Annual report pursuant to Section 13 and 15(d)

Statements of Cash Flows

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Statements of Cash Flows (USD $)
 12 Months Ended 60 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
OPERATING ACTIVITIES      
Net loss $ (1,454,884) $ (5,101,519) $ (6,901,648)
Adjustments to reconcile net loss to net cash used by operating activities:      
Discontinued operations       (678,413)
Common stock issued for services 309,322 10,000 329,822
Warrants issued for services 632,089 123,170 1,183,513
Stock Option Expense 406,267 47,900 1,085,568
(Gain) loss on extinguishment of debt (21,005) (49,179) (89,594)
Gain on sale of asset    (70,500) (70,500)
(Gain) loss on derivative liabilities (1,812,224) 3,977,041 684,231
Depreciation 9,456 5,004 15,310
Amortization of patent costs 78,273 78,480 176,346
Changes in operating assets and liabilities      
Prepaid expenses and deposits (105,893) 82,303 (143,084)
Other receivables and other current assets 184,358 (119,236) 85,025
Accounts payable and accrued expenses 20,412 12,009 108,624
Net Cash Used in Operating Activities (1,753,829) (1,004,527) (4,214,800)
INVESTING ACTIVITIES      
Proceeds from sale of asset    70,500 70,500
Purchase of equipment (33,403)    (58,421)
Purchase of patents and other intellectual property       (300,000)
Discontinued operations       418,000
Net Cash Provided by (Used in) Investing Activities (33,403) 70,500 130,079
FINANCING ACTIVITIES      
Proceeds from the sale of preferred stock and warrants       1,005,000
Proceeds from the sale of common stock and warrants 1,100,000 1,050,000 2,150,000
Proceeds from warrants exercised for cash 2,902,560    3,907,560
Proceeds from related party payables       125,453
Repayments of related party payables       (125,453)
Proceeds from short-term notes payable       64,408
Repayments of short-term notes payable (52,701) (17,486) (117,109)
Repayment of convertible debentures    (51,115) (490,000)
Net Cash Provided by Financing Activities 3,949,859 981,399 6,519,859
NET CHANGE IN CASH 2,162,627 47,372 2,435,138
CASH AT BEGINNING OF PERIOD 469,786 422,414 197,275
CASH AT END OF PERIOD 2,632,413 469,786 2,632,413
CASH PAID FOR:      
Interest 1,817 24,003 71,740
Income Taxes         
NON CASH FINANCING ACTIVITIES:      
Reclassification of derivative liability to permanent equity 3,454,094    3,454,094
Financing of insurance premiums through issuance of short term notes 74,738    74,738
Transfer of investment for dividends payable       186,000
Purchase of patents for debenture       500,000
Conversion of debenture       10,000
Options issued to settle accounts payable