Notes Payable, Related Parties | Notes Payable/Credit Facilities The following summarizes our notes payable as of June 30, 2016 and September 30, 2015 . June 30, September 30, Due Date Interest Rate Iowa State Bank, line of credit $ 500,000 $ 500,000 April 15, 2017 8% Iowa State Bank, notes payable 2,334,052 2,541,414 October 15, 2021 8% Other unsecured term notes payable 29,622 44,315 February 27, 2017 3.54% 2,863,674 3,085,729 Less current portion (876,110 ) (880,698 ) Notes payable, non-current portion $ 1,987,564 $ 2,205,031 Credit Facilities In October 2014 , we entered into a loan agreement and new working capital line of credit with Iowa State Bank in which we refinanced approximately $2,567,000 due to the bank under an existing loan agreement, $30,000 for transaction fees and $150,000 due one of our officers. Under the terms of the new term loan, we are required to make 82 monthly payments of $44,223 including principal and interest commencing January 15, 2015 , with the final payment of all principal and accrued interest not yet paid, due on October 15, 2021 . Iowa State Bank has provided a $500,000 working capital line of credit which was renewed on April 15, 2016 for an additional year. All borrowings under the term loan and the line of credit bear interest at a rate equal to the base rate on corporate loans posted by at least 70% of the 10 largest U.S. banks (known as The Wall Street Journal U.S. Prime Rate ) plus 4.0% , with a minimum interest rate of 8.0% per annum. Our obligations due Iowa State Bank continue to be secured by the grant of a first priority security interest in all of our assets including a $310,120 certificate of deposit. In addition, under the terms of a stock transfer agreement, should we fail to make any payment when due, we have agreed to issue Iowa State Bank that number of shares of common stock which is equal in value to the past due amount. For purposes of determining the number of shares of common stock to be issued under the stock transfer agreement, the value of our common stock will be deemed to be the closing price of the common stock on the date of such default. In no event, however, will we be obligated to issue more than 2,000,000 shares of the common stock under the stock transfer agreement. In addition, one director and two officers have each pledged 500,000 shares of our common stock owned by them in the aggregate, as additional collateral to Iowa State Bank. The credit facility also requires us to meet certain monthly loan covenants. As of June 30, 2016 , we were not in compliance with our working capital covenant but Iowa State Bank agreed to waive the default. We are currently in advanced discussions with Iowa State Bank regarding a potential restructuring of our obligations due the bank which could positively impact our financial condition and cash flows on a go forward basis. In conjunction with these discussions, Iowa State Bank has agreed to defer all interest and principal payments due under our term loan and working capital line starting in May 2016 pending completion of these discussions. At June 30, 2016, the total deferred payments of principal and interest were approximately $57,000 . We believe that ASC 470-60, "Troubled Debt Restructurings by Debtors" may apply if we are successful in our restructuring efforts and will evaluate the impact that this guidance will have on our results of operations, cash flows and financial position.There can be no assurance that such restructuring will ultimately happen or if it does, on favorable terms. Notes Payable, Related Parties June 30, September 30, Due Date Interest Rate Term Note Payable, Trident Resources, LLC $ 1,716,500 $ 1,716,500 Varying maturity dates 6% Term Note Payable, WPU Leasing, LLC 1,759,199 1,385,843 Varying maturity dates 22.2% Related Party Promissory Note 640,000 — July 31, 2016 10% Officer's Promissory Note 50,000 50,000 September 30, 2016 8% Contingent Convertible Notes Payable — 2,475,000 October 21, 2015 10% 4,165,699 5,627,343 Less current portion (1,432,865 ) (2,861,083 ) Notes payable, non-current portion $ 2,732,834 $ 2,766,260 Notes Payable-Related Party-Trident Resources, LLC On August 12, 2015, we purchased two processing systems from Trident for $1,716,500 and in return we issued Trident a promissory note for $832,000 , which was payable in 12 equal monthly installments of principal and interest at 6.75% commencing September 20, 2015 and a second secured promissory note for $884,500 , which was payable in 36 equal monthly installments of principal and interest at 6% commencing September 20, 2016. These notes are secured by liens on the purchased equipment. As of December 1, 2015, we amended and restated these two secured promissory notes and combined the obligations of the original notes into a new note for $1,716,500 which bears interest at 6% per year with 48 monthly payments of principal and interest estimated to initially begin on August 31, 2016 assuming the Trident NGL Services division meets specified production goals in the preceding month. If these productions goals are not met, the new note provides that we may defer payments otherwise due in any month following a month in which the production goals are not met to the maturity date, without incurring any additional interest. The amended and restated note also permits us to offset against amounts otherwise due under such note in the event of any default by Trident under their promissory note to the Company. Financing Agreement - WPU Leasing, LLC On August 24, 2015, we entered into a Secured Financing Agreement with WPU Leasing LLC, an accredited institutional investor, the members of which are affiliated with certain members of our Board of Directors. Pursuant to this agreement, WPU Leasing committed to loan us up to $3,250,000 to fund our purchase of two additional wellhead gas processing systems. Our initial note of $1,400,000 under the financing agreement was issued on August 24, 2015 and the second note of $500,000 was issued on October 9, 2015. The notes bear interest at the rate of 22.2% per annum, and are secured by a security interest in the purchased equipment and are guaranteed by the Company. In January 2016, we reached an agreement pursuant to which WPU Leasing agreed to defer cash payments on approximately 70% of the $1.9 million of debt outstanding. The deferral of payments reduces our cash outflow commitments by approximately $500,000 during fiscal 2016. WPU Leasing has the option, starting as June 30, 2016, of taking deferred and current payments in shares of our Common Stock (based on the 20 day volume weighted average price prior to conversion) which would again positively impact our cash flow position going forward. At June 30, 2016, a member of WPU Leasing, LLC which is affiliated with one of our Directors agreed to accept 1,209,857 shares of common stock (valued at $.14 per share) in lieu of cash for deferred principal and interest payments due as of June 30, 2016 of $169,379 . In consideration of WPU Leasing's commitment under the financing agreement, we issued to WPU Leasing's members warrants to purchase up to the lesser of (i) an aggregate of 3,250,000 shares of our Common Stock or (ii) one share of Common Stock for each dollar borrowed by the us under the related Loan Agreement. The initial exercise price of the warrants is $0.20 per share and are exercisable for a period of four years from the date of issue and may be exercised on a cashless basis. We determined the value of these warrants using the Black Scholes option pricing model and recorded deferred financing costs of $86,293 , which will be amortized over the term of the finance agreement. Related Party Promissory Note During the three months ended June 30, 2016, an entity affiliated with one of our Directors loaned us $640,000 , in aggregate under several unsecured promissory notes, bearing interest at 10% and which were July 31, 2016. On July 11, 2016, the entity agreed to convert the entire principal balance plus accrued interest of $4,661 into a private placement of Common Stock and warrants. (See Note 17). During July 2016, an entity affiliated with another Director loaned us $200,000 , in aggregate under the same terms with maturities ranging from July 31, 2016 to September 30, 2016. On July 11, 2016, the entity agreed to convert $100,000 of principal balance plus accrued interest of $250 into a private placement of Common Stock and warrants. Officer's Promissory Note In 2010, an officer loaned us $50,000 under an unsecured promissory note, the maturity of which has been extended several times. In May 2016, the officer agreed to extend the maturity of the outstanding $50,000 balance to September 30, 2016. Contingent Convertible Promissory Notes - Related Parties On June 2, 2015, we completed a private placement of $2.475 million of Contingent Convertible Promissory Notes with several existing shareholders and investors affiliated with members of our Board of Directors. The unsecured notes bear simple interest at the rate of 10% per annum and were automatically convertible into shares of Series C Convertible Preferred Stock at a conversion price of $10,000 per share upon the effectiveness of the filing of a Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock with the Secretary of State of Delaware. On October 21, 2015 the outstanding principal amount $2,475,000 , together with approximately $96,000 of accrued but unpaid interest, automatically was converted into approximately 257 shares of our Series C Convertible Preferred Stock . Each share of Series C Convertible Preferred Stock is convertible into shares of our common stock at a conversion price of $0.20 per share. Upon the conversion of the notes into shares of Series C Convertible Preferred Stock, we issued to the investors five year warrants to purchase 12,853,053 shares of common stock at an exercise price of $0.20 per share. (See Note 15). In addition, one of the investors, Arrow LLC, was granted the right under certain conditions to designate two members of our Board of Directors. We determined the discount on the contingent convertible promissory note to be $1,556,687 of which $906,874 was allocable to the warrants and $649,813 was allocable to the intrinsic value of the conversion feature. The discount was recorded as paid-in-capital and as non-cash financing expense on the date of the conversion and is included in the results for the nine months ended June 30, 2016 . In connection with this private placement, our securities purchase agreements dated April 30, 2012 and November 26, 2014 were amended to provide that the issuance of the Series C Convertible Preferred Stock would not trigger adjustments to the exercise price of the warrants issued in connection with those agreements (the “Prior Warrants”). We also amended the Prior Warrants to extend the term of any Prior Warrant held by the purchasers of the Notes (and their affiliates, members of their families and certain related trusts) as of the issuance of the Notes or subsequently acquired by such persons. The maximum period by which any Prior Warrant was extended is the difference between 60 months and the remaining term of the respective Prior Warrant as of the initial issuance of the Notes. The fair value of the warrants before and after the modification was determined using Black-Scholes and recorded on the balance sheet, and the difference between fair value of the extended terms and of the existing terms of $454,253 was recognized in the income statement as non-cash warrant extension expense during the fiscal year ended September 30, 2015. Each share of Series C Preferred Stock is convertible, at any time at the option of any holder, into 50,000 shares of the Company’s Common Stock, at a conversion price of $0.20 per share. The conversion ratio of the Series C Preferred Stock is subject to adjustment in the event that, with certain exceptions, we issue shares of Common Stock or other securities convertible into or exchangeable for Common Stock at a price per share that is less than the then applicable conversion price of the Series C Preferred Stock. The Series C Preferred Stock does not bear dividends. The holders of the Series C Preferred Stock vote with the holders of the Common Stock and the holders of the Company’s 10% Convertible Preferred Stock (the “Series A Preferred Stock”) and Series B 10% Convertible Preferred Stock on all matters presented to the holders of the Preferred Stock, on a Common Stock-equivalent basis. In addition to certain approval rights of the holders of the Series A Preferred Stock and/or the Series B Preferred Stock, the approval of the holders of at least 67% of the outstanding shares of Series C Preferred Stock will be required before we may take certain actions as described in the Certificate of Designation. The holders of the Series C Preferred Stock have priority in the event of a liquidation of the Company over the outstanding shares of Common Stock. Upon liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, before any distribution or payment is made to the holders of the Common Stock, the holders of the Preferred Stock will be entitled to be paid out of the assets of the Company an amount equal to the stated value of the Preferred Stock, which is initially $10,000 per share, plus (in the case of the Series A Preferred Stock and the Series B Preferred Stock) any accrued, but unpaid, dividends. The Preferred Stock may be required to convert into shares of Common Stock at our election if the trading price of the Common Stock meets certain thresholds as set forth in the Certificate of Designation. If we fail to meet certain obligations affecting the Preferred Stock, the holders of Preferred Stock may require the Company to redeem the Preferred Stock. The Series C Preferred Stock is subject to the rights and privileges of our Series D Convertible Preferred Stock, our Series D-2 Convertible Preferred Stock and our Series D-3 Convertible Preferred Stock. (See Note 15) |