EQUIPMENT, INTANGIBLES AND OTHER ASSETS

3 Months Ended

Dec. 31, 2014

Property, Plant and Equipment [Abstract]

NOTE 2 EQUIPMENT, INTANGIBLES AND OTHER ASSETS

(A)

Equipment

At December 31, 2014 and September 30, 2014, equipment is as follows:

	December 31, 2014		September 30, 2014

Computer Equipment	$	12,093	$	15,755
Furniture & Equipment		17,653		15,153
Integra Disk Filtration Units		600,000		600,000
Vehicles		21,000		21,000
Less accumulated depreciation		(55,015)		(27,386)

	$	595,731	$	624,522

Depreciation expense for the three months ended December 31, 2014 and 2013 was $32,537 and $1,425 respectively.

(B)

Intangibles

On April 29, 2014, the Company entered into an agreement to purchase existing patents and trademarks related to the Integra Disk Filtration Units previously described. On September 5, 2014, the purchase was completed. The acquisition of the patents and trademarks will allow the Company to produce additional units should the future need arise. The patents and trademarks have been valued at $300,000 and have been capitalized as intangible assets with a useful life of five years. Amortization expense for the three months ended December 31, 2014 was $15,000. Future amortization expense is as follows:

Fiscal year ending September 30
2015	$	45,000
2016		60,000
2017		60,000
2018		60,000
2019		55,000

	$	280,000

On April 20, 2012, Next Fuel acquired the rights to certain intellectual property, as further described below. These rights were acquired with cash (see Note 7). The intellectual property rights that were acquired were in the form of rights to new technologies and assignment of U.S. Provisional Patent Application No. 61624313 entitled “Transition Metals Enhancement of Biogenic Natural Gas Production”, filed on April 15, 2012. Due to early stage and requirement for further development of these technologies, the fact that Next Fuel was a development stage company at the time of acquisition, and the significant uncertainty of recoverability in the future; the Company has expensed the costs of these transactions to research and development at the time of the acquisitions. The CTG Technology in China was sold in February 2014 to a company owned by a shareholder/director of the Company in exchange for the return of 600,000 shares of the Company’s common stock (See Note 3(E)). The Company retained the rights to the CTG Technology for the United States.

In February 2012, Next Fuel acquired the rights to two new technologies from individual inventors (LPV Technology and CTP Technology described below). Both technologies are early stage and will require further development before we understand their full commercial potential. Provisional U. S. patent applications were filed for each. In February 2014, as described below, the Company sold its CTG Technology.

Coal-to-Gas (CTG) Technology

Next Fuel, Inc. is a technology provider and service company that assists owners of natural gas and oil production resources to increase the efficiency of their operations. In February 2014, the Company sold its Coal-to-Gas technology to Star Holding (U.K.) Ltd., which is controlled by Mr. Guangwei Guo, a member of the Board of Directors of the Company who also controls the Company’s China licensee. The primary terms of the sale were that Mr. Guo transferred 600,000 shares of common stock of the Company back to the Company and terminated the Company’s obligation to maintain a registration statement for resale of the remaining 1,851,666 shares of the Company’s common stock owned by Mr. Guo and his business associates. Due to the related party nature of this transaction, no gain was recorded related to the sale, and the transaction was accounted for as an equity transaction. Although the Company retains a license in the United States, the Company lacks financial resources to begin any United States Coal-to-Gas projects and is not currently in negotiations with any prospective partners or sub-licensees.

Low Energy-input Pervaporation (LPV) Technology

The Company expects to launch its LPV water treatment technology after completing tests later this calendar year. This LPV technology will provide the oil and gas industry with a new cost-effective method for treating waste water that contains the most challenging, high-salt and total dissolved solids used or produced in U.S. oil & gas operations to help the industry deal with environmental restrictions on operations.

Although the company has expensed the costs of the CTG and LPV technologies, it is the company’s belief that this intellectual property and associated patent applications may provide growth opportunities for the company in the highly competitive markets associated with oil & gas produced water and carbon dioxide sequestration. Given the early stage of the acquired technologies, the company believes they will not make significant contributions to the company's business for several years.

(C)

Other Current Assets

On November 6, 2012, the Company purchased a two-year Certificate of Deposit in the amount of $75,000 to be held as security for the issuance of Company credit cards. The Certificate of Deposit matured and was renewed on November 6, 2014 with a current interest rate of .15%. Interest earned and accumulated for the three months ended December 31, 2014 and 2013 was $72 and $47, respectively. As of December 31, 2014, the balance owed on the Company credit cards secured by the Certificate of Deposit was $62,095.

(D)

Lease Acquisition Costs

On October 30, 2013, the Company made an initial deposit of $100,000 in connection with a non-binding letter of intent for the purchase of Integra Water Filtration Units and Technology. On April 29, 2014, the Company entered into an agreement to purchase the Integra Water Filtration Units and Technology and has capitalized the deposit of $100,000 together with the remaining purchase price of $800,000 for a total cost of $900,000. The purchase was completed on September 5, 2014 for cash of $650,000 and a new Equipment Lease for the remaining $150,000. The Equipment Lease called for the issuance of 300,000 shares of the Company’s common stock valued at $.50 per share, which is being capitalized as Lease Acquisition Costs to be amortized over the life of the lease, which is three years. See Note 5 for a description of the lease.

- Definition

The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures.

+ References+ Details

NEXT FUEL, INC. 10-Q