# Edesa Biotech, Inc.: Form 10-Q for the period ended Jun 30, 2016

- Company: [Edesa Biotech, Inc.](/companies/edsa.md) (CIK 1540159)
- Form: 10-Q
- Filed: 2016-08-09
- Accepted by EDGAR: Aug 9, 2016, 09:01 ET
- Period: 2016-06-30
- Accession: 0001144204-16-117445
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1540159/000114420416117445/v445006_10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1540159/000114420416117445/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2016-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2016-04-01 to 2016-06-30 | $181.1k | us-gaap:Revenues |
| Revenue | 9 months, 2015-10-01 to 2016-06-30 | $995.6k | us-gaap:Revenues |
| Cost of revenue | 3 months, 2016-04-01 to 2016-06-30 | $120.0k | us-gaap:CostOfGoodsAndServicesSold |
| Cost of revenue | 9 months, 2015-10-01 to 2016-06-30 | $701.0k | us-gaap:CostOfGoodsAndServicesSold |
| Research and development | 3 months, 2016-04-01 to 2016-06-30 | $470.1k | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 9 months, 2015-10-01 to 2016-06-30 | $1.1m | us-gaap:ResearchAndDevelopmentExpense |
| Income tax | 3 months, 2016-04-01 to 2016-06-30 | $0 | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2015-10-01 to 2016-06-30 | $7.2k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2016-04-01 to 2016-06-30 | −$1.2m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2015-10-01 to 2016-06-30 | −$3.7m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2016-04-01 to 2016-06-30 | −$0.14 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2015-10-01 to 2016-06-30 | −$0.44 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2016-04-01 to 2016-06-30 | −$0.14 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2015-10-01 to 2016-06-30 | −$0.44 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2016-04-01 to 2016-06-30 | 8,448,758 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2015-10-01 to 2016-06-30 | 8,423,429 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2015-10-01 to 2016-06-30 | −$3.3m | us-gaap:NetCashProvidedByUsedInOperatingActivitiesContinuingOperations |
| Capital expenditure | 9 months, 2015-10-01 to 2016-06-30 | $294.9k | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2016-06-30 | $4.8m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2016-06-30 | $7.7m | us-gaap:AssetsCurrent |
| Total assets | at 2016-06-30 | $8.5m | us-gaap:Assets |
| Current liabilities | at 2016-06-30 | $839.0k | us-gaap:LiabilitiesCurrent |
| Shareholders' equity | at 2016-06-30 | $7.7m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 25,039 characters.

*The following management’s discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed interim consolidated financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q as of June 30, 2016 and our audited consolidated financial statements for the year ended September 30, 2015 included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on December 14, 2015.*

*This Quarterly Report on Form 10-Q contains forward-looking statements. When used in this report, the words “expects,” “anticipates,” “suggests,” “believes,” “intends,” “estimates,” “plans,” “projects,” “continue,” “ongoing,” “potential,” “expect,” “predict,” “believe,” “intend,” “may,” “will,” “should,” “could,” “would” and similar expressions are intended to identify forward-looking statements. You should not place undue reliance on these forward-looking statements. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including the risks described in this report, the risks described in our Annual Report on Form 10-K for the year ended September 30, 2015 and other reports we file with the Securities and Exchange Commission. Although we believe the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made. We do not intend to update any of the forward-looking statements after the date of this report to conform these statements to actual results or to changes in our expectations, except as required by law.*

*The discussion and analysis of our financial condition and results of operations are based on our unaudited condensed interim consolidated financial statements as of June 30, 2016 and September 30, 2015, and for the nine months ended June 30, 2016 and 2015 included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which we have prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during the reporting periods. On an ongoing basis, we evaluate such estimates and judgments, including those described in greater detail below. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.*

### Overview

Stellar Biotechnologies, Inc. (“Stellar,” the “Company,” “we,” “our” and “us”) is a biotechnology company engaged in the aquaculture, research and development, manufacture and commercialization of Keyhole Limpet Hemocyanin, or KLH, protein. KLH is a high molecular weight, immune-stimulating protein with an extensive history (over 40 years) of safe and effective use in immunological applications.

KLH can be used as an active pharmaceutical ingredient (“API”) and combined with a disease-targeting agent to create immunotherapies targeting cancer, immune disorders, Alzheimer’s disease, and inflammatory diseases, or it can be used as a finished, injectable product in the immunodiagnostic market for measuring immune response in patients and research settings. Our mission is to become the world leader in the sustainable manufacture of KLH and use our unique, proprietary methods and intellectual property to serve the growing demand for KLH in immunotherapeutic and immunodiagnostic markets.

### Third Quarter Highlights; Recent Developments

- On May 11, 2016, our Company and Neovacs, S.A. (“Neovacs”) entered into an agreement (the “Joint Venture Agreement”) to form a joint venture to manufacture and sell conjugated therapeutic vaccines using Stellar’s proprietary KLH and Neovacs’ cytokine antigens conjugated to KLH, including Neovacs’ Kinoid immunotherapy product candidates and other KLH-based immunotherapy vaccine products, for human or veterinary use (the “Neovacs Joint Venture”). We agreed with Neovacs to organize the Neovacs Joint Venture as a French simplified corporation and, in connection with the Neovacs Joint Venture, to enter into (a) an exclusive supply agreement within a limited field of use for the supply of Stellar KLH™ to the Neovacs Joint Venture and (b) a service agreement for the provision of various knowledge and expertise by our Company to the Joint Venture.

The Company holds a 30% equity interest in the Neovacs Joint Venture in exchange for an initial capital contribution of €120,000. One-half of the initial contribution, approximately $67,000, was paid prior to June 30, 2016 with the balance due upon the occurrence of certain future events as set forth in the Joint Venture Agreement.

- On June 30, 2016, we entered into securities purchase agreements with certain institutional investors providing for the issuance and sale by us of an aggregate of 1,687,500 of our common shares, at a price of $4.00 per share in a registered direct offering (the “Registered Direct Offering”). In a concurrent private placement, we agreed to sell to such investors warrants to purchase up to an aggregate of 1,265,625 of our common shares, with an exercise price of $4.50 per share (the “Private Placement”).

On July 6, 2016, the Registered Direct Offering and the Private Placement were consummated, resulting in net proceeds to the Company of approximately $6 million.

- At our request, our common shares were voluntarily delisted from the TSX Venture Exchange (the “TSX-V”) in Canada and were no longer trading on the TSX-V as of the close of business on April 8, 2016.

### Significant Accounting Policies and Estimates

For a discussion of our significant accounting policies and estimates, refer to Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2015, as filed with the Securities and Exchange Commission (the “SEC”) on December 14, 2015. There are no material changes in our significant accounting policies and estimates from the disclosure provided in our Annual Report on Form 10-K for the fiscal year ended September 30, 2015.

### Results of Operations

#### Comparison of Nine Months Ended June 30, 2016 and 2015

Our net loss was $3,684,890, or $0.44 loss per basic share, for the nine months ended June 30, 2016 compared to $1,305,655, or $0.16 loss per basic share, for the nine months ended June 30, 2015. The increase in net loss was primarily due to fluctuations in non-cash gain/loss in fair value of warrant liability, as more fully discussed below.

Total revenues were $995,587 and $558,036 for the nine months ended June 30, 2016 and 2015, respectively. The increase in revenues for the nine months ended June 30, 2016 was due to greater product sales volume including sales under supply agreements and custom manufactured products. Our product sales were $963,587 and $408,036 for the nine months ended June 30, 2016 and 2015, respectively. We also recorded $173,333 of deferred revenue for a customer deposit on products that were shipped subsequent to June 30, 2016. Contract services revenue was $32,000 for the nine months ended June 30, 2016, as compared to $150,000 for the nine months ended June 30, 2015. The decrease over the prior period was due to the successful conclusion of a collaboration agreement mid-December 2015 and completion of services related to a supply agreement in December 2014.

Total expenses were $4,587,362 and $3,948,669 for the nine months ended June 30, 2016 and 2015, respectively. Costs of sales and contract services were $700,953 and $571,039 for the nine months ended June 30, 2016 and 2015, respectively. These costs did not increase in line with revenues since our indirect manufacturing costs are incurred regardless of product sales levels. In addition, some employees were temporarily assigned to process development related to our Stellar KLH™ products, thereby lowering indirect manufacturing costs in the current period. Our research and development expenses were $1,068,008 for the nine months ended June 30, 2016, as compared to $830,115 for the nine months ended June 30, 2015. The increase over the prior period was a result of the increased internal research and process development related to our Stellar KLH™ products and increased costs related to our aquaculture feasibility assessment in Baja California, Mexico. Our administration expenses were $2,595,176 for the nine months ended June 30, 2016, as compared to $2,346,019 for the nine months ended June 30, 2015. The increase over the prior period resulted primarily from a combination of increased corporate expenses, including our Nasdaq listing fees; compensation increases; expanded customer and business development travel and increased investor relations activity.

Other income (loss) was an overall loss of $85,915 for the nine months ended June 30, 2016, as compared to a gain of $2,112,778 for the nine months ended June 30, 2015. The change in the nine months ended June 30, 2016 as compared to the prior period resulted primarily from the non-cash gain/loss in fair value of warrant liability, which fluctuated to a loss of $211,956 for the nine months ended June 30, 2016 from a gain of $2,455,361 in the prior period. All warrants with Canadian dollar exercise prices were exercised or expired by October 2015 and, consequently, there was no warrant liability and no gain/loss in fair value of warrant liability after that time. These fair value gains and losses occur in inverse relation to changes in our share price that affect the Black-Scholes valuation model. This increased loss was partially offset by a foreign exchange gain of $109,448 for the nine months ended June 30, 2016, as compared to a foreign exchange loss of $391,190 for the nine months ended June 30, 2015. The change was due primarily to favorable exchange rates for our Canadian cash and cash equivalents. The portion of foreign exchange gain (loss) realized in cash was $3,171 and ($13,517) for the nine months ended June 30, 2016 and 2015, respectively.

#### Comparison of Three Months Ended June 30, 2016 and 2015

Our net loss was $1,194,077, or $0.14 loss per basic share, for the three months ended June 30, 2016 compared to $463,986 net income, or $0.06 income per basic share, for the three months ended June 30, 2015. The increase in net loss over the prior period net income was primarily due to fluctuations in non-cash gain/loss in fair value of warrant liability, as more fully discussed below.

Total revenues were $181,092 and $157,748 for the three months ended June 30, 2016 and 2015, respectively. The increase in revenues for the three months ended June 30, 2016 was due to an increase in customers and greater product sales volume including sales under supply agreements. Our product sales were $181,092 and $112,748 for the three months ended June 30, 2016 and 2015, respectively.

Total expenses were $1,369,570 and $1,033,333 for the three months ended June 30, 2016 and 2015, respectively. Costs of sales and contract services were $119,989 and $231,999 for the three months ended June 30, 2016 and 2015, respectively. These costs decreased relative to revenues due to the temporary re-assignment of some employees to process development related to our Stellar KLH™ products, thereby lowering indirect manufacturing costs, and due to the mix of product sales and contract services which have lower cost-to-revenue ratios in the current period over the prior period. Our research and development expenses were $470,097 for the three months ended June 30, 2016, as compared to $129,710 for the three months ended June 30, 2015. The increase over the prior period was a result of increased costs related to our aquaculture feasibility assessment in Baja California, Mexico, increased internal research and process development related to our Stellar KLH™ products, new R&D employees and the completion of contract services under our collaboration agreement, resulting in higher costs incurred by internal research. Our administration expenses were $720,421 for the three months ended June 30, 2016, as compared to $618,185 for the three months ended June 30, 2015. The increase over the prior period resulted from increased corporate expenses, costs related to hiring new employees, increased business development travel and increased investor relations activity.

Other income (loss) was an overall loss of $5,599 for the three months ended June 30, 2016, as compared to a gain of $1,348,571 for the three months ended June 30, 2015. The decrease in overall gain (loss) resulted primarily from the non-cash gain/loss in fair value of warrant liability, which had no activity for the three months ended June 30, 2016 from a gain of $1,254,029 in the prior period. All warrants with Canadian dollar exercise prices were exercised or expired by October 2015 and, consequently, there was no warrant liability and no gain/loss in fair value of warrant liability after that time. These fair value gains and losses occur in inverse relation to changes in our share price that affect the Black-Scholes valuation model. This decrease was also due to a foreign exchange loss of $8,188 for the three months ended June 30, 2016, as compared to a foreign exchange gain of $77,468 for the three months ended June 30, 2015. The change was due to fluctuations in exchange rates for our Canadian cash and cash equivalents. The portion of foreign exchange gain (loss) realized in cash was ($206) and ($679) for the three months ended June 30, 2016 and 2015, respectively.

### Capital Expenditures

Our capital expenditures, which primarily consist of scientific, manufacturing, and aquaculture equipment, and facility leasehold improvements for the nine months ended June 30, 2016 and 2015 are as follows:

| Assets Acquired | Nine Months Ended June 30, 2016 | June 30, 2015 |
| --- | ---: | ---: |
| Property, plant and equipment | $238,957 | $114,134 |
| Construction in progress | 55,901 | 89,477 |

### Liquidity and Capital Resources

Our working capital position at June 30, 2016 was $6,887,427, including cash and cash equivalents of $4,787,203 and short-term investments of $1,999,081. Subsequent to June 30, 2016, we completed the Registered Direct Offering and the Private Placement of our securities for net proceeds of approximately $6 million.

Management believes our current working capital is sufficient to meet our present requirements, including all contractual obligations and anticipated research and development expenditures for at least the next 12 months. We expect to finance our future expenditures and obligations through revenues from product sales, contract services income, grant revenues, and sales of common shares. We expect to continue incurring losses for the foreseeable future and may need to raise additional capital to pursue our business plan and continue as a going concern. .

We may pursue opportunities to obtain additional financing in the future through equity and/or debt financings. We have filed with the SEC, and the SEC declared effective, a universal shelf registration statement which permits us to issue up to $100 million of registered equity securities, of which we utilized approximately $6.7 million in our Registered Direct Offering. Under this effective shelf registration, we have the flexibility to issue registered securities, from time to time, in one or more separate offerings or other transactions with the size, price and terms to be determined at the time of issuance. Registered securities issued through this shelf may be used to raise additional capital to fund our general corporate needs, including capital expenditures, research and development and working capital.

Our management believes that we have access to capital resources through possible public or private equity offerings, debt financings, corporate collaborations or other means, if needed; however, we have not secured any commitment for new financing at this time, nor can we provide any assurance that new financing will be available on commercially acceptable terms, if needed.

#### Nine Months Ended June 30, 2016

Our working capital was $6,887,427 as of June 30, 2016, compared to working capital of $7,485,971 as of September 30, 2015. Working capital was reduced by the non-cash current portion of our warrant liability in the amount of $1,550,630 at September 30, 2015. All warrants with Canadian dollar exercise prices have been exercised or have expired and, consequently, there was no warrant liability at June 30, 2016.

Our cash and cash equivalents totaled $4,787,203 at June 30, 2016, compared to cash and cash equivalents of $3,955,503 at September 30, 2015, which represented an increase of $831,700 over the nine-month period. Our short-term investments totaled $1,999,081 at June 30, 2016, compared to short-term investments of $5,015,171 at September 30, 2015, which represented a decrease of $3,016,090 over the nine-month period.

During the nine months ended June 30, 2016, operating activities used cash of $3,313,962. Items not affecting cash included: depreciation and amortization of $106,712; share-based compensation related to the issuance and vesting of stock options of $209,781; unrealized foreign exchange gain of $109,448; and loss in fair value of warrant liability of $211,956 due to the adjustment to the fair value of warrants previously issued. Changes in non-cash working capital items primarily result from a decrease in accounts receivable of $148,611 and an increase in deferred share issuance costs of $232,822.

Investing activities provided cash of $2,654,537. The acquisition of property, plant and equipment used cash of $294,858 related to improvements in manufacturing and aquaculture facilities. Purchase of short-term investments in U.S. Treasury Bills used cash of $6,005,737. Sales and maturities of short-term investments in mutual fund debt securities and U.S. Treasury Bills provided cash of $9,021,827. Approximately $5 million of this amount represents mutual fund debt securities that were sold to purchase U.S. Treasury Bills. Each time U.S. Treasury Bills mature, additional U.S. Treasury Bills are purchased, resulting in an increase in gross purchases and maturities. Contribution to our joint venture with Neovacs S.A. used cash of $66,695.

The effect of fluctuations in exchange rates on cash and cash equivalents was an increase of $122,865 due to an improvement in the Canadian dollar relative to the U.S. dollar.

Financing activities provided cash of $1,368,260 related to proceeds from the exercise of warrants. As a result of such exercises, 464,000 common shares were issued during the period.

#### Nine Months Ended June 30, 2015

Our working capital was $8,944,753 as of June 30, 2015, as compared to working capital of $13,751,301 as of September 30, 2014. Working capital was reduced by the non-cash current portion of our warrant liability in the amount of $1,235,905 and $460 at June 30, 2015 and September 30, 2014, respectively.

Our cash and cash equivalents totaled $5,147,260 at June 30, 2015, compared to cash and cash equivalents of $8,768,459 at September 30, 2014, which represented a decrease of $3,621,199. Our short-term investments totaled $5,014,198 at June 30, 2015, as compared to short-term investments of $5,450,126 at September 30, 2014, which represented a decrease of $435,928 over the nine-month period.

During the nine months ended June 30, 2015, operating activities used cash of $3,497,293. Items not affecting cash included: depreciation and amortization of $119,410; share-based compensation related to the issuance and vesting of stock options of $244,781; unrealized foreign exchange loss of $391,190; and gain in fair value of warrant liability of $2,455,361 due to the adjustment to the fair value of warrants previously issued. Changes in non-cash working capital items include a increase in accounts receivable of $69,242; increase in inventory related to custom manufacturing orders in process of $159,476; increase in prepaid expenses of $137,939; decrease in accounts payable and accrued liabilities of $211,667; and increase in deferred revenue of $86,666.

Investing activities provided cash of $203,582. The acquisition of property, plant and equipment used cash of $202,997. Purchase of short-term investments used cash of $12,704. Proceeds on maturities of short-term investments provided cash of $419,283. The effect of exchange rate changes on cash and cash equivalents was a reduction of $356,207 due to a decline in Canadian dollars relative to U.S. dollars.

Financing activities provided cash of $28,719 related to proceeds from the exercise of warrants and options. As a result of such exercises, 12,680 common shares were issued during the period.

### Geographic Concentrations

The geographic markets of our customers are principally Europe, the United States and Asia. We had the following concentrations of revenues by geographic areas:

|  | Nine Months Ended June 30, 2016 | June 30, 2015 |
| --- | ---: | ---: |
| Europe | 55% | 43% |
| Asia | 32% | 47% |
| U.S. | 13% | 10% |

### Research and Development

Our core business is developing and commercializing Keyhole Limpet Hemocyanin for use in immunotherapy and immunodiagnostic applications. Our internal research includes, among other activities, continual improvement of methods for the culture and growth of the Giant Keyhole Limpet, innovations in aquaculture systems and infrastructure, biophysical and biochemical characterization of the KLH molecule, analytical processes to enhance performance of our products, KLH manufacturing process improvements, new KLH formulations, and early development of potential new KLH-based immunotherapies. However, from time to time we may engage in non-related research and development activities as opportunities arise.

Research and development costs, including materials and salaries of employees directly involved in research and development efforts, are expensed as incurred.

The following table includes our research and development costs for each of the nine months ended June 30, 2016 and 2015:

|  | Nine Months Ended June 30, 2016 | June 30, 2015 |
| --- | ---: | ---: |
| Research and development expense | $1,068,008 | $830,115 |

The increase in research and development expense over the prior period was a result of increased internal research and process development related to our Stellar KLH™ products and increased costs related to our aquaculture feasibility assessment in Baja California, Mexico.

### Disclosure of Contractual Obligations

We lease three buildings and facilities used in our operations under sublease agreements with the Oxnard Harbor District. In June 2015, we exercised our option to extend these sublease agreements for an additional five-year term beginning in October and November 2015. We negotiated an option to extend the leases for two additional five-year terms.

We lease facilities used for executive offices and laboratories, and we must pay a portion of the common area maintenance. In July 2016, we extended this lease for a two-year term, which extension includes three (3) options to renew this lease for successive, two-year terms.

We lease undeveloped land in Baja California, Mexico to assess the potential development of an additional aquaculture locale and expansion of production. The lease term is three years beginning June 2015, with an option to extend for 30 years if we proceed with site development. We may terminate the lease early upon 30 days’ notice. Under a related collaboration agreement, we are responsible for certain improvements to the leased undeveloped land, and for reimbursement to the lessor for local operational support. The collaboration agreement expires in June 2018, unless terminated earlier.

We have purchase commitments for contract research organizations, consultants and contractors.

There have been no material changes in our contractual obligations previously disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2015, as filed with the SEC on December 14, 2015.

### Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements, including unrecorded derivative instruments, that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

## Market risk

As filed, 696 characters.

We are exposed to financial market risks associated with foreign exchange rates, concentration of credit, and liquidity. In accordance with our policies, we manage our exposure to various market-based risks and where material, these risks are reviewed and monitored by our Board of Directors. For a discussion of our market risk exposure, refer to Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2015, as filed with the SEC on December 14, 2015. There are no material changes in market risk from the disclosure provided in our Annual Report on Form 10-K for the fiscal year ended September 30, 2015.

## Controls and procedures

As filed, 1,333 characters.

#### Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining disclosure controls and procedures to provide reasonable assurance that material information related to our Company, including our consolidated subsidiaries, is made known to senior management, including our Chief Executive Officer and Chief Financial Officer, by others within those entities on a timely basis so that appropriate decisions can be made regarding public disclosure.

We carried out an evaluation, under the supervision and with the participation of our management, including our Principal Executive Officer and our Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) under the Securities and Exchange Act of 1934, as amended) as of June 30, 2016. Our Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures, as of June 30, 2016, were effective.

#### Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 200 characters.

There have been no material changes in the risk factors previously disclosed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2015, as filed with the SEC on December 14, 2015.

Filed Aug 9, 2016.
Source: SEC EDGAR, the filing index for accession 0001144204-16-117445. Last ingested by Listed: Nov 5, 2026, 19:56 ET. No prices; not investment advice.