Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | |||
Sep. 30, 2011 | Sep. 26, 2013 | Sep. 25, 2013 | Sep. 25, 2013 | |
Common Stock | Preferred Stock | |||
Entity Registrant Name | NATIONAL SCIENTIFIC CORP/AZ | |||
Entity Central Index Key | 1022505 | |||
Document Type | 10-K | |||
Document Period End Date | 30-Sep-11 | |||
Amendment Flag | FALSE | |||
Current Fiscal Year End Date | -21 | |||
Is Entity a Well-known Seasoned Issuer? | No | |||
Is Entity a Voluntary Filer? | No | |||
Is Entity's Reporting Status Current? | No | |||
Entity Filer Category | Smaller Reporting Company | |||
Entity Public Float | $5,087,389 | |||
Entity Common Stock, Shares Outstanding | 214,634,216 | 4,000,000 | ||
Document Fiscal Period Focus | FY | |||
Document Fiscal Year Focus | 2011 |
Balance_Sheets
Balance Sheets (USD $) | Sep. 30, 2011 | Sep. 30, 2010 |
CURRENT ASSETS: | ||
Cash | $11,016 | |
Net assets of discontinued operations | 2,597 | |
Total current assets | 11,016 | 2,597 |
Noncurrent ASSETS: | ||
Proprietary technology | 1,200,106 | |
Total noncurrent assets | 1,200,106 | |
TOTAL ASSETS | 1,211,122 | 2,597 |
CURRENT LIABILITIES: | ||
Advances from officers | 180,795 | 21,281 |
Line of Credit | 44,535 | |
Net liabilities of discontinued operations | 1,760,459 | 1,767,460 |
Total current liabilities | 1,985,790 | 1,788,741 |
NONCURRENT LIABILITIES: | ||
Note payable affiliate | 1,200,106 | |
Total Noncurrent Liabilities | 1,200,106 | |
TOTAL LIABILITIES | 3,185,896 | 1,788,741 |
STOCKHOLDERS' DEFICIT: | ||
Preferred stock, $.10 par value, 4,000,000 shares authorized; none issued and outstanding as of September 30, 2011 and 2010 | 40,000 | |
Common stock, $.01 par value, 650,000,000 shares authorized; 180,526,879 and 165,276,913 issued and outstanding as of September 30, 2011 and 2010, respectively | 1,805,269 | 1,652,769 |
Additional paid-in capital | 22,409,927 | 22,434,427 |
Accumulated deficit | -26,229,970 | -25,873,341 |
Total stockholders' deficit | -1,974,774 | -1,786,145 |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $1,211,122 | $2,597 |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2011 | Sep. 30, 2010 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, Par Value | $0.10 | $0.10 |
Preferred Stock, Shares Authorized | 4,000,000 | 4,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstandng | 0 | 0 |
Common Stock, Par Value | $0.01 | $0.01 |
Common Stock, Shares Authorized | 650,000,000 | 650,000,000 |
Common Stock, Shares Issued | 180,526,879 | 165,276,913 |
Common Stock, Shares Outstanding | 180,526,879 | 165,276,913 |
Statements_of_Operations
Statements of Operations (USD $) | 12 Months Ended | |
Sep. 30, 2011 | Sep. 30, 2010 | |
OPERATING EXPENSES: | ||
Total operating expenses | $340,417 | $21,964 |
OPERATING LOSS | -340,417 | -21,964 |
(LOSS) INCOME BEFORE TAXES AND DISCOUNTED OPERATIONS | -340,417 | -21,964 |
(LOSS) INCOME FROM CONTINUED OPERATIONS | -340,417 | -21,964 |
(LOSS) INCOME FROM DISCONTINUED OPERATIONS | -16,212 | -35,121 |
NET LOSS | ($356,629) | ($57,085) |
Basic | ||
Continuing operations | $0 | $0 |
Discontinuing operations | $0 | $0 |
NET (LOSS) INCOME PER COMMON SHARE | ||
Basic | $0 | $0 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | ||
Basic | 180,526,879 | 165,276,879 |
Shareholders_Equity
Shareholders Equity (USD $) | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning Balance, Amount at Sep. 30, 2008 | $1,372,770 | $22,658,682 | ($25,491,084) | ($1,459,633) | |
Beginning Balance, Shares at Sep. 30, 2008 | 137,276,879 | ||||
Options expired | 19,945 | 19,945 | |||
Common stock issued for back pay of officers, Shares | 28,000,000 | ||||
Common stock issued for back pay of officers, Amount | 280,000 | -244,200 | 35,800 | ||
Shares issued for compensation, Shares | 28,000,000 | ||||
Net loss | -325,172 | -325,172 | |||
Ending Balance, Amount at Sep. 30, 2009 | 1,652,769 | 22,434,427 | -25,816,256 | -1,729,061 | |
Ending Balance, Shares at Sep. 30, 2009 | 165,276,879 | ||||
Shares issued for compensation, Amount | |||||
Common stock issued for cash, Shares | |||||
Net loss | -57,085 | -57,085 | |||
Ending Balance, Amount at Sep. 30, 2010 | 1,652,769 | 22,434,427 | -25,873,341 | -1,786,145 | |
Beginning Balance, Shares at Sep. 30, 2010 | 165,276,879 | ||||
Shares issued for compensation, Shares | 4,000,000 | 15,000,000 | 15,000,000 | ||
Shares issued for compensation, Amount | 40,000 | 150,000 | -47,000 | 143,000 | |
Common stock issued for cash, Shares | 250,000 | 25,000 | |||
Common stock issued for cash, Amount | 2,500 | 22,500 | 250,000 | ||
Net loss | -356,629 | -356,629 | |||
Ending Balance, Amount at Sep. 30, 2011 | $40,000 | $1,805,269 | $22,409,927 | ($26,229,970) | ($1,974,774) |
Ending Balance, Shares at Sep. 30, 2011 | 4,000,000 | 180,526,879 |
Statements_of_Cash_Flows
Statements of Cash Flows (USD $) | 12 Months Ended | |||
Sep. 30, 2012 | Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2009 | |
Statement of Cash Flows [Abstract] | ||||
Net Loss | ($356,629) | ($57,085) | ($325,172) | |
Adjustments to reconcile net loss to net cash (used in) operating activities: | ||||
Discontinued operations | 16,212 | 35,121 | ||
Changes in assets and liabilities: | ||||
Stock issued for compensation | 143,000 | |||
Net assets and liabilities from discontinued operations | -23,214 | -9,554 | ||
Net cash used in operating activities | -220,631 | -31,518 | ||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
Common stock issued for cash | 90,000 | 25,000 | ||
Advances from affiliates | 159,515 | 36,000 | ||
Line of credit | 44,535 | -14,719 | ||
Net cash provided by financing activities | 229,050 | 21,281 | ||
INCREASE IN CASH | 8,419 | -10,237 | ||
CASH, BEGINNING OF PERIOD | 11,016 | 2,597 | 12,434 | |
CASH, END OF PERIOD | 11,016 | 2,597 | 12,434 | |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||||
Interest paid | ||||
Taxes paid | ||||
Purchase of proprietary technology | $1,200,106 |
NOTE_1_DESCRIPTION_OF_BUSINESS
NOTE 1 - DESCRIPTION OF BUSINESS | 12 Months Ended |
Sep. 30, 2011 | |
Accounting Policies [Abstract] | |
NOTE 1 - DESCRIPTION OF BUSINESS | NOTE 1 - DESCRIPTION OF BUSINESS |
THE COMPANY PREVIOUSLY HAD INSUFFICIENT WORKING CAPITAL TO PAY FOR THE PROFESSIONAL SERVICES REQUIRED TO PREPARE, AUDIT, AND FILE THE QUARTERLY AND ANNUAL REPORTS REQUIRED BY THE SECURITIES ACT OF 1934. AS A RESULT, THE AUDITORS WHO AUDITED THE SEPTEMBER 30, 2007 FINANCIAL STATEMENTS AND REVIEWED THE QUARTERLY REPORTS THROUGH JUNE 30, 2008 RESIGNED EFFECTIVE DECEMBER 13, 2011. | |
IN FEBRUARY 2010 THE BOARD OF DIRECTORS VOTED TO DISCONTINUE THE MOBILE DVR AND LOCATION PRODUCTS LINE OF BUSINESS REPORTED IN THESE FINANCIAL STATEMENTS DUE TO THE CUMULATIVE EFFECTS OF SEVERELY DECLINING REVENUES RESULTING FROM THE 2008 RECESSION. SINCE THIS DECISION WAS MADE SUBSEQUENT TO THE YEARS ENDED SEPTEMBER 30, 2008 AND 2009, THE QUARTERLY AND YEAR END STATEMENTS FOR THOSE YEARS ARE BEING REPORTED ON A GOING CONCERN BASIS RATHER THAN AS DISCONTINUED OPERATIONS. THEY WILL, HOWEVER, BE REPORTED AS DISCONTINUED OPERATIONS COMMENCING WITH THE FISCAL 2010 FILINGS. | |
NEW MANAGEMENT HAS SUBSEQUENTLY INFUSED SUFFICIENT WORKING CAPITAL TO BRING THE 1934 ACT FILINGS CURRENT. ADDITIONALLY, A NEW LINE OF BUSINESS HAS ALSO COMMENCED WHICH WILL BE REPORTED ON IN THE FISCAL 2011 AND 2012 FILINGS. | |
ACCORDINGLY, THESE FINANCIAL STATEMENTS ARE BEING SUBMITTED ONLY TO COMPLY WITH SEC RULES AND REGULATIONS AND SHOULD NOT BE RELIED UPON FOR YOUR INVESTMENT DECISIONS. THE OPERATIONS REPORTED ON IN THESE FINANCIAL STATEMENTS HAVE BEEN DISCONTINUED AS OF FEBRUARY 4, 2010. NEW MANAGEMENT ENCOURAGES THE READERS OF THESE FINANCIAL STATEMENTS TO SUSPEND ANY INVESTMENT DECISIONS PERTAINING TO THE STOCK OF THIS COMPANY UNTIL ALL REQUIRED 1934 ACT FILINGS ARE BROUGHT CURRENT. | |
The Company was incorporated in Texas on June 22, 1953 as American Mortgage Company. On May 16, 1996, the Company changed its name to National Scientific Corporation. On April 3, 2012, the Company changed its name to Cloud Medical Doctor Software Corporation. During 1996, the Company acquired the operations of Eden Systems, Inc. (Eden) as a wholly owned subsidiary. Eden was engaged in water treatment and the retailing of cleaning products. Eden’s operations were sold on October 1, 1997. From September 30, 1997 through the year ended September 30, 2001, we aimed our efforts in the research and development of semiconductor proprietary technology and processes and in raising capital to fund its operations and research. Beginning in calendar 2002, we focused our efforts on the development, acquisition, enhancement and marketing of location device technologies. Our revenue is derived from sales of electronic devices, recognized as the product is delivered. | |
In February 4, 2010 the prior Board members Mr. Michael Grollman and Mr. Greg Szabo, voted to discontinue and wind down the operations of the Company's Mobile DVR and Location Products business and operate the remaining Company assets in a Limited Liability Company named NSC Labs, LLC, a company controlled and owned by Mr. Grollman. Mr. Grollman and NSC Labs, LLC entered into an agreement to pay the Company $100,000 plus 2% of revenues. Since as of this filing neither Mr. Grollman nor NSC Labs, LLC have paid the specified consideration for this transaction the transaction has not been recorded in the accounting records of the Company | |
In November 19, 2010, the prior management was terminated and new management began working on operations related to the Company’s medical billing software. In fiscal 2011, the year of termination of prior management, new management has deemed that the above transaction transferring prior operations to NSC Labs, LLC was transacted in full and final settlement of the liabilities to former management including those captioned as “disputed accrued expenses – related party” on the Balance Sheet. Since the transaction was related to former management who had the ability to affect the terms and outcomes of the liabilities, the transaction has been subsequently recorded as an increase to additional paid in capital. |
NOTE_2_BASIS_OF_PRESENTATION_A
NOTE 2 - BASIS OF PRESENTATION AND GOING CONCERN ISSUES | 12 Months Ended |
Sep. 30, 2011 | |
Notes to Financial Statements | |
NOTE 2 - BASIS OF PRESENTATION AND GOING CONCERN ISSUES | NOTE 2 - BASIS OF PRESENTATION AND GOING CONCERN ISSUES |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and (iii) the reported amount of net revenues and expenses recognized during the periods presented. Adjustments made with respect to the use of estimates often relate to improved information not previously available. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of financial statements; accordingly, actual results could differ from these estimates. | |
In managements’ opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. |
NOTE_3_GOING_CONCERN_ISSUES
NOTE 3 - GOING CONCERN ISSUES | 12 Months Ended |
Sep. 30, 2011 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NOTE 3 - GOING CONCERN ISSUES | NOTE 3 - GOING CONCERN ISSUES |
The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. However, the Company has a net loss for the twelve months ended September 30, 2011 of $356,629, an accumulated deficit at September 30, 2011 of $26,229,970, and needs additional cash to maintain its operations. | |
These factors raise doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company’s continued existence is dependent upon management’s ability to develop profitable operations, continued contributions from the Company’s executive officers to finance its operations and the ability to obtain additional funding sources to explore potential strategic relationships and to provide capital and other resources for the further development and marketing of the Company’s products and business. |
NOTE_4_SUMMARY_OF_SIGNIFICANT_
NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | |||||||||||||||
Sep. 30, 2011 | ||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||
NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||
The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America. Significant accounting policies are as follows: | ||||||||||||||||
Use of Estimates and Assumptions | ||||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and (iii) the reported amount of net revenues and expenses recognized during the periods presented. Adjustments made with respect to the use of estimates often relate to improved information not previously available. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of financial statements; accordingly, actual results could differ from these estimates. | ||||||||||||||||
Revenue Recognition | ||||||||||||||||
Revenue includes provision of services. The Company recognizes revenue from provision of services at the time evidence of an arrangement exists, fees are contractually fixed or determinable, collection is reasonably assured through historical collection results and regular credit evaluations, and there are no uncertainties regarding customer acceptance. | ||||||||||||||||
Accounts Receivable and Allowance for Uncollectible Accounts | ||||||||||||||||
Substantially all of the Company’s accounts receivable balance is related to trade receivables. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company will maintain allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments for services. Accounts with known financial issues are first reviewed and specific estimates are recorded. The remaining accounts receivable balances are then grouped in categories by the number of days the balance is past due, and the estimated loss is calculated as a percentage of the total category based upon past history. Account balances are charged off against the allowance when it is probable the receivable will not be recovered. | ||||||||||||||||
Cash and Cash Equivalents | ||||||||||||||||
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. At September 30, 2011, cash and cash equivalents include cash on hand and cash in the bank and the FDIC insures these deposits up to $250,000. | ||||||||||||||||
Income Taxes | ||||||||||||||||
Deferred income taxes are provided to reflect the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. | ||||||||||||||||
The Company adopted the provisions of ASC Topic 740, Accounting For Uncertainty In Income Taxes-An Interpretation of ASC Topic 740 ("ASC Topic 740"). ASC Topic 740 contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not, that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating the Company's tax positions and tax benefits, which may require periodic adjustments. At September 30, 2011, the Company did not record any liabilities for uncertain tax positions. | ||||||||||||||||
Share-Based Compensation | ||||||||||||||||
The Company measures the cost of services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. Compensation cost is recognized over the vesting or requisite service period. The Black-Scholes option-pricing model is used to estimate the fair value of options or warrants granted. | ||||||||||||||||
Basic and Diluted Net Loss Per Share | ||||||||||||||||
Basic income (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. The weighted average number of shares is calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding. Diluted earnings per share reflects the potential dilution that could occur if stock options, warrants, and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company. | ||||||||||||||||
Diluted loss per share is the same as basic loss per share during periods where net losses are incurred since the inclusion of the potential common stock equivalents would be anti-dilutive as a result of the net loss. | ||||||||||||||||
Concentration of Credit Risk | ||||||||||||||||
All of the Company’s cash and cash equivalents are maintained in regional and national financial institutions. The Company has exposure to credit risk to the extent that its cash and cash equivalents exceed amounts covered by the U.S. federal deposit insurance; however, the Company has not experienced any losses in such accounts. In management’s opinion, the capitalization and operating history of the financial institutions are such that the likelihood of material loss is remote. | ||||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||||
The Company's financial instruments consist primarily of cash, accounts payable and accrued expenses, and debt. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments. | ||||||||||||||||
The Company adopted ASC Topic 820, Fair Value Measurements (“ASC Topic 820”), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The standard provides a consistent definition of fair value which focuses on an exit price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The standard also prioritizes, within the measurement of fair value, the use of market-based information over entity specific information and establishes a three-level hierarchy for fair value measurements based on the nature of inputs used in the valuation of an asset or liability as of the measurement date. | ||||||||||||||||
The three-level hierarchy for fair value measurements is defined as follows: | ||||||||||||||||
• | Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; liabilities in active markets; | |||||||||||||||
• | Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets that are not considered to be active; or directly or indirectly including inputs in markets that are not considered to be active; | |||||||||||||||
• | Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement | |||||||||||||||
The following table summarizes fair value measurements by level at September 31, 2011 and 2010 for assets measured at fair value on a recurring basis: | ||||||||||||||||
at September 30, 2011 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Proprietary Technology | 1,200,106 | 1,200,106 | ||||||||||||||
Total Proprietary Technology | 1,200,106 | 1,200,106 | ||||||||||||||
at September 30, 2010 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Proprietary Technology | ||||||||||||||||
Total Proprietary Technology | — | — | ||||||||||||||
Reclassifications | ||||||||||||||||
Certain prior period amounts have been reclassified to conform to current year presentations. | ||||||||||||||||
Recent Accounting Pronouncements | ||||||||||||||||
No accounting standards or interpretations issued recently are expected to a have a material impact on the Company’s financial position, operations or cash flows. |
NOTE_5_DISCONTINUED_OPERATIONS
NOTE 5 - DISCONTINUED OPERATIONS | 12 Months Ended | ||||||||
Sep. 30, 2011 | |||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||
NOTE 5 - DISCONTINUED OPERATIONS | NOTE 5- DISCONTINUED OPERATIONS | ||||||||
The Company’s former Board of Directors believed that it was in the best interest of the Company to discontinue the business operation of the GPS operational device business. In 2011, this business was transferred to National Scientific, LLC by prior management in which he was to pay $100,000 for that technology the former officer never paid the required compensation. The Company discontinued these operations and began selling Medical Business Software and is the current operation of the Company. | |||||||||
Accordingly, the Company reclassified the assets, liabilities and operations related to its GPS operational device business as discontinued operations. Consequently, the accompanying consolidated financial statements reflect the assets, liabilities and operations of the GPS operational device business as net assets of discontinued operations, net liabilities of discontinued operations and operations from discontinued operations in accordance with ASC Topic 360, Accounting for the Impairment or Disposal of Long Lived Assets. | |||||||||
Details of those classifications are shown below. | |||||||||
30-Sep-11 | September 30, | ||||||||
2010 | |||||||||
Net assets of discontinued operations: | |||||||||
Cash | $ | — | $ | 2,197 | |||||
Accounts receivable | — | — | |||||||
Deferred offering costs | — | 400 | |||||||
Net assets of discontinued operations | $ | — | $ | 2,597 | |||||
Net liabilities of discontinued operations: | |||||||||
Accounts payable and accrued expenses | $ | 169,176 | $ | 195,072 | |||||
Disputed salaries & vacation of former officers | 968,645 | 968,645 | |||||||
Disputed salary – former employee | 20,256 | 20,256 | |||||||
Disputed payroll taxes for back pay of former officers | 84,701 | 84,701 | |||||||
Disputed interest | 209,215 | 191,346 | |||||||
Interest expenses | 42,137 | 42,137 | |||||||
Former officer note payable at 8% interest rate | 59,704 | 59,704 | |||||||
Shareholders demand note payable at 12% | 11,625 | 11,625 | |||||||
Shareholders demand note payable at 12% | 20,000 | 20,000 | |||||||
Unsecured note payable at 8% interest due November 2010, interest payments in default at 9/30/2010 | 175,000 | 175,000 | |||||||
Note discount | — | (860 | ) | ||||||
Note beneficial conversion feature | — | (166 | ) | ||||||
Net liabilities of discontinued operations | $ | 1,760,459 | $ | 1,767,460 | |||||
Years ended | |||||||||
September 30, | |||||||||
2011 | 2010 | ||||||||
Discontinued operations: | |||||||||
Revenues | $ | 3,400 | $ | 58,788 | |||||
Cost of sales | — | 25,462 | |||||||
Operating expenses | — | 36,485 | |||||||
Interest expense | 19,612 | 31,962 | |||||||
Interest income | — | — | |||||||
Loss from Discontinued Operations | $ | 16,212 | $ | 35,121 | |||||
Commitments and contingencies that were discontinued as a result of the transfer of the assets to National Scientific LLC as follows: | |||||||||
On September 7, 2005, we entered into a factoring agreement with United Capital Funding (UCF) of Florida. UCF is a specialized financial services firm offering Accounts Receivable Management and working capital funding via factoring. We expect to improve our cash flow with this arrangement. | |||||||||
Under the arrangement, we sell to UCF as absolute owner, invoices that we submit to UCF to be factored. Upon purchase, UCF assumes the risk of non-payment on purchased invoices, so long as the cause of non-payment is solely due to the occurrence of an insolvency event. As collateral securing the obligations, we grant UCF a continuing first priority security interest in all accounts and related inventory. Notwithstanding the creation of the above security interest, our relationship with UCF is one of Seller and Purchaser of accounts, and not that of lender and borrower. However, as there is certain recourse for non-payment, the accounts receivable are recorded at the estimated realizable value, net of allowances and the net advanced amount from UCF is recorded as an obligation at the end of fiscal 2010 and 2010. The initial and periodic factoring fee is .45% of the face amount of factored invoices. The factoring period is five days and the purchase price is 80% of the face amount, excluding sales tax. | |||||||||
UCF typically advances to us 80% of the total amount of invoices factored, excluding sales tax. UCF retains 20% of the outstanding factored invoices as a reserve, which it holds until the customer pays the factored invoice to UCF. | |||||||||
On November 1, 2005, as an important phase in the current year’s financing plan, we entered into a financing program with Strategic Working Capital Fund, LP. The terms of this program include a five-year Note payable at maturity in November 2010 for $175,000, at an effective annual interest rate of 8%. Interest is due and payable semi-annually on May 1st and November 1st for each year in which the note is outstanding The transaction also included 1,200,000 restricted common shares and a conversion/exchange option to convert the principal amount and any unpaid interest of the Note into common shares at a per share conversion price of $0.0525. These shares include weighted average anti-dilution provisions, as well as piggyback registration rights. Additionally, the Note has various put and call rights, and has a right to early payment under certain conditions after 2 years. The 1,200,000 restricted common shares were recorded at $0.043, which was the five-day average market closing price of our stock. The note and common stock were issued with a debt discount of $51,600 and a beneficial conversion feature of $9,933. The discount and beneficial conversion feature are being amortized to interest expense over the term of the note, which is approximately 60 months. The issuance of the shares resulted in deferred financing costs of $24,000. The deferred financing costs are being amortized over term of the note, which is approximately 60 months, and are included in the statement of operations as offering costs. | |||||||||
On February 24, 2005, March 28, 2005, May 2, 2005, and May 27, 2005 our Chairman Michael Grollman made new personal loans to the Company totaling $159,000 to assist us with working capital needs. The loans are evidenced by a demand note that provides for repayment within five business days of a demand notice from Mr. Grollman, with interest of 6% compounded annually from June 1, 2005. These loans were secured by an interest in the copyrights in the Company’s iBus software and designs. During the quarter to September 30, 2007, these loans were paid down by $11,000. As of September 30, 2007, these loans had a balance outstanding of $148,000 and the interest rate going forward was adjusted to 8% compounded annually from October 1, 2007. On September 30, 2007, the Company converted unpaid interest of $13,300 on demand notes payable to Michael Grollman into a new demand note of $13,300 that provides for repayment within five business days of a demand notice from Mr. Grollman, with interest of 8% compounded annually on October 1st. The balance of the note at September 30, 2011 is $59,704. | |||||||||
On April 27, 2006, we secured a short-term loan of $16,625 from a shareholder. The loan carries an origination/placement fee of $500 and has a perfectible security interest a) prior to delivery in any assets purchased for the fulfillment of a customer’s order dated March 16, 2006, and b) in any receivable resulting from the fulfillment of the customer’s purchase order. The interest rate on the loan is 12%. The transaction also included 100,000 warrants to purchase our common stock at $0.036 at any time before April 27, 2009. The note had an approximate maturity date of June 15, 2006. At September 30, 2006 and September 30, 2007 this note was in default. As of September 30, 2011 $11,625 of this loan was in default. | |||||||||
On May 31, 2006, we secured a short-term loan of $20,000 from a shareholder. The loan carries an origination/placement fee of $500 and has a perfectible security interest a) prior to delivery in any assets purchased for the fulfillment of Clover Park, WA’s order and b) in any receivable resulting from the fulfillment of the Clover Park purchase order. The interest rate on the loan is 12%. The transaction also included 100,000 warrants to purchase our common stock at $0.036 at any time before May 31, 2009. The note had a maturity date of July 10, 2006. At September 30, 2011 this note was in default. |
NOTE_6_COMMITMENT_AND_CONTINGE
NOTE 6 - COMMITMENT AND CONTINGENCIES | 12 Months Ended |
Sep. 30, 2011 | |
Commitments and Contingencies Disclosure [Abstract] | |
NOTE 6 - COMMITMENT AND CONTINGENCIES | NOTE 6– COMMITMENT AND CONTINGENCIES |
Rent expense for the years ended September 30, 2011 and 2010 was approximately $0.00 and $7,245 respectively |
NOTE_7_RELATED_PARTY_TRANSACTI
NOTE 7 - RELATED PARTY TRANSACTIONS | 12 Months Ended | ||
Sep. 30, 2011 | |||
Related Party Transactions [Abstract] | |||
NOTE 7 - RELATED PARTY TRANSACTIONS | NOTE 7– RELATED PARTY TRANSACTIONS | ||
In September 30, 2009 the Company issued 28,000,000 common shares at the trading price of the common stock of $0.0012785. The Stock was issued for unpaid compensation to officers and reduced accrued compensation by $35,800. | |||
On July 19, 2010 the Company assumed the line of credit of new management from Chase Bank of $36,000 to fund transitional expenses of which the net advance totaled $44,535. | |||
In September 30, 2011 the Company issued 15,000,000 common shares at the trading price of the common stock of $0.007. The Stock was issued for compensation to new management and recorded and expense of $105,000. | |||
In April 2011 the Company issued 4,000,000 common shares at the trading price of the common stock of $0.0095. The stock was issued for compensation to new management and recorded and expense of $38,000. | |||
The Company entered into an employment agreement with its Chief Executive Officer (the “Executive’) on January 1, 2013 (the “Employment Agreement”). The Employment Agreement, will expire January 1, 2018 and shall automatically renew for another 5 years unless terminated in accordance with the provisions of the Employment Agreement. The Employment Agreement provides for: | |||
i. | A monthly salary of $20,833 per month subject to an annual increase of 10% per year and consistent with the Company policy applicable to other senior executives and officers and approval by the Board of Directors. | ||
ii. | A cash bonus of 25% of his annual base salary each year if the Company reaches the following milestones (none of which were attained in 2013): | ||
a. | The Company posts annual gross revenues on a consolidated basis of at least $5,000,000; | ||
b. | The Company's earnings before the deduction of income taxes and amortization expenses (“EBITA”), including cash extraordinary items but before officer's bonuses, on a consolidated basis for any year is at least $1,000,000; or | ||
iii. | The issuance of shares equal to 1% of the then issued and outstanding shares of the Company annually, which will be issued in 2013. | ||
iv. | The issuance of common stock on each anniversary date of the Employment Agreement of 5,000,000 and issuance of common stock for every acquisition granting 5,000,000 for DNA, 5,000,000, and 1,000,000 for MediSouth, LLC | ||
v. | An automobile allowance of $1,500 per month. | ||
vi. | A medical insurance allowance of $1,500 per month. | ||
vii. | In the event the Executive's employment is terminated without cause he will receive the entire contract remaining on the agreement. | ||
For the years ended September 30, 2011 and 2010, the Company paid $0.00 compensation. | |||
The Company entered into an employment agreement with its Chief Financial Officer (the “Executive’) on January 1, 2013 (the “Employment Agreement”). The Employment Agreement will expire January 1, 2018 and shall automatically renew for another 5 years unless terminated in accordance with the provisions of the Employment Agreement. The Employment Agreement provides for: | |||
i. | A monthly salary of $12,500 per month subject to an annual increase of 10% per year and consistent with the Company policy applicable to other senior executives and officers and approval by the Board of Directors. | ||
ii. | A cash bonus of 25% of his annual base salary each year if the Company reaches the following milestones (none of which were attained in 2013): | ||
a. | The Company posts annual gross revenues on a consolidated basis of at least $5,000,000; | ||
b. | The Company's earnings before the deduction of income taxes and amortization expenses (“EBITA”), including cash extraordinary items but before officer's bonuses, on a consolidated basis for any year is at least $1,000,000; or | ||
iii. | The issuance of shares equal to 1% of the then issued and outstanding shares of the Company annually, which will be issued in 2013. | ||
iv. | The issuance of common stock on each anniversary date of the Employment Agreement of 5,000,000 and issuance of common stock for every acquisition granting 3,000,000 for DNA, 3,000,000, and 750,000 for MediSouth, LLC | ||
v. | An automobile allowance of $1,000 per month. | ||
vi. | A medical insurance allowance of $1,500 per month. | ||
vii. | In the event the Executive's employment is terminated without cause he will receive the entire contract remaining on the agreement. | ||
For the years ended September 30, 2011 and 2010, the Company paid $0.00 compensation |
NOTE_8_EQUITY
NOTE 8 - EQUITY | 12 Months Ended |
Sep. 30, 2011 | |
Equity [Abstract] | |
NOTE 8 - EQUITY | NOTE 8 - EQUITY |
On April 11, 2011 the Company amended its articles of incorporation to increase the authorized common shares to 650,000,000, at $0.01 par value and 180,526,879 are issued and outstanding as of September 30, 2011. and 4,000,000 preferred shares outstanding at a par value of $.01. | |
The Common stock holders have right to vote one share for every share that is issued. | |
The Preferred stockholders have designated rights and preferences of a Series A Convertible Preferred Stock, and reserved 4,000,000 shares of preferred stock against its issuance, such rights, preferences and designations. Each share of the Preferred Stock shall have 150 votes on all matters presented to be voted by the holders of our common stock. | |
2013 | |
In October, 2012 the Company issued 137,500 common shares for $46,000 and issued 10,000 common stock in conjunction with the sale of medical software. | |
In December 6, 2012 the Company issued 500,000 common shares for the acquisition of CipherSmith software, issued 200,000 common shares for the sale of medical software. | |
In January 22, 2013 the Company issued 200,000 common shares for the acquisition of CipherSmith software. | |
In March 21, 2013 the Company issued 270,000 common shares for software investment in the company in accordance with the Software Investment Agreements. | |
In March 21, 2013 the Company issued 500,000 to Krooss Family Trust LLP for the acquisition of Doctors Network of America in Flowood, Mississippi and all of the assets of that company. Also on April 17, 2013 the Company issued 167,000 for compensation for the salaries for the entire year of 2013 those shares were issued to Krooss Family Trust LLP in accordance with the Agreement. On April 17, 2013 the Company issued 378,500 to Krooss Family Trust LLP in accordance with the Agreement with total shares issued to William and Marie Krooss of 1,045,500 common shares. | |
April 17, 2013 the Company cancelled the 200,000 common shares issued to for the acquisition and reissued 220,004 common shares for the acquisition of CipherSmith software. | |
April 17, 2013 the Company issued 95,000 for the software investment in the Company in accordance with the Software Investment Agreements. | |
May 10, 2013 the Company issued 20,000 common shares for software investment in the company in accordance with the Software Investment Agreements. | |
June 26, 2013 the Company issued 25,000 common shares for software investment in the company in accordance with the Software Investment Agreements. | |
August 26, 2013 the Company issued 120,000 common shares to two Software Sales Personal located in California. | |
2012 | |
During the ten months ended July 31, 2012 the Company issued 30,000,000 common shares for there the reduction of debt from our CEO and reduced debt of the company by $1,200,106. The Company also issued 19,000 common shares for services rendered by professionals and recorded the expenses based upon the trading price of the common shares of $0.0102 and expensed $204 as consulting fees. The Company issued 706,333 common shares to third parties that have purchased our medical billing software at the trading price of the common stock of $0.0160 and recorded a revenue contra account of $10,401. | |
The Company issued 90,000 common shares for $18,000 in cash. | |
The Company issued 200,000 common shares to Kroosss Medical Management in accordance with the acquisition agreement and recorded it at the trading price of the common shares of $0.020 and recorded an investment in Krooss Medical Management of $4,000. | |
In August of 2012 the Company issued 100,000 shares to MediSouth LLC for the acquisition of its software. The stock was valued at $2,500 (See MediSouth LLC software acquisition below). | |
2011 | |
In September 30, 2011 the Company issued 15,000,000 common shares at the trading price of the common stock of $0.007. The Stock was issued for compensation to new management and recorded and expense of $105,000. | |
The Company issued 250,000 in common stock for $25,000 in cash. | |
2010 | |
No common stock was issued. | |
Common Stock | |
The holders of our common stock are entitled to receive such dividends, if any, as may be declared by our board of directors from time to time out of legally available funds. The dividend rights of our common stock are junior to any preferential dividend rights of any outstanding shares of preferred stock. The holders of our common stock also are entitled to receive distributions upon our liquidation, dissolution or winding up of our assets that are legally available for distribution, after payment of all debt and other liabilities and distribution in full of preferential amounts, if any, to be distributed to holders of our preferred stock. | |
The holders of our common stock are not entitled to preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of our common stock are subject to, and may be adversely affected by, the rights of any series of preferred stock that we may designate and issue in the future. | |
Preferred Stock | |
The Company has authorized 4,000,000 shares of preferred stock, at $.001 par value and zero are issued and outstanding as of September 30, 2011. The Corporation established and designates the rights and preferences of a Series A Convertible Preferred Stock, and reserves 4,000,000 shares of preferred stock against its issuance, such rights, preferences and designations. Each share of the Preferred Stock shall have 150 votes on all matters presented to be voted by the holders of our common stock. All 4,000,000 shares of preferred stock that have been issued to our CEO & CFO on April 11, 2011 valued at the trading price of the common stock of $0.0095 and recorded as an expense of $38,000. | |
The issuance of preferred stock by our board of directors could adversely affect the rights of holders of the common stock by, among other things, establishing preferential dividends, liquidation rights or voting powers. See “Risk Factors” above. |
NOTE_9_STOCKBASED_COMPENSATION
NOTE 9 - STOCK-BASED COMPENSATION | 12 Months Ended | ||||||||||||||||||||||
Sep. 30, 2011 | |||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||
NOTE 9 - STOCK-BASED COMPENSATION | NOTE 9 – STOCK-BASED COMPENSATION | ||||||||||||||||||||||
Options | |||||||||||||||||||||||
The Prior board of directors adopted the 2000 Stock Option Plan effective January 1, 2001. Our stockholders formally approved the 2000 Stock Option Plan on February 14, 2001. The 2000 Stock Option plan terminated in accordance with the plan provisions on December 1, 2010. The Current Board of Directors did not extend the Stock Option Plan, allowing it to terminate. | |||||||||||||||||||||||
Under the 2000 Stock Option Plan, the purchase price must be at least 100% of the fair market value of our common stock (if the option is an incentive stock option), or at least 25% of the fair market value of our common stock at the time the option was granted (if the option is a nonqualified grant), or such higher price as may be determined by the Board of Directors at the time of grant. If however, an incentive stock option was granted to an individual who would, immediately before the grant, directly or indirectly own more than 10% of the total combined voting power of all our classes of stock, the purchase price of the shares of common stock covered by such incentive stock option may not be less than 110% of the fair market value of such shares on the day the incentive stock option was granted. As the price of the Company’s common stock was quoted on the OTC Bulletin Board, the fair market value of the common stock underlying options granted under the 2000 Stock Option Plan was the last closing sale price of the common stock on the day the options were granted. If there was no market price for the common stock, then our Board of Directors may, after taking all relevant facts into consideration, determined the fair market value of our common stock. | |||||||||||||||||||||||
According to Section 10. Of the agreement captioned “Exercise of Options Upon Termination” | |||||||||||||||||||||||
“(a) Subject to Section 10(c), upon the termination of a Grantee’s relationship with the Company and its Subsidiaries, the period during which such Grantee may exercise any outstanding exercisable installments of his Options that were exercisable at the date of termination of his relationship with the Company shall not exceed (i) if such termination is due to death or permanent and total disability, one year from the date of such termination, and (ii) in all other cases, three months (six months for Nonemployee Directors) from the date of such termination, provided, however, that in no event shall the period extend beyond the expiration of the Option term. Notwithstanding the foregoing, all Options shall immediately terminate upon a termination of a Grantee’s employment if the Committee determines, in its sole discretion, that such termination is for Cause. | |||||||||||||||||||||||
(b) In no event shall any Option be exercisable for more than the maximum number of shares that the Grantee was entitled to purchase at the date of termination of the relationship with the Company and its Subsidiaries. | |||||||||||||||||||||||
(c) The Committee may, in its discretion, extend the period of exercisability set forth in clauses (i) and (ii) in paragraph (a) above; provided, however, that such period may not be extended for Options granted to Nonemployee Directors or for ISOs.” | |||||||||||||||||||||||
Accordingly, upon termination of employment with the Company, whether through dismissal or resignation, the options granted to former management expired. All remaining options expired three months after the resignation of Mr. Grollman in 2010. Additionally, current management did not extend the options of any prior management. | |||||||||||||||||||||||
A summary of Options activity for the year ended September 30, 2011 and 2010 is presented below: | |||||||||||||||||||||||
Outstanding Options | |||||||||||||||||||||||
Shares | Number of | Weighted | Weighted Average | Aggregate | |||||||||||||||||||
Available for | Shares Granted | Average | Remaining | Intrinsic Value | |||||||||||||||||||
Grant | Exercise Price | Contractual Life | |||||||||||||||||||||
(years) | |||||||||||||||||||||||
1-Oct-08 | 7,000,000 | 5,271,756 | 0.43 | 4.75 | $ | — | |||||||||||||||||
Grants | 40,000 | $ | 0.15 | — | |||||||||||||||||||
Forfeitures | — | — | |||||||||||||||||||||
30-Sep-09 | — | 5,311,756 | $ | 0.43 | 3.75 | — | |||||||||||||||||
Grants | — | — | |||||||||||||||||||||
Forfeitures | (5,311,756 | )- | .64- | ||||||||||||||||||||
30-Sep-11 | 7,000,000 | — | $ | — | — | — | |||||||||||||||||
The Company values all warrants using the Black-Scholes option-pricing model. Critical assumptions for the Black-Scholes option-pricing model include the market value of the stock price at the time of issuance, the risk-free interest rate corresponding to the term of the warrant, the volatility of the Company’s stock price, dividend yield on the common stock, as well as the exercise price and term of the warrant. The warrants are not subject to any form of vesting schedule and, therefore, are exercisable by the holders anytime at their discretion during the life of the warrant. No discounts were applied to the valuation determined by the Black-Scholes option-pricing model. | |||||||||||||||||||||||
Warrants | |||||||||||||||||||||||
During the year ended September 30, 2011, no awards were granted, no share purchase warrants were exercised, and no warrants were forfeited. | |||||||||||||||||||||||
Summary of warrant activity for the year ended September 30, 2011 and 2010 is presented below: | |||||||||||||||||||||||
Number of | Weighted | Weighted Average | Aggregate | ||||||||||||||||||||
Shares Granted | Average | Remaining | Intrinsic Value | ||||||||||||||||||||
Exercise Price | Contractual Life | ||||||||||||||||||||||
(years) | |||||||||||||||||||||||
1-Oct-09 | 2,308,497 | $ | 0.1 | $ | 58 | $ | — | ||||||||||||||||
Grants | — | — | |||||||||||||||||||||
Expired | — | — | |||||||||||||||||||||
30-Sep-10 | 2,308,497 | $ | 0.1 | 0.38 | — | ||||||||||||||||||
Grants | — | — | |||||||||||||||||||||
Expired | (2,308,497 | ) | — | ||||||||||||||||||||
30-Sep-11 | — | $ | — | $ | — | $ | — | ||||||||||||||||
The Company values all warrants using the Black-Scholes option-pricing model. Critical assumptions for the Black-Scholes option-pricing model include the market value of the stock price at the time of issuance, the risk-free interest rate corresponding to the term of the warrant, the volatility of the Company’s stock price, dividend yield on the common stock, as well as the exercise price and term of the warrant. The warrants are not subject to any form of vesting schedule and, therefore, are exercisable by the holders anytime at their discretion during the life of the warrant. No discounts were applied to the valuation determined by the Black-Scholes option-pricing model. | |||||||||||||||||||||||
Stock Option Plan | |||||||||||||||||||||||
Our board of directors adopted the 2000 Stock Option Plan effective January 1, 2001. Our stockholders formally approved the 2000 Stock Option Plan on February 14, 2001. The 2000 Stock Option plan terminates in accordance with the term on December 1, 2010. The Current Board of Directors has not approved nor extended the Stock Option Plan therefore it is terminated. |
NOTE_10_INCOME_TAXES
NOTE 10 - INCOME TAXES | 12 Months Ended | ||||||||||||
Sep. 30, 2011 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
NOTE 10 - INCOME TAXES | NOTE 10 INCOME TAXES | ||||||||||||
September 30, | |||||||||||||
2011 | 2010 | ||||||||||||
Current: | |||||||||||||
Federal | $ | 0 | $ | 0 | |||||||||
State | 0 | 0 | |||||||||||
$ | 0 | $ | 0 | ||||||||||
Deferred: | |||||||||||||
Federal | $ | 8,378,837 | $ | 8,264,131 | |||||||||
State | 44,703 | 25,445 | |||||||||||
8,423,540 | 8,289,576 | ||||||||||||
Valuation allowance | (8,423,540 | ) | (8,289,576 | ) | |||||||||
Provision benefit for income taxes, net | $ | — | $ | — | |||||||||
The difference between income tax expense computed by applying the federal statutory corporate tax rate and actual income tax expense is as follows: | |||||||||||||
September 30, | |||||||||||||
2011 | 2010 | ||||||||||||
Statutory federal income tax rate | 34 | % | 34 | % | |||||||||
State income taxes and other | 9 | 9 | |||||||||||
Valuation allowance | (43.0 | ) | (43.0 | ) | |||||||||
Effective tax rate | 0 | % | 0 | % | |||||||||
Deferred income taxes result from temporary differences in the recognition of income and expenses for the financial reporting purposes and for tax purposes. The tax effect of these temporary differences representing deferred tax asset and liabilities result principally from the following: | |||||||||||||
September 30, | |||||||||||||
2011 | 2010 | ||||||||||||
Net operating loss carryforward | $ | 25,866,296 | 25,331,677 | ||||||||||
Valuation allowance | (25,688,296 | ) | (25,331,677 | ) | |||||||||
Deferred income tax asset | $ | — | $ | — | |||||||||
The Company has a net operating loss carryforward of approximately $25.0 million available to offset future taxable income through 2030. For income tax reporting purposes, the Company’s aggregate unused net operating losses are subject to limitations of Section 382 of the Internal Revenue Code, as amended. Under the Tax Reform Act of 1986, the benefits from net operating losses carried forward may be impaired or limited on certain circumstances. Events which may cause limitations in the amount of net operating losses that the Company may utilize in any one year include, but are not limited to, a cumulative ownership change of more than 50% over a three-year period. The consolidation of any limitations that may be imposed for future issuances of equity securities, including issuances with respect to acquisitions have not been determined. The Company has provided a valuation reserve against the full amount of the net operating loss benefit, because in the opinion of management based upon the earning history of the Company; it is more likely than not that the benefits will not be realized. | |||||||||||||
ASC 740 requires the consideration of a valuation allowance to reflect the likelihood of realization of deferred tax assets. Significant management judgment is required in determining any valuation allowance recorded against deferred tax assets. In evaluating the ability to recover deferred tax assets, the Company considered available positive and negative evidence, giving greater weight to its recent cumulative losses and its ability to carry-back losses against prior taxable income and lesser weight to its projected financial results due to the challenges of forecasting future periods. The Company also considered, commensurate with its objective verifiability, the forecast of future taxable income including the reversal of temporary differences. At that time the Company continued to have sufficient positive evidence, including recent cumulative profits, a reduction in operating expenses, the ability to carry-back losses against prior taxable income and an expectation of improving operating results, showing a valuation allowance was not required. At the end of the year ended September 30, 2007, changes in previously anticipated expectations and continued operating losses necessitated a valuation allowance against the tax benefits recognized in this quarter and prior quarters since they are no longer “more-likely-than-not” realizable. Under current tax laws, this valuation allowance will not limit the Company’s ability to utilize U.S. federal and state deferred tax assets provided it can generate sufficient future taxable income in the U.S. | |||||||||||||
The Company anticipates it will continue to record a valuation allowance against the losses of certain jurisdictions, primarily federal and state, until such time as it is able to determine it is “more-likely-than-not” the deferred tax asset will be realized. Such position is dependent on whether there will be sufficient future taxable income to realize such deferred tax assets. The Company’s effective tax rate may vary from period to period based on changes in estimated taxable income or loss by jurisdiction, changes to the valuation allowance, changes to federal, state or foreign tax laws, future expansion into areas with varying country, state, and local income tax rates, deductibility of certain costs and expenses by jurisdiction. |
NOTE_11_SOFTWARE_ACQUISITION_T
NOTE 11 - SOFTWARE ACQUISITION: TRANSACTION BETWEEN ENTITIES UNDER COMMON CONTROL | 12 Months Ended | ||||
Sep. 30, 2011 | |||||
Business Combinations [Abstract] | |||||
NOTE 11 - SOFTWARE ACQUISITION: TRANSACTION BETWEEN ENTITIES UNDER COMMON CONTROL | NOTE 11 – SOFTWARE ACQUISITION: TRANSACTION BETWEEN ENTITIES UNDER COMMON CONTROL | ||||
On January 2, 2011 the Company entered into an asset purchase agreement with certain private companies owned by Michael de la Garza (“MDLG”) whereby NSC acquired the rights to proprietary medical billing and practice management software developed by the private companies. | |||||
The Office of the Chief Accountant (OCA) of the Securities and Exchange Commission was consulted by Company management to insure that the transaction was recorded correctly on the books of NSC. The OCA considered the facts and circumstances as described below in their deliberations. | |||||
January 1, 2011 Acquisition Of Software A Business Combination Under Common Control | |||||
On August 24, 2010 –National Scientific Corporation (“NSC”) signed a letter of intent for NSC to acquire the Private Companies’ assets. | |||||
On November 19, 2010 – NSC and MDLG signed a revised letter of intent with the Private Companies. | |||||
In accordance with the revised LOI the following occurred and on December 1, 2010 the NSC reported that change on Form 8-K: | |||||
1 | On November 19, 2010 - MDLG was appointed CEO, President, and Chairman of the Board. At that time there were now then 3 Board members. | ||||
2 | On November 29, 2010, 4,000,000 shares of Preferred A were authorized by the Board. These preferred shares are not convertible but entitle to 150 votes per share. | ||||
3 | On November 30, 2010 – 3,000,000 Preferred A shares were beneficially issued to The Private Companies and 1,000,000 were issued to another Board member. | ||||
4 | On January 2, 2011 the sale of the software by the Private Companies to NSC was finalized which included the exchange for a $5,000,000 note convertible to 500,000,000 of common stock at $.01 per share. At the time of this transaction the Company did not have the available authorized shares to issue these shares for the convertible note. Therefore, the Company agreed to issue a $5,000,000 promissory note for 8% interest rate the note matures on April 30, 2021. | ||||
5 | On January 2, 2011 10,000,000 common shares were beneficially issued to MDLG via an affiliate for compensation. | ||||
On January 18, 2011 the prior CEO of NSC resigned from the Board of Directors and a Form 8-K was filed on February 8, 2011. | |||||
On October 5, 2011 the Company issued Absolute Medical Software Systems, LLC 30,000,000 common shares in full payment of this promissory note. | |||||
On January 3, 2013 the Company engaged a valuation expert to assess the value of the software for impairment purposes at September 30, 2011 and 2012. The Company valued the software and source code on the development cost of the software provided by Absolute Medical Software Systems, LLC of $4,296,000 for September 30, 2011 and September 30, 2012. This valuation was done by an independent Certified Valuation Analysis. | |||||
Prior Public Company Transaction | |||||
Michael de la Garza (“MDLG”) is the owner of three related private companies, Absolute, PayMed, and MedPay (“the private companies”) who own and operate medical billing software. On September 10, 2008 the private company entered into an asset purchase agreement with a prior public company. On September 10, 2008 prior publicly traded companies, purchased all the private companies’ assets, for 10,000,000 shares of common stock per the purchase agreements. On the date of that sale, September 10, 2008, the stock was trading at $.10 which valued the transaction at $1,000.000. This value was based on the software before the update to operate on a Cloud based platform. Management considers the price to represent the fair value of the software at that point in time. | |||||
This transaction was an arms-length value since MDLG was not a shareholder, officer or director of this prior public company. On June 9, 2009 the transaction was rescinded and the assets returned to The Private Companies. The private companies impaired the GAAP basis software development cost to the value of the prior public company transaction value of $1,000,000. | |||||
During the period of 2009 through 2010 the software was updated to operate on a Cloud based platform and had additional software development costs of $200,106. | |||||
The Office of Chief Accountant (“OCA”) has determined that due to the voting rights of the Preferred A shares that the transaction occurred between parties under common control. Accordingly, they have determined that the GAAP basis software development cost of the private entity sellers should become the cost basis of NSC. | |||||
Since these costs ($1,011,223) exceeded the transaction price ($1,000,000) with the prior public company, the prior costs incurred have been impaired to the September 10, 2008 value of the share received in the prior transaction. | |||||
The related convertible note which was subsequently converted to common shares has been discounted to the cost basis used to value the transaction which is less than the fair value of the software as determined by independent appraisal. | |||||
The cost basis was determined as follows: | |||||
Cost Basis for assets acquired under Common Control | Cost Basis | ||||
Cost basis of Consideration: | |||||
Absolute Medical Software Systems LLC development costs from inception | $ | 1,011,222 | |||
Impairment of software on September 10, 2008 to value | (11,222 | ) | |||
Total Value at September 10, 2008 | $ | 1,000,000 | |||
Software Update to Operate on Cloud Based Platform | |||||
Absolute Medical Software Systems LLC development costs | $ | 200,106 | |||
Total Cost Basis at January 1, 2011 | $ | 1,200,106 | |||
Purchase Price Allocation | 1-Jan-11 | ||||
Value of Consideration: | |||||
Equity instrument of $5,000,000 promissory note converted to 30,000,000 common stock on October 4, 2011 value under common control | $ | 1,200,106 | |||
Total Purchase Price | $ | 1,200,106 | |||
Cost Basis of Assets acquired under common control: | |||||
Assets: | |||||
Software source code and development costs of software | $ | 1,200,106 | |||
Cost Basis of total assets | $ | 1,200,106 | |||
NOTE_12_SUBSEQUENT_EVENTS
NOTE 12 - SUBSEQUENT EVENTS | 12 Months Ended | ||||
Sep. 30, 2011 | |||||
Subsequent Events [Abstract] | |||||
NOTE 12 - SUBSEQUENT EVENTS | NOTE 12– SUBSEQUENT EVENTS | ||||
In accordance with the Subsequent Events Topic of the FASB ASC 855, Management has evaluated subsequent events, and have determined that the following events are reasonably likely to impact the financial statements: | |||||
2013 | |||||
In October, 2012 the Company issued 137,500 common shares for $46,000 and issued 10,000 common stock in conjunction with the sale of medical software. | |||||
In December 6, 2012 the Company issued 500,000 common shares for the acquisition of CipherSmith software, issued 200,000 common shares for the sale of medical software. | |||||
In January 22, 2013 the Company issued 200,000 common shares for the acquisition of CipherSmith software. | |||||
In March 21, 2013 the Company issued 270,000 common shares for software investment in the company in accordance with the Software Investment Agreements. | |||||
In March 21, 2013 the Company issued 500,000 to Krooss Family Trust LLP for the acquisition of Doctors Network of America in Flowood, Mississippi and all of the assets of that company. Also on April 17, 2013 the Company issued 167,000 for compensation for the salaries for the entire year of 2013 those shares were issued to Krooss Family Trust LLP in accordance with the Agreement. On April 17, 2013 the Company issued 378,500 to Krooss Family Trust LLP in accordance with the Agreement with total shares issued to William and Marie Krooss of 1,045,500 common shares. | |||||
April 17, 2013 the Company cancelled the 200,000 common shares issued to for the acquisition and reissued 220,004 common shares for the acquisition of CipherSmith software. | |||||
April 17, 2013 the Company issued 95,000 for the software investment in the Company in accordance with the Software Investment Agreements. | |||||
May 10, 2013 the Company issued 20,000 common shares for software investment in the company in accordance with the Software Investment Agreements. | |||||
June 26, 2013 the Company issued 25,000 common shares for software investment in the company in accordance with the Software Investment Agreements. | |||||
August 26, 2013 the Company issued 120,000 common shares to two Software Sales Personal located in California. | |||||
2012 | |||||
During the ten months ended July 31, 2012, the Company issued the following shares: | |||||
The Company issued 30,000,000 common shares for there the reduction of debt from our CEO and reduced debt of the company by $1,200,106. | |||||
The Company issued 19,000 common shares for services rendered by professionals and recorded the expenses based upon the trading price of the common shares of $0.0102 and expensed $204 as consulting fees. | |||||
The Company issued 1,055,333 common shares to third parties that have purchased our medical billing software at the trading price of the common stock of $0.0160 and recorded a revenue contra account of $20,871. | |||||
The Company issued 90,000 common shares for $18,000 in cash. | |||||
The Company issued 200,000 common shares to Krooss Medical Management in accordance with the acquisition agreement and recorded it at the trading price of the common shares of $0.020 and recorded an investment in Krooss Medical Management of $4,000. | |||||
In August of 2012 the Company issued 100,000 shares to MediSouth LLC for the acquisition of its software. The stock was valued at $2,500 (See MediSouth LLC software acquisition below). | |||||
Software asset purchases: | |||||
On June 22, 2012 | |||||
The Company acquired Doctors Network of America in Flowood, Mississippi for 500,000 common shares and the acquisition was valued at $10,000. | |||||
The fair value of the consideration and the assets acquired is based on the aggregate value of the common stock issued in exchange for the software as shown below: | |||||
22-Jun-12 | |||||
Fair Value of Consideration: | |||||
Common Stock (500,000 common shares valued at $.008) | $ | 10,000 | |||
Total Purchase Price | $ | 10,000 | |||
Fair Value of Assets acquired: | |||||
Assets: | |||||
Software | $ | 10,000 | |||
Fair value of total assets | $ | 10,000 | |||
The acquisitions terms are as follows: | |||||
1 | Cloud-MDs will provide medical billing services under Cloud-MDs Corporation. No need for a wholly owned subsidiary to be formed to accommodate medical billing. | ||||
2 | DNA will provide personnel, network access, facilities and expertise to deliver contracted billing service support to Cloud-MDs for clients that Cloud-MDs sends to DNA for billing support. DNA will be compensated on an agreed upon schedule. All revenue will be reported as Cloud-MDs revenue and tracked separately. | ||||
3 | Goal is to grow DNA related gross revenue within Cloud-MDs to 3X, or greater, current DNA gross revenue over the next 3 years. | ||||
4 | Cloud-MDs will acquire the assets of Kroosss Medical management Systems, LLC once the revenue goals in item #3 are achieved. As consideration to Bill Kroosss and Marie Kroosss (collectively “Ownership”) of Kroosss Medical Management Systems, LLC for the acquisition of DNA, Cloud-MDs proposes the following: | ||||
a. | Current Ownership will remain in their current roles at Kroosss Medical Management Systems, LLC with current responsibilities and will take on additional responsibilities of sales and marketing in the territory of the state of Mississippi and surrounding states and will assume new responsibilities within Cloud-MDs corporate. | ||||
b. | Current executive management will remain for a period of not less than 1 year after the acquisition and Ownership salary will be established as $200,000.00. | ||||
c. | Current Ownership will be awarded NSCT class 144 stock in the amount of 500,000 common shares, with anti-dilution clause, that is restricted for 12 months during which time Ownership may not sell the awarded stock. These shares will be awarded as follows: | ||||
i. | Upon acquisition, 200,000 shares of class 144 common stock with a 12 month restriction with applicable anti-dilution clause. This stock is non-refundable to NSCT in the event of any misrepresentations by NSCT to Kroosss Medical Management Systems, LLC during the acquisition or the first 90 days following the acquisition; | ||||
ii. | After the first 90 days following the acquisition, NSCT will award to the Ownership 300,000 shares of class 144, common stock with a 12 month restriction with applicable anti-dilution clauses. | ||||
d. | For one (1) year after the acquisition, current Ownership will have the opportunity to earn up to 125,000 shares, per calendar quarter, of addition shares of NSCT common stock based on meeting certain performance criteria. The shares will be issued with applicable anti-dilution clause. | ||||
5 | The acquired assets and customer base of Kroosss Medical Management Systems, LLC will be merged into the current asset and customer base of Cloud-MDs. | ||||
6 | Upon the purchase of DNA by Cloud-MDs, all liabilities of DNA as of the date of asset transfer will be the responsibility of Kroosss Medical management Systems, LLC. | ||||
7 | DNA cannot add new clients. New clients will be sent to Cloud-MDs. | ||||
8 | DNA ownership may be called upon to act as a reference for Cloud-MDs and/or work with Cloud-MDs senior management in an advisory capacity. | ||||
9 | DNA will become a Cloud-MDs software (PM/EMR/RM) reseller and will acquire an enterprise license with unlimited use: | ||||
a. | Enterprise license is $100,000 and includes all updates, hosting, etc. and DNA receives 100,000 shares of Cloud-MDs 144 class stock if done prior to stock roll-back. If after roll-back, stock award shall equal $100,000/then current share price. Leasing is available. | ||||
b. | DNA can resell licenses to current DNA clients or other clients: | ||||
i. | MSRP of software license is $50,000/provider, leasing is available | ||||
ii. | A commission of up to 40% of revenue on each software license sold goes to DNA + up to 3,000 shares of stock per software license sold and support will be provided by DNA staff after training. | ||||
iii. | All revenue other than commissions goes to Cloud-MD | ||||
iv. | DNA takes 1st support call on all software licenses it sells | ||||
v. | Primary, non-exclusive, territories are the states of Mississippi, Alabama and Louisiana with additional non-exclusive territories permissible based on a specific sales opportunity | ||||
c. | DNA will become official beta site for Cloud-MDs PM/EMR/RM software releases. | ||||
10 | Upon acquisition of DNA by Cloud-MDs, Cloud-MDs will assume employer responsibilities for all current Kroosss Medical Management Systems, LLC employees. All employees of Kroosss Medical Management Systems, LLC will remain employed by Cloud-MDs in their current positions for at least 180 days after the acquisition after which time each will be evaluated for their then current responsibilities or considered for new responsibilities. | ||||
11 | Independent Medical Practice Support, LLC (“IMPS”) assets and customer base are not part of this acquisition discussion or negotiation and any IMPS related expenses or liabilities must be removed from DNA accounting records and will not be considered in future acquisition discussions or negotiations. | ||||
On August 14, 2012 | |||||
The Company through a comprehensive agreement with MediSouth, LLC, has purchased a complete source code license and will integrate and enhance this feature set as part of its ever expanding Cloud-MD Office product suite. | |||||
The fair value of the consideration and the assets acquired is based on the aggregate value of the common stock issued in exchange for the software as shown below: | |||||
14-Aug-12 | |||||
Fair Value of Consideration: | |||||
Common Stock (100,000 common shares valued at $.025) | $ | 2,500 | |||
Total Purchase Price | $ | 2,500 | |||
Fair Value of Assets acquired: | |||||
Assets: | |||||
Software source code | $ | 2,500 | |||
Fair value of total assets | $ | 2,500 | |||
2.4. Principal Conditions and Consideration. Subject to all of the terms and conditions set forth in this Agreement, and in consideration of the sale, assignment, transfer and delivery of the Purchased Assets by Licensor to Licensee, as of the Effective Date of this agreement Licensee and Licensor agree to the following (the "Purchase Consideration"): | |||||
a) MediSouth will provide Cloud-MD with the software source code for the License, expertise to install and integrate the License into Cloud-MD product offerings and deliver the MediSouth software source code to Cloud-MD. | |||||
b) For as long as Licensee makes use of the License, Licensor agrees to provide Licensee with all software updates for the License within 5 working days of Licensor implementing those same software updates in its own production version of the License. | |||||
c) Licensor agrees that Licensee shall have the right to modify the software contained in the License to meet Licensee's operational needs. | |||||
d) Cloud-MD shall provide back to MediSouth, with the permission of each affected Cloud-MD client, the de-identified purchasing data it collects as a result of Cloud-MD clients utilizing the embedded Medical Supplies and Pharmaceutical Inventory Management functionality provided by the License. | |||||
e) MediSouth shall receive 100,000 shares of non-diluteable, Class 144, Cloud-MD stock with a one (1) year trading restriction if this agreement is executed prior to Licensee's planned stock roll-back. If this agreement is executed after the Licensee's stock roll-back, the stock award shall equal $300,000/then current share price of Licensee's publicly traded stock. MediSouth shall complete the Subscription Agreement. | |||||
f) MediSouth will grant Cloud-MD all necessary rights to use the License and related patents and those rights shall be transferable to any Licensee who may purchase Cloud-MD and its assets. | |||||
g) In the event that Cloud-MD is acquired by another entity, the use of the License shall transfer to the acquiring entity with the provision that the License may be used only within the Cloud-MD software application as it was used at the time of the acquisition. | |||||
h) Other than 2.4.g above, Cloud-MD may not sell the License, transfer the License, allow any other entity to use the License as part of that entity's software application or transfer any rights to another party to use the License separately from Cloud-MD products in which the License is embedded. | |||||
i) If from the Effective Date of this agreement through the end of the 1st year following the Permanent Transfer, Licensee discovers any misrepresentations on the part of Licensor to Licensee or Licensor, Licensee or Licensor will have the right to dissolve this agreement. Should this occur, Licensor will be required to forfeit the stock awarded to it as described in item 2.4.e above with that stock having an established per share value equal to the value of a share of Licensee's stock as officially recorded on the date of Licensee's stock rollback and any assets from the original acquisition that still remain under the control of Licensee will be returned to Licensor and in their then current condition or status and both parties will exit the relationship holding each other harmless in all matters. | |||||
j) Licensor agrees to provide a software device in the licensed software that will offer an automatic logon from Licensee's software. | |||||
k) Licensor agrees to provide software operations, communications and hosting services for the licensed software in same computing facility as Licensee has its operational software until Licensee and Licensor mutually agree that this service is no longer necessary, | |||||
1) Licensee and Licensor agree to execute sales agreements for each other's products and services. | |||||
m) Licensee agrees that if due to Licensee modifications to the Licensed software, data from the modified Licensed software cannot be processed by Licensor, Licensee shall provide data in original Licensed software format and make that data available to Licensor as in 2.4.d. | |||||
n) Licensee shall have the right to copy and use all forms of documentation, marketing information and data related to the License. | |||||
o) Licensee shall have the right to brand the License with a product name selected by the Licensee and Licensor. | |||||
p) Licensor shall change the appearance of the License's end-user computer display screens to match the appearance of the Licensee's computer application's end-user computer displays, including the branding described in 2.4.0 above. | |||||
q) In the event that Licensor should cease doing business, Licensee shall have the right to continue usage of the License and all associated documentation and related marketing material without recourse from Licensor or any entity representing Licensor's interests. | |||||
r) The "powered by MediScan" text or graphic must always be displayed on modules and application web pages provided by Licensor. | |||||
2.5 Holdback Stock. Pursuant to the terms and subject to the conditions of this Agreement, no provisions shall be made for the purpose of withholding previously awarded stock by Licensee to Licensor other than those already cited in section 2.4 of this Agreement. | |||||
Cloud-MD Inventory Management System is a ground breaking Cloud-based Medical Supply Inventory Management System, specifically designed for small and medium Medical Practices, DME's, Home Health, Long-term Care, and Surgery Centers that will offer: | |||||
1. Centralized management control over medical supply and drug inventories | |||||
2. Real time utilization and financial inventory summary | |||||
3. Low price notifications | |||||
4. Par level/reorder tracking | |||||
5. RX expiration tracking | |||||
6. Auto supply re-ordering from a practices established suppliers | |||||
Based on a barcode scanning technology, Cloud-MD Inventory Management is designed to reduce workloads by automating inventory control processes. The Cloud-MD's Inventory Management System requires no installation, on-site software or special hardware. The new Cloud-MD Office application suite, of which Cloud-MD Inventory Management is a part, is fully delivered via the Internet and requires no special computing environment at the end-user facility. | |||||
Manual inventory is time consuming, labor intensive and leaves room for error. Benefiting healthcare professionals across the country, Cloud-MD's Inventory Management System is a low-cost, low-maintenance, easy to use automated system that can provide effective solutions. | |||||
On November 21, 2012 | |||||
The Company through a comprehensive agreement with CipherSmith, LLC, has purchased a complete source code, intellectual property rights, all computer software or algorithm licensed or sold under CipherSmith, and appropriate copy rights, patents, mask works, trademarks,, service marks, internet domain names or world wide web URS. This security software will be part of its ever expanding Cloud-MD Office product suite. | |||||
The fair value of the consideration and the assets acquired is based on the aggregate value of the common stock issued in exchange for the software as shown below: | |||||
21-Nov-12 | |||||
Fair Value of Consideration: | |||||
Common Stock (800,000 common shares valued at $.018) | $ | 14,400 | |||
Total Purchase Price | $ | 14,400 | |||
Fair Value of Assets acquired: | |||||
Assets: | |||||
Software source code and security software | $ | 14,400 | |||
Fair value of total assets | $ | 14,400 |
NOTE_4_SUMMARY_OF_SIGNIFICANT_1
NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | |||||||||||||||
Sep. 30, 2011 | ||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||
Use of Estimates and Assumptions | Use of Estimates and Assumptions | |||||||||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and (iii) the reported amount of net revenues and expenses recognized during the periods presented. Adjustments made with respect to the use of estimates often relate to improved information not previously available. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of financial statements; accordingly, actual results could differ from these estimates. | ||||||||||||||||
Revenue Recognition | Revenue Recognition | |||||||||||||||
Revenue includes provision of services. The Company recognizes revenue from provision of services at the time evidence of an arrangement exists, fees are contractually fixed or determinable, collection is reasonably assured through historical collection results and regular credit evaluations, and there are no uncertainties regarding customer acceptance. | ||||||||||||||||
Accounts Receivable and Allowance for Uncollectible Accounts | Accounts Receivable and Allowance for Uncollectible Accounts | |||||||||||||||
Substantially all of the Company’s accounts receivable balance is related to trade receivables. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company will maintain allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments for services. Accounts with known financial issues are first reviewed and specific estimates are recorded. The remaining accounts receivable balances are then grouped in categories by the number of days the balance is past due, and the estimated loss is calculated as a percentage of the total category based upon past history. Account balances are charged off against the allowance when it is probable the receivable will not be recovered. | ||||||||||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents | |||||||||||||||
The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. At September 30, 2011, cash and cash equivalents include cash on hand and cash in the bank and the FDIC insures these deposits up to $250,000. | ||||||||||||||||
Income Taxes | Income Taxes | |||||||||||||||
Deferred income taxes are provided to reflect the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. | ||||||||||||||||
The Company adopted the provisions of ASC Topic 740, Accounting For Uncertainty In Income Taxes-An Interpretation of ASC Topic 740 ("ASC Topic 740"). ASC Topic 740 contains a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not, that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating the Company's tax positions and tax benefits, which may require periodic adjustments. At September 30, 2011, the Company did not record any liabilities for uncertain tax positions. | ||||||||||||||||
Share-Based Compensation | Share-Based Compensation | |||||||||||||||
The Company measures the cost of services received in exchange for an award of an equity instrument based on the grant-date fair value of the award. Compensation cost is recognized over the vesting or requisite service period. The Black-Scholes option-pricing model is used to estimate the fair value of options or warrants granted. | ||||||||||||||||
Basic and Diluted Net Loss Per Share | Basic and Diluted Net Loss Per Share | |||||||||||||||
Basic income (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. The weighted average number of shares is calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding. Diluted earnings per share reflects the potential dilution that could occur if stock options, warrants, and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company. | ||||||||||||||||
Diluted loss per share is the same as basic loss per share during periods where net losses are incurred since the inclusion of the potential common stock equivalents would be anti-dilutive as a result of the net loss. | ||||||||||||||||
Concentration of Credit Risk | Concentration of Credit Risk | |||||||||||||||
All of the Company’s cash and cash equivalents are maintained in regional and national financial institutions. The Company has exposure to credit risk to the extent that its cash and cash equivalents exceed amounts covered by the U.S. federal deposit insurance; however, the Company has not experienced any losses in such accounts. In management’s opinion, the capitalization and operating history of the financial institutions are such that the likelihood of material loss is remote. | ||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | |||||||||||||||
The Company's financial instruments consist primarily of cash, accounts payable and accrued expenses, and debt. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments. | ||||||||||||||||
The Company adopted ASC Topic 820, Fair Value Measurements (“ASC Topic 820”), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The standard provides a consistent definition of fair value which focuses on an exit price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The standard also prioritizes, within the measurement of fair value, the use of market-based information over entity specific information and establishes a three-level hierarchy for fair value measurements based on the nature of inputs used in the valuation of an asset or liability as of the measurement date. | ||||||||||||||||
The three-level hierarchy for fair value measurements is defined as follows: | ||||||||||||||||
• | Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; liabilities in active markets; | |||||||||||||||
• | Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets that are not considered to be active; or directly or indirectly including inputs in markets that are not considered to be active; | |||||||||||||||
• | Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement | |||||||||||||||
The following table summarizes fair value measurements by level at September 31, 2011 and 2010 for assets measured at fair value on a recurring basis: | ||||||||||||||||
at September 30, 2011 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Proprietary Technology | 1,200,106 | 1,200,106 | ||||||||||||||
Total Proprietary Technology | 1,200,106 | 1,200,106 | ||||||||||||||
at September 30, 2010 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Proprietary Technology | ||||||||||||||||
Total Proprietary Technology | — | — | ||||||||||||||
Reclassifications | Reclassifications | |||||||||||||||
Certain prior period amounts have been reclassified to conform to current year presentations. | ||||||||||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | |||||||||||||||
No accounting standards or interpretations issued recently are expected to a have a material impact on the Company’s financial position, operations or cash flows. |
NOTE_4_SUMMARY_OF_SIGNIFICANT_2
NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | |||||||||||||||
Sep. 30, 2011 | ||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||
Fair Value Measurements Summarized by Level | at September 30, 2011 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Proprietary Technology | 1,200,106 | 1,200,106 | ||||||||||||||
Total Proprietary Technology | 1,200,106 | 1,200,106 | ||||||||||||||
at September 30, 2010 | ||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Proprietary Technology | ||||||||||||||||
Total Proprietary Technology | — | — |
NOTE_5_DISCONTINUED_OPERATIONS1
NOTE 5 - DISCONTINUED OPERATIONS (Tables) | 12 Months Ended | ||||||||
Sep. 30, 2011 | |||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||
Discontinued Operations Balance Sheet | 30-Sep-11 | September 30, | |||||||
2010 | |||||||||
Net assets of discontinued operations: | |||||||||
Cash | $ | — | $ | 2,197 | |||||
Accounts receivable | — | — | |||||||
Deferred offering costs | — | 400 | |||||||
Net assets of discontinued operations | $ | — | $ | 2,597 | |||||
Net liabilities of discontinued operations: | |||||||||
Accounts payable and accrued expenses | $ | 169,176 | $ | 195,072 | |||||
Disputed salaries & vacation of former officers | 968,645 | 968,645 | |||||||
Disputed salary – former employee | 20,256 | 20,256 | |||||||
Disputed payroll taxes for back pay of former officers | 84,701 | 84,701 | |||||||
Disputed interest | 209,215 | 191,346 | |||||||
Interest expenses | 42,137 | 42,137 | |||||||
Former officer note payable at 8% interest rate | 59,704 | 59,704 | |||||||
Shareholders demand note payable at 12% | 11,625 | 11,625 | |||||||
Shareholders demand note payable at 12% | 20,000 | 20,000 | |||||||
Unsecured note payable at 8% interest due November 2010, interest payments in default at 9/30/2010 | 175,000 | 175,000 | |||||||
Note discount | — | (860 | ) | ||||||
Note beneficial conversion feature | — | (166 | ) | ||||||
Net liabilities of discontinued operations | $ | 1,760,459 | $ | 1,767,460 | |||||
Years ended | |||||||||
September 30, | |||||||||
2011 | 2010 | ||||||||
Discontinued operations: | |||||||||
Revenues | $ | 3,400 | $ | 58,788 | |||||
Cost of sales | — | 25,462 | |||||||
Operating expenses | — | 36,485 | |||||||
Interest expense | 19,612 | 31,962 | |||||||
Interest income | — | — | |||||||
Loss from Discontinued Operations | $ | 16,212 | $ | 35,121 |
NOTE_9_STOCKBASED_COMPENSATION1
NOTE 9 - STOCK-BASED COMPENSATION (Tables) | 12 Months Ended | ||||||||||||||||||||||
Sep. 30, 2011 | |||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||
Outstanding Options | Outstanding Options | ||||||||||||||||||||||
Shares | Number of | Weighted | Weighted Average | Aggregate | |||||||||||||||||||
Available for | Shares Granted | Average | Remaining | Intrinsic Value | |||||||||||||||||||
Grant | Exercise Price | Contractual Life | |||||||||||||||||||||
(years) | |||||||||||||||||||||||
1-Oct-08 | 7,000,000 | 5,271,756 | 0.43 | 4.75 | $ | — | |||||||||||||||||
Grants | 40,000 | $ | 0.15 | — | |||||||||||||||||||
Forfeitures | — | — | |||||||||||||||||||||
30-Sep-09 | — | 5,311,756 | $ | 0.43 | 3.75 | — | |||||||||||||||||
Grants | — | — | |||||||||||||||||||||
Forfeitures | (5,311,756 | )- | .64- | ||||||||||||||||||||
30-Sep-11 | 7,000,000 | — | $ | — | — | — | |||||||||||||||||
Warrant Activity | Number of | Weighted | Weighted Average | Aggregate | |||||||||||||||||||
Shares Granted | Average | Remaining | Intrinsic Value | ||||||||||||||||||||
Exercise Price | Contractual Life | ||||||||||||||||||||||
(years) | |||||||||||||||||||||||
1-Oct-09 | 2,308,497 | $ | 0.1 | $ | 58 | $ | — | ||||||||||||||||
Grants | — | — | |||||||||||||||||||||
Expired | — | — | |||||||||||||||||||||
30-Sep-10 | 2,308,497 | $ | 0.1 | 0.38 | — | ||||||||||||||||||
Grants | — | — | |||||||||||||||||||||
Expired | (2,308,497 | ) | — | ||||||||||||||||||||
30-Sep-11 | — | $ | — | $ | — | $ | — |
NOTE_10_INCOME_TAXES_Tables
NOTE 10 - INCOME TAXES (Tables) | 12 Months Ended | ||||||||||||
Sep. 30, 2011 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Income Tax Expense | September 30, | ||||||||||||
2011 | 2010 | ||||||||||||
Current: | |||||||||||||
Federal | $ | 0 | $ | 0 | |||||||||
State | 0 | 0 | |||||||||||
$ | 0 | $ | 0 | ||||||||||
Deferred: | |||||||||||||
Federal | $ | 8,378,837 | $ | 8,264,131 | |||||||||
State | 44,703 | 25,445 | |||||||||||
8,423,540 | 8,289,576 | ||||||||||||
Valuation allowance | (8,423,540 | ) | (8,289,576 | ) | |||||||||
Provision benefit for income taxes, net | $ | — | $ | — | |||||||||
Income Tax Expense Reconciliation | September 30, | ||||||||||||
2011 | 2010 | ||||||||||||
Statutory federal income tax rate | 34 | % | 34 | % | |||||||||
State income taxes and other | 9 | 9 | |||||||||||
Valuation allowance | (43.0 | ) | (43.0 | ) | |||||||||
Effective tax rate | 0 | % | 0 | % | |||||||||
Tax Credit Carryforwards | September 30, | ||||||||||||
2011 | 2010 | ||||||||||||
Net operating loss carryforward | $ | 25,866,296 | 25,331,677 | ||||||||||
Valuation allowance | (25,688,296 | ) | (25,331,677 | ) | |||||||||
Deferred income tax asset | $ | — | $ | — |
NOTE_11_SOFTWARE_ACQUISITION_T1
NOTE 11 - SOFTWARE ACQUISITION: TRANSACTION BETWEEN ENTITIES UNDER COMMON CONTROL (Tables) | 12 Months Ended | ||||
Sep. 30, 2011 | |||||
Business Combinations [Abstract] | |||||
Business Acquisition Information | 1 | On November 19, 2010 - MDLG was appointed CEO, President, and Chairman of the Board. At that time there were now then 3 Board members. | |||
2 | On November 29, 2010, 4,000,000 shares of Preferred A were authorized by the Board. These preferred shares are not convertible but entitle to 150 votes per share. | ||||
3 | On November 30, 2010 – 3,000,000 Preferred A shares were beneficially issued to The Private Companies and 1,000,000 were issued to another Board member. | ||||
4 | On January 2, 2011 the sale of the software by the Private Companies to NSC was finalized which included the exchange for a $5,000,000 note convertible to 500,000,000 of common stock at $.01 per share. At the time of this transaction the Company did not have the available authorized shares to issue these shares for the convertible note. Therefore, the Company agreed to issue a $5,000,000 promissory note for 8% interest rate the note matures on April 30, 2021. | ||||
5 | On January 2, 2011 10,000,000 common shares were beneficially issued to MDLG via an affiliate for compensation. | ||||
Assets Acquired under Common Control | Cost Basis for assets acquired under Common Control | Cost Basis | |||
Cost basis of Consideration: | |||||
Absolute Medical Software Systems LLC development costs from inception | $ | 1,011,222 | |||
Impairment of software on September 10, 2008 to value | (11,222 | ) | |||
Total Value at September 10, 2008 | $ | 1,000,000 | |||
Software Update to Operate on Cloud Based Platform | |||||
Absolute Medical Software Systems LLC development costs | $ | 200,106 | |||
Total Cost Basis at January 1, 2011 | $ | 1,200,106 | |||
Purchase Price Allocation | 1-Jan-11 | ||||
Value of Consideration: | |||||
Equity instrument of $5,000,000 promissory note converted to 30,000,000 common stock on October 4, 2011 value under common control | $ | 1,200,106 | |||
Total Purchase Price | $ | 1,200,106 | |||
Cost Basis of Assets acquired under common control: | |||||
Assets: | |||||
Software source code and development costs of software | $ | 1,200,106 | |||
Cost Basis of total assets | $ | 1,200,106 |
NOTE_12_SUBSEQUENT_EVENTS_Tabl
NOTE 12 - SUBSEQUENT EVENTS (Tables) | 12 Months Ended | ||||
Sep. 30, 2011 | |||||
Subsequent Events [Abstract] | |||||
Fair Value of Consideration and Assets Acquired | 22-Jun-12 | ||||
Fair Value of Consideration: | |||||
Common Stock (500,000 common shares valued at $.008) | $ | 10,000 | |||
Total Purchase Price | $ | 10,000 | |||
Fair Value of Assets acquired: | |||||
Assets: | |||||
Software | $ | 10,000 | |||
Fair value of total assets | $ | 10,000 |
NOTE_1_DESCRIPTION_OF_BUSINESS1
NOTE 1 - DESCRIPTION OF BUSINESS (Details Narrative) | 12 Months Ended |
Sep. 30, 2010 | |
Accounting Policies [Abstract] | |
Compensation Related Costs | Mr. Grollman and NSC Labs, LLC entered into an agreement to pay the Company $100,000 plus 2% of revenues. |
NOTE_3_GOING_CONCERN_ISSUES_De
NOTE 3 - GOING CONCERN ISSUES (Details Narrative) (USD $) | 12 Months Ended | ||
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2009 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Net Loss | ($356,629) | ($57,085) | ($325,172) |
Accumulated Deficit | ($26,229,970) | ($25,873,341) |
NOTE_4_SUMMARY_OF_SIGNIFICANT_3
NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Fair Value Measurements Summarized by Level (Details) (USD $) | Sep. 30, 2011 | Sep. 30, 2010 |
Proprietary Technology | $1,200,106 | |
Total Proprietary Technology | 1,200,106 | |
Level 3 | ||
Proprietary Technology | 1,200,106 | |
Total Proprietary Technology | $1,200,106 |
NOTE_4_SUMMARY_OF_SIGNIFICANT_4
NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | Sep. 30, 2011 |
Accounting Policies [Abstract] | |
FDIC Insured Amount | $250,000 |
NOTE_5_DISCONTINUED_OPERATIONS2
NOTE 5 - DISCONTINUED OPERATIONS - Discontinued Operations Balance Sheet (Details) (USD $) | 12 Months Ended | |||
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2009 | Nov. 01, 2005 | |
Cash | $11,016 | |||
Note discount | 51,600 | |||
Note beneficial conversion feature | 22,409,927 | 22,434,427 | ||
NET LOSS | -356,629 | -57,085 | -325,172 | |
Discontinued Operations [Member] | ||||
Cash | 2,197 | |||
Accounts receivable | ||||
Deferred offering costs | 400 | |||
Net assets of discontinued operations | 2,597 | |||
Accounts payable and accrued expenses | 169,176 | 195,072 | ||
Disputed salaries & vacation of former officers | 968,645 | 968,645 | ||
Disputed salary - former employee | 20,256 | 20,256 | ||
Disputed payroll taxes for back pay of former officers | 84,701 | 84,701 | ||
Disputed interest | 209,215 | 191,346 | ||
Interest expenses | 42,137 | 42,137 | ||
Former officer note payable at 8% interest rate | 59,704 | 59,704 | ||
Shareholders demand note payable at 12% | 11,625 | 11,625 | ||
Shareholders demand note payable at 12% | 20,000 | 20,000 | ||
Unsecured note payable at 8% interest due November 2010, interest payments in default at 9/30/2010 | 175,000 | 175,000 | ||
Note discount | -860 | |||
Note beneficial conversion feature | -166 | |||
Net liabilities of discontinued operations | 1,760,459 | 1,767,460 | ||
Revenues | 3,400 | 58,788 | ||
Cost of sales | 25,462 | |||
Operating expenses | 36,485 | |||
Interest expense | 19,612 | 31,962 | ||
Interest income | ||||
NET LOSS | $16,212 | $35,121 |
NOTE_5_DISCONTINUED_OPERATIONS3
NOTE 5 - DISCONTINUED OPERATIONS (Details Narrative) (USD $) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 48 Months Ended | 60 Months Ended | ||||
Jul. 10, 2006 | Jun. 15, 2006 | Sep. 30, 2007 | 27-May-05 | Sep. 30, 2011 | Nov. 01, 2010 | 31-May-06 | Apr. 27, 2006 | Nov. 01, 2005 | |
Discontinued Operations and Disposal Groups [Abstract] | |||||||||
Note Payable, Fair Value | $175,000 | ||||||||
Effective Interest Rate | 1200.00% | 800.00% | |||||||
Shares Issued, Lending Arrangement | 1,200,000 | ||||||||
Per Share Conversion Price | $0.05 | ||||||||
Price per share issued, lending arrangement | $0.04 | ||||||||
Debt Discount | 51,600 | ||||||||
Beneficial Conversion Feature | 9,933 | ||||||||
Deferred Financing Costs | 24,000 | ||||||||
Related Party Debt | 20,000 | 16,625 | 13,300 | 159,000 | |||||
Related Party Interest Rate | 1200.00% | 8.00% | 6.00% | 8.00% | |||||
Repayments of Related Party Debt | 11,000 | ||||||||
Accounts Payable, Related Parties, Current | 148,000 | 59,704 | |||||||
Interest Expense Related Party | 13,300 | ||||||||
Origination/Placement Fee | 500 | 500 | |||||||
Warrants Issued | 100,000 | 100,000 | |||||||
Warrant Exercise Price | $0.04 | $0.04 | |||||||
Debt Default Amount | $11,625 |
NOTE_6_COMMITMENT_AND_CONTINGE1
NOTE 6 - COMMITMENT AND CONTINGENCIES (Details Narrative) (USD $) | 12 Months Ended | |
Sep. 30, 2011 | Sep. 30, 2010 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Rent Expense | $0 | $7,245 |
NOTE_7_RELATED_PARTY_TRANSACTI1
NOTE 7 - RELATED PARTY TRANSACTIONS (Details Narrative) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | |||||
Jul. 31, 2010 | Sep. 30, 2011 | Apr. 30, 2011 | Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2009 | Apr. 01, 2011 | Jul. 19, 2010 | |
Related Party Transactions [Abstract] | ||||||||
Stock Issued During Period Compensation, Shares | 4,000,000 | 15,000,000 | 28,000,000 | |||||
Price Per Share Issued, Compensation | $0.01 | $0.01 | $0.00 | $0.01 | ||||
Increase (Decrease) Deferred Compensation | $35,800 | |||||||
Line of Credit Assumed | 36,000 | |||||||
Due To Related Parties, Current | 44,535 | |||||||
Stock Issued During Period Compensation, Value | 105,000 | 38,000 | 143,000 | |||||
Compensation Expense | $0 |
NOTE_8_EQUITY_Details_Narrativ
NOTE 8 - EQUITY (Details Narrative) (USD $) | 1 Months Ended | 10 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||
Oct. 31, 2012 | Jul. 31, 2012 | Sep. 30, 2012 | Sep. 30, 2011 | Sep. 30, 2010 | Aug. 26, 2013 | Jun. 26, 2013 | 10-May-13 | Apr. 17, 2013 | Mar. 21, 2013 | Oct. 01, 2012 | Aug. 01, 2012 | Jun. 22, 2012 | Jan. 01, 2012 | Oct. 05, 2011 | Apr. 11, 2011 | Sep. 10, 2008 | Apr. 17, 2013 | Feb. 22, 2013 | Jan. 22, 2013 | Dec. 06, 2012 | Apr. 17, 2013 | Dec. 06, 2012 | Oct. 15, 2012 | Jul. 31, 2012 | Apr. 17, 2013 | Mar. 21, 2013 | Jul. 31, 2012 | Jul. 31, 2012 | |
custom:CipherSmithMember | custom:CipherSmithMember | custom:CipherSmithMember | custom:CipherSmithMember | custom:MedicalMember | custom:MedicalMember | custom:MedicalMember | custom:MedicalMember | custom:KroossMember | custom:KroossMember | custom:KroossMember | custom:ConsultingMember | ||||||||||||||||||
Common Stock, Shares Authorized | 650,000,000 | 650,000,000 | 650,000,000 | ||||||||||||||||||||||||||
Common Stock, Par Value | $0.01 | $0.01 | |||||||||||||||||||||||||||
Common Stock, Shares Issued | 180,526,879 | 165,276,913 | |||||||||||||||||||||||||||
Preferred Stock, Shares Outstanding | 0 | 0 | |||||||||||||||||||||||||||
Prefered Stock, Par Value | $0.10 | $0.10 | |||||||||||||||||||||||||||
Common Stock, Voting Rights | 1 | ||||||||||||||||||||||||||||
Preferred Stock, Shares Reserved | 4,000,000 | ||||||||||||||||||||||||||||
Preferred Stock, Voting Rights | 150 | ||||||||||||||||||||||||||||
Stock Issued, Shares, Cash | 137,500 | 90,000 | 90,000 | 25,000 | |||||||||||||||||||||||||
Stock Issued for Cash, Value | $46,000 | $18,000 | $18,000 | $250,000 | |||||||||||||||||||||||||
Shares, Issued | 30,000,000 | 15,000,000 | 120,000 | 25,000 | 20,000 | 378,500 | 270,000 | 10,000 | 100,000 | 200,000 | 30,000,000 | 10,000,000 | 220,004 | 200,000 | 200,000 | 500,000 | 95,000 | 200,000 | 10,000 | 706,333 | 167,000 | 500,000 | 200,000 | ||||||
Shares Held by Shareholder | 1,045,500 | 4,000,000 | |||||||||||||||||||||||||||
Equity Cancellation, Shares | 200,000 | ||||||||||||||||||||||||||||
Shares, Issued, Value | $1,200,106 | $1,805,269 | $1,652,769 | $2,500 | $10,000 | $4,000 | $105,000 | $1,000 | $10,401 | $4,000 | $204 | ||||||||||||||||||
Stock Issued During Period for Services, Shares | 19,000 | ||||||||||||||||||||||||||||
Shares Issued, Price Per Share | $0.01 | $0.01 | $0.02 | $0.02 | $0.02 | ||||||||||||||||||||||||
Preferred Stock, Shares Authorized | 4,000,000 | 4,000,000 | |||||||||||||||||||||||||||
Preferred Stock, Shares Issued | 0 | 0 |
NOTE_9_STOCKBASED_COMPENSATION2
NOTE 9 - STOCK-BASED COMPENSATION - Outstanding Options (Details) (USD $) | 12 Months Ended | |
Sep. 30, 2011 | Sep. 30, 2010 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Shares Available | 7,000,000 | |
Shares Granted | 5,271,756 | 5,311,756 |
Weighted Average Exercise Price | $0.43 | $0.43 |
Weighted Average Remaining Contractual Life | 4 years 8 months | 3 years 8 months |
October 1, 2008, Value | ||
Grants | 40,000 | |
Grants, Per Share | $0.15 | |
Grants, Value | ||
Forfeitures | -5,311,756 | |
Forfeitures, Per Share | $0.64 | |
Forfeitures, Value | ||
Shares Available | 7,000,000 |
NOTE_9_STOCKBASED_COMPENSATION3
NOTE 9 - STOCK-BASED COMPENSATION - Warrant Activity (Details) (USD $) | 12 Months Ended | |
Sep. 30, 2011 | Sep. 30, 2010 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Shares Granted | 2,308,497 | 2,308,497 |
Weighted Average Exercise Price | $0.10 | $0.10 |
Weighted Average Remaining Contractual Life | 58 years | 3 months |
Aggregate Intrinsic Value | ||
Grants | ||
Grants, Per Share | ||
Expired | -2,308,497 | |
Expired, Per Share |
NOTE_10_INCOME_TAXES_Income_Ta
NOTE 10 - INCOME TAXES - Income Tax Expense (Details) (USD $) | 12 Months Ended | |
Sep. 30, 2011 | Sep. 30, 2010 | |
Current: | ||
Federal | $0 | $0 |
State | 0 | 0 |
Current Tax Expense Benefit | 0 | 0 |
Deferred: | ||
Federal | 8,378,837 | 8,264,131 |
State | 44,703 | 25,445 |
Deferred Tax Expense (Benefit) | 8,423,540 | 8,289,576 |
Valuation allowance | -8,423,540 | -8,289,576 |
Provision benefit for income taxes, net |
NOTE_10_INCOME_TAXES_Income_Ta1
NOTE 10 - INCOME TAXES - Income Tax Expense Reconciliation (Details) | 12 Months Ended | |
Sep. 30, 2011 | Sep. 30, 2010 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal income tax rate | 34.00% | 34.00% |
State income taxes and other | 900.00% | 900.00% |
Valuation allowance | -4300.00% | -4300.00% |
Effective tax rate | 0.00% | 0.00% |
NOTE_10_INCOME_TAXES_Tax_Credi
NOTE 10 - INCOME TAXES - Tax Credit Carryforwards (Details) (USD $) | Sep. 30, 2011 | Sep. 30, 2010 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforward | $25,866,296 | $25,331,677 |
Valuation allowance | -25,688,296 | -25,331,677 |
Deferred income tax asset |
NOTE_11_SOFTWARE_ACQUISITION_T2
NOTE 11 - SOFTWARE ACQUISITION: TRANSACTION BETWEEN ENTITIES UNDER COMMON CONTROL - Assets Acquired under Common Control (Details) (USD $) | 12 Months Ended | ||
Sep. 30, 2011 | Jun. 22, 2012 | Jan. 01, 2011 | |
Business Combinations [Abstract] | |||
Absolute Medical Software Systems LLC development costs from inception | $1,011,222 | ||
Impairment of software on September 10, 2008 to value | -11,222 | ||
Total Value at September 10, 2008 | 1,000,000 | ||
Software Update to Operate on Cloud Based Platform Absolute Medical Software Systems LLC development costs | 200,106 | ||
Total Cost Basis at January 1, 2011 | 1,200,106 | ||
Equity instrument of $5,000,000 promissory note converted to 30,000,000 common stock on October 4, 2011 value under common control | 1,200,106 | ||
Total Purchase Price | 10,000 | 1,200,106 | |
Software source code and development costs of software | 1,200,106 | ||
Cost Basis of total assets | $1,200,106 |
NOTE_11_SOFTWARE_ACQUISITION_T3
NOTE 11 - SOFTWARE ACQUISITION: TRANSACTION BETWEEN ENTITIES UNDER COMMON CONTROL (Details Narrative) (USD $) | 12 Months Ended | |||||||||||||||||
Sep. 30, 2010 | Sep. 30, 2009 | Aug. 26, 2013 | Jun. 26, 2013 | 10-May-13 | Apr. 17, 2013 | Mar. 21, 2013 | Oct. 01, 2012 | Aug. 01, 2012 | Jul. 31, 2012 | Jun. 22, 2012 | Jan. 01, 2012 | Oct. 05, 2011 | Sep. 30, 2011 | Apr. 11, 2011 | Sep. 10, 2008 | |||
Business Combinations [Abstract] | ||||||||||||||||||
Shares Issued | 120,000 | 25,000 | 20,000 | 378,500 | 270,000 | 10,000 | 100,000 | 30,000,000 | 200,000 | 30,000,000 | 15,000,000 | 10,000,000 | ||||||
Asset, Fair Value | $4,296,000 | |||||||||||||||||
Share Price | $0.10 | |||||||||||||||||
Common Stock Value | 1,652,769 | 2,500 | 1,200,106 | 10,000 | 4,000 | 1,805,269 | 105,000 | 1,000 | ||||||||||
Impairment | 1,000,000 | |||||||||||||||||
Payments to Develop Software | 200,106 | |||||||||||||||||
Acquisition Costs | ($1,011,223) | |||||||||||||||||
Acquisition Purchase Price | ($1,000,000) | |||||||||||||||||
Business Acquistion Terms | In accordance with the revised LOI the following occurred and on December 1, 2010 the NSC reported that change on Form 8-K: | |||||||||||||||||
1 | On November 19, 2010 - MDLG was appointed CEO, President, and Chairman of the Board. At that time there were now then 3 Board members. | |||||||||||||||||
2 | On November 29, 2010, 4,000,000 shares of Preferred A were authorized by the Board. These preferred shares are not convertible but entitle to 150 votes per share. | |||||||||||||||||
3 | On November 30, 2010 – 3,000,000 Preferred A shares were beneficially issued to The Private Companies and 1,000,000 were issued to another Board member. | |||||||||||||||||
4 | On January 2, 2011 the sale of the software by the Private Companies to NSC was finalized which included the exchange for a $5,000,000 note convertible to 500,000,000 of common stock at $.01 per share. At the time of this transaction the Company did not have the available authorized shares to issue these shares for the convertible note. Therefore, the Company agreed to issue a $5,000,000 promissory note for 8% interest rate the note matures on April 30, 2021. | |||||||||||||||||
5 | On January 2, 2011 10,000,000 common shares were beneficially issued to MDLG via an affiliate for compensation. | |||||||||||||||||
NOTE_12_SUBSEQUENT_EVENTS_Fair
NOTE 12 - SUBSEQUENT EVENTS - Fair Value of Consideration and Assets Acquired (Details) (USD $) | Aug. 01, 2012 | Jul. 31, 2012 | Jun. 22, 2012 | Jan. 01, 2012 | Sep. 30, 2011 | Apr. 11, 2011 | Jan. 01, 2011 | Sep. 30, 2010 | Sep. 10, 2008 |
Subsequent Events [Abstract] | |||||||||
Shares, Issued, Value | $2,500 | $1,200,106 | $10,000 | $4,000 | $1,805,269 | $105,000 | $1,652,769 | $1,000 | |
Total Purchase Price | 10,000 | 1,200,106 | |||||||
Software | 10,000 | ||||||||
Fair value of total assets | $10,000 | $1,211,122 | $2,597 |
NOTE_12_SUBSEQUENT_EVENTS_Deta
NOTE 12 - SUBSEQUENT EVENTS (Details Narrative) (USD $) | 1 Months Ended | 10 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||
Oct. 31, 2012 | Jul. 31, 2012 | Sep. 30, 2012 | Sep. 30, 2011 | Sep. 30, 2010 | Aug. 26, 2013 | Jun. 26, 2013 | 10-May-13 | Apr. 17, 2013 | Mar. 21, 2013 | Oct. 01, 2012 | Aug. 01, 2012 | Jun. 22, 2012 | Jan. 01, 2012 | Oct. 05, 2011 | Apr. 11, 2011 | Sep. 10, 2008 | Apr. 17, 2013 | Dec. 06, 2012 | Oct. 15, 2012 | Jul. 31, 2012 | Apr. 17, 2013 | Feb. 22, 2013 | Jan. 22, 2013 | Dec. 06, 2012 | Jun. 26, 2013 | 10-May-13 | Apr. 17, 2013 | Mar. 21, 2013 | Apr. 17, 2013 | Mar. 21, 2013 | Jul. 31, 2012 | Apr. 17, 2013 | Aug. 26, 2013 | Jul. 31, 2013 | Aug. 02, 2012 | |
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custom:CompensationMember | ||||||||||||||||||||||||||||||||||||
Common stock issued for cash, Shares | 137,500 | 90,000 | 90,000 | 25,000 | ||||||||||||||||||||||||||||||||
Stock Issued for Cash, Value | $46,000 | $18,000 | $18,000 | $250,000 | ||||||||||||||||||||||||||||||||
Stock Issued | 30,000,000 | 15,000,000 | 120,000 | 25,000 | 20,000 | 378,500 | 270,000 | 10,000 | 100,000 | 200,000 | 30,000,000 | 10,000,000 | 95,000 | 200,000 | 10,000 | 706,333 | 220,004 | 200,000 | 200,000 | 500,000 | 25,000 | 20,000 | 95,000 | 270,000 | 167,000 | 500,000 | 200,000 | 167,000 | 120,000 | 1,055,333 | 100,000 | |||||
Cancellation of Shares | 200,000 | |||||||||||||||||||||||||||||||||||
Shares, Issued, Value | 1,200,106 | 1,805,269 | 1,652,769 | 2,500 | 10,000 | 4,000 | 105,000 | 1,000 | 10,401 | 4,000 | 20,871 | 2,500 | ||||||||||||||||||||||||
Stock Issued During Period for Services, Shares | 19,000 | |||||||||||||||||||||||||||||||||||
Stock Issued, Price per Share | $0.01 | $0.01 | $0.02 | $0.02 | $0.02 | $0.02 | ||||||||||||||||||||||||||||||
Stock Issued for Services, Value | 204 | |||||||||||||||||||||||||||||||||||
Stock Issued for Acquisition, Shares | 500,000 | |||||||||||||||||||||||||||||||||||
Stock Issued for Acquisitions, Value | $10,000 |