Quarterly report pursuant to Section 13 or 15(d)

Statements of Cash Flows (Unaudited)

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Statements of Cash Flows (Unaudited) (USD $)
 6 Months Ended 54 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Mar. 31, 2012
OPERATING ACTIVITIES      
Net income (loss) $ (1,061,580) $ (605,688) $ (6,508,344)
Adjustments to reconcile net loss to net cash used by operating activities:      
Discontinued operations       (678,413)
Common stock issued for services    10,000 20,500
Fair value of warrants issued for services 111,370    662,794
Fair value of employee stock options 304,948 23,950 984,249
Amortization of common stock and warrants issued in advance of services 51,432    51,432
(Gain) loss on extinguishment of debt (21,005)    (89,594)
Gain on sale of asset    (70,500) (70,500)
(Gain) loss on derivative liability (322,032) 109,213 2,174,423
Depreciation 4,728 2,502 10,582
Amortization of patent costs 39,272 39,166 137,345
Changes in operating assets and liabilities      
Prepaid expenses and deposits (134,417) (16,213) (171,608)
Other receivables and other current assets 184,358 150,146 85,025
Accounts payable and accrued expenses 33,584 (8,767) 121,796
Net Cash (Used in) Operating Activities (809,342) (366,191) (3,270,313)
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 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 of warrants exercised for cash       1,005,000
Proceeds from related party payables       125,453
Repayments of related party payables       (125,453)
Proceeds from short-term notes payable 48,300    112,708
Repayments of short-term notes payable    (15,797) (64,408)
Repayment of convertible debentures    (51,115) (490,000)
Net Cash Provided by Financing Activities 1,148,300 983,088 3,718,300
NET INCREASE IN CASH 305,555 687,397 578,066
CASH AT BEGINNING OF PERIOD 469,786 422,414 197,275
CASH AT END OF PERIOD 775,341 1,109,811 775,341
CASH PAID FOR:      
Interest    2,349 69,923
Income Taxes         
NON CASH FINANCING ACTIVITIES:      
Common stock and warrants issued in advance of services 320,422    320,422
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       $ 3,991