, Options granted	800,000	400,000	0
Options Outstanding, Options cancelled/expired			0
Balance at the end			6,986,227	6,986,227
Balance at the beginning			$ 0.02
Weighted Average Exercise Price, Options granted	$ 0.10	$ 0.10	0
Weighted Average Exercise Price, Options cancelled/expired			0
Balance at the end			$ 0.02	$ 0.02
Weighted Average Remaining Life			8 years 4 months 13 days	9 years 11 months 23 days
Balance			$ 0
Balance			$ 0	$ 0

Stockholders' Deficit (Details Textual) - USD ($)	1 Months Ended						6 Months Ended
Stockholders' Deficit (Details Textual) - USD ($)	Mar. 31, 2015	May. 30, 2014	Apr. 17, 2014	Jan. 27, 2014	Nov. 30, 2013	Apr. 30, 2011	Dec. 31, 2015	Jul. 02, 2015	Jun. 30, 2015	Feb. 26, 2014
Stockholders Equity [Line Items]
Convertible Preferred Stock, Terms of Conversion	The Preferred D Stock shall have no voting rights. The Preferred D Stock is convertible at any time at 60% of the lowest VWAP of the 30 days leading up to conversion multiplied by the stated value of $100. The Preferred D Stock has a 12% per annum stated dividend rate, which is calculated daily on a 360 day year. Any dividends, whether paid in cash or shares of Common Stock, that not paid within five trading days following a dividend payment date shall continue to accrue and shall entail a late fee at 18% per annum. In addition, the dividend rate of 12% is subject to an adjustment up to 18% if at any time the Company does not have an amount equal to or greater than 150% of the authorized but unissued common shares that would be required (on an “if converted” basis) to settle the conversion of Preferred C Stock outstanding. As of December 31, 2015, the Company has accrued dividends on Preferred D Stock in the amount of $158,251. The amount of dividends has not yet been determined by the Company and the holders whether to be payable in cash, common stock or additional shares of Preferred D Stock. The Preferred D Stock shall have a liquidation preference equal to the stated value of each share of Preferred Stock or $100 per share.
Treasury Stock, Number of Shares Held							1,433,047
Share Price							$ 100
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number							4,093,114
Allocated Share-based Compensation Expense							$ 10,994
Class of Warrant or Right, Outstanding							20,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance							6,986,227
Notes Payable, Other Payables [Member]
Stockholders Equity [Line Items]
Debt Conversion, Converted Instrument, Shares Issued							15,000,000
Debt Conversion, Converted Instrument, Amount							$ 11,750
Employee Stock Option [Member]
Stockholders Equity [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross					800,000	400,000	0
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price					$ 0.10	$ 0.10	$ 0
Fair Value Assumptions, Risk Free Interest Rate					2.35%
Fair Value Assumptions, Expected Volatility Rate					257.00%
Share Price					$ 0.038
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period					5 years
Sharebased Compensation Arrangement By Sharebased Payment Award Award Effective Agreement Date Vesting Rights Percentage					50.00%
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value					$ 21,987
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance							6,986,227		6,986,227
Warrant [Member]
Stockholders Equity [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross							0
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price							$ 0
Fair Value Of Warrants							$ 438,590
Fair Value Assumptions, Risk Free Interest Rate							1.47%
Fair Value Assumptions, Expected Volatility Rate							203.47%
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number, Beginning Balance							20,000,000		20,000,000
Convertible Debt [Member]
Stockholders Equity [Line Items]
Debt Conversion, Converted Instrument, Shares Issued							373,321,375
Debt Conversion, Converted Instrument, Amount							$ 60,077
Redeemable Convertible Preferred Stock [Member]
Stockholders Equity [Line Items]
Preferred Stock, Shares Authorized							500,000,000
Purchase Agreement [Member] \| Warrant [Member]
Stockholders Equity [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross							20,000,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price							$ 0.02
Chief Executive Officer [Member] \| Employee Stock Option [Member]
Stockholders Equity [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross					5,786,227
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price					$ 0.0038
Chief Technical Officer [Member] \| Employee Stock Option [Member]
Stockholders Equity [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross					800,000	400,000
Series A Preferred Stock [Member]
Stockholders Equity [Line Items]
Preferred Stock, Shares Authorized							30,000		30,000
Preferred Stock, Par or Stated Value Per Share				$ 0.001			$ 0.001		$ 0.001
Preferred Stock, Voting Rights				Each share of Series A Preferred stock is entitled to 100,000 votes on matters that the holders of the Company's common stock may vote.
Series A Preferred Stock [Member] \| Board Of Directors [Member]
Stockholders Equity [Line Items]
Preferred Stock, Shares Authorized				30,000
Series B Preferred Stock [Member]
Stockholders Equity [Line Items]
Preferred Stock, Shares Authorized			9,250				9,250		9,250
Preferred Stock, Par or Stated Value Per Share			$ 0.001				$ 0.001		$ 0.001	$ 0.001
Preferred Stock Additional Shares Issued			2,500
Convertible Preferred Stock, Terms of Conversion			The terms of the Series B Preferred Stock (“Preferred B”) are as follows: The Preferred B Stock shall have no voting rights. The Preferred B Stock is convertible at any time at 60% of the lowest VWAP of the 20 days leading up to conversion multiplied by the stated value of $100. The Preferred B Stock has a 12% per annum stated dividend rate, which is calculated daily on a 360 day year. The Preferred B Stock shall have a liquidation preference equal to the stated value of each share of Preferred Stock or $100 per share.				925,000
Preferred Stock, Dividend Rate, Percentage			12.00%
Preferred Stock, Liquidation Preference Per Share			$ 100
Series B Preferred Stock [Member] \| Board Of Directors [Member]
Stockholders Equity [Line Items]
Preferred Stock, Shares Authorized										6,750
Common Stock [Member]
Stockholders Equity [Line Items]
Convertible Preferred Stock, Shares Issued upon Conversion							2,226,134,436
Stock Issued During Period, Value, New Issues							$ 2,614,455,811
Conversion of Stock, Shares Issued							2,226,134,436
Common Stock [Member] \| Warrant [Member]
Stockholders Equity [Line Items]
Share Price							$ 158,251
Series D Preferred Stock [Member]
Stockholders Equity [Line Items]
Preferred Stock, Shares Authorized							20,000		20,000
Preferred Stock, Par or Stated Value Per Share	$ 0.001						$ 0.001		$ 0.001
Dividends Payable	$ 158,251
Preferred Stock issued for cash							7,387
Stock Issued During Period, Value, New Issues							$ 738,749
Conversion of Stock, Shares Converted							2,700,000,000
Series D Preferred Stock [Member] \| Preferred Stock [Member]
Stockholders Equity [Line Items]
Preferred Stock, Shares Authorized								20,000
Series D Preferred Stock [Member] \| Board Of Directors [Member]
Stockholders Equity [Line Items]
Preferred Stock, Shares Authorized	10,000
Series C Preferred Stock [Member]
Stockholders Equity [Line Items]
Preferred Stock, Shares Authorized							120,000		120,000
Preferred Stock, Par or Stated Value Per Share		$ 0.001					$ 0.001		$ 0.001
Convertible Preferred Stock, Terms of Conversion		The Preferred C Stock shall have no voting rights. The Preferred C Stock is convertible at any time at 60% of the lowest VWAP of the 20 days leading up to conversion multiplied by the stated value of $100. The Preferred C Stock has a 12% per annum stated dividend rate, which is calculated daily on a 360 day year. Any dividends, whether paid in cash or shares of Common Stock, that are not paid within five trading days following a dividend payment date shall continue to accrue and shall entail a late fee at 18% per annum. In addition, the dividend rate of 12% is subject to an adjustment up to 18% if at any time the Company does not have an amount equal to or greater than 150% of the authorized but unissued common shares that would be required (on an “if converted” basis) to settle the conversion of Preferred C Stock outstanding. As of December 31, 2015, the Company has accrued dividends on Preferred C Stock in the amount of $588,961. The amount of dividends has not yet been determined by the Company and the holders whether to be payable in cash, common stock or additional shares of Preferred C Stock. The Preferred C Stock shall have a liquidation preference equal to the stated value of each share of Preferred Stock or $100 per share.
Preferred Stock, Dividend Rate, Percentage		12.00%
Dividends Payable							$ 588,961
Preferred Stock issued for cash							0
Conversion of Stock, Shares Converted							178,300,000,000
Conversion of Stock, Amount Converted							$ 334,042
Conversion of Stock, Shares Issued							3,341
Series C Preferred Stock [Member] \| Preferred Stock [Member]
Stockholders Equity [Line Items]
Conversion of Stock, Shares Converted							3,341
Series C Preferred Stock [Member] \| Board Of Directors [Member]
Stockholders Equity [Line Items]
Preferred Stock, Shares Authorized		120,000

Commitments and Contingencies (Details Textual) - USD ($)			1 Months Ended			12 Months Ended
	Oct. 06, 2015	Aug. 01, 2014	Oct. 22, 2015	Apr. 15, 2015	Nov. 30, 2014	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2015	Jan. 18, 2011
Purchase Commitment, Remaining Minimum Amount Committed									$ 1,815,450
Loss Contingency, Damages Sought, Value	$ 151,272.65		$ 194,569
Litigation Settlement, Amount		$ 180,564.50
Payments for Legal Settlements		$ 30,000		$ 2,500	$ 10,000
Loss Contingency, Settlement Agreement, Terms					November 1, 2014 through February 1, 2016
Loss Contingency, Accrual, Current								$ 123,065
Hartindo AF21 Product Purchase, Distribution and Services Agreement [Member]
Purchase Commitment, Description						1,264	842
Purchase Commitment, Remaining Minimum Amount Committed						$ 3,530,352	$ 2,351,706

Subsequent Events (Details Textual) - USD ($)	1 Months Ended	6 Months Ended
Subsequent Events (Details Textual) - USD ($)	Feb. 22, 2016	Dec. 31, 2015
Series C Preferred Stock [Member]
Subsequent Event [Line Items]
Conversion of Stock, Shares Converted		178,300,000,000
Stock Issued During Period, Shares, New Issues		0
Series D Preferred Stock [Member]
Subsequent Event [Line Items]
Conversion of Stock, Shares Converted		2,700,000,000
Stock Issued During Period, Shares, New Issues		7,387
Stock Issued During Period, Value, New Issues		$ 738,749
Subsequent Event [Member] \| Common Stock [Member] \| Investor [Member]
Subsequent Event [Line Items]
Convertible Preferred Stock, Shares Issued upon Conversion	116,666,667
Subsequent Event [Member] \| Series C Preferred Stock [Member] \| Investor [Member]
Subsequent Event [Line Items]
Conversion of Stock, Shares Converted	70
Subsequent Event [Member] \| Series D Preferred Stock [Member] \| Investor [Member]
Subsequent Event [Line Items]
Stock Issued During Period, Shares, New Issues	3,083
Stock Issued During Period, Value, New Issues	$ 308,333
Subsequent Event [Member] \| Convertible Debt [Member]
Subsequent Event [Line Items]
Debt Conversion, Converted Instrument, Amount	$ 150,000,000
Debt Conversion, Converted Instrument, Shares Issued	7,500

Discontinued Operations (Details Textual) - USD ($)	6 Months Ended
Discontinued Operations (Details Textual) - USD ($)	Dec. 31, 2015	Apr. 15, 2015
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal Group, Including Discontinued Operation, Liabilities, Current, Total	$ 1,148,229	$ 112,102
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent, Total	216,164
Disposal Group, Including Discontinued Operation, Revenue	363,500
Disposal Group, Deferred Gain on Disposal	44,702
Disposal Group, Including Discontinued Operation, Operating Expense	624,366
Disposal Group, Including Discontinued Operation, Accounts Payable, Current	205,113
Disposal Group, Including Discontinued Operation, Accrued Liabilities, Current	$ 943,116

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