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BlueNRGY Group Ltd – ‘20-F’ for 6/30/16

On:  Friday, 10/28/16, at 2:45pm ET   ·   For:  6/30/16   ·   Accession #:  1575705-16-189   ·   File #:  1-36136

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

10/28/16  BlueNRGY Group Ltd                20-F        6/30/16   11:5.7M                                   Premier Fin’l Fi… LLC/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 20-F        Annual Report by a Foreign Non-Canadian Issuer      HTML   1.29M 
 2: EX-4.18     Instrument Defining the Rights of Security Holders  HTML     48K 
 3: EX-4.19     Instrument Defining the Rights of Security Holders  HTML     47K 
 4: EX-4.20     Instrument Defining the Rights of Security Holders  HTML    152K 
 5: EX-4.21     Instrument Defining the Rights of Security Holders  HTML     83K 
 6: EX-4.22     Instrument Defining the Rights of Security Holders  HTML    286K 
 7: EX-4.23     Instrument Defining the Rights of Security Holders  HTML    536K 
10: EX-13.1     Annual or Quarterly Report to Security Holders      HTML      9K 
11: EX-13.2     Annual or Quarterly Report to Security Holders      HTML      9K 
 8: EX-12.1     Statement re: Computation of Ratios                 HTML     13K 
 9: EX-12.2     Statement re: Computation of Ratios                 HTML     12K 

UNITED STATES
SECURITIES AND EXCHANGE 

COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

(Mark One)

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

or

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

For the fiscal year ended June 30, 2016

or

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

or

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

Date of event requiring this shell company report

From the transition period from ___________ to _____________

Commission file number 001-36136

BlueNRGY Group Limited

(Exact Name of Registrant as specified in its charter)

Richard Pillinger

Chief Financial Officer

BlueNRGY Group Limited

Level 11

32 Martin Place

Sydney NSW 2000

Tel: +61 (0)2 8069 7970

E-mail: Richard.pillinger@bluenrgy.com

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

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

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

None

(Title of Class)

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

Ordinary Shares no par value

(Title of Class)

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

As of June 30, 2016, 5,956,453 ordinary shares, no par value, were issued and outstanding.

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

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

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

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

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

Large accelerated filer  ☐                       Accelerated filer  ☐                          Non-accelerated filer  ☒

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

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

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

FORWARD-LOOKING STATEMENTS

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

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

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

PART I

ITEM 1.      IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2.     OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3.      KEY INFORMATION

3.A.             Selected Financial Data

The following consolidated statement of operations data as of June 30, 2016, 2015 and 2014 and for the three years ended June 30, 2016, 2015 and 2014 and summary consolidated balance sheet data as of June 30, 2016 and 2015 and for the two years ended June 30, 2016 and 2015 are derived from the audited consolidated financial statements of BlueNRGY Group Limited included elsewhere in this Report.

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

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

Consolidated Statements of Operations Data:

The following tables set forth, for the periods and dates indicated, certain information regarding the rates of exchange of A$1.00 into US$ based on the 4 pm market daily rate in Australia for cable transfers in Australian dollars as certified for customs purposes by the Reserve Bank of Australia. The exchange rate in effect on September 30, 2016, was AUD 1.00 = USD$0.7630.

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

3.B.             Capitalization and Indebtedness

Not applicable.

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

Not Applicable.

3.D.             Risk Factors

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

Risks Related to our Financial Condition

Since our restructuring and emergence from Voluntary Administration during our 2015 fiscal year, we have experienced losses from continuing operations that cannot be sustained by our liquidity and there is uncertainty that we can continue as a going concern.

We entered Voluntary Administration, or VA, in Australia in November 2014. Pursuant to a deed of company arrangement, or DOCA, we shed various unprofitable businesses and compromised liabilities of approximately A$38.8 million and exited VA on January 27, 2015, referred to as the Emergence Date. Notwithstanding the restructuring of our business through the VA process, several of our operating units, have subsequently experienced operating losses and continue to do so in the current fiscal year. Moreover, there is no assurance that the losses affecting some of our businesses can be avoided in the future or that cash flow from our profitable businesses will be sufficient to offset such losses. In conjunction with our corporate overhead and our debt service obligations, operating losses have depleted our liquidity to the extent that we cannot continue as a going concern unless we can achieve one or more of the following: higher levels of operating profitably now and in the future, raising additional debt or equity capital, deferring payment to creditors and selling assets. There is no assurance that we will have access to sufficient funds from such initiatives on terms acceptable to our Board of Directors (the “Board”), or on any terms, to meet our future needs.

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

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

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

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

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

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

Our project-based businesses, including monitoring, solar and energy efficiency / climate control systems, require continuing investment in sales and marketing activities to generate leads to replenish or grow the sales pipeline. Consequently, our success depends heavily on the ability to fund such initiatives. The time taken for a lead generated from marketing and advertising activity to completion of the associated installation can vary from one month to over six months. All of our project-based businesses require us to utilize our own working capital to fund operations between progress payments and through retention hold-back periods that can extend up to a year. The monitoring business is a net consumer of cash due largely to the requirement to fund system development expenses necessary to provide a competitive product offering to our customers. Our O&M business typically requires that we invest in staff and other operational capability in advance of payment from customers. We currently lack the capital and liquidity to adequately fund all of these businesses. Additional cash will be needed to fund any growth. Consequently, our project activities, particularly in the large-scale solar sector have been constrained, leading to losses that are ongoing and an inability to fully capitalize on opportunities to generate revenue. We must raise additional capital, further curtail operations in some of our lines of business or divest some of our business units to achieve profitability. Failure to do so increases the likelihood that we will not be able to continue as a going concern, or may cause the value of our ordinary shares to decline or become worthless.

Our indebtedness to lenders and other creditors is significant relative to our liquidity and we may encounter demands for payment that we cannot meet, which could have adverse consequences for our business and future prospects.

Our instalment notes and other liabilities payable by our corporate parent and our major subsidiaries as of June 30, 2016 (excluding current trade balances and accruals and Redeemable Preference Shares) was approximately A$8.6 million in the aggregate and has increased subsequently. While we have negotiated to satisfy this indebtedness in the future, (refer to Item 5.B. under the heading “Indebtedness”), our ability to meet our obligations when payment is due will also depend on our cash reserves, available additional financing and ongoing operating performance. There can be no assurance that we will possess or be able to secure the resources to meet these obligations when they become due.

There can be no assurance that creditors who have agreed to payment terms will continue to forbear if we cannot meet those terms. In such case, or in cases where there is no agreement to forbear, we may receive demands for immediate payment that exceed our ability to pay or attempts to enforce collection of amounts due. Our failure to satisfy or refinance these obligations when due could have a material adverse impact on the indebted operating subsidiaries and could jeopardize our ability or that of the affected operating subsidiaries to continue in business and could cause us to liquidate, resulting in the total loss of value to our shareholders.

Our growth strategy and the future success of our company is based, in part, on pursuing acquisitions of operating companies that operate as competitors or are complementary to our existing lines of business. If we are not successful in completing such acquisitions, or realizing the anticipated benefits from such transactions, then it could have a material adverse effect on our results of operations and financial condition.

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

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

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

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

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

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

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

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

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

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

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

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

Risks Related to Our Industry and Business

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

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

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

We typically expect to complete projects initiated under the BOT model within one to three months from the commencement of construction. However, our prior experience in selling a portfolio of solar projects demonstrates that closing a sale of commissioned projects can be delayed for months for factors not anticipated at the time installation starts. When we complete a project under the BOT model we may be exposed to changes in project value from the period between our commitment to undertake such a project and the time we sell it for a set price.

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

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

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

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

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

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

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

We do not have contractual relationships with financing sources that can be relied on to provide debt or equity financing to us or to our customers who require such financing in order to commit to projects or engage our services. The availability of financing for projects and our project receivables in the markets we serve is specific to the particulars of the installation and customer financial strength and varies widely. The consequence is that we are forced to compete for large-scale projects largely on price or from the limited universe of buyers who have their own sources of financing for projects and can provide us with up-front payments or frequent progress payments. As a result, the growth of our project-related business that is focused on the provision of engineering, procurement, and construction / installation, or EPC, services has been slow and irregular in all of the markets we serve, and there is no assurance that this will change or that our businesses with high EPC content will achieve consistent profitability.

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

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

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

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

A portion of our revenue in Australia is generated by construction contracts for new or renovated buildings, and, thus, a decrease in construction activity in our Australian markets could reduce our sales derived from construction-contracts and, in turn, adversely affect our revenues.

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

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

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

Problems with product quality and performance on projects and systems we design or install may damage our market reputation and cause our revenue and operating results to decline.

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

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

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

Except for system design and installation workmanship deficiencies, the warranty obligations related to our monitoring, climate control and solar systems are limited to pass-through obligations of the system component suppliers. Our contractual obligations to our customers in the event of a third-party component failure are generally limited to fielding service requests and organizing the repair or replacement of the faulty unit with the original component’s manufacturer for a period of time specified in the contract. In our experience, the costs of such service obligations have not been material and we expense them as incurred.

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

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

The further expansion of our business into new jurisdictions is one of our primary strategies for growing revenues from renewable system monitoring and operations and maintenance, or O&M, services utilizing our monitoring technology software platform and data. For example, our recent acquisition of Draker (refer to Item 4.A. under the heading “Recent Acquisitions”) greatly expanded our customer base for monitoring services in the United States and we expect the Inaccess transaction (refer to Item 4.A. under the heading “Recent Acquisitions”) to do the same for Europe, Africa and Latin America. The resulting customer and geographic diversification is expected to mitigate the impact of downturns in renewable energy demand in countries with large bases of installed capacity and in countries like the United States where we are currently installing systems for new solar projects. However, undertaking further international expansion of our businesses supporting solar system installations is a complex task that requires, among other things the identification of locations that are environmentally favorable for solar project development and that have suitable regulatory and tax policies, utility cost, tariff and interconnection structures that allow renewable energy to be cost competitive (after taking into account local subsidies) and access to cost-effective financing for project owners, among other considerations. Even if we successfully identify suitable countries for expansion, we may be unable to extend our business into these new locations if competitors enter the market first or are already well established. In addition, we may not have the necessary management, local knowledge or financial resources to undertake the successful and timely development or integration of projects in additional countries or mesh our work force and business systems with those of the businesses we acquired. Additionally, our ability to generate cash from existing operations may be slower than expected, depend on new investments or may not occur at all, resulting in the requirement for further funding to achieve our expansion plans that exceeds our ability to raise additional capital on acceptable terms. Our expansion plans could also be affected by cost overruns, failures or delays in obtaining government approvals of necessary permits and our inability to establish supply chains to serve new markets and other factors.

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

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

A portion of our revenue has been attributable to operations in countries other than Australia including the United States, Italy, Thailand and the United Kingdom and this is expected to extend to other countries in Europe, Asia and Latin America with the planned completion of the Inaccess acquisition and the assets of Draker, Inc. in September 2015 (refer to Item 4.A. under the heading “Recent Acquisitions”). We expect that consolidated revenue from our international activities could grow from approximately 13% and 60% for our 2015 and 2016 fiscal year respectively to more than 75%, by the end of our 2017 fiscal year. Risks associated with our operations in foreign areas include, but are not limited to:

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

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

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

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

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

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

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

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

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

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

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

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

We currently offer performance monitoring and control O&M and other services for renewable power generation systems targeting markets in North America, the Eurozone and the Pacific region, including various island nations. Through our pending acquisition of Inaccess (Refer to Item 4.A. under the heading “Recent Acquisitions.”) and other transactions, we intend to undertake and provide life-cycle services to project developments in other international markets. New geographic markets may have different characteristics from the markets in which we currently sell products, and our success will depend on our management’s ability to properly address these differences. These differences may include:

In addition, we have and will continue to pursue acquisitions and joint ventures to facilitate our expansion into new products and services and into new geographic markets. For example, we acquired Green Earth Developers, LLC (“GED”), a Georgia limited liability company, in July 2014 and BlueNRGY LLC, a Florida limited liability company in January 2015, the assets of Draker, Inc. in September 2015, and a minority equity position in Inaccess, a UK company, in July 2016, with a commitment to acquire the equity interests we do not currently own by January 2017. Whether the mechanism we use for expanding our business is through internal development or acquisition, failure to develop and introduce new products and services successfully, to generate sufficient revenue from these products and services to offset associated marketing and installation costs, or to otherwise effectively anticipate and manage the risks and challenges associated with expansion into new product and geographic markets, could adversely affect our revenues and our ability to achieve or sustain profitability.

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

Subsequent to our restructuring in VA and the effectiveness of the DOCA in January 2015, through the date of this Report, we have experienced the following changes among members of our Board and among members of our top management:

Board members: Effective January 27, 2015, the two then-existing members of the Board, William C. Morro and Carlo Botto, by unanimous resolution, appointed John H. Chapple, Yves-Regis Cotrel, and John F. Donohue as members of the Board, subject to receipt of their written consent to serve in such capacity. The appointment of Mr. Cotrel and Mr. Donohue became effective on January 27, 2015 and that of Mr. Chapple on February 2, 2015. Subsequently, on June 16, 2015 and July 31, 2015 respectively, John Chapple and John Donohue resigned due to concerns that they could not give adequate time to their other business commitments and to their role with the Board. In May, 2016, Mr. Olivier Ferrari was unanimously appointed by the remaining directors to fill one of the vacancies on our Board. With the exception of Mr. Botto, who has been employed by companies serving the power generation and energy trading sectors throughout his career, our directors have limited experience in the renewable energy sector.

Management. Effective June 5, 2015, Donald Reed, the senior executive officer and a former owner of GED resigned. Effective September 1, 2015 he was replaced by Peter Maros, who was also appointed a Senior Vice President and Managing Director of U.S. Renewable Solutions. Effective December, 2015 we appointed Mr. Steve Ritacco as our Chief Technology Officer, replacing the manager who held that position for BlueNRGY LLC. None of the executive managers of Draker, Inc. were hired following our acquisition of the Draker assets.

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

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

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

In December 2014, a class action securities suit was filed in a federal court in the Eastern District of Texas against the Company and various current and past officers and directors, namely Mr. William Morro, Mr. Carlo Botto, Mr. Richard Pillinger, Mr. Todd Barlow, Mr. Gerard McGowan and Mr. James Greer. Mr. Morro, formerly a non-executive independent director currently serves as Chairman of the Company’s Board and its Managing Director (the Australian entity equivalent of a CEO); Mr. Botto continues as a non-executive member of the Board; and Mr. Pillinger is the Company’s CFO. The other parties to the lawsuit are no longer associated with the Company. On August 13, 2015 the Texas Action was amended to include the Company’s subsidiary, CBD Energy (USA) Limited. In September 2016, a second class action securities suit was filed in the same Texas court based on substantially the same facts and circumstances arising prior to the effectiveness of the DOCA and alleging violations of different provisions of the securities regulations. Mr. McGowan is not named in this second action, presumably because the action would be stayed by his personal bankruptcy. Together, the lawsuits are referred to as the Texas Actions.

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

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

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

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

Our failure to timely consummate the purchase of the remaining Inaccess shares that we do not own could subject us to penalties that would impair the value of our investment in Inaccess Preferred shares.

We have committed to purchase all of the equity in Inaccess that we do not already own (refer to Item 4.A. under the heading “Recent Acquisitions”). Our default on the purchase subjects us to various adverse consequences, at the discretion of Inaccess or its other shareholders that could impair the value of our investment in Inaccess preferred shares, including any or all of the following: (i) conversion of our preferred shares into Inaccess ordinary shares, (ii) loss of our rights to representation on the Inaccess board of directors, (iii) redemption of our Inaccess shares by Inaccess at the original purchase price, and (iv) extinguishment of our right to purchase the remaining shares of Inaccess on the terms negotiated or any terms. We have no intention of defaulting, but circumstances beyond our control may cause us to do so, including our inability to timely raise funds necessary to meet the cash portion of our purchase commitments. We do not currently have the cash on hand to meet our obligations under the Inaccess share purchase agreement. The foregoing summary of consequences of a default under the Inaccess share purchase agreement is qualified in its entirety by the terms of the agreement, a copy of which is filed as an Exhibit hereto.

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

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

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

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

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

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

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

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

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

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

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

The Company’s operations are affected by global political, economic and market conditions. The economic downturn following the 2008 global financial crisis generally reduced the availability of liquidity and credit to fund business operations worldwide. In many countries the effects have lingered and slow economic growth and the inability of governments to fund incentives favouring renewable energy development dampens demand for new renewable investment and makes it less predictable. In the markets of particular interest to us, these effects are being acutely felt in Europe, where renewable developments are not growing at historical rates and the situation is likely to worsen. This dynamic has adversely affected some of our customers, suppliers and lenders and the lower pace of new solar installations in particular has limited opportunities for us to grow organically in Europe where competitors are entrenched. Because of the large installed base of projects in Europe, however, we still consider this a promising market to address through Inaccess and to extend additional services to the Inaccess customers.

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

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

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

The United States and many U.S. states, including California, Massachusetts, Nevada, New Jersey and North Carolina, and other countries such as the United Kingdom, Australia and Italy, have offered substantial incentives to offset the cost of solar power or wind generation systems. Although generally reduced from historical levels, such incentives continue to be available in many jurisdictions and can take various forms, including direct rebates, state tax credits, system performance payments and feed-in tariffs, and Renewable Energy Credits, referred to as RECs. However, there can be no assurance that these incentives will continue to be available in any or all of the jurisdictions in which we operate and, in many places, government policies and regulations are structured to will reduce over time or are scheduled to be eliminated. For example, in Australia the number of RECs received per KW installed has been reduced continuously and actions of the regulator can reduce the value of RECs with little advance notice and the U.S. federal tax credit applicable to solar projects is scheduled to be reduced from December 31, 2019. It is possible, and should be considered likely that the surviving incentives in most countries will ultimately be phased out altogether. In the UK and many European countries, minimum user prices for solar electricity production and feed-in tariffs are subject to reduction annually for new applications and are potentially subject to unannounced change for new and installed renewable power generation facilities; subsequent, unpredictable decrees and utility practices imposed or supported by regulators is likely to redefine rates and revenue generation potential for solar power plants, regardless of the commissioning date. A reduction in or elimination of such incentives could substantially increase the cost or reduce the economic benefit to owners of renewable power generation projects, resulting in significant reductions in demand for new renewable installations and our products and services. Our sales and margins could be disproportionally adversely affected because of our weak competitive position.

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

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

In addition, we believe that our ability to compete depends in part on a number of factors outside of our control, including:

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

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

The first commercial version of our monitoring system software was released in February 2015 and was deployed to only a few institutional customers on a trial basis when we acquired the monitoring platform of Draker, Inc. in September 2015. We have fully integrated and harmonized the BlueNRGY and Draker monitoring software to better serve the market and build on the more established base of U.S. customers served by the Draker system. However, if we complete the acquisition of Inaccess as expected, we will face a similar challenge of integrating its monitoring software and control technologies with our own and, notwithstanding their collective deployment on thousands of systems having a capacity of more than 6GW, neither entity’s software or services offerings are mature. The roll-out of our monitoring systems and related services to a broad spectrum of users comprising significant market share will require that we hire additional personnel to effectively and efficiently integrate the data feeds from a larger universe of sources than is currently possible. Because of the uncertainties about our ability to win customers and earn revenue, and the expectations that development and marketing costs will accelerate, we are unable to determine when, or if, the monitoring business will make a significant positive contribution to our profits and cash flow. This uncertainty is magnified by the competitive dynamics of the monitoring services and controls market. There are numerous competitors developing or marketing monitoring and control systems with at least some characteristics similar to ours and several of these competitors currently offer robust systems with features and capabilities similar or superior to those we are able to provide. Despite the proliferation of renewable power generating systems worldwide, asset ownership is beginning to concentrate and we believe that the market for monitoring services may be largely locked up by a small number of competitors within a few years. Primarily for this reason, we are investing aggressively, within the limitations of our liquidity, to accelerate system development and deployments. If we cannot capture meaningful market share quickly, we may be foreclosed from pursuing much of the available revenue from this sector and we may not realize a return on investment in the development of our monitoring system or related acquisitions or to cultivate a customer base of sufficient scale that purchases of support services such as O&M would be material to our financial results.

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

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

The renewable energy sectors we serve, and the monitoring and controls and related software business in particular, are notable for the pace of technological change and our operations could be adversely affected if we fail to keep pace with such changes; and changes in technology could make it difficult for us to be competitive with our products and service offerings and prevent us from achieving sustained profitability.

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

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

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

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

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

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

In all of our system installation businesses, if we fail to backstop the warranty obligations of our suppliers who fail to do so, we may face precipitous declines in our sales. We believe the importance of reputation as a provider of reliable systems is a critical factor in the sustainability of our businesses. However, taking on warranty obligations for suppliers who default could place a financial burden on us that we are unable to meet. Either course of action could damage or render our business non-viable.

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

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

Our business is highly dependant on and benefits from the declining cost of solar power generation systems per unit of electricity generated and an ample supply of key components and our financial results would be harmed if these dynamics reversed or did not continue.

A key driver in the pricing of solar energy systems and customer adoption of this form of renewable energy has been the declining cost of solar panels and the raw materials necessary to manufacture them, reductions in the costs of other components, lower power losses from electricity distribution and power conversion components and efficiencies in regulatory costs of installations. If these changes do not continue to produce reductions in the delivered cost of power produced from solar installations, growth in the industry could slow and our sales and financial results would suffer. Global supplies of solar panels have increasingly been provided by manufacturers based in China, some of whom benefit from favorable foreign regulatory regimes and governmental support, including subsidies. If this support were to decrease or be eliminated, if internal Chinese demand for panels increases to a level that exports are reduced, or if tariffs and import restrictions above current levels were to be imposed by U.S. or European governments, it could lead to higher prices for panels (or other components), reducing demand and margins. A similar adverse impact on our results would occur if our access to specialized technology from Chinese manufacturers is restricted or becomes more expensive.

If potential owners of solar PV systems are unable to secure financing on acceptable terms as a result of financial crisis, rising rates perceived instability of revenues or other factors, there could be a reduction in demand for solar PV systems and the monitoring, control and support services we offer.

Many developers and owners of solar PV systems depend on readily available financing to fund new systems and underpin liquidity and value of installed systems. Moreover, in the case of debt financed projects, even if lenders are willing to finance the purchase of these systems, an increase in interest rates, perceived financial or operating instability of owners and asset managers or a change in tax incentives could make it difficult for owners to secure financing on favorable terms, or at all. We believe that a substantial majority of solar PV system owners utilize significant debt financing in making their investments. Difficulties in obtaining or increased costs of debt financing could lower an investor’s return on investment in a solar PV installation, or make alternative power generation systems or other investments more attractive relative to solar PV systems. Any of these events could result in reduced demand for our systems and services, which could have a material adverse effect on our financial condition and results of operations.

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

Over the last few years, public disfavor of solar and wind farms in the United States, certain European countries and Australia that have historically encouraged such projects has been manifested in changes in government policies. In the opinion of our management, the public opposition to renewable power generation projects has been triggered by concerns such as that scarce farm land was being displaced, local aesthetics were being compromised and the cost of the power supplied from ground-based systems in particular did not justify government policy concessions and was leading to the approval of excessively high feed-in tariff rates by regulators. Key policy changes observed include reductions of subsidies applicable to ground-based solar installations relative to other types of projects and changes in permitting regulations that make ground-based installations difficult or practically impossible to start in some locales. Consequently, the number of economically feasible projects has declined in many areas. The resulting and expected reduction opportunities for us to support large-scale solar projects in these proven markets for us may constrain our overall market opportunity and will necessitate that we rely more heavily on serving emerging markets and developed markets that are unfamiliar to us. This is likely to reduce our growth potential and poses operational challenges that could adversely affect our financial performance.

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

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

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

Our businesses focused on system design and installation, including solar monitoring systems and new installations and energy efficiency / climate control systems, provide the preponderance of our revenue. Nevertheless, our small scale and weak financial condition have compelled us to obtain key components required by these businesses from a small number of suppliers who would offer us credit terms or produce products to our specifications. We believe that our commercial relationship with our critical suppliers in each of our business segments is currently good, but if we experience difficulty in making timely payments, our past experience has demonstrated that it will lead to immediate curtailment of shipments to us by suppliers, which in turn would reduce revenues and increase our supply costs. We do not maintain, or expect to be able to maintain, sufficient inventories to allow us to buffer the consequences of supply interruptions. Although alternative suppliers exist for most of the components we sell in our solar and climate control businesses, new suppliers may not be willing to ship to us on customary trade terms, or at all, due to our financial condition. Sometimes we are in a position of having only one source of component supply. The sudden loss of any of our current primary component supply relationships could cause a delay in order fulfilment and be disruptive to our operations and lead to financial losses.

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

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

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

We lack strong brand identity in our served markets and our failure to achieve greater prominence and favourable recognition of our brands could severely and adversely affect the viability of our solar-related businesses and the ability of the Company to continue as a going concern.

We have determined to apply our own BlueNRGY brand to some of our businesses and the acquired Draker brand to our monitoring products in the markets where Draker, Inc. was historically active, notably North America and Japan. The BlueNRGY brand is substantially unknown. It is therefore unclear whether or not the BlueNRGY brand will gain enough market acceptance to drive sales as we expect at a cost that allows us to be profitable. Although it was once recognized as the solar monitoring technology leader in the United States the Draker brand is associated with some execution and reliability problems for its systems and software in the period immediately prior to our acquisition of the Draker assets. Although we have invested heavily in remediating performance issues with the Draker software platform and in the fulfilment of new system orders, this may not be sufficient to overcome adverse market reputation and allow us to rebuild market share. If our brand choices constrain revenue and margin growth and delay our attainment of profitability, it would be detrimental to our overall business. If our brand gains recognition and acceptance in our served markets, our failure to effectively execute on delivery or service promises would be highly adverse to our prospects and create a window of opportunity for the continued growth of competitors utilizing similar technology and could foreclose us from establishing ourselves in key markets. The expense of simultaneously building two brands in multiple markets is significant and could further impair our liquidity and chances for success.

Risks Related to our Ordinary Shares

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

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

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

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

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

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

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

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

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

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

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

The SEC prohibits the use of Rule 144 for resale of securities issued by shell companies (other than business transaction related shell companies) or issuers that have been at any time previously a shell company. The SEC has provided an important exception to this prohibition, however, if the following conditions are met: the issuer of the securities that was formerly a shell company has ceased to be a shell company; the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act; the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company. We believe that, upon the filing of this Report, we will have met all of these requirements. In the 2014 and 2015 fiscal years, however, we did not file our Annual Report on Form 20-F in a timely fashion.

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

Although our NASDAQ listing application is currently pending until we meet the NASDAQ Capital Market’s initial listing requirements, there is no assurance that our application will be approved or that an active public market for our ordinary shares will develop or be sustained. Our ordinary shares only began trading on the OTC Markets on September 10, 2015 following a nine-month suspension and delisting from the NASDAQ Capital Market and it is not clear if an active market for our shares will develop. Since trading recommenced on the OTC Markets and we completed a 1-for-80 share consolidation on December 17, 2016, the highest trading volume recorded in a single day through September 30, 2016 was 11,560 shares, representing a total value of shares traded on such day of $23,120. This lack of an active market means that the number of persons interested in purchasing ordinary shares at or near bid prices at any given time may be relatively small or non-existent. This situation is attributable to a number of factors, including the fact that many of our shareholders are located in Australia and lack the capability or knowledge to trade in the U.S. markets, were issued unregistered shares, pursuant to the DOCA or in private placement transactions following our emergence from VA that are not currently eligible to trade in the U.S. market, the Company’s history of losses and the fact that we are a small company that is relatively unknown to stock analysts, stock brokers, institutional investors and others in the U.S. investment community that generate or influence sales volume. Even if we came to the attention of such persons, they tend to be risk-adverse and may be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares until such time as our business has demonstrated viability and we become larger and more seasoned. As a consequence, there may continue to be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer that has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on our stock price. There are no assurances that a broader or more active public trading market for our ordinary shares will develop or be sustained, or even that current trading levels experienced on the OTC Markets will be sustained.

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

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

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

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

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

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

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

We recently completed a 1-for-80 reverse share split which could may have adversely affected the market liquidity of our ordinary shares and could continue to do so and impair the value of your investment and harm our business.

On December 17, 2016 we effected a 1-for-80 share consolidation. This action may have depressed the value of our shares and continue to do so with the following adverse consequences:

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

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

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

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

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

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

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

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

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

Our principal shareholders include affiliates of W.H. Soul Pattinson and certain affiliates, referred to as WHSP, ESOL B.V., Mr. Y-R Cotrel, Mr. Emmanuel Cotrel, and Mr. Morro (the latter three are officers and/or directors of the Company) and they collectively control over 52.6% of our outstanding ordinary shares as of September 30, 2016.

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

A significant portion of our total outstanding shares has recently or may become eligible to be sold into the market, which could cause the market price of our ordinary shares to drop significantly or be sustained at low levels, even if our business is doing well.

Our ordinary shares issued in conjunction with the DOCA and to former holders of shares of BlueNRGY LLC who received our shares as consideration for its acquisition have recently become eligible to be sold or will be eligible to be sold immediately following effectiveness of the resale registration statement that we intend to file as soon as practicable following the filing of this Annual Report on Form 20-F. Sales of such shares could cause the market price of our ordinary shares to drop significantly or be sustained at low levels that impair realization of shareholder value and preclude acceptance of application to trade on the NASDAQ Capital Market.

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

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

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

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

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

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

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

Risks Related to Takeovers

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

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

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

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

ITEM 4.      INFORMATION ON THE COMPANY

4.A.             History and Development of the Company

We were originally formed on August 18, 1989 in Australia as London Securities Limited, a corporation subject to the laws of Australia, specifically, the Australian Corporations Act. Following our inception, we began acquiring energy generation assets. Subsequently, we undertook major adjustments in strategic focus and changed our name in 1996. After a suspension in trading on the ASX in 1998 and a restructuring in 1999, during which we had nominal non-cash assets and operations and again changed our name, we resumed trading on ASX on April 18, 2000. We adopted the name CBD Energy Limited on December 6, 2002. Operating as CBD Energy Limited, we reemphasized development of energy-related businesses and undertook new initiatives to acquire installation and service contractors delivering energy-efficient commercial-scale climate control systems. We entered VA on November 14, 2014 and our corporate organization and liabilities were restructured pursuant to the DOCA. We emerged from the VA on January 27, 2015 having retained a strategic focus on delivering and managing renewable energy generation and energy-efficient climate-control systems. On March 20, 2015 the Company’s name was changed to BlueNRGY Group Limited.

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

Recent Acquisitions

In July 2016 we acquired 22.41% of the equity interests of Inaccess Holdings Ltd., or Inaccess, a UK company specializing in monitoring and control systems and related software services. While the Inaccess technologies have broad applicability to the control and management of distributed operating systems applicable to many sectors, the company’s focus and product development has been targeted on the Solar PV and telecom sectors. Inaccess is one of the leading independent providers of systems for monitoring large-scale Solar PV installations and the generating capacity of the projects on which it is installed is approximately 4GW. We believe that the Inaccess business is complementary to that of our subsidiary, Draker Corporation and so, in September 2016, we elected to exercise our rights to acquire the remainder of the Inaccess equity that we do not already own. The agreement for doing so contemplates a closing in January 2017 on the terms set forth in the agreements included as an exhibit to this Annual Report.

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

In January 2015, we acquired 100% of the equity interests of BlueNRGY LLC, a U.S. company specializing in data acquisition, analysis and management related to the performance of geographically distributed energy generation systems and providing related operations and maintenance, or O&M, services. At the time of the BN Acquisition, BlueNRGY LLC was a development-stage company serving a small number of customers in Europe and Asia. Subsequently it has expanded the scope of its operations to include customers with U.S. and Australian generating assets. Consideration paid to the BlueNRGY LLC shareholders and shares issued to key executives and Directors of the Group as part of the transaction comprised in aggregate 1,927,175 of our ordinary shares. Based on the issuance of our ordinary shares to investors in a contemporaneous private placement at US$3.03 per share (after giving effect to the 1:80 share consolidation that occurred in December 2015) per share, the value of our shares issued to the BlueNRGY LLC shareholders was US$5.8 million. BlueNRGY LLC has its principal offices in Fort Lauderdale, FL.

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

Recent Divestitures/Liquidations

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

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

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

4.B.             Our Business

Overview

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

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

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

BlueNRGY’s operations support and maintenance optimization, or O&M businesses, are still in the development stage and not yet material to our operations. However, we intend to scale these rapidly in response to requests from our customers who want the benefit of applying our data-driven processes for maximizing the financial performance of their projects. In addition, our O&M unit oversees our own small portfolio of renewable generation assets, including the Chatham Project, which is discussed further below.

Over the past five years, we actively diversified our solar PV business geographically in order to capitalize on changing demand for new renewable energy generation. Since emergence from the VA process, we have continued our activities in Australia. We have focused expansion initiatives in selected U.S. states and to serve customers of our monitoring business because we have limited resources to extend our services to multiple markets and we believe we can expand profitably in the chosen markets and by serving our established customers. Including the experience of our GED subsidiary, acquired in July 2014, we have designed and completed more than 70MW of large-scale projects in Australia, the U.S. and other international markets and we have designed and installed more than 17,000 small-scale and residential systems in Australia. Because of market factors, we stopped pursuing residential installation opportunities following our emergence from VA.

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

Our wind project development business was historically confined to Australia and was active during our 2012 to 2014 fiscal years. During that period, we developed and managed the construction of wind farms with peak generating capacity of 107MW, including a 0.5 MW installation that we still own on Chatham Island and a wind farm at Taralga in New South Wales that was constructed at a cost of approximately A$290 million. As developer, we developed demonstrated competencies in negotiation of long-term energy off-take agreements, or PPAs, New development activities in the wind segment were curtailed upon emergence from VA, but we retained core competencies that we believe will have application in our Data Management and Performance Analytics business.

Our Industry

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

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

Source: http://fs-unep-centre.org/sites/default/files/publications/globaltrendsinrenewableenergyinvestment2016lowres_0.pdf

Although Figure 1 illustrates that the growth rate of aggregate investment levels in renewable energy capacity has slowed, installed generating capacity continues to grow rapidly because unit costs of installing renewable capacity are declining. According to the Renewables 2016 Global Status Report, or the REN21 Report, published by the Renewable Energy Policy Network for the 21^st Century (http://www.ren21.net/status-of-renewables/global-status-report/),installed global capacity of wind and solar generation systems reached 433GW and 227GW respectively at the end of 2015 and had year-over-year growth rates compared with 2014 of 63GW and 50GW respectively. This REN21 report also stated that in 2015, for the first time in history, investments in renewable energy in developing countries exceeded investments in developed economies.

We are active in the solar, wind, and energy efficiency sectors in specific geographies, however, our experience and technology can be applied in in any market. In the solar market we have historically focused primarily on small-scale commercial and residential installations, particularly in Australia, but we expect a continued shift in our revenue mix in our applicable lines of business toward larger-scale projects.

The Solar PV Segment

As reflected in Figure 1 the solar sector has become the largest recipient of investment capital among the renewable energy sectors. According to the REN Report, solar generating assets attracted $161 billion of investment commitments in in 2015, 56% of the total invested in clean energy for that year excluding large hydro projects >50MW. The solar sector encompasses a wide variety of commercial activity ranging from PV solar to solar thermal concentrators, including the monitoring and management of data pertaining to installed capacity. Progress in each of these areas of the Solar PV sector has contributed to making solar power more cost effective over time and this trend is continuing.

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

Figure 2, shown below, illustrates the Levelized Cost of Energy, or LCOE, for solar PV at year-end 2014 is at or below the retail price of electricity in many major markets, including markets served by us. As further discussed below, our management believes that the trend toward LCOE parity is continuing.

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

Source: Renewable Energy World article is utility scale solar growth economically viable by Philip Wolfe

Over the last several years, a dramatic reduction in the cost of components for solar PV systems, most notably in the modules that generate electricity, has led to reductions in the installed cost per watt of system capacity. The trajectory of the decline between 2009 and 2016 for the U.S. was charted by the Solar Energy Industry Association, or SEIA and is shown in Figure 3 below:

Figure 3: Prices and installation rates of solar PV systems in the United States (2000 – Q2, 2016)

Source: Industry Data SEIA Research and Resources

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

Figure 4: Reduction in solar PV modules Prices in Australia

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

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

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

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

Figure 5 Electricity price indices for households and businesses in Australia

Source: Australian Energy Council

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

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

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

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

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

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

United States. The regulatory incentives in the United States include a federal income tax credit that represents approximately 30% of the value of a project. In addition, a patchwork of state- and local-level programs exist that vary widely in structure and economic effect and may include tax credits or other deductions, outright grants, REC programs and mandated net metering or feed-in tariff arrangements that have the effect of further subsidizing solar installations. The availability of federal tax credit program was extended at the end of 2015 and now begins to step down toward phase out beginning in 2019. Incentive programs of states that were early boosters of solar are generally also declining in significance. In general, state level incentives such as net metering have tended to be most favorable to residential or small-scale solar installations and we expect this to continue to be the case. Our management also expects that the impending reduction in the federal tax credit will produce a high level of activity in calendar year 2016 – 2019, followed by a downturn in the pace of U.S. solar PV installations. The magnitude of any future downturn is unpredictable and depends on various factors including changes in system installation costs and expectations for retail and wholesale power generation costs.

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

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

Figure 7: Historical and projected residential capacity increases – 2001 to 2016

Source: Australia PV Institute (APVI) Solar Map

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

United States. Overall demand for PV solar installations has continue to grow in the United States following the extension of the Federal investment tax credit program at year-end 2015. As illustrated by Figure 8 below, according to a publication of the Solar Energy Industries Association, recent growth has been driven primarily by utility-scale and residential installations and this is forecast to continue. Other non-residential PV installations (commercial and industrial, or C&I, projects), which could fall into either small-scale or large-scale categories, have been relatively stable but are also forecast to grow. We expect this pattern to continue as long as the ITC remains at the 30% level, currently through 2019.

Figure 8: U.S. PV Installations, Q2 2016 Solar PV Forecast

Source: gtmresearch / Solar Energy Industries Association: http://www.seia.org/research-resources/solar-industry-data

This market opportunity creates substantial overall growth potential for participants in the U.S. market, including us.

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

The small-scale solar PV market in Australia is fragmented, with no dominant competitors. The three major energy retailers (Origin Energy, AGL and Energy Australia) have active installation businesses, and there are a number of other, even larger competitors. An Australian consultancy, Sunwiz, identified the largest installation businesses and their relative sales for the first six months of 2016 are depicted in Figure 9 below.

Figure 9: Sunwiz Top 10 Small-scale Solar PV Installers in July 2016

Source: Sunwiz- http//reneweconomy.com.au 2016 australia-break-5gw-rooftop-solar-mark-july-16858

In the United States, where our addressable market includes both large utility-scale and C&I segments, the market is highly fragmented. Based on the 2016 listing of the 500 Top Solar Contractors published by Solar Power World (http://www.solarpowerworldonline.com/2016-top-500-north-american-solar-contractors/):

Large-Scale Wind

Wind energy is currently among the most economic forms of large-scale renewable energy and can often be developed at scale in the regions where power is needed if the wind resource is strong. The wind sector encompasses the design and installation of the generating system (turbines & towers) and ongoing maintenance and management. As with other renewable energy sectors, installation of wind power generation capacity has grown rapidly over the past decade, although wind energy investments globally have recently plateaued, as shown in Figure 1 above. Hence, the wind sector represents an attractive market for the application of our monitoring and control systems and related services.

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

Table 10 - Cumulative Installed Wind Capacity in Australia

Sourced: http_ramblingsdc.net_Australia_WindPower.html#Wind_power_capacity_in_Australia

To satisfy the recently adopted Australian renewable energy target, the Australian Clean Energy Council estimates growth in wind capacity averaging between 500MW and 750MW per year will be required through 2020 is required in Australia’s installed wind generation capacity. As shown in Table 11 below, as of October 2105 there were 17 wind projects announced representing 2.6GW of wind generation capacity, with more than 10GW of projects in a less advanced stage.

Table 11. Major renewable electricity generation projects – October 2015

Source: Australian Bureau of Resources and Energy Economics – Electricity Generation Major Projects Report - 2015

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

Our understanding of the wind development markets in the US and Europe is less complete, but based on the Ren21 Report, we believe that there are expected to be numerous large-scale wind projects developed in both regions over the coming years.

Monitoring & Performance Analytics and O&M Services

The addressable market for services targeting the data management and operations and maintenance of renewable generation projects of any type and in any region is defined largely by the installed generation capacity, with adjustments for differences that exist in project sizes and vertical integration among regional markets. According to the REN21 Report, worldwide as of the end of 2015, 785GW of renewable power generation systems were in operation, including 227GW for Solar PV and 443GW for Wind.

Solar PV:

Distributed solar projects come in a wide variety of sizes, roughly characterized as residential (typically rooftop), small-scale commercial (often located on rooftops or elevated structures) and utility- or megawatt-scale. Data acquisition and control systems for these projects are provided by numerous specialist firms, equipment OEMs such as the inverter companies, and a handful of large, vertically integrated organizations and utilities or independent power producers who have developed proprietary systems. Given our capabilities to provide data management, operations and maintenance, the markets that are immediately relevant for our data management services and O&M services range from small-scale commercial installations, often involving fleets of systems and megawatt-scale installations for both small- and large-fleet owners. With the enhanced capabilities we will have gained through the Inaccess transaction, very large utility-scale projects and project fleets owned by vertically integrated solar companies are now also part of our target market scope.

United States: Based on statistics published by the Electric Industries Association shown in Figure 12 below, the total addressable market in the United States for monitoring and O&M for Solar PV distributed generation (which excludes large utility scale projects, approximated 8GW by the fourth quarter of 2015. Given growth rates, we estimate that this will represents more than an $800 million market by 2020. The geographic concentration of these installations is also illustrated in the chart below and provides perspective on states with the greatest market potential:

Figure 12: Representative Solar PV Installations

Source: US EIA Electric Power Monthly

We believe that competition for O&M services in the below-utility-scale market is highly fragmented and includes such firms as MaxGen Energy Services, Burke Electrical Solar, Petersen Dean, BorregoSolar and Trinity Solar. Notable competitors serving the U.S. market (both small-scale and utility- scale) with specialized data management and control systems for solar PV (both small-scale and mega-watt scale) include MeteoControl, Green Power Monitor, Power Factors, Solar Log, Swinerton, Also Energy, TriMark and various inverter OEMs.

We believe the U.S. utility-scale market includes many very large single-site power plants and a high concentration of ownership by vertically integrated companies such as First Solar, Sun Power and various utilities. While the solar installations run by these companies are potentially within our addressable market, our market share in this sub-segment is insignificant. We have had success in winning projects of this scale with special-purpose funds and operating entities (both public and private) that invest in renewable energy assets with PPAs for the cash flows derived from the projects and Inaccess has distinct competitive advantages in serving this market segment. Funds of this nature are increasingly providing the renewable energy industry with access to cost-effective capital, particularly in North America, that is one of the factors driving market growth and consolidation of renewable assets into portfolios, or fleets. According to Kaye Scholer – Investment Financing Opportunities in Alternative Energy 2015 report, six publicly-listed North American YieldCos (NRG Yield, TransAlta Renewables, Pattern Energy, Abengoa Yield, NextEra Energy Partners and TerraForm Power) secured $3.8 billion in equity on the public markets in 2014, more than three times the $1.1 billion reported by Clean Energy Pipeline as having been raised in 2013. The figures do not include acquisitions by other funds or independent power producers that we believe to be significant in number and to be amassing portfolios of renewable energy projects. YieldCos and similar aggregators of renewable generation assets, whether public or private, have requirements for enhanced data analytics delivered through a single platform and we believe they will form an important new category of customer in North America for our data analytics and O&M services that help to maximize power plant generation and revenue. Our management also believes that the aggregation of renewable asset ownership by specialized owners will grow globally and will create new customers for our services.

Many of the same firms who provide O&M services for the distributed generation market also serve the utility-scale market, including MaxGen Energy Services, Borrego Solar and Swinerton. Other companies such as EDF Renewables, the Global Asset Management unit of SunEdison and Next Phase Solar are providing services to the utility-scale market, however, we are not aware that any of these companies has significant market share.

Australia: We believe that the preponderance of solar PV installations in Australia have been residential or were constructed by the major vertically-integrated utilities. Only the latter of these categories is currently addressable by us with our current capabilities to provide either monitoring or O&M services in Australia. As the market matures and financing becomes more readily available, we believe that fleets of commercial installations will grow and that a viable distributed generation market for both our monitoring solutions and O&M services for solar PV will emerge.

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

Wind. Because data management, asset management and maintenance contracts on wind projects typically extend for several years, we believe our best opportunities to win new business in the wind sector are in areas where new projects are likely to be commissioned over the next several years rather than endeavoring to displace established service providers at seasoned projects. Collectively, the pipeline projects in our targeted regions represent an attractive market opportunity for our maintenance and data management services, but there can be no assurance that we will be successful in garnering contracts with any of these prospective customers or projects. For Australia this opportunity is illustrated by the pipeline information in Figure 11 above. In the last several years there has been slow but steady growth in wind generation capacity in the United States, but the rate of new project completions has been moderate. The most recent Ren21 Report indicates that investment levels for in wind projects in Europe will continue in line with current levels or grow moderately.

Figure 13 – Wind Capacity Under Construction

Source: EIA AWEA into the wind the AWEA blog

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

Energy Efficiency

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

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

Our Competitive Strengths

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

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

Track record - As the renewable energy industry matures, execution experience and prior project success are increasingly important to securing bidding opportunities and winning contract awards. Notwithstanding our restructuring in VA, we have retained core competencies in, and have a solid track record of successfully developing, designing and implementing large and small-scale renewable projects in both developed countries and remote and difficult geographies. This gives us experience to understand and better serve our customers and credibility when handling the challenges of integrating renewable power into diverse local power grids. In Australia and through our foreign subsidiaries, we have successfully installed more than 80 MW of solar capacity worldwide, including over 17,000 residential systems. Our wind projects include completed systems with more than 100MW of capacity. In addition, we have handled numerous complex climate control system installations with total value of more than A$250 million.

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

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

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

Our Business Strategies

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

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

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

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

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

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

Selectively acquire or retain project ownership interests. Through our project development and proprietary data management activities we have visibility of expected project returns in many situations. Over time we expect to be able to invest opportunistically in commissioned generating projects that we believe will have high returns on our invested capital, generate O&M revenue or foster future business development. As capital cost and availability permit, we intend to invest in such projects, although we are not currently making such investments.

Acquire complimentary businesses. We have grown and evolved the Company through acquisitions and intend to continue to do so (see “—Acquisitions” below). We recently completed the acquisition of GED, BlueNRGY LLC and the operating platform, certain assets of Draker and an equity investment in Inaccess. We are taking steps to complete the acquisition of the Inaccess equity we do not already own and are actively exploring other acquisitions and strategic partnerships that we believe would accelerate our entry into targeted markets and enhance the depth of our management team

Our Challenges

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

With respect to our business:

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

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

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

With respect to our industry:

Instability of renewable energy policies and market conditions – Changes to global political and economic conditions have negatively impacted our business in the past and are likely to do so in the future. The renewable energy sectors we serve depend, to a degree, on the availability of rebates, tax credits and other financial incentives and government policies affecting the purchase and use of energy generated from solar and wind resources, changes in which could reduce the demand for our services and impair our margins. Some changes can be anticipated, such as the reduction in the U.S. federal tax credit for renewable energy projects that is scheduled to step down beginning in 2019. But other changes can occur with little advance warning and opportunities to mitigate the consequences of policy changes in any single jurisdiction may be limited. Our strategy to diversify our operations across renewable energy technologies and geographies is intended to ameliorate this risk but cannot eliminate it.

Rapidly Evolving Technology and Industry Structure – The data monitoring and performance analytics business, which forms the core of our business activity, is undergoing rapid technological change and customers and grid-interconnect authorities are requiring (among other things);

Our competitors are constantly innovating in response to dynamic customer demands and this creates a substantial challenge and investment burden for us to do the same. We have recognized that it will be necessary for us to strengthen our technical capabilities and our financial position to compete effectively.

In addition to the technological changes that are driving success and failure in our industry, significant new competition is emerging to the independent providers of monitoring systems from component suppliers, such as inverter manufacturers, who are bundling software tools for gathering data and managing site performance into their product offerings. Many of our independent monitoring competitors have been acquired by larger, better capitalized companies with complementary lines of business that can facilitate growth and provide efficiencies. These dynamics make it harder for us to compete successfully and necessitate our growth through acquisition to rapidly achieve scale and synergies from complementary business activities.

Description of Our Business Segments

Monitoring & Performance Analytics

The integration of BlueNRGY LLC with the Company in conjunction with our emergence from VA, the subsequent acquisition of the Draker monitoring platform and the Inaccess transaction give us capabilities that our management believes will allow us to access the growing market for data acquisition, control systems and recurring services related to operating and maintaining the large global pool of distributed renewable generating assets over their multi-decade life-cycles. We also have the expectation that these capabilities will allow us to sell products and services for the management of other infrastructure operating assets as Inaccess has demonstrated with its application of systems for the telecom sector.

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

Our proprietary data management system is monitoring over 2,000 sites with a combined power generation capacity of more than 2GW and, when considered with the Inaccess customer base, more than 6GW. We provide data and performance analytics are PV solar installations located in the U.S., Europe, throughout the Americas and in Japan, China and Australia. To meet local regulations regarding data security we have established server and storage capacity in the U.S., China and Europe. Typically, our customers for data management services subscribe to multi-year contracts and we expect to serve most of them over the useful lives of their systems.

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

Operations & Maintenance, or O&M. - In our climate control business, further discussed below (under the heading “Energy Efficiency — Parmac Air Conditioning & Mechanical Services Pty Ltd, or Parmac”) we have, for many years, successfully offered post-installation maintenance servicing of systems. This service is offered to prospective clients whenever we install a system and we frequently win contracts to service systems installed by others. In our experience, post-installation maintenance servicing provides a steady stream of recurring revenue, often pursuant to multi-year contracts, at attractive margins. We have begun to offer similar services for operators of solar PV systems in those regions where we have operations, but this business activity is still in the development stage and revenues are not yet material to our business or broken out separately. There is no assurance that this activity will gain market acceptance or have a material impact on our financial performance.

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

Solar PV Design & Installation

In addition to our data management and O&M services businesses, we design and install, primarily through the use of local contractors, small-scale (typically roof-top) solar PV systems in Australia. Since 2010 we have installed over 17,000 small-scale (mostly residential) systems in Australia and we expect, over time, to be able to apply our home market experience in the United States and other regions, particularly to small-scale installers and selected other customers who can benefit from our know-how and services. Our backlog as of the date of this report on Form 20-F includes approximately 1MW of small-scale systems globally.

Following our emergence from VA, we re-launched commercial sales in Australia under the BlueNRGY brand and are currently undertaking residential sales in Australia only an opportunistic basis due to the high costs of customer acquisition and commodity-nature of this market.

As discussed in the profile of our industry above, growth in small-scale installations in the United States is expected to be robust over the next few years. We consider the opportunity to participate in this market to be attractive and we are currently developing plans to do so in league with customers of our monitoring and O&M business, sometimes utilizing their services as local contractors and using our BlueNRGY brand.

We also have capabilities to design, construct and update / upgrade large-scale systems. This capability was further augmented with the acquisition of GED, a U.S. EPC contractor in 2014. The projects we have developed include both ground mount and large commercial rooftop solar projects in various geographic markets. Our large-scale solar business now employs two delivery models, depending on customer requirements, working capital availability and cost at the time project opportunities became available:

Engineering, Procurement and Construction (EPC)

Under the EPC model, the customer pays us as the EPC contractor (or program manager if we are utilizing an EPC partner for execution) on a milestone or percentage of completion basis as project construction progresses and ownership of project work-in-progress is turned over to the customer. The EPC contractor typically takes responsibility for:

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

Build, Own and Transfer (BOT)

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

Although our large-scale solar experience is substantial, our projects generally represented less than 1% of the installations in our served markets at the time they were performed. Nevertheless, these experiences in designing and building large-scale solar PV projects have focused us on the potential profitability of this line of business and our familiarity with project design and construction issues makes us effective in serving EPC customers of our monitoring systems and handling projects on request for our asset owners with whom we have established relationships.

Whenever we construct a large-scale solar project we generally tender or negotiate for post-commissioning operations and maintenance, or O&M, contracts if we have the capability to perform the required services or can direct the project to customers with whom we have strategic alliances. Such contracts, if awarded, normally have a multi-year term and sometimes are in place for the life of these projects, but there is no assurance that an O&M contract will be awarded to the project constructor. Our opportunity and success in winning O&M awards through this channel has been limited and there is no assurance that it will be material to our future sales.

Except for monitoring system hardware, all of the system components for our solar installations are procured from third parties suppliers. We have no commitments to use components or technology from any particular manufacturer, but we do work with preferred component suppliers to ensure quality products are installed and that strong warranty support from large established equipment manufacturers is available to our customers. This strategy allows us to optimize total project costs to give us and our customers an advantage in some bidding situations. In countries where we are undertaking large-scale solar projects our procurement activities are generally of sufficient scale to permit us buy components directly from a diverse group of manufacturers if the project owner is not negotiating component procurement arrangements directly. In such cases, we believe that, our procurement costs are competitive with other large installers/developers and that we have a competitive advantage over some smaller installers who must purchase system components through distributors. In Australia and other regions where project volumes are not significant in the aggregate, we are actively working to expand the supply chain to include additional supply sources and direct purchasing arrangements with specific component manufacturers. Obtaining such direct supply arrangements will necessitate growing our PV solar revenues substantially from current levels or expanding cooperation with our customers to pool purchasing power.

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

Wind

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

Following our emergence from VA, we intend to confine our activities in the wind sector primarily to data management and supporting operations and maintenance of commissioned facilities. We intend to emphasize regions where there are large concentrations of wind projects and we have established business operations and relationships and projects that are combined with PV solar and/or energy storage installations.

Energy Efficiency

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

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

Other capabilities include:

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

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

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

Remote Area Power Systems (RAPS). Our RAPS business segment historically includes generating assets. The only remaining assets in our RAPS business segment after emergence from VA are related to the above-described Chatham (wind) Project we developed in 2010. The Chatham Project is a 450kW installation on Chatham Island, completed in 2010. The Chatham Islands are a remote part of New Zealand in the South Pacific where previously power was generated solely by diesel generation. The Chatham Project comprises two turbines that were installed with the goal of delivering approximately one-third of the island’s total electricity power. The Chatham Project is not currently operating due to a dispute with the counterparty to the power purchase agreement, Chatham Islands Electricity Limited. Chatham Islands Electricity Limited is seeking to terminate its power purchase agreement with our subsidiary, Chatham Islands Wind Ltd (“CIWL”), and acquire the assets in accordance with contractual rights triggered by our VA. At this time it is not possible to predict how this matter will be resolved or what economic impact it will have on us.

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

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

Seasonality

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

Intellectual Property

Our intellectual property includes trade names and trademarks that we own.

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

Research and Development

We did not conduct research and development through the end of our 2016 fiscal year.

OH&S and Environmental Regulations

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

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

Insurance

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

Currently, no material insurance claims are outstanding.

4.C.             Organization Structure

The table below lists, as of October 20, 2016, our material direct and indirect subsidiaries and the jurisdictions in which they are registered:

4.D.             Property, Plants and Equipment

Our facilities, as of October 20, 2016, consist of stand-alone administrative offices and multi-purpose facilities incorporating office, warehouse and manufacturing activities for some of our businesses. Our administrative office facilities, located in various countries, are utilized by our various business units as necessary to support changing operational requirements. We believe that our administrative offices are adequate to support our current needs and all foreseeable growth and we have no current plans for expansion or improvements. All are occupied pursuant to short-term operating leases and are listed below:

All of our multi-purpose facilities are located in Australia and are leased. Their sizes, locations and our business units that they primarily serve are listed below as of October 20, 2016:

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

As of October 20, 2016, we owned or held under leases assets in the categories shown in the following table having an aggregate value of A$2.1 million, which comprised an “at cost” total of A$4.1 million less depreciation and impairment of A$2.0 million

Capital Expenditures

Our capital expenditures for property, plant and equipment for the fiscal year ended June 30, 2016 and 2015 respectively were approximately A$0.03 million and A$0.2 million. In the year ended June 30, 2016 property, plant and equipment with a net value of A$0.1 million was acquired as part of the Draker Corporation acquisition.

Our capital expenditures for the 2016 fiscal year mainly related to replacement of vehicles and computer assets which had reached the end of their useful lives. There were no significant one-time asset purchases.

The capital expenditure total for fiscal year 2015 was primarily for essential upgrades to our motor vehicle fleet in Parmac and leasehold assets.

ITEM 4E.    UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 5.      OPERATING AND FINANCIAL REVIEW AND PROSPECTS

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

5.A.             Operating Results

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

Our activities are currently divided among the following principal lines of business:

Previously, and into our 2015 fiscal year, we were active in developing large-scale wind projects, but our involvement with wind generation systems is now, and is expected to continue to be, limited to providing data management and system management services. In addition we operate owned power generation facilities in a separate business unit we refer to as RAPS. Although there is a possibility that RAPS will grow in the future, it is not currently material to our operations.

In keeping with customary practice in Australia, our fiscal years end on June 30. During the fiscal years ended June 30, 2016 (fiscal year 2016); June 30, 2015 (fiscal year 2015) and June 30, 2014 (fiscal year 2014), we incurred a net loss from continuing operations of A$9.3million, A$13.6 million and A$22.2 million respectively, of which A$Nil, A$6.2 million and A$10.0 million for fiscal years 2016, 2015 and 2014 respectively were attributable to asset impairments and non-recurring expenses, as further described below. However, as a result of our initiatives to reduce costs and increase our capitalization, our management expects that we will return to profitability in the future, although there is no assurance that we will be able to do so. If we are unable to achieve our business growth strategies and objectives or to obtain sufficient financing on acceptable terms in order to meet our future operational needs, there is a substantial doubt as to whether we will be able to continue as a going concern.

The breakdown of our revenues by segment is shown below for fiscal years ended June 30, 2016, 2015 and 2014:

Monitoring & Performance Analytics

We entered the business of data management and the provision of O&M services for renewable generation assets in January 2015 with our acquisition of BlueNRGY LLC. At the time we acquired BlueNRGY LLC, the BlueNRGY data management and O&M businesses were in the early stages of commercialization.

In September 2015 we acquired the Draker data management platform. The Draker Transaction substantially boosted our U.S. market position to being, in the judgment of our management, one of the leading independent providers of monitoring and data management services for solar PV facilities in the United States. Despite Draker’s market standing and broad customer base, numerous customers suffered delivery or service interruptions prior to our consummation of the Draker Transaction. Consequently, we experienced some short-term customer attrition and interruption of the historical growth pattern for this business for several months following the acquisition. To reverse this dynamic, we were obliged to invest substantial resources to upgrade the Draker software platform, integrate it fully with the BlueNRGY LLC technology and improve the subscriber experience. Although the integration with the BlueNRGY LLC technology is now complete, we are continuing to invest in software and platform upgrades and development to further enhance the software functionality and its capabilities relative to competitors’ systems. Consequently, our monitoring and performance analytics business sustained losses throughout our 2016 fiscal year that have continued into our 2017 fiscal year.

However, as a result of our investment, and also due to the positive industry growth dynamics, particularly in the USA, we foresee our monitoring and performance analytics revenue growing strongly during our 2017 fiscal year. This growth is expected to come from an increased share of the business of existing customers, significant new customer additions based on the improved value proposition of the Draker products and services, and efforts to broaden the served market base for Draker to other countries where we operate or there is substantial growth in PV deployments. In addition, we are succeeding in garnering subscription renewals for our enhanced software from the legacy customers where Draker systems and software were installed prior to the Draker Transaction.

Consequently, our management expects a turnaround to positive profitability for this line of business in the 2017 fiscal year, however, there can be no assurances about when, if ever, the data management business will become profitable.

To further improve our competitive posture, to provide a range of products and system control technologies that are often required by our utility-scale customers and that we cannot currently supply, and to broaden our market access, we completed an investment in Inaccess in July 2016 (refer to Item 4.A under the heading “Recent Acquisitions”). We expect to acquire the remainder of the Inaccess shares that we do not own in two tranches in January 2017 and July 2017 in accordance with the share purchase agreement. If the Inaccess transaction is consummated as planned, we will have sufficient ownership of the equity to consolidate the Inaccess revenue for financial reporting purposes beginning in January 2017. This factor, together with additional market penetration that we expect to achieve through application of Inaccess technologies, is expected to substantially boost revenue in our Monitoring and Performance Analytics line of business for our 2017 fiscal year as compared with our 2016 fiscal year. Inaccess is currently profitable and the scale economies and other efficiencies that we expect to achieve through the Inaccess transaction are expected to accelerate the timing and magnitude of our turnaround to positive profitability for this line of business.

Since the acquisition of BlueNRGY LLC the revenues in our O&M services line of business have not been material to our overall operations and this business continues to be incubated in our Data Management segment under bundled service contracts. Although we are working actively to accelerate the growth of O&M services, there can be no assurance as to when or whether this line of business will be large enough to significantly affect our financial performance.

Solar PV Design & Installation

The increase in revenue in the solar PV segment from our 2014 to 2015 fiscal years was attributable to the acquisition of GED in July 2014. The subsequent increase from our 2015 to 2016 fiscal years was primarily derived from contracts for the design and delivery of approximately 50MW of large-scale solar projects by GED. This is a project-based business focused on design and installation of solar PV facilities for customers with which we have or are seeking to have a strategic relationship over the life-cycle of the assets. Because of the intense nature of the competition in this business line and competitive disadvantages that we have with respect to bidding against large, well capitalized EPC contractors, we have chosen to focus our business development initiatives in the solar design and installation business on situations where we have competitive advantage in design or program management as a result of our technology. Consequently, the number and installation rate of projects awarded to us, and large-scale projects in particular, has been and is expected to be irregular. We have evolved our cost structure for this segment to be scalable, both up and down. Other than a core team of staff members based in Australia and the USA who handle project design and overall program management, we rely heavily on outsourcing and sub-contractors working in markets where projects are constructed, often with customers of our other lines of business. As a consequence of these initiatives, our large-scale solar business in some of our served markets made a positive contribution to operating profit in our 2016 fiscal year with a low net working capital requirement. Our management expects this dynamic to continue and an overall positive contribution from this line of business for our 2017 fiscal year, but there can be no assurance that such expectations will be borne out or that this segment of our business will avoid losses in the future.

With a few exceptions, project fulfilment cycles for our Solar PV projects have been short, typically less than 6 months, and we are paid on a progress-payment basis. In general, the timing of payments to suppliers has been closely linked to progress payments, where applicable, thereby limiting the net working capital requirements the company needs to support these projects. In cases where we construct projects and on-sell the project at completion, construction financing has been sourced to meet working capital requirements. Because of the short execution cycle, we have not historically tracked backlog for our large-scale solar business but it is our intention to begin to do so as new projects are awarded. As of September 30, 2016 our backlog of large-scale solar projects was approximately 1MW, mostly at our GED unit. Because of uncertainties in the contract bidding process, there can be no assurance about when we will win further new contracts.

Until mid-way through fiscal year 2016, we maintained a three person organization in Europe intended to allow us to transact future projects in that market. Because of diminished opportunities in the UK market caused by a declining feed-in-tariff rate and lower policy incentives, this team has been wound down and we have shifted of our business development focus to the Americas and Australia.

Energy Efficiency / Climate Control Solutions.

Our Parmac business unit primarily designs and installs energy efficient HVAC systems and controls for commercial customers. It often works as a sub-contractor on larger projects and it typically receives deposits or progress payments for its work on new projects and bills for service work monthly as incurred, so it has an average net working capital requirement of about 15% of revenues. Parmac also have a low fixed cost structure typical of construction contractors and achieved average pre-tax operating margins in the range of 7% - 8% in some fiscal years prior to fiscal year 2012. We believe this level of profitability is sufficient to sustain available growth opportunities from operating cash flow. However, Parmac experienced adverse performance on several contracts entered into in the latter half of fiscal year 2013 that resulted in a loss in the 2014 fiscal year as those contracts were completed. These losses are believed by our management to be contract-specific and are not necessarily indicative of the Parmac’s expected future performance. During the 2015 fiscal year, Parmac’s net profit was impacted by one-time expenses totalling A$1.1million relating to a parent entity loan extinguishment in the VA process and a bad debt arising from a major customer entering voluntary administration. During the 2016 fiscal year the Parmac business has been impacted by cyclical industry wide downward pressure on margins for large tendered projects, coupled with poor cost control on a number of projects. Following a strategic review of this business in May 2016 a number of personnel changes have been made, business development has been refocused on customer and project segments which have historically returned operating margins in excess of recently achieved levels and project cost control processes have been improved. As a result, our management believes that Parmac will return to historical levels of profitability in the current fiscal year, however, there can be no assurance that this will be the case.

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

RAPS

This business segment currently comprises solely of The Chatham Island Project, which was completed in 2010 and is 100% owned by us as a power generating asset. There is currently a dispute regarding the status of the Chatham Island contract and consequently, no revenue is currently being received from the project. At present we are unable to project the outcome of this dispute or whether we will realize continuing value from the Chatham Island Project Assets that are recorded in our financial statements without provision for impairment.

Large-scale wind. During our 2013 to 2015 fiscal years, we were active in the sourcing of opportunities for the development of large-scale wind projects in Australia and the associated costs were reflected in our expenses. Our active pursuit of new large-scale wind opportunities has now been curtailed and we are no longer incurring expenses related to this line of business and we do not expect to realize additional revenues from this segment of our business related to our prior activities. When we were active in the Large-scale wind development arena, we typically incurred costs on early-stage development of projects with a view to sourcing the equity and/or debt funding required to take it through to construction and operation. Such expenses were undertaken with no assurance of being able to realize a recover of the development expense. The Taralga Project is an example of a project for which equity funding to complete construction was secured and we were able to recover our costs and profit from the activity.

In our 2012 fiscal year we earned a development fee in connection with the Taralga project and reinvested this fee as equity into the project. As a result, we retained a residual equity ownership of the completed project. During the 2014 financial year, the timeline for the completion of the Taralga project was delayed as a result of design changes and the subsequent requirement to amend Development Approvals. The impact of these delays, coupled with cost overruns has negatively impacted the value of our residual equity interest in the project, and our holding was fully impaired at June 30, 2014, resulting in an impairment charge being recognized in the Statement of Comprehensive income for our 2014 fiscal year of A$10.8 million. We also entered into a separate project management agreement for the Taralga Project, but this was terminated in our 2015 fiscal year and we did not realize any management fee revenue in our 2016 fiscal year.

Other Factors Materially Affecting Our Businesses and Results of Operations

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

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

This situation is due to a confluence of factors:

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

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

Many government policies in place including those applicable to the largest markets we serve, such as Europe and the United States, call for increasing levels of renewable energy usage over time and impose mandates or incentives for purchases of renewable power even though such power may cost more than conventionally generated power. This pressure tends to add to the pace of renewable power adoption in specific countries, states and municipalities where the mandates apply. Favorable tax incentives in the USA, most notably the 30% federal investment tax credit (ITC) applicable to renewable energy projects are expected to create a bubble of growth in the 2017 - 2019 calendar years that should be favourable to us.

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

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

As individual governments experience fiscal constraints that make direct subsidies impractical or are forced to adjust mandates because their constituents demand limits on premium payments for renewable energy, some of the demand for new renewable energy capacity will abate. This impact will fall unevenly across countries and regions as corrections are made to compensate for policies that were not sustainable or sound when implemented. Our management expects the effect of this trend will most greatly affect our business development initiatives and we have already seen supply-demand imbalances for services corrected in some of our served markets such as the UK.

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

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

In addition, access to incremental capital is essential to the successful pursuit of our business strategies (see Item 3.D.- Risk Factors under the heading “Risks Related to our Financial Condition” and the information below under the heading “—Liquidity and Capital Resources”).

Recent Acquisitions

We have developed our current business in part through several strategic acquisitions and we expect to pursue additional acquisitions in the future. Summary descriptions of the material acquisitions we completed during fiscal year 2014 through the date of this Report are as follows, but the terms described below are qualified in their entirety by the applicable acquisition documents included as Exhibits to our filings with the SEC:

Inaccess Transaction

The Company subscribed to €3.25 million of convertible preferred shares (‘Preferred Shares’) of Inaccess Holdings Ltd (‘IHL’) on July 7, 2016. IHL is a UK company that provides hardware and software systems for monitoring and controlling the performance of distributed renewable energy and telecom facilities worldwide. Our management believes that the Inaccess business is highly complementary to our own Monitoring and Data Analytics business. At the time of the Preferred Share subscription, the Preferred Shares were convertible into 20% of the IHL ordinary equity interests, although subsequent repurchases of its ordinary shares by IHL boosted this percentage to approximately 23%. The rights and designations of the Preferred Shares make such shares senior to other classes of IHL equity, provide for a preferential payout upon liquidation equal to the subscription price and entitle the holder thereof to a board seat.

Subject to a withdrawal right that expired on September 15, 2016 and that we elected not to exercise, we also entered into an agreement on July 7, 2016 to purchase all of the remaining equity of Inaccess that we do not own in two tranches scheduled to close in January and July 2017 (together with the IHL share subscription referred to as the Inaccess Transaction). We are therefore obligated to acquire the remaining shares at a price that would value 100% of the IHL equity in a range from €16.3 million to €20.0 million. Consideration will be made in a combination of ordinary shares of the Company and/or cash in ratios that are not determinable as of the date of this report on Form 20-F. The foregoing summary of terms of the Inaccess Transaction is qualified in its entirety by the subscription and share purchase agreements included as Exhibits hereto.

Draker Transaction

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

BlueNRGY LLC

On January 27, 2015 we acquired 100% of the equity interests of BlueNRGY LLC, a U.S. company specializing in managing data related to geographically distributed energy generation systems and providing related operations and maintenance, or O&M, services. At the time of its acquisition, BlueNRGY LLC was serving customers in Europe and Asia. Subsequently we have expanded the scope of its operations to include customers with U.S. and Australia and fully integrated its technology and operations into that of Draker Corporation. Consideration paid to the BlueNRGY LLC shareholders and shares issued to key executives and Directors of the Group as part of the transaction comprised solely our ordinary shares. Based on the issuance of our ordinary shares to investors in a contemporaneous private placement at US$3.03 per share (after giving effect to the 1-for-80 share consolidation that we implemented in December 2015), the value of our shares issued to the BlueNRGY LLC shareholders was US$5.8 million.

Green Earth Developers LLC (GED)

On July 1, 2014 we acquired Green Earth Developers LLC, a solar and electrical EPC contractor in the Southeastern U.S. that has bolstered our ability to capitalize on commercial project opportunities in the U.S. market. GED had a track record of successfully completing projects of 1MW – 5MW in size. The purchase price was USD$1,500,000 cash, $500,000 of which was deferred, plus restricted shares in BlueNRGY valued at US$1.675 million at the time of the transaction. Of the deferred cash component of the purchase price, $100,000 was paid in cash and the remainder was exchanged for our ordinary shares at an exchange price of US$3.03 per share (after giving effect to the 1-for-80 share consolidation that we implemented in December 2015) following the effectiveness of the Reorganization Plans in January 2015.

Results of Operations

Fiscal Year Ended June 30, 2016 Compared to Fiscal Year Ended June 30, 2015 —Consolidated Results

Operating revenue

Total operating revenues from continuing operations increased from A$16.9 million for the year ended June 30, 2015 to A$32.1 million for the year ended June 30, 2016. The revenues increases were mainly attributable to the acquisition of Draker and an increase in revenue for GED.

* Includes O&M Services

Monitoring & Performance Analytics revenue increased from A$0.2 million for the year ended June 30, 2015 to A$2.6 million for the year ended June 30, 2016, following the Draker Transaction in September 2015.

Solar PV revenue increased by 464% from A$3.1 million for the year ended June 30, 2015 to A$17.3 million for the year ended June 30, 2016, due to the performance of large scale EPC contracts performed in the USA by our GED subsidiary. In May 2015, GED commenced the design and construction of part of its contracted backlog resulting in the recognition of revenue for these projects in line with the percentage completed through the year ended June 30, 2016. The installation of these projects was largely completed by June 30, 2016.

Parmac revenue remained consistent at A$12.2 million for both years ended 30 June 2016 and 2015. Around 80% of Parmac’s revenue is derived from its contracting business with the 20% balance from its services division. This ratio also remained consistent between the 2015 and 2016 fiscal years. RAPS revenue decreased by A$0.1m from 2015 to 2016 primarily as a result of an ongoing contractual dispute regarding the Chatham Island wind project triggered by the 2015 VA process.

Revenue from our Large-scale Wind segment recognized during our fiscal year 2015 was from the provision of project management services to the now-competed Taralga wind project. In conjunction with our Reorganization Plans the project management agreement was terminated in January 2015, we withdrew from the development and construction of wind projects and, accordingly, we did not generate any revenue for these services during our 2016 fiscal year.

Operating costs

For the year ended June 30, 2016 and 2015, respectively, total operating costs including the cost of raw materials, consumables and contractors are presented in the table below for our various business segments: