UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended: September 30, ~~2015~~2016

o TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 000-49962

NEAH POWER SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Nevada		88-0418806
(State or other jurisdiction of		(IRS Employer Identification No.)
(State or other jurisdiction of incorporation or organization		(IRS Employer Identification No.)
incorporation or organization
22722 29th Drive SE, Suite 100, Bothell, WA		98021
22118 20th Ave SE, Suite 142, Bothell Washington		98021
(Address of principal executive offices)		(Zip Code)

(425) 424-3324

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class		Name of Each Exchange on Which Registered
None		None

Securities registered pursuant to Section 12(g) of the Exchange Act:

Common Stock, $0.001 par value per share

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

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes o No x

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

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 ~~x No~~ o No x

Indicate by check mark if disclosure of delinquent filers in response to Item 405 of Regulation S-K (§ 229.405) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o x

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

o Large Accelerated Filer	o Accelerated Filer

o Non-accelerated Filer (do not check if smaller reporting company)	x Smaller Reporting Company

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The aggregate market value of the Registrant’s common stock held by non-affiliates was approximately $61,~~540~~622,~~616~~723 as of March 31, ~~2015~~2016 (the last business day of the registrant’s most recently completed ~~second~~first fiscal quarter) based upon the closing price of common stock on that date of $0.~~0085~~0010.

As of ~~December~~August 167, ~~2015~~2018 there were 13,~~364~~117,~~055~~427,~~829~~774 shares of the Registrant’s $0.001 par value common stock issued and outstanding ~~and there were 1,203,576 shares of the Registrant’s $0~~.~~001 par value preferred stock issued and outstanding.~~

Documents Incorporated By Reference: None

	Neah Power Systems, Inc.
	ANNUAL REPORT ON FORM 10-K FOR THE PERIOD ENDED SEPTEMBER 30, 2015
	TABLE OF CONTENTS
PART I
ITEM 1.	BUSINESS	2
ITEM 1A.	RISK FACTORS	8
ITEM 1B.	UNRESOLVED STAFF COMMENTS	9
ITEM 2.	PROPERTIES	9
ITEM 3.	LEGAL PROCEEDINGS	9
ITEM 4.	MINE SAFETY DISCLOSURES	9
PART II		9
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	10
ITEM 6.	SELECTED FINANCIAL DATA	10
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	12
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	15
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	16
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	17
ITEM 9A.	CONTROLS AND PROCEDURES	17
ITEM 9B.	OTHER INFORMATION	17
PART III
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	18
ITEM 11.	EXECUTIVE COMPENSATION	20
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	23
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	24
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	25
PART IV
ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	26
	SIGNATURES	27

	Neah Power Systems, Inc.

	ANNUAL REPORT ON FORM 10-K FOR THE PERIOD ENDED SEPTEMBER 30, 2016

	TABLE OF CONTENTS
PART I		4
ITEM 1.	BUSINESS	4
ITEM 1A.	RISK FACTORS	9
ITEM 1B.	UNRESOLVED STAFF COMMENTS	9
ITEM 2.	PROPERTIES	9
ITEM 3.	LEGAL PROCEEDINGS	9
ITEM 4.	MINE SAFETY DISCLOSURES	9

PART II		10
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	10
ITEM 6.	SELECTED FINANCIAL DATA	10
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	11
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	13
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	13
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	15
ITEM 9A.	CONTROLS AND PROCEDURES	15
ITEM 9B.	OTHER INFORMATION	16

PART III		17
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	17
ITEM 11.	EXECUTIVE COMPENSATION	18
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	21
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	22
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	22

PART IV		24
ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	24
SIGNATURES		25

Table of Contents

EXPLANATORY NOTE

As used herein, the terms “Neah,” “Neah Power,” “Neah Power Systems,” “Company,” “we,” “our” and like references mean and include both Neah Power Systems, Inc., a Nevada corporation, and our wholly-owned subsidiary, Neah Power Systems, Inc., a Washington corporation.

FORWARD LOOKING STATEMENTS

This Annual Report on Form 10-K and the documents incorporated herein by reference contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Specifically, all statements other than statements of historical facts included in this Annual Report on Form 10-K regarding our financial position, business strategy and plans and objectives of management for future operations are forward-looking statements. These forward-looking statements are based on the beliefs of management, as well as assumptions made by and information currently available to management. When used in this Annual Report on Form 10-K, the words “anticipate,” “believe,” “estimate,” “expect,” “may,” “will,” “continue” and “intend,” and words or phrases of similar import, as they relate to our financial position, business strategy and plans, or objectives of management, are intended to identify forward-looking statements.

These statements reflect our current view with respect to future events and are inherently subject to risks and uncertainties, many of which we cannot predict with accuracy and some of which we might not even anticipate. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions at the time made, we can give no assurance that such expectations will be achieved. Future events and actual results, financial and otherwise, may differ materially from those expressed in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements. We undertake no duty to update or revise any forward-looking statements after the date of this Annual Report on Form 10-K and the documents incorporated herein by reference or to conform them to actual results, new information, future events or otherwise, except as may be required by law.

The following factors, among others, could cause our future results to differ materially from historical results or those anticipated:

· our ability to obtain financing;

· our future capital needs;

· the acceptance and success of our products, our ability to develop and commercialize products, and to enter into sales agreements with customers and generate revenue;

· the success or failure of our research and development programs, marketing, and sales efforts;

· resolution of outstanding lawsuits and default judgments against us, and our ability to settle disputes and negotiate with creditors for past due amounts;

· general market, labor and economic conditions and related uncertainties; and

· our limited operating history, and current debt and working capital conditions

These factors are the important factors of which we are currently aware that could cause actual results, performance or achievements to differ materially from those expressed in any of the forward looking statements. We operate in a continually changing business environment and new risk factors emerge from time to time. Other unknown or unpredictable factors could have material adverse effects on our future results, performance or achievements. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this Annual Report on Form 10-K may not occur.

For a discussion of these and other factors that may affect our business, results and prospects, see “Item 1A – Risk Factors” beginning on page 8. Readers are urged to carefully review and consider the various disclosures made by us in this Report and in our other reports previously filed with the Securities and Exchange Commission (the “SEC”), including our periodic reports on Forms 10-K, 10-Q and 8-K, and those described from time to time in our press releases and other communications, which attempt to advise interested parties of the risks and factors that may affect our business, prospects and results of operations.

1 3

Table of Contents

PART I

ITEM 1. BUSINESS

Overview

Neah Power Systems, Inc. (NPWZ) is engaged in the development and sale of renewable energy solutions using ~~proprietary~~our direct methanol micro fuel cell technology., ~~Our~~our ~~fuel~~reformer ~~cells~~technology, ~~are~~and ~~designed~~our silicon based rechargeable battery technology. This allows us to ~~replace~~generate ~~existing~~hydrogen ~~rechargeable~~using ~~and~~our ~~non-rechargeable~~Formira ~~battery~~reformer technology, inuse athat ~~variety~~hydrogen, ofor ~~applications~~use methanol directly, using the fuel cell technology, and then store that energy using the silicon based rechargeable lithium battery. We are developing solutions specifically targeted for the military, transportation vehicles, and portable electronics applications~~, and are continuing to pursue additional applications for our technology~~. Our long-lasting, efficient and safe power solutions include devices, such as notebook PCs, military radios, and other power-hungry computer, entertainment and communications products.

We ~~are~~use ~~developing~~a ~~two~~unique ~~classes of fuel cells~~patented, ~~one referred to as the PowerChip™ and the other as the BuzzCell™. We are also developing a hydrogen gas generating reformer technology referred to as Formira™. The PowerChip™ is a~~ silicon -based ~~fuel~~design ~~cell~~for ~~that~~our ~~uses~~micro ~~traditional~~fuel ~~computer~~cells ~~chip~~and ~~manufacturing to build the fuel cell.~~our ~~The~~battery ~~BuzzCell™~~that ~~product~~create ~~was~~higher ~~developed~~power ~~during~~densities ~~the last two years using some processing steps of the PowerChip™ technology~~ and ~~using~~enables ~~polymeric materials for a lower cost~~lighter-weight, ~~consumer~~smaller ~~oriented product. The PowerChip™ is targeted for applications where the quality of the surrounding air is unpredictable or not available like diesel~~form-~~fumes~~factors, ~~contaminated~~and ~~environments~~will orpotentially ~~underwater~~create ~~applications.~~more ~~The~~cost ~~BuzzCell™~~effective ~~product~~manufacturing ~~uses air from the surrounding environment~~ and ispotentially ~~targeted for consumer-oriented and less aggressive applications for~~ lower ~~power~~product ~~ranges~~costs. ~~The~~With ~~Company~~our isFormira ~~also~~Hydrogen ~~developing~~on ~~Formira™~~demand system, a reformer platform for direct on-site generation of hydrogen gas., ~~Customers~~customers will be able to carry a liquid with a ~~more~~better ~~acceptable~~ safety profile and generate hydrogen gas at point of use rather than carrying high pressure hydrogen gas cylinders. ~~Our~~ ~~technology~~The ~~and~~hydrogen ~~its~~is ~~applications~~designed ~~have~~to ~~been~~be ~~validated~~consumed ~~both~~directly by ~~our~~a ~~own research and customer results. We believe our~~ fuel ~~cells will outperform lithium ion batteries and other similar power sources~~cell, ~~with~~using ~~longer~~either ~~run~~our ~~time,~~silicon ~~shorter~~based ~~recharge time, ease of portability, and other measures of performance. We anticipate that our~~ fuel cell, ~~solution~~or ~~will~~commercially beavailable ~~particularly~~proton ~~beneficial~~exchange inmembrane ~~applications~~(PEM) ~~requiring the use of more than one battery because the user will only need to use a single~~ fuel ~~cell with a supply of smaller fuel cartridges, resulting in reduced overall size and weight~~cells.

We ~~have~~currently anare ~~intellectual~~doing ~~property~~our ~~portfolio~~battery ~~consisting~~development ofat 13a ~~issued~~third ~~patents,~~party 3facility ~~patent~~in ~~applications~~Beaverton, ~~pending issuance~~OR, and 13the ~~additional~~Company ~~patent~~is ~~applications~~primarily infocused ~~process,~~on ~~that~~the ~~are~~battery ~~being~~development ~~developed~~at ~~and~~this ~~various trade secrets for our proprietary technology~~time. We ~~use~~are using a ~~unique,~~variety ~~patented~~of ~~and~~consultants ~~award winning, silicon-based design~~ for ~~our~~business ~~Powerchip™~~development, ~~micro~~who ~~fuel~~are ~~cells~~located ~~that enable higher power densities~~worldwide, ~~lower cost~~ and ~~compact~~who ~~form-factors.~~are ~~The~~compensated ~~PowerChip™~~based ~~technology~~on ~~has~~commercial ~~been~~success. ~~recognized~~We ~~for~~currently ~~both~~operate ~~its~~out ~~innovativeness~~of ~~and its application potential from noted sources including the 2012 ZINO Green finalist~~Bothell, ~~the 2010 WTIA finalist, 2010 Best of What’s New Popular Science and other awards~~Washington.

~~Strategy~~ Due to the greater commercial interest in rechargeable battery systems, we are primarily focusing our limited resources on the development and ~~Current~~marketing ~~Business~~of our lithium battery technology while at the same time exploring licensing opportunities for the fuel cell and hydrogen markets.

~~Recently,~~We we have ~~announced~~an ~~teaming~~intellectual ~~agreements~~property ~~with~~portfolio ~~several~~consisting ~~leading~~of ~~companies~~13 inissued ~~the security/defense~~patents, ~~robotics~~2 ~~and~~patent ~~mobile~~applications ~~electronics~~pending ~~industries. Additionally~~issuance, ~~we have expanded industry relationships with battery~~ and ~~fuel~~13 ~~cell~~additional ~~suppliers~~patent ~~and~~applications ~~manufacturers~~in ~~and have entered into discussions with multiple strategic partners regarding the license~~process, ~~sale~~that ~~and~~are ~~manufacture~~being ofdeveloped ~~Neah Power’s products. To help facilitate~~ and ~~manage~~various ~~this~~trade ~~growth~~secrets ~~the~~for Company, has also expanded with the addition of several key consultants and advisors bringing high value associations including potential co-development sponsors within the U.S. Government. All of this, together with other significant advancements, is expected to open the door to the use of our ~~products~~proprietary ~~in several rapidly expanding markets, including transportation/automotive, distributed energy/smart grid infrastructure and telecommunications, and result in significant revenue growth~~technology.

WeStrategy ~~continue to explore licensing~~ and ~~product~~Current ~~sales~~Business ~~opportunities with leading defense, commercial and consumer companies. Our discussions with potential customers include, but are not limited only to, the following:~~

~~· Continuing~~Due ~~discussions~~to ~~with~~ the ~~DRDO~~generally tolow ~~license~~interest ~~our~~in fuel cell and hydrogen generation technology ~~for~~worldwide, ~~production~~we ~~and~~are ~~use~~exploring various licensing avenues for supplying product to regions which include India, ~~military~~China, ~~applications~~and parts of Europe. Given the potential of our silicon based technology in the rechargeable lithium battery space, we have redirected our efforts to those products and markets.

~~· Various~~Our ~~teaming~~business ~~agreements~~model ~~with~~includes ~~system~~the ~~integrators~~potential ~~and manufacturers~~ to ~~incorporate~~license ~~our~~the ~~products~~manufacturing ~~into~~of ~~their~~our ~~platforms,~~fuel ascells ~~well~~or asto ~~resell~~purchase ~~our~~product ~~products~~directly tofrom ~~their~~the ~~customers~~Company. In ~~addition,~~We webelieve ~~are~~that ~~presently~~our ~~negotiating~~licensing anstrategy ~~order~~will ~~for~~be ~~several~~particularly ~~demonstration~~attractive ~~units~~to ~~with~~customers awho ~~leading~~have ~~security~~access ~~and~~to ~~defense~~their ~~system~~own ~~integrator~~manufacturing ~~which~~capacity, isbecause ~~developing~~our ~~markets~~products ~~for~~can ~~our~~be ~~fuel~~manufactured ~~cell~~with ~~products~~existing equipment used in the ~~U.S.,~~semiconductor ~~Asia~~industry ~~Pacific,~~without ~~and~~significant ~~Middle~~capital ~~East~~outlays ~~and~~for ~~North~~new ~~Africa regions~~equipment.

~~· We~~The ~~have~~deployment aof ~~letter~~our ofbusiness ~~interest~~strategy ~~with~~has abeen ~~large~~delayed ~~U.S.~~due ~~based~~to ~~aerospace~~the ~~company,~~availability of capital and weour ~~have~~inability ~~provided~~to araise ~~scope~~sufficient ofcapital ~~work~~to ~~with~~fund ~~detailed~~ongoing ~~milestones~~operations, sales and amarketing ~~commercial~~and ~~proposal~~production. ~~for~~Assuming ~~commercial~~we ~~aviation~~are ~~applications.~~able ~~Depending~~to continue to obtain sufficient financing, we intend to focus on ~~the~~production ~~availability~~and delivery of ~~sufficient~~products ~~funding,~~to ~~our~~customers ~~plans~~and ~~for~~sales ~~fiscal~~efforts. ~~2016~~We ~~include~~intend ~~progress~~to oncontinue ~~various~~to ~~milestones~~develop ~~related~~business relationships and demonstrate our technology to ~~this~~potential ~~scope~~leading ofedge ~~work~~adopters.

~~· Continued~~Our ~~commercial~~Patented ~~proposals~~Silocon ~~for~~Based ~~the~~Fuel ~~BuzzBar™~~Cell ~~technology~~and toBattery ~~a large consumer company who has expressed interest in this product.~~Technology

~~· Strategic~~Our ~~Joint~~silicon ~~Venture~~based ~~with~~fuel acell ~~South~~design ~~African~~utilizes ~~Consortium~~a ~~comprised~~patented ofporous asilicon ~~Provincial~~electrode ~~Government~~structure and ~~Platinum~~circulating ~~Mining~~liquid ~~Conglomerates~~streams ~~regarding~~of ~~the~~fuel, ~~sale~~oxidant and ~~transfer~~electrolyte ofthat aproduce ~~license~~the chemical reactions needed to ~~produce~~generate ~~NEAH~~power. ~~Power’s~~We believe that our use of porous silicon and liquid oxidant is unique in the fuel cell industry. In final form, our products ~~for~~can ~~sale~~be packaged in ~~Africa~~plastic casings to create self-contained systems that retain the excess water produced during operation and prevent contamination to the ~~Middle~~cathode ~~East~~as occurs in traditional Proton Exchange Membrane (“PEM”) based direct methanol fuel cells.

Our ~~business~~silicon ~~model~~based ~~includes~~rechargeable lithium battery uses the ~~potential~~same tobasic ~~license~~silicon ~~the~~architecture ~~manufacturing~~and ofthen ~~our~~uses ~~fuel~~lithium ~~cells~~on orthe toanode, ~~purchase~~and ~~product~~a ~~directly~~variety ~~from~~of different materials on the ~~Company~~cathode. WeThe ~~believe~~cathode ~~that~~materials ~~our~~typically ~~licensing~~drive ~~strategy~~the ~~will~~end beapplication ~~particularly~~of ~~attractive~~the tobattery, ~~customers~~like ~~who~~the ~~have~~use ~~access~~of toLCO ~~their~~for ~~own~~consumer ~~manufacturing capacity~~devices, ~~because~~for ~~our~~example. ~~products~~This ~~can~~architecture beis ~~manufactured~~unique ~~with~~to ~~existing~~what ~~equipment~~is used in the ~~semiconductor~~ industry, ~~without~~and ~~significant~~we believe it leverages the strengths of the microchip manufacturing infrastructure, in terms of capital ~~outlays~~efficient manufacturing, economies of scale, and the use of depreciated factories for ~~new~~the ~~equipment~~production of the products.

WeOur ~~also~~BuzzBar™ ~~intend~~technology tois ~~design~~targeted ~~and~~for ~~distribute~~low ~~the~~power ~~fuel~~applications ~~cartridges~~and ~~that~~uses ~~these~~air ~~fuel~~from ~~cells~~the ~~require~~surrounding ~~for~~ambient ~~refueling.~~in Weits ~~anticipate~~current ~~that~~implementation. weWe ~~will~~are ~~generate~~also ~~future~~exploring ~~revenues~~the ~~from~~use of the ~~sale~~silicon ~~and~~based ~~licensing~~technology offor ~~both~~these ~~fuel~~low ~~cartridges~~power, ~~and~~consumer ~~the~~oriented ~~completed~~applications. ~~fuel~~The ~~cells.~~BuzzBar™ ~~Our~~product ~~business~~is ~~plan~~based ~~contemplates~~on ~~that~~an weAnion ~~will~~Exchange ~~subcontract~~Membrane, toand ~~third~~uses ~~parties~~some ~~substantially~~processing ~~all~~steps offrom the ~~production~~silicon ~~and~~fuel ~~assembly~~cell oftechnology ~~the~~to ~~reformer,~~build ~~fuel~~a ~~cells~~cost ~~and~~effective ~~fuel~~product ~~cartridges~~for consumer oriented applications.

2Our silicon based fuel cell technology was developed to address various issues seen with the incumbent PEM-based direct methanol fuel cells. We believed an entirely new design approach was necessary to achieve the power density, manufacturability, cost and reliability, and the unique ability to operate in anaerobic (non air-breathing) environments required by portable electronic devices and transportation applications. Furthermore, since our design is based largely on standard silicon wafer processing, we believe that it should have significant manufacturing advantages over traditional fuel cells. Compared to competing direct methanol fuel cell technologies that use carbon-based electrodes and solid PEM’s, we believe that our fuel cell’s silicon-based approach will deliver higher power output, lower cost for the equivalent size of fuel cell, a cost efficient manufacturing model that is used by the semiconductor industry, and aerobic and anaerobic operations.

~~Table of Contents~~4

~~For~~Table ~~the~~of PowerChip™ technology, we are focusing our initial sales strategy on markets requiring anaerobic or low oxygen content environments, such as underwater, transportation, aerospace and military applications. Our product focus for fiscal 2016 will be directed to our business with the aforementioned US defense supplier and the proposal to the commercial aviation provider, as well as fuel cell range extenders for electric and other recreational vehicles. Contents

~~For~~ Comparison ~~the~~between ~~PowerChip™~~Porous ~~and~~Silicon ~~the~~Fuel ~~BuzzBar™~~Cells product, we will also continue to pursue adoption in the consumer markets. While the size of the consumer markets is very significant, the adoption cycle can be much longer than the other markets that we are currently focused on. These longer adoption cycles are driven by longer lead times for product development, distribution, supply chain implementation, and ~~consumer~~PEM-Based specific safety testing. We are in preliminary discussions with a large consumer company for consumer applications, which, if successful, is expected to take 6 to 16 months for product placement on store shelves.Designs

~~The~~We ~~deployment~~believe ofthat ~~our business strategy has been delayed due to~~ the ~~availability~~principal advantages of ~~capital and~~ our ~~inability~~porous tosilicon ~~raise~~fuel ~~sufficient~~cell ~~capital~~approach toover ~~fund~~PEM-based ~~ongoing~~designs operations, sales and marketing and production. Assuming we are able to continue to obtain sufficient financing, we intend to focus on production and delivery of products to customers and sales efforts. We intend to continue to develop business relationships and demonstrate our technology to potential leading edge adopters.include:

· Our ~~Patented~~use ~~PowerChip™~~of ~~Technology~~porous silicon electrodes and the liquid electrolyte eliminate a range of possible failure modes that have hampered introduction of PEM-based systems. These include degradation of the PEM membrane, crossover of methanol fuel and degradation of the cathode catalyst, damage to the cathode catalyst by exposure to airborne contaminants such as sulfur, and flooding or alternatively drying out of the cathode catalyst. We believe that these advantages will allow our fuel cells to operate in a broader range of environmental conditions, in all orientations, with high reliability.

~~Our~~· The ~~PowerChip™~~use ~~fuel~~of ~~cell design utilizes a patented porous~~ silicon ~~electrode~~technology ~~structure~~allows ~~and~~us ~~circulating~~to ~~liquid~~make ~~streams~~use of ~~fuel,~~existing ~~oxidant~~silicon ~~and~~production ~~electrolyte~~infrastructure, ~~that~~with ~~produce~~reduced ~~the~~need ~~chemical~~to ~~reactions~~create ~~needed~~specialized toproduction ~~generate power~~facilities. We ~~believe~~can ~~that~~also ~~our~~ use ofstandard ~~porous~~ silicon ~~and~~technology ~~liquid~~to ~~oxidant~~optimize isthe ~~unique~~dimension inof the ~~fuel~~pores ~~cell~~for ~~industry.~~high ~~In final form~~power, ~~our~~while ~~products~~optimizing ~~can~~the bethickness ~~packaged in plastic casings~~ to ~~create~~reduce ~~self-contained~~cost ~~systems that retain the excess water produced during operation~~ and ~~prevent~~overall ~~contamination~~dimensions toof the ~~cathode as occurs in traditional Proton Exchange Membrane (“PEM”) based direct methanol~~ fuel ~~cells~~cell.

~~Our~~· The ~~BuzzBar™~~larger ~~technology~~reaction isarea, ~~targeted~~coupled ~~for~~with ~~low power applications and uses air from~~ the ~~surrounding ambient in its current implementation. We are also exploring the~~ use of ~~the~~oxidizer ~~PowerChip™~~at ~~technology~~the ~~for these low power~~cathode, ~~consumer~~leads ~~oriented~~to ~~applications.~~greater ~~The~~available ~~BuzzBar™~~power ~~product is based on an Anion Exchange Membrane~~density, ~~and~~which ~~uses~~reduces ~~some processing steps from~~ the ~~PowerChip™~~size ~~technology~~and ~~to build a~~ cost ~~effective~~of ~~product~~the ~~for~~fuel ~~consumer~~cell ~~oriented applications~~system. ~~We intend to discuss our BuzzBar™ technology in more detail as we implement patent protection around this technology.~~

· Our ~~PowerChip™~~ technology ~~was~~allows ~~developed~~us to ~~address~~create ~~various~~alternative ~~issues~~product ~~seen~~designs ~~with~~that ~~the~~do ~~incumbent~~not ~~PEM-based~~require ~~direct~~interactions ~~methanol~~with ~~fuel cells. We believed an entirely new design approach was necessary to achieve~~ the ~~power~~environment ~~density,~~for ~~manufacturability,~~operation. ~~cost~~This ~~and~~allows ~~reliability, and~~ the unique ability to operate in anaerobic (non air-breathing) environments required by portable electronic devices and transportation applications. Furthermore, since our design is based largely on standard silicon wafer processing, we believe that it should have significant manufacturing advantages over traditional fuel cells. Compared to competing direct methanol fuel cell technologies that use ~~carbon-based~~of ~~electrodes and solid PEM’s, we believe that~~ our fuel cell’s ~~silicon-based~~products ~~approach will deliver higher power output, lower cost~~ for ~~the~~applications ~~equivalent~~like ~~size~~sensor ofnetworks ~~fuel cell, a cost efficient manufacturing model~~ that isrequire ~~used~~operation bywithout ~~the~~breathing ~~semiconductor~~air ~~industry,~~or ~~and~~expelling ~~aerobic and anaerobic operations~~gases.

~~Comparison~~· Water ~~between~~created ~~Porous~~in ~~Silicon~~the ~~Fuel~~fuel ~~Cells~~cell reaction is retained in the fuel cartridge and ~~PEM-Based~~not ~~Designs~~vented where it can damage the host device.

We believe that the principal ~~advantages~~disadvantages of our ~~PowerChip™~~ approach ~~over~~consist ~~PEM-based~~of ~~designs~~the ~~include~~following factors:

· Our ~~use~~approach ofrequires ~~porous~~both ~~silicon electrodes and~~ the ~~liquid electrolyte eliminate a range of possible failure modes that have hampered introduction of PEM-based systems. These include degradation of the PEM membrane, crossover of methanol~~ fuel cell and ~~degradation of~~ the ~~cathode~~cartridge ~~catalyst, damage~~ to ~~the~~contain ~~cathode~~acids ~~catalyst~~at bycorrosive ~~exposure~~concentrations, tobut ~~airborne~~at ~~contaminants~~concentrations ~~such~~lower asthan ~~sulfur,~~those ~~and~~extant ~~flooding~~in orvarious ~~alternatively~~liquid ~~drying~~acid ~~out of the cathode catalyst~~batteries. WeIt ~~believe~~is ~~that~~therefore ~~these~~important ~~advantages will allow our fuel cells~~ to ~~operate~~ensure inthat ausers ~~broader range~~ of ~~environmental~~the ~~conditions,~~technology inare ~~all~~safely ~~orientations,~~separated ~~with~~from ~~high~~these ~~reliability~~acids.

· The ~~use~~need ~~of silicon technology allows us~~ to ~~make~~select ~~use~~materials ofcompatible ~~existing silicon production infrastructure,~~ with ~~reduced need to create specialized production facilities. We can also use standard silicon technology to optimize~~ the ~~dimension of the pores for high power, while optimizing the thickness to reduce cost and overall dimensions of the fuel cell~~chemistry.

~~· The~~ Comparison ~~larger~~between ~~reaction~~our ~~area,~~Porous ~~coupled~~Silicon ~~with~~rechargeable ~~the~~lithium ~~use~~battery ~~of oxidizer at the cathode, leads to greater available power density, which reduces the size~~ and ~~cost~~other ofrechargeable ~~the~~lithium ~~fuel~~battery ~~cell system.~~designs

~~· Our~~We ~~technology~~believe ~~allows us to create alternative product designs~~ that ~~do not require interactions with~~ the ~~environment~~principal ~~for~~advantages ~~operation. This allows the use~~ of our ~~fuel~~Porous ~~cell~~Silicon ~~products~~battery ~~for~~approach ~~applications~~over ~~like~~conventional ~~sensor~~rechargeable ~~networks~~lithium ~~that~~batteries ~~require~~are ~~operation without breathing air or expelling gases.~~:

· ~~Water~~The ~~created~~use inof ~~the~~proven ~~fuel~~micro ~~cell~~chip ~~reaction~~manufacturing istechnologies ~~retained~~to inproduce ~~the~~our ~~fuel~~batteries, ~~cartridge~~makes ~~and~~our technologies capital efficient, not ~~vented~~requiring ~~where~~a itlarge ~~can~~outlay ~~damage~~of ~~the~~capital ~~host~~to ~~device~~produce our battery.

3· The larger reaction area, leads to greater available power density, and more efficient reactions.

~~Table~~· Our porous silicon architecture allows us to use a variety of ~~Contents~~cathode materials to serve a variety of different markets.

· We believe ~~that~~ the ~~principal~~battery ~~disadvantages~~will ofbe ~~our~~more ~~approach~~inherently ~~consist~~safe due to the architecture of the ~~following~~battery, ~~factors:~~and the mix of materials used by the battery.

~~· Our~~We ~~approach~~believe ~~requires~~that ~~both~~ the ~~fuel~~principal ~~cell~~disadvantages ~~and~~of ~~the~~our ~~cartridge~~approach toconsist ~~contain acids at corrosive concentrations, but at concentrations lower than those extant in various liquid acid batteries. It is therefore important to ensure that users~~ of the ~~technology~~following ~~are safely separated from these acids.~~factors:

· ~~The~~We need to ~~select~~continue ~~materials~~to ~~compatible~~run ~~with~~extensive testing to demonstrate the ~~chemistry~~lifetime of the battery, and to quantify the benefits over time.

As· Due ~~an ongoing effort~~ to ~~increase~~ the ~~competitiveness~~inherently ofdifferent ~~our~~structure ~~product,~~of ~~we are focused on~~ the ~~following continuous improvement programs that we believe will further enhance the performance differentiation of our fuel cell~~battery, ~~reduce~~customers ~~the~~might ~~cost,~~have ~~and~~certain ~~enhance~~hesitation ~~manufacturability~~to ~~and~~adopt ~~increase~~such ~~lifetime~~new ~~and reliability:~~architecture.

~~· Increase~~As ~~the~~an ~~volumetric~~ongoing ~~power~~effort ~~density~~to ~~over~~increase the ~~power~~competitiveness ~~density~~of ~~currently available in~~ our ~~fuel~~product, ~~cells~~we -are ~~this~~focused ~~will~~on ~~enable~~the ~~more~~following ~~compact~~continuous ~~solutions;~~improvement programs:

· ~~Continue~~Reduce ~~development of manufacturing techniques for fuel cell and fuel cartridge assembly, allowing~~ the ~~unit~~cost ~~to meet relevant specifications (such as those~~ of the ~~Underwriters Laboratories) that are required by many customers~~product;

· ~~Further~~Continue ~~develop~~development ~~manufacturing techniques for key components~~ of ~~the~~current ~~fuel cells~~ and ~~locate~~new ~~suitable manufacturing partners or subcontractors~~technologies;

· ~~Reduce~~Outsource the ~~precious~~manufacturing ~~metal content~~ of ~~the~~various ~~fuel~~key ~~cells from present levels according to a staged program in order to meet and exceed our production cost objectives~~components; ~~and~~

~~· Improve the aerobic solution that will provide higher energy density for aerobic applications, while leveraging other capabilities from our anaerobic system.~~5

~~Our~~Table ~~Industry~~of Contents

~~NEAH’s~~Our proprietary fuel cell technologies offer a number of compelling advantages compared to current fossil-fuel and battery-powered solutions, enabling the company and its licensed partners and distributers to tap into a number of large and growing markets in the military, transportation, and portable electronics applications sectors as described below.Industry

~~PowerChip®~~NEAH’s ~~Fuel~~proprietary ~~Cell~~fuel cell and ~~Formira~~battery ~~HOD®~~technologies ~~system~~offer a number of compelling advantages compared to current fossil-fuel and battery-powered solutions, enabling the company and its licensed partners and distributers to tap into a number of large and growing markets in the military, transportation, and portable electronics applications sectors as described below.

· MilitaryPourous Applicationssilicon fuel cells, batteries, and Formira HOD® system markets

~~Neah~~· Military believes that the market for military applications of Neah Products will be a significant driver of its revenues, as reflected in market research by Frost & Sullivan, as well as management’s own internal marketing estimates. As the commitment of governments worldwide to “clean energy” in compliance with global emissions reduction policies increases, so will the pace of adoption of efficient fuel cell and energy storage solutions by military and other homeland defense forces. Neah Products can serve as highly effective primary, secondary and backup power solutions for both mission critical and mission support requirements. Neah Products can also be deployed along coastlines, and in other isolated areas, to enable wide-area surveillance and security monitoring, which have become key priorities for rapidly developing emerging nations in Africa, Asia and the Middle East. Neah’s PowerChip® Fuel Cell uniquely addresses the demand for power systems that can operate in anaerobic (“non-air”) environments, such as that required in underwater, underground, close quarters, high altitude, and no-atmosphere applications specific to military and defense requirements. As the only anaerobic fuel cell commercially-available in the marketplace, Neah’s management believes that there is little to no-competition to the PowerChip® Fuel Cell in addressing the growing demand for non-air operable fuel cells. The continued rapid growth in the military use of unmanned vehicles (aerial, ground, and underwater), which are increasingly becoming strategic elements of a military’s mission capability, is expected to drive military use of Neah’s Products. the global fuel cell market for all unmanned vehicles is expected to grow to USD2 billion by 2023 (Frost & Sullivan). Neah expects significant demand for its products for use in soldier wearable and portable power systems. Weight, durability and run-time are critical issues, which gives the Neah Products certain market advantages.Applications

~~· Community~~Neah ~~Power~~believes –that the market for military applications of Neah Products will be a significant driver of its revenues, as reflected in market research by Frost & Sullivan, as well as management’s own internal marketing estimates. As the commitment of governments worldwide to “~~Micro~~clean energy” in compliance with global emissions reduction policies increases, so will the pace of adoption of efficient fuel cell and energy storage solutions by military and other homeland defense forces. Neah Products can serve as highly effective primary, secondary and backup power solutions for both mission critical and mission support requirements. Neah Products can also be deployed along coastlines, and in other isolated areas, to enable wide-~~Grids~~area surveillance and security monitoring, which have become key priorities for rapidly developing emerging nations in Africa, Asia and the Middle East. Neah’s products uniquely addresses the demand for power systems that can operate in anaerobic (“non-air”) environments, such as that required in underwater, underground, close quarters, high altitude, and no-atmosphere applications specific to military and defense requirements.

~~Globally,~~· Community ~~over~~Power ~~1.4~~– ~~billion people lack access to electricity. Due to the slow pace of electricity infrastructure penetration in rural areas of emerging nations of Africa, Middle East and Asia, remote fuel cell~~ “~~micro~~Micro-~~grid~~Grids” power plants have emerged as an increasingly viable alternative. Two basic models of distribution to the community have emerged in the marketplace over the last 5 years; the “energy hub” and the “micro-grid”. In countries with high population density such as India and Bangladesh the micro-grid model can be cost-effective, but it is more difficult in most of Africa without substantial subsidies. The less capital-intensive and scalable approach is to create an energy hub which requires beneficiaries to travel to a central point. Neah and its distribution partners intend to use this scaling effect of mobile telecommunications and infrastructure to market Formira HOD® Systems to government utilities and private utility service providers to provide millions of underserved communities access to vital energy services.

~~· Telecommunications~~Globally, over 1.4 billion people lack access to electricity. Due to the slow pace of electricity infrastructure penetration in rural areas of emerging nations of Africa, Middle East and Asia, remote fuel cell “micro-grid” ~~Back~~power plants have emerged as an increasingly viable alternative. Two basic models of distribution to the community have emerged in the marketplace over the last 5 years; the “energy hub” and the “micro-Upgrid”. ~~Power~~In countries with high population density such as India and Bangladesh the micro-grid model can be cost-effective, but it is more difficult in most of Africa without substantial subsidies. The less capital-intensive and scalable approach is to create an energy hub which requires beneficiaries to travel to a central point. Neah and its distribution partners intend to use this scaling effect of mobile telecommunications and infrastructure to market its systems to government utilities and private utility service providers to provide millions of underserved communities access to vital energy services.

~~Neah~~· Telecommunications expects its power generation and energy storage products will capture a major share of the tower power market, as telecommunications and utilities companies continue to convert to fuel cell systems to provide remote and back-up power for their service infrastructure. According to the Groupe Speciale Mobile Association (GSMA), as of date “green’” telecom towers comprise just 1% of total installed towers worldwide. With an estimated 5 million towers worldwide, 3 million of which are in developing countries, 1.5 million of which are tied to unreliable grids and 640,000 of which are completely offBack-~~grid,~~Up only 55,000 towers are currently serviced with a hybrid mix of “green” energy technology and diesel generation sets. China has installed nearly half of these green telecom towers. In terms of addressable market size, telecom towers consume the energy equivalent of 1% of the world’s electricity, costing up to USD136 billion per annum (MIT Technology Review). The industry’s growth markets are largely in developing countries, where 3 out of every 4 new base stations will be deployed over the next decade, a significant portion of which will be constructed in off-grid locations – which is ideal for fuel cell and hybrid powered renewable energy systems.Power

Neah expects its power generation and energy storage products will capture a major share of the tower power market, as telecommunications and utilities companies continue to convert to fuel cell systems to provide remote and back-up power for their service infrastructure. In terms of addressable market size, telecom towers consume the energy equivalent of 1% of the world’s electricity, costing up to USD136 billion per annum (MIT Technology Review). The industry’s growth markets are largely in developing countries, where 3 out of every 4 new base stations will be deployed over the next decade, a significant portion of which will be constructed in off-grid locations – which is ideal for fuel cell and hybrid powered renewable energy systems.

~~Table~~· Transportation of& ~~Contents~~Aerospace

~~· Transportation~~Neah &expects that it will be a significant player with its porous silicon battery and Formira HOD® System in providing energy storage and hydrogen generation technologies for the rapidly growing transportation and aerospace markets. The largest growth segment is the electric vehicle (EV) market, which includes hybrid and electric automobiles (powered by both fuel cells and/or batteries), and the small manned EV market, which includes everything from e-bikes to electric microEVs, and is expected to reach over USD33 billion by 2025. Aerospace applications include power systems for unmanned aerial vehicles (UAVs).

~~Neah~~· Consumer ~~expects~~Electronics ~~that it will be a significant player with its Formira HOD® System in providing fuel cell~~ and ~~hybrid~~Mobile fuel cell power systems for the rapidly growing transportation and aerospace markets. The largest growth segment is the electric vehicle (EV) market, which includes hybrid and electric automobiles (powered by both fuel cells and/or batteries), and the small manned EV market, which includes everything from e-bikes to electric microEVs, and is expected to reach over USD33 billion by 2025. Aerospace applications include power systems for unmanned aerial vehicles (UAVs).Devices

~~· Consumer~~Recent ~~Electronics~~trends continue to demonstrate a need for better and ~~Mobile~~longer ~~Devices~~lasting power solutions to close the “power gap” - the difference between power capacity and power need - thus enhancing mobility and productivity. Based on user demand, mobile electronics companies continue to add features for richer experiences. Users are also more dependent on these mobile devices and are using them longer without access to outlet power. Market research indicates that the size of the consumer market for fuel cells as battery replacements is estimated to reach USD6 billion per year by 2020.

~~Recent~~· Industrial trends continue to demonstrate a need for better and longer lasting power solutions to close the “power gap” - the difference between power capacity and power need - thus enhancing mobility and productivity. Based on user demand, mobile electronics companies continue to add features for richer experiences. Users are also more dependent on these mobile devices and are using them longer without access to outlet power. Market research indicates that the size of the consumer market for fuel cells as battery replacements is estimated to reach USD6 billion per year by 2020. Applications

~~· Industrial~~With ~~Applications~~regard to mainstream commercial and industrial applications, Neah’s fuel cells and batteries can be designed to be placed anywhere, as well as integrated with critical equipment, sensors and other electrical devices through teaming and co-development agreements. Neah’s PowerChip® Fuel Cell and Formira HOD® System, together with its energy storage solutions, will be marketed as “clean energy” solutions for customers requiring distributed or “micro-grid” power to operate facilities and equipment installed at remote installations, as well as to power specialized high value equipment used in facility monitoring and management, including surveillance, site incursion control, and infrastructure/asset protection. Target customers shall include those involved in security, environmental, agriculture, mining and manufacturing.

With regard to mainstream commercial and industrial applications, Neah’s fuel cells can be designed to be placed anywhere, as well as integrated with critical equipment, sensors and other electrical devices through teaming and co-development agreements. Neah’s PowerChip® Fuel Cell and Formira HOD® System, together with its energy storage solutions, will be marketed as “clean energy” solutions for customers requiring distributed or “micro-grid” power to operate facilities and equipment installed at remote installations, as well as to power specialized high value equipment used in facility monitoring and management, including surveillance, site incursion control, and infrastructure/asset protection. Target customers shall include those involved in security, environmental, agriculture, mining and manufacturing. Neah has identified significant market demand particularly in remote regions where oil and gas drilling, mining and other large scale industrial activity is occurring. Competition

~~PowerChip®~~The ~~Battery~~development ~~Markets~~and marketing of fuel cells, batteries, and fuel cell systems is extremely competitive. In many cases, we may compete directly with alternative energy, fuel cell, and entrenched power-generation and power-storage technologies. In addition, a number of firms throughout the world have established fuel cell development programs and battery technologies. Competitors range from development stage companies to major domestic and international companies. Many of our competitors have:

· ~~Grid-Storage~~ substantially greater financial, technical, marketing and human resource capabilities;

~~Utility~~· established ~~companies~~relationships are increasingly seeking to improve operational efficiency through the use of stand-by energy storage. As the use of solar energy and the rapid shift to distributed power systems increase, so does the demand for longer lasting, higher energy dense and scalable storage solutions. Accordingly, the grid storage segment is expected to grow from 6.9% of the battery market to 37.6% by 2020. Presently, there are over 40 lithium-ion based grid storage projects under construction that would benefit significantly from Neah’s ability to deliver with ~~its~~original ~~PowerChip®~~equipment ~~Battery 10x the energy density over existing lithium-ion solutions at lower cost.~~ manufacturers;

· ~~Electric~~ name-brand ~~Vehicles~~recognition; ~~(EV)~~and

~~With~~· established ~~the~~positions ~~impending~~in ~~mass adoption of EV and hybrid vehicles,~~ the EVmarkets ~~automotive~~that ~~segment~~we ishave ~~expected~~targeted tofor ~~grow from 18~~penetration.3% of the battery market to 30% by 2020, reaching about USD15.7 billion. With its battery’s cost advantage (USD150/Kwh vs. USD400/Kwh) and high power to weight ratio, Neah is a potential leader in the rapidly expanding EV automotive battery market.

· Consumer Electronics and Portable DevicesRecent consumer trends in everything from mobile phones to wearable technology to portable medical devices demonstrate the need for better, longer lasting and flexible power solutions, creating opportunities for both Neah’s BuzzBar® Suite and its current line of fuel cells suited for off-grid and remote energy generation with an estimated market of between USD6.0 billion and USD8.0 billion per year.6

~~· Medical~~Table Devices The PowerChip® technology provides a superior form factor, enabling long lasting lithium batteries to be built as small as a dime. Neah’s lithium battery is thus not only viable in many applications in the medical sector (ECG, flow sensor, etc.), it’s a safer and higher density alternative to the older lithium-ion batteries in current use. The wireless portable medical device market is expected to represent USD2.83 billion of ~~the global battery market by 2020.~~Contents

~~Competition~~These or other companies may succeed in developing and bringing to market products or technologies that are more cost-effective than those we develop or that would render our products and technology obsolete or non-competitive in the marketplace.

~~The~~Our ~~development~~Proprietary ~~and~~Rights ~~marketing of fuel cells~~ and ~~fuel~~Intellectual cell systems is extremely competitive. In many cases, we may compete directly with alternative energy, fuel cell, and entrenched power-generation and power-storage technologies. In addition, a number of firms throughout the world have established fuel cell development programs, although most of them are PEM-based. Competitors range from development stage companies to major domestic and international companies. Many of our competitors have:Property

~~· substantially~~We ~~greater~~rely ~~financial~~primarily on patents and contractual obligations with employees and third parties to protect our proprietary rights. We continue to seek appropriate patent protection for our proprietary technologies by filing patent applications in the U.S. and in certain foreign countries. As of the date of this Annual Report on Form 10-K, ~~technical~~we own or control 13 issued patents, ~~marketing~~3 patent applications pending issuance, and ~~human~~13 ~~resource~~additional ~~capabilities;~~patent applications in process. Listed below are Neah’s patents and patent pending applications. All intellectual property is wholly owned by Neah and is not licensed to, or otherwise owned by, any third-parties.

~~· established~~In ~~relationships~~addition ~~with~~to ~~original~~the ~~equipment~~patents ~~manufacturers;~~listed below, we have filed two patent applications and six patent disclosures related to the silicon based lithium battery. We have requested confidential treatment on these applications / disclosures.

· name-brand recognition; and

Patent No.	Title	Status
6641948	Fuel Cells Having Silicon Substrates and/or Sol-Gel Derived Support Structures	Granted
6852443	Fuel Cells Having Silicon Substrates and/or Sol-Gel Derived Support Structures	Granted
7157177	Porous Fuel Cell Electrode Structures Having Conformal Electrically Conductive Layers Thereon	Granted
7198864	Silicon-Based Fuel Cell Electrode Structures	Granted
6720105	Metallic Blocking Layers Integrally Associated with Fuel Cell Electrode Structures and Fuel Cell Electrode Stack Assemblies	Granted
6808840	Silicon-Based Fuel Cell Electrode Structures and Fuel Cell Electrode Stack Assemblies	Granted
7968248	Liquid-Liquid Fuel Cell Systems Having Flow-Through Anodes and Flow-By Cathodes	Granted
6924058	Hydrodynamic Transport and Flow Channel Passageways Associated with Fuel Cell Electrode Structures and Fuel Cell Electrode Assemblies	Granted
7105245	Fuel Cell System Reactant Supply and Effluent Storage Cartridges	Granted
6811916	Fuel Cell Electrode Pair Assemblies and Related Methods	Granted
7118822	Fuel Cell Electrode Pair Assemblies and Related Methods	Granted
7205665	Porous Silicon Undercut Etching Deterrent Masks and Related Methods	Granted
9184463 B2	Nitric Acid Regeneration Fuel Cell Systems	Granted
	Nitric Acid Regeneration Fuel Cell Systems	Patent Pending
	Nitric Acid Regeneration Fuel Cell Systems	Patent Pending
	Nitric Acid Regeneration Fuel Cell Systems	Patent Pending
	Nitric acid regeneration fuel cell systems	Patent Pending
	Flow management in fuel cell configurations	Patent Pending
	Charging system containing a fuel cell and battery with materials and methods of assembly for a fuel cell utilizing an anionic exchange membrane and fuel cell cartridge designs	Patent Pending
	Charging system containing a fuel cell and battery with materials and methods of assembly for a fuel cell utilizing an anionic exchange membrane and fuel cell cartridge designs	Patent Pending
	Charging system containing a fuel cell and battery with materials and methods of assembly for a fuel cell utilizing an anionic exchange membrane and fuel cell cartridge designs	Patent Pending
	Passive proton exchange membrane fuel cell	Patent Pending
	Method and system for simultaneously charging an energy storage device from multiple energy input devices	Patent Pending
	Catalytic Hydrogel	Patent Pending
	Polymer Bound Solid Metal Complex Catalyst for Hydrogen Reforming From Fromic Acid	Patent Pending
	Passive Proton Exchange Membrane Fuel Cell	Patent Pending
	Method and system for simultaneously charging and energy storage device from multiple energy input devices	Patent Pending
	Devise and related method for assembling a battery using porous, structured silicon	Patent Pending
	Reformer Device and Method related to obtaining Hydrogen from Formic Acid	Patent Pending

~~· established~~Our ~~positions~~financial insuccess ~~the~~will ~~markets~~depend ~~that~~in welarge ~~have~~part ~~targeted~~on ~~for~~our ~~penetration.~~ability to:

~~These~~· obtain orpatent ~~other companies may succeed in developing~~ and ~~bringing~~other toproprietary ~~market~~protection ~~products~~for ~~or technologies that are more cost-effective than those we develop or that would render~~ our ~~products~~intellectual ~~and technology obsolete or non-competitive in the marketplace.~~property;

5· enforce and defend patents and intellectual property once obtained;

~~Table~~· operate without infringing on the patents and proprietary rights of ~~Contents~~third parties; and

~~Our~~· preserve ~~Proprietary~~our ~~Rights~~best known methods and ~~Intellectual~~trade ~~Property~~secrets;

WeThere ~~rely~~is ~~primarily~~a onnumber ~~patents~~of ~~and~~existing ~~contractual~~U.S. ~~obligations~~patents ~~with~~covering ~~employees~~PEM-based ~~and~~direct ~~third~~methanol ~~parties~~fuel tocells ~~protect~~held ~~our~~by ~~proprietary~~several ~~rights~~organizations. We ~~continue~~believe ~~to seek appropriate patent protection for~~ our ~~proprietary~~fuel ~~technologies~~cell bydesign ~~filing patent applications in the U.S.~~ and intechnology ~~certain~~do ~~foreign~~not ~~countries.~~conflict Aswith ofthese ~~the date of this Annual Report on Form 10-K, we own or control 13 issued~~ patents, ~~3 patent applications pending issuance,~~ and ~~13 additional patent applications in process. Listed below~~ are ~~Neah’s~~independently ~~patents and patent pending applications~~protectable. ~~All intellectual property is wholly owned by Neah and is not licensed to, or otherwise owned by, any third-parties.~~

Patent No.	Title
6641948	Fuel Cells Having Silicon Substrates and/or Sol-Gel Derived Support Structures	Granted
6852443	Fuel Cells Having Silicon Substrates and/or Sol-Gel Derived Support Structures	Granted
7157177	Porous Fuel Cell Electrode Structures Having Conformal Electrically Conductive Layers Thereon	Granted
7198864	Silicon-Based Fuel Cell Electrode Structures	Granted
6720105	Metallic Blocking Layers Integrally Associated with Fuel Cell Electrode Structures and Fuel Cell Electrode Stack Assemblies	Granted
6808840	Silicon-Based Fuel Cell Electrode Structures and Fuel Cell Electrode Stack Assemblies	Granted
7968248	Liquid-Liquid Fuel Cell Systems Having Flow-Through Anodes and Flow-By Cathodes	Granted
6924058	Hydrodynamic Transport and Flow Channel Passageways Associated with Fuel Cell Electrode Structures and Fuel Cell Electrode Assemblies	Granted
7105245	Fuel Cell System Reactant Supply and Effluent Storage Cartridges	Granted
6811916	Fuel Cell Electrode Pair Assemblies and Related Methods	Granted
7118822	Fuel Cell Electrode Pair Assemblies and Related Methods	Granted
7205665	Porous Silicon Undercut Etching Deterrent Masks and Related Methods	Granted
9184463B2	Nitric Acid Regeneration Fuel Cell Systems	Granted
	Nitric Acid Regeneration Fuel Cell Systems	Patent Pending
	Nitric Acid Regeneration Fuel Cell Systems	Patent Pending
	Nitric Acid Regeneration Fuel Cell Systems	Patent Pending
	Nitric acid regeneration fuel cell systems	Patent Pending
	Flow management in fuel cell configurations	Patent Pending
	Charging system containing a fuel cell and battery with materials and methods of assembly for a fuel cell utilizing an anionic exchange membrane and fuel cell cartridge designs	Patent Pending
	Charging system containing a fuel cell and battery with materials and methods of assembly for a fuel cell utilizing an anionic exchange membrane and fuel cell cartridge designs	Patent Pending
	Charging system containing a fuel cell and battery with materials and methods of assembly for a fuel cell utilizing an anionic exchange membrane and fuel cell cartridge designs	Patent Pending
	Passive proton exchange membrane fuel cell	Patent Pending
	Method and system for simultaneously charging an energy storage device from multiple energy input devices	Patent Pending
	Catalytic Hydrogel	Patent Pending
	Polymer Bound Solid Metal Complex Catalyst for Hydrogen Reforming From Fromic Acid	Patent Pending
	Passive Proton Exchange Membrane Fuel Cell	Patent Pending
	Method and system for simultaneously charging and energy storage device from multiple energy input devices	Patent Pending
	Devise and related method for assembling a battery using porous, structured silicon	Patent Pending
	Reformer Device and Method related to obtaining Hydrogen from Formic Acid	Patent Pending

~~Our~~Table ~~patents and patent applications are directed to the components and systems involved in our fuel cell design and the use~~ of ~~porous substrates coated with catalyst as fuel cell electrodes and electrode structures, cell bonding techniques, and cartridges. Our financial success will depend in large part on our ability to:~~Contents

~~· obtain~~Research ~~patent~~ and ~~other proprietary protection for our intellectual property;~~Development

~~· enforce~~We conduct our research and ~~defend~~development, ~~patents~~marketing and ~~intellectual~~sales ~~property~~activities ~~once~~at ~~obtained;~~our headquarters in Bothell, Washington and at leased facilities in Oregon. Contingent upon the receipt of adequate financing, we plan to continue investing in research and development, marketing, and sales. We anticipate that these efforts, and resulting costs, will increase in future years compared to prior years due to increased product development related to specific customer products and to additional improvements to our technology. For the years ended September 30, 2016 and 2015, our expenses related to research and development were $423,912 and $1,320,837 respectively.

~~· operate without infringing on the patents and proprietary rights of third parties; and~~Employees

~~· preserve~~As ~~our~~of ~~best~~September ~~known~~30, ~~methods~~2016, we had 2 employees, including one executive officer and ~~trade~~one ~~secrets;~~technical employee. We also had an additional executive officer who is a part time contractor and not an employee. We continue to use part-time staff composed of former full-time employees, and contractors for various technical and administrative services. We expect to continue to use outside business development consultants, whose compensation will be based on revenue opportunities they create.

There is a number of existing U.S. patents covering PEM-based direct methanol fuel cells held by several organizations. We believe our fuel cell design and technology do not conflict with these patents and are independently protectable.History

6Our company was incorporated in the State of Nevada on February 1, 2001 under the name Growth Mergers, Inc. Effective March 9, 2006, we entered into an Agreement and Plan of Merger, as amended on April 10, 2006, whereby Growth Acquisitions, Inc., a Washington corporation and wholly-owned subsidiary of Growth Mergers, Inc., merged with and into Neah Power Systems, Inc., a Washington corporation (“Neah Power Washington”). Following the merger, Growth Mergers, Inc. changed its corporate name to Neah Power Systems, Inc. By virtue of this merger, Neah Power Washington became our wholly-owned subsidiary.

~~Table~~The purpose of ~~Contents~~the merger was to enable Neah Power Washington, as Growth Mergers, Inc.’s subsidiary, to access the capital markets via a public offering. Our common stock currently trades on the OTC “Pink” market under the symbol “NPWZ.”

~~Research~~Available ~~and Development~~Information

WeThe ~~conduct~~Company ~~our~~chose ~~research~~to ~~and~~file ~~development~~a Form 15 on May 15, ~~marketing~~2017, terminating its obligation to file current, quarterly and ~~sales~~annual ~~activities~~SEC atreports. ~~our~~The ~~headquarters~~Company inintends ~~Bothell~~to maintain its non-reporting status for the foreseeable future, ~~Washington.~~and ~~Contingent~~will evaluate its various options based upon ~~the~~future ~~receipt~~business ofdevelopment. ~~adequate~~Prior ~~financing~~to May 15, 2017, we ~~plan~~were subject to ~~continue~~the ~~investing~~information inrequirements ~~research~~of the Exchange Act and ~~development~~file annual, ~~marketing~~quarterly and current reports, and ~~sales~~other information with the SEC. WeYou ~~anticipate~~may ~~that~~read and copy these ~~efforts~~reports on our website, www.neahpower.com, and ~~resulting~~at ~~costs~~the SEC’s Public Reference Room at 100 F Street, ~~will~~NE, ~~increase~~Washington, inDC ~~fiscal~~20549. ~~year~~Please ~~2016~~call ~~compared~~the toSEC ~~prior~~at ~~years~~1-800-SEC-0330 ~~due~~or toemail ~~increased~~the ~~product~~SEC ~~development~~at ~~related~~publicinfo@SEC.gov tofor ~~specific~~more ~~customer~~information ~~products~~on ~~and~~the tooperation ~~additional~~of ~~improvements~~the topublic ~~our~~reference ~~technology~~room. ~~For~~Our SEC filings are also available at the ~~years~~SEC’s ~~ended~~website ~~September~~at 30http://www.sec.gov. In addition, ~~2015~~we ~~and~~make ~~2014~~available, without charge, through our ~~expenses~~website ~~related~~(www.neahpower.com), toelectronic ~~research~~copies ~~and~~of ~~development~~our ~~were~~SEC $1filings,~~320~~ as soon as reasonably practicable after we electronically file such reports or amendments with,~~837~~ ~~and~~or $1furnish information to,~~300,265~~ ~~respectively~~the SEC.

~~Employees~~8

AsTable of September 30, 2015, we had 3 employees, including one executive officer, one administrative and one technical employee. We also had an additional executive officer who is a part time contractor and not an employee. We continue to use part-time staff composed of former full-time employees, and contractors for various technical and administrative services. We expect to continue to use outside business development consultants, whose compensation will be based on revenue opportunities they create.Contents

~~History~~ITEM 1A. RISK FACTORS

~~Our~~Not ~~company was incorporated in the State of Nevada on February 1, 2001 under the name Growth Mergers, Inc~~applicable. Effective March 9, 2006, we entered into an Agreement and Plan of Merger, as amended on April 10, 2006, whereby Growth Acquisitions, Inc., a Washington corporation and wholly-owned subsidiary of Growth Mergers, Inc., merged with and into Neah Power Systems, Inc., a Washington corporation (“Neah Power Washington”). Following the merger, Growth Mergers, Inc. changed its corporate name to Neah Power Systems, Inc. By virtue of this merger, Neah Power Washington became our wholly-owned subsidiary.

The purpose of the merger was to enable Neah Power Washington, as Growth Mergers, Inc.’s subsidiary, to access the capital markets via a public offering. Our common stock currently trades on the OTC Bulletin Board under the symbol “NPWZ.”

Available Information

We are subject to the information requirements of the Exchange Act and file annual, quarterly and current reports, and other information with the SEC. You may read and copy these reports on our website, www.neahpower.com, and at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 or email the SEC at publicinfo@SEC.gov for more information on the operation of the public reference room. Our SEC filings are also available at the SEC’s website at http://www.sec.gov. In addition, we make available, without charge, through our website (www.neahpower.com), electronic copies of our SEC filings, as soon as reasonably practicable after we electronically file such reports or amendments with, or furnish information to, the SEC.

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ITEM 1A. RISK FACTORS

Readers should carefully consider the risks described below in evaluating our business, prospects and results of operations and before making an investment decision in our common stock. The risks described below are not the only ones we face. Additional risks not presently known to us or that we currently believe are immaterial may also impair our business operations and financial results. If any of the following risks actually occur, our business, financial condition or results of operations could be materially adversely affected.

Risks Related to Our Business

We need to raise significant additional capital to continue our business operations.

Our current monthly cash operating expenses are approximately $150,000. We have no significant revenues and we expect that our current cash will last us only through January 2016. Accordingly, we will need to raise financing to fund our operations. In the event we are unable to obtain the additional financing required to meet our cash needs, on a timely basis, we will have to reduce or curtail operations which would materially and adversely affect our development efforts, and we may need to seek protection under the bankruptcy laws. Even if such financing is obtained, it may not be on commercially acceptable terms or may otherwise substantially dilute the equity interests of our current shareholders.

Our auditors have issued a “going concern” modification in their report on our Consolidated Financial Statements.

The auditors’ report on our Consolidated Financial Statements as of September 30, 2015 and 2014 indicates that there is substantial doubt about our ability to continue as a going concern based upon our accumulated deficit and negative working capital at September 30, 2015, our recurring net losses, and the cash used in operations for the year ended September 30, 2015. We may be unable to obtain sufficient funds from financing activities or our planned operations to support our continued business. If we cannot continue as a going concern, we may need to substantially revise our business plan, cease operations, sell or seek protection under the bankruptcy laws.

We have incurred net losses each year since our inception and had accumulated losses of approximately $66.7 million through September 30, 2015. We expect to continue to incur net losses at least through our fiscal year 2016 and these losses may be substantial. To implement our business strategy, we will continue to incur considerable research and development expenses and capital expenditures. Accordingly, if we are unable to generate substantial revenues to cover these expenses we will not achieve profitability.

Commercialization, market acceptance, and productization risks

We are transitioning from a developmental organization to a commercialization organization. Neah has traditionally focused on development of the PowerChip™ technology and has a pilot-scale facility in Bothell to manufacture units. As the Company transitions to commercialization of the technology, there are risks related to the Company’s ability to hire and retain the appropriate talent, ability to scale up the output using internal or outsourced manufacturing, ability of our suppliers to supply the needed quality and quantity of subcomponents, and other raw materials used in our fuel cells and to do it in a cost effective fashion. Fuel cells are a disruptive technology that requires customer and market acceptance.

The fuel cell market is an emerging market, and the adoption by defense, commercial and consumer markets is in the early stages. There is no guarantee of adoption, and further more, cost effectiveness, customer adoption, government regulation and other restrictions could inhibit the adoption of fuel cell technology. As the Company focuses on commercialization of the technology, our quarterly operating results are likely to fluctuate significantly in the future. Fluctuations in our quarterly financial performance may result from research and development costs, increased sales, general and administrative (SG&A) expenses, and the predictability will be very low of sales orders, contracts, and follow business and other commercial opportunities.

Technical risks

Neah’s technology acceptance requires customers and markets to accept a new paradigm for the operation of fuel cells. The Company also strives to continuously improve its products, and there is the risk of the Company not achieving certain milestones or completion of commercial systems. Methanol, which is flammable, is the fuel of choice for this class of fuel cells by the Company, as well as its competitors. The energy from the methanol is extracted using an electrochemical reaction which does not include combustion. While the Company intends to package the systems so that they are virtually leak proof, there can be no assurance that will not be manufacturing defects that cause of these acids whose concentrations are comparable to “wet” batteries. The availability and price of methanol would affect the adoption of the fuel cell technology. Our business exposes us to the risk of harmful substances escaping into the environment, resulting in personal injury or loss of life, damage to or destruction of property, and natural resource damage. Our business is subject to numerous federal, state and local laws, regulations and policies that govern environmental protection. These laws and regulations have changed frequently in the past and it is reasonable to expect additional changes in the future, and we are not currently insured against such risks.

Intellectual property risks

The intellectual property is the primary asset of the Company. Our ability to compete effectively will depend, in part, on our ability to maintain the exclusive ownership of our technology and manufacturing processes through a combination of patent and trade secret protection, non-disclosure agreements and other arrangements. Patents may not be issued under pending applications and any issued patents that we hold may not provide adequate protection for our products or processes. Moreover, patent applications filed in foreign countries are subject to laws, rules and procedures that differ from those of the United States and any resulting patents may be difficult to enforce. There can be no assurance that our competitors will not either independently develop proprietary information that is the same or similar to ours or obtain access to our proprietary information. In addition, there can be no assurance that we would prevail if challenges to our intellectual property rights were asserted by third parties against us.

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As a result of a government grant, the U.S. government will obtain rights in certain of our technology, including inventions, developed with their funding. In addition, the U.S. government may require us to grant to a third party an exclusive license to any inventions resulting from the grant if the government determines that we have not taken adequate steps to commercialize the inventions. The rights of the U.S. government may adversely impact sales or license of our products.

Risks Related to Our Common Stock

We could issue a significant amount of common stock or a series of preferred stock that would dilute and adversely affect our shareholders.

Our amendment to the articles of incorporation authorize the issuance of 1,800,000,000 shares of common stock and 5,000,000 shares of “blank check” preferred stock, with designations, rights and preferences that may be determined from time to time by our board of directors, which may be superior to those attached to the common stock. As of September 30, 2015, we have the following designated classes of preferred stock:

· 2,222,022 shares of preferred stock designated as Series B Preferred Stock, with 1,203,576 shares issued and outstanding and which are convertible into an estimated 661,749,257 shares of our common stock as of September 30, 2015 (the exact number of which is not determinable at this time because the Series B are convertible into shares of our common stock based on the future trading price of our common stock). The Series B shares can be converted to Common stock or redeemed in cash, solely at the discretion of the Company.

Our stock price is volatile, and we do not intend to pay any cash dividends.

There is a very limited public market for our common stock. We cannot predict the extent to which, or if, investor interest will lead to the development of an active and liquid trading market. If a market for our common stock develops, the price at which our common stock will trade may be highly volatile and may fluctuate as a result of a number of factors, including the number of shares available for sale in the market, variations in our actual and anticipated operating results, our failure to timely achieve technical milestones or to commercialize our fuel cell systems, changes in technology or competitive fuel cell solutions, and our failure to meet analysts’ performance expectations.

We have not paid any cash dividends on our common stock and we do not intend to declare and pay any cash dividends on our common stock. Stock markets, particularly the OTCBB where our stock is currently traded, have experienced extreme price and volume fluctuations, and the market prices of securities of technology companies have been highly volatile. These fluctuations are often unrelated to operating performance and may adversely affect the market price of our common stock. As a result, investors may not be able to resell their shares on a timely basis if at all, and may lose some or all of their investment.

Our common stock is subject to penny stock rules.

Our common stock is subject to the SEC regulations for “penny stock.” Penny stock includes any non-Nasdaq or other exchange listed equity security that has a market price of less than $5.00 per share, subject to certain exceptions. The regulations require that prior to any non-exempt buy/sell transaction in a penny stock; a disclosure schedule set forth by the SEC relating to the penny stock market must be delivered to the purchaser of such penny stock. This disclosure must include the amount of commissions payable to both the broker-dealer and the registered representative and current price quotations for the common stock. The regulations also require that monthly statements be sent to holders of penny stock, which disclose recent price information for the penny stock and information of the limited market for penny stocks. These requirements adversely affect the market liquidity of our common stock.

In addition, our common stock is subject to Rule 15g-1 through 15g-9 under the Exchange Act, which imposes certain sales practice requirements on broker-dealers who sell our common stock to persons other than established customers and “accredited investors” (generally, individuals with a net worth in excess of $1,000,000 (exclusive of the value of their primary residence) or annual incomes exceeding $200,000 individually, or $300,000 together with their spouse)). For transactions covered by this rule, a broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to the sale. This rule adversely affects the ability of broker-dealers to sell our common stock and purchasers of our common stock to sell their shares of such common stock.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

~~Our~~In ~~corporate~~April ~~offices~~2016 ~~and~~we ~~laboratory~~relocated ~~facilities~~from ~~are~~our ~~located at 22118 20th Ave SE~~Bothell, ~~Suite 142, Bothell~~ Washington, ~~where~~corporate weoffice ~~lease~~to ~~approximately~~our ~~2,000~~current ~~square~~office ~~feet~~located ofat ~~office~~22722 ~~space~~29th ~~and~~Drive 4SE,~~053~~ ~~square~~Suite ~~feet~~100, ofBothell, ~~laboratory~~WA ~~space~~98021. AsWe ofpay ~~November~~rent 1,to ~~2011~~for wethe ~~entered~~current ~~into~~office anon ~~amended~~a ~~lease agreement with the landlord~~ month-to-month ~~extend~~basis. ~~our~~Through ~~lease~~a ~~through~~consulting ~~October~~and ~~31,~~service ~~2013. As of November 1~~contract, ~~2013,~~we ~~Neah~~also ~~has~~have aaccess ~~holdover month-~~to~~-month~~ ~~agreement~~laboratory ~~with~~facilities ~~the~~in ~~landlord~~Beaverton, atOregon noon ~~change~~an inas ~~monthly~~needed ~~rent~~basis. (~~Please~~See ~~see~~ Note 1311 to our Notes to Consolidated Financial Statements). The average monthly rental payment including utilities and operating expenses for the facility is approximately $12,000 per month. We believe that the leased facility is in good condition and adequate to meet our current and anticipated requirements.

ITEM 3. LEGAL PROCEEDINGS

From time to time, we become subject to legal proceedings and other claims that arise in the ordinary course of business. Litigation can be expensive and disruptive to normal business operations. Moreover, the results of legal proceedings are difficult to predict. An unfavorable resolution of one or more of these lawsuits would materially adversely affect our business, results of operations, or financial condition. The need to defend any such claims could require payments of legal fees and our limited financial resources could severely impact our ability to defend any such claims.

As of September 30, 2015 we remained a party to certain judgments and legal actions related to failure to pay outstanding invoices on Accounts Payable, representing a total liability of approximately $164,000 which is included in our financial statements as Accounts Payable. We continue to work with these vendors to negotiate and settle these debts, based on available cash resources.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II

Market Information

Our common stock trades on the ~~Over-the-Counter Bulletin Board and the~~ OTC ~~Markets~~“Pink ~~Group~~Sheets” markets under the symbol “NPWZ.” Set forth below are the range of high and low closing transactions for the periods indicated as reported by NASDAQ. The market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not necessarily represent actual transactions.

	High		Low
Fiscal Year Ended September 30, 2014:
First Quarter (October 1, 2013 – December 31, 2013)	$	0.0233	$	0.0040
Second Quarter (January 1, 2014 – March 31, 2014)	$	0.0533	$	0.0080
Third Quarter (April 1, 2014 – June 30, 2014)	$	0.0270	$	0.0149
Fourth Quarter (July 1, 2014 –September 30, 2014)	$	0.0170	$	0.0100
Fiscal Year Ended September 30, 2015:
First Quarter (October 1, 2014 – December 31, 2014)	$	0.0115	$	0.0056
Second Quarter (January 1, 2015 – March 31, 2015)	$	0.0100	$	0.0047
Third Quarter (April 1, 2015 – June 30, 2015)	$	0.0082	$	0.0046
Fourth Quarter (July 1, 2015 –September 30, 2015)	$	0.0054	$	0.0028
Fiscal Year Ended September 30, 2016:
First Quarter (October 1, 2015 – December 31, 2015)	$	0.0034	$	0.0018
Second Quarter (January 1, 2016 – March 31, 2016)	$	0.0021	$	0.0010
Third Quarter (April 1, 2016 – June 30, 2016)	$	0.0011	$	0.0004
Fourth Quarter (July 1, 2016 –September 30, 2016)	$	0.0025	$	0.0002

The last sale price of our common stock on ~~December~~July 1627, ~~2015~~2018 was $0.~~0022~~0004. The source of the data is www.nasdaq.com.

Holders

As of ~~December~~July 1229, ~~2015~~2018, there were approximately ~~408~~400 holders of record of our common stock. This number does not include beneficial owners of common stock whose shares are held in the names of various dealers, clearing agencies, banks, brokers and other fiduciaries.

Dividends

We have not paid any cash dividends to date and do not anticipate or contemplate paying dividends in the foreseeable future. It is the present intention of management to utilize all available funds for the development of our business. There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, prohibit us from declaring dividends where, after giving effect to the distribution of the dividend: (i) we would not be able to pay our debts as they become due in the usual course of business; or (ii) our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of stockholders who have preferential rights superior to those receiving the distribution, unless otherwise permitted under our articles of incorporation.

Unregistered Sales of Equity Securities

The information below lists all of the securities we sold during the fiscal year that ended September 30, ~~2015~~2016, other than those sales previously reported in a Current Report on Form 8-K or a Quarterly Report on Form 10-Q, which were not registered under the Securities Act, including all sales of reacquired securities, as well as new issues, securities issued in exchange for property, services, or other securities, and new securities resulting from the modification of outstanding securities. No underwriting discounts or commissions were incurred in connection with any of the following transactions. Each of the transactions was conducted as a private placement, without the use of any general solicitation, and was exempt from registration under Section 4(2)a of the Securities Act.

~~All~~In ~~sales~~August and September of ~~equity~~2016, ~~securities~~Union ~~have~~Capital ~~been~~LLC ~~previously~~converted ~~reported~~$55,574 inof anotes ~~Current~~payable ~~Report~~and oninterest ~~Form~~into ~~8-K~~345,162,084 orshares aof ~~Quarterly~~common ~~Report~~stock. ~~for~~(See ~~the~~Note ~~period~~8 ~~ending~~to ~~September~~our ~~30,~~Notes ~~2015~~to Consolidated Financial Statements).

The purchase and sale of shares of Common Stock pursuant to the Securities Agreement are being made pursuant to a private placement transaction exemption under Section 4(2)a of the Securities Act of 1933, as amended, and Rule 506 of Regulation D promulgated thereunder. The offering was not conducted in connection with a public offering and no public solicitation or advertisement was made or relied upon by the investors in connection with the offering.

ITEM 6. SELECTED FINANCIAL DATA

As a smaller reporting company, we are not required to provide the information required by this item.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview and Background

~~The~~We ~~following~~are ~~management’s~~engaged ~~discussion~~in the development and ~~analysis~~sale isof ~~intended~~renewable toenergy ~~provide~~solutions ~~information~~using ~~necessary~~our todirect ~~understand~~methanol ~~our~~micro ~~audited~~fuel ~~condensed~~cell ~~consolidated~~technology, ~~financial~~our ~~statements~~reformer technology, and ~~highlight~~our ~~certain~~silicon ~~other~~based ~~financial~~rechargeable ~~information,~~battery ~~which~~technology. inThis ~~the~~allows ~~opinion~~us ofto ~~management,~~generate ~~will~~hydrogen ~~enhance~~using aour ~~reader’s~~Formira ~~understanding~~reformer oftechnology, ~~our~~use ~~financial~~that ~~condition~~hydrogen, ~~changes~~or inuse ~~financial~~methanol ~~condition~~directly, ~~and~~using ~~results~~the offuel ~~operations.~~cell ~~In particular~~technology, ~~the~~and ~~discussion~~then isstore ~~intended~~that toenergy ~~provide~~using anthe ~~analysis~~silicon ofbased ~~significant~~rechargeable ~~trends~~lithium ~~and~~battery ~~material~~We ~~changes~~are indeveloping ~~our~~solutions ~~financial~~specifically ~~condition~~targeted ~~and~~for ~~operating~~the ~~results~~military, ~~during~~transportation ~~the~~vehicles, ~~year~~and ~~ended~~portable ~~September~~electronics ~~30,~~applications. ~~2015~~Our long-lasting, ~~compared~~efficient toand ~~the~~safe ~~year~~power ~~ended~~solutions ~~September~~include 30devices, ~~2014.~~such ~~Operating~~as ~~results~~notebook ~~for~~PCs, ~~the~~military ~~year~~radios, ~~ended~~and ~~September~~other 30power-hungry computer, ~~2015~~entertainment ~~are~~and ~~not~~communications ~~necessarily~~products. ~~indicative~~We ofuse ~~the~~a ~~results~~unique ~~that~~patented, ~~may~~silicon-based bedesign ~~expected~~ for ~~any~~our ~~future~~micro ~~period.~~fuel ~~Investors~~cells ~~should~~and ~~read~~our ~~the~~battery ~~following~~that ~~discussion~~create ~~and~~higher ~~analysis~~power indensities ~~conjunction~~and ~~with~~enables ~~our~~lighter-weight, ~~audited~~smaller ~~financial~~form-factors, ~~statements~~ and ~~related~~will ~~notes~~potentially ~~for~~create ~~the~~more ~~year~~cost ~~ended~~effective ~~September~~manufacturing ~~30,~~and ~~2015~~potentially lower product costs.

WeWith ~~are~~our ~~developing~~Formira ~~two~~Hydrogen ~~classes~~on ofdemand ~~fuel cells~~system, ~~one referred to as the PowerChip™ and the other as the BuzzCell™. The PowerChip™ is~~ a silicon based fuel cell that uses traditional computer chip manufacturing to build the fuel cell. The BuzzCell™ product was developed during the last two years using some processing steps of the PowerChip™ technology and using polymeric materials for a lower cost, consumer oriented product. The PowerChip™ is targeted for applications (anaerobic) where the quality of the surrounding air is unpredictable or not available like diesel-fumes contaminated environments or underwater applications. The BuzzCell™ product uses air from the surrounding environment and is targeted for consumer-oriented and less aggressive applications for lower power ranges. The Company is also developing Formira™, a reformer platform for direct on-site generation of hydrogen gas., ~~Customers~~customers will be able carry a liquid with a better safety profile and generate hydrogen gas at point of use rather than carrying high pressure hydrogen gas cylinders. ~~Our~~ ~~technology~~The ~~and~~hydrogen ~~its~~is ~~applications~~designed ~~have~~to ~~been~~be ~~validated~~consumed ~~both~~directly by ~~our~~a ~~own research and customer results. We believe our~~ fuel ~~cells will outperform lithium ion batteries and other similar power sources~~cell, ~~with~~using ~~longer~~either ~~run~~our ~~time,~~silicon ~~shorter~~based ~~recharge time, ease of portability, and other measures of performance. We anticipate that our~~ fuel cell, ~~solution~~or ~~will~~commercially beavailable ~~particularly~~proton ~~beneficial~~exchange inmembrane ~~applications~~(PEM) ~~requiring the use of more than one battery because the user will only need to use a single~~ fuel ~~cell with a supply of smaller fuel cartridges, resulting in reduced overall size and weight~~cells.

We ~~have~~currently anare ~~intellectual~~doing ~~property~~our ~~portfolio~~battery ~~consisting~~development ofat 13a ~~issued~~facility ~~patents~~in Beaverton, ~~3 patent applications pending issuance~~OR, and 13the ~~additional~~Company ~~patent~~is ~~applications~~primarily infocused ~~process~~on ~~that~~the ~~are~~battery ~~being~~development ~~developed~~at ~~and~~this ~~various trade secrets for our proprietary technology~~time. We ~~use~~are using a ~~unique,~~variety ~~patented~~of ~~and~~consultants ~~award winning, silicon-based design~~ for ~~our~~business ~~Powerchip™~~development, ~~micro~~who ~~fuel~~are ~~cells~~located ~~that enable higher power densities~~worldwide, ~~lower cost~~ and ~~compact~~who ~~form-factors.~~are ~~The~~compensated ~~PowerChip™~~based ~~technology~~on ~~has~~commercial ~~been~~success. ~~recognized~~We ~~for~~currently ~~both~~operate ~~its~~out ~~innovativeness~~of ~~and its application potential from noted sources including the 2012 ZINO Green finalist~~Bothell, ~~the 2010 WTIA finalist, 2010 Best of What’s New Popular Science and other awards~~Washington.

~~Our~~Due ~~business model includes the potential~~ to ~~license~~a ~~the~~combination ~~manufacturing~~ of ~~our~~tepid ~~fuel~~interest ~~cells~~in orfuel tocell ~~purchase~~and ~~product~~hydrogen ~~directly~~generation ~~from the Company. Previously~~technology, ~~our~~and ~~business~~severe ~~plan~~capital ~~had an outsourced manufacturing business model~~constraints, ~~subcontracting to third parties substantially all of~~ the ~~production~~Company ~~and~~is ~~assembly.~~exploring ~~The~~various ~~shift to emphasize a~~ licensing ~~strategy,~~avenues ~~while~~for ~~continuing an outsourced manufacturing model, is intended to further leverage existing third-party manufacturing capacity in~~ the ~~semiconductor industry. We also intend to design and distribute the~~ fuel ~~cartridges~~cell ~~that these fuel cells require for refueling. We anticipate that we will generate future revenues from the sale~~ and ~~licensing~~hydrogen ofgeneration ~~both~~technologies, ~~fuel cartridges~~ and ~~the~~is ~~completed~~focusing ~~fuel~~its ~~cells.~~limited ~~Our~~resources ~~business~~on ~~plan contemplates that we will subcontract to third parties substantially all of~~ the ~~production~~development ~~and assembly~~ of the ~~fuel~~silicon ~~cells~~based ~~and~~rechargeable ~~fuel~~lithium ~~cartridges~~battery.

~~For~~The ~~the~~deployment ~~PowerChip™~~of ~~technology, we are focusing~~ our ~~initial~~business ~~sales~~ strategy onhas ~~markets~~been ~~requiring~~delayed ~~anaerobic~~during or2015 ~~low oxygen content environments, such as underwater, transportation, aerospace~~ and ~~military applications. Our product focus for fiscal~~ 2016 ~~will~~by ~~be directed to our business with~~ the ~~large~~availability USof ~~defense~~capital ~~supplier~~ and ~~the~~our ~~proposal~~inability to ~~the~~raise ~~commercial~~sufficient ~~aviation~~capital ~~provider,~~to asfund ~~well~~ongoing asoperations, ~~fuel~~sales ~~cell~~and ~~range~~marketing ~~extenders for electric~~ and ~~other~~production. ~~recreational~~Assuming ~~vehicles. For~~we ~~the~~are ~~PowerChip™~~able ~~and~~to ~~the~~continue ~~BuzzBar™~~to ~~suite~~obtain ofsufficient ~~products~~financing, we ~~will~~intend ~~also continue~~ to ~~pursue~~focus ~~adoption~~on inproduction ~~the~~and ~~consumer~~delivery ~~markets. While the size~~ of ~~the~~products ~~consumer~~to ~~markets~~customers isand ~~very~~sales ~~significant,~~efforts. ~~the~~We ~~adoption~~intend ~~cycle~~to ~~can~~continue beto ~~much~~develop ~~longer~~business ~~than~~relationships ~~the~~and ~~other~~demonstrate ~~markets~~our ~~that~~technology weto ~~are~~potential ~~currently~~leading ~~focused~~edge onadopters.

~~The~~Going deployment of our business strategy has been delayed during 2014 and 2015 by the availability of capital and our inability to raise sufficient capital to fund ongoing operations, sales and marketing and production. Assuming we are able to continue to obtain sufficient financing, we intend to focus on production and delivery of products to customers and sales efforts. We intend to continue to develop business relationships and demonstrate our technology to potential leading edge adopters.Concern

~~Going~~ The ~~Concern~~accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of our Company as a going concern. Since inception, we have reported net losses, including losses of $2,418,835 and $4,363,574 during the years ended September 30, 2016 and 2015, respectively, and we expect losses to continue in the near future as we grow our operations. At September 30, 2016, we have a working capital deficit of $2,614,501, and an accumulated deficit of $69,150,040. Net cash used by operating activities was $878,548 and $1,956,157 during the years ended September 30, 2016 and 2015, respectively. We have funded our operations through sales of our common and preferred stock, and short-term borrowings. In this regard, during the year ended September 30, 2016, we raised a net amount of $872,582 from our financing activities. These factors raise substantial doubt about our ability to continue as a going concern. Subsequent to September 30, 2016, we have received additional investment (see Note 13 to our Notes to Consolidated Financial Statements).

~~The~~ We ~~accompanying~~require ~~consolidated~~additional ~~financial~~financing ~~statements~~to ~~have~~execute ~~been~~our ~~prepared~~business instrategy ~~conformity~~and ~~with~~to ~~accounting~~satisfy ~~principles generally accepted in the United States of America, which contemplate continuation of~~ our ~~Company~~near-term asworking acapital ~~going concern~~requirements. ~~Since~~Our ~~inception,~~operating weexpenses ~~have~~will ~~reported~~use ~~net~~a ~~losses,~~significant ~~including~~amount ~~losses~~ of ~~$4,363,574~~our ~~and~~cash ~~$3,831,809~~resources. ~~during~~Our ~~the~~management ~~years~~intends ~~ended~~to ~~September~~raise ~~30,~~additional ~~2015~~financing ~~and 2014, respectively, and we expect losses~~ to ~~continue~~fund ~~in the near~~ future ~~as we grow our~~ operations. Atand ~~September~~to ~~30,~~provide ~~2015,~~additional ~~we have a~~ working capital ~~deficit~~to offurther ~~$1,802,938,~~fund ~~and~~our ~~an accumulated deficit of $66,731,205~~growth. ~~Net~~There ~~cash~~is ~~used~~no byassurance ~~operating~~that ~~activities~~such ~~was~~financing ~~$1,956,157~~will ~~and~~be ~~$2,513,568~~obtained ~~during~~in ~~the~~sufficient ~~years~~amounts ~~ended~~necessary ~~September~~or ~~30,~~on ~~2015~~terms ~~and~~favorable ~~2014,~~or ~~respectively.~~acceptable Weto ~~have~~us ~~funded~~to ~~our~~meet ~~operations through sales of~~ our ~~common and preferred stock, and short-term borrowings~~needs. In ~~this~~the ~~regard,~~event ~~during~~that ~~the~~we ~~year~~cannot ~~ended~~obtain ~~September~~additional 30funds, ~~2015,~~on ~~we raised~~ a ~~net~~timely ~~amount~~basis ofor ~~$1,481,831 from~~ our ~~financing~~operations ~~activities.~~do ~~These~~not ~~factors~~generate ~~raise~~sufficient ~~substantial~~cash ~~doubt~~flow, ~~about~~we ~~our~~may ~~ability~~be forced to ~~continue~~curtail asour adevelopment ~~going~~or ~~concern~~cease our activities.

WeRecent ~~require~~Financing additional financing to execute our business strategy and to satisfy our near-term working capital requirements. Our operating expenses will use a significant amount of our cash resources. Our management intends to obtain additional financing to fund future operations and to provide additional working capital to further fund our growth. There is no assurance that such financing will be obtained in sufficient amounts necessary or on terms favorable or acceptable to us to meet our needs. In the event that we cannot obtain additional funds, on a timely basis or our operations do not generate sufficient cash flow, we may be forced to curtail our development or cease our activities. Activities

11 In December 2015, we received proceeds from Union Capital LLC, for the issuance of an 8% Convertible Promissory Note in the principal amount of $170,250. In conjunction with the transaction, Union Capital LLC retired the Company’s debt obligation to Inter-Mountain Capital LLC in full and we issued a replacement note to Union Capital LLC in the amount of $388,428.

~~Table~~ In February 2016, we received proceeds from Union Capital LLC, for the issuance of ~~Contents~~an 8% Convertible Redeemable Note in the principal amount of $28,000. Also in February 2016, we received proceeds from this lender for the issuance of an 8% Convertible Redeemable Note in the principal amount of $50,000, which included legal expenses in the amount of $2,500 and financing fees of $5,000.

~~Recent~~ In ~~Financing~~April ~~Activities~~2016, we received proceeds from Union Capital LLC, for the issuance of an 8% Convertible Redeemable Note in the principal amount of $50,000.

On During ~~May 7, 2014 we received an initial payment on a May 5, 2014 Securities Purchase Agreement with Inter-Mountain Capital Corporation LLC (“Inter-Mountain”), for~~ the ~~sale~~year ofended aSeptember ~~5% Secured Convertible Promissory Note in the principal amount of $832~~30,~~500,~~ ~~which includes legal expenses in the amount of $7~~2016,~~500~~ ~~and~~we areceived ~~$75,000~~proceeds ~~original issue discount,~~ for ~~net~~a ~~proceeds~~series of ~~$750,000,~~six ~~consisting~~month ~~of $450,000 paid in cash at closing and two secured promissory~~ notes ~~payable~~issued to ~~the~~various ~~Company,~~individuals ~~aggregating $300,000,~~ bearing interest at the rate of 58% per annum~~. On~~ ~~March~~on ~~9, 2015,~~ the ~~two~~unpaid ~~secured~~principal ~~promissory~~balance. The notes ~~payable~~ were ~~paid~~of byvarious ~~Inter-Mountain~~amounts, ~~and~~from ~~the~~$1,000 ~~Company~~to ~~received proceeds in the amount of~~ $~~300~~125,000, ~~and~~totaling ~~the note has been fully funded by Inter-Mountain~~$405,455.

On During ~~June 17, 2015 we received an initial payment on a June 16, 2015 Securities Purchase Agreement with Inter-Mountain, for~~ the ~~sale~~year ofending aSeptember ~~5% Secured Convertible Promissory Note in the principal amount of $832~~30,~~500,~~ ~~which includes legal expenses in the amount of $7~~2016,~~500~~ ~~and~~we aissued ~~$75~~187,~~000~~654 ~~original~~shares ~~issue discount, for net proceeds~~ of ~~$750,000,~~Series ~~consisting~~B ofpreferred ~~$150,000~~stock ~~paid~~to inSierra ~~cash~~Trading atCorp ~~closing~~ and ~~four~~Summit ~~secured~~Trading ~~promissory~~LLC ~~notes payable to the Company, aggregating $600,000, bearing interest~~ at ~~the~~a ~~rate~~price ~~of 5%~~ per ~~annum. On~~share ~~July 31, 2015 one~~ of ~~the secured promissory notes was partially paid by Inter-Mountain and the Company received~~ $~~50,000~~1 ~~and~~for ~~that~~gross ~~note~~cash ~~has~~proceeds aof $~~100~~187,~~000 remaining balance~~654.

On December 5, 2014, we issued 5,244 shares of Series B Preferred Stock to Summit Trading Limited at a price per share of $1 and received gross proceeds of $5,244 under the terms of a Security Purchase Agreement11

OnTable ~~December 18, 2014, we issued 13,258.10 shares~~ of ~~Series B Preferred Stock to Summit Trading Limited at a price per share of $1 and received gross proceeds of $13,258.10 under the terms of a Security Purchase Agreement~~Contents

OnLiquidity ~~February 6, 2015, we issued 22,428 shares of Series B Preferred Stock to Summit Trading Limited at a price per share of $1~~ and ~~received~~Capital ~~gross proceeds of $22,428 under the terms of a Security Purchase Agreement~~Resources

On We ~~February~~used 12cash of $878,548 ~~2015~~in our operating activities in the year ended September 30, we2016, ~~issued~~compared 49to $1,~~207~~956,157 ~~shares~~in ofthe ~~Series~~same Bperiod ~~Preferred~~in ~~Stock~~2015. toDuring ~~Summit~~the ~~Trading~~year ~~Limited~~ended atSeptember a30, ~~price~~2016, ~~per~~our ~~share~~use of cash was offset by $1176,519 for the payment of services with equity instruments and ~~received~~$543,108 ~~gross~~by ~~proceeds~~the amortization of certain debt discounts. We also incurred a non-cash gain of $49125,~~207~~092 ~~under~~related to gain on debt settlements. During the ~~terms~~year ended September 30, 2016, we incurred changes in operating assets and liabilities of a$776,456 ~~Security~~that ~~Purchase~~off ~~Agreement~~set our use of cash.

OnWe ~~February~~used ~~23,~~$0 ~~2015,~~for weinvesting ~~issued~~activities ~~48,181~~related ~~shares~~to offixed ~~Series~~asset Bpurchases ~~Preferred~~and ~~Stock~~received to$61,497 ~~Summit~~in ~~Trading~~proceeds ~~Limited~~from atsales aof ~~price~~fixed ~~per~~assets ~~share~~in ofthe $1year ~~and~~ended ~~received~~September ~~gross~~30, ~~proceeds~~2016, ofcompared to $489,~~181~~572 ~~under~~and ~~the~~$13,500, ~~terms~~respectively, ofin athe ~~Security~~same ~~Purchase~~period ~~Agreement~~in 2015.

OnOur ~~March~~financing ~~09,~~activities ~~2015,~~provided wecash ~~issued~~of 35$872,~~099~~582 ~~shares~~in ofthe ~~Series~~year Bended ~~Preferred~~September ~~Stock~~30, to2016 ~~Summit~~compared ~~Trading~~to ~~Limited at a price per share of~~ $1,481,831 ~~and~~in ~~received~~the ~~gross~~same ~~proceeds~~period ofin ~~$35,099~~2015. ~~under~~During the ~~terms~~year ofended aSeptember ~~Security~~30, ~~Purchase~~2016, ~~Agreement~~we:

On· sold ~~March 16, 2015, we issued 21,571 shares of~~ Series B ~~Preferred~~preferred ~~Stock~~stock ~~to Summit Trading Limited at a price per share of $1~~ and received ~~gross~~net proceeds of $21187,~~571~~654; ~~under the terms of a Security Purchase Agreement~~and

On· received ~~March~~proceeds ~~24,~~from ~~2015,~~convertible wenotes ~~issued 26~~payable,~~168~~ ~~shares~~net of ~~Series~~payments ~~B Preferred Stock to Summit Trading Limited at a price per share~~ of $1principals and ~~received~~deferred ~~gross~~loan ~~proceeds~~fees, of $26684,~~168 under the terms of a Security Purchase Agreement~~928

OnResults ~~April 6, 2015, we issued 34,400 shares~~ of ~~Series B Preferred Stock to Summit Trading Limited at a price per share of $1 and received gross proceeds of $34,400 under the terms of a Security Purchase Agreement~~Operations

OnYear ~~April~~Ended 8,September ~~2015~~30, ~~we issued 43~~2016,~~488~~ ~~shares~~Compared ~~of Series B Preferred Stock~~ to ~~Summit~~Year ~~Trading~~Ended ~~Limited~~September ~~at a price per share of $1 and received gross proceeds of $43~~30,~~488~~ ~~under the terms of a Security Purchase Agreement~~2015

OnRevenues ~~May~~for 6,the ~~2015,~~years weended ~~issued~~September 830,~~050~~ ~~shares~~2016 ofand ~~Series~~2015 Bwere ~~Preferred~~$0 ~~Stock~~and to$196,073 ~~Summit~~respectively. ~~Trading~~In ~~Limited~~fiscal atyear a2015 ~~price~~revenue ~~per~~was ~~share~~predominately offrom $1a ~~and~~multiyear ~~received~~development ~~gross~~contract ~~proceeds~~with ~~of $8,050 under the terms of~~ a ~~Security Purchase Agreement~~customer.

OnResearch ~~May~~and 15development expenses (“R&D”) consist primarily of salaries and other personnel-related expenses, ~~2015~~facilities costs, weand ~~issued~~other ~~14,639~~laboratory ~~shares~~and ofresearch ~~Series~~related Bexpenses. ~~Preferred~~Total ~~Stock~~R&D tocosts ~~Summit~~for ~~Trading~~the ~~Limited~~year atended aSeptember ~~price~~30, ~~per~~2016 ~~share~~decreased ofby $896,925 to $423,912 from $1,320,837 for the same period in 2015. The decrease was primarily due to decrease in R&D salaries and ~~received~~wages ~~gross~~of ~~proceeds~~$412,785, a decrease in project expenses of $14411,~~639~~891 ~~under~~and ~~the~~a ~~terms~~decrease in facilities cost and depreciation expense of $72,249, due to a ~~Security~~reduction ~~Purchase~~in ~~Agreement~~operating activities.

OnMarketing ~~May~~and 28sales expenses (“Marketing”) consist primarily of salaries and other personnel-related expenses, ~~2015~~marketing, wepatent ~~issued~~expenses, 75public relations consultants,~~000~~ ~~shares~~and other related expenses to market products and prepare for placement of ~~Series~~product Binto ~~Preferred~~market. ~~Stock~~Total toMarketing ~~Summit~~costs ~~Trading~~for ~~Limited~~the atyear aended ~~price~~September ~~per~~30, ~~share~~2016 ofdecreased by $529,291 to $761,208 from $1,290,499 ~~and~~for ~~received~~the ~~gross~~same ~~proceeds~~period in 2015. The decrease was primarily due to decrease in Marketing salaries, wages, benefits and stock compensation of $75433,~~000~~340 ~~under~~to ~~the~~$143,003 ~~terms~~from of$576,343, a ~~Security~~decrease ~~Purchase~~in ~~Agreement~~marketing, patent expense, public relations consultants and other related expenses of $95,950 to $618,206 from $714,156.

OnGeneral ~~May~~and ~~29,~~administrative ~~2015~~expenses (“G&A”) consist primarily of salaries and related expenses for our management, wefinance ~~issued~~and 25related personnel,~~000~~ ~~shares~~professional offees, ~~Series~~such Bas ~~Preferred~~accounting ~~Stock~~and tolegal, ~~Summit~~corporate ~~Trading~~insurance ~~Limited~~and atfacilities acosts, ~~price~~and ~~per~~non-employee ~~share~~members of $1our ~~and~~board ~~received~~of ~~gross~~directors. ~~proceeds~~G&A ofexpenses decreased to $25521,~~000~~030 ~~under~~from $1,275,375 for the ~~terms~~same period in 2015. The decrease in G&A expense in the year ended September 30, 2016 of a$754,345 was ~~Security~~primarily ~~Purchase~~due ~~Agreement~~to the following:

On· a ~~June~~decrease 5,in ~~2015,~~employee weand ~~issued~~director ~~44,498~~stock ~~shares~~compensation expense of ~~Series~~$508,338 Bto ~~Preferred~~$0 ~~Stock~~from to$508,338, ~~Summit~~recorded ~~Trading~~for ~~Limited~~the atsame aperiod ~~price~~in ~~per~~2015. ~~share~~The ofdecrease $1was ~~and~~due ~~received~~to ~~gross~~no ~~proceeds~~issuance of ~~$44,498~~warrants ~~under~~compared to the ~~terms~~issuance of anew ~~Security~~warrants ~~Purchase~~to ~~Agreement~~the directors in the same period in 2015. The new warrants were issued and expensed to replace warrants that had expired for the directors.

On· a ~~June~~decrease ~~15,~~in ~~2015,~~board wecompensation ~~issued~~of 26$12,~~829~~372 ~~shares~~to of$52,000 ~~Series~~from B$64,372, ~~Preferred~~recorded ~~Stock~~in tothe ~~Summit~~same ~~Trading~~period ~~Limited~~in at2015. aThe ~~price~~decrease ~~per~~is ~~share~~due ofto $1a ~~and~~reduction ~~received~~in ~~gross~~board ~~proceeds~~meeting ofattendance ~~$26~~in 2016,~~829~~ ~~under~~compared ~~the~~to ~~terms of a Security Purchase Agreement~~2015.

On· an ~~July~~increase ~~24,~~in ~~2015,~~other weexpenses ~~issued~~of 25$8,~~300~~609 ~~shares~~to of$60,996 ~~Series~~from B$52,387 ~~Preferred~~recorded ~~Stock~~in tothe ~~Summit~~same ~~Trading~~period ~~Limited~~in at2015. aThe ~~price~~increase ~~per~~is ~~share~~nearly ofall $1due ~~and~~to ~~received~~an ~~gross~~increase ~~proceeds~~in oftravel ~~$25,300~~expenses ~~under~~of the ~~terms~~directors ofand ~~a Security Purchase Agreement~~officers.

On· a ~~August~~decrease ~~13,~~in ~~2015,~~salaries weexpense ~~issued~~of 3$70,~~600~~982 ~~shares~~to of$49,860 ~~Series~~from B$120,842 ~~Preferred~~(including ~~Stock~~payroll totaxes ~~Summit~~and ~~Trading~~benefits), ~~Limited~~recorded atfor athe ~~price~~same ~~per~~period ~~share~~in of2015. $1Most ~~and~~of ~~received~~the ~~gross~~salary ~~proceeds~~expense ofis ~~$3,600~~due ~~under~~to ~~the~~reduction ~~terms~~ of astaffing ~~Security~~in ~~Purchase~~2016, ~~Agreement~~compared to 2015.

12· a decrease in professional services of $171,262 to $358,174 from $529,436, recorded for the same period in 2015. Most of the decrease in professional services is due to the decrease in legal and accounting expenses.

~~Table~~Interest ofexpense ~~Contents~~increased by $22,738 for the year ended September 30, 2016 to $692,105 compared with $669,368 in the same period in fiscal 2015. The increase in the year ended September 30, 2016 compared with the same period in 2015 was primarily due to increases in notes payable as new debt was added during 2016.

OnFinancing ~~September~~costs ~~17,~~decreased ~~2015~~$96,331 weto ~~issued~~$206,343 7from $302,~~230~~674, ~~shares~~recorded ofin ~~Series~~the Bsame ~~Preferred~~period ~~Stock~~in to2015. ~~Summit~~The ~~Trading~~decrease ~~Limited~~in atthe ayear ~~price~~ended ~~per~~September ~~share~~30, of2016 $1compared ~~and~~with ~~received~~the ~~gross~~same ~~proceeds~~period ofin ~~$7,230~~2015 ~~under~~was ~~the~~primarily ~~terms~~due ofto adecreased ~~Security~~costs ~~Purchase~~in ~~Agreement~~acquiring new debt.

OnGain ~~June~~on 10settlements of liabilities decreased $178,554 ~~2015~~to $125,092 wefrom ~~issued~~$303,646, 36recorded in the same period in 2015. The decrease in the year ended September 30,~~000~~ ~~shares~~2016 ofcompared ~~Series~~with Bthe ~~Preferred~~same ~~Stock~~period toin ~~Sierra~~2015 ~~Trading~~was ~~Corp~~primarily atdue to a ~~price~~large ~~per~~gain ~~share~~recorded ofin $12015, ~~and~~when ~~received~~liabilities ~~gross~~were ~~proceeds~~removed ofdue ~~$36,000~~to ~~under~~reaching the ~~terms~~statute of limitations for vendor debt recovery, compared to a ~~Security~~smaller ~~Purchase~~gain ~~Agreement~~recorded in 2016 as less liabilities were removed.

On June 11, 2015, we issued 14,080 shares of Series B Preferred Stock to Sierra Trading Corp at a price per share of $1 and received gross proceeds of $14,080 under the terms of a Security Purchase Agreement.12

OnTable ~~June 19, 2015, we issued 50,000 shares~~ of ~~Series B Preferred Stock to Sierra Trading Corp at a price per share of $1 and received gross proceeds of $50,000 under the terms of a Security Purchase Agreement.~~Contents

OnWe ~~August~~are ~~13,~~not ~~2015,~~certain wehow ~~issued~~the ~~17,685~~current ~~shares~~economic ofconditions ~~Series~~may Baffect ~~Preferred~~our ~~Stock~~business. Government agencies and private industry may not have the funds to ~~Sierra~~purchase ~~Trading~~our ~~Corp~~power atsystems. aWe ~~price~~may ~~per~~find ~~share~~it ofdifficult $1to ~~and~~raise ~~received~~capital. ~~gross~~Other ~~proceeds~~than ofas ~~$17~~discussed herein,~~685~~ ~~under~~ the ~~terms~~Company does not know of aany ~~Security~~material ~~Purchase~~trends, ~~Agreement~~events or uncertainties that may impact its operations in the future.

OnCritical ~~September~~Accounting ~~11,~~Policies ~~2015, we issued 17,936 shares of Series B Preferred Stock to Sierra Trading Corp at a price per share of $1~~ and ~~received gross proceeds of $17,936 under the terms of a Security Purchase Agreement.~~Estimates

~~Liquidity~~We prepare our Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and ~~Capital~~judgments ~~Resources~~that affect the reported amounts of assets, liabilities and expenses. Our critical accounting policies include revenue recognition, accounting for research and development costs, accounting for contingencies, accounting for income taxes, and accounting for share-based compensation. For a more detailed discussion on our accounting policies, see Note 2 to our Consolidated Financial Statements.

WeRevenue used cash of $1,956,157 in our operating activities in the year ended September 30, 2015, compared to $2,513,568 in the same period in 2014. During the year ended September 30, 2015, our use of cash was offset by $1,521,055 for the payment of services with equity instruments and $606,364 by the amortization of certain debt discounts. We also incurred a non-cash gain of $303,646 related to losses on debt settlements. During the year ended September 30, 2015, we incurred changes in operating assets and liabilities of $ 312,188 that off set our use of cash.recognition

WeIn ~~used~~general, $9we recognize revenue when we have persuasive evidence of an arrangement,~~572~~ ~~for~~the ~~investing~~services/goods ~~activities~~have ~~related~~been provided or delivered to ~~fixed~~the ~~asset~~customer, ~~purchases~~the price is fixed and ~~received~~determinable, ~~$13~~no significant unfulfilled obligations exist,~~500~~ inand ~~proceeds~~collectability is reasonably assured. Revenue from ~~sales~~research and development arrangements is recognized either (a) as performance is estimated to be completed which is based on factors such as costs or direct labor hours of ~~fixed~~the ~~assets~~project, or (b) using the milestone method if the contractual milestones in the ~~year~~arrangement ~~ended~~are ~~September~~determined ~~30,~~to ~~2015,~~be ~~compared~~substantive. Each research and development arrangement is analyzed to ~~$44,458~~determine the appropriate revenue recognition method to be utilized. Estimates of performance completion are reviewed on a periodic basis and ~~$64~~are subject to change,~~327~~ ~~respectively~~and changes could occur in the ~~same~~near ~~period~~term. If an estimate is changed, revenue could be impacted significantly. Payments received in ~~2014~~excess of amounts earned are recorded as deferred revenue. Revenue from the sale of products and prototypes is generally recognized after both the goods are shipped to the customer and acceptance has been received, if required. Our products are shipped complete and ready to be incorporated into higher-level assemblies by our customers. The terms of the customer arrangements generally pass title and risk of ownership to the customer at the time of shipment.

~~Our~~Research ~~financing~~and ~~activities~~development ~~provided cash of $1,481,831 in the year ended September 30, 2015 compared to $2,954,488 in the same period in 2014. During the year ended September 30, 2015, we:~~expense

~~· sold~~Research ~~Series B preferred stock~~ and ~~received~~development ~~net~~costs ~~proceeds~~are ofexpensed ~~$642,463;~~as ~~and~~incurred.

~~· received proceeds from convertible debentures, net of payments of principals, of $839,368~~Contingencies

~~Results~~Certain conditions may exist as of ~~Operations~~the date financial statements are issued, which may result in a loss but which will only be resolved when one or more future events occur or not occur. We assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to pending legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we evaluate the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a liability has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable would be disclosed.

~~Year~~Income ~~Ended September 30, 2015, Compared to Year Ended September 30, 2014~~taxes

~~Revenues~~We account for income taxes using an asset and liability method which requires recognition of deferred tax assets and liabilities for the ~~years~~expected ~~ended~~future ~~September~~tax 30consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, ~~2015~~deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and ~~2014~~liabilities ~~were~~and ~~$196,073~~their financial reporting amounts at each period end based on enacted tax laws and ~~$1,787~~statutory ~~respectively~~tax rates applicable to the periods in which the differences are expected to affect taxable income. InValuation ~~fiscal~~allowances ~~year~~are ~~2015~~established, ~~revenue~~when isnecessary, ~~predominately~~to ~~from~~reduce adeferred ~~multi~~tax ~~year~~assets ~~development~~to ~~contract~~amounts ~~with~~that awe ~~customer~~expect to realize. ~~Fiscal~~ ~~year~~We ~~2014~~continue ~~consisted~~to ofprovide ~~sales~~a full valuation allowance to reduce our net deferred tax asset to zero, inasmuch as we have not determined that realization of ~~various~~deferred ~~BuzzBar~~tax assets is more likely than not. Any provision for income taxes would represent the tax payable for the period and ~~related~~change ~~products~~during tothe ~~individuals~~period in net deferred tax assets and liabilities.

~~Research and development expenses (“R&D”) consist primarily of salaries and other personnel~~Off-~~related~~Balance ~~expenses,~~Sheet facilities costs, and other laboratory and research related expenses. Total R&D costs for the year ended September 30, 2015 increased by $20,572 to $1,320,837 from $1,300,265 for the same period in 2014. The increase was primarily due to increase in R&D salaries and wages of $199,382. All of the increase in R&D salaries and wages was due to increase in compensation paid with stock options or warrants and not due to additional employees. The increase in R&D salaries and wages was offset by, a decrease in project expenses of $153,706 and a decrease in facilities cost and depreciation expense of $25,104, due to a reduction in operating activities.Arrangements

~~Marketing~~As ~~and sales expenses (“Marketing”) consist primarily~~ of salaries and other personnel-related expenses, marketing, patent expenses, public relations consultants, and other related expenses to market products and prepare for placement of product into market. Total Marketing costs for the year ended September 30, ~~2015~~2016 ~~increased~~we bydid ~~$466,814~~not tohave ~~$1,290,499~~any ~~from~~off-balance ~~$823,685~~sheet ~~for the same period in 2014~~arrangements. The increase was primarily due to increase in Marketing salaries, wages, benefits and stock compensation of $282,578 to $576,343 from $293,765, and an increase in marketing, patent expense, public relations consultants and other related expenses of $184,236 to $714,156 from $529,920 due to public relations and investor out reach programs.

GeneralITEM and administrative expenses (“G&A”) consist primarily of salaries and related expenses for our management, finance and related personnel, professional fees, such as accounting and legal, corporate insurance and facilities costs, and non-employee members of our board of directors7A. G&A expensesQUANTITATIVE increasedAND toQUALITATIVE $1,275,375DISCLOSURES fromABOUT $932,017MARKET for the same period in 2014. The increase in G&A expense in the year ended September 30, 2015 of $343,358 was primarily due to the following:RISK

~~· an~~As ~~increase~~a insmaller ~~employee~~reporting ~~and director stock compensation expense of $278~~company,~~112~~ towe ~~$508,338~~are ~~from~~not ~~$230,226,~~required ~~recorded for the same period in 2014. The increase was due~~ to ~~the~~provide ~~issuance of new warrants to~~ the ~~directors. The~~information ~~new~~required ~~warrants~~by ~~were~~this ~~issued and expensed to replace warrants that had expired for the directors~~item.

~~· an~~ITEM ~~increase~~8 FINANCIAL inSTATEMENTS ~~board~~AND ~~compensation~~SUPPLEMENTARY ~~of $14,220 to $64,372 from $50,1524, recorded in the same period in 2014. The increase is due to the directors attendance to more board meeting in 2015, compared to 2014.~~DATA

13 The information required by this Item is set forth in our Consolidated Financial Statements and Notes thereto beginning at page F-1 of this Annual Report on Form 10-K.

~~Table of Contents~~13

~~· a~~Table ~~decrease in other expenses~~ of $67,435 to $52,387 from $119,822 recorded in the same period in 2014. The decrease is nearly all due to a reduction of facility expenses as there was less staff in 2015 compared to 2014, reduction in travel expenses of the directors and officers and reduction in donations.Contents

· a decrease in salaries expense of $48,210 to $120,842 from $169,052 (including payroll taxes and benefits), recorded for the same period in 2014. Most of the salary expense is due to reduction of staffing in 2015, compared to 2014.

	PAGE
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	F-1

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Balance Sheets at September 30, 2016 and 2015	F-2

Consolidated Statements of Operations for the years ended September 30, 2016 and 2015	F-3

Consolidated Statements of Cash Flows for the years ended September 30, 2016 and 2015	F-4

Consolidated Statements of Stockholders’ Deficit for the years ended September 30, 2016 and 2015	F-5

Notes to Consolidated Financial Statements	F-6

· an increase in professional services of $166,671 to $529,436 from $362,765, recorded for the same period in 2014. Most of the increase in professional services is due to the increase in legal and accounting expenses.14

~~Interest~~Table expense increased by $569,307 for the year ended September 30, 2015 to $669,368 compared with $100,061 in the same period in fiscal 2014. The increase in the year ended September 30, 2015 compared with the same period in 2014 was primarily due to large increases costs associated with the amortization of ~~debt discounts associated with obtaining new debt.~~ Contents

~~Financing~~REPORT ~~costs~~OF ~~increased~~INDEPENDENT ~~$25,980~~REGISTERED toPUBLIC ~~$302,674~~ACCOUNTING from $276,694, recorded in the same period in 2014. The increase in the year ended September 30, 2015 compared with the same period in 2014 was primarily due to increased costs of acquiring new debt in 2015.FIRM

~~Gain~~To ~~(Loss)~~the ~~on extinguishment~~Board of liabilities increased $706,779 to a gain of $303,646 from a loss of ($403,133), recorded in the same period in 2014. The increase in the year ended September 30, 2015 compared with the same period in 2014 was primarily due to a gain recorded in 2015, when liabilities were extinguished, compared to a loss recorded in 2014 for costs associated with increased share issuances necessary to settle debt with stock and warrants.Directors

WeNeah ~~are~~Power ~~not certain how the current economic conditions may affect our business. Because of the global recession~~Systems, ~~government agencies and private industry may not have the funds to purchase its power systems~~Inc. It may also be more difficult for us to raise capital in the current economic environment. Other than as discussed herein, the Company does not know of any material trends, events or uncertainties that may impact its operations in the future.

~~Critical~~Bothell, ~~Accounting Policies and Estimates~~Washington

We ~~prepare~~have ~~our~~audited ~~Consolidated Financial Statements in conformity with accounting principles generally accepted in~~ the ~~United~~accompanying ~~States.~~consolidated ~~The~~balance ~~preparation~~sheets of ~~these~~Neah ~~financial~~Power ~~statements~~Systems, ~~requires~~Inc. ~~us to make estimates~~ and Subsidiary ~~judgments that affect~~ ("the Company") ~~reported~~as ~~amounts~~ of ~~assets~~September 30, ~~liabilities~~2016 and ~~expenses.~~2015, ~~Our~~and ~~critical~~the ~~accounting~~related ~~policies~~consolidated ~~include~~statements ~~revenue~~of ~~recognition~~operations, ~~accounting~~stockholders' ~~for~~deficit, ~~research~~ and ~~development~~cash ~~costs,~~flows ~~accounting~~ for ~~contingencies,~~the ~~accounting~~years ~~for~~then ~~income~~ended. These ~~taxes,~~consolidated ~~and~~financial ~~accounting~~statements ~~for~~are ~~share-based~~the ~~compensation.~~responsibility ~~For~~of athe ~~more~~Company's ~~detailed~~management. Our ~~discussion~~responsibility onis ~~our~~to ~~accounting~~express ~~policies,~~an ~~see~~opinion ~~Note~~on 2these toconsolidated ~~our~~financial ~~Consolidated~~statements ~~Financial~~based ~~Statements~~on our audits.

~~Revenue~~We ~~recognition~~conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In ~~general~~our opinion, wethe ~~recognize~~consolidated ~~revenue~~financial ~~when~~statements wereferred ~~have~~to ~~persuasive~~above ~~evidence~~present ~~of an arrangement~~fairly, ~~the~~in ~~services/goods~~all ~~have~~material ~~been provided or delivered to the customer~~respects, the ~~price~~financial isposition ~~fixed~~of ~~and~~Neah ~~determinable,~~Power ~~no significant unfulfilled obligations exist~~Systems, ~~and collectability is reasonably assured~~Inc. ~~Revenue from research~~ and ~~development~~Subsidiary, ~~arrangements is recognized either (a)~~ as ~~performance is estimated to be completed which is based on factors such as costs or direct labor hours~~ of ~~the project~~September 30, or2016 ~~(b) using the milestone method if the contractual milestones in the arrangement are determined to be substantive. Each research~~ and development arrangement is analyzed to determine the appropriate revenue recognition method to be utilized. Estimates of performance completion are reviewed on a periodic basis and are subject to change2015, and ~~changes could occur in~~ the ~~near~~results ~~term. If an estimate is changed, revenue could be impacted significantly. Payments received in excess~~ of ~~amounts~~its ~~earned~~operations ~~are recorded as deferred revenue. Revenue from the sale of products~~ and ~~prototypes~~its iscash ~~generally~~flows ~~recognized~~for ~~after both~~ the ~~goods~~years ~~are~~then ~~shipped to the customer and acceptance has been received~~ended, ifin ~~required.~~conformity ~~Our~~with ~~products~~accounting ~~are~~principles ~~shipped complete and ready to be incorporated into higher-level assemblies by our customers. The terms of the customer arrangements~~ generally ~~pass~~accepted ~~title~~in ~~and risk of ownership to~~ the ~~customer~~United ~~at the time of shipment~~States.

~~Research~~The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company had an accumulated deficit of $69,150,040 and ~~development~~a ~~expense~~working capital deficit of $2,614,501 at September 30, 2016. Additionally, net cash used in operating activities was $878,548 for the year ended September 30, 2016, and the Company has experienced recurring net losses since inception. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans regarding this matter are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~Research~~/S/ ~~and~~PETERSON ~~development~~SULLIVAN ~~costs are expensed as incurred.~~LLP

~~Contingencies~~Seattle, Washington

~~Certain~~August ~~conditions may exist as of the date financial statements are issued~~8, which may result in a loss but which will only be resolved when one or more future events occur or not occur. We assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to pending legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we evaluate the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a liability has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable would be disclosed.2018

~~Income~~F ~~taxes~~- 1

WeTable ~~account for income taxes using an asset and liability method which requires recognition~~ of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to amounts that we expect to realize. We continue to provide a full valuation allowance to reduce our net deferred tax asset to zero, inasmuch as we have not determined that realization of deferred tax assets is more likely than not. Any provision for income taxes would represent the tax payable for the period and change during the period in net deferred tax assets and liabilities.Contents

NEAH POWER SYSTEMS, INC CONSOLIDATED BALANCE SHEETS


ASSETS
	September 30, 2016		September 30, 2015

Current Assets
Cash & cash equivalents	$	60,268	$	4,737
Restricted cash		10,000		10,000
Prepaid expenses and other current assets		39,762		63,696
Deferred loan fees		29,474		142,061
Total current assets		139,504		220,494

Property and equipment, net		45,775		70,203

Total assets	$	185,279	$	290,697

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
Accounts payable	$	878,586	$	344,484
Accrued compensation and related expenses		747,948		719,540
Other liabilities		26,890		98,583
Notes payable and accrued interest, net of discount of $45,775and $72,255 respectively		1,100,581		860,825
Total current liabilities		2,754,005		2,023,432

Long term liabilities
Notes payable and accrued interest, net of discount of $173,383 and $0 respectively		121,574		-
Total liabilities		2,875,579		2,023,432

COMMITMENTS AND CONTINGENCIES (SEE NOTE11)

Stockholders' deficit
Preferred stock $0.001par value: 5,000,000 shares authorized Series B convertible: 2,222,022 shares designated, 1,222,236 and 1,203,576 shares issued and outstanding, respectively		1,222		1,204

Common stock $0.001 par value, 5,400,000,000 shares authorized 2,596,508,421 and 1,286,829,462 shares issued and outstanding, respectively		2,596,508		1,286,829
Additional paid-in-capital		63,862,010		63,710,437
Accumulated deficit		(69,150,040)		(66,731,205)

Total stockholders' deficit		(2,690,300)		(1,732,735)


Total liabilities and stockholders' deficit	$	185,279	$	290,697

See Notes to Consolidated Financial Statements

~~Table~~F of- ~~Contents~~2

~~Off-Balance~~Table ~~Sheet~~of ~~Arrangements~~Contents

As of September 30, 2015 we did not have any off-balance sheet arrangements.

NEAH POWER SYSTEMS, INC CONSOLIDATED STATEMENTS OF OPERATIONS
	For the year ended September 30,
	2016		2015

Revenues			$	196,073
Cost of revenues				11,740

Gross profit				184,333

Operating expenses
Research and development expense	$	423,912		1,320,837
Marketing and sales		761,208		1,290,499
General and administrative expense		521,030		1,275,375

Total operating expenses		1,706,150		3,886,711

Loss from operations		(1,706,150)		(3,702,378)

Other income (expense)
Financing costs		(206,343)		(302,674)
Interest expense		(692,105)		(669,368)
Gain on disposal of equipment		60,671		13,500
Gain on extinguishment of liabilities, net		125,092		303,646
Other				(6,300)

Net loss	$	(2,418,835)	$	(4,363,574)

Net loss per share
Basic and diluted loss per common share		(0.00)		(0.00)

Weighted average shares used to compute net income (loss) per share
Basic and diluted weighted average common shares outstanding		1,758,188,794		1,060,777,052

See Notes to Consolidated Financial Statements

~~ITEM~~F ~~7A.~~- ~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~3

AsTable aof ~~smaller reporting company, we are not required to provide the information required by this item.~~Contents

ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

NEAH POWER SYSTEMS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS


	For the year ended September 30,
	2016		2015

Cash flows from operating activities:
Net loss	$	(2,418,835)	$	(4,363,574)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		23,602		22,881
Amortization of debt discount		543,108		606,364
Amortization of deferred loan fees		161,365		219,776
Expense from financing costs paid in equity and debt issuance		-		35,999
Stock-based compensation expense from options, warrants, and shares issued for services		176,519		1,521,055
Expense paid with issuance of promissory note		45,000		-
Gain on extinguishment of liabilities, net		(125,092)		(303,646)
Gain on disposal of equipment		(60,671)		(13,500)
Other		-		6,300
Changes in operating assets and liabilities
Prepaid expenses and other current assets		23,934		101,412
Accounts payable		406,610		(51,167)
Accrued compensation and related expense		198,547		191,153
Accrued interest and other liabilities		147,365		70,790
Net cash used in operating activities		(878,548)		(1,956,157)
Cash flows from investing activities:
Proceeds from sale of equipment		61,497		13,500
Purchase of fixed assets		-		(9,572)
Net cash provided by investing activities		61,497		3,928
Cash flows from financing activities:
Proceeds from notes payable, net		1,122,134		907,500
Financing Fees deducted from notes payable proceeds		(48,778)		-
Proceeds from sale of preferred stock		187,654		642,463
Principal payments on notes payable		(388,428)		(68,132)
Net cash provided by financing activities		872,582		1,481,831
Net change in cash and cash equivalents		55,531		(470,398)
Cash and cash equivalents, beginning of period		4,737		475,135
Cash and cash equivalents, end of period	$	60,268	$	4,737

Supplemental cash flow information
Cash paid for interest	$	5,976	$	1,243
Cash paid for income taxes	$	-	$	-

Noncash investing and financing activities
Shares and warrants issued in connection with settlement of liabilities and conversion of convertible notes	$	407,086	$	561,093
Discount (including beneficial conversion feature) on notes payable	$	690,011	$	630,233
Warrants issued as a loan fee	$	-	$	288,712
Original issue discount on notes payable issued	$	-	$	50,000
Accounts payable converted to debt	$	-	$	30,000

See Notes to Consolidated Financial Statements

~~The information required by this Item is set forth in our Consolidated Financial Statements and Notes thereto beginning at page~~ F-1 ~~of this Annual Report on Form 10~~-K. 4

	PAGE
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	F-1
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets at September 30, 2015 and 2014	F-2
Consolidated Statements of Operations for the years ended September 30, 2015 and 2014	F-3
Consolidated Statements of Cash Flows for the years ended September 30, 2015 and 2014	F-4
Consolidated Statements of Stockholders’ Deficit for the years ended September 30, 2015 and 2014	F-5
Notes to Consolidated Financial Statements	F-6

Table of Contents

NEAH POWER SYSTEMS, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT For the years ended September 30, 2016 and 2015

	Preferred stock											Total Stockholders' Deficit
	Series B Preferred Stock			Common stock				Additional paid-in capital		Accumulated Deficit
	Shares		Amount	Shares		Amount		Additional paid-in capital		Accumulated Deficit
Balances at September 30, 2014	1,314,988	$	1,315	966,107,350	$	966,107	$	60,351,492	$	(62,367,631)	$	(1,048,717)
Issuance of common stock on conversion of notes payable and accrued interest				152,134,000		152,134		408,959				561,093
Issuance of common stock and warrants for services				6,646,113		6,646		1,213,343				1,219,989
Issuance of common stock and warrants in connection with fee associated with note payable issues				5,931,818		5,932		318,780				324,712
Warrant issued in connection with note payable								208,000				208,000
Stock-based compensation - options								301,066				301,066
Issuance of Series B Preferred Stock	642,462		642					641,821				642,463
Conversion of Series B Preferred Stock to common stock	(753,874)		(754)	156,010,181		156,010		(155,256)				-
Beneficial conversion feature on convertible debt issued								422,233				422,233
Net loss for the year ended September 30, 2015										(4,363,574)		(4,363,574)
Balances at September 30, 2015	1,203,576	$	1,204	1,286,829,462	$	1,286,829	$	63,710,437	$	(66,731,205)	$	(1,732,735)
Issuance of common stock on conversion of notes payable and accrued interest				1,163,045,205		1,163,045		(755,959)				407,086
Issuance of common stock and warrants for services				10,761,094		10,761		141,384				152,145
Stock-based compensation - options								24,374				24,374
Issuance of Series B Preferred Stock	187,654		187					187,467				187,654
Conversion of Series B Preferred Stock to common stock	(168,994)		(169)	135,872,660		135,873		(135,704)				0
Beneficial conversion feature on convertible debt issued								690,011				690,011
Net loss for the year ended September 30, 2016										(2,418,835)		(2,418,835)
Balances at September 30, 2016	1,222,236	$	1,222	2,596,508,421	$	2,596,508	$	63,862,010	$	(69,150,040)	$	(2,690,300)

See Notes to Consolidated Financial Statements

~~Table~~F of- ~~Contents~~5

~~REPORT~~Table OFof ~~INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM~~Contents

ToNEAH ~~the~~POWER ~~Board~~SYSTEMS, ofINC. ~~Directors~~AND SUBSIDIARY

~~Neah~~NOTES ~~Power~~TO ~~Systems,~~CONSOLIDATED ~~Inc.~~FINANCIAL STATEMENTS

~~Bothell,~~Note ~~Washington~~1 – Description of business

We have audited the accompanying consolidated balance sheets of Neah Power Systems, Inc. and Subsidiary ("the Company") as of September 30, 2015 and 2014, and the related consolidated statements of operations, stockholders' deficit, and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.Organization

WeOur ~~conducted~~Company ~~our~~was ~~audits~~incorporated in ~~accordance with~~ the ~~standards~~State of ~~the~~Nevada ~~Public~~in ~~Company~~2001, ~~Accounting~~as ~~Oversight~~Neah ~~Board~~Power ~~(United~~Systems, ~~States)~~Inc., ~~Those standards require that we plan~~ and ~~perform~~together ~~the~~with ~~audits~~its tosubsidiary, ~~obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. The Company has determined that it~~ is ~~not~~referred ~~required~~ to ~~have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting~~ as ~~a basis for designing audit procedures that are appropriate in~~ the ~~circumstances, but not for the purpose of expressing an opinion on the effectiveness of the~~ “Company~~'s internal control over financial reporting. Accordingly~~”, “we ~~express no such opinion. An audit includes examining~~”, ~~on a test basis~~“us”, ~~evidence~~or supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that “our ~~audits provide a reasonable basis for our opinion~~”.

InReporting our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Neah Power Systems, Inc. and Subsidiary, as of September 30, 2015 and 2014, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.Status

~~The~~On ~~accompanying~~May ~~consolidated~~15, ~~financial~~2017, ~~statements have been prepared assuming~~ the Company ~~will~~chose ~~continue as a going concern. As discussed in Note 3~~ to ~~the~~file ~~consolidated financial statements, the Company had an accumulated deficit of $66,731,205 and~~ a ~~working~~Form ~~capital deficit of $1~~15,~~802,938~~ atterminating ~~September~~its ~~30,~~obligation ~~2015.~~to ~~Additionally,~~file ~~net cash used in operating activities was $1~~current,~~956,157~~ ~~for~~quarterly ~~the year ended September 30, 2015,~~ and ~~the~~annual ~~Company~~SEC ~~has experienced recurring net losses since inception~~reports. ~~This~~The ~~raises substantial doubt about the~~ Company's ~~ability~~intends to ~~continue~~maintain asits anon-reporting ~~going~~status ~~concern.~~for ~~Management's~~the ~~plans~~foreseeable ~~regarding~~future ~~this~~(see ~~matter are also described in~~ Note 3.13 ~~The~~– ~~consolidated~~Subsequent ~~financial statements do not include any adjustments that might result from the outcome of this uncertainty.~~Events)

~~/S/ PETERSON SULLIVAN LLP~~Business

~~Seattle~~We are engaged in the development and sale of renewable energy solutions using our direct methanol micro fuel cell technology, ~~Washington~~our reformer technology, and our silicon based rechargeable battery technology. This allows us to generate hydrogen using our Formira® reformer technology, use that hydrogen, or use methanol directly, using the PowerChip® fuel cell technology, and then store that energy using the silicon based rechargeable lithium battery. We are developing solutions specifically targeted for the military, transportation vehicles, and portable electronics applications. Our long-lasting, efficient and safe power solutions include devices, such as notebook PCs, military radios, and other power-hungry computer, entertainment and communications products. We use a unique patented, silicon-based design for our micro fuel cells and our battery that create higher power densities and enables lighter-weight, smaller form-factors, and will potentially create more cost effective manufacturing and potentially lower product costs.

~~January~~With 13our Formira hydrogen on demand system, ~~2016~~a reformer platform for direct on-site generation of hydrogen gas, customers will be able to carry a liquid with a better safety profile and generate hydrogen gas at point of use rather than carrying high pressure hydrogen gas cylinders. The hydrogen is designed to be consumed directly by a fuel cell, using either our silicon based fuel cell, or commercially available proton exchange membrane (PEM) fuel cells.

~~F-1~~We currently are doing our battery development at a third party facility in Beaverton, OR, and the Company is primarily focused on the battery development at this time. We are using a variety of consultants for business development, who are located worldwide, and who are compensated based on commercial success. We currently operate out of Bothell, Washington.

~~Table~~Due to the greater commercial interest in rechargeable battery systems, we are primarily focusing our limited resources on the development and marketing of ~~Contents~~our lithium battery technology while at the same time exploring licensing opportunities for the fuel cell and hydrogen markets.

NEAH POWER SYSTEMS, INC. CONSOLIDATED BALANCE SHEETS
ASSETS	September 30, 2015		September 30, 2014
Current Assets
Cash & cash equivalents	$	4,737	$	475,135
Restricted cash		10,000		10,000
Note receivable, net of allowance for uncollectable accounts of $52,347		-		-
Accounts receivable		-		6,300
Prepaid expenses and other current assets		63,696		165,108
Deferred loan fees		142,061		23,125
Total current assets		220,494		679,668
Property and equipment, net		70,203		83,511
Total assets	$	290,697	$	763,179
LIABILITIES AND STOCKHOLDER'S DEFICIT
Current liabilities
Accounts payable	$	344,484	$	729,297
Accrued compensation and related expenses		719,540		528,387
Other liabilities		98,583		89,733
Notes payable and accrued interest, net of discount of $72,255 and $48,385, respectively		860,825		464,479
Total current liabilities		2,023,432		1,811,896
Commitments and contingencies (see note 13)
Stockholders' deficit
Preferred stock $0.001 par value: 5,000,000 shares authorized Series B convertible: 2,222,022 shares designated, 1,203,576 and 1,314,988 shares issued and outstanding, respectively		1,204		1,315
Common stock $0.001 par value, 1,800,000,000 shares authorized, 1,286,829,462 and 966,107,350 shares issued and outstanding, respectively		1,286,829		966,107
Additional paid-in-capital		63,710,437		60,351,492
Accumulated deficit		(66,731,205)		(62,367,631)
Total stockholders' deficit		(1,732,735)		(1,048,717)
Total liabilities and stockholders' deficit	$	290,697	$	763,179

Note 2 – Summary of significant accounting policies

~~See~~Use ~~Notes~~of toestimates ~~Consolidated~~in ~~Financial~~the ~~Statements~~preparation of financial statements

~~F-2~~Preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The more significant accounting estimates inherent in the preparation of our consolidated financial statements include estimates as to the valuation of equity related instruments and valuation allowance for deferred income tax assets.

~~Table of Contents~~Consolidation

NEAH POWER SYSTEMS, INC.CONSOLIDATED STATEMENTS OF OPERATIONS
	For the year ended September 30,
	2015		2014
Revenues	$	196,073	$	1,787
Cost of revenues		11,740		1,730
Gross profit		184,333		57
Operating expenses
Research and development expense		1,320,837		1,300,265
Marketing and sales expense		1,290,499		823,685
General and administrative expense		1,275,375		932,017
Total operating expenses		3,886,711		3,055,967
Loss from operations		(3,702,378)		(3,055,910)
Other income (expense)
Financing costs		(302,674)		(276,694)
Interest expense		(669,368)		(100,061)
Gain (loss) on sale of equipment		13,500		(2,011)
Gain (Loss) on extinguishment of liabilities, net		303,646		(403,133)
Other income (expense)		(6,300)		6,000
Net loss	$	(4,363,574)	$	(3,831,809)
Net loss per share
Basic and diluted loss per common share	$	(0.00)	$	(0.00)
Weighted average shares used to compute net loss per share
Basic and diluted weighted average common shares outstanding		1,060,777,052		896,518,105

The consolidated financial statements include the accounts of the Company and our wholly-owned subsidiary. All significant intercompany balances and transactions have been eliminated.

~~See~~Cash ~~Notes~~and tocash ~~Consolidated~~equivalents ~~Financial~~and ~~Statements~~restricted cash

~~F-3~~We consider all highly liquid investments purchased with maturities of three months or less to be cash equivalents. We place our cash balances with high credit quality financial institutions. At times, such balances may be in excess of the FDIC insurance limit. Restricted cash is reported separately and not reported as cash and cash equivalents. Restricted cash is reserved as collateral against a bank issued company credit card.

~~Table~~F of- ~~Contents~~6

NEAH POWER SYSTEMS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS
	For the year ended September 30,
	2015		2014
Cash flows from operating activities:
Net loss	$	(4,363,574)	$	(3,831,809)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		22,881		3,910
Amortization of debt discount		606,364		81,194
Expense from financing costs paid in equity and debt issuance		255,775		104,569
Stock-based compensation expense from options, warrants, and shares issued for services		1,521,055		690,395
Bad debt allowance		6,300		(6,000)
Loss(Gain) on extinguishment of liabilities, net		(303,646)		403,133
Loss (gain) on sale of equipment		(13,500)		2,011
Non-cash charitable donations of fixed assets and stock				35,947
Changes in operating assets and liabilities
Prepaid expenses and other current assets		101,412		(34,692)
Accounts payable		(51,167)		(10,387)
Accrued compensation and related expense		191,153		33,025
Accrued interest and other liabilities		70,790		15,136
Net cash used in operating activities		(1,956,157)		(2,513,568)
Cash flows from investing activities
Proceeds from sale of equipment		13,500		64,327
Purchases of equipment		(9,572)		(44,458)
Change in restricted cash				(10,000)
Collection of note receivable		-		6,000
Net cash provided by investing activities:		3,928		15,869
Cash flows from financing activities:
Proceeds from sale of common stock		-		1,200,000
Proceeds from notes payable, net		907,500		570,000
Proceeds from sale of preferred stock		642,463		1,314,988
Proceeds from warrant exercise		-		2,000
Principal payments on notes payable		(68,132)		(132,500)
Net cash provided by financing activities		1,481,831		2,954,488
Net change in cash and cash equivalents		(470,398)		456,789
Cash and cash equivalents, beginning of year		475,135		18,346
Cash and cash equivalents, end of year	$	4,737	$	475,135
Supplemental cash flow information
Cash paid for interest	$	1,243	$	5,647
Cash paid for income taxes	$	-	$	-
Noncash investing and financing activities
Shares and warrants issued in connection with settlement of liabilities and conversion of convertible notes	$	561,093	$	597,278
Shares issued in connection with an asset purchase agreement	$	-	$	120,633
Discount (including beneficial conversion feature) on notes payable	$	630,233	$	91,671
Original issue discount on notes payable issued	$	50,000	$	45,000
Warrants issued as loan fee	$	288,712	$	-
Accounts payable converted to debt	$	30,000	$	-
See Notes to Condensed Consolidated Financial Statements

Table of Contents

~~F-4~~NEAH POWER SYSTEMS, INC. AND SUBSIDIARY

~~Table~~NOTES ofTO ~~Contents~~CONSOLIDATED FINANCIAL STATEMENTS

NEAH POWER SYSTEMS, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT For the year ended September 30, 2015
	Preferred stock												Total
	Series B Preferred Stock				Common stock			Additional paid-in capital			Accumulated		Stockholders'
	Shares		Amount		Shares		Amount				Deficit		Deficit
Balances at September 30, 2013		286,700	$	287	766,991,327	$	766,991	$	56,422,602	$	(58,535,822)	$	(1,345,942)
Issuance of common stock in settlement of liabilities					18,545,595		18,546		521,454				540,000
Issuance of common stock on conversion of notes payable					15,353,144		15,353		41,925				57,278
Issuance of common stock and warrants for services					5,673,346		5,673		143,381				149,055
Issuance of common stock for cash					33,333,333		33,333		466,667				500,000
Issuance of common stock for funding and asset purchase					60,100,000		60,100		760,533				820,633
Issuance of common stock in connection with fees associated with note payable issues					7,294,748		7,295		89,774				97,068
Issuance of common stock for donation					937,500		938		14,063				15,000
Exercise of warrants					1,612,204		1,612		388				2,000
Stock-based compensation - options									541,341				541,341
Issuance of Series B Preferred Stock		1,314,988		1,315					1,313,673				1,314,988
Conversion of Series B Preferred Stock to common stock		(286,700)		(287)	56,266,153		56,266		(55,979)				-
Beneficial conversion feature on convertible debt issued									91,671				91,671
Net loss for the year ended September 30, 2014										$	(3,831,809)		(3,831,809)
Balances at September 30, 2014		1,314,988	$	1,315	966,107,350	$	966,107	$	60,351,492	$	(62,367,631)	$	(1,048,717)
Issuance of common stock on conversion of notes payable and accrued interest					152,134,000		152,134		408,959				561,093
Issuance of common stock and warrants for services					6,646,113		6,646		1,213,343				1,219,989
Issuance of common stock and warrants in connection with fee associated with note payable issues					5,931,818		5,932		318,780				324,712
Warrants issued in connection with note payable									208,000				208,000
Stock-based compensation - options									301,066				301,066
Issuance of Series B Preferred Stock		642,462		642					641,821				642,463
Conversion of Series B Preferred Stock to common stock		(753,874)		(754)	156,010,181		156,010		(155,256)				-
Beneficial conversion feature on convertible debt issued									422,233				422,233
Net loss for the year ended September 30, 2015										$	(4,363,574)		(4,363,574)
Balances at September 30, 2015		1,203,576	$	1,204	1,286,829,462	$	1,286,829	$	63,710,437	$	(66,731,205)	$	(1,732,735)

Accounts Receivable

~~See~~In ~~Notes~~the normal course of business, we decide to ~~Consolidated~~extend ~~Financial~~credit ~~Statements~~to certain customers without requiring collateral or other security interests. Management reviews its accounts receivable at each reporting period to provide for an allowance against accounts receivable for an amount that could become uncollectible. This review process may involve the identification of payment problems with specific customers. Periodically we estimate this allowance based on the aging of the accounts receivable, historical collection experience, and other relevant factors, such as changes in the economy and the imposition of regulatory requirements that can have an impact on the industry. These factors continuously change, and can have an impact on collections and our estimation process.

~~F-5~~Contingencies

~~Table~~Certain conditions may exist as of ~~Contents~~the date financial statements are issued, which may result in a loss but which will only be resolved when one or more future events occur or do not occur. We assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to pending legal proceedings that are pending against us or unasserted claims that may result in such proceedings, we evaluate the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a liability has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in our consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable would be disclosed.

~~Note~~Fair 1value ~~–Description~~ of ~~business~~financial instruments

~~Organization~~The carrying value of cash and cash equivalents approximate their fair value (determined based on level 1 inputs in the fair value hierarchy) based on the short-term nature of these financial instruments. The carrying values of the notes payable and accrued interest approximate their fair value (determined based on level 3 inputs in the fair value hierarchy) because interest rates approximate market interest rates.

~~Our~~Property ~~Company was incorporated in the State of Nevada in 2001, as Neah Power Systems, Inc.,~~ and ~~together with its subsidiary, is referred to as the “Company”, “we”, “us”, or “our”.~~ equipment

~~Business~~Property and equipment is stated at cost. Additions and improvements that significantly add to the productive capacity or extend the life of an asset are capitalized. Maintenance and repairs are expensed as incurred. Depreciation is computed using the straight-line method over three to five years. Leasehold improvements are amortized over the lesser of the estimated remaining useful life of the asset or the remaining lease term.

WeImpairment ~~are engaged in the development and sale~~ of renewable energy solutions using our direct methanol micro fuel cell technology, our formic acid fuel cell technology and our reformer technology. Our fuel cells are designed to replace existing rechargeable battery technology in a variety of applications and can run in either aerobic or anaerobic modes. We are developing solutions specifically targeted for the military, transportation vehicles, and portable electronics applications. Our long-~~lasting,~~lived efficient and safe power solutions include devices, such as notebook PCs, military radios, and other power-hungry computer, entertainment and communications products. We use a unique patented, silicon-based design for our micro fuel cells that create higher power densities and enables lighter-weight, smaller form-factors, and will potentially create more cost effective manufacturing and potentially lower product costs.assets

WeLong-lived assets are ~~developing~~reviewed ~~two~~for ~~classes~~impairment ofwhenever ~~fuel~~events ~~cells,~~or ~~one~~changes ~~referred~~in tocircumstances asindicate ~~the~~that ~~PowerChip™ and~~ the ~~other~~carrying asamount ~~the~~of ~~BuzzCell™~~an ~~product.~~asset ~~The~~may ~~PowerChip™~~not isbe ~~a silicon based fuel cell that uses traditional computer chip manufacturing to build the fuel cell~~recoverable. ~~The~~Recoverability ~~BuzzCell™ product was developed during the last two years using some processing steps~~ of ~~the~~assets ~~PowerChip™~~to ~~technology~~be held and ~~using~~used ~~polymeric~~is ~~materials~~measured ~~for~~by a ~~lower~~comparison ~~cost, consumer oriented product. The PowerChip™ is targeted for applications (anaerobic) where the quality~~ of the ~~surrounding~~carrying ~~air~~amount isof ~~unpredictable~~an orasset ~~not~~to ~~available~~future ~~like~~net ~~diesel-fumes~~cash ~~contaminated~~flows ~~environments~~that orwe ~~underwater~~expect ~~applications.~~to ~~The~~be ~~BuzzCell™~~generated ~~product~~by ~~uses air from~~ the ~~surrounding~~asset. ~~environment~~If ~~and~~such isassets ~~targeted~~are ~~for~~considered ~~consumer-oriented~~to ~~and~~be ~~less~~impaired, ~~aggressive~~the ~~applications~~impairment ~~for~~to ~~lower~~be ~~power~~recognized ~~ranges. The Company~~ is ~~also~~measured ~~developing~~by ~~Formira~~the ~~HOD™,~~amount aby ~~reformer~~which ~~platform~~the ~~for~~carrying ~~direct~~amount ~~on-site generation~~ of ~~hydrogen~~the ~~gas.~~assets ~~Customers~~exceeds ~~will~~the befair ~~able~~value ~~carry a liquid with a better safety profile and generate hydrogen gas at point~~ of ~~use~~the ~~rather~~assets. ~~than~~We ~~carrying~~have ~~high~~not ~~pressure~~recognized ~~hydrogen~~any ~~gas cylinders~~impairment.

~~Our~~Income ~~laboratory facilities and corporate office are located in Bothell, Washington.~~taxes

~~Note~~We 2account ~~–Summary~~for income taxes using an asset and liability method which requires recognition of ~~significant~~deferred ~~accounting~~tax ~~policies~~assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to amounts that we expect to realize. We continue to provide a full valuation allowance to reduce our net deferred tax asset to zero, inasmuch as we have not determined that realization of deferred tax assets is more likely than not. Any provision for income taxes would represent the tax payable for the period and change during the period in net deferred tax assets and liabilities.

~~Use~~Debt ~~of estimates in the preparation of consolidated financial statements~~discount

~~Preparation~~We ofrecord ~~consolidated financial~~the ~~statements~~value inof ~~conformity~~original ~~with~~issue ~~accounting~~discounts ~~principles~~associated ~~generally~~with ~~accepted~~notes inpayable ~~the~~on ~~United~~issuance ~~States requires management to make estimates~~ and ~~assumptions~~the ~~that~~recognized ~~affect~~value ~~reported amounts~~ of ~~assets~~beneficial ~~and~~conversion ~~liabilities~~feature ~~and disclosure~~ of ~~contingent~~debt ~~assets~~securities ~~and~~as ~~liabilities~~a atdebt ~~the~~discount, ~~date~~which ofis ~~the~~presented ~~consolidated~~net ~~financial statements and reported amounts~~ of ~~revenue~~related ~~and~~notes ~~expenses~~payable ~~during~~on the ~~reporting period. Actual results could differ from those estimates. The more significant accounting estimates inherent in the preparation of our~~ consolidated ~~financial~~balance ~~statements~~sheets ~~include~~and ~~estimates~~amortized as toan ~~the~~adjustment ~~valuation~~to ofinterest ~~equity~~expense ~~related~~over ~~instruments~~the ~~and~~borrowing ~~valuation allowance for deferred income tax assets~~term.

~~Consolidation~~Research and development expense

~~The~~Research ~~consolidated financial statements include the accounts of the Company~~ and ~~our~~development ~~wholly-owned~~costs ~~subsidiary.~~are ~~All~~expensed ~~significant~~as ~~intercompany balances and transactions have been eliminated~~incurred.

F -6 7

Table of Contents

NEAH POWER SYSTEMS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~Cash~~Share ~~and~~based ~~cash equivalents and restricted cash~~compensation

We ~~consider~~use ~~all~~the ~~highly~~Black-Scholes-Merton ~~liquid~~option ~~investments~~pricing ~~purchased~~model ~~with~~as ~~maturities~~our method of ~~three~~valuation ~~months~~for orstock-based ~~less~~option toand bewarrant ~~cash equivalents~~awards. WeStock-based ~~place~~compensation ~~our~~expense ~~cash~~is ~~balances~~based ~~with~~on ~~high~~the ~~credit~~value ~~quality~~of ~~financial~~the ~~institutions~~portion of the stock-based award that will vest during the period, adjusted for expected forfeitures. AtThe ~~times~~estimation of stock-based awards that will ultimately vest requires judgment, and to the extent actual or updated results differ from our current estimates, such ~~balances~~amounts ~~may~~will be recorded in ~~excess~~the ofperiod the ~~FDIC~~estimates ~~insurance~~are ~~limit~~revised. ~~Restricted~~The ~~cash~~Black-Scholes-Merton option pricing model requires the input of highly subjective assumptions, and other reasonable assumptions could provide differing results. Our determination of the fair value of stock-based awards on the date of grant using an option pricing model is ~~reported~~affected ~~separately~~by our stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not ~~reported~~limited asto, ~~cash~~the expected life of the award and ~~cash~~expected ~~equivalents~~stock price volatility over the term of the award. ~~Restricted~~ ~~cash~~Stock-based iscompensation ~~reserved~~expense asis ~~collateral~~recognized ~~against~~on a ~~bank~~straight-line ~~issued~~basis ~~company~~over ~~credit~~the ~~card~~applicable vesting period (deemed the requisite service period) based on the fair value of such stock-based awards on the grant date.

~~Accounts~~Revenue ~~Receivable~~recognition

In ~~the~~general, ~~normal~~we ~~course~~recognize revenue when we have persuasive evidence of ~~business~~an arrangement, wethe ~~decide~~services/goods tohave ~~extend~~been ~~credit~~provided or delivered to ~~certain~~the ~~customers~~customer, ~~without~~the ~~requiring~~price ~~collateral~~is orfixed ~~other~~and ~~security~~determinable, ~~interests~~no significant unfulfilled obligations exist, and collectability is reasonably assured. ~~Management~~Revenue ~~reviews~~from ~~its~~research ~~accounts~~and ~~receivable~~development atarrangements ~~each~~is ~~reporting~~recognized ~~period~~either (a) as performance is estimated to ~~provide~~be ~~for~~completed anwhich ~~allowance~~is ~~against~~based ~~accounts~~on ~~receivable~~factors ~~for~~such anas ~~amount~~costs ~~that~~or ~~could~~direct ~~become~~labor ~~uncollectible.~~hours ~~This~~of ~~review~~the ~~process~~project, ~~may~~or ~~involve~~(b) using the ~~identification~~milestone ofmethod ~~payment~~if ~~problems~~the ~~with~~contractual ~~specific~~milestones ~~customers~~in the arrangement are determined to be substantive. ~~Periodically~~Each weresearch ~~estimate~~and ~~this~~development ~~allowance~~arrangement ~~based~~is onanalyzed to determine the ~~aging~~appropriate revenue recognition method to be utilized. Estimates of ~~the~~performance ~~accounts~~completion ~~receivable,~~are ~~historical~~reviewed ~~collection~~on ~~experience,~~a periodic basis and ~~other~~are ~~relevant~~subject ~~factors~~to change, ~~such~~and as changes could occur in the ~~economy~~near ~~and~~term. If an estimate is changed, revenue could be impacted significantly. Payments received in excess of amounts earned are recorded as deferred revenue. Revenue from the ~~imposition~~sale of ~~regulatory~~products ~~requirements~~and ~~that~~prototypes ~~can~~is ~~have~~generally anrecognized ~~impact~~after onboth the ~~industry.~~goods ~~These~~are ~~factors~~shipped ~~continuously~~to ~~change,~~the customer and ~~can~~acceptance ~~have~~has anbeen ~~impact~~received, onif ~~collections~~required. Our products are shipped complete and ready to be incorporated into higher-level assemblies by our ~~estimation~~customers. ~~process~~The terms of the customer arrangements generally pass title and risk of ownership to the customer at the time of shipment. Revenue for the year ended September 30, 2015 included $172,285 from a customer located in India.

~~Contingencies~~Reclassifications

Certain ~~conditions~~prior ~~may~~year ~~exist~~amounts ashave ofbeen ~~the~~reclassified date financial statements are issued, which may result in a loss but which will only be resolved when one or more future events occur or do not occur. We assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to ~~pending~~conform ~~legal~~with ~~proceedings that are pending against us or unasserted claims that may result in such proceedings, we evaluate~~ the ~~perceived~~current ~~merits~~year ~~of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein~~presentation. IfThere ~~the assessment of a contingency indicates that it is probable that a liability~~ has been ~~incurred~~no ~~and~~impact ~~the~~on ~~amount~~previously ofreported ~~the~~net ~~liability can be estimated, then the estimated liability would be accrued in our consolidated financial statements. If the assessment indicates that a potentially material~~ loss ~~contingency is not probable but is reasonably possible,~~ or isstockholders’ ~~probable~~deficit ~~but~~from ~~cannot~~such ~~be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable would be disclosed~~reclassifications.

~~Fair~~Recent ~~value~~accounting ~~of financial instruments~~pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09), to supersede nearly all existing revenue recognition guidance under GAAP. The ~~carrying~~core ~~value~~principle of ~~cash~~ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, ~~cash~~in ~~equivalents~~doing ~~approximate~~so, ~~their~~it ~~fair~~is ~~value~~possible ~~(determined~~more ~~based~~judgment onand ~~level~~estimates 1may ~~inputs~~be required within the revenue recognition process than required under existing GAAP including identifying performance obligations in the ~~fair~~contract, ~~value~~estimating ~~hierarchy~~the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for the fiscal and interim reporting periods beginning after December 15, 2017 using either of two methods: (i) ~~based~~retrospective onto each prior reporting period presented with the ~~short~~option to elect certain practical expedients as defined within ASU 2014-~~term~~09; ~~nature~~or (ii) retrospective with the cumulative effect of ~~these~~initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09. Management is currently evaluating the impact of the Company's pending adoption of ASU 2014-09 on its consolidated financial ~~instruments~~statements. With no current revenue streams, it is not determinable what the impact of ASU 2014-09 will be. The ~~carrying~~effective ~~values~~date of ~~the~~ASU ~~note~~2014-09 ~~receivable~~was delayed one year, ~~before~~changed ~~allowance~~from December 15, ~~and~~2016 ~~notes~~to ~~payable~~December ~~and~~15, ~~accrued~~2017 ~~interest~~by ~~approximate~~the ~~their~~FASB ~~fair~~in ~~value~~July ~~(determined~~2015 ~~based~~although onentities ~~level~~can 3still ~~inputs~~elect into ~~the~~adopt ~~fair~~beginning ~~value~~during ~~hierarchy)~~fiscal ~~because~~reporting ~~interest~~periods, ~~rates~~beginning ~~approximate~~after ~~market~~December ~~interest~~15, ~~rates~~2016.

~~Property~~In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (ASU 2014-15), which provides guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and ~~equipment~~to provide related footnote disclosures. ASU 2014-15 will be effective for the year ended September 30, 2017 and the Company will implement any changes at that time.

~~Property~~In ~~and~~April ~~equipment~~2015, isthe ~~stated~~FASB atissued ~~cost~~Accounting Standards Update No. ~~Additions~~2015-03, ~~and~~Simplifying ~~improvements~~the Presentation of Debt Issuance Costs (ASU 2015-03), which requires that ~~significantly~~debt ~~add~~issuance costs related to a recognized debt liability be presented in the ~~productive~~balance ~~capacity~~sheet oras ~~extend~~a direct deduction from the ~~life~~carrying amount of anthat ~~asset~~debt ~~are~~liability, ~~capitalized~~consistent with debt discounts. ~~Maintenance~~ASU ~~and~~2015-03 ~~repairs~~will ~~are~~be ~~expensed~~effective asfor ~~incurred~~the year ended September 30, 2017. ~~Depreciation~~The isCompany ~~computed~~does ~~using~~not ~~the~~expect ~~straight-line~~adoption ~~method~~of ~~over~~ASU ~~three~~2015-03 to ~~five~~have ~~years.~~a ~~Leasehold~~material ~~improvements~~impact ~~are~~on ~~amortized~~its ~~over~~consolidated ~~the~~financial ~~lesser~~statements. Upon adoption of ~~the~~ASU ~~estimated~~2015-03, ~~remaining~~deferred ~~useful~~loan ~~life~~fees ofthat have historically been recorded as assets will be recorded as a debt discount and netted against the ~~asset~~related ordebt in the ~~remaining~~consolidated ~~lease~~balance ~~term~~sheet.

F -7 8

Table of Contents

NEAH POWER SYSTEMS, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~Impairment~~In ofFebruary ~~long~~2016, the FASB issued Accounting Standards Update No. 2016-~~lived~~02, Leases: Topic 842 (ASU 2016-02) that replaces existing lease guidance. The new standard is intended to provide enhanced transparency and comparability by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet. Under the new guidance, leases will continue to be classified as either finance or operating, with classification affecting the pattern of expense recognition in the Consolidated Statements of Operations. Lessor accounting is largely unchanged under ASU 2016-02. Adoption of ASU 2016-02 is required for fiscal reporting periods beginning after December 15, 2018, including interim reporting periods within those fiscal years with early adoption being permitted. The new standard is required to be applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients. The Company is currently evaluating the potential impact of the pending adoption of ASU 2016-02 on its consolidated financial statements.

~~Long-lived~~In ~~assets~~March ~~are~~2016, ~~reviewed~~the ~~for~~FASB ~~impairment~~issued ~~whenever~~Accounting ~~events~~Standards orUpdate ~~changes~~No. in2016-09, ~~circumstances~~Compensation-Stock ~~indicate~~Compensation ~~that~~(Topic ~~the~~718): ~~carrying~~Improvements ~~amount~~to ofEmployee anShare-Based ~~asset~~Payment ~~may~~Accounting ~~not be recoverable~~(ASU-2016-09). ~~Recoverability~~The ofupdated ~~assets~~guidance tosimplifies ~~be held~~ and ~~used~~changes ishow ~~measured~~companies byaccount afor ~~comparison~~certain aspects of ~~the~~share-based ~~carrying~~payment ~~amount~~awards ofto anemployees, ~~asset~~including toaccounting ~~future~~for ~~net~~income ~~cash~~taxes, ~~flows~~forfeitures, ~~that~~and westatutory ~~expect~~tax towithholding berequirements, ~~generated~~as bywell ~~the~~as ~~asset.~~classification Ifof ~~such~~certain ~~assets~~items ~~are~~in ~~considered~~the tostatement beof ~~impaired,~~cash ~~the~~flows. ~~impairment~~Adoption toof beASU ~~recognized~~2016-09 is ~~measured~~required byfor ~~the~~fiscal ~~amount~~reporting byperiods ~~which~~beginning ~~the~~after ~~carrying~~December ~~amount~~15, of2016. ~~the~~In ~~assets~~future ~~exceeds~~years, the ~~fair~~Company ~~value~~will ofimplement ~~the~~any ~~assets.~~changes Weas ~~have~~prescribed ~~not~~in ~~recognized~~this ~~any impairment~~update.

~~Income~~In ~~taxes~~August 2016, the FASB issued Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15). The updated guidance clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows. Adoption of ASU 2016-15 is required for fiscal reporting periods beginning after December 15, 2017, including interim reporting periods within those fiscal years with early adoption being permitted. We do not expect the adoption of ASU 2016-15 to have a material impact on our consolidated financial statements.

WeIn ~~account~~November ~~for~~2016, ~~income~~the ~~taxes~~FASB ~~using~~issued anAccounting ~~asset~~Standards ~~and~~Update ~~liability~~No. ~~method~~2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18) which ~~requires~~amends ~~recognition~~ASC of230 ~~deferred~~to ~~tax~~add ~~assets~~or ~~and~~clarify ~~liabilities~~guidance ~~for~~on the ~~expected~~classification ~~future~~and ~~tax~~presentation ~~consequences~~of restricted cash in the statement of ~~events~~cash ~~that~~flows. ~~have~~The ~~been~~amended ~~included~~guidance inrequires ~~the~~that ~~consolidated~~amounts ~~financial~~that ~~statements~~are ordeemed ~~tax~~to ~~returns.~~be ~~Under~~restricted ~~this~~cash ~~method,~~and ~~deferred~~restricted ~~income~~cash ~~taxes~~equivalents ~~are~~be ~~recognized~~included ~~for~~in the ~~tax~~cash ~~consequences~~and cash-equivalent balances in ~~future~~the ~~years~~statement of ~~differences~~cash flows. A reconciliation between the ~~tax~~consolidated ~~bases~~balance sheet and the statement of ~~assets~~cash ~~and~~flows ~~liabilities~~must ~~and~~be ~~their~~disclosed ~~financial~~when ~~reporting~~the ~~amounts~~consolidated atbalance ~~each~~sheet ~~period~~includes ~~end~~more ~~based~~than onone ~~enacted~~line ~~tax~~item ~~laws~~for cash, cash equivalents, restricted cash, and ~~statutory~~restricted ~~tax~~cash ~~rates~~equivalents. ~~applicable~~The toguidance ~~the~~also ~~periods~~requires inthat ~~which~~changes ~~the~~in ~~differences~~restricted ~~are~~cash ~~expected~~and torestricted ~~affect~~cash ~~taxable~~equivalents ~~income.~~that ~~Valuation~~result ~~allowances~~from ~~are~~transfers ~~established~~between cash, ~~when~~cash ~~necessary~~equivalents, toand ~~reduce~~restricted ~~deferred~~cash ~~tax~~and ~~assets~~restricted tocash ~~amounts~~equivalents ~~that~~should wenot ~~expect~~be topresented ~~realize.~~as Wecash ~~continue~~flow toactivities ~~provide~~in athe ~~full~~statement ~~valuation~~of ~~allowance~~cash toflows. ~~reduce~~An ~~our~~entity ~~net~~with ~~deferred~~a ~~tax~~material ~~asset~~balance toof ~~zero,~~amounts ~~inasmuch~~generally described as werestricted ~~have~~cash ~~not~~and ~~determined~~restricted ~~that~~cash ~~realization~~equivalents ofmust ~~deferred~~disclose ~~tax~~information ~~assets~~about isthe ~~more~~nature ~~likely~~of ~~than~~the ~~not~~restrictions. ~~Any~~Adoption ~~provision~~of ASU 2016-18 is required for ~~income~~fiscal ~~taxes~~reporting ~~would~~periods ~~represent~~beginning ~~the~~after ~~tax~~December ~~payable~~15, ~~for~~2017, ~~the~~including ~~period~~interim ~~and~~reporting ~~change~~periods ~~during~~within ~~the~~those ~~period~~fiscal inyears ~~net~~with ~~deferred~~early ~~tax~~adoption ~~assets~~being ~~and~~permitted. ~~liabilities~~The Company is evaluating the potential impact on its consolidated financial statements.

~~Debt~~In ~~discount~~June 2018, the FASB issued Accounting Standards Update No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. The updated guidance seeks to simplify several aspects of the accounting for nonemployee share-based payment transactions. The Company is evaluating the potential impact on its consolidated financial statements.

WeNote ~~record~~3 ~~the~~– ~~value~~Going of original issue discounts associated with notes payable on issuance and the recognized value of beneficial conversion feature of debt securities as a debt discount, which is presented net of related notes payable on the consolidated balance sheets and amortized as an adjustment to interest expense over the borrowing term. concern

~~Deferred~~The ~~Loan~~accompanying ~~Fees~~consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of our Company as a going concern. Since inception, we have reported net losses, including losses of $2,418,835 and $4,363,574 during the years ended September 30, 2016 and 2015, respectively, and we expect losses to continue in the near future as we grow our operations. At September 30, 2016, we have a working capital deficit of $2,614,501, and an accumulated deficit of $69,150,040. Net cash used by operating activities was $878,548 and $1,956,157 during the years ended September 30, 2016 and 2015, respectively. We have funded our operations through sales of our common and preferred stock, short-term borrowings and long-term borrowings. In this regard, during the year ended September 30, 2016, we raised a net amount of $872,582 from our financing activities. These factors raise substantial doubt about our ability to continue as a going concern.

~~Deferred~~We ~~loan~~require ~~fees~~additional ~~consist~~financing ofto ~~fees~~execute ~~associated~~our ~~with~~business ~~obtaining~~strategy orand ~~restructuring~~to ~~existing~~satisfy ~~debt~~our near-term working capital requirements. ~~These~~ ~~fees~~Our ~~are~~operating ~~amortized~~expenses ~~over~~will ~~the~~use ~~term~~a significant amount of ~~the~~our ~~related~~cash ~~debt~~resources. ~~using~~Our management intends to raise additional financing to fund future operations and to provide additional working capital to further fund our growth. There is no assurance that such financing will be obtained in sufficient amounts necessary or on terms favorable or acceptable to us to meet our needs. In the ~~effective~~event ~~interest~~that ~~method~~we cannot obtain additional funds, on a timely basis or our operations do not generate sufficient cash flow, we may be forced to curtail our development or cease our activities. Subsequent to September 30, 2016, we have received additional investment (see note 13).

~~Research~~The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and ~~development~~classification ~~expense~~of assets or amounts and classifications of liabilities that may result from the outcome of this uncertainty.

~~Research~~F ~~and~~- ~~development costs are expensed as incurred.~~9

~~Share~~Table ~~based~~of ~~compensation~~Contents

WeNEAH ~~use~~POWER the Black-Scholes-Merton option pricing model as our method of valuation for stock-based option and warrant awards. Stock-based compensation expense is based on the value of the portion of the stock-based award that will vest during the periodSYSTEMS, ~~adjusted for expected forfeitures~~INC. ~~The~~AND estimation of stock-based awards that will ultimately vest requires judgment, and to the extent actual or updated results differ from our current estimates, such amounts will be recorded in the period the estimates are revised. The Black-Scholes-Merton option pricing model requires the input of highly subjective assumptions, and other reasonable assumptions could provide differing results. Our determination of the fair value of stock-based awards on the date of grant using an option pricing model is affected by our stock price as well as assumptions regarding a number of highly complex and subjective variables. These variables include, but are not limited to, the expected life of the award and expected stock price volatility over the term of the award. Stock-based compensation expense is recognized on a straight-line basis over the applicable vesting period (deemed the requisite service period) based on the fair value of such stock-based awards on the grant date.SUBSIDIARY

~~F-8~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~Table~~Note of4 ~~Contents~~– Net loss per share

~~NEAH~~Basic ~~POWER~~and ~~SYSTEMS,~~diluted ~~INC~~net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. ~~AND~~Common ~~SUBSIDIARY~~stock equivalents for 2016 and 2015 are excluded as the effect would be anti-dilutive due to our net losses. The following numbers of shares have been excluded from net loss per share computations for the fiscal years ending September 30, 2016 and 2015, respectively:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Shares	2016	2015
Convertible preferred stock	922,007,111	661,749,257
Convertible debt	1,538,616,111	364,953,649
Common stock options (see note 9)	163,931,804	232,446,007
Common stock purchase warrants (see note 9)	492,574,124	477,542,486

~~Revenue~~All ~~recognition~~of the convertible preferred stock issued is convertible solely at the Company’s option. Convertible debt payments are either to be made in cash or in converted shares. (Please see Notes 8 and 9 for specific provisions of convertible of preferred stock and debt instruments.) While being exercisable, all of the common stock options exercise prices exceed the current market price for common stock.

InNote ~~general,~~5 we– ~~recognize~~Property ~~revenue when we have persuasive evidence of an arrangement, the services/goods have been provided or delivered to the customer, the price is fixed~~ and determinable, no significant unfulfilled obligations exist, and collectability is reasonably assured. Revenue from research and development arrangements is recognized either (a) as performance is estimated to be completed which is based on factors such as costs or direct labor hours of the project, or (b) using the milestone method if the contractual milestones in the arrangement are determined to be substantive. Each research and development arrangement is analyzed to determine the appropriate revenue recognition method to be utilized. Estimates of performance completion are reviewed on a periodic basis and are subject to change, and changes could occur in the near term. If an estimate is changed, revenue could be impacted significantly. Payments received in excess of amounts earned are recorded as deferred revenue. Revenue from the sale of products and prototypes is generally recognized after both the goods are shipped to the customer and acceptance has been received, if required. Our products are shipped complete and ready to be incorporated into higher-level assemblies by our customers. The terms of the customer arrangements generally pass title and risk of ownership to the customer at the time of shipment.equipment

~~$172,285~~Property ofand ~~revenue~~equipment ~~for~~consisted of the ~~year~~following ~~ended~~at September 30, 2016 and 2015, ~~was from one customer located in India.~~respectively:

Reclassifications

	September 30, 2016		September 30, 2015
Laboratory equipment	$	425,900	$	1,149,219
Computer hardware and software		114,016		213,376
Leasehold improvements		0		579,641
Total property and equipment	$	539,916	$	1,942,236

Accumulated depreciation and amortization		(494,141)		(1,872,033)

Net property and equipment	$	45,775	$	70,203

~~Certain~~Note ~~prior~~6 ~~year~~– ~~amounts~~Prepaid ~~have~~Expenses ~~been~~and ~~reclassified~~Other toCurrent ~~conform with the current year presentation. There has been no impact on previously reported net income (loss) or shareholders’ deficit from such reclassifications.~~Assets

~~Recent~~Prepaid ~~accounting~~Expenses ~~pronouncements~~and Other Current Assets consist of the following at September 30, 2016 and 2015, respectively:

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09), to supersede nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for the fiscal and interim reporting periods beginning after December 15, 2017 using either of two methods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09; or (ii) retrospective with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09. Management is currently evaluating the impact of the Company's pending adoption of ASU 2014-09 on its consolidated financial statements. The effective date of ASU 2014-09 was delayed one year, changed from December 15, 2016 to December 15, 2017 by the FASB in July 2015 although entities can still elect to adopt beginning during fiscal reporting periods, beginning after December 15, 2016.

Prepaid Assets	2016		2015
Insurances	$	6,090	$	14,904
Deposits		13,540		23,298
Advanced Payments on Manufactured Product		13,143		13,143
Other		6,989		12,351
Total	$	39,762	$	63,696

~~F-9~~Note 7 – Accrued compensation due executive officers and board of directors

~~NEAH~~Due ~~POWER~~to ~~SYSTEMS~~working capital limitations, ~~INC~~we have deferred payments of compensation to our Chief Executive Officer and former Chief Financial Officer, our former Acting Principal Financial Officer and to members of our board of directors, which are included in accrued compensation and related expenses in the accompanying consolidated balance sheets. ~~AND~~Accrued ~~SUBSIDIARY~~compensation due to executive officers and board of directors consisted of the following:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

	September 30, 2016		September 30, 2015
Due to officers	$	475,232	$	475,972
Due to directors		236,821		184,821
Total	$	712,053	$	660,793

InOf ~~August 2014,~~ the ~~Financial~~balance ~~Accounting~~of ~~Standards~~the ~~Board~~$747,947 ~~(FASB)~~and ~~issued~~$719,540 ~~Accounting~~in ~~Standards~~accrued ~~Update~~compensation ~~No.~~and ~~2014-15,~~related ~~Disclosure~~expenses ofin ~~Uncertainties~~the ~~about~~consolidated anbalance ~~Entity’s~~sheets ~~Ability~~at toSeptember ~~Continue~~30, as2016 aand ~~Going~~2015, ~~Concern~~$60,506 ~~(ASU~~and ~~2014-15)~~$57,803 ~~which~~respectively ~~provides~~is ~~guidance~~related onto ~~management’s~~accrued ~~responsibility~~paid intime ~~evaluating~~off ~~whether~~and ~~there~~to isaccrued ~~substantial~~payroll ~~doubt~~taxes ~~about~~on adeferred ~~company’s~~compensation. ~~ability~~Included toin ~~continue~~the as$475,232 aand ~~going~~$475,972 ~~concern~~due ~~and~~ to ~~provide~~officers ~~related~~at ~~footnote~~September ~~disclosures. ASU~~31, ~~2014-15~~2016 ~~will~~and be2015 ~~effective~~respectively, ~~for~~is ~~the~~$0 ~~year~~and ~~ended September 30~~$170,139, ~~2017~~respectively, ~~with~~owed ~~early~~to ~~adoption~~Advanced ~~permitted. The~~Materials ~~Company~~Advisory isLLC ~~currently~~and ~~evaluating~~$60,500 ~~the~~and ~~impact~~$0, ofrespectively, ~~its~~owed ~~pending~~to ~~adoption~~Jeffrey ofA ~~ASU~~May, ~~2014-15~~PC on(see ~~its~~note ~~consolidated financial statements~~12).

InF ~~April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2015~~-~~03,~~ Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03), which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. ASU 2015-03 will be effective for the year ended September 30, 2017, with early adoption permitted. The Company is currently evaluating the impact of its pending adoption of ASU 2015-03 on its consolidated financial statements.10

~~Note~~Table 3of ~~–Going concern~~Contents

~~The~~NEAH ~~accompanying~~POWER ~~consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America~~SYSTEMS, ~~which contemplate continuation of our Company as a going concern~~INC. ~~Since~~AND inception, we have reported net losses, including losses of $4,363,574 and $3,831,809 during the years ended September 30, 2015 and 2014, respectively, and we expect losses to continue in the near future as we grow our operations. At September 30, 2015, we have a working capital deficit of $1,802,938, and an accumulated deficit of $66,731,205. Net cash used by operating activities was $1,956,157 and $2,513,568 during the years ended September 30, 2015 and 2014, respectively. We have funded our operations through sales of our common and preferred stock, and short-term borrowings. In this regard, during the year ended September 30, 2015, we raised a net amount of $1,481,831 from our financing activities. These factors raise substantial doubt about our ability to continue as a going concern.SUBSIDIARY

WeNOTES ~~require~~TO ~~additional~~CONSOLIDATED ~~financing~~FINANCIAL to execute our business strategy and to satisfy our near-term working capital requirements. Our operating expenses will use a significant amount of our cash resources. Our management intends to raise additional financing to fund future operations and to provide additional working capital to further fund our growth. There is no assurance that such financing will be obtained in sufficient amounts necessary or on terms favorable or acceptable to us to meet our needs. In the event that we cannot obtain additional funds, on a timely basis or our operations do not generate sufficient cash flow, we may be forced to curtail our development or cease our activities. STATEMENTS

~~The~~Note ~~accompanying~~8 ~~consolidated~~– ~~financial~~Notes statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classifications of liabilities that may result from the outcome of this uncertainty.payable

~~F-10~~Notes payable and accrued interest consisted of the following:

NEAH POWER SYSTEMS, INC. AND SUBSIDIARY

	September 30, 2016		September 30, 2015
Convertible debentures	$	1,285,133	$	888,510
Accrued interest		156,180		44,570
Debt discount		(219,158)		(72,255)
Total	$	1,222,155	$	860,825

~~NOTES~~Issuance TOof ~~CONSOLIDATED~~Convertible ~~FINANCIAL~~Promissory ~~STATEMENTS~~Notes – Inter-Mountain

On May 7, 2014 we received an initial payment on a May 5, 2014 Securities Purchase Agreement with Inter-Mountain Capital Corporation LLC (“Inter-Mountain”), for the sale of a 5% Secured Convertible Promissory Note 4in ~~–Net~~the ~~loss~~principal amount of $832,500, which included legal expenses in the amount of $7,500 and a $75,000 original issue discount, for net proceeds of $750,000, consisting of $450,000 paid in cash at closing in May 2014 with the remaining amount of $300,000 funded in March 2015. The outstanding balance of this note in our consolidated balance sheets at September 30, 2016, and September 30, 2015, is zero and $231,010, respectively. The note bore interest at the rate of 5% per annum. All interest and principal was to be repaid on or prior to October 7, 2015. The note, as amended, was convertible into common stock at the lesser of $0.05 per share or 75% (the “Conversion Factor”) of the average of the three (3) lowest VWAPs in the twenty (20) Trading Days immediately preceding the applicable Conversion (the “Market Price”), provided that if at any time the average of the three (3) lowest VWAPs in the twenty (20) Trading Days immediately preceding any date of measurement was below $0.01, then in such event the Conversion Factor would be reduced to 70% for all future Conversions. The Company had the option to prepay the note at the rate of 125%.

~~Basic~~We ~~and~~recorded ~~diluted~~beneficial ~~net~~conversion ~~loss~~feature ~~per~~in ~~common~~the ~~share~~amount isof ~~computed~~$76,706 byfor ~~dividing~~ the ~~net~~funding ~~loss~~paid byat ~~the~~initial ~~weighted~~closing ~~average~~in ~~number~~May of ~~common~~2014, ~~shares~~and ~~outstanding~~an ~~during~~additional $135,178 for the ~~period~~amount funded in March 2015. ~~Common~~During ~~stock~~the ~~equivalents~~years ~~for~~ended September 30, 2016 and 2015, we amortized $5,024 and ~~2014~~$178,539 ~~are~~respectively, ~~excluded~~to asinterest expense for these notes in our consolidated statements of operations. During the ~~effect~~year ~~would~~ended beSeptember ~~anti-dilutive~~30, ~~due~~2016, the Company opted to ~~our~~convert ~~net~~$78,750, ~~losses~~of principal and interest into 60,458,806 shares of common stock. ~~The~~On ~~following~~conversion, ~~numbers~~we recorded a reduction to accrued interest of $2,692, and a reduction to notes payable in the amount of $76,058. During the year ended September 30, 2015, the Company opted to convert $561,093, of principal and interest into 152,134,000 shares ~~have~~of ~~been~~common ~~excluded~~stock. ~~from~~On ~~net~~conversion, ~~loss~~we ~~per~~recorded ~~share~~a ~~computations~~reduction ~~for~~to accrued interest of $27,735, and a reduction to notes payable in the ~~fiscal~~amount ~~years~~of ~~ending~~$533,358. During the year ended September 30, 2015, The Company also opted to pay one installment of $69,375 in cash and ~~2014~~recorded a reduction to accrued interest of $1,243, ~~respectively:~~and a reduction to notes payable in the amount of $68,132.

Shares	2015	2014
Convertible preferred stock	546,696,939	165,617,183
Convertible debt	364,953,649	66,365,107
Common stock options (see note 11)	232,446,007	236,096,007
Common stock purchase warrants (see note 11)	477,542,486	368,585,978

On June 17, 2015 we received an initial payment on a June 16, 2015 Securities Purchase Agreement with Inter-Mountain, for the sale of a 5% Secured Convertible Promissory Note in the principal amount of $832,500, which includes legal expenses in the amount of $7,500 and a $75,000 original issue discount, for net proceeds of $750,000, consisting of $150,000 paid in cash at closing and four secured promissory notes payable to the Company, aggregating $600,000, bearing interest at the rate of 5% per annum. On July 31, 2015 one of the secured promissory notes was partially paid and the Company received $50,000 and that note had a $100,000 remaining balance. The outstanding net balance of these notes on our consolidated balance sheets at September 30, 2016, and September 30, 2015, is zero and $227,500, respectively. The note bore interest at the rate of 5% per annum. All interest and principal was to be repaid on or prior to September 15, 2016. The note was convertible into common stock at the lesser of $0.05 per share or 75% (the “Conversion Factor”) of the average of the three (3) lowest VWAPs in the twenty (20) Trading Days immediately preceding the applicable Conversion (the “Market Price”), provided that if at any time the average of the three (3) lowest VWAPs in the twenty (20) Trading Days immediately preceding any date of measurement was below $0.01, then in such event the Conversion Factor shall be reduced to 70% for all future Conversions. The Company had the option to prepay the note at the rate of 125%.

~~All~~We ofrecorded ~~the~~beneficial ~~convertible~~conversion ~~preferred~~feature ~~stock issued is convertible solely at the Company’s option. Convertible debt payments are either 1) to be made~~ in ~~cash or in converted shares at~~ the ~~Company’s~~amount ~~option~~of or$95,056 2)for ~~not~~this ~~convertible due to an extension of the~~ note ~~term. While~~during ~~exercisable, all of~~ the ~~common~~year ~~stock~~ended ~~options~~September ~~exercise~~30, ~~prices~~2015. ~~exceed~~During the ~~current~~years ~~market~~ended ~~price for common stock. As of~~ September 30, 2016 and 2015, ~~warrants~~we ~~exercisable~~amortized ~~into~~$67,231 ~~341~~and $27,~~263~~825,~~225~~ ~~shares~~respectively ofto ~~common~~interest ~~stock~~expense ~~are~~in ~~not~~our ~~exercisable~~consolidated ~~until~~statements ~~the Company’s authorized shares~~ of ~~common stock are increased by shareholder approval which is anticipated for late January 2016~~operations.

~~Note~~On 5December ~~–Property~~16, 2015, these notes were paid in full in the amount of $388,427.77 and ~~equipment~~replaced in the full amount by a note with Union Capital (see below). As of September 30, 2016 the Company no longer has a liability to Inter-Mountain.

~~Property~~F ~~and~~- ~~equipment consisted of the following at September 30, 2015 and 2014, respectively:~~11

	September 30, 2015		September 30, 2014
Laboratory equipment	$	1,149,219	$	1,229,716
Computer hardware and software		213,376		213,376
Leasehold improvements		579,641		579,641
Total property and equipment	$	1,942,236	$	2,022,733
Accumulated depreciation and amortization		(1,872,033)		(1,939,222)
Net property and equipment	$	70,203	$	83,511

Table of Contents

~~Note~~NEAH 6POWER –SYSTEMS, ~~Note~~INC. ~~receivable~~AND SUBSIDIARY

InNOTES ~~May~~TO ~~2011,~~CONSOLIDATED weFINANCIAL announced that we had signed a non-binding letter of intent to acquire privately-held Exigent Security Products, Inc. (“Exigent”). We have since discontinued our efforts to consummate this acquisition and we have terminated this letter of intent. During the year ended September 30, 2011 and in conjunction with the acquisition efforts, we advanced $47,500 to Exigent pursuant to a note receivable due in June 2012, which bears interest at 10% per annum and is collateralized by certain technology. The total principal and interest due has been fully reserved as of September 30, 2015 and 2014, and we have ceased accruing interest.STATEMENTS

~~Note~~Convertible 7Promissory –Note- ~~Prepaid~~Rich ~~Expenses and Other Current Assets~~Niemiec

~~Prepaid~~In ~~Expenses~~December 2014, we issued a convertible promissory note to Rich Niemiec in the amount of $400,000 and ~~Other~~warrants ~~Current~~to ~~Assets~~purchase ~~consist~~50,000,000 shares of our common stock at the ~~following~~price of $0.008 per share, subject to adjustment, for proceeds of $400,000. The note was interest bearing at an initial rate of 10% per annum and had a maturity date of June 18, 2015. The Conversion Price per share of Common Stock would have been the lower of (A) the 10-day trailing volume weighted average price of the Borrower’s Common Stock, calculated at time of conversion, or (B) $0.008 (“Fixed Price Component”) subject to adjustment. The Fixed Price Component of the Conversion Price would have been subject to adjustments during the period that the Note is outstanding. Each adjustment would have been at the Holder’s election, using the 10-day trailing volume weighted average bid price of the Borrower’s Common Stock at the time of such election (the “New Reference Price”). If the New Reference Price was less than the existing Fixed Price Component of the Conversion Price, then the New Reference Price would have been used as the new Fixed Price Component of the Conversion Price subject to a floor of $0.003 per share. This convertible promissory note was senior to all existing debt of the Borrower and was subordinate to any future line of credit backed by the Borrower’s accounts receivable and inventory. This convertible note was un-perfected but secured by the assets of the Borrower. Such security interest would have been affected upon an Event of Default. The Company recorded a debt discount related to the value of the warrants in the amount of $208,000. The debt discount amount recorded related to the warrants was determined based on the relative fair value of the note payable and the warrants. The fair value of the warrants was determined using the Black-Scholes-Merton model. The Company also recorded a debt discount related to a beneficial conversion feature in the amount of $192,000 for this note. The total debt discount of $400,000 was fully amortized to interest expense in our consolidated statement of operations for the year ended September 30, 2015. ~~and~~The ~~2014~~outstanding balance of this note in our consolidated balance sheet is $400,000 ~~respectively:~~at both September 30, 2016 and 2017.

Prepaid Assets	2015		2014
Consulting Services		-	$	28,645
Insurances	$	14,904		8,610
Deposits		23,298		33,814
Advanced Payments on Manufactured Product		13,143		81,997
Other		12,351		12,042
Total	$	63,696	$	165,108

On June 19, 2015, the Company opted for an automatic extension of the maturity date of the Note of six months to December 19, 2015 under the terms of the original agreement. Per these terms, the interest rate increased from 10% per annum to 18% on the outstanding principal balance, and the Company issued a warrant to purchase an additional 52,493,151 shares of common stock at an exercise price of $0.008 per share, pursuant to the terms of the agreement. The fair value of the warrant of $288,712 was determined using the Black-Sholes-Merton model and was being amortized to expense over the amended term of the debt with $128,315 and $160,397 amortized to financing costs in our consolidated statements of operations for the years ended September 30, 2016 and 2015 respectively. Subsequent to September 30, 2016, this obligation has been paid in full (see note 13).

~~The~~Convertible ~~prepaid~~Promissory ~~consulting~~Note ~~services~~Payable ~~are~~– ~~related~~JMJ ~~to various investor relations and marketing agreements for services related to various business and related matters.~~ Financial

FOn November 4, 2015 we received an initial payment of $30,000 on a Convertible Promissory Note with JMJ Financial, a Nevada sole proprietorship. The note was for an amount of up to $250,000 10% Original Issue Discount (“OID”) dated October 28, 2015. The Note was interest free if repaid within 90 days of the effective date, otherwise a one-11time interest charge of 12% would be applied to the principal balance in addition to the 10% OID. The note was not repaid within 90 days and therefore incurred interest. The maturity date was to be two years from the effective date of each payment. The note was convertible into common stock at the price lesser of $0.0026 per share or 63% of the lowest trade price in the 25 trading days previous to the conversion.

~~Table~~We recorded beneficial conversion feature in the amount of ~~Contents~~$20,000 for this note during the year ended September 30, 2016. During the year ended September 30, 2016, we amortized $20,000 to interest expense in our consolidated statement of operations.

~~NEAH~~This ~~POWER~~note ~~SYSTEMS~~was fully converted to stock by election of note holder during the year ended September 30, ~~INC.~~2016, ~~AND~~with ~~SUBSIDIARY~~122,148,135 shares of stock issued to the note holder, paying off the principal balance of $30,000 and accrued interest of $7,333.

~~NOTES~~December TO2015 ~~CONSOLIDATED~~Convertible ~~FINANCIAL~~Promissory ~~STATEMENTS~~Notes Payable – Union Capital

~~Note~~On December 17, 2015 we received proceeds from Union Capital LLC (“Union Capital”), for the issuance of an 8% –Convertible ~~Accrued~~Promissory ~~compensation~~Note ~~due~~in ~~executive~~the ~~officers~~principal amount of $170,250 which included legal expenses in the amount of $70,240. In conjunction with the transaction, Union Capital retired the Company’s debt obligation to Inter-Mountain Capital LLC in full and ~~board~~we issued a replacement note to Union Capital in the amount of ~~directors~~$388,428.

~~Due~~The tonotes ~~working~~bear ~~capital~~interest ~~limitations,~~at wethe ~~have~~rate ~~deferred~~of ~~payments~~8% ofper ~~compensation~~annum. All interest and principal was to ~~our~~have ~~Chief~~been ~~Executive~~repaid ~~Officer~~on ~~and~~or ~~former~~prior ~~Chief~~to ~~Financial~~December ~~Officer~~17, ~~our~~2017. ~~Acting~~The ~~Principal~~notes ~~Financial~~were ~~Officer~~convertible ~~and~~into tocommon ~~members~~stock at the price of ~~our~~sixty ~~Board~~percent (60%) of ~~Directors,~~the ~~which~~lowest ~~are~~trading ~~included~~price in ~~accrued~~the ~~compensation~~prior ~~and~~20 ~~related~~trading ~~expenses~~days inbefore conversion. The Company had the ~~accompanying~~option ~~consolidated~~to ~~balance~~prepay ~~sheets. Accrued~~the ~~compensation~~$170,250 ~~due~~note toat ~~executive~~the ~~officers~~rate ~~and~~of ~~board~~120% of ~~directors~~the ~~consisted~~face ofamount if repaid within the ~~following:~~first 60 days.

	September 30, 2015		September 30, 2014
Due to officers	$	475,972	$	341,541
Due to directors		184,821		120,424
Total	$	660,793	$	461,965

We recorded beneficial conversion feature in the amount of $558,678 for these notes during the year ended September 30, 2016. During the year ended September 30, 2016, we have amortized $385,295 to interest expense in our consolidated statement of operations.

OfDuring the ~~balance~~year ~~of $719,540~~ended ~~and $528,387 in accrued compensation and related expenses in the consolidated balance sheets at~~ September 30, ~~2015 and 2014~~2016, ~~$57,803~~Union ~~and~~Capital ~~$64,133~~opted ~~respectively is related~~ to ~~accrued~~convert ~~paid~~$291,003 ~~time~~of ~~off~~principal and tointerest ~~accrued~~into ~~payroll~~980,438,264 ~~taxes~~shares onof ~~deferred~~common ~~compensation~~stock. ~~Included~~ inOn ~~the $475~~conversion,~~972~~ ~~and~~we ~~$341,541~~recorded ~~Due~~a reduction to ~~officers~~accrued atinterest ~~September~~of ~~31, 2015 and 2014 respectively, is~~ $~~170~~9,~~139~~003 and ~~$113,489~~a ~~owed~~reduction to ~~Advanced~~notes ~~Materials~~payable ~~Advisory~~in ~~LLC~~the ~~(see~~amount ~~note~~of ~~14)~~$282,000.

~~Note~~The 9outstanding –balances ~~Other~~of ~~liabilities~~these notes were $276,678 at September 30, 2016. Subsequent to September 30, 2016, this obligation was paid in full (see note 13).

~~Other~~F ~~liabilities~~- ~~consisted of the following:~~ 12

~~September~~Table ~~30,~~of ~~2015 September 30, 2014 Other accrued expenses $ 98,583 $ 69,489 Deferred revenue - 20,244 Total $ 98,583 $ 89,733~~Contents

~~Note~~NEAH 10POWER –SYSTEMS, ~~Notes~~INC. ~~payable~~AND SUBSIDIARY

~~Notes~~NOTES ~~payable~~TO ~~and~~CONSOLIDATED ~~accrued~~FINANCIAL ~~interest consisted of the following:~~STATEMENTS

	September 30, 2015		September 30, 2014
Convertible debentures	$	888,510	$	502,500
Accrued interest		44,570		10,364
Debt discount		(72,255)		(48,385)
Total	$	860,825	$	464,479

February 3, 2016 Convertible Note Payable – Union Capital

~~F-12~~On February 3, 2016, we received proceeds from Union Capital, for the issuance of an 8% Convertible Redeemable Note in the principal amount of $28,000, which included legal expenses in the amount of $2,000.

~~Table~~The note bore interest at the rate of ~~Contents~~8% per annum on the unpaid principal balance. All interest and principal was to have been repaid on or prior to February 3, 2017. The note and interest were convertible into common stock at the price of sixty percent (60%) of the lowest trading price in the prior 20 trading days before conversion. The Company had the option to prepay the $28,000 note at the rate of 120% of the face amount plus any accrued interest if repaid within the first 60 days. If the note was prepaid after 60 days after the issuance date, but less than 121 days after the date of issuance, then the Company would have prepaid the note at 135% of the face amount plus any accrued interest. If the note was prepaid after 120 days after the issuance date, but less than 180 days after the date of issuance, then the Company would have prepaid the note at 140% of the face amount plus any accrued interest. This note could not be prepaid after the 6th month anniversary.

~~NEAH~~We ~~POWER~~recorded ~~SYSTEMS~~beneficial conversion feature in the amount of $28,000 ~~INC~~for this note during the year ended September 30, 2016. ~~AND~~During ~~SUBSIDIARY~~the year ended September 30, 2016, we amortized $18,664 to interest expense in our consolidated statement of operations.

~~NOTES~~The TOoutstanding ~~CONSOLIDATED~~balance ~~FINANCIAL~~of ~~STATEMENTS~~this note was $28,000 at September 30, 2016. Subsequent to September, 30, 2016, this obligation was paid in full (see note 13).

~~Settlement~~February of23, ~~Notes~~2016 Convertible Note Payable – Union Capital

InOn ~~October~~February ~~2013~~23, 2016, we ~~issued~~received aproceeds ~~convertible~~from ~~promissory~~Union ~~note to an investor in the amount of $20~~Capital,~~000~~ for ~~net~~the ~~proceeds~~issuance of ~~$19,000.~~an ~~The note bore interest at a rate of 6~~8% ~~per~~Convertible ~~annum~~Redeemable ~~and~~Note ~~had a maturity date of September 30, 2014. The Company recorded beneficial conversion feature~~ in the principal amount of $1450,~~965 for this note~~000, which ~~has~~included ~~been~~legal ~~amortized~~expenses ~~to interest expense~~ in the ~~year~~amount ~~ended~~of ~~September 30~~$2,500 ~~2014.~~and Infinancing ~~April~~fees ~~2014,~~of ~~the note holder converted the~~ $205,000 ~~note in full into 1,504,139 shares of common stock~~.

~~During~~The note bore interest at the ~~year~~rate ~~ended~~of ~~September~~8% ~~30,~~per ~~2014~~annum on the unpaid principal balance. All interest and principal was to be repaid on or prior to February 23, ~~one~~2017. ofThe ~~our~~note and interest were convertible ~~note~~into ~~holders~~common ~~converted~~stock at the ~~remaining~~price ~~balance~~of sixty percent (60%) of the lowest trading price in the prior 20 trading days before conversion. The Company had the option to prepay the $3850,~~274~~000 note at the rate of 120% of the face amount plus any accrued interest ~~into~~if 14repaid within the first 60 days. If the note was prepaid after 60 days after the issuance date,~~068~~ but less than 121 days after the date of issuance,~~600~~ ~~share~~then the Company would have prepaid the note at 135% of ~~common~~the ~~stock~~face amount plus any accrued interest. ~~The~~If ~~Company~~the ~~amortized~~note was prepaid after 120 days after the ~~remaining~~issuance ~~beneficial~~date, ~~conversion~~but ~~feature~~less inthan 180 days after the ~~amount~~date of ~~$23~~issuance,~~427~~ tothen ~~interest~~the ~~expense~~Company inwould ~~our~~have ~~consolidated~~prepaid ~~statement~~the ofnote ~~operations~~at ~~for~~140% of the ~~year~~face ~~ended~~amount ~~September~~plus ~~30,~~any ~~2014~~accrued interest. This note could not be prepaid after the 6th month anniversary.

InWe ~~October~~recorded ~~2013~~beneficial weconversion ~~received~~feature ~~$100,000~~in ~~under two security purchase agreements together with two 18% senior debentures. The debentures were to be paid back if~~ the ~~Company~~amount ~~raises in excess~~ of $~~265~~50,000 infor ~~debt~~this ornote ~~equity~~during ~~financing. The~~the ~~debentures~~year ~~carried~~ended aSeptember ~~minimum interest amount equal to $2~~30,~~250~~ ~~each~~2016. InDuring ~~December 2013~~ the ~~Company~~year ~~paid~~ended ~~$52~~September 30,~~250~~ ~~to each of the holders in full payment of the notes and also issued 1~~2016,~~978,143~~ ~~shares~~we ofamortized ~~common stock each per the agreement. We recorded~~ $3730,~~980~~211 to ~~finance~~interest ~~charges~~expense ~~for this stock issuance~~ in our consolidated statement of operations ~~for the year ended September 30, 2014~~.

InThe ~~December~~outstanding ~~2013~~balance weof ~~exercised~~this ~~the Company’s right to prepay a convertible~~ note ofwas $3250,~~500.~~000 ~~The note bore interest~~ at aSeptember ~~rate~~30, ~~of 8% per annum and included a prepayment penalty of 50%~~2016.~~The~~ ~~Company~~Subsequent ~~recorded $16,250 in prepayment penalties~~ to ~~finance charges in our consolidated statement of operations for the year ended~~ September, 30, ~~2014~~2016, ~~and~~this ~~amortized~~obligation ~~the~~was ~~remaining~~paid ~~beneficial conversion feature of $14,481 to interest expense~~ in ~~our~~full ~~consolidated~~(see ~~statement of operations for the year ended September 30, 2014. The~~ note ~~has been returned “paid-in-full”~~13).

InApril ~~March 2014 the Company and one of its note holders agreed to convert a $100~~01,~~000~~ ~~note~~2016 ~~plus~~Convertible ~~interest~~Note ofPayable ~~$5,742~~– ~~dated~~Union July 1, 2013, into 17,000,000 shares of common shares with a fair value of $510,000. We recorded $404,258 to loss on extinguishment of liabilities in our consolidated statement of operations for the year ended September 30, 2014 for this conversion.Capital

~~F-13~~On April 2016, we received proceeds from Union Capital, for the issuance of an 8% Convertible Redeemable Note in the principal amount of $50,000, which included legal expenses in the amount of $2,500 and financing fees of $5,000.

~~Table~~The note bore interest at the rate of ~~Contents~~8% per annum on the unpaid principal balance. All interest and principal was to be repaid on or prior to April 01, 2017. The note and interest were convertible into common stock at the price of sixty percent (60%) of the lowest trading price in the prior 20 trading days before conversion.

~~NEAH~~The ~~POWER~~note ~~SYSTEMS~~terms included the following penalties: if the note was paid within 60 days of issuance date, ~~INC~~then it could be paid off at 120% of the face amount plus any accrued interest, if the note was paid after 60 days after the date of issuance but less than 121 days after the issuance date, then the note would have been paid off at 135% of face plus any accrued interest, if the note was paid off after 120 days after the issuance date but less than 180 days after the issuance date, then the note would have been paid off at 140% of the face amount plus any accrued interest. ~~AND~~This ~~SUBSIDIARY~~note could not be prepaid after the 6th month anniversary.

~~NOTES~~We TOrecorded ~~CONSOLIDATED~~beneficial ~~FINANCIAL~~conversion ~~STATEMENTS~~feature in the amount of $33,333 for this note during the year ended September 30, 2016. During the year ended September 30, 2016, we have amortized $16,683 to interest expense in our consolidated statement of operations.

~~Issuance~~The outstanding balance of ~~Convertible~~this ~~Promissory~~note ~~Notes~~was –$50,000 ~~Inter-Mountain~~at September 30, 2016. Subsequent to September, 30, 2016, this obligation was paid in full (see note 13).

OnF ~~May 7, 2014 we received an initial payment on a May 5, 2014 Securities Purchase Agreement with Inter~~-~~Mountain~~ Capital Corporation LLC (“Inter-Mountain”), for the sale of a 5% Secured Convertible Promissory Note in the principal amount of $832,500, which includes legal expenses in the amount of $7,500 and a $75,000 original issue discount, for net proceeds of $750,000, consisting of $450,000 paid in cash at closing in May 2014 with the remaining amount of $300,000 funded in March 2015. The outstanding balance of this note in our consolidated balance sheets at September 30, 2015, and September 30, 2014, is $231,010 and $502,500, respectively. The note bears interest at the rate of 5% per annum. All interest and principal must be repaid on or prior to October 7, 2015. The note, as amended, is convertible into common stock at the lesser of $0.05 per share or 75% (the “Conversion Factor”) of the average of the three (3) lowest VWAPs in the twenty (20) Trading Days immediately preceding the applicable Conversion (the “Market Price”), provided that if at any time the average of the three (3) lowest VWAPs in the twenty (20) Trading Days immediately preceding any date of measurement is below $0.01, then in such event the Conversion Factor shall be reduced to 70% for all future Conversions. The Company has the option to prepay the note at the rate of 125%. The note was purchased by another lender in December 2015 (see Note 15).13

WeTable ~~recorded beneficial conversion feature in the amount~~ of $76,706 for the funding paid at initial closing in May of 2014, and an additional $135,178 for the amount funded in March 2015. During the years ended September 30, 2015 and 2014, we have amortized $178,539 and $28,321 respectively, to interest expense for these notes in our consolidated statements of operations. During the twelve months ended September 30, 2015, the Company opted to convert $561,093, of principal and interest into 152,134,000 shares of common stock. On conversion, we recorded a reduction to accrued interest of $27,735, and a reduction to notes payable in the amount of $533,358. The Company also opted to pay one installment of $69,375 in cash and recorded a reduction to accrued interest of $1,243, and a reduction to notes payable in the amount of $68,132.Contents

OnNEAH ~~June~~POWER 17SYSTEMS, 2015 we received an initial payment on a June 16, 2015 Securities Purchase Agreement with Inter-Mountain, for the sale of a 5% Secured Convertible Promissory Note in the principal amount of $832,500, which includes legal expenses in the amount of $7,500 and a $75,000 original issue discount, for net proceeds of $750,000, consisting of $150,000 paid in cash at closing and four secured promissory notes payable to the Company, aggregating $600,000, bearing interest at the rate of 5% per annumINC. On ~~July~~AND 31, 2015 one of the secured promissory notes was partially paid and the company received $50,000 and that note has a $100,000 remaining balance. We are carrying the net value of these notes on our consolidated balance sheet at September 30, 2015, in the amount of $227,500. The note bears interest at the rate of 5% per annum. All interest and principal must be repaid on or prior to September 15, 2016. The note is convertible into common stock at the lesser of $0.05 per share or 75% (the “Conversion Factor”) of the average of the three (3) lowest VWAPs in the twenty (20) Trading Days immediately preceding the applicable Conversion (the “Market Price”), provided that if at any time the average of the three (3) lowest VWAPs in the twenty (20) Trading Days immediately preceding any date of measurement is below $0.01, then in such event the Conversion Factor shall be reduced to 70% for all future Conversions. The Company has the option to prepay the note at the rate of 125%. The note was purchased by another lender in December 2015 (see Note 15).SUBSIDIARY

WeNOTES ~~recorded~~TO ~~beneficial~~CONSOLIDATED ~~conversion~~FINANCIAL feature in the amount of $95,056 for this note during the year ended September 30, 2015. During the year ended September 30, 2015, we have amortized $27,825 to interest expense in our consolidated statements of operations.STATEMENTS

FSix-14Month Convertible Promissory Notes

~~NEAH~~A ~~POWER~~series ~~SYSTEMS~~of six month notes were issued to various individuals and entities for bridge funding during the year ended September 30, ~~INC~~2016. ~~AND~~The ~~SUBSIDIARY~~notes were of various amounts, from $1,000 to $125,000, totaling $405,455 all of which was outstanding at September 30, 2016. The due dates of these notes ranged from October 19, 2016 to January 17, 2017. The notes bear interest at the rate of 8% per annum on the unpaid principal balance and are secured by the assets of the Company.

~~NOTES~~The TOHolder ~~CONSOLIDATED~~of ~~FINANCIAL~~each ~~STATEMENTS~~note shall have the right, from time to time, commencing upon the Issue Date to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the conversion price. The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount by the Conversion Price on the date specified in the notice of conversion.

~~Convertible~~The ~~Promissory~~conversion price per share of Common Stock (the “Conversion Price”) shall be determined (on a pre-Qualified Financing basis) by: (i) calculating the percentage of the entire unpaid principal amount of this Note sought to be converted (the “Conversion Percentage”); (ii) multiplying the sum of Three Million (3,000,000.00) dollars by the Conversion Percentage (the “Conversion Value Amount”) ; (iii) then, multiplying the number of issued and outstanding Common Shares of the Company on the Conversion Date by the Conversion Percentage (the “Conversion Share Pool”), and; (iv) then, dividing the Conversion Value Amount by the Conversion Share Pool. In the event that the Borrower consummates a Qualified Financing at a pre-money ~~Rich~~valuation ~~Niemiec~~of less than Three Million (3,000,000.00) dollars, for the purposes of determining the Conversion Price, such pre-money valuation if lower than Three Million (3,000,000) dollars shall replace “Three Million (3,000,000.00) dollars above. There was no beneficial conversion feature on these notes.

InPlease ~~December~~see ~~2014,~~Note we13 ~~issued a convertible promissory note to Rich Niemiec in the amount of $400,000 and warrants to purchase 50,000,000 shares of our common stock at the price of $0.008 per share, subject to adjustment,~~ for ~~proceeds of $400~~additions,~~000.~~ ~~The note is interest bearing at a rate of 10% per annum and had a maturity date of June 18~~amendments, 2015. The Conversion Price per share of Common Stock shall be the lower of (A) the 10-day trailing volume weighted average price of the Borrower’s Common Stock, calculated at time of conversion, or (B) $0.008 (“Fixed Price Component”) subject to adjustment. The Fixed Price Component of the Conversion Price will be subject to adjustments during the period that the Note is outstanding. Each adjustment shall be at the Holder’s election, using the 10-day trailing volume weighted average bid price of the Borrower’s Common Stock at the time of such election (the “New Reference Price”). If the New Reference Price is less than the existing Fixed Price Component of the Conversion Price, then the New Reference Price shall be used as the new Fixed Price Component of the Conversion Price subject to a floor of $0.003 per share. This convertible promissory note is senior to all existing debt of the Borrower and isconversions ~~subordinate to any future line~~ of ~~credit~~these ~~backed~~notes bysubsequent the Borrower’s accounts receivable and inventory. This convertible note is un-perfected but secured by the assets of the Borrower. Such security interest will be effected upon an Event of Default. The Company recorded a debt discount related to the value of the warrants in the amount of $208,000. The debt discount amount recorded related to the warrants was determined based on the relative fair value of the note payable and the warrants. The fair value of the warrants was determined using the Black-Scholes-Merton model. The Company also recorded a debt discount related to a beneficial conversion feature in the amount of $192,000 for this note. The total debt discount of $400,000 has been fully amortized to interest expense in our consolidated statement of operations for the year ended September 30, ~~2015~~2016.

OnPromissory ~~June 19, 2015, the Company opted for an automatic extension of the maturity date of the~~ Note of– ~~six~~Global ~~months~~Resource toAdvisors December 19, 2015 under the terms of the original agreement. Per these terms, the interest rate increased from 10% per annum to 18% on the outstanding principal balance, and the Company issued a warrant to purchase an additional 52,493,151 shares of common stock at an exercise price of $0.008 per share, pursuant to the terms of the agreement. The fair value of the warrant of $288,712 was determined using the Black-Sholes-Merton model and is being amortized to expense over the amended term of the debt with $160,397 amortized to financing costs in our consolidated statement of operations for the year ended September 30, 2015. Subsequent to December 19, 2015, the Company is in discussions with the lender to extend or modify repayment terms.LLC

~~Note~~During 11the –year ~~Preferred~~ended September 30, 2015, we settled a trade debt for the issuance of a non-interest bearing note due in 180 days. At any time up to maturity date, the note bearer could have demanded common stock ~~and~~in full satisfaction of the balance. As of the 03/23/2016 maturity date the note was still unpaid. Since the note is unpaid after the maturity date, the Company has the option to pay the balance in cash or common stock. The Company is currently in discussions with the note holder to extend or modify repayment terms.

~~Preferred~~The ~~Stock~~outstanding balance of this note was $30,000 at both September 30, 2016 and September 30, 2015.

~~Our~~Promissory ~~board~~Note of– ~~directors~~MediaTech ~~has~~Capital ~~the~~Partners authority to designate and issue up to 5,000,000 shares of $0.001 par value preferred stock in one or more series, and to fix and determine the relative economic rights and preferences of preferred shares any or all of which may be greater than the rights of our common stock, as well as the authority to issue such shares without further stockholder approval. As a result, our Board of Directors could authorize the issuance of a series of preferred stock that would grant to holders preferred rights to our assets upon liquidation, the right to receive dividends before dividends are declared to holders of our common stock, and the right to the redemption of such preferred shares, together with a premium, prior to the redemption of the common stock. In addition, shares of preferred stock could be issued with terms calculated to delay or prevent a change in control or make removal of management more difficult. Preferred stock is designated 2,222,022 shares to Series B at September 30, 2015 (2,000,000 at September 30, 2014). LLC

~~F-15~~During the year ended September 30, 2016, we entered into an agreement MediaTech Capital Partners LLC (MediaTech). In return for providing strategic and advisory consulting services for up to one year, MediaTech was to be compensated in the form of a convertible note, as mutually agreed upon by MediaTech and us. As of September 30, 2016, the amount due MediaTech was $45,000 and we are still negotiating the terms of the note with MediaTech. Please see Note 13 for activity subsequent to September 30, 2016.

~~NOTES~~Note TO9 ~~CONSOLIDATED~~– ~~FINANCIAL~~Preferred ~~STATEMENTS~~stock and common stock

~~Series B~~ Preferred Stock

~~Holders~~Our board of ~~Series~~directors ~~B preferred stock~~ (“~~Series~~the BBoard”) ~~have~~has nothe ~~redemption~~authority ~~rights~~to designate and ~~earn~~issue ~~interest~~up atto 6%5,000,000 ~~per~~shares ~~annum~~of $0.001 ~~The~~par ~~holders~~value ofpreferred ~~the~~stock ~~Series~~in Bone ~~are~~or ~~entitled~~more series, and to ~~vote~~fix ~~with~~and determine the ~~holders~~relative economic rights and preferences of ~~our~~preferred ~~common~~shares ~~stock~~any aor ~~number~~all of ~~votes~~which ~~equal~~may tobe greater than the ~~number~~rights of our common ~~shares~~stock, ~~available~~as bywell ~~conversion.~~as ~~Series~~the Bauthority isto ~~convertible~~issue ~~into~~such ~~common~~shares ~~stock,~~without atfurther ~~the~~stockholder ~~sole~~approval. ~~discretion~~As ofa ~~management~~result, ~~except~~the inBoard could authorize the ~~event~~issuance of ~~the~~a ~~resignation~~series orof ~~termination~~preferred ofstock ~~Dr.~~that ~~Gerard~~would C.grant ~~D’Couto,~~to holders preferred rights to our ~~current~~assets ~~President~~upon ~~and~~liquidation, ~~Chief~~the ~~Executive~~right ~~Officer~~to inreceive ~~which~~dividends ~~case~~before ~~the~~dividends are declared to holders of ~~the~~our ~~Series~~common Bstock, ~~can~~and ~~elect~~the right to ~~convert~~ the ~~Series~~redemption Bof ~~stock~~such preferred shares, together with a premium, prior to the redemption of the common stock. AsIn ~~well~~addition, weshares ~~have~~of ~~the~~preferred ~~right~~stock could be issued with terms calculated to ~~redeem~~delay ~~the~~or prevent a change in control or make removal of management more difficult. Preferred stock is designated 2,222,022 shares to Series B inat ~~cash~~September 30, 2016 (2,222,022 at ~~the~~September ~~face~~30, ~~amount~~2015). ~~plus~~As ~~any~~of ~~unpaid~~September ~~dividends~~30, 2016, there were 2,777,978 shares of undesignated preferred stock.

~~The number of shares of common stock to be issued upon a conversion is calculated by (i) multiplying the number of~~ Series B ~~being~~Preferred converted by the per share purchase price received by the Company for such Series B, and then, multiplying such number by 130% and then dividing this calculated value by the average closing bid price, as defined, or by (ii) first, allocating the Series B proportionately according to the amounts by date of individual cash tranches received by the Company then, second, multiplying the number of Series B being converted, identified by tranche, by the per share purchase price received by the Company for such Series B , and then, multiplying such number or numbers by 130% and, finally, dividing the calculated value(s) by the average closing bid price, as defined. Stock

~~Pursuant~~Holders ~~to the terms~~ of ~~the Certificate of Designation of~~ Series B ~~Preferred Stock, redeemed shares are returned to the Company’s general designated pool of~~ preferred stock~~. As~~ of(“Series ~~September~~B”) ~~30,~~have ~~2015,~~no ~~there~~redemption ~~were~~rights ~~1,018,446~~and ~~shares~~earn ~~remaining~~interest ofat ~~Series~~6% Bper ~~Preferred Stock available for issue~~annum.

~~During~~In ~~the year ended September 30~~2016, ~~2014,~~ the ~~Company opted to convert 286,700 shares of~~ Series B ~~preferred~~holders ~~stock,~~agreed ~~together~~and ~~with~~the ~~dividends~~Board intook ~~the~~action ~~amount~~to ofterminate ~~$55,577,~~the ~~into~~voting ~~56,266,153~~rights ~~shares~~provisions of ~~common~~the Series B stock. ~~pursuant~~Prior to this action, the ~~terms~~holders of the Series B ~~certificate~~were ofentitled ~~designation. Also~~to ~~during~~vote with the ~~same~~holders ~~period,~~of ~~the~~our ~~Company~~common ~~issued~~stock ~~1,314,988~~a ~~shares~~number of ~~Series~~votes Bequal ~~preferred stock~~ to ~~investors~~the ~~under~~number ~~Securities~~of ~~Purchase~~common ~~Agreements~~shares inavailable ~~return~~by ~~for~~conversion. aIn ~~total~~March ~~of $1~~2018,~~314,998~~ inthe ~~cash.~~holders As of ~~September~~Series ~~30,~~B ~~2014,~~agreed weand ~~had~~the ~~1,314,988~~Company ~~shares~~took ofaction to reinstate the Series B ~~issued~~voting ~~and~~rights ~~outstanding~~to the original terms.

~~During the year ended September 30, 2015, the Company opted to convert 753,874 shares of~~ Series B ~~preferred~~is ~~stock~~convertible ~~together~~into ~~with~~common ~~dividends~~stock, inat the ~~amount~~sole discretion of ~~$46~~management,~~160~~ ~~into~~except ~~156,010,181~~in ~~shares of common stock pursuant to~~ the ~~terms~~event of the ~~Series~~resignation Bor ~~certificate~~termination of ~~designation~~Dr. ~~Also~~ ~~during~~Gerard ~~the~~C. ~~same period~~D’Couto, ~~the~~our ~~Company~~current ~~issued~~President ~~642,462~~and ~~shares~~Chief ofExecutive ~~Series~~Officer ~~B preferred stock to investors under Securities Purchase Agreements~~ in ~~return~~which ~~for~~case athe ~~total~~holders of ~~$642,463~~the inSeries ~~cash.~~B Ascould ofelect ~~September~~to ~~30,~~convert ~~2015,~~the ~~we had 1,203,576 shares of~~ Series B ~~issued~~stock ~~and~~to ~~outstanding~~common stock.

~~All~~The ~~sales~~Company ofmay ~~Series~~at Bany ~~preferred~~time ~~stock~~redeem ~~during~~ the ~~years~~Series ~~ended~~B ~~September~~in ~~30,~~cash ~~2015~~at ~~and~~the ~~2014~~face ~~were~~amount toplus ~~Summit~~any ~~Trading~~unpaid ~~LLC and Sierra Trading Corp~~dividends.

F -16 14

~~NEAH~~Table ~~POWER~~of ~~SYSTEMS, INC. AND SUBSIDIARY~~Contents

~~NOTES~~NEAH TOPOWER ~~CONSOLIDATED~~SYSTEMS, ~~FINANCIAL~~INC. ~~STATEMENTS~~AND SUBSIDIARY

WeNOTES ~~are~~TO ~~authorized~~CONSOLIDATED toFINANCIAL issue up to 1.8 billion shares of $0.001 par value common stock. Holders of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of the holders of our common stock. Subject to the rights of the holders of any class of our capital stock having any preference or priority over our common stock, the holders of shares of our common stock are entitled to receive dividends that are declared by our board of directors out of legally available funds. In the event of our liquidation, dissolution or winding up, the holders of our common stock are entitled to share ratably in our net assets remaining after payment of liabilities, subject to prior rights of preferred stock, if any, then outstanding. Our common stock has no preemptive rights, conversion rights, redemption rights, or sinking fund provisions, and there are no dividends in arrears or in default. All shares of our common stock have equal distribution, liquidation and voting rights and have no preferences or exchange rights. STATEMENTS

~~Common~~The number of shares of common stock to be issued ~~for~~upon ~~settlement~~a conversion is calculated by (i) multiplying the number of ~~liabilities~~Series B being converted by the per share purchase price received by the Company for such Series B, and then, multiplying such number by 130% and then dividing this calculated value by the average closing bid price, as defined, or ~~conversion~~by (ii) first, allocating the Series B proportionately according to the amounts by date of ~~notes~~individual ~~payable~~cash tranches received by the Company then, second, multiplying the number of Series B being converted, identified by tranche, by the per share purchase price received by the Company for such Series B , and then, multiplying such number or numbers by 130% and, finally, dividing the calculated value(s) by the average closing bid price, as defined.

~~During~~Pursuant to the ~~years~~terms ~~ended~~of ~~September~~the ~~30,~~Certificate ~~2015~~of ~~and~~Designation ~~September~~of ~~30,~~Series ~~2014,~~B wePreferred ~~issued 152~~Stock,~~134,000~~ ~~and~~redeemed ~~33,898,739~~ shares, ~~respectively,~~are ~~valued~~returned atto ~~$561,093~~the ~~and~~Company’s ~~$597,278,~~general ~~respectively,~~designated onpool ~~conversion~~ of ~~notes~~preferred ~~payable~~stock. ~~and~~As ~~related~~of ~~accrued~~September ~~interest~~30, ~~and~~2016, inthere ~~settlement~~were ~~for~~842,792 ~~certain~~shares remaining of ~~our~~Series ~~outstanding~~B ~~notes~~Preferred ~~and~~Stock ~~accounts~~available ~~payable~~for issue.

~~The~~During ~~carrying~~the ~~value~~year ended September 30, 2016, the Company opted to convert 168,994 shares of Series B preferred stock and associated accrued dividends into 135,872,660 shares of common stock pursuant to the ~~liabilities~~terms ~~that~~of ~~were~~the ~~converted~~Series B certificate of designation. Also during the ~~year~~same ~~ended~~period, ~~September~~the ~~30,~~Company ~~2015~~issued 187,654 ~~amounted~~shares of Series B preferred stock to ~~$561,093~~investors ~~resulting~~under Securities Purchase Agreements in noreturn ~~loss~~for ona ~~settlement~~total of ~~liabilities~~$187,654 ~~recorded~~ in cash. As of September 30, 2016, the ~~consolidated~~Company ~~statement~~had 1,222,236 shares of ~~operations~~Series B issued and outstanding.

~~The~~During ~~carrying~~the ~~value~~year ended September 30, 2015, the Company opted to convert 753,874 shares of Series B preferred stock and associated accrued dividends into 156,010,181 shares of common stock pursuant to the ~~liabilities~~terms ~~that~~of ~~were~~the ~~converted~~Series orB ~~settled~~certificate of designation. Also during the year ended September 30, ~~2014~~2016, ~~amounted~~the toCompany ~~$193~~issued 642,~~020~~462 ~~resulting~~shares inof aSeries ~~loss~~B onpreferred ~~settlement~~stock ofto ~~liabilities~~investors ofunder ~~$404,258~~Securities ~~recorded~~Purchase Agreements in ~~the~~return ~~consolidated~~for ~~statement~~a total of ~~operations. See~~$642,463 ~~Note~~in 10cash. ~~for~~As ~~additional~~of ~~discussion~~September on30, 2015, the ~~transaction~~Company ~~that~~had ~~resulted~~1,203,576 inshares ~~this~~of ~~loss~~Series B issued and outstanding.

~~Common~~All sales of Series B preferred stock ~~issued~~during inthe ~~connection~~years ~~with~~ended ~~fees~~September ~~associated~~30, ~~with~~2016 ~~notes~~and ~~payable~~2015 were to Summit Trading LLC (“Summit”) and Sierra Trading Corp (“Sierra”).

InCommon March 2014, the Company issued 1,538,462 shares of common stock to Clark Dodge & Company in consideration of a finder’s fee under a Bridge Loan Engagement Letter dated October 1, 2013. We recorded $10,000 to financing costs in the consolidated statement of operations for the year ended September 30, 2014 for this transaction.Stock

InWe ~~May~~are ~~2014,~~authorized weto ~~issued~~issue ~~1,800,000~~up to 5.4 billion shares of $0.001 par value common stock. ~~and~~Holders ~~$36,000~~of inour ~~cash~~common stock are entitled to ~~Carter~~one ~~Terry~~vote &for ~~Company~~each inshare ~~consideration~~held of arecord ~~fee~~on ~~under~~all matters submitted to a ~~Placement~~vote ~~Agent~~of ~~Agreement~~the ~~dated~~holders ~~March~~of 4,our ~~2014~~common stock. ~~The~~Subject ~~Company~~to ~~recorded~~the ~~$72~~rights of the holders of any class of our capital stock having any preference or priority over our common stock,~~000~~ the holders of shares of our common stock are entitled to ~~financing~~receive ~~costs~~dividends inthat are declared by the ~~consolidated~~Board ~~statement~~out of ~~operations~~legally ~~for~~available funds. In the ~~year~~event ~~ended~~of ~~September~~our 30liquidation, ~~2014~~dissolution ~~for~~or ~~this~~winding ~~transaction~~up, the holders of our common stock are entitled to share ratably in our net assets remaining after payment of liabilities, subject to prior rights of preferred stock, if any, then outstanding. Our common stock has no preemptive rights, conversion rights, redemption rights, or sinking fund provisions, and there are no dividends in arrears or in default. All shares of our common stock have equal distribution, liquidation and voting rights and have no preferences or exchange rights.

InCommon ~~March~~stock ~~2015, the Company~~ issued ~~3,750,000 shares as a partial payment to Carter, Terry & Company~~ for ~~placement~~settlement ~~agency services. We recorded $24,000 to financing costs in the consolidated statement~~ of ~~operations~~liabilities ~~for~~or ~~the~~conversion ~~year ended September 30, 2015 for this transaction. In June 2015, the Company issued 2,181,818 shares~~ of ~~common~~notes stock as a partial payment to Carter, Terry & Company for placement agency services. We recorded $12,000 to financing costs in the consolidated statement of operations for the year ended September 30, 2015 for this transaction.payable

~~See~~During ~~Note~~the 10years ~~for~~ended ~~additional~~September ~~equity~~30, ~~transactions~~2016 inand ~~connection~~September ~~with~~30, ~~fees~~2015, ~~associated~~we ~~with~~issued 1,163,045,205 and 152,134,000 shares, respectively, valued at $407,086 and $561,093, respectively, on conversion of notes payable and related accrued interest. The carrying value of the notes that were converted during the years ended September 30, 2016 and 2015 amounted to $407,086 and $561,093, respectively. There was no loss on settlement of liabilities recorded in the consolidated statements of operations for either year.

~~F-17~~Common stock issued in connection with fees associated with notes payable

~~Table~~In March 2015, the Company issued 3,750,000 shares as a partial payment to Carter, Terry & Company for placement agency services. We recorded $24,000 to financing costs in the consolidated statement of ~~Contents~~operations for the year ended September 30, 2015 for this transaction. In June 2015, the Company issued 2,181,818 shares of common stock as a partial payment to Carter, Terry & Company for placement agency services. We recorded $12,000 to financing costs in the consolidated statement of operations for the year ended September 30, 2015 for this transaction.

~~NEAH~~See ~~POWER~~Note ~~SYSTEMS,~~8 ~~INC.~~for ~~AND~~additional ~~SUBSIDIARY~~equity transactions in connection with fees associated with notes payable.

~~NOTES~~Common TOstock ~~CONSOLIDATED~~issued ~~FINANCIAL~~for ~~STATEMENTS~~services

~~Common~~During ~~stock~~the years ended September 30, 2016 and 2015, we issued 10,761,094 and 6,646,113 shares of our common stock, respectively, valued at $176,518 and $54,375, respectively, to service providers and consultants recorded as ~~donation~~marketing and sales expense.

~~There~~F ~~were~~- no donations of common stock during the fiscal year ending September 30, 2015. During the fiscal year ending September 30, 2014, the Board of Directors approved a common stock share issuance of 937,500 shares as a donation to Asante Africa. The Company recorded $15~~,000 in our consolidated statement of operations for the year ended September 30, 2014 to general and administrative expenses for this transaction.~~

~~Common~~Table ~~stock~~of ~~issued for services~~Contents

~~During~~NEAH ~~the~~POWER ~~years ended September 30~~SYSTEMS, ~~2015 and 2014, we issued 6,646,113 and 5,673,346 shares of our common stock, respectively, valued at $54,375 and $115,750, respectively, to service providers and consultants~~INC. WeAND recorded $54,375 as marketing and sales expense in the year ended September 30, 2015 and recorded $28,645 to prepaid expense and $87,105 as marketing and sales expense in the year ended September 30, 2014. SUBSIDIARY

~~Common~~NOTES ~~stock~~TO ~~issued~~CONSOLIDATED ~~for~~FINANCIAL ~~cash and assets~~STATEMENTS

InLong-term ~~November~~incentive ~~2013,~~compensation the Company entered into agreements with Clean Tech Investors, LLC (“Clean Tech”), to issue 60,100,000 shares of restricted common stock of the Company to Clean Tech for $700,000 of cash and equipment and other fixed assets with an estimated fair value of $120,633. In connection with the agreements with Clean Tech, our board of directors appointed William M. Shenkin, a managing member of Clean Tech, to serve on the Company’s board. The fair value of the common stock issued as of the date of the agreements was approximately $313,000 which was less than the value of cash and fixed assets received of $821,000. The additional $508,000 is considered a capital contribution by Clean Tech in relation to the significant ownership interest and board seat.Plan

~~Common~~Our Long Term Incentive Compensation Plan (the “Plan"), as restated, was approved by shareholders in July 2014. The Plan is administered by the Board. In July 2014, shareholders also approved an automatic share reserve increase by an amount equal to ten (10%) percent of the common shares available for issuance under the Plan beginning on August 1, 2014, and on each August 1st of the next nine (9) years. The aggregate number of shares available for issuance under the Plan is 589,875,000 as of September 30, 2016. We have granted stock ~~issued~~options under the Plan to employees, members of the Board, advisors and consultants. No options have been exercised. Options are exercisable for ~~cash~~ten years from date of grant.

~~There~~The ~~was~~following notable ~~common~~summarizes stock ~~issued~~option ~~for~~activity ~~cash~~during in the ~~fiscal~~years ~~year~~ ended September 30, ~~2015. During~~2016 ~~the~~and ~~year ended~~ September 30, 2014, we issued 33,333,333 shares of restricted common stock to one accredited investor and received gross proceeds of $500,000. In connection with that investment, we also issued 11,666,666 three-year warrants with a weighted average exercise price of $0.032 per share.2015:

Long-term incentive compensation Plan Our Long Term Incentive Compensation Plan (the “Plan"), as restated, was approved by shareholders in July 2014. The Plan is administered by our board of directors. In July 2014, shareholders also approved an automatic share reserve increase by an amount equal to ten (10%) percent of the common shares available for issuance under the Plan beginning on August 1, 2014, and on each August 1st of the next nine (9) years. The aggregate number of shares available for issuance under the Plan is 393,250,000 as of September 30, 2015. We have granted stock options under the Plan to employees, members of our board of directors, advisors and consultants. No options have been exercised. Options are exercisable for ten years from date of grant.

	Options Outstanding	Weighted Average Exercise Price
Outstanding at September 30, 2014	236,096,007	$	0.0065
Granted	4,600,000		0.0088
Forfeited	(8,250,000)		0.0153
Cancelled	-		-
Expired	-		-
Outstanding at September 30, 2015	232,446,007	$	0.0067
Granted	-		-
Forfeited	(68,506,703)		0.00697
Cancelled	-		-
Expired	(7,500)		6.6667
Outstanding at September 30, 2016	163,931,804	$	0.0057
Exercisable at September 30, 2016	163,931,804	$	0.0057

FThere were no options granted during the year ended September 30, 2016. The weighted average fair value of the options granted during the year ended September 30, 2015 was $0.0088 per share. The weighted average remaining contractual lives of outstanding and exercisable options at September 30, 2016 was 6.6 years. As of September 30, 2016, we had no unrecognized compensation cost related to unvested options. As of September 30, 2016, the aggregate intrinsic value of options outstanding and exercisable, representing the excess of the closing market price of our common stock over the exercise price, was $0. Stock-18based compensation expense related to options was $24,374 and $301,066 during the years ended September 30, 2016 and 2015, respectively, of which $0 and $75,020 was recognized as general and administrative expense, $24,374 and $134,877 was recognized as marketing and sales expense, and $0 and $91,169 was recognized as research and development expense in 2016 and 2015, respectively. We determine the value of share-based compensation using the Black-Scholes-Merton fair value option-pricing model with weighted average assumptions for options granted during the year ended September 30, 2015 including risk-free interest rate of 1.33%, volatility of 247%, expected lives of 5.75 years, and dividend yield of 0%.

Table of ContentsWarrants

~~NEAH~~At ~~POWER~~September ~~SYSTEMS~~30, ~~INC~~2016, we had warrants outstanding for the purchase of 492.6 ~~AND~~million ~~SUBSIDIARY~~shares of our common stock at a weighted average exercise price of $0.0055 per share. The fair value of the warrants is calculated using the Black-Scholes-Merton model. Warrants outstanding at September 30, 2016 expire at various dates from May 2017 to June 2022.

~~NOTES~~A TOsummary ~~CONSOLIDATED~~of ~~FINANCIAL~~warrant ~~STATEMENTS~~activity during the years ended September 30, 2016 and 2015 are as follows:

The following table summarizes stock option activity during the years ended September 30, 2015 and September 30, 2014:

	Warrants Outstanding
Outstanding at September 30, 2014	368,585,978
Granted	443,756,376
Exercised	-
Expired	(334,799,868)
Cancelled	-
Outstanding at September 30, 2015	477,542,486
Granted	28,200,000
Exercised	--
Expired	(13,168,362)
Cancelled	--
Outstanding at September 30, 2016	492,574,124

	Options Outstanding	Weighted Average Exercise Price
Outstanding at September 30, 2013	240,482,543	$0.0059
Granted	17,100,000	0.0187
Forfeited	(12,000,000)	0.0036
Cancelled	-	-
Expired	(9,486,536)	0.0118
Outstanding at September 30, 2014	236,096,007	$0.0065
Granted	4,600,000	0.0088
Forfeited	(8,250,000)	0.0153
Cancelled
Expired	-	-
Outstanding at September 30, 2015	232,446,007	$0.0067
Exercisable at September 30, 2015	226,946,107	$0.0061

F - 16

~~The~~Table ~~weighted average fair value~~ of the options granted during the years ended September 30, 2015 and 2014 was $0.0088 and $0.0177 per share respectively, and the weighted average remaining contractual lives of outstanding and exercisable options at September 30, 2015 was 7.9 years. As of September 30, 2015, we had $63,760 of total unrecognized compensation cost related to unvested options. Unrecognized compensation cost is to be recognized over 25 months with over half to be recognized in the next fiscal year. As of September 30, 2015, the aggregate intrinsic value of options outstanding and exercisable, representing the excess of the closing market price of our common stock over the exercise price, is $0. Stock-based compensation expense related to options was $301,066 and $541,341 during the years ended September 30, 2015 and 2014, respectively, of which $75,020 and $230,226 was recognized as general and administrative expense, $134,877 and $163,172 was recognized as marketing and sales expense, and $91,169 and $147,943 was recognized as research and development expense in 2015 and 2014 respectively. We determine the value of share-based compensation using the Black-Scholes-Merton fair value option-pricing model with weighted average assumptions for options and warrants granted to employees and directors during the years ended September 30, 2015 and 2014 including risk-free interest rates of 1.33% and 1.49% respectively, volatility of 247% and 251% respectively, expected lives of 5.0 and 6.3 years, respectively, and dividend yield of 0%. Contents

~~WarrantsAt~~NEAH ~~September~~POWER 30SYSTEMS, ~~2015, we had warrants outstanding for the purchase of 477~~INC.5 ~~million~~AND shares of our common stock at a weighted average exercise price of $0.0497 per share. The fair value of the warrants is calculated using the Black-Scholes-Merton model. Warrants outstanding at September 30, 2015 expire at various dates from November 2015 to June 2022.SUBSIDIARY

~~F-19~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~Table~~28,200,000 warrants granted during the year ended September 30, 2016. All were granted to consultants in exchange for services to be provided. All but 900,000 of ~~Contents~~these warrants have vested as of September 30, 2016.

~~NEAH~~Of ~~POWER~~the ~~SYSTEMS~~443,756,376 ~~INC~~warrants granted during the year ended September 30, 2015, 270,263,225 warrants were granted to our CEO and certain board members to replace 60,270,692 previous warrants set to expire in September 2015, in exchange for continued commitment to accrue director fees/wages, continued commitment to assist the Company’s capital raising efforts and commitment to continue rendering services to the Company during the current underfunded period. ~~AND~~These ~~SUBSIDIARY~~warrants were fully vested on grant and thus, there was not deemed to be a requisite service period and we recorded the full fair value of these warrants of $918,626 to expense in the year ended September 30, 2015. The fair value was determined by using the Black-Scholes-Merton option pricing model.

~~NOTES~~Note TO10 ~~CONSOLIDATED~~– ~~FINANCIAL~~Income ~~STATEMENTS~~taxes

AWe ~~summary~~have ofrecorded ~~warrant~~no ~~activity~~provision or benefit for income taxes. The difference between tax at the statutory rate and no tax is primarily due to the full valuation allowance. The valuation allowance increased by $637,332 and $1,269,238 during the years ended September 30, ~~2015~~2016 and ~~2014~~2015, ~~are~~respectively. A valuation allowance has been recorded in the full amount of total deferred tax assets as ~~follows:~~it has not been determined that it is more likely than not that these deferred tax assets will be realized. As of September 30, 2016, we have net operating loss carry forwards of $56.1 million, which begin to expire in 2023 and will continue to expire through 2036 if not otherwise utilized. Our ability to use such net operating losses and tax credit carry forwards is subject to annual limitations due to change of control provisions under Sections 382 and 383 of the Internal Revenue Code, and such limitation would be significant. Realization is dependent on generating sufficient taxable income prior to expiration.

	Warrants Outstanding
Outstanding at September 30, 2013	371,668,230
Granted	19,417,749
Exercised	(2,113,333)
Expired	(3,620,000)
Cancelled	(16,766,668)
Outstanding at September 30, 2014	368,585,978
Granted	443,756,376
Exercised	--
Expired	(334,799,868)
Cancelled	--
Outstanding at September 30, 2015	477,542,486

Deferred income taxes represent the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for income tax purposes.

OfSignificant ~~the~~components ~~443,756,376~~of ~~warrants~~our ~~granted~~deferred ~~during~~tax ~~the~~assets ~~year~~and ~~ended~~liabilities ~~September 30, 2015, 270,263,225 warrants were granted to our CEO~~ and ~~certain~~related ~~board~~valuation ~~members~~allowances toat ~~replace 60,270,692 previous warrants set to expire in~~ September ~~2015~~30, in2016 ~~exchange for continued commitment to accrue director fees/wages, continued commitment to assist the Company’s capital raising efforts~~ and ~~commitment to continue rendering services to the Company during the current underfunded period. These warrants were fully vested on grant and thus~~, ~~there was not deemed to be a requisite service period and we recorded the full fair value of these warrants of $918,626 to expense in the year ended September 30,~~ 2015. ~~The~~are ~~fair~~as ~~value was determined by using the Black-Scholes-Merton option pricing model.~~ follows:

In March and May 2014, three of our warrant holders opted to convert their warrants to purchase 1,913,333 shares of common stock via cashless exercise into 1,412,204 shares of common stock.

Deferred Taxes	2016		2015
Net operating loss carry forward	$	19,622,226	$	19,068,950
Share-based compensation		3,024,470		2,964,454
R&D Tax Credit Carry forward		953,928		953,928
Other		288,274		264,235
TOTAL DEFERRED TAX ASSETS		23,888,898		23,251,567

Deferred Tax Liability		(528,808)		(528,808)
Valuation Allowance		(23,360,090)		(22,722,759)
Deferred Tax Assets & Liabilities, net	$	-	$	-

~~Note~~We 12have –identified ~~Income~~our ~~taxes~~federal tax return as our “major” tax jurisdiction, as defined. Tax years from 2011 are subject to audit. We believe our income tax filing positions and deductions will be sustained on audit and we do not anticipate any adjustments that would result in a material change to our financial position. No reserves for uncertain income tax positions have been recorded. Our policy for recording interest and penalties associated with uncertain income tax positions is to record such items as a component of interest expense.

WeNote ~~have~~11 ~~recorded~~– noCommitments ~~provision or benefit for income taxes. The difference between tax at the statutory rate~~ and no tax is primarily due to the full valuation allowance. The increase in the valuation allowance was $1,226,863, and $1,238,080 during the years ended September 30, 2015 and 2014, respectively. A valuation allowance has been recorded in the full amount of total deferred tax assets as it has not been determined that it is more likely than not that these deferred tax assets will be realized. As of September 30, 2015, we have net operating loss carry forwards of $55.10 million, which begin to expire in 2023 and will continue to expire through 2035 if not otherwise utilized. Our ability to use such net operating losses and tax credit carry forwards is subject to annual limitations due to change of control provisions under Sections 382 and 383 of the Internal Revenue Code, and such limitation would be significant. Realization is dependent on generating sufficient taxable income prior to expiration.contingencies

~~F-20~~Lease and Facilities

~~NEAH~~Our ~~POWER~~rent ~~SYSTEMS~~expense for the years ended September 30, ~~INC~~2016 and 2015 was $90,092 and $159,127, respectively. ~~AND~~As ~~SUBSIDIARY~~of September 30, 2016, we do not have any lease commitments. In March 2015, we entered into a consulting agreement with Polaris Laboratories for $2,000 per month to provide consulting services along with access to laboratory facilities where some of our equipment is stored. This agreement can be discontinued with 30 days’ notice. The remaining personal property assets are being stored in a local, Seattle area storage facility on a month-to-month agreement at minimal cost.

~~NOTES~~F TO- ~~CONSOLIDATED FINANCIAL STATEMENTS~~17

~~Deferred~~Table ~~income taxes represent the net tax effects~~ of ~~temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for income tax purposes.~~Contents

~~Significant~~NEAH ~~components~~POWER ~~of our deferred tax assets and liabilities and related valuation allowances at September 30~~SYSTEMS, ~~2015~~INC. ~~and,~~AND ~~2014 are as follows:~~SUBSIDIARY

Deferred Taxes	2015		2014
Net operating loss carry forward	$	18,732,453	$	18,195,890
Share-based compensation		3,074,856		2,447,295
R&D Tax Credit Carry forward		953,928		973,000
Other		223,290		148,395
TOTAL DEFERRED TAX ASSETS		22,984,527		21,764,580
Deferred Tax Liability		(528,808)		(535,724)
Valuation Allowance		(22,455,719)		(21,228,856)
Deferred Tax Assets & Liabilities, net	$	-	$	-

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

We have identified our federal tax return as our “major” tax jurisdiction, as defined. Tax years since 2006 are subject to audit. We believe our income tax filing positions and deductions will be sustained on audit and we do not anticipate any adjustments that would result in a material change to our financial position. No reserves for uncertain income tax positions have been recorded. Our policy for recording interest and penalties associated with uncertain income tax positions is to record such items as a component of interest expense.Litigation

~~Note~~From 13time –to ~~Commitments~~time, ~~and~~the ~~contingencies~~Company is subject to various legal proceedings that arise in the ordinary course of business. In the opinion of management, none of which are currently material to our operations.

~~Lease~~Disputes with various vendors

~~Our~~Certain ~~rent~~of ~~expense~~our ~~for~~vendors ~~the~~and ~~years~~lenders ~~ended~~have ~~September~~brought ~~30,~~suits ~~2015~~ and/or ~~2014~~obtained ~~was~~judgments ~~$159,127~~in ~~and~~their ~~$145,218,~~favor ~~respectively~~regarding past due balances owed them by us. ~~Our~~We ~~lease~~have ~~agreement~~recorded ~~provides~~these ~~for~~past adue ~~month-to-month~~balances ~~holdover~~in ~~status~~liabilities in our consolidated balance sheets at ~~the~~September ~~monthly~~30, ~~rate~~2016 and 2015. We do not believe any loss in excess of ~~$9,500~~amounts ~~plus~~recorded ~~operating~~that ~~expenses~~could ~~commencing~~arise ~~November~~would 1,be ~~2013~~material. ~~The~~We ~~holdover~~have ~~status~~not ~~can~~recorded any liabilities for finance charges or legal fees that could be ~~terminated~~applied by ~~giving~~the avendors ~~two~~or ~~month~~lenders ~~notice~~ to ~~terminate~~these debts.

~~Litigation~~Accounts Payable reduction

~~From~~During ~~time~~the toyears ~~time~~ending September 30, 2016 and 2015, the Company isreduced ~~subject~~accounts topayable ~~various~~by ~~legal~~$125,092 ~~proceedings~~and $331,560, respectively, that ~~arise~~the inCompany determined it no longer had a legal obligation to the ~~ordinary~~vendors ~~course~~based ofupon ~~business. In~~the vendors’ legal status and the ~~opinion~~applicable oflegal ~~management,~~statutes. ~~none~~A gain of ~~which~~$125,092 ~~are~~and ~~currently~~$303,646, ~~material~~respectively, towas recognized in our consolidated statements of operations. for the years ended September 30, 2016 and 2015

~~Certain~~For purposes of ~~our~~these ~~vendors~~consolidated ~~and~~financial ~~lenders~~statements, ~~have~~Summit, ~~brought~~Sierra ~~suits~~ and~~/or~~ ~~obtained~~Green ~~judgments~~World inTrust, ~~their~~are ~~favor~~considered ~~regarding~~related ~~past~~parties due ~~balances~~to ~~owed~~their ~~them~~beneficial byownership ~~us.~~(shareholdings Weor ~~have~~voting ~~recorded~~rights) ~~these~~in ~~past~~excess ~~due~~of ~~balances~~5%, inor ~~liabilities~~their inaffiliate ~~our~~status, ~~consolidated~~during ~~balance~~the ~~sheets~~years atended September 30, ~~2015~~2016 and ~~2014~~2015. WeAll domaterial ~~not~~transactions ~~believe~~with ~~any~~these ~~loss~~investors inand ~~excess~~other ofrelated ~~amounts~~parties ~~recorded~~for ~~that~~the ~~could~~years ~~arise~~ended ~~would~~September be30, ~~material.~~2016 Weand ~~have~~2015, not ~~recorded~~listed ~~any~~elsewhere, ~~liabilities~~are ~~for~~listed ~~finance charges or legal fees that could be applied by the vendors or lenders to these debts~~below.

~~F-21~~During the year ended September 30, 2016, the Company opted to convert 83,000 shares of Series B into 66,030,614 shares of common stock per the Series B certificate of designation for Sierra in three separate tranches.

~~Table~~During the year ended September 30, 2016, the Company opted to convert 85,994 shares of ~~Contents~~Series B into 69,842,046 shares of common stock per the Series B certificate of designation for Summit in three separate tranches.

~~NEAH~~During ~~POWER~~the ~~SYSTEMS~~year ended September 30, ~~INC.~~2015, ~~AND~~the ~~SUBSIDIARY~~Company opted to convert 250,789 shares of Series B, together with dividends in the amount of $16,486, into 57,336,304 shares of common stock per the Series B certificate of designation for Sierra in one tranche.

~~NOTES~~During TOthe ~~CONSOLIDATED~~year ~~FINANCIAL~~ended ~~STATEMENTS~~September 30, 2015, the Company opted to convert 503,085 shares of Series B, together with dividends in the amount of $29,677, into 98,673,877 shares of common stock per the Series B certificate of designation for Summit in three separate tranches.

~~Accounts~~All ~~Payable~~sales ~~reduction~~of Series B during the years ended September 30, 2016 and 2015 were to Summit and Sierra.

During the ~~year~~years ~~ending~~ended September 30, 2016 and 2015, ~~the~~we ~~Company~~recorded ~~reduced~~consulting ~~accounts~~expense ~~payable~~in bythe amount of $~~331~~66,~~560~~000 ~~that~~and ~~the~~$132,000, ~~Company~~respectively, ~~determined~~with noAdvanced ~~longer~~Materials ~~had~~Advisory, aLLC ~~legal~~(“Advanced ~~obligation~~Materials”) tofor ~~vendors~~services ~~based~~by ~~upon~~David ~~the~~Schmidt ~~vendors~~as ~~legal~~Acting ~~status~~Principal ~~and~~Financial ~~applicable~~Officer. ~~legal~~Advanced ~~statutes.~~Materials Ais ~~gain~~owned ofby ~~$303~~David Schmidt,~~646~~ who was ~~recognized~~also ina ~~our~~member ~~consolidated~~of ~~statement~~the ofBoard ~~operations~~until ~~for~~March ~~the~~2016. ~~year~~The ~~ended~~Company had account balances with Advanced Materials Advisory LLC of $224,900 and $170,139 at September 30, 2016 and 2015, respectively, included in liabilities. Effective March 31, 2016, Mr. Schmidt resigned from the Board and as Acting Principal Financial Officer.

~~Note~~On 14April –15, ~~Related~~2016, ~~party~~the ~~transactions~~Company appointed Jeffrey A. May as Chief Financial Officer and principal financial officer of the Company effective as of that date. In the year ended September 30, 2016, we recorded $55,000 in expense for his services in these roles. The Company had an account balance of $60,500 with Mr. May as of September 30, 2016, included in liabilities in the consolidated balance sheet.

~~For~~Note ~~purposes~~13 of– ~~these~~Subsequent consolidated financial statements, Summit Trading Limited, Sierra Trading Corp, Green World Trust, Clean Tech Investors, LLC, and Bard Associates, are considered related parties due to their beneficial ownership (shareholdings or voting rights) in excess of 5%, or their affiliate status, during the years ended September 30, 2015 and 2014. All material transactions with these investors and other related parties for the years ended September 30, 2015 and 2014, not listed elsewhere, are listed below.events

~~During~~Due to the ~~year~~capital ~~ended~~constraints ~~September~~and ~~30,~~the ~~2015~~costs associated with being an SEC reporting company and maintaining its public status, the Company ~~opted~~chose to ~~convert~~file ~~250~~a Form 15 on May 15,~~789~~ ~~shares~~2017, ofterminating ~~Series~~its Bobligation ~~preferred~~to ~~stock~~file current, ~~together~~quarterly ~~with~~and ~~dividends~~annual inSEC ~~the~~reports. ~~amount~~The ofCompany ~~$16,486,~~intends ~~into~~to 57maintain its non-reporting status for the foreseeable future,~~336,304~~ ~~shares~~and will evaluate its various options based upon future business development. At the request of ~~common~~the ~~stock~~Financial ~~per~~Industry Regulatory Agency (“FINRA”), the ~~Series~~Company Bis ~~certificate~~filing ofthis ~~designation~~Form 10-K and the Form 10-Q for ~~Sierra~~the ~~Trading~~following ~~Corp~~quarter into ~~one~~make ~~tranche~~our filings current as of the filing date of the Form 15.

~~During~~Subsequent ~~the~~to ~~year ended~~ September 30, ~~2015~~2016, the Company ~~opted~~has satisfied all loan obligations with Union Capital through conversions to ~~convert~~common ~~503,085~~stock ~~shares~~and cash payments in payment of ~~Series~~principal Band ~~preferred~~interest. ~~stock~~In May 2017, ~~together~~the ~~with~~Company ~~dividends~~paid $439,678 in cash against the ~~amount~~loans, of which $29285,~~677~~728 was applied to principal and $153,950 to interest. In July 2017, Union Capital opted to convert $42,664 of principal and interest into 98237,~~673~~019,~~877~~787 shares of common stock, ~~per~~of ~~the~~which ~~Series~~$35,000 Bwas ~~certificate~~applied against principal and $7,664 to accrued interest. In April 2018, Union Capital opted to convert $30,864 of ~~designation~~principal ~~for~~and ~~Summit~~interest ~~Trading~~into ~~Limited~~257,199,566 shares of common stock of which $22,825 was applied against principal and $8,039 to accrued interest. In April and June 2018, the Company paid $23,065 in ~~three~~remaining ~~separate~~principal ~~tranches~~and interest, of which $15,960 was applied against principal and $7,105 to accrued interest.

~~During~~F ~~the~~- year ended September 30, 2014, the Company opted to convert 142,200 shares of Series B preferred stock, together with dividends in the amount of $21,151, into 26,777,382 shares of common stock per the Series B certificate of designation for Sierra Trading Corp in three separate tranches.18

~~During~~Table ~~the year ended September 30, 2014, the Company opted to convert 144,500 shares~~ of Series B preferred stock, together with dividends in the amount of $34,426, into 29,488,771 shares of common stock per the Series B certificate of designation for Summit Trading Limited in three separate tranches.Contents

~~All~~NEAH ~~sales~~POWER ~~of Series B preferred stock during the years ended September 30~~SYSTEMS, ~~2015~~INC. ~~and~~AND ~~2014 were to Summit Trading LLC and Sierra Trading Corp.~~SUBSIDIARY

~~During~~NOTES ~~the~~TO ~~years~~CONSOLIDATED ~~ended~~FINANCIAL September 30, 2015 and 2014, we recorded consulting expense in the amount of $132,000 and $158,900, respectively, with Advanced Materials Advisory, LLC (“Advanced Materials”) for services by David Schmidt as Acting Principal Financial Officer. Advanced Materials is owned by David Schmidt, who is also a Member of Neah's Board of Directors. The Company has an account balance with Advanced Materials Advisory LLC of $170,139 and $113,489 at September 30, 2015 and 2014, respectively (note 8).STATEMENTS

~~F-22~~During the period from October 2016 through May 2017, the Company entered into an additional series of Six Month Convertible notes (see Note 8) and received proceeds of $458,500. These notes carry the same terms and 8% interest rate as the earlier notes and are secured by the assets of the Company. In total, the Company has received $864,000 in proceeds from these convertible notes. During the period from April 2017 and through March 2018, the Company entered into amendments to extend the original maturity dates for $496,500 of these agreements with interest accruing during such periods at the rate of ten (10%) percent, per annum thereafter, if not paid in full or if not converted in full into the Borrower’s Common Stock on or before the extended maturity date, the Promissory Note maturity date would be automatically extended for an additional six (6) months with interest accruing during such period at the rate of twelve (12%) percent, per annum. In March 2018, the Company and investors of $819,000 of the bridge notes entered into a Convertible Note Settlement Agreement whereby the notes would be converted into 549,607 shares of the new Class A Common Stock. The Company is negotiating with the remaining note holders to also convert the remaining $45,000 in notes.

~~Table~~In April 2017, the Company entered into a securities purchase agreement with Image Securities FZC to sell 370,000,000 shares of ~~Contents~~the Company’s common stock for a total of $5 million, beginning with an initial $1,000,000 followed by $200,000 per month for 20 months. In May 2018, the Company entered into an amended agreement with the investor to instead purchase 1,162,000 shares of Class A Common Stock for the $5 million investment. As of the date of this report, the Company has received $2,200,000 from this investor for 511,280 shares of Class A Common Stock.

~~NEAH~~In ~~POWER~~May ~~SYSTEMS~~2017, ~~INC~~the Company paid the $400,000 principal balance Rich Niemiec in cash. ~~AND~~The ~~SUBSIDIARY~~Company has also issued 26,700,000 of common stock in payment of $154,236 in accrued interest.

~~NOTES~~In TOAugust ~~CONSOLIDATED~~2017, ~~FINANCIAL~~the ~~STATEMENTS~~Company entered into a “Trade Debt Settlement Agreement and Promissory Note” with MediaTech where, in exchange of a trade debt balance of $45,000, the Company agreed to issue 3,462,000 shares of common stock in settlement of the obligation.

~~Note~~In 15September –2017, ~~Subsequent~~Jeffrey ~~events~~May resigned as Chief Financial Officer and principal financial officer.

In ~~October~~February ~~and~~2018, ~~November~~the ~~2015~~Company entered into an agreement to sell 1,622,400 ~~Inter-Mountain~~shares ~~Capital~~of ~~LLC~~its ~~converted~~new ~~$78~~Class A Common Stock when authorized to an investor from Dubai,~~750~~ United Arab Emirates for a purchase price of ~~principal~~$2,000,000. In May 2018, the Company and ~~interest~~the ~~into~~investor 60agreed to an amendment committing an additional 597,~~458,806~~100 shares of ~~common~~Class ~~stock~~A inCommon ~~two~~Stock ~~installments~~for ~~under~~a purchase price of $716,520. As of the ~~Note~~date ~~described~~of this report, the Company has received $700,000 in ~~note~~proceeds 10from this investor.

OnIn ~~November~~March 4of 2018, ~~2015~~the ~~Neah~~Company ~~Power~~filed ~~Systems~~with ~~received~~the ~~an initial~~State ~~payment~~ of ~~$30,000~~Nevada onan aAmendment ~~Convertible~~to ~~Promissory~~Certificate ~~Note~~of ~~(the~~Designation ~~“Note”)~~After ~~with~~Issuance ~~JMJ~~of ~~Financial,~~Class aor ~~Nevada~~Series ~~sole~~which ~~proprietorship~~restored (the ~~“Investor”)~~common instock ~~the~~voting ~~amount~~rights of upholders toof ~~$250,000~~Series ~~10%~~B ~~Original~~to ~~Issue~~state ~~Discount (~~“~~OID”)~~the ~~dated~~holders ~~October 28, 2015. The Note is interest free if repaid within 90 days~~ of the ~~effective~~Series ~~date,~~B ~~otherwise~~Preferred aStock ~~one~~will ~~time interest charge of 12% shall~~ be ~~applied~~entitled to ~~the~~vote ~~principal~~with ~~balance in addition to~~ the ~~10%~~Company’s ~~OID. The~~Common ~~Note~~Stock iswith ~~convertible~~the ~~into~~number ~~common~~of ~~stock~~votes atequal to the ~~price~~number ~~lesser~~ of ~~$0.0026~~common ~~per~~shares ~~share~~available orby ~~63%~~conversion ofto the ~~lowest~~holders ~~trade~~of ~~price in~~ the 25Series ~~day~~B ~~trading~~Preferred ~~days~~Stock ~~previous~~as tocalculated ~~the~~in ~~conversion~~Section 9(c)(ii).”

In ~~November~~March ~~2015~~2018 upon approval by the ~~Company~~Board, ~~entered~~owners ~~into~~of a ~~consulting~~majority ~~services~~of ~~agreement~~the ~~with~~Company’s ~~SRS~~outstanding ~~Consulting~~voting ~~Ltd.~~shares, voted to ~~provide~~amend ~~management~~its ~~consulting~~Articles ~~services~~of Incorporation to authorize 15,000,000 ~~corporate~~new ~~communications~~Class A Common Shares (“Class A Common Stock”). The shares shall rank senior to the Company’s common stock and ~~market~~any ~~out~~class ~~reach,~~or ~~media~~series ~~placement,~~of ~~branding~~capital /stock ~~marketing~~in ~~consulting~~case ~~services~~of ~~together~~distribution ~~with~~of ~~Radius~~the ~~Consulting~~assets of the Corporation in the event of liquidation. The ~~agreement~~Class ~~was~~A ~~subsequently~~Common ~~modified~~Stock shall be entitled to a dividend, accruing at the simple interest rate of 10%, payable in ~~December~~cash ~~2015~~or shares of Class A Common Stock upon declaration by the Board. In ~~conjunction~~The holders of the Class A Common Stock will be entitled to twenty thousand (20,000) votes per share and will be entitled to vote with the ~~said~~Company’s ~~agreements~~Common Stock on all matters properly brought before the shareholders of the Company. In April 2018, the Company isfiled ~~obligated~~with ~~to issue~~the State of Nevada an “Amendment to ~~each~~Certificate ~~SRS~~of ~~Consulting~~Designation ~~and~~After ~~Radius~~Issuance ~~Consulting~~of ~~for~~Class 5or Series” to affect these changes. In addition,~~000,000~~ ~~shares~~the Company also amended its Articles of ~~common~~Incorporation ~~stock~~to change its name to XNRGI, ~~each~~Inc. asIn May 2018, owners of ~~November~~a ~~18,~~majority ~~2015~~of the Company's voting shares approved these actions. The name change is pending FINRA approval.

OnIn ~~December~~March 142018, ~~2015~~ the ~~Company~~Board ~~commenced~~approved the ~~mailing~~2018 ofClass aA ~~consent~~Common ~~solicitation~~Shares ~~proxy~~Stock toPlan ~~consider~~(“the ~~and~~Plan”) ~~vote~~which ~~upon~~permits athe ~~proposal~~Company to ~~amend~~grant ~~our~~various ~~Articles~~types of ~~Incorporation~~stock toincentive ~~increase~~awards. ~~the~~The ~~number~~Plan ofreserves an aggregate 4,800,000 shares of ~~our~~Class ~~authorized~~A ~~common~~Common ~~stock,~~Stock ~~par~~for ~~value~~awards ~~$0.001~~under ~~per~~the ~~share,~~Plan. ~~from~~In 1May 2018,~~800,000,000~~ ~~shares~~owners toof ~~5,400,000,000~~a ~~shares. The~~majority ~~final~~of ~~date~~the ~~for~~Company's ~~tabulation~~voting isshares ~~January~~approved ~~28,~~the ~~2016~~Plan.

~~During~~In ~~the~~May ~~period between October and December 2015~~2018, the Company ~~opted~~entered into an agreement to ~~convert~~sell 2371,~~000~~429 shares of ~~Series~~its Bnew ~~preferred~~Class ~~stock~~A ~~together~~Common ~~with~~Stock ~~dividends~~to inan ~~the~~investor ~~amount~~from ~~of $2~~Dubai,~~423.51~~ ~~into~~United ~~16,525,500~~Arab ~~shares~~Emirates offor ~~common~~a ~~stock~~purchase ~~pursuant~~price toof ~~the~~$100,000. ~~terms~~As of the ~~Series~~date ~~B certificate~~ of ~~designation. Also~~this ~~during the same period~~report, the Company ~~issued~~has ~~98,642~~received ~~shares~~the ~~of Series B preferred stock to investors under Securities Purchase Agreements in return for a total of~~ $98100,~~642~~000 in ~~cash. All~~proceeds ~~sales~~from ofthis ~~Series B preferred stock during the period were to Summit Trading LLC and Sierra Trading Corp~~investor.

OnIn ~~December~~May 162018, ~~2015~~ the Company entered into aan ~~Securities~~agreement ~~Purchase Agreement, $388,428 Debt Purchase Agreement, and $170,250 Convertible Note~~ with ~~Union~~Summit ~~Capital LLC. The term of the notes are two years~~ and ~~carry~~Sierra 8%to ~~interest. The~~convert ~~notes~~all ~~are~~shares ~~convertible at 60%~~ of ~~the~~Series ~~lowest~~B ~~trading price in the previous 20 days. In conjunction with the transaction $21,462 was paid~~ to New Venture Attorneys, PC and $48,778 was paid to SRS Consulting Ltd. for legal fees directly upon closing. On December 18, 2015 the Company received a notice of conversion for $5,000 in principal and $1.10 in interest into 4,630,648 shares of ~~common stock at~~ the ~~applicapble~~new ~~conversion~~Class ~~price~~A ofCommon $0Stock.~~0018~~ ~~per~~Summit ~~share.~~holds ~~On January 4~~592,542 ~~2016,~~shares ~~the Company received a notice~~ of ~~conversion~~Series ~~for~~B ~~$5,000~~to inbe ~~principal~~converted ~~and $19.73 in interest~~ into 4228,~~921,304~~571 shares of ~~common~~Class ~~stock~~A atCommon ~~the applicable conversion price of $0~~Stock.~~00102~~ ~~per~~Sierra ~~share.~~holds ~~On January 13~~629,695 ~~2016,~~shares ~~the Company received a notice~~ of ~~conversion~~Series ~~for~~B ~~$10,000~~to inbe ~~principal~~converted ~~and $59.18 in interest~~ into 10265,~~478,313~~637 shares of ~~common~~Class ~~stock~~A atCommon ~~the applicable conversion price of $0~~Stock.~~00096 per share.~~

OnF ~~January~~- ~~13, 2016 the Company filed an amendment to the certificate of designation of the Company’s Series B preferred stock. The amendment is filed as an exhibit herewith.~~19

~~F-23~~Table of Contents

TableITEM of9. ContentsCHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

~~ITEM~~There 9.are ~~CHANGES~~not INand ~~AND~~have ~~DISAGREEMENTS~~not ~~WITH~~been ~~ACCOUNTANTS~~any ONdisagreements ~~ACCOUNTING~~between ~~AND~~us ~~FINANCIAL~~and ~~DISCLOSURE~~our accountants on any matter of accounting principles, practices or financial statement disclosure.

ThereITEM are9A. notCONTROLS andAND have not been any disagreements between us and our accountants on any matter of accounting principles, practices or financial statement disclosure.PROCEDURES

~~ITEM~~Evaluation ~~9A.~~of ~~CONTROLS~~Disclosure ~~AND~~Controls ~~PROCEDURES~~and Procedures

~~Evaluation~~As of ~~Disclosure~~the ~~Controls~~end of the period covered by this Annual Report on Form 10-K, we carried out an evaluation, under the supervision and ~~Procedures~~with the participation of senior management, which is comprised of our Chief Executive Officer (“CEO”), of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon that evaluation, our CEO concluded that our disclosure controls and procedures were not effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in the reports that we file or submit under the Exchange Act due to the material weaknesses in our internal control over financial reporting. A discussion of the material weaknesses in our internal control over financial reporting is described below.

AsManagement’s ~~of the end of the period covered by this~~ Annual Report on ~~Form~~Internal ~~10-K,~~Control weover ~~carried out an evaluation, under the supervision and with the participation of senior management, including our Chief Executive Officer (“CEO”) and Chief~~ Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were not effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in the reports that we file or submit under the Exchange Act due to the material weaknesses in our internal control over financial reporting. A discussion of the material weaknesses in our internal control over financial reporting is described below.Reporting

Management’s ~~Annual~~is ~~Report~~responsible onfor establishing and maintaining adequate internal control over financial reporting. Internal ~~Control~~control over ~~Financial~~financial ~~Reporting~~reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, is a process designed by, or under the supervision of, our CEO or persons performing similar functions, and effected by our board of directors, management or other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our management, with the participation of our CEO, has established and maintained policies and procedures designed to maintain the adequacy of our internal control over financial reporting, and include those policies and procedures that:

~~Management~~· pertain isto responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the ~~Exchange~~maintenance ~~Act, is a process designed by, or under the supervision~~ of, ~~our~~records ~~CEO and CFO~~that, orin ~~persons~~reasonable ~~performing similar functions~~detail, ~~and~~accurately ~~effected by our board of directors, management or other personnel, to provide reasonable assurance regarding the reliability of financial reporting~~ and ~~the~~fairly ~~preparation~~reflect ~~of financial statements for external purposes in accordance with generally accepted accounting principles. Our management, with~~ the ~~participation~~transactions ~~of our CEO~~ and ~~CFO,~~dispositions ~~has established and maintained policies and procedures designed to maintain the adequacy~~ of our ~~internal control over financial reporting, and include those policies and procedures that:~~assets;

· ~~pertain~~provide reasonable assurance that transactions are recorded as necessary to ~~the~~permit ~~maintenance~~preparation of ~~records~~financial ~~that,~~statements in ~~reasonable~~accordance ~~detail~~with generally accepted accounting principles, ~~accurately~~and that our receipts and ~~fairly~~expenditures ~~reflect~~are ~~the~~being ~~transactions~~made ~~and~~only ~~dispositions~~in accordance with authorizations of our ~~assets~~management and directors; and

· provide reasonable assurance ~~that~~regarding ~~transactions~~prevention ~~are~~or ~~recorded~~timely asdetection ~~necessary to permit preparation~~ of ~~financial~~unauthorized ~~statements~~acquisition, inuse, ~~accordance~~or ~~with~~disposition ~~generally~~of ~~accepted~~our ~~accounting~~assets ~~principles, and~~ that ~~our~~could ~~receipts~~have ~~and~~a ~~expenditures~~material ~~are~~effect ~~being~~on ~~made~~the ~~only~~interim inor ~~accordance~~annual ~~with~~Consolidated ~~authorizations~~Financial ~~of our management and directors; and~~Statements.

16In order to evaluate the effectiveness of internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act, management has conducted an assessment, including testing, using the criteria in the Internal Control Integrated Framework-2013, issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Management was unable to implement its remediation plans during 2016 due to cost considerations. As a result of the material weaknesses described below, management has concluded that our internal control over financial reporting was not effective as of September 30, 2016.

~~· provide~~Management ~~reasonable~~has ~~assurance~~determined ~~regarding~~that, ~~prevention~~as orof ~~timely~~the ~~detection~~September of30, ~~unauthorized~~2016 ~~acquisition,~~measurement ~~use~~date, orthere ~~disposition~~were deficiencies in both the design and the effectiveness of our ~~assets~~internal control over financial reporting. Management has assessed these deficiencies and determined that ~~could~~there ~~have~~were various material weaknesses in our internal control over financial reporting. The existence of a material ~~effect~~weakness onor ~~the~~weaknesses ~~interim~~is an indication that there is a more than remote likelihood that a material misstatement of our financial statements will not be prevented or ~~annual~~detected ~~Consolidated~~in ~~Financial~~a ~~Statements~~future period.

Management has ~~used~~assigned ~~the~~a ~~framework~~high ~~set~~priority ~~forth~~to in the ~~report~~short-and ~~entitled~~long-term ~~Internal~~improvement ~~Control – Integrated Framework 2013 published by the Committee~~ of ~~Sponsoring Organizations of the Treadway Commission (“COSO”) to evaluate the effectiveness of~~ our internal control over financial reporting. ~~Management~~We ~~was~~have ~~unable~~listed tobelow ~~implement~~the ~~its~~nature ~~remediation plans during 2015 due to cost considerations. As a result~~ of the material weaknesses ~~described~~we ~~below,~~have ~~management has concluded that our internal control over financial reporting was not effective as of September 30, 2015.~~identified:

~~Management~~· inadequate ~~has~~personnel ~~determined~~for ~~that,~~documenting ~~as of the September 30, 2015 measurement date, there were deficiencies in both the design~~ and ~~the~~execution ~~effectiveness~~ of ~~our~~processes ~~internal~~related ~~control~~to ~~over~~accounting ~~financial~~for reporting. Management has assessed these deficiencies and determined that there were various material weaknesses in our internal control over financial reporting. The existence of a material weakness or weaknesses is an indication that there is a more than remote likelihood that a material misstatement of our financial statements will not be prevented or detected in a future period.transactions;

~~Management~~· inadequate ~~has~~segregation ~~assigned~~of aduties ~~high~~due ~~priority~~ to the ~~short-and~~limited ~~long-term~~size ~~improvement~~ of ~~our internal control over financial reporting. We have listed below~~ the ~~nature~~accounting ofstaff; ~~the~~and ~~material weaknesses we have identified:~~

· ~~inadequate~~a lack of experienced personnel ~~for~~with ~~documenting~~relevant accounting and ~~execution~~financial ofreporting ~~processes~~experience, ~~related~~due in part to ~~accounting~~our ~~for~~limited ~~transactions;~~financial resources.

~~· inadequate~~We ~~segregation~~intend ofto ~~duties~~design ~~due~~and implement policies and procedures to remediate the ~~limited~~material ~~size~~weaknesses ofin our internal control over financial reporting in future fiscal accounting years, including the continued implementation of a new accounting ~~department;~~system and related internal procedures, and pending the financial resources, the hiring of a qualified staff.

~~· a~~Management ~~lack~~does ofnot ~~experienced~~believe ~~personnel~~that ~~with~~any ~~relevant~~of ~~accounting~~our ~~and~~annual or interim financial ~~reporting~~statements ~~experience,~~issued ~~due~~to indate ~~part~~contain toa material misstatement as a result of the aforementioned weaknesses in our ~~limited~~internal control over financial ~~resources~~reporting.

WeThis ~~intend~~annual toreport ~~design~~does ~~and~~not ~~implement~~include ~~policies~~an ~~and~~attestation ~~procedures~~report toof ~~remediate~~our ~~the~~independent ~~material~~registered ~~weaknesses~~public inaccounting ~~our~~firm regarding internal control over financial reporting. inManagement’s ~~fiscal~~report ~~2016,~~was ~~including~~not ~~the~~subject ~~continued~~to ~~implementation~~attestation ofby aour ~~new~~independent ~~accounting~~registered ~~system~~public ~~and~~accounting ~~related~~firm ~~internal~~pursuant ~~procedures,~~to ~~and~~rules ~~pending~~of the ~~financial~~SEC ~~resources,~~that ~~the~~permit ~~hiring~~us ofto aprovide ~~full~~only ~~time~~management’s ~~regular~~report ~~employee~~in ~~Chief~~this ~~Financial~~annual ~~Officer~~report.

Management does not believe that any of our annual or interim financial statements issued to date contain a material misstatement as a result of the aforementioned weaknesses in our internal control over financial reporting.15

~~Changes~~Table inof ~~Internal Control over Financial Reporting~~Contents

~~There~~Changes ~~have been no changes~~ in ~~our~~Internal ~~internal~~Control ~~controls~~ over ~~financial~~Financial ~~reporting or in other factors during the fourth fiscal quarter ended September 30, 2015 that materially affected, or is likely to materially affect, our internal control over financial reporting.~~ Reporting

~~Limitations~~There onhave ~~Internal~~been ~~Controls~~no changes in our internal controls over financial reporting or in other factors during the fourth fiscal quarter ended September 30, 2016 that materially affected, or is likely to materially affect, our internal control over financial reporting.

~~Because~~Limitations ofon ~~its~~Internal inherent limitations, internal control over financial reporting may not prevent or detect all errors or misstatements and all fraud. Therefore, even those systems determined to be effective can provide only reasonable, not absolute, assurance that the objectives of the policies and procedures are met. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.Controls

~~ITEM~~Because 9Bof its inherent limitations, internal control over financial reporting may not prevent or detect all errors or misstatements and all fraud. ~~OTHER~~Therefore, ~~INFORMATION~~even those systems determined to be effective can provide only reasonable, not absolute, assurance that the objectives of the policies and procedures are met. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

NoneITEM 9B. OTHER INFORMATION

17None.

~~PART III~~16

~~ITEM~~Table ~~10.~~of ~~DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE~~Contents

~~DIRECTORS,~~PART ~~EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE~~III

BoardITEM of10. DirectorsDIRECTORS, andEXECUTIVE ExecutiveOFFICERS OfficersAND CORPORATE GOVERNANCE

~~The table below lists certain biographical information regarding our current directors and executive officers. As of December 12~~DIRECTORS, ~~2015,~~EXECUTIVE ~~our~~OFFICERS ~~board~~AND ofCORPORATE directors consists of five directors. Each director holds his office until his successor is elected and qualified or his earlier resignation or removal. Executive officers are appointed by our board of directors, and each executive officer holds his office until he resigns or is removed by our Board or his successor is elected then qualified. There are no family relationships among members of our management or our Board.GOVERNANCE

Name	Title	Age
Dr. Gerard C. D’Couto	President, Chief Executive Officer, Director	49
Jeffrey B Sakaguchi	Chairman of the Board	54
David Schmidt	Director, Acting Principal Financial Officer	52
Jon M. Garfield	Director	52
William M Shenkin	Director	55

Board of Directors and Executive Officers

~~Background~~The /table ~~Experience~~ below lists certain biographical information regarding our current directors and executive officers. As of July 23, 2018, our board of directors consists of three directors. Each director holds his office until his successor is elected and qualified or his earlier resignation or removal. Executive officers are appointed by our board of directors, and each executive officer holds his office until he resigns or is removed by our Board or his successor is elected then qualified. There are no family relationships among members of our management or our Board.

Dr. Gerard C. (Chris) D’Couto. Dr. Gerard C. D’Couto has served as a member of our Board since January 28, 2008 and as our Chief Executive Officer and President since February 2008. Dr. D’Couto previously served as our Chief Operating Officer and Executive Vice President from September 2007 until February 2008. Prior to joining us, Dr. D’Couto served as senior director of marketing at Form Factor Inc. from January 2006 until September 2007, where he headed the launch of NAND flash and DRAM sort probe cards. Prior to that, Dr. D’Couto had a nine-year tenure at Novellus Systems, Inc., with positions of increasing responsibility ranging from product management to technology development and sales. Prior to that, Dr. D’Couto worked at Varian Associates and as a consultant to Intel Corporation. Dr. D’Couto received a bachelor’s degree in chemical engineering from the Coimbatore Institute of Technology in India and also received a master’s and a doctoral degree in chemical engineering from Clarkson University in New York. Dr. D’Couto also earned an MBA from the Haas School of Business at the University of California, Berkeley. Dr. D’Couto was chosen to serve on our Board because of his management and operational skills from his business school education and past management positions as well as his technical knowledge related to our fuel cell technology.

Name	Title	Age
Dr. Gerard C. D’Couto	President, Chief Executive Officer, Director	51
Jon M. Garfield	Director	54
Paul Sidlo	Director	62

~~Jeffrey~~Background B./ Sakaguchi. Jeffrey Sakaguchi has served on our board since November 2010. Since December 2010, Mr. Sakaguchi has also served on the boards of directors of True Blue, Inc., a publicly-traded industrial staffing and placement company, and Eccentex, Inc., a venture-backed, early-stage software company. Since June 2015, he has served on the board of directors of ACT Holdings, Inc., a privately-held debt collection and business process outsourcing company. Since May 2005, he has served on the board of directors of the American Red Cross, Los Angeles Region, and served as Chairman of the Board from 2009 to 2012, during which time he was responsible for the financial and organizational turnaround of region performance, as well as the integration of nine chapters into the region. From 2004 until 2007, Mr. Sakaguchi served as the President and Chief Operating Officer of Evolution Robotics Retail, Inc., for which he co-led a spin-off of the company from its former parent company, and was responsible for developing and executing a commercialization strategy for a breakthrough visual scanning product targeted for the retail industry. From 1995 until 2003, Mr. Sakaguchi served as the Managing Partner for the North American Energy Strategy Practice at Accenture LLP in Los Angeles. From 1989 until 1995, Mr. Sakaguchi served as the Senior Engagement Manager at McKinsey & Company, Inc. in Los Angeles. Mr. Sakaguchi earned his Bachelor of Science degree in chemical engineering from the Massachusetts Institute of Technology, and his masters in business administration from the Wharton School of the University of Pennsylvania. Mr. Sakaguchi was chosen to serve on our Board because of his extensive business leadership experience with technology and emerging companies and his knowledge of the emerging fuel cell industry.Experience

~~David~~Dr. ~~Schmidt~~Gerard C. ~~David~~(Chris) ~~Schmidt~~D’Couto. Dr. Gerard C. D’Couto has served onas a member of our ~~board~~Board since ~~November~~January ~~2010.~~28, ~~Mr.~~2008 ~~Schmidt~~and ~~has~~as ~~served~~our Chief Executive Officer and President since February 2008. asDr. anD’Couto ~~independent~~previously ~~consultant~~served ~~advising~~as ~~chemical,~~our ~~material~~Chief Operating Officer and ~~alternate~~Executive ~~energy~~Vice ~~spaces~~President ~~regarding~~from ~~strategic~~September ~~marketing~~2007 ~~and~~until ~~execution~~February ~~services~~2008. ~~From~~Prior ~~2004~~to ~~until~~joining ~~2008~~us, MrDr. ~~Schmidt~~D’Couto served as ~~the~~senior ~~Manager~~director of ~~Commercial~~marketing ~~Excellence~~at ~~and~~Form Factor Inc. from January 2006 until September 2007, where he headed the ~~Strategic~~launch ~~Marketing~~of ~~Business~~NAND ~~Development~~flash ~~Manager~~and atDRAM ~~Honeywell~~sort ~~International~~probe ~~Specialty~~cards. ~~Materials~~Prior to that, ~~Inc~~Dr. ~~From~~D’Couto ~~2000~~had ~~until~~a ~~2003~~nine-year tenure at Novellus Systems, MrInc., ~~Schmidt~~with ~~served~~positions asof aincreasing ~~Senior~~responsibility ~~Director~~ranging ~~and~~from ~~Chief~~product ~~Operations~~management ~~Officer~~to oftechnology ~~Plasmion~~development ~~Corporation,~~and ~~Inc~~sales. MrPrior to that, Dr. ~~Schmidt~~D’Couto ~~has~~worked ~~also~~at ~~served~~Varian inAssociates ~~management~~and ~~positions~~as ata ~~Film~~consultant ~~Specialties,~~to ~~Inc~~Intel Corporation. ~~from~~Dr. ~~1993~~D’Couto ~~until~~received ~~2000,~~a ~~Hydromer,~~bachelor’s ~~Inc.~~degree in chemical engineering from ~~1989~~the ~~until~~Coimbatore ~~1992~~Institute of Technology in India and ~~ROI~~also ~~Group,~~received ~~Inc.~~a master’s and a doctoral degree in chemical engineering from ~~1986~~Clarkson ~~until~~University ~~1988~~in New York. MrDr. ~~Schmidt~~D’Couto also earned ~~his~~an ~~bachelor~~MBA offrom ~~science~~the inHaas ~~business~~School ~~and~~of ~~economics~~Business ~~from~~at ~~Lehigh~~the University of California, Berkeley. MrDr. ~~Schmidt~~D’Couto was chosen to serve on our Board because of his ~~extensive~~management ~~executive~~ and operational skills from his business ~~development~~school ~~experience~~education inand ~~technology~~past ~~industries~~management positions as well as his technical knowledge related to our fuel cell technology.

Jon M. Garfield. Jon M. Garfield has served on our Board since May 2008. Mr. Garfield isformerly ~~currently~~served as the CFO of Monte Nido LLC a behavioral healthcare treatment facility from 2015 to January 2016. He also ~~serves~~served as a board member of Seaniemac International, Ltd. (OTCMKTS: BETS) ~~since~~from 2013 until 2016. Mr. Garfield served as Chief Executive Officer of technology company Clearant, Inc. (OTCBB: CLRA) from January 2007 until August 2010 and as Chief Financial Officer at Clearant, Inc. from September 2006 until August 2010. Mr. Garfield has served as a member of Clearant, Inc.’s board of directors from May 2007 until August 2010. From September 2001 through 2006, Mr. Garfield served as an independent financial consultant, including advising as to SEC reporting obligations and Sarbanes-Oxley compliance. From 1998 until 2001, he served as Chief Financial Officer of a telecom service provider and a software developer. From 1996 to 1998, he served as Vice President of Acquisitions for the formerly NYSE-listed ground transportation consolidator Coach USA, Inc. From 1991 to 1996, Mr. Garfield served as Corporate Assistant Controller of Maxxim Medical, Inc., a formerly New York Stock Exchange listed manufacturer and distributor. During 1986 to 1991, Mr. Garfield practiced public accounting with Arthur Andersen and PricewaterhouseCoopers. Mr. Garfield received a Bachelor of Business Administration in Accounting from University of Texas, Austin. Mr. Garfield was chosen to serve on our Board because of his past experience in chief executive officer and chief financial officer roles at public companies and because of his financial literacy.

18Paul Sidlo. Paul Sidlo, a former member of the Company’s Board of Directors (2008-2009) has served now on our board since February 2017. Mr. Sidlo was formerly the CEO and President of REZN8 Production which he founded in 1987 and is currently a Special Projects Manager consultant. REZN8 Productions was an early pioneer company in the 3D computer animation user interface. REZN8 Productions engages with clients that included Microsoft, XBOX, Netflix, Microsoft Surface, Microsoft Home of the Future, Citibank, Intel, five Olympics, 14 Super Bowls, the Academy Awards, and CBS, NBC, ABC, and Fox Networks, for which Mr. Sidlo received nine Emmy awards. Since 2001, he has served as a Strategic Consultant and Board member of EMN8 (now Tillster), an enterprise that provides order and pay solutions for the retail businesses such as Yum International, Pizza Hut, KFC, Burger King, Taco Bell, Baskin Robins and the top 40 quick-service restaurants around the world. Between 2014 and 2016, Mr. Sidlo served as Executive Vice President, Partner and Chief Marketing Officer for Litricity, a company that developed and patented a way to reduce the capital cost of its solar energy system while at the same time increasing the electricity output. In addition, he served as a Marketing Consultant to Amici Enterprises from 2015 to 2016, a company that provides industrial, commercial and government organizations with a proven cool, clean, conditioned power technology that reduces total power consumption by 20% to 40%. Mr. Sidlo graduated from Ohio State University with a BA in Communications.

~~Table~~Board ~~of Contents~~Committees

~~William~~During M.fiscal ~~Shenkin.~~2016 ~~William~~and M.to ~~Shenkin has served on our Board since November 2013. Mr. Shenkin is currently~~ the ~~CEO~~date ~~and President~~ of ~~CeFO,~~this ~~Inc. Mr. Shenkin specializes in working with businesses and individuals in providing family office services for high net worth individuals~~report, ~~chief~~there ~~financial~~have ~~officer~~been ~~services~~five ~~including~~standing ~~strategic~~committees ~~business~~of ~~review~~our ~~and~~board ~~planning,~~of ~~monthly~~directors ~~financial~~- ~~and accounting review~~Audit, ~~equity and debt financing~~Compensation, ~~buy/sell negotiations~~Nominating, ~~and~~Financing ~~tax services. Mr. Shenkin’s professional history encompasses 30 years of CPA, tax, audit~~ and ~~advisory~~Governance ~~services beginning with Ernst & Young, then Shenkin Kurtz Baker & Co~~Committees. and presently CeFO, Inc. He is a member of the American Institute of Public Accountants as serves as a Board Member and Board Advisor for numerous companies and non-profits. Mr. Shenkin holds a M.A. in Accounting from Florida Atlantic University. Mr. Shenkin was chosen to serve on our Board because of his extensive background with growing technology businesses and at the recommendation by recent financing activities.

~~Board Committees~~17

~~During~~Table ~~fiscal 2015, there were five standing committees~~ of ~~our board of directors - Audit, Compensation, Nominating, Financing and Governance Committees.~~Contents

Audit Committee

We have an Audit Committee of the Board consisting only of ~~two independent directors,~~ Jon M. Garfield ~~(Chair)~~as ~~and~~its ~~William~~sole M.member ~~Shenkin~~and Chair. Our Board has determined that Mr. Garfield ~~and~~qualifies ~~Mr. Shenkin qualify~~ as an Audit Committee financial ~~experts~~expert. In addition to being independent under Nasdaq Marketplace Rule 5605(a)(2), Mr. Garfield ~~and Mr. Shenkin~~ meets the additional independence and qualification standards for audit committee members set forth in Nasdaq Marketplace Rule 5605(c)(2)(A). The Audit Committee functions in part as an independent and objective party with oversight of our financial reporting process and internal controls.

Compensation Committee

The Compensation Committee consists only of ~~two independent directors Jeffrey B Sakaguchi (Chair) and~~ Jon M Garfield. The functions of the Compensation Committee are to review and approve the goals of the Chief Executive Officer, to review and approve salaries, bonuses and other benefits payable to our executive officers and to administer our Long Term Incentive Compensation Plan and the surviving cash portion of the Director, Officer, and Employee Sales Incentive Plan.

Nominating Committee

The Nominating Committee consists of ~~David Schmidt (Chair),~~ Jon M Garfield, and Gerard C. D’Couto. The Nomination Committee is responsible for proposing a slate of directors for election by the stockholders at each annual stockholders meeting and for proposing candidates to fill any vacancies.

Financing Committee

The Financing Committee consists only of Gerard C. D’Couto ~~(Chair),~~as ~~David~~its ~~Schmidt,~~sole member and ~~Jeffrey Sakaguchi~~Chair. The Financing Committee is responsible for evaluating various financing options and recommending to the full Board various financing avenues.

Governance Committee

The Governance Committee consists only of ~~two independent directors,~~ Jon M Garfield ~~and Jeffrey Sakaguchi, and David Schmidt (Chair)~~. The Governance Committee is responsible for supervision and oversight of our general operations.

Code of Ethics

We have adopted a Code of Ethics and Business Conduct for our principal executive, financial and accounting officers. The Code of Ethics addresses such issues as conflicts of interest, corporate opportunities, confidentiality, fair dealing, protection and proper use of our assets, compliance with applicable laws (including insider trading laws) and reporting of illegal or unethical behavior. We are committed to ensuring transparent and good corporate governance in our dealings with all stakeholders. Our Code of Ethics can be found on our website at http://www.neahpower.com.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act requires our officers and directors, and persons who own more than ten percent of a registered class of our securities, to file with the SEC reports of ownership of our securities and changes in reported ownership. Officers, directors and greater than ten percent stockholders are required by SEC rules to furnish us with copies of all Section 16(a) reports they file.

Based solely on a review of the reports furnished to us, or written representations from reporting persons that reportable transactions were reported, we believe that during the fiscal year ended September 30, ~~2015~~2016, our officers, directors and greater than ten percent stockholders timely filed the reports they were required to file under Section 16(a).

19ITEM 11. EXECUTIVE COMPENSATION

~~ITEM~~ The following table shows for each of the two fiscal years ended September 30, 2016 and 2015, all compensation awarded or paid to, or earned by, Gerard C. D’Couto, our Chief Executive Officer and David Schmidt, our Acting Principal Officer (“collectively, the “Named Executive Officers”). Due to working capital limitations, we have deferred payments of compensation to our Chief Executive Officer and former Chief Financial Officer, and to members of our Board of Directors, which are included in accrued compensation and related expenses in the accompanying consolidated balance sheets (see Note 11 to our Notes to Consolidated Financial Statements).~~EXECUTIVE~~ Other ~~COMPENSATION~~than the Named Executive Officers, we had no executive officers whose compensation exceeded $100,000 during the fiscal years ended September 30, 2016 and 2015.

The following table shows for each of the two fiscal years ended September 30, 2015 and 2014, all compensation awarded or paid to, or earned by, Gerard C. D’Couto, our Chief Executive Officer and David Schmidt, our Acting Principal Officer(“collectively, the “Named Executive Officers”). Due to working capital limitations, we have deferred payments of compensation to our Chief Executive Officer and former Chief Financial Officer, and to members of our Board of Directors, which are included in accrued compensation and related expenses in the accompanying consolidated balance sheets (Note 8). Other than the Named Executive Officers, we had no executive officers whose compensation exceeded $100,000 during the fiscal years ended September 30, 2015 and 2014.18

~~Summary~~Table ~~Compensation~~of ~~Table~~Contents

			Options or Warrants (1) ($)	All Other (2) ($)	Total ($)
Name & Position	Fiscal Year	Salary($)
Gerard C. D’Couto	2015	225,000	636,776 (4)	12,837	874,613
President, Chief Executive Officer	2014	225,000		16,153	241,153
David Schmidt	2015	132,000 (3)			132,000
Acting Principal Financial Officer	2014	158,890 (3)			158,890

Summary Compensation Table

(1) This column represents the aggregate grant-date fair value of the awards computed in accordance with FASB ASC Topic 718. These amounts reflect our accounting value for these awards and do not necessarily correspond to the actual value that may be realized by the named executive officer. The assumptions used in the calculation of these amounts are described in Note 11 to our Consolidated Financial Statements included with this Annual Report on Form 10-K.

		Salary	Options or Warrants ⁽¹⁾	All Other ⁽²⁾	Total
Name & Position	Fiscal Year	($)	($)	($)	($)
Gerard C. D’Couto	2016	225,000			225,000
President, Chief Executive Officer	2015	225,000	636,776	12,837	874,613

Jeffrey A. May	2016	55,000⁽³⁾			93,000
Chief Financial Officer

David Schmidt	2016	66 ,000⁽⁴⁾			66,000
Acting Principal Financial Officer	2015	132,000 ⁽⁴⁾			132,000

(21) ~~Consists~~This column represents the aggregate grant-date fair value of ~~health~~the ~~related~~awards ~~benefits~~computed ~~provided~~in accordance with FASB ASC Topic 718. These amounts reflect our accounting value for these awards and do not necessarily correspond to ~~employees~~the actual value that may be realized by the named executive officer. The assumptions used in the calculation of these amounts are described in Note 11 to our Consolidated Financial Statements included with this Annual Report on Form 10-K.

(32) ~~Mr.~~Consists ~~Schmidt~~of ishealth arelated ~~Board~~benefits ~~member~~provided ~~and~~to ~~a consultant~~employees. ~~Amounts for Mr. Schmidt are earned consulting fees for the years ended September 30, 2015 and September 30, 2014.~~

(43) ~~The~~ Mr. ~~value~~May ofserved ~~the~~as ~~underlying~~Chief ~~warrants~~Financial ~~for~~Officer ~~common~~from ~~stock~~April is2016 ~~calculated~~through ~~using~~ the ~~Black-Scholes-Merton~~date ~~model. These~~of ~~warrants~~his ~~replace~~resignation ~~previous~~in ~~warrants~~September ~~that~~2017. ~~were~~Amounts ~~previously~~for ~~expensed and set to expire~~Mr. ~~These~~ ~~warrants~~May ~~were~~are ~~issued in exchange~~ for ~~continued~~consulting ~~commitment to accrue director~~ fees~~/wages,~~ ~~continued~~earned ~~commitment~~from tohis ~~assist~~appointment ~~the~~date ~~Company’s~~through ~~capital~~September ~~raising~~30, ~~efforts and commitment to continue rendering services to the Company during the current underfunded period~~2016.

~~Outstanding~~(4) Mr. ~~Equity~~Schmidt ~~Awards~~is ata ~~Fiscal~~Board ~~Year-End~~member and a consultant. Amounts for Mr. Schmidt are earned consulting fees for the years ended September 30, 2016 and September 30, 2015. Mr. Schmidt resigned from the board in April 2016.

~~The~~Outstanding ~~following~~Equity ~~table~~Awards ~~sets~~at ~~forth~~Fiscal ~~information regarding the outstanding equity awards held by our Named Executive Officers as of September 30, 2015:~~ Year-End

Option Awards
Name	Number of Securities Underlying Unexercised Options and Warrants (#) Exercisable	Number of Securities Underlying Unexercised Options and Warrants (#) Unexercisable	Number of Securities Underlying Unexercised Unearned Options and Warrants (#)	Exercise Price $	Expiration date
Gerard C. D’Couto	2,400,000			0.02300	Nov 2020
President, Chief Executive Officer	1,685,393	-	-	0.00890	Apr 2021
	2,587,500	-	-	0.08000	Jun 2020
	137,000,000		-	0.00354	Aug 2023
	187,341,935 (1)			0.00310	Sep 2020
David Schmidt	800,000			0.02300	Nov 2020
Acting Principal Financial Officer	1,685,393			0.00809	Apr 2021
	26,000,000			0.00354	Aug 2023
	12,000,000			0.00406	Aug 2023

The following table sets forth information regarding the outstanding equity awards held by our Named Executive Officers as of September 30, 2016:

(1) These warrants replace 41,705,537 previous warrants in exchange for continued commitment to accrue director fees/wages, continued commitment to assist the Company’s capital raising efforts and commitment to continue rendering services to the Company during the current underfunded period. These warrants are fully vested as of September 30, 2015.

	Option Awards
Name	Number of Securities Underlying Unexercised Options and Warrants (#) Exercisable	Number of Securities Underlying Unexercised Options and Warrants (#) Unexercisable	Number of Securities Underlying Unexercised Unearned Options and Warrants (#)	Exercise Price $	Expiration date
Gerard C. D’Couto	2,400,000			0.02300	Nov 2020
President, Chief Executive Officer	1,685,393	-	-	0.00890	Apr 2021
	2,587,500	-	-	0.08000	Jun 2020
	137,000,000		-	0.00354	Aug 2023
	187,341,935⁽¹⁾			0.00310	Sep 2020

~~Long~~(1) These ~~Term~~warrants ~~Incentive~~replace ~~Compensation~~41,705,537 ~~Plan~~previous warrants in exchange for continued commitment to accrue director fees/wages, continued commitment to assist the Company’s capital raising efforts and commitment to continue rendering services to the Company during the current underfunded period. These warrants are fully vested as of September 30, 2015.

~~Our~~ Long Term Incentive Compensation Plan (the “Plan"), as restated, was approved by shareholders in July 2014. The Plan is administered by our board of directors. In July 2014, shareholders also approved an automatic share reserve increase by an amount equal to ten (10%) percent of the common shares available for issuance under the Plan beginning on August 1, 2014, and on each August 1st of the next nine (9) years. The aggregate number of shares available for issuance under the Plan is 393,250,000 as of September 30, 2015. We have granted stock options under the Plan to employees, members of our board of directors, advisors and consultants. No options have been exercised. Options are exercisable for ten years from date of grant.

20Our Long Term Incentive Compensation Plan (the “Plan"), as restated, was approved by shareholders in July 2014. The Plan is administered by our board of directors. In July 2014, shareholders also approved an automatic share reserve increase by an amount equal to ten (10%) percent of the common shares available for issuance under the Plan beginning on August 1, 2014, and on each August 1st of the next nine (9) years. The aggregate number of shares available for issuance under the Plan is 589,875,000 as of September 30, 2016. We have granted stock options under the Plan to employees, members of our board of directors, advisors and consultants. No options have been exercised. Options are exercisable for ten years from date of grant.

~~Table~~Employment, ofSeverance ~~Contents~~and Change in Control Agreements

~~Employment~~Under the terms of the Offer Letter entered into between Dr. Gerard C. (Chris) D’Couto and the Company when Dr. D’Couto joined us as Chief Operating Officer, ~~Severance~~Dr. D’Couto receives a per annum base salary of $225,000 and ~~Change~~a bonus equal to 50% of his base salary upon the completion of certain milestones. In the event Dr. D’Couto’s employment is terminated (i) for any reason other than for cause or a winding down of our operations or (ii) due to a change in ~~Control~~control ~~Agreements~~where he is not offered a comparable position at a similar compensation, Dr. D’Couto will be entitled to a severance payment equal to six months of his then current base salary.

~~Under~~In ~~the~~June ~~terms~~2012, ofwe ~~the~~appointed ~~Offer~~David ~~Letter~~Schmidt, ~~entered~~a ~~into~~member ~~between~~of ~~Dr.~~our ~~Gerard~~Board C.of ~~(Chris)~~Directors ~~D’Couto~~ and ~~the~~Chairman ~~Company~~of ~~when~~the ~~Dr.~~Governance ~~D’Couto~~and ~~joined~~Nominating ~~us as Chief Operating Officer~~Committees, ~~Dr. D’Couto receives a per annum base salary of $225,000 and a bonus equal~~ to ~~50%~~serve ofpart ~~his~~time ~~base~~as ~~salary~~Acting ~~upon~~Principal ~~the~~Financial ~~completion~~Officer of ~~certain milestones. In~~ the ~~event Dr~~Company. ~~D’Couto’s~~Acting ~~employment~~Principal isFinancial ~~terminated~~Officer ~~(i)~~services ~~for~~and ~~any~~consulting ~~reason~~services ~~other~~were ~~than~~provided ~~for~~by ~~cause~~Advanced orMaterials aAdvisory ~~winding~~LLC ~~down~~on ~~of our operations or (ii) due to~~ a ~~change~~monthly inbasis ~~control~~at ~~where~~the herate isof ~~not~~$11,000 ~~offered~~per amonth. ~~comparable position at a similar compensation, Dr~~Mr. ~~D’Couto~~Schmidt ~~will~~resigned befrom ~~entitled~~the toboard ain ~~severance~~April ~~payment equal to six months of his then current base salary~~2016.

OnIn ~~June~~April 302016, ~~2012,~~ we appointed ~~David~~Jeffrey ~~Schmidt,~~A. aMay ~~member~~as ofChief ~~our~~Financial ~~Board~~Officer ~~of Directors~~ and ~~Chairman~~principal offinancial ~~the~~officer ~~Governance and Nominating Committees, to serve part time as Acting Principal Financial Officer~~ of the Company. ~~Acting~~Mr. ~~Principal~~May’s ~~Financial Officer~~ services ~~and~~were ~~consulting services are~~ provided bythrough ~~Advanced~~Jeffrey ~~Materials~~A. ~~Advisory~~May, ~~LLC~~PC on a monthly basis at the rate of $11,000 per month.

Compensation of Directors

On August 23, 2011, our Board of Directors approved a Cash Compensation Plan for the directors on the Board, to be administered by the Compensation Committee. The Cash Compensation Plan effective as of August 23, 2011 and covers current members of the Board. Cash compensation will accrue effective from the date that the director originally joined the Board, but no earlier than June 1, 2009 and, with the exception of retainer compensation, will be pro-rated based on attendance at Board and Committee meetings. The effectiveness of the Cash Compensation Plan and the payment of compensation are conditional upon our receiving cash in the amount of at least $1.5 million either by direct outside investment or from sales or from licensing revenues. The following sets forth the cash compensation plan:

Retainer	$10,000
Board Meetings
Chairman	$15,000
Member	8,000
Audit Committee
Chairman	$6,000
Member	2,500
Compensation Committee
Chairman	$2,500
Member	1,500
Governance Committee
Chairman	$1,500
Member	400
Nominating Committee
Member	$400

~~Except~~Table ~~as described above, we do not have any formal policy for the compensation~~ of our non-employee directors. Our Board has made grants of stock options to our outside directors at various times as compensation for our director’s service on the Board. In the future, we anticipate adopting a policy of paying directors a fee for their attendance at board and committee meetings if the financial condition of our Company improves.Contents

The following table sets forth information regarding the compensation of directors during the fiscal year ended September 30, 2015:

Retainer	$	10,000
Board Meetings
Chairman	$	15,000
Member		8,000
Audit Committee
Chairman	$	6,000
Member		2,500
Compensation Committee
Chairman	$	2,500
Member		1,500
Governance Committee
Chairman	$	1,500
Member		400
Nominating Committee
Member	$	400

~~Director~~Except ~~Compensation~~as described above, we do not have any formal policy for the compensation of our non-employee directors. Our Board has made grants of stock options to our outside directors at various times as compensation for our director’s service on the Board. In the future, we anticipate adopting a policy of paying directors a fee for their attendance at board and committee meetings if the financial condition of our Company improves.

Name	Fees Earned or Paid in Cash ($)	Stock Awards($)	Option and Warrant Awards ($) (1)	All Other Compensation ($)	Total ($)
Gerard C. D’Couto (2)	-	-	-	-	-
Jeffrey Sakaguchi (3)	26,259	-	97,578 (7)	-	123,837
David Schmidt (4)	-	-	-	-	-
Jon Garfield (5)	21,659	-	184,272 (7)	-	205,931
William Shenkin (6)	16,212				16,212

The following table sets forth information regarding the compensation of directors during the fiscal year ended September 30, 2016:

~~(1) This~~Director column represents the aggregate grant-date fair value of the awards computed in accordance with FASB ASC Topic 718. These amounts reflect our accounting value for these awards and do not necessarily correspond to the actual value that may be realized by the named executive officer. The assumptions used in the calculation of these amounts are described in note 11 to our Consolidated Financial Statements included with this Annual Report on Form 10-K.Compensation

(2) Dr. D’Couto’s compensation for fiscal year 2015 is fully reflected in the “Summary Compensation Table” above. Mr. D’Couto received no additional compensation for his service as a director.

Name	Fees Earned or Paid in Cash ($)	Stock Awards	Option and Warrant Awards ($)	All Other Compensation ($)	Total ($)
Gerard C. D’Couto⁽²⁾	-	-	-	-	-
Jeffrey Sakaguchi ⁽³⁾	25,000	-	-	-	25,000
Jon Garfield ⁽⁴⁾	13,500	-	-	-	13,500
William Shenkin ⁽⁵⁾	13,500				13,500

21(1) This column represents the aggregate grant-date fair value of the awards computed in accordance with FASB ASC Topic 718. These amounts reflect our accounting value for these awards and do not necessarily correspond to the actual value that may be realized by the named executive officer. The assumptions used in the calculation of these amounts are described in note 11 to our Consolidated Financial Statements included with this Annual Report on Form 10-K.

(2) Dr. D’Couto’s compensation for fiscal year 2016 is fully reflected in the “Summary Compensation Table” ofabove. ~~Contents~~Mr. D’Couto received no additional compensation for his service as a director.

(3) Mr. Sakaguchi’s earned fees of $2625,~~259~~000 have been deferred as of September 30, ~~2015~~2016. During the year ended September 30, 2015, Mr. Sakaguchi received 28,707,742 warrants that replace 6,427,344 previous warrants in exchange for continued commitment to accrue director fees/wages, continued commitment to assist the Company’s capital raising efforts and commitment to continue rendering services to the Company during the current underfunded period. These warrants are fully vested as of September 30, 2015. Mr. Sakaguchi resigned from the board in February 2017.

(4) Mr. ~~Schmidt~~Garfield’s ~~compensation~~earned ~~for~~fees ~~fiscal~~of ~~year~~$13,500 ~~2015~~have isbeen ~~fully~~deferred ~~reflected~~as inof September 30, 2016. During the ~~“Summary~~year ~~Compensation~~ended ~~Table”~~September ~~above.~~30, 2015, Mr. ~~Schmidt~~Garfield received no54,213,548 ~~additional~~warrants ~~compensation~~that replace 12,137,811 previous warrants in exchange for ~~his~~continued ~~service~~commitment asto aaccrue director fees/wages, continued commitment to assist the Company’s capital raising efforts and commitment to continue rendering services to the Company during the current underfunded period. These warrants are fully vested as of September 30, 2015.

(5) Mr. ~~Garfield~~Shenkin’s earned fees of $2113,~~659~~500 have been deferred as of September 30, ~~2015~~2016. Mr. ~~Garfield~~Shenkin ~~received~~resigned ~~54,213,548~~from ~~warrants~~the ~~that~~board ~~replace 12,137,811 previous warrants~~ in exchange for continued commitment to accrue director fees/wages, continued commitment to assist the Company’s capital raising efforts and commitment to continue rendering services to the Company during the current underfunded period. These warrants are fully vested as of September ~~30, 2015~~2017.

~~(6) Mr. Shenkin’s earned fees of $16,212 have been deferred as of September 30, 2015.~~20

~~(7) The~~Table ~~value~~ of the underlying warrants for common stock is calculated using the Black-Scholes-Merton model. These warrants replace previous warrants that were previously expensed and set to expire. These warrants were issued in exchange for continued commitment to accrue director fees/wages, continued commitment to assist the Company’s capital raising efforts and commitment to continue rendering services to the Company during the current underfunded periodContents

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table presents information as of September 30, ~~2015~~2016 concerning the beneficial ownership of our common stock and each of our outstanding classes of preferred by the following persons or groups:

· each person who, to our knowledge, beneficially owns more than 5% of our common stock or any class of preferred stock;

· each Named Executive Officer identified in the Executive Compensation table above;

· each of our current directors; and

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

Percentage of common stock beneficially owned is based on 12,~~286~~596,~~829~~508,~~462~~421 shares of common stock outstanding on September 30, ~~2015~~2016. In accordance with SEC rules, when we computed the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, we deemed as outstanding shares of common stock subject to options or warrants held by that person that are currently exercisable or exercisable within 60 days of September 30, ~~2015~~2016. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person.

This table is based upon information supplied by executive officers, directors and principal shareholders. Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, to our knowledge, each of the shareholders named in this table has sole voting and investment power with respect to the common stock shown as beneficially owned. The address for each of our officers and directors is c/o Neah Power Systems, Inc., ~~22118~~22722 ~~20th~~29th ~~Avenue~~Drive SE, Suite ~~142~~100, Bothell, ~~Washington~~WA 98021.

Name of Beneficial Owner	Number of Shares Beneficially Owned	~~Number~~Percentage ~~of Shares Beneficially~~ Owned (%)	~~Percentage Owned (%)~~
Chris D'Couto (1)	331,414,830	~~331,414,830~~12.8%	~~20.5%~~
David Schmidt (2)		44,818,748	3.4%
Jeffrey Sakaguchi (2)	48,415,489	1.8%
Jeffrey Sakaguchi (3)		42,312,820	3.2%
Jon Garfield (3)	69,252,377	2.7%
Jon Garfield (4)		57,114,566	4.2%
All directors and named executive officers as a group (3 individuals)	449,082,696	17.3%
William Shenkin (5)		46,934,216	3.6%
5% or More Shareholders
All directors and named executive officers as a group (5 individuals)		522,595,180	29.9%
Sierra Trading Corp (4)	505,597,111	19.5%
5% or More Shareholders
Summit Trading Limited (5)	416,410,000	16.0%
Green World Trust (7)		121,571,201	9.4%
Bard Associates (6)		94,421,577	7.3%
Summit Trading Limited (8)		290,766,709	18.7%
Sierra Trading Corp (9)		408,749,147	24.3%

22(1) Gerard C. D’Couto is the beneficial owner of 331,414,830 shares of common stock, which consists of 400,002 common shares, 187,341,935 shares of common stock underlying warrants, and 143,672,893 shares of common stock underlying options.

(12) ~~Gerard~~Jeffrey C.Sakaguchi ~~D’Couto~~ is the beneficial owner of ~~331~~48,~~414~~415,~~830~~489 shares of common stock, which consists of ~~400~~10,~~002~~395,010 shares of common shares, ~~187~~35,~~341~~135,~~935~~086 shares of common stock underlying warrants, and ~~143~~2,~~672~~885,~~893~~393 shares of common stock underlying options.

(23) ~~David~~Jon ~~Schmidt~~Garfield is the beneficial owner of 4469,~~818~~252,~~748~~377 shares of common stock, which consists of 466,~~333~~351,~~355~~359 ~~common~~ shares ~~owned~~of bycommon ~~Advanced~~stock ~~Materials~~underlying ~~Advisory,~~warrants and 402,~~485~~901,~~393~~018 shares of common stock underlying options.

(34) ~~Jeffrey~~Sierra ~~Sakaguchi~~Trading Corp (“Sierra”) is a Florida corporation. We have been advised that Daisy Rodriguez owns 100% of Sierra. Daisy Rodriguez is a private investor married to the ~~beneficial~~primary ~~owner~~beneficiary of 42Summit Trading Limited. Sierra owns 629,~~312,820~~695 shares of ~~common~~our series B preferred stock, which ~~consists~~is ofconvertible ~~10,395,010~~at our sole option into shares of our common ~~shares~~stock. As of September 30, 292016 the shares would have been convertible into an estimated 505,~~032~~597,~~417~~111 shares of our common stock ~~underlying~~(the ~~warrants~~exact ~~and 2,885,393~~number of which is not determinable at this time because the Series B are convertible into shares of our common stock ~~underlying~~based ~~options~~on the future trading price of our common stock). The holders of the Series B are entitled to vote with the holders of our common stock with the number of votes equal to the number of common shares available by conversion to the holders of the Series B.

(45) ~~Jon~~Summit ~~Garfield~~Trading Limited (“Summit”) is a Bahamian holding company and is owned by the ~~beneficial~~Weast ~~owner~~Family Trust. The Weast Family Trust is a private trust established for the benefit of 57C.S. Arnold,~~114~~ Daisy Rodriguez,~~566~~ Stephanie Kaye and Tracia Fields. C.S. Arnold is the settlor of the Weast Family Trust. The natural person exercising voting control of the shares of our common stock held by Summit is Daryl Orenge. The address of Summit is Charlotte House, ~~which~~P.O. ~~consists~~Box N-65, Charlotte Street, Nassau, Bahamas. Summit owns 59,750 shares of 54our common stock and 592,~~213~~541 shares of our preferred series B stock,~~548~~ which is convertible at our sole option into shares of our common stock. ~~underlying~~As ~~warrants~~of ~~and~~September 230,~~901~~ 2016 the series B shares would have been convertible into an estimated 416,~~018~~410,000 shares of our common stock (the exact number of which is not determinable at this time because the Series B are convertible into shares of our common stock ~~underlying~~based ~~options~~on the future trading price of our common stock). The holders of the series B are entitled to vote with the holders of our common stock with the number of votes equal to the number of common shares available by conversion to the holders of the series B.

(5) Clean Tech Investors LLC is a Colorado Limited Liability Company; with a registered address of 88 Inverness Circle East L107, Englewood, CO 80112 that engages in the development of renewable energy initiatives, among other activities. William M Shenkin is a managing member of Clean Tech Investors LLC and Director of Neah Power Systems, Inc. Clean Tech Investors LLC is the beneficial owner of 46,934,216 shares of common stock.21

~~(6) The~~Table ~~address~~ of Bard Associates, Inc. is 135 South LaSalle Street, Suite 3700, Chicago, Illinois. Bard Associates, Inc. is the beneficial owner of 10,000,000 shares of common stock. Bard Associates, Inc. also has sole dispositive power over 84,421,577 shares of common stock. 99,640,000 underlying warrants expired during the twelve month period ending September 30, 2015. This information is obtained from company records and a Form SC 13G/A filed on March 17, 2015Contents

~~(7) The~~Description ~~address~~ of ~~Green~~Equity ~~World~~Incentive ~~Trust~~Compensation is 4093 Quakerbridge Road, Princeton Jct, NJ 08550. Green World Trust and Millennium Trust is the beneficial owner of 121,571,201 shares of common stock, which consists of 119,519,253 shares of common stock, and 2,051,948 shares of common stock underlying warrants. Plans

~~(8) Summit~~We Trading Limited (“Summit”) is a Bahamian holding company and is owned by the Weast Family Trust. The Weast Family Trust is a private trust established for the benefit of C.S. Arnold, Daisy Rodriguez, Stephanie Kaye and Tracia Fields. C.S. Arnold is the settlor of the Weast Family Trust. The natural person exercising voting control of the shares of our common stock held by Summit is Daryl Orenge. The address of Summit is Charlotte House, P.O. Box N-65, Charlotte Street, Nassau, Bahamas. Summit owns 26,741,955 shares of our common stock and 592,757 shares of our preferred series B stock, which is convertible at our sole option into shares of our common stock. As of September 30, 2015 the series B shares would have ~~been~~one ~~convertible~~

ITEM 1. BUSINESS

· MilitaryPourous Applicationssilicon fuel cells, batteries, and Formira HOD® system markets

Table of ContentsWarrants

DisputesNote with12 various– vendorsRelated party transactions

TableITEM of9. ContentsCHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

ThereITEM are9A. notCONTROLS andAND have not been any disagreements between us and our accountants on any matter of accounting principles, practices or financial statement disclosure.PROCEDURES

NoneITEM 9B. OTHER INFORMATION

BoardITEM of10. DirectorsDIRECTORS, andEXECUTIVE ExecutiveOFFICERS OfficersAND CORPORATE GOVERNANCE

19ITEM 11. EXECUTIVE COMPENSATION

Filing Compare · NEAH POWER SYSTEMS, INC.