<SEC-DOCUMENT>0001571049-16-016722.txt : 20160722
<SEC-HEADER>0001571049-16-016722.hdr.sgml : 20160722
<ACCEPTANCE-DATETIME>20160722160518
ACCESSION NUMBER:		0001571049-16-016722
CONFORMED SUBMISSION TYPE:	8-K/A
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20150911
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20160722
DATE AS OF CHANGE:		20160722

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			APPLIED DNA SCIENCES INC
		CENTRAL INDEX KEY:			0000744452
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-MISCELLANEOUS BUSINESS SERVICES [7380]
		IRS NUMBER:				592262718
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		8-K/A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-36745
		FILM NUMBER:		161779775

	BUSINESS ADDRESS:	
		STREET 1:		50 HEALTH SCIENCES DRIVE
		CITY:			STONY BROOK
		STATE:			NY
		ZIP:			11790
		BUSINESS PHONE:		631-240-8800

	MAIL ADDRESS:	
		STREET 1:		50 HEALTH SCIENCES DRIVE
		CITY:			STONY BROOK
		STATE:			NY
		ZIP:			11790

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PROHEALTH MEDICAL TECHNOLOGIES INC
		DATE OF NAME CHANGE:	20010504

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DCC ACQUISITION CORP
		DATE OF NAME CHANGE:	19990211

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DATALINK CAPITAL CORP/TX/
		DATE OF NAME CHANGE:	19980306
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K/A
<SEQUENCE>1
<FILENAME>t1600453_8ka.htm
<DESCRIPTION>FORM 8-K (AMENDMENT NO. 1)
<TEXT>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNITED STATES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>WASHINGTON, D.C. 20549</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FORM 8-K/A</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(AMENDMENT NO. 1)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CURRENT REPORT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PURSUANT TO SECTION 13 OR 15(d) OF THE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECURITIES EXCHANGE ACT OF 1934</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Date of Report (Date of earliest event reported):
September 11, 2015</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Applied DNA Sciences, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Exact name of registrant as specified in
its charter)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Delaware</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(State or other jurisdiction of<BR>
        incorporation)</P></TD>
    <TD STYLE="width: 33%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>001-36745</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Commission File Number)</P></TD>
    <TD STYLE="width: 33%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>59-2262718</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(IRS Employer No.)</P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>50 Health Sciences Drive</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Stony Brook, New York 11790</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Address of principal executive offices;
zip code)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Registrant&rsquo;s telephone number, including
area code: <B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>631-240-8800</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>N/A</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Former name or former address, if changed
since last report)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 95%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Wingdings; font-size: 10pt">&uml;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Wingdings; font-size: 10pt">&uml;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Wingdings; font-size: 10pt">&uml;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Wingdings; font-size: 10pt">&uml;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</FONT></TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Explanatory Note</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This Amendment No. 1 to Current Report on Form 8-K/A amends
the Current Report on Form 8-K (the &ldquo;Original Form 8-K&rdquo;) of Applied DNA Sciences, Inc. (&ldquo;we,&rdquo; &ldquo;us&rdquo;,
&quot;APDN&quot; or the &ldquo;Company&rdquo;), filed on September 17, 2015, regarding the Company&rsquo;s announcement that it
had entered into an Asset Purchase Agreement (the &ldquo;Asset Purchase Agreement&rdquo;) with Vandalia Research, Inc., a West
Virginia corporation (now known as VR Holdings, Inc., &ldquo;Vandalia&rdquo;), and Derek A. Gregg, Vandalia&rsquo;s Chief Executive
Officer and a director of Vandalia, providing for the purchase by the Company of substantially all the assets (&quot;Asset Acquisition&quot;)
of Vandalia as of September 11, 2015.&nbsp;The Asset Purchase Agreement has been previously filed as Exhibit 2.1 to the Original
Form 8-K. This Current Report on Form 8-K/A is being filed to provide certain audited financial statements and certain unaudited
pro forma information required by Item 9.01 of Form 8-K.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Item 9.01. Financial Statements and Exhibits.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(a) Financial Statements of Businesses Acquired.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The audited consolidated balance sheets of Vandalia as of December
31, 2014 and 2013 and the related consolidated statements of operations, consolidated statements of changes in stockholders' equity
(deficit) and consolidated statements of cash flows of Vandalia for the years ended December 31, 2014 and 2013 and the related
notes and the unaudited consolidated balance sheet of Vandalia as of June 30, 2015 and the related consolidated statement
of operations and consolidated statement of cash flows of Vandalia for the six months ended June 30, 2015 and 2014 and the related
notes are being filed as Exhibit 99.1 to this Current Report on Form 8-K/A.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(b) Pro Forma Financial Information.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The unaudited pro forma condensed combined statement of operations
for the Company and Vandalia for the fiscal year ended September 30, 2014, and unaudited pro forma condensed combined balance sheet
for the Company and Vandalia as of June 30, 2015 and the unaudited condensed combined statement of operations for the nine months
ended June 30, 2015 are being furnished as Exhibit 99.2 to this Current Report on Form 8-K/A. The fiscal year ended September 30,
2014 referenced in such unaudited pro forma statement of operations is the fiscal year of the Company. Because the fiscal year
of Vandalia ends on December 31 of each year, such unaudited pro forma statement of operations makes reference to the fiscal year
of Vandalia ended December 31, 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(d) Exhibits&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <TD STYLE="width: 12%; padding-left: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.1*</FONT></TD>
    <TD STYLE="width: 88%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Asset Purchase Agreement dated September 11, 2015 by
and among Applied DNA Sciences, Inc., Vandalia Research, Inc. and Derek A. Gregg.&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 0.5in">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">99.1</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Audited Financial
    Statements of Vandalia Research, Inc. and Subsidiary as of and for the years ended December 31, 2014 and 2013 and Unaudited
    Financial Statements of Vandalia Research, Inc. and Subsidiary as of June 30, 2015 and for the six months ended June 30, 2015
    and     2014.</FONT></TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

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<TR STYLE="vertical-align: top">
    <TD STYLE="width: 12%; padding-left: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">99.2</FONT></TD>
    <TD STYLE="width: 88%"><FONT STYLE="font-size: 10pt">Unaudited Pro Forma Consolidated Statement of Operations for Applied DNA Sciences, Inc. and Vandalia Research, Inc. for the fiscal year ended September 30, 2014 and nine months ended June 30, 2015, and unaudited Pro Forma Consolidated Balance Sheet for Applied DNA Sciences, Inc. and Vandalia Research, Inc. as of June 30, 2015.&nbsp;&nbsp;The fiscal year ended September 30, 2014 referenced in such unaudited pro forma statement of operations is the fiscal year of the Company. Because the fiscal year of Vandalia ends on December 31 of each year, such unaudited pro forma statement of operations makes reference to the fiscal year of Vandalia ended December 31, 2014.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">* Previously filed</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SIGNATURE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.</P>

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    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Date: July 22, 2016</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">APPLIED DNA SCIENCES, INC.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 51%">&nbsp;</TD>
    <TD STYLE="width: 6%">&nbsp;</TD>
    <TD STYLE="width: 43%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">By:</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/ James A. Hayward</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Name:</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">James A. Hayward</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Title:</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief Executive Officer</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>t1600453_ex99-1.htm
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
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<P STYLE="margin: 0">&nbsp;</P>

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<P STYLE="margin: 0; text-align: right"><B>Exhibit 99.1</B></P>

<P STYLE="margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>VANDALIA RESEARCH, INC. AND SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FOR THE YEARS ENDED DECEMBER 31, 2014
AND 2013 AND THE SIX MONTHS ENDED JUNE 30, 2015 AND 2014 (UNAUDITED)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>VANDALIA RESEARCH,INC. AND SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONTENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: Azure">
    <TD STYLE="width: 86%; text-align: justify"><FONT STYLE="font-size: 10pt"><B>Independent Auditors&rsquo; Report</B></FONT></TD>
    <TD STYLE="width: 14%; text-align: right"><FONT STYLE="font-size: 10pt">1</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: Azure">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B>Consolidated Financial Statements</B></FONT></TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: Azure">
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font-size: 10pt">Balance Sheets</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">2</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font-size: 10pt">Statements of Operations</FONT></TD>
    <TD STYLE="text-align: right">3</TD></TR>
<TR STYLE="vertical-align: top; background-color: Azure">
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font-size: 10pt">Statements of Changes in Stockholders&rsquo; Equity</FONT></TD>
    <TD STYLE="text-align: right">4</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font-size: 10pt">Statements of Cash Flows</FONT></TD>
    <TD STYLE="text-align: right">5</TD></TR>
<TR STYLE="vertical-align: top; background-color: Azure">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><B>Notes to Consolidated Financial Statements</B></FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">6-20</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INDEPENDENT AUDITORS&rsquo; REPORT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To the Board of Directors and Stockholders
of</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Vandalia Research, Inc. and Subsidiary</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Report on the Financial Statements</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have audited the accompanying financial
statements of Vandalia Research, Inc. and Subsidiary<B> </B>(the &ldquo;Company&rdquo;), which comprise the consolidated<B> </B>balance
sheets as of December 31, 2014 and 2013, and the related consolidated<B> </B>statements of  operations, changes in stockholders&rsquo;
equity and cash flows for the years then ended, and the related notes to the financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Management&rsquo;s Responsibility for the Financial Statements</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Management is responsible for the preparation
and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United
States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and
fair presentation of <B> </B>financial statements that are free from material misstatement, whether due to fraud or error.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Auditors&rsquo; Responsibility</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our responsibility is to express an opinion
on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free from material misstatement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">An audit involves performing procedures
to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the
auditors&rsquo; judgment, including the assessment of the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity&rsquo;s
preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity&rsquo;s internal control. Accordingly,
we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness
of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our audit opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Opinion</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In our opinion, the
financial statements referred to above present fairly, in all material respects, the consolidated financial position of
Vandalia Research, Inc. and Subsidiary<B> </B>as of December 31, 2014 and 2013, and the consolidated results of its
operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the
United States of America.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Melville, NY</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">July 22, 2016</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>VANDALIA RESEARCH, INC. AND SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONSOLIDATED BALANCE SHEETS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>December 31,</B></FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>December 31,</B></FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>June 30,</B></FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 2px"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 2px solid"><FONT STYLE="font-size: 10pt"><B>2014</B></FONT></TD><TD NOWRAP STYLE="padding-bottom: 2px; font-weight: bold"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 2px"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 2px solid"><FONT STYLE="font-size: 10pt"><B>2013</B></FONT></TD><TD NOWRAP STYLE="padding-bottom: 2px; font-weight: bold"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 2px"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 2px solid"><FONT STYLE="font-size: 10pt"><B>2015</B></FONT></TD><TD NOWRAP STYLE="padding-bottom: 2px; font-weight: bold"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt"><B>(unaudited)</B></FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: center">ASSETS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Current assets:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="width: 61%; text-align: left">Cash and cash equivalents</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">62,851</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">75,087</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">25,934</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accounts receivable, net of allowance</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">142,339</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">180,523</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">184,518</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>Inventories</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">238,234</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">155,015</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">103,199</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Deferred tax asset</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">558,256</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-bottom: 2px">Prepaid expenses and other current assets</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">2,727</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">7,172</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">2,727</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Total current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">446,151</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">417,797</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">874,634</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Property, and equipment-net of accumulated depreciation of $227,726, $213,179, and&nbsp;&nbsp;$233,870
    (unaudited) at December 31, 2014, 2013 and June 30,&nbsp;&nbsp;2015, respectively</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">44,807</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33,619</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">38,663</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Other assets:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="padding-bottom: 2px">Deposits</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">10,000</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">10,000</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">10,000</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-bottom: 4px">Total Assets</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">500,958</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">461,416</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">923,297</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: center">LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Current liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accounts payable and accrued liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">207,507</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">318,794</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">291,596</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>Line of credit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">157,945</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">156,213</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">157,908</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2px">Current portion of related party term loan</TD><TD STYLE="font-weight: bold; padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">2,859</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Total current liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">365,452</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">475,007</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">452,363</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-bottom: 2px">Related party term loan, including accrued interest expense</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">26,041</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">25,106</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">23,913</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-bottom: 4px">Total Liabilities</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">391,493</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">500,113</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">476,276</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Commitments and Contingencies</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Stockholders' Equity (Deficit)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Preferred stock, par value $0.01 per share; 112,528 shares authorized, issued and outstanding as of December 31, 2014,
    2013 and June 30, 2015 (unaudited)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,125</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,125</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,125</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Common stock, par value $0.01 per share; 414,472 shares authorized; 254,100 issued and outstanding as of December 31,
    2014, 2013 and June 30, 2015 (unaudited)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,541</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,541</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,541</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Additional paid in capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,574,086</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,567,215</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,577,522</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2px">Accumulated deficit</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(2,591,475</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(2,730,633</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(2,261,572</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Total stockholders' equity (deficit), attributable to Vandalia Research, Inc.</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(13,723</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(159,752</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">319,616</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2px">Noncontrolling interest</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">123,188</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">121,055</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">127,405</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Total stockholders' equity (deficit)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">109,465</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(38,697</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">447,021</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-bottom: 4px">Total Liabilities and Stockholders' Equity (Deficit)</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">500,958</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">461,416</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">923,297</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>See the accompanying notes to the consolidated
financial statements</I><FONT STYLE="font-size: 10pt"> </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>VANDALIA RESEARCH, INC. AND SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONSOLIDATED STATEMENTS OF OPERATIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Year&nbsp;ended&nbsp;December&nbsp;31,</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 10pt">Six&nbsp;Months&nbsp;Ended</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid"><FONT STYLE="font-size: 10pt">2014</FONT></TD><TD NOWRAP STYLE="padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid"><FONT STYLE="font-size: 10pt">2013</FONT></TD><TD NOWRAP STYLE="padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid"><FONT STYLE="font-size: 10pt">June&nbsp;30,&nbsp;2015</FONT></TD><TD NOWRAP STYLE="padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid"><FONT STYLE="font-size: 10pt">June&nbsp;30,&nbsp;2014</FONT></TD><TD NOWRAP STYLE="padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: right"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 10pt">(unaudited)</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 10pt">(unaudited)</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="width: 48%; text-align: left">Net Sales</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">950,603</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">740,522</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">223,154</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">521,175</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2px">Cost of Sales</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">361,659</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">453,580</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">266,637</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">245,206</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2px">Gross Margin</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">588,944</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">286,942</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(43,483</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">275,969</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Operating expenses:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Selling, general and administrative</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">416,244</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">708,851</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">163,907</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">215,351</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2px">Depreciation and amortization</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">14,546</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">10,706</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">6,144</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">5,353</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2px">Total operating expenses</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">430,790</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">719,557</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">170,051</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">220,704</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">INCOME (LOSS) FROM OPERATIONS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">158,154</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(432,615</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(213,534</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">55,265</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Other income (expense):</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Other income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,220</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2px">Interest expense, net</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(16,863</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(4,616</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(10,602</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(7,078</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Net Income (loss) before provision for income taxes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">141,291</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(419,011</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(224,136</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">48,187</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2px">Income tax benefit</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(558,256</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2px">NET INCOME (LOSS)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">141,291</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(419,011</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">334,120</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">48,187</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-bottom: 2px">Income (Loss) attributable to noncontrolling interest</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">2,133</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(13,931</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">4,217</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">2,313</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-bottom: 4px">Net Income (loss) attributable to Vandalia Research, Inc.</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">139,158</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">(405,080</TD><TD STYLE="padding-bottom: 4px; text-align: left">)</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">329,903</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">45,874</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>See the accompanying notes to the consolidated
financial statements</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>VANDALIA RESEARCH, INC. AND SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONSOLIDATED STATEMENTS OF CHANGES IN
STOCHOLDERS' EQUITY (DEFICIT)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Preferred</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Preferred<BR> Stock</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Common</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Common<BR> Stock</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Additional<BR> Paid&nbsp;in</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Accumulated</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Non-<BR> controlling</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Total</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">Shares</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">Amount</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">Shares</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">Amount</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">Capital</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">Deficit</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">Total</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">interest</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">Equity</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="width: 10%">Balance, January 1, 2013</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">112,528</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">1,125</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">254,100</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">2,541</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">2,556,332</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">(2,325,553</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">234,445</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: right">134,986</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">369,431</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Stock based compensation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,883</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,883</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,883</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2px">Net loss</TD><TD STYLE="font-weight: bold; padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(405,080</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(405,080</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(13,931</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(419,011</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2px">Balance, December 31, 2013</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">112,528</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">1,125</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">254,100</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">2,541</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">2,567,215</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(2,730,633</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(159,752</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">121,055</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(38,697</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Stock based compensation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">-</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">-</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,871</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">-</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,871</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,871</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2px">Net income</TD><TD STYLE="font-weight: bold; padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">139,158</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">139,158</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">2,133</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">141,291</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2px">Balance, December 31, 2014</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">112,528</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">1,125</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">254,100</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">2,541</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">2,574,086</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(2,591,475</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(13,723</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">123,188</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">109,465</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Stock based compensation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">-</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">-</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,436</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,436</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,436</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2px">Net income</TD><TD STYLE="font-weight: bold; padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; font-weight: bold; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">329,903</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">329,903</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">4,217</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">334,120</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4px">Balance, June 30, 2015 (unaudited)</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">112,528</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">1,125</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">254,100</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">2,541</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">2,577,522</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">(2,261,572</TD><TD STYLE="padding-bottom: 4px; text-align: left">)</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">319,616</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">127,405</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">447,021</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>See the accompanying notes to the consolidated
financial statements</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>VANDALIA RESEARCH, INC. AND SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONSOLIDATED STATEMENTS OF CASHFLOWS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 10pt">Year ended<br><B>December&nbsp;31,</B></FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center">Six months ended<br><FONT STYLE="font-size: 10pt"><B>June&nbsp;30,</B></FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 2px"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 2px solid"><FONT STYLE="font-size: 10pt"><B>2014</B></FONT></TD><TD STYLE="padding-bottom: 2px; font-weight: bold"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 2px"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 2px solid"><FONT STYLE="font-size: 10pt"><B>2013</B></FONT></TD><TD STYLE="padding-bottom: 2px; font-weight: bold"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 2px"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 2px solid"><FONT STYLE="font-size: 10pt"><B>2015</B></FONT></TD><TD STYLE="padding-bottom: 2px; font-weight: bold"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 2px"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 2px solid"><FONT STYLE="font-size: 10pt"><B>2014</B></FONT></TD><TD STYLE="padding-bottom: 2px; font-weight: bold"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="6" STYLE="text-align: center"><FONT STYLE="font-size: 10pt">(unaudited)</FONT></TD><TD><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Cash flows from operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 48%; text-align: left">Net income (loss)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">141,291</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">(419,011</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">334,120</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">48,187</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Adjustments to reconcile net income (loss) to net used in operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Depreciation and amortization</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,546</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,706</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,144</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,353</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Deferred tax benefit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(558,256</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Stock based compensation expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,871</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,883</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,436</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,436</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Interest paid in kind on term loan</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">935</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">731</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">418</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-style: italic; text-align: left">Change in operating assets and liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Accounts receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">38,184</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">157,771</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(42,179</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,943</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Prepaid expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,446</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,349</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,846</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>Inventories</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(83,219</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,276</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">135,035</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(58,456</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Security deposit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-bottom: 2px">Accounts payable and accrued liabilities</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(111,287</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">162,124</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">84,089</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">29,321</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Net cash provided by (used in) operating activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,767</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(71,600</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(36,880</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29,162</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Cash flows from investing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-bottom: 2px">Purchase of property and equipment</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(25,734</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(29,785</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(25,734</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Net cash used in investing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(25,734</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(29,785</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(25,734</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Cash flows from financing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Repayment of term loan</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(23,377</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2px">Net proceeds (repayments) lines of credit</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">1,731</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">23,350</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(37</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">35,708</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Net cash provided by (used in) financing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,731</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(27</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(37</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">35,708</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Net (decrease) increase in cash and cash equivalents</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(12,236</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(101,412</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(36,917</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">39,136</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2px">Cash and cash equivalents at beginning of period</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">75,087</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">176,499</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">62,851</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">75,087</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-bottom: 4px">Cash and cash equivalents at end of period</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">62,851</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">75,087</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">25,934</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">114,223</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Supplemental Disclosures of Cash Flow Information:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4px">Cash paid during period for interest</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">15,928</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">4,616</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">9,871</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">6,455</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><I>See the accompanying
notes to the consolidated financial statements</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>VANDALIA RESEARCH, INC. AND SUBSIDIAIRES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>FOR THE YEARS
    ENDED DECEMBER 31, 2014 AND 2013 AND THE SIX MONTHS </B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>ENDED JUNE 30, 2015 (unaudited)</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-variant: small-caps"><B>Note
1 - Summary of Significant Accounting Policies</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B><I>Nature
of Business</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">Vandalia Research, Inc.
(&ldquo;Vandalia&rdquo;) was incorporated in West Virginia on September 9, 2005. Vandalia owns approximately 89% of
Crosscutting Concepts, LLC (&quot;Crosscutting&quot;) and is deemed to have a controlling interest in Crosscutting. Vandalia
and its majority owned subsidiary, Crosscutting are referred to herein as the &ldquo;Company&rdquo;. The Company primarily
engages in the production of specific high-quality DNA sequences as well as the production of educational scientific kits.
The Company sells its products primarily in the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B><I>Principles
of Consolidation and Basis of Presentation</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">The consolidated financial
statements include the accounts of Vandalia and its majority owned subsidiary, Crosscutting. All intercompany accounts and transactions
have been eliminated upon consolidation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B><I>Cash
and Cash Equivalents</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">For the purposes of the statement
of cash flows, the Company considers all short-term investments with an original maturity of three months or less to be cash equivalents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">In addition, the Company places
its cash deposits and temporary cash investments with financial institutions that at times may be uninsured or in deposit accounts
that exceed the Federal Deposit Insurance Corporation (&ldquo;FDIC&rdquo;) insurance limit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B><I>Allowance
for Doubtful Accounts</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">The allowance for doubtful
accounts reflects management's best estimate of probable losses inherent in the accounts receivable balance. Management determines
the allowance based on known troubled accounts, historical experience, and other currently available evidence.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in"><FONT STYLE="font-variant: small-caps"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in"><FONT STYLE="font-variant: small-caps"><B><I>Inventories</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">Inventories, which consist
primarily of raw materials, work in process, and finished goods (see Note 2), is stated at the lower of cost or market, with cost
determined by using the first-in, first-out (FIFO) method.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B><I></I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>VANDALIA
                                         RESEARCH, INC. AND SUBSIDIAIRES</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: bold 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-size: 10pt"><B>FOR THE YEARS
    ENDED DECEMBER 31, 2014 AND 2013 AND THE SIX MONTHS </B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>ENDED JUNE 30, 2015 (unaudited)</B></FONT></TD></TR></TABLE>


<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-variant: small-caps"><B>Note
1 - Summary of Significant Accounting Policies (continued)</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-variant: small-caps"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B><I>Property
and Equipment</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">Property and equipment are
stated at cost. Maintenance and repairs are charged to expense as incurred; costs of major additions and betterments are capitalized.
When property and equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are eliminated from
the accounts and any resulting gain or loss is reflected in the statement of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B><I>Depreciation</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">Depreciation is provided for
using the straight-line method over the estimated useful lives of the related assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B><I>Revenue
Recognition</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">The Company primarily derives
revenue from the sales of DNA sequences and science kits to its various customers. The Company recognizes product sales revenue
when title and risk of loss have transferred to the customer, there is persuasive evidence of an arrangement, shipment and passage
of title has occurred, the sales price is fixed or determinable and collectability is reasonably assured.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">Revenue from government contract
awards, which supports the Company's development efforts on specific projects, is recognized as milestones are achieved as per
the contract. The Company recognized revenue of $92,925 during the year ended December 31, 2013. There was no grant revenue recognized
during the year ended December 31, 2014 or the six months ended June 30, 2015 and 2014. In addition, the Company received $18,220
during the year ended December 31, 2013 as a grant for the purchase of an analytical system, which is included in other income
on the consolidated statements of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>VANDALIA RESEARCH, INC. AND SUBSIDIAIRES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>FOR THE YEARS
    ENDED DECEMBER 31, 2014 AND 2013 AND THE SIX MONTHS </B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>ENDED JUNE 30, 2015 (unaudited)</B></FONT></TD></TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-variant: small-caps"><B>Note
1 - Summary of Significant Accounting Policies (continued)</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B><I>Use
of Estimates in the Financial Statements</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">The preparation of financial
statements in conformity with accounting principles generally accepted in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ significantly from those estimates. The most significant estimates include: inventory valuation
and income taxes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B><I>Long-Lived
Assets</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">The Company reviews long-lived
assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Recoverability is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated
by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which
the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of
the carrying amount or fair value less costs to sell.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B><I>Stock
Based Compensation</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">The Company accounts for stock-based
compensation for employees utilizing a fair value methodology. The fair value methodology requires all share-based payments to
employees, including grants of employee stock options, to be recognized in the statement of operations based on their fair values.
Under the fair value methodology, stock-based compensation costs are measured at the grant date, based on the fair value of the
award, and are recognized as expense over the employee's requisite service period (generally the vesting period of the equity
grant). The fair value of the Company's common stock options are estimated using the Black Scholes option-pricing model with the
following assumptions: expected volatility, dividend rate, risk free interest rate and the expected life. The Company expenses
stock-based compensation by using the straight-line method.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">The Company recorded stock
based compensation expense of $6,871, $10,883, $3,436 (unaudited) and $3,436 (unaudited) for the years ended December 31, 2014
and 2013 and the six months ended June 30, 2015 and 2014, respectively. There were 1,912 and 1,237 (unaudited) unvested options
as of December 31, 2014 and June 30, 2015, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>VANDALIA RESEARCH, INC. AND SUBSIDIAIRES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>FOR THE YEARS
    ENDED DECEMBER 31, 2014 AND 2013 AND THE SIX MONTHS </B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>ENDED JUNE 30, 2015 (unaudited)</B></FONT></TD></TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-variant: small-caps"><B>Note
1 - Summary of Significant Accounting Policies (continued)</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B><I>Advertising
Costs</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">The Company follows the policy
of charging the costs of advertising to expense as incurred. Advertising costs for the years ended December 31, 2014 and 2013
and the six months ended June 30, 2015 and 2014 were $2,427, $24,341, $104 (unaudited) and $2,428 (unaudited), respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B><I>Shipping
and Handling Costs</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">The Company incurs shipping
and handling costs in its operations. The shipping and handling costs incurred by the Company and billed to its customers was
insignificant for the years ended December 31, 2014 and 2013 and the six months ended June 30, 2015 and 2014. The Company&rsquo;s
shipping and handling costs are included in cost of sales in the accompanying consolidated statements of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B><I>Income
Taxes</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">The Company accounts for income
taxes in accordance with ASC 740, Income Taxes (&ldquo;ASC 740-10&rdquo;) which requires the recognition of deferred tax liabilities
and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns.
Under this method, deferred tax liabilities and assets are determined based on the difference between financial statements and
tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.
Temporary differences between taxable income reported for financial reporting purposes and income tax purposes include, but not
limited to, equity based compensation and depreciation. The Company evaluates the recoverability of deferred tax assets and establishes
a valuation allowance when it is more likely than not that some portion or all of the deferred tax asset will not be realized.
The accounting for uncertainty in income taxes prescribes a recognition threshold and measurement of a tax position taken or expected
to be taken in an income tax return. It also provides guidance in de-recognition, classification, interest and penalties, accounting
in interim periods, disclosures and transition. The Company recognizes such tax benefits based upon the tax position being more-likely-than-not
to be sustained upon examination by taxing authorities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">The Company&rsquo;s policy
for recording interest and penalties is to record such items as a component of income before income taxes. Penalties are recorded
in general and administrative expenses and interest paid or received is recorded in interest expense or interest income, respectively,
in the statement of operations. There were no amounts accrued for penalties or interest as of or during years ended December 31,
2014 and 2013 or as of or during the six months ended June 30, 2015 and 2014. The Company does not expect its unrecognized tax
benefit position to change during the next twelve months. Management is currently unaware of any issues under review that could
result in significant payments, accruals or material deviations from its position.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>VANDALIA RESEARCH, INC. AND SUBSIDIAIRES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>FOR THE YEARS
    ENDED DECEMBER 31, 2014 AND 2013 AND THE SIX MONTHS </B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>ENDED JUNE 30, 2015 (unaudited)</B></FONT></TD></TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-variant: small-caps"><B>Note
1 - Summary of Significant Accounting Policies (continued)</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B><I>Income
Taxes (continued)</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">The Company has identified
its Federal tax return and its State tax return in West Virginia as &ldquo;major&rdquo; tax jurisdictions. Based on the Company&rsquo;s
evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company&rsquo;s
financial statements. The Company&rsquo;s evaluation was performed for tax years ended 2012 through 2014, the only periods subject
to examination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B><I>Subsequent
Events</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">The Company has evaluated subsequent
events occurring after the balance sheet date through July 22, 2016, which is the date of issuance of the financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>VANDALIA RESEARCH, INC. AND SUBSIDIAIRES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>FOR THE YEARS
    ENDED DECEMBER 31, 2014 AND 2013 AND THE SIX MONTHS </B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>ENDED JUNE 30, 2015 (unaudited)</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-variant: small-caps"><B>Note 2 - Inventories</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">Inventories consist of the
following at December 31, 2014, 2013 and June 30, 2015:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 95%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.35in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="text-align: center">December&nbsp;31,</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">June&nbsp;30,</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">2014</TD><TD NOWRAP STYLE="border-bottom: Black 2px solid">&nbsp;</TD><TD NOWRAP STYLE="border-bottom: Black 2px solid">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">2013</TD><TD NOWRAP STYLE="border-bottom: Black 2px solid">&nbsp;</TD><TD NOWRAP STYLE="border-bottom: Black 2px solid">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">2015<BR> (unaudited)</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="width: 61%; text-align: left">Raw materials</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">195,064</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">113,152</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">44,786</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Work in-process</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,295</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,307</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,885</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-bottom: 2px">Finished goods</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">31,875</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">30,556</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">38,528</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="font-weight: bold; padding-bottom: 4px">Total</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">238,234</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">155,015</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">103,199</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-variant: small-caps"><B>Note 3 - Property
and Equipment</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">Property and equipment consists
of the following at December 31, 2014, 2013 and June 30, 2015:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 95%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.35in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="text-align: center">December&nbsp;31,</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">June&nbsp;30,</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">Estimated</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">2014</TD><TD NOWRAP STYLE="border-bottom: Black 2px solid">&nbsp;</TD><TD NOWRAP STYLE="border-bottom: Black 2px solid">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">2013</TD><TD NOWRAP STYLE="border-bottom: Black 2px solid">&nbsp;</TD><TD NOWRAP STYLE="border-bottom: Black 2px solid">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">2015<BR> (unaudited)</TD><TD NOWRAP STYLE="border-bottom: Black 2px solid">&nbsp;</TD><TD NOWRAP STYLE="border-bottom: Black 2px solid">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">Useful&nbsp;Lives</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="width: 48%; text-align: left">Machinery and equipment</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">272,533</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">246,798</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">272,533</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 12%; text-align: right">3 years</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: 0.3pt; padding-left: 21pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Less: accumulated depreciation <BR></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2px solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2px solid">(227,726</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2px solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2px solid">(213,179</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2px solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2px solid">(233,870</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: right; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4px">Property and Equipment, Net</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">44,807</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">33,619</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">38,663</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="text-decoration: none; padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="text-decoration: none; text-align: right; padding-bottom: 4px">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">Depreciation expense for the
years ended December 31, 2014 and 2013 and the six months ended June 30, 2015 and 2014 were $14,546, $10,706, $6,144 (unaudited)
and $5,353 (unaudited), respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>VANDALIA RESEARCH, INC. AND SUBSIDIAIRES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>FOR THE YEARS
    ENDED DECEMBER 31, 2014 AND 2013 AND THE SIX MONTHS </B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>ENDED JUNE 30, 2015 (unaudited)</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-variant: small-caps"><B>Note
4 - Lines of Credit</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">Vandalia had entered into a
$100,000 line of credit agreement with a bank. Borrowings under the line of credit agreement bear interest at the Prime Rate plus
1.0%. The interest rate at December 31, 2014, 2013 and June 30, 2015 (unaudited) was 4.25%. The line of credit is due on demand.
The borrowings under the line of credit are secured by substantially all assets of Vandalia. The Company had an outstanding balance
of $99,323, $96,445 and $99,312 (unaudited) under the line of credit as of December 31, 2014, 2013 and June 30, 2015, respectively.
This line was paid in full on September 11, 2015 with a portion of the funds received from the asset purchase agreement with Applied
DNA Sciences, Inc., detailed in Note 12.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">Crosscutting has a $100,000
line of credit agreement with a bank. Borrowings under the line of credit agreement bear interest at the Prime Rate plus 2.0%.
The interest rate at December 31, 2014, 2013 and June 30, 2015 (unaudited) was 5.25%. The borrowings under the line of credit
are secured by substantially all assets of Crosscutting. This loan was renewed on October 3, 2015 and matures on October 3, 2016.
The Company had an outstanding balance of $58,622, $59,768 and $58,596 (unaudited) under the line of credit as of December 31,
2014 and 2013 and June 30, 2015, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-variant: small-caps"><B>Note 5 - Related
Party Term Loan</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">On December 11, 2012, the Company
entered into a term loan with the spouse of a shareholder of the Company for $25,000. The term loan bears interest at a rate of
5.0% and expires on December 1, 2019. Payments for principal and interest are due commencing on March 1, 2016 and payable in quarterly
installments of $1,734, thereafter until maturity. Accrued interest on this loan as of December 31, 2014, 2013 and June 30, 2015
was $1,041, $106 and $1,772 (unaudited), respectively and is included in the term loan balance on the accompanying consolidated
balance sheet.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">Future minimum principal maturities under this debt
agreement are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 60%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">For&nbsp;the&nbsp;Year<BR> Ended&nbsp;December&nbsp;31,</TD><TD NOWRAP STYLE="border-bottom: Black 2px solid">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">Amount</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: center">2015</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 77%; text-align: center">2016</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 20%; text-align: right">5,790</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: center">2017</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,088</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center">2018</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,398</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: center; padding-bottom: 2px">2019</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">6,724</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 4px">Total</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">25,000</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>VANDALIA RESEARCH, INC. AND SUBSIDIAIRES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>FOR THE YEARS
    ENDED DECEMBER 31, 2014 AND 2013 AND THE SIX MONTHS </B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>ENDED JUNE 30, 2015 (unaudited)</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-variant: small-caps"><B>Note 6 - Stockholders&rsquo;
Equity</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B><I>Common
and Preferred Stock</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">The Company has both common
and preferred stock. The preferred stockholders are entitled to dividends at a rate of 8.0% of the original purchase price, per
year. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, as defined, the preferred
stockholders also have the right to be paid out in full before any payment shall be made to the common stockholders. The preferred
stock is convertible, at the option of the holder, into shares of the Company's common stock at the initial preferred stock conversion
price of $13.33, subject to adjustment, as defined per the agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-variant: small-caps"><B>Note
7 - Income Taxes</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: justify">The provision for income taxes
included for the years ended December 31, 2014 and 2013 consists of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.5in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">2014</TD><TD NOWRAP STYLE="border-bottom: Black 2px solid">&nbsp;</TD><TD NOWRAP STYLE="border-bottom: Black 2px solid">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">2013</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>Current:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt">Federal</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-bottom: 2px; padding-left: 9pt">State and Local</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2px">Total Current</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Deferred:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="width: 74%; padding-left: 9pt">Federal</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">(52,562</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">136,332</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">State and Local</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,336</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,457</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="padding-bottom: 4px">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2px">Change in valuation allowance</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">58,898</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(152,789</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2px">Total Deferred</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; padding-bottom: 4px">Total</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>


<!-- Field: Page; Sequence: 15; Value: 1 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>VANDALIA RESEARCH, INC. AND SUBSIDIAIRES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>FOR THE YEARS
    ENDED DECEMBER 31, 2014 AND 2013 AND THE SIX MONTHS </B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>ENDED JUNE 30, 2015 (unaudited)</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-variant: small-caps"><B>Note 7 - Income Taxes
(continued)</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: justify">The provision for income taxes
included for the six months ended June 30, 2015 and 2014(unaudited) consists of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.5in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">2015</TD><TD NOWRAP STYLE="border-bottom: Black 2px solid">&nbsp;</TD><TD NOWRAP STYLE="border-bottom: Black 2px solid">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">2014</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>Current:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt">Federal</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-bottom: 2px; padding-left: 9pt">State and Local</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2px">Total Current</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Deferred:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="width: 74%; padding-left: 9pt">Federal</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right"><FONT STYLE="font-size: 10pt">(76,
                                         992</FONT></TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">(11,004</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">State and Local</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(9,294</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,328</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2px">Change in valuation allowance</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(471,970</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">12,332</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2px">Total Deferred</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(558,256</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; padding-bottom: 4px">Total</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">(558,256</TD><TD STYLE="padding-bottom: 4px; text-align: left">)</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">-</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">Deferred income taxes reflect
the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes. A valuation allowance is required if, based on the weight of available evidence,
it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of December 31, 2014 and
2013, based on current income projections, management concluded that it is more likely than not that the Company will not realize
any benefits from the deferred tax assets recorded by the Company in previous periods. As of June 30, 2015, based on the sale
of the assets in September 2015 as disclosed in Note 12, management concluded that it is more likely than not that the Company
will utilize certain of its net operating losses and as such reduced its deferred tax valuation allowance by $471,970.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>VANDALIA RESEARCH, INC. AND SUBSIDIAIRES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>FOR THE YEARS
    ENDED DECEMBER 31, 2014 AND 2013 AND THE SIX MONTHS </B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>ENDED JUNE 30, 2015 (unaudited)</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-variant: small-caps"><B>Note 7 - Income Taxes
(continued)</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">The tax effects of temporary
differences that give rise to significant portions of the deferred tax assets at December 31, 2014 and 2013 and June 30, 2015
are presented as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="text-align: center">December 31,</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">June 30,</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">2014</TD><TD NOWRAP STYLE="border-bottom: Black 2px solid">&nbsp;</TD><TD NOWRAP STYLE="border-bottom: Black 2px solid">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">2013</TD><TD NOWRAP STYLE="border-bottom: Black 2px solid">&nbsp;</TD><TD NOWRAP STYLE="border-bottom: Black 2px solid">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">2015</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Deferred tax assets, current</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 10pt">(unaudited)</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-left: 9pt; width: 61%">&nbsp;Allowance for doubtful accounts</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">79</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">79</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">79</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">&nbsp;Net operating loss carryforwards</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">558,256</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2px">Total Deferred Tax Assets, current</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">79</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">79</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">558,335</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="font-weight: bold; text-align: left">Deferred tax assets, long-term</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Net operating loss carryforwards</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">952,644</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,006,908</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">482,313</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-bottom: 2px; padding-left: 9pt">Investment in subsidiary</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">42,252</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">45,576</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">39,083</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2px">Total Long-Term Deferred Tax Assets</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">994,896</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">1,052,484</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">1,079,731</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="font-weight: bold; text-align: left">Deferred tax liabilities, long-term</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2px; padding-left: 9pt">Property and equipment</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(9,242</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(7,932</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(7,712</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2px">Net Deferred Tax Assets</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">985,733</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right"><FONT STYLE="font-size: 10pt"><U STYLE="text-decoration: none">&nbsp;1,044,
                                         631</U></FONT></TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">1,072,019</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2px">Less: valuation allowance</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(985,733</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(1,044,631</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(513,763</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 4px">Total Net Deferred Tax Assets</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">558,256</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">At December 31, 2014 and June
30, 2015, the Company has net operating losses of approximately $2,428,667 and $2,652,821 (unaudited) expiring at various dates
through 2035.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>VANDALIA RESEARCH, INC. AND SUBSIDIAIRES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>FOR THE YEARS
    ENDED DECEMBER 31, 2014 AND 2013 AND THE SIX MONTHS </B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>ENDED JUNE 30, 2015 (unaudited)</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-variant: small-caps"><B>Note 8 - Commitments
and Contingencies</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt"><FONT STYLE="font-variant: small-caps"><B><I>Litigation</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: justify">From time to time, the Company
may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. When the Company
is aware of a claim or potential claim, it assesses the likelihood of any loss or exposure. If it is probable that a loss will
result and the amount of the loss can be reasonably estimated, the Company will record a liability for the loss. In addition to
the estimated loss, the recorded liability includes probable and estimable legal costs associated with the claim or potential
claim. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to
time that may harm the Company&rsquo;s business.&nbsp;There is no pending litigation involving the Company at this time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B><I>Lease
Agreements</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">The Company has a lease commitment
under a non-cancelable operating lease which expired in November 2014, principally for equipment and facilities and was on a month
to month status until March 1, 2015. On March 1, 2015, the Company entered into a lease agreement with annual rent of $93,600.
The Company has two subleases for a portion of its facility. The one sublease was from September 1, 2011 and expired on August
31, 2013. The other sublease commenced during October 2009 and is on a month to month basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">Future minimum lease payments
under these operating leases are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 60%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">For&nbsp;the&nbsp;Year<BR> Ending&nbsp;December&nbsp;31,</TD><TD NOWRAP STYLE="border-bottom: Black 2px solid">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">Amount</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="width: 77%; text-align: center">2015</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 20%; text-align: right">78,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center; padding-bottom: 2px">2016</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">15,600</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 4px">Total</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">93,600</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>


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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>VANDALIA RESEARCH, INC. AND SUBSIDIAIRES</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; font: bold 10pt Times New Roman, Times, Serif">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; font: bold 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-size: 10pt"><B>FOR THE YEARS
    ENDED DECEMBER 31, 2014 AND 2013 AND THE SIX MONTHS </B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>ENDED JUNE 30, 2015 (unaudited)</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>


<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-variant: small-caps"><B>Note
8 - Commitments and Contingencies (continued)</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B><I>Lease
Agreements (Continued)</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">Rent expense, net with sublease
rental income for the years ended December 31, 2014, 2013 and the six months ended June 30, 2015 was $57,050, 52,077 and $28,600
(unaudited), respectively. Sublease rental income for the years ended December 31, 2014 and 2013 and the six months ended June
30, 2015 was $18,900, $28,100 and $6,500 (unaudited), respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B><I>License
Agreement</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify"><FONT STYLE="font-variant: small-caps"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: justify">Vandalia has a patent license agreement with Marshall
University Research Corporation (&ldquo;Marshall&rdquo;), a related party, that was entered into during August 2005 and subsequently
amended on April 15, 2008. In consideration for the license, Marshall was issued 5% of the common stock of Vandalia, in addition,
Vandalia pays Marshall 1% of the net revenues received by Vandalia, as defined in the agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-align: justify">Commencing December 31, 2010, Vandalia shall pay the
greater of the royalty payable, or $10,000 per year. The term of this agreement was for five years, with an automatic renewal
for an additional five years. The license fees incurred for the years ended December 31, 2014 and 2013 and for the six months
ended June 30, 2015 were $10,000, $10,640 and $10,000 (unaudited), respectively. The amounts due to Marshall as of December 31,
2014, 2013 and June 30, 2015 were $14,640, $10,640, and $24,640 (unaudited), respectively and is included in accounts payable
and accrued liabilities in the consolidated balance sheets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font-variant: small-caps"><B>Note 9 -
Stock Option Plans</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">The Company currently has stock
options outstanding related to the 2010 Long Term Incentive Plan (the &ldquo;2010 Plan&rdquo;), which allows the Company to grant
options to purchase common stock to employees of the Company. Under the 2010 Plan, options have a ten year term and vest twenty-five
percent immediately and the remainder vest evenly over a three year period. The 2010 Plan expired on June 1, 2012 and there will
be no further issuances under the 2010 Plan. As of December 31, 2014, unrecorded compensation expense related to non-vested awards
was $9,732, which is expected to be recognized over a weighted average period of approximately 1.42 years. As of June 30, 2015,
unrecorded compensation expense related to non-vested awards was $6,296 (unaudited), which is expected to be recognized over a
weighted average period of approximately 0.92 (unaudited) years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>VANDALIA RESEARCH, INC. AND SUBSIDIAIRES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>FOR THE YEARS
    ENDED DECEMBER 31, 2014 AND 2013 AND THE SIX MONTHS </B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>ENDED JUNE 30, 2015 (unaudited)</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font-variant: small-caps"><B>Note 9 -
Stock Option Plans (continued)</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">As of December 31, 2014
and June 30, 2015, the, weighted average remaining contractual life of these options was 8.42, and 7.92 (unaudited) years,
respectively. There were 5,400 options granted during the year ended December 31, 2013 and no options were granted during the
year ended December 31, 2014 or the six months ended June 30, 2015. There were no cancellations of options during 2014 and
2013 or during the six months ended June 30, 2015. The weighted average grant date fair value per share for options granted
during the year ended December 31, 2013 was $5.09.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">Transactions involving stock
options issued to employees are summarized below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; border-bottom: Black 2px solid">&nbsp;</TD><TD STYLE="text-align: center; border-bottom: Black 2px solid">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">Number of<BR> Shares</TD><TD STYLE="text-align: center; border-bottom: Black 2px solid">&nbsp;</TD><TD STYLE="text-align: center; border-bottom: Black 2px solid">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid">Weighted <BR> Average<BR> Exercise<BR> Price
    Per<BR> Share</TD><TD NOWRAP STYLE="padding-bottom: 2px">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="width: 74%">Outstanding at January 1, 2014</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">5,400</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">6.00</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Granted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>Exercised</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2px">Cancelled or expired</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>Outstanding at December 31, 2014</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,400</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">6.00</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Granted (unaudited)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Exercised (unaudited)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2px">Cancelled or expired (unaudited)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">&mdash;</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="padding-bottom: 4px">Outstanding at June 30, 2015 (unaudited)</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">5,400</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4px; text-align: left">$</TD><TD STYLE="padding-bottom: 4px; text-align: right">6.00</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4px">Vested at December 31, 2014</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">3,488</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4px; text-align: left">$</TD><TD STYLE="padding-bottom: 4px; text-align: right">6.00</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="padding-bottom: 4px">Non-vested at December 31, 2014</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">1,912</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 4px">Vested at June 30, 2015 (unaudited)</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">4,163</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4px; text-align: left">$</TD><TD STYLE="padding-bottom: 4px; text-align: right">6.00</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="padding-bottom: 4px">Non-vested at June 30, 2015 (unaudited)</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">1,237</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">The fair value of options granted
to employees during the year ended December 31, 2013 was determined using the Black Scholes Option Pricing Model with the following
weighted average assumptions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 60%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>Stock price</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD COLSPAN="2" STYLE="text-align: right">6.00</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Exercise price</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD COLSPAN="2" STYLE="text-align: right">6.00</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Expected term, years</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD COLSPAN="2" STYLE="text-align: right">5.75</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; width: 87%">Dividend yield</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 1%">&nbsp;</TD><TD STYLE="text-align: right; width: 10%"><FONT STYLE="font-size: 10pt">&nbsp;&mdash;</FONT></TD><TD STYLE="text-align: left; width: 1%">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>Volatility</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">157</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Risk free rate</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.05</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>VANDALIA RESEARCH, INC. AND SUBSIDIAIRES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>FOR THE YEARS
    ENDED DECEMBER 31, 2014 AND 2013 AND THE SIX MONTHS </B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>ENDED JUNE 30, 2015 (unaudited)</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-variant: small-caps"><B>Note 9 -
Stock Option Plans (continued)</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">The stock price was determined
based on management's estimate. As the Company has been privately held since inception, there is no specific historical or implied
volatility information available. Accordingly, the Company determines volatility based on an average of reported volatility of
selected peer companies within the industry.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-variant: small-caps"><B>Note 10 - Concentration
of Credit Risk</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">During the years ended December
31, 2014 and 2013, sales to two and four customers, totaled $623,358 (66%) and $460,536 (62%), respectively. As of December 31,
2014 and 2013, the amount due from these customers included in accounts receivable was $0 and $119,033, respectively. During the
six months ended June 30, 2015 and 2014, sales to three and two customers, totaled $113,791 (51%) and $343,358 (66%)(unaudited).
As of June 30, 2015 the amount due from these customers included in accounts receivable was $57,777 (unaudited).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">During the years ended December
31, 2014 and 2013, the Company purchased a substantial portion of its inventory from one supplier. Inventory purchases from this
supplier totaled $108,765 (47%) and $55,642 (24%), respectively. As of December 31, 2014 and 2013, the amount due to this supplier
was $0 and $33,568, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-variant: small-caps"><B>Note 11 - Related
Party Transactions</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">The spouse of the Company's
Chief Executive Officer provided accounting services for the Company. The total expense recorded for these services was $8,778,
$5,982, $5,687 (unaudited) and $3,861(unaudited), respectively for the years ended December 31, 2014 and 2013 and the six months
ended June 30, 2015 and 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-indent: -27pt"><FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>VANDALIA RESEARCH, INC. AND SUBSIDIAIRES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <TD STYLE="width: 100%; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>FOR THE YEARS
    ENDED DECEMBER 31, 2014 AND 2013 AND THE SIX MONTHS </B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>ENDED JUNE 30, 2015 (unaudited)</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;<FONT STYLE="font-variant: small-caps"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-variant: small-caps"><B>Note 12 - Subsequent
Events</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 27pt; text-indent: -27pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">On
September 11, 2015, Vandalia entered into an Asset Purchase Agreement (the &ldquo;Asset Purchase Agreement&rdquo;) with
Applied DNA Sciences, Inc., providing for the sale of substantially all the assets (&ldquo;Assets&rdquo;) of Vandalia. The
Vandalia Assets sold relate to the business of producing specific, high-quality DNA sequences with the PCR production system
known as Triathlon&trade; , including machinery, equipment, inventory, registered and other intellectual property, including
patents, trademarks, trade secrets, domain names, copyrights and rights to software, and customer contracts. The Assets also
include Vandalia&rsquo;s rights under a patent license agreement between Marshall University Research Corporation
(&ldquo;Marshall&rdquo;) and Vandalia. The purchase price for the Assets was $1,500,000, which amount was determined through
arms-length negotiation. Of this amount, $500,000 was placed in an escrow account for a period of nine (9) months following
the closing to satisfy Vandalia&rsquo;s indemnification obligations with $350,000 of this amount less the amount of any
indemnification claims paid out of escrow to be released after sixty (60) days. Vandalia and Derek Gregg, Vandalia's chief
executive officer, agreed not to compete with Applied DNA Sciences, Inc. and not to solicit its employees or customers for a
period of five (5) years following the closing. Derek Gregg also entered into a consulting agreement with Applied DNA
Sciences, Inc. for a term of twelve (12) months subject to earlier termination by either party upon thirty (30) days&rsquo;
notice. Pursuant to the Asset Purchase Agreement, Applied DNA Sciences, Inc., entered into a month to month sublease with
Vandalia of approximately 5,000 square feet at Vandalia&rsquo;s office facility at an aggregate monthly rent of $5,416.
Purchase orders of $237,000 were assigned by Vandalia to Applied DNA Sciences, Inc.. Prior to the Vandalia Asset Acquisition,
Applied DNA Sciences, Inc. was a customer of Vandalia.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-align: justify">&nbsp;</P>


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<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>t1600453_ex99-2.htm
<DESCRIPTION>EXHIBIT 99.2
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
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<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 1pt; margin-bottom: 1pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>Exhibit&nbsp;99.2</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNAUDITED PRO FORMA FINANCIAL INFORMATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following unaudited pro forma financial statements give
effect to the Asset Purchase Agreement (the &ldquo;Asset Purchase Agreement&rdquo;), dated September 11, 2015, by and among Applied
DNA Sciences, Inc. (the &ldquo;Company&rdquo; or &ldquo;APDN&rdquo;), Vandalia Research, Inc., a West Virginia corporation (now
known as VR Holdings, Inc., &ldquo;Vandalia&rdquo;), and Derek A. Gregg, Vandalia&rsquo;s Chief Executive Officer and a director
of Vandalia, providing for the purchase by the Company of substantially all the assets of Vandalia (the &ldquo;Asset Acquisition&rdquo;)
under the acquisition method of accounting in accordance with Financial Accounting Standards Board (FASB) Accounting Standard Codification
(ASC) Topic 805, Business Combinations (&ldquo;ASC 805&rdquo;), with the Company treated as the legal and accounting acquirer.
The historical consolidated financial information has been adjusted in the unaudited pro forma financial statements to give effect
to pro forma events that are (1) directly attributable to the Asset Acquisition, (2) factually supportable, and (3) with respect
to the statements of operations, have a continuing impact on the combined results of the Company and Vandalia. The unaudited pro
forma condensed combined balance sheet is based on the individual historical balance sheets of the Company and Vandalia as of June
30, 2015, and has been prepared to reflect the Asset Acquisition as if it occurred on June 30, 2015. The unaudited pro forma condensed
combined statements of operations for the fiscal year ended September 30, 2014 and the nine months ended June 30, 2015 are based
on the historical results of operations of the Company and Vandalia, giving effect to the Asset Acquisition as if it occurred on
October 1, 2013. The fiscal year ended September 30, 2014 referenced in such unaudited pro forma statement of operations is the
fiscal year of the Company. Because the fiscal year of Vandalia ends on December 31 of each year, such unaudited pro forma statement
of operations makes reference to the fiscal year of Vandalia ended December 31, 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The unaudited pro forma condensed combined financial information
is presented for illustrative purposes only and is not necessarily indicative of: (i) results of operations and financial position
that would have been achieved had the Asset Acquisition taken place on the dates indicated or (ii) the future results of operations
or financial position of the Company following the Asset Acquisition. All pro forma adjustments and their underlying assumptions
are described more fully in the notes to the unaudited pro forma condensed combined financial information. Actual financial position
and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONDENSED COMBINED STATEMENT OF OPERATIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>For the Year Ended September 30, 2014</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 2px solid"><FONT STYLE="font-size: 10pt">Historical</FONT></TD><TD NOWRAP STYLE="padding-bottom: 2px; font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 2px; font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 2px; font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 2px solid"><FONT STYLE="font-size: 10pt">APDN</FONT></TD><TD NOWRAP STYLE="padding-bottom: 2px; font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 2px solid"><FONT STYLE="font-size: 10pt">Vandalia</FONT></TD><TD NOWRAP STYLE="padding-bottom: 2px; font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Total</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Historical</B></FONT></P></TD><TD NOWRAP STYLE="padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Pro
                                         Forma</B><BR>
                                         <B>Adjustments</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>For
                            The</B><BR>
                            <B>Transaction</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>(Note
                            3)</B></FONT></P></TD><TD NOWRAP STYLE="padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Footnote</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Reference</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>(Note
                                         3)</B></FONT></P></TD><TD NOWRAP STYLE="padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Pro
                                         Forma</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Combined</B></FONT></P></TD><TD NOWRAP STYLE="padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Year
                                         Ended</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>September
                                         30,</B><BR>
                                         <B>2014</B></FONT></P></TD><TD NOWRAP><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Year
                                         Ended</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>December
                                         31,</B><BR>
                                         <B>2014</B></FONT></P></TD><TD NOWRAP><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="width: 22%">Revenues</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">2,721,224</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">950,603</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">3,671,827</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">(548,506</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 12%; font-weight: bold; text-align: center; padding-left: 1.5pt">A, D</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">3,123,321</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2px">Cost of goods sold</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">361,659</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">361,659</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(142,461</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 2px; padding-left: 1.5pt">&nbsp;A</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">219,198</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-left: 9pt">Gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,721,224</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">588,944</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,310,168</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(406,045</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,904,123</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Selling, general and administrative expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,249,753</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">416,244</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,665,997</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(146,596</TD><TD STYLE="text-align: left">)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-left: 1.5pt">&nbsp;A, E</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,519,401</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Research and development</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,300,750</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,300,750</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(275,653</TD><TD STYLE="text-align: left">)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-left: 1.5pt">&nbsp;D</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,025,097</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-bottom: 2px">Depreciation and amortization</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">442,262</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">14,546</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">456,808</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">89,624</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 2px; padding-left: 1.5pt">A, B</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">546,432</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2px">Total operating expenses</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">14,992,765</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">430,790</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">15,423,555</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(332,625</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2px; padding-left: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">15,090,930</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-left: 9pt">(Loss) income from operations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(12,271,541</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">158,154</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(12,113,387</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(73,420</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(12,186,807</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Other income (expense):</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Interest expense, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(11,029</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(16,863</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(27,892</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16,863</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-left: 1.5pt">A</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(11,029</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Other income</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">123,914</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">123,914</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">123,914</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-bottom: 2px">Loss on conversion of promissory notes</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(908,005</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(908,005</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2px; padding-left: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(908,005</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Loss before provision for&nbsp;&nbsp;income taxes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(13,066,661</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">141,291</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(12,925,370</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(56,557</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(12,981,927</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-bottom: 2px">Income taxes (benefit)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 2px; padding-left: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2px">Net (loss) income</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(13,066,661</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">141,291</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(12,925,370</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(56,557</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2px; padding-left: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(12,981,927</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-bottom: 2px">Income attributable to noncontrolling interest</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">2,133</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">2,133</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(2,133</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 2px; padding-left: 1.5pt">A</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4px">Income attributable to Vandalia Research, Inc.</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">-</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">139,158</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">139,158</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">(139,158</TD><TD STYLE="padding-bottom: 4px; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 4px; padding-left: 1.5pt">A</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">-</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4px; padding-left: 9pt">Net loss per share - basic and diluted</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: right">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">(0.97</TD><TD STYLE="padding-bottom: 4px; text-align: left">)</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">-</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">-</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">-</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4px; padding-left: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">(0.96</TD><TD STYLE="padding-bottom: 4px; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 4px">Weighted-average shares outstanding -basic and diluted</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">13,515,518</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">-</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">-</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">-</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4px; padding-left: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">13,515,518</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>See accompanying notes to unaudited pro forma condensed combined
financial information</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNAUDITED PRO FORMA CONDENSED COMBINED
STATEMENT OF OPERATIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>For the Nine Months Ended June 30, 2015</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 2px solid"><FONT STYLE="font-size: 10pt">Historical</FONT></TD><TD NOWRAP STYLE="padding-bottom: 2px; font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 2px; font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 2px; font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 2px solid"><FONT STYLE="font-size: 10pt">APDN</FONT></TD><TD NOWRAP STYLE="padding-bottom: 2px; font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-size: 8pt; font-weight: bold; padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 8pt; font-weight: bold; text-align: center; border-bottom: Black 2px solid"><FONT STYLE="font-size: 10pt">Vandalia</FONT></TD><TD NOWRAP STYLE="padding-bottom: 2px; font-size: 8pt; font-weight: bold"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Total</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Historical</B></FONT></P></TD><TD NOWRAP STYLE="padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Pro
                                         Forma</B><BR>
                                         <B>Adjustments</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>For
                            The</B><BR>
                            <B>Transaction</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>(Note
                            3)</B></FONT></P></TD><TD NOWRAP STYLE="padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Footnote</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Reference</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>(Note
                                         3)</B></FONT></P></TD><TD NOWRAP STYLE="padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 2px solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Pro
                                         Forma</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Combined</B></FONT></P></TD><TD NOWRAP STYLE="padding-bottom: 2px"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="width: 22%">Revenues</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">5,028,234</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">407,010</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">5,435,244</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">(203,083</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 12%; font-weight: bold; text-align: center; padding-left: 1.5pt">A</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">5,232,161</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2px">Cost of goods sold</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">353,762</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">353,762</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(105,267</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 2px; padding-left: 1.5pt">A</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">248,495</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-left: 9pt">Gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,028,234</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">53,248</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,081,482</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(97,816</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,983,666</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Selling, general and administrative expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,078,405</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">288,907</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,367,312</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(113,454</TD><TD STYLE="text-align: left">)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-left: 1.5pt">&nbsp;A, F</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,253,858</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Research and development</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">961,745</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">961,745</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">961,745</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-bottom: 2px">Depreciation and amortization</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">354,144</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">9,781</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">363,925</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">68,347</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 2px; padding-left: 1.5pt">A, C</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">432,272</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Total operating expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,394,294</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">298,688</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,692,982</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(45,107</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,647,875</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-left: 9pt">Loss from operations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,366,060</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(245,440</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,611,500</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(52,709</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,644,209</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Other income (expense)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Interest income (expense), net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(26,807</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(14,426</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(41,233</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,426</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-left: 1.5pt">A</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(26,807</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Other income (expense)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(16,853</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(131</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(16,984</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">131</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-left: 1.5pt">A</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(16,853</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Loss on conversion of promissory notes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(980,842</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(980,842</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(980,842</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2px">Other income, net</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(2,994,540</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(2,994,540</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2px; padding-left: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(2,994,540</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Loss before provision for&nbsp;&nbsp;income taxes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(11,385,102</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(259,997</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(11,645,099</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(38,152</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(11,683,251</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2px">Income taxes (benefit)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(558,256</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(558,256</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">558,256</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 2px; padding-left: 1.5pt">G</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-bottom: 2px; padding-left: 9pt">Net (loss) income</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(11,385,102</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">298,259</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(11,086,843</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(596,408</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2px; padding-left: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(11,683,251</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2px">Income (loss) attributable to noncontrolling interest</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">1,259</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">1,259</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(1,259</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 2px; padding-left: 1.5pt">A</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-bottom: 4px">Income (loss) attributable to Vandalia Research, Inc.</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">-</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">297,000</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">297,000</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">(297,000</TD><TD STYLE="padding-bottom: 4px; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 4px; padding-left: 1.5pt">A</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">-</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-bottom: 4px; padding-left: 9pt">Net loss per share - basic and diluted</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">(0.63</TD><TD STYLE="padding-bottom: 4px; text-align: left">)</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">-</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">-</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">-</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4px; padding-left: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">(0.65</TD><TD STYLE="padding-bottom: 4px; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-bottom: 4px">Weighted-average shares outstanding -basic and diluted</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">18,075,506</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">-</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">-</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">-</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="padding-bottom: 4px; padding-left: 1.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">18,075,506</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD></TR>
</TABLE>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>See accompanying notes to unaudited pro forma condensed combined
financial information</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNAUDITED PRO FORMA CONDENSED COMBINED
BALANCE SHEET</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>As of June 30, 2015</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 2px solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Historical</B></FONT> <FONT STYLE="font-size: 10pt"><B></B></FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B></B></FONT></P></TD><TD NOWRAP><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"><P STYLE="border-bottom: Black 2px solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>APDN</B></FONT></P></TD><TD NOWRAP><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; vertical-align: bottom"><P STYLE="border-bottom: Black 2px solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Vandalia</B></FONT></P></TD><TD NOWRAP><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 2px solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Total<br>Historical&nbsp;</B></FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"><P STYLE="border-bottom: Black 2px solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Pro
Forma<br>Adjustments<br>For the<br>Transaction<br>(Note 4)</B></FONT></P></TD><TD NOWRAP><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD NOWRAP><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><P STYLE="border-bottom: Black 2px solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Footnote<br>Reference<br>(Note
4)</B></FONT></P></TD><TD NOWRAP><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"><P STYLE="border-bottom: Black 2px solid; text-align: center"><FONT STYLE="font-size: 10pt"><B>Pro
Forma<br>Combined</B></FONT></P></TD><TD NOWRAP><FONT STYLE="font-size: 10pt"><B>&nbsp;</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="font-weight: bold">ASSETS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Current assets:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="width: 22%; text-align: left; padding-left: 9pt">Cash and cash equivalents</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">10,730,144</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">25,934</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">10,756,078</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">(1,525,934</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 12%; font-weight: bold; text-align: center; padding-left: 1.5pt">A, B</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">9,230,144</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Accounts receivable, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,077,756</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">184,518</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,262,274</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(184 518 )</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-left: 1.5pt">B</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,077,756</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="padding-left: 9pt">Inventories</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">103,199</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">103,199</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(73,199</TD><TD STYLE="text-align: left">)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-left: 1.5pt">B</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Deferred tax asset</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">558,256</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">558,256</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(558,256</TD><TD STYLE="text-align: left">)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-left: 1.5pt">A, B</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-left: 9pt">Prepaid expenses and other current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">209,831</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">2,727</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">212,558</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(2,727</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-left: 1.5pt">A, B</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">209,831</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Total current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,017,731</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">874,634</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,892,365</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,344,634</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,547,731</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Property, plant and equipment, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">526,816</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">38,663</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">565,479</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,049</TD><TD STYLE="text-align: left">)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-left: 1.5pt">A</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">563,430</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Other assets:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>Deposits</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">52,988</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">62,988</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">62,988</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Goodwill</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">285,386</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-left: 1.5pt">A</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">285,386</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Intangible assets, net</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">525,902</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">525,902</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">1,138,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-left: 1.5pt">A</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">1,663,902</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Total assets</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">14,123,437</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left; vertical-align: top">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">923,297</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">15,046,734</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left; vertical-align: top">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">(923,297</TD><TD STYLE="text-align: left; vertical-align: top">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 1.5pt">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">14,123,437</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Current liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Accounts payable and accrued liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,418,615</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">291,596</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,710,211</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(77,463</TD><TD STYLE="text-align: left">)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-left: 1.5pt">B, C</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,632,748</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-left: 9pt">Deferred revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">204,863</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">204,863 1</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">204,863</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt">Lines of credit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">157,908</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">157,908</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(157,908</TD><TD STYLE="text-align: left">)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-left: 1.5pt">B</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-left: 9pt">Current portion of related party term loan</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">2,859</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">2,859</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(2,859</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-left: 1.5pt">B</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Total current liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,623,478</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">452,363</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,075,841</TD><TD STYLE="text-align: left">(</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(238,230</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,837,611</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Related party term loan, net of current portion</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">23,913</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">23,913</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(23,913</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-left: 1.5pt">B</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Total liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">1,623,478</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">476,276</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">2,099,754</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(262,143</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">1,837,611</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Shareholders&rsquo; equity:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Preferred stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,1,25</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,125</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,125</TD><TD STYLE="text-align: left">)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-left: 1.5pt">B</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-left: 9pt">Series A Preferred stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Series B Preferred stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-left: 9pt">Common stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,483</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,541</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,024</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,541</TD><TD STYLE="text-align: left">)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-left: 1.5pt">B</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,483</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Additional paid in capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">223,623,850</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,577,522</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">226,201,372</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,577,522</TD><TD STYLE="text-align: left">)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-left: 1.5pt">B</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">223,623,850</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-left: 9pt">Accumulated deficit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(211,145,374</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,261,572</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(213,406,946</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,047,439</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-left: 1.5pt">B, C</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(211,359,507</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Noncontrolling interest</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">127,405</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">127,405</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(127,405</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-left: 1.5pt">B</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left; padding-left: 9pt">Total shareholders&rsquo; equity (deficit)&nbsp;attritbutable to Applied DNA Sciences, Inc.</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">12,499,959</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">447,021</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">12,946,980</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">(661,154</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">12,285,826</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Total liabilities and shareholders&rsquo; equity</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">14,123,437</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">923,297</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">15,046,734</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">(923,297</TD><TD STYLE="padding-bottom: 2px; text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 1.5pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">14,123,437</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>See accompanying notes to unaudited pro forma condensed combined
financial information</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Unaudited Pro Forma Condensed
Combined Financial Information</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Note 1- Basis of presentation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The unaudited pro forma combined financial
information herein is based upon the historical consolidated financial statements of APDN and Vandalia and has been prepared to
illustrate the effects of the reported transactions in accordance with accounting principles generally accepted in the United States
and pursuant to Article 11 of Regulation S-X.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Asset Acquisition was accounted  as a business
combination using the acquisition method of accounting under the provisions of ASC 805, Business Combinations (&quot;ASC
805&quot;). Under ASC 805, all assets acquired are recorded at their acquisition date fair value. The allocation of the
purchase price as reflected in the unaudited pro forma condensed combined financial data is based upon a third party
valuation firm's valuation of the fair market value of assets acquired, as if the Asset Acquisition had occurred on June 30,
2015, with respect to the unaudited pro forma condensed combined balance sheet. With respect to the unaudited pro
forma condensed combined statement of operations, the allocation of purchase price is reflected for the fiscal year ended
September 30, 2014 and the nine months ended June 30, 2015, giving effect to the Asset Acquisition as if it occurred on
October 1, 2013. The fiscal year ended September 30, 2014 referenced in such unaudited pro forma statement of operations is
the fiscal year of the Company. Because the fiscal year of Vandalia ends on December 31 of each year, such unaudited pro
forma statement of operations makes reference to the fiscal year of Vandalia ended December 31, 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Note 2- Allocation of consideration transferred to
the assets acquired</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For the purposes of this pro forma
financial information, fair values have been determined by a third party valuation firm for all assets acquired. The excess
of the acquisition consideration over the fair value of the assets acquired is allocated to goodwill. The adjustments to
reflect the acquisition method of accounting are based upon available information and certain assumptions which management
believes are reasonable under the circumstances.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table summarizes the purchase
price allocation as if the Asset Acquisition had occurred as of June 30, 2015:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="width: 82%; padding-bottom: 4px">Purchase price</TD><TD STYLE="width: 1%; padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="width: 15%; border-bottom: Black 4px double; text-align: right">1,500,000</TD><TD STYLE="width: 1%; padding-bottom: 4px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Allocation of purchase price to the fair market values of  assets acquired:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Goodwill</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">285,386</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Identifiable intangible assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,138,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Security deposit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="text-align: left">Fixed assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">36,614</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2px">Inventory</TD><TD STYLE="padding-bottom: 2px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2px solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2px solid; text-align: right">30,000</TD><TD STYLE="padding-bottom: 2px; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: Azure">
    <TD STYLE="padding-bottom: 4px; padding-left: 9pt">Total</TD><TD STYLE="padding-bottom: 4px">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 4px double; text-align: left">$</TD><TD STYLE="border-bottom: Black 4px double; text-align: right">1,500,000</TD><TD STYLE="padding-bottom: 4px; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The goodwill and identifiable intangible assets related to
the Acquisition are tax deductible.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Note 3- Pro Forma adjustments for the combined statement
of operations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.75pt; text-indent: -48pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23.75pt"></TD><TD STYLE="width: 48.25pt">(A)</TD><TD>Adjustment to remove items not purchased as part of the
                                         Asset Purchase Agreement.&nbsp;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.75pt; text-indent: -48pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 25.25pt"></TD><TD STYLE="width: 46.5pt">(B)</TD><TD>Adjustment to record 12 months of identifiable intangible assets amortization of $91,966 and depreciation on fixed assets acquired
of $12,204.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -48.25pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 25.25pt"></TD><TD STYLE="width: 46.5pt">(C)</TD><TD>Adjustment to record 9 months of identifiable intangible assets amortization of $68,975 and depreciation on fixed assets acquired
of $9,153.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.75pt; text-indent: -46.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 25.25pt"></TD><TD STYLE="width: 46.5pt">(D)</TD><TD>Adjustment to eliminate sales of $275,653 between Vandalia and APDN during the fiscal year ended September 30, 2014.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.75pt; text-indent: -46.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 25.25pt"></TD><TD STYLE="width: 46.5pt">(E)</TD><TD>Adjustment to record 12 months of consulting expense per Derek Gregg's consulting agreement of $60,000 and remove his payroll
expense of $101,175 for the same period.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.75pt; text-indent: -46.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 25.25pt"></TD><TD STYLE="width: 46.5pt">(F)</TD><TD>Adjustment to record 9 months of consulting expense per Derek Gregg's consulting agreement of $45,000 and remove his payroll
expense of $78,558 for the same period.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.75pt; text-indent: -46.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 25.25pt"></TD><TD STYLE="width: 46.5pt">(G)</TD><TD>Adjustment to remove the deferred tax benefit for the gain on the sale of assets of $558,256.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.75pt; text-indent: -46.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Note 4- Pro Forma adjustments for the combined balance
sheet</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<TD STYLE="width: 23.75pt"></TD><TD STYLE="width: 48pt">(A)</TD><TD>Adjustment to record the purchase price consideration of $1,500,000 in cash.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 23.75pt"></TD><TD STYLE="width: 48.25pt">(B)</TD><TD>Adjustment to remove the items for not purchased as part of the Asset Purchase Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 25.25pt"></TD><TD STYLE="width: 46.5pt">(C)</TD><TD>Adjustment to accrue for transactions costs incurred as part of the Asset Purchase Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.75pt; text-indent: -46.5pt">&nbsp;</P>


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