Know Labs (KNWN) 10-K 13 Jan 15 2014 FY Annual report Financial data

Document_and_Entity_Informatio

Document and Entity Information (USD $)	12 Months Ended
	Sep. 30, 2014	Jan. 13, 2015	Mar. 31, 2014
Document And Entity Information
Entity Registrant Name	VISUALANT INC
Entity Central Index Key	1074828
Document Type	10-K
Document Period End Date	30-Sep-14
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?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$11,463,411
Entity Common Stock, Shares Outstanding		168,163,674
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2014

CONSOLIDATED_BALANCE_SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)	Sep. 30, 2014	Sep. 30, 2013
CURRENT ASSETS:
Cash and cash equivalents	$70,386	$747,129
Accounts receivable, net of allowance of $40,750 and $40,750, respectively	815,460	1,007,074
Prepaid expenses	25,067	56,531
Inventories	412,831	600,790
Refundable tax assets	29,590	29,773
Total current assets	1,353,334	2,441,297
EQUIPMENT, NET	447,236	427,215
OTHER ASSETS
Intangible assets, net	431,653	770,882
Goodwill	983,645	983,645
Other assets	5,070	6,161
TOTAL ASSETS	3,220,938	4,629,200
CURRENT LIABILITIES:
Accounts payable - trade	2,234,123	2,301,149
Accounts payable - related parties	66,729	66,025
Accrued expenses	31,369	80,926
Accrued expenses - related parties	260,687	0
Derivative liability - warrants	2,579,157	4,184,000
Convertible notes payable	166,500	0
Notes payable - current portion of long term debt	1,290,960	753,129
Total current liabilities	6,629,525	7,385,229
LONG TERM LIABILITIES:
Long term debt	0	1,894
COMMITMENTS AND CONTINGENCIES	0	0
STOCKHOLDERS' DEFICIT
Preferred stock - $0.001 par value, 50,000,000 shares authorized, no shares issued and outstanding	0	0
Common stock - $0.001 par value, 500,000,000 shares authorized, 168,163,674 and 165,263,674 shares issued and outstanding at 9/30/14 and 9/30/13, respectively	168,164	165,264
Additional paid in capital	17,958,368	17,565,568
Accumulated deficit	-21,535,119	-20,537,825
Total stockholders' deficit	-3,408,587	-2,806,993
Noncontrolling interest	0	49,070
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$3,220,938	$4,629,200

CONSOLIDATED_BALANCE_SHEETS_Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Sep. 30, 2014	Sep. 30, 2013
CURRENT ASSETS:
Allowance for Accounts receivable	$40,750	$40,750
EQUITY (DEFICIT)
Preferred stock par value	$0.00	$0.00
Preferred stock shares authorized	50,000,000	50,000,000
Preferred stock shares issued	0	0
Preferred stock shares outstanding	0	0
Common stock par value	$0.00	$0.00
Common stock shares authorized	500,000,000	500,000,000
Common stock shares issued	168,163,674	165,263,674
Common stock shares outstanding	168,163,674	165,263,674

CONSOLIDATED_STATEMENTS_OF_OPE

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Income Statement [Abstract]
REVENUE	$7,983,352	$8,572,799
COST OF SALES	6,694,274	6,717,192
GROSS PROFIT	1,289,078	1,855,607
RESEARCH AND DEVELOPMENT EXPENSES	670,742	1,169,281
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	3,179,699	4,580,653
OPERATING LOSS	-2,561,363	-3,894,327
OTHER INCOME (EXPENSE):
Interest expense	-104,808	-173,248
Other income	38,534	31,881
Gain (loss) on change - derivative liability warrants	1,604,843	-1,448,710
Loss on purchase of warrants and additional investment right	0	-1,150,000
Total other income (expense)	1,538,569	-2,740,077
LOSS BEFORE INCOME TAXES	-1,022,794	-6,634,404
Income taxes - current benefit	-5,513	-29,773
NET LOSS	-1,017,281	-6,604,631
NONCONTROLLING INTEREST	0	17,263
NET (LOSS) ATTRIBUTABLE TO VISUALANT, INC. AND SUBSIDIARIES COMMON SHAREHOLDERS	($1,017,281)	($6,621,894)
Basic and diluted income (loss) per common share attributable to Visualant, Inc. and subsidiaries common shareholders-
Basic and diluted income (loss) per share	($0.01)	($0.05)
Weighted average shares of common stock outstanding- basic and diluted	166,344,657	122,934,436

CONSOLIDATED_STATEMENT_OF_SHAR

CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY (USD $)	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Total
Beginning Balance, Amount at Sep. 30, 2012	$90,993	$13,995,554	($13,915,931)	$170,616
Beginning Balance, Shares at Sep. 30, 2012	90,992,954
Stock compensation expense - employee options		250,013	0	250,013
Issuance of common stock for services, Amount	2,800	311,700	0	314,500
Issuance of common stock for services, Shares	2,800,000
Issuance of common stock, Amount	53,293	2,063,789	0	2,117,082
Issuance of common stock, Shares	53,293,049
Issuance of common stock for debenture conversion, Amount	15,000	735,000	0	750,000
Issuance of common stock for debenture conversion, Shares	15,000,000
Issuance of common stock for accrued liabilities, Amount	2,613	134,017	0	136,630
Issuance of common stock for accrued liabilities, Shares	2,612,603
Issuance of common stock for warrants - cashless, Amount	4,564	-4,564	0	0
Issuance of common stock for warrants - cashless, Shares	4,565,068
Issuance of warrants for services, Amount	0	76,060	0	76,060
Retirement of option shares, Amount	-3,999	3,999	0	0
Retirement of option shares, Shares	-4,000,000
Net loss	0	0	-6,621,894	-6,621,894
Comprehensive loss				-6,621,894
Ending Balance, Amount at Sep. 30, 2013	165,264	17,565,568	-20,537,825	-2,806,993
Ending Balance, Shares at Sep. 30, 2013	165,263,674
Stock compensation expense - employee options	0	87,550	0	87,550
Issuance of common stock for services, Amount	1,300	89,700	0	91,000
Issuance of common stock for services, Shares	1,300,000
Issuance of common stock for debenture conversion, Amount	1,600	158,400	0	160,000
Issuance of common stock for debenture conversion, Shares	1,600,000
Issuance of warrants for services, Amount	0	57,150	0	57,150
Sale of noncontroling interest	0	0	19,987	19,987
Net loss	0	0	-1,017,281	-1,017,281
Comprehensive loss				-1,017,281
Ending Balance, Amount at Sep. 30, 2014	$168,164	$17,958,368	($21,535,119)	($3,408,587)
Ending Balance, Shares at Sep. 30, 2014	168,163,674

CONSOLIDATED_STATEMENTS_OF_CAS

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	($1,017,281)	($6,604,631)
Adjustments to reconcile net loss to net cash (used in) operating activities
Depreciation and amortization	418,271	397,871
Issuance of capital stock for services and expenses	91,000	314,500
Issuance of warrants for services and expenses	57,150	76,060
Issuance of capital stock for accrued liabilities	160,000	136,630
Stock based compensation	87,550	250,013
Loss on sale of assets	-28,363	-4,923
(Gain) loss on change - derivative liability warrants	-1,604,843	1,448,710
Provision for losses on accounts receivable	36	29,281
Changes in operating assets and liabilities:
Accounts receivable	191,578	-23,658
Prepaid expenses	31,464	166,447
Inventory	87,959	-256,098
Other assets	1,091	0
Loss on purchase of warrants and additional investment right	0	850,000
Accounts payable - trade and accrued expenses	144,808	383,342
Deferred revenue	0	-666,667
Income tax receivable	183	-457
CASH (USED IN) OPERATING ACTIVITIES	-1,379,397	-3,503,580
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	0	-25,841
Proceeds from sale of equipment	29,300	13,908
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES:	29,300	-11,933
CASH FLOWS FROM FINANCING ACTIVITIES:
(Repayments) payments from line of credit	-260,925	308,988
Proceeds from notes payable	200,000	0
Proceeds from notes payable- related party	600,000	0
Proceeds from convertible notes payable	166,500
Repayment of debt	0	-2,027,640
Proceeds from the issuance of common stock	0	4,852,372
Repayments of capital leases	-3,138	-12,243
Change in noncontrolling interest	-29,083	0
NET CASH PROVIDED BY FINANCING ACTIVITIES	673,354	3,121,477
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	-676,743	-394,036
CASH AND CASH EQUIVALENTS, beginning of period	747,129	1,141,165
CASH AND CASH EQUIVALENTS, end of period	70,386	747,129
Supplemental disclosures of cash flow information:
Interest paid	52,755	112,076
Taxes paid	0	0
Non-cash investing and financing activities:
Debenture converted to common stock	$0	$750,000

1_ORGANIZATION

1. ORGANIZATION	12 Months Ended
	Sep. 30, 2014
Notes to Financial Statements
1. ORGANIZATION	Visualant, Inc. (the “Company” or “Visualant”) was incorporated under the laws of the State of Nevada on October 8, 1998 with authorized common stock of 500,000,000 shares at $0.001 par value. On September 13, 2002, 50,000,000 shares of preferred stock with a par value of $0.001 were authorized by the shareholders.  There are no preferred shares issued and the terms have not been determined. The Company’s executive offices are located in Seattle, Washington.
	The Company has invented a way to shine light at a material (solid surface, liquid, or gas) and measure the amount of light that is reflected back. The pattern of this reflected light is compared to other patterns the Company has captured and this allows the Company to identify, detect, or diagnose materials that cannot be identified by the human eye. The Company refers to this pattern of reflected light as a ChromaID™. The Company designs ChromaID Scanner devices made with electronic, optical, and software parts to produce and capture the light.
	The Company’s first product, the ChromaID Lab Kit, scans and identifies solid surfaces. The Company is marketing this product to customers who are considering licensing the technology. Target markets include, but are not limited to, commercial paint manufacturers, pharmaceutical equipment manufacturers, process control companies, currency paper and ink manufacturers, security card, reader, and scanner manufacturers, food processing, and electronic gaming.
	Through our wholly owned subsidiary, TransTech Systems, Inc., based in Aurora, Oregon, the Company provides value added security and authentication solutions to corporate and government security and law enforcement markets throughout the United States.
	On November 11, 2013, the Company entered into a Services and License Agreement with Invention Development Management Company, L.L.C. (“IDMC”), a Delaware limited liability company. IDMC is affiliated with Intellectual Ventures, which collaborates with inventors, partners with pioneering companies and invests both expertise and capital in the process of invention. On November 19, 2014, the Company entered into an Amendment to Services and License Agreement with IDMC. This Amendment exclusively licenses ten filed patents to the Company.
	On June 10, 2013, the Company entered into a Purchase Agreement, Warrants, Registration Rights Agreement and Voting Agreement with Special Situations and forty other accredited investors pursuant to which we issued 52,300,000 shares of common stock at $0.10 per share for a total of $5,230,000, which amount includes the conversion of $500,000 in outstanding debt of the Company owed to one of its officers.  As part of the transaction which closed on June 14, 2013, the Company issued to the investors (i) five year Series A Warrants to purchase a total of 52,300,000 shares of common stock at $0.15 per share; and (ii) five year Series B Warrants to purchase a total of 52,300,000 shares of common stock at $0.20 per share. The transaction was entered into to strengthen our balance sheet, complete the purchase of our TransTech subsidiary, and provide working capital to support the rapid movement of our ChromaID technology into the marketplace.
	To date, the Company been issued seven patents by the United States Office of Patents and Trademarks.  See page 5 for more detailed information regarding the Company’s patents and business.

2_GOING_CONCERN

2. GOING CONCERN	12 Months Ended
	Sep. 30, 2014
Notes to Financial Statements
2. GOING CONCERN	The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company incurred net losses of $1,017,281 and $6,604,631 for the years ended September 30, 2014 and 2013, respectively. Our net cash used in operating activities was $1,404,462 for the year ended September 30, 2014.
	The Company anticipates that it will record losses from operations for the foreseeable future. As of September 30, 2014, our accumulated deficit was $21,535,119.  The Company has limited capital resources, and operations to date have been funded with the proceeds from private equity and debt financings and loans from Ronald P. Erickson, our Chief Executive Officer. These conditions raise substantial doubt about our ability to continue as a going concern. The audit report prepared by our independent registered public accounting firm relating to our financial statements for the year ended September 30, 2014 includes an explanatory paragraph expressing the substantial doubt about our ability to continue as a going concern.
	Continuation of the Company as a going concern is dependent upon obtaining additional working capital.  The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

3_SIGNIFICANT_ACCOUNTING_POLIC

3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS	12 Months Ended
	Sep. 30, 2014
Notes to Financial Statements
3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS	BASIS OF PRESENTATION - The accompanying unaudited consolidated financial statements include the accounts of the Company. Intercompany accounts and transactions have been eliminated. The preparation of these unaudited condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”).
	PRINCIPLES OF CONSOLIDATION - The consolidated financial statements include the accounts of the Company and its wholly owned and majority-owned subsidiaries, TransTech Systems, Inc. Inter-Company items and transactions have been eliminated in consolidation.
	CASH AND CASH EQUIVALENTS - The Company classifies highly liquid temporary investments with an original maturity of three months or less when purchased as cash equivalents. The Company maintains cash balances at various financial institutions. Balances at US banks are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risk for cash on deposit.
	ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS - Accounts receivable consist primarily of amounts due to the Company from normal business activities. The Company maintains an allowance for doubtful accounts to reflect the expected non-collection of accounts receivable based on past collection history and specific risks identified within the portfolio. If the financial condition of the customers were to deteriorate resulting in an impairment of their ability to make payments, or if payments from customers are significantly delayed, additional allowances might be required.
	INVENTORIES - Inventories consist primarily of printers and consumable supplies, including ribbons and cards, badge accessories, capture devices, and access control components held for resale and are stated at the lower of cost or market on the first-in, first-out (“FIFO”) method.  Inventories are considered available for resale when drop shipped and invoiced directly to a customer from a vendor, or when physically received by TransTech at a warehouse location.  The Company records a provision for excess and obsolete inventory whenever an impairment has been identified. There is a $10,000 reserve for impaired inventory as of September 30, 2014 and 2013.
	EQUIPMENT - Equipment consists of machinery, leasehold improvements, furniture and fixtures and software, which are stated at cost less accumulated depreciation and amortization. Depreciation is computed by the straight-line method over the estimated useful lives or lease period of the relevant asset, generally 2-10 years, except for leasehold improvements which are depreciated over 5-20 years.
	INTANGIBLE ASSETS / INTELLECTUAL PROPERTY – The Company amortizes the intangible assets and intellectual property acquired in connection with the acquisition of TransTech, over sixty months on a straight - line basis, which was the time frame that the management of the Company was able to project forward for future revenue, either under agreement or through expected continued business activities.  Intangible assets and intellectual property acquired from RATLab LLC and Javelin are recorded likewise. The Company performs annual assessments and has determined that no impairment is necessary. On June 7, 2011, the Company closed the acquisition of all Visualant related assets of the RATLab LLC, namely the rights to the medical field of use of the Chroma ID technology. On July 31, 2012, the Company closed the acquisition of all rights to the ChromaID technology in the environmental field of use from Javelin LLC.
	GOODWILL – Goodwill is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities assumed in a business combination. With the adoption of ASC 350, goodwill is not amortized, rather it is tested for impairment annually, and will be tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. Impairment testing for goodwill is done at a reporting unit level. Reporting units are one level below the business segment level, but are combined when reporting units within the same segment have similar economic characteristics. Under the criteria set forth by ASC 350, the Company has one reporting unit based on the current structure.  An impairment loss generally would be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit.  The Company performs annual assessments and has determined that no impairment is necessary.
	LONG-LIVED ASSETS – The Company reviews its long-lived assets for impairment annually or when changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Long-lived assets under certain circumstances are reported at the lower of carrying amount or fair value. Assets to be disposed of and assets not expected to provide any future service potential to the Company are recorded at the lower of carrying amount or fair value (less the projected cost associated with selling the asset). To the extent carrying values exceed fair values, an impairment loss is recognized in operating results.
	FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS – ASC Topic 820, Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  This topic also establishes a fair value hierarchy, which requires classification based on observable and unobservable inputs when measuring fair value.  The fair value hierarchy distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs).  The hierarchy consists of three levels:
	Level 1 – Quoted prices in active markets for identical assets and liabilities;
	Level 2 – Inputs other than level one inputs that are either directly or indirectly observable; and
	Level 3 – Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.
	Derivative Instruments – Warrants with the June 2013 Private Placement
									Carrying
		Fair Value Measurements Using Inputs							Amount at
	Financial Instruments	Level 1			Level 2		Level 3		30-Sep-14
	Liabilities:
	Derivative Instruments - Warrants	$	-		$	2,092,000	$	-	$	2,092,000
	Total	$	-		$	2,092,000	$	-	$	2,092,000
	Liabilities measured at fair value on a recurring basis are summarized as follows:
		30-Sep-14
	Market price and estimated fair value of common stock:	$	0.08
	Exercise price	$	0.15-0.20
	Expected term (years)	3-5 years
	Divident yield		-
	Expected volatility		65.5	%
	Risk-free interest rate		0.78	%
	The risk-free rate of return reflects the interest rate for the United States Treasury Note with similar time-to-maturity to that of the warrants.
	The Company issued warrants to 104,600,000 shares of common stock in connection with the June 2013 Private Placement of 52,300,000 shares of common stock.  The strike price of these warrants is $0.15 to $0.20 per share.  These warrants were not issued with the intent of effectively hedging any future cash flow, fair value of any asset, liability or any net investment in a foreign operation.  These warrants were issued with a down-round provision whereby the exercise price would be adjusted downward in the event that additional shares of the Company’s common stock or securities exercisable, convertible or exchangeable for the Company’s common stock were issued at a price less than the exercise price.  Therefore, the fair value of these warrants were recorded as a liability in the consolidated balance sheet and are marked to market each reporting period until they are exercised or expire or otherwise extinguished.
	The proceeds from the Private Placement were allocated between the Common Shares and the Warrants issued in connection with the Private Placement based upon their estimated fair values as of the closing date at June 14, 2013, resulting in the aggregate amount of $2,494,710 to the Stockholders’ Equity and $2,735,290 to the warrant derivative.  The Company recognized $1,448,710 of other expense resulting from the increase in the fair value of the warrant liability at September 30, 2013. During the year ended September 30, 2014, the Company recognized $2,092,000 of other income resulting from the decrease in the fair value of the warrant liability at June 30, 2014.
	Derivative Instruments – Warrant with the November 2013 IDMC Services and License Agreement:
									Carrying
		Fair Value Measurements Using Inputs							Amount at
	Financial Instruments	Level 1			Level 2		Level 3		30-Sep-14
	Liabilities:
	Derivative Instruments - Warrants	$	-		$	320,657	$	-	$	320,657
	Total	$	-		$	320,657	$	-	$	320,657
	Liabilities measured at fair value on a recurring basis are summarized as follows:
		30-Sep-14
	Market price and estimated fair value of common stock:		0.08
	Exercise price		0.2
	Expected term (years)		5
	Divident yield		-
	Expected volatility		65.5	%
	Risk-free interest rate		0.78	%
	The risk-free rate of return reflects the interest rate for the United States Treasury Note with similar time-to-maturity to that of the warrants.
	The Company issued a warrant to purchase 14,575,286 shares of common stock as consideration for the exclusive IP license and application development services to IDMC signed on November 11, 2013. The warrant price of $0.20 per share expires November 10, 2018 and the per share price is subject to adjustment.  This warrant was not issued with the intent of effectively hedging any future cash flow, fair value of any asset, liability or any net investment in a foreign operation.  This warrant was issued with a down-round provision whereby the exercise price would be adjusted downward in the event that additional shares of the Company’s common stock or securities exercisable, convertible or exchangeable for the Company’s common stock were issued at a price less than the exercise price.  Therefore, the fair value of these warrants were recorded as a liability in the consolidated balance sheet and are marked to market each reporting period until they are exercised or expire or otherwise extinguished.
	During the year ended September 30, 2014, the Company recognized $320,657 of other expense related to the IDMC warrant.
	Derivative Instrument – Convertible Note Payable
									Carrying
		Fair Value Measurements Using Inputs							Amount at
	Financial Instruments	Level 1			Level 2		Level 3		30-Sep-14
	Liabilities:
	Derivative Instruments - Convertible Promissory Note	$	-		$	103,500	$	-	$	103,500
	Total	$	-		$	103,500	$	-	$	103,500
	Liabilities measured at fair value on a recurring basis are summarized as follows:
		30-Sep-14
	Market price and estimated fair value of common stock:		0.07
	Exercise price		0.07
	Expected term (years)		0.75
	Divident yield		-
	Expected volatility		65.5	%
	Risk-free interest rate		0.78	%
The risk-free rate of return reflects the interest rate for the United States Treasury Note with similar time-to-maturity to that of the Convertible Note Payable.
The Company entered into a Convertible Note Payable with KBM Worldwide, Inc. on August 25, 2014 for $103,500. The Note is due May 27, 2015 and provides for interest at 8%. The Note is convertible at 65% of the average of the lowest three day trading price in the 10 days prior to conversion; however, the Note is not convertible until the second quarter of fiscal year 2015. The Note provides short term working capital while funding closes and the Company expects to repay the Note at the closing of funding.
The Company has recorded a derivative liability for the conversion discount in the amount of $103,500 at September 30, 2014.
Derivative Instrument – Convertible Note Payable
								Carrying
	Fair Value Measurements Using Inputs							Amount at
Financial Instruments	Level 1			Level 2		Level 3		30-Sep-14
Liabilities:
Derivative Instruments - Convertible Promissory Note	$	-		$	63,000	$	-	$	63,000
Total	$	-		$	63,000	$	-	$	63,000
Liabilities measured at fair value on a recurring basis are summarized as follows:
	30-Sep-14
Market price and estimated fair value of common stock:		0.08
Exercise price		0.07
Expected term (years)		0.75
Divident yield		-
Expected volatility		65.5	%
Risk-free interest rate		0.78	%
The risk-free rate of return reflects the interest rate for the United States Treasury Note with similar time-to-maturity to that of the Convertible Note Payable.
The Company entered into a Convertible Note Payable with KBM Worldwide, Inc. on September 23, 2014 for $63,000. The Note is due June 26, 2015 and provides for interest at 8%. The Note is convertible at 65% of the average of the lowest three day trading price in the 10 days prior to conversion; however, the Note is not convertible until the second quarter of fiscal year 2015. The Note provides short term working capital while funding closes and the Company expects to repay the Note at the closing of funding.
The Company has recorded a derivative liability for the conversion discount in the amount of $63,000 at September 30, 2014.
The recorded value of other financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable, other current assets, and accounts payable and accrued expenses approximate the fair value of the respective assets and liabilities at September 30, 2014 and 2013 based upon the short-term nature of the assets and liabilities.
REVENUE RECOGNITION – Visualant and TransTech revenue are derived from other products and services. Revenue is considered realized when the services have been provided to the customer, the work has been accepted by the customer and collectability is reasonably assured. Furthermore, if an actual measurement of revenue cannot be determined, we defer all revenue recognition until such time that an actual measurement can be determined. If during the course of a contract management determines that losses are expected to be incurred, such costs are charged to operations in the period such losses are determined. Revenues are deferred when cash has been received from the customer but the revenue has not been earned. The Sumitomo License fee was recorded as revenue over the life the Joint Development Agreement and was fully recorded as of May 31, 2013.
STOCK BASED COMPENSATION - The Company has share-based compensation plans under which employees, consultants, suppliers and directors may be granted restricted stock, as well as options to purchase shares of Company common stock at the fair market value at the time of grant. Stock-based compensation cost is measured by the Company at the grant date, based on the fair value of the award, over the requisite service period. For options issued to employees, the Company recognizes stock compensation costs utilizing the fair value methodology over the related period of benefit.  Grants of stock options and stock to non-employees and other parties are accounted for in accordance with the ASC 505.
INCOME TAXES - Income tax benefit is based on reported loss before income taxes. Deferred income taxes reflect the effect of temporary differences between asset and liability amounts that are recognized for financial reporting purposes and the amounts that are recognized for income tax purposes. These deferred taxes are measured by applying currently enacted tax laws where that company operates out of. The Company recognizes refundable and deferred assets to the extent that management has determined their realization. As of September 30, 2014 and September 30, 2013, the Company had refundable tax assets related to TransTech of $29,590 and $29,773, respectively.
NET LOSS PER SHARE – Under the provisions of ASC 260, “Earnings Per Share,” basic loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of shares of common stock outstanding for the periods presented. Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that would then share in the income of the Company, subject to anti-dilution limitations. The common stock equivalents have not been included as they are anti-dilutive. As of September 30, 2014, there were options outstanding for the purchase of 13,100,000 common shares, warrants for the purchase of 128,555,286 common shares and an unknown number of shares related to the conversion of $166,500 in Convertible Promissory Notes due to KBM Worldwide, Inc. which could potentially dilute future earnings per share. As of September 30, 2013, there were options outstanding for the purchase of 12,735,000 common shares, warrants for the purchase of 113,507,050 common shares which could potentially dilute future earnings per share.
DIVIDEND POLICY - The Company has never paid any cash dividends and intends, for the foreseeable future, to retain any future earnings for the development of our business. Our future dividend policy will be determined by the board of directors on the basis of various factors, including our results of operations, financial condition, capital requirements and investment opportunities.
USE OF ESTIMATES - The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
RECENT ACCOUNTING PRONOUNCEMENTS
A variety of proposed or otherwise potential accounting standards are currently under study by standard setting organizations and various regulatory agencies. Due to the tentative and preliminary nature of those proposed standards, management has not determined whether implementation of such proposed standards would be material to our consolidated financial statements.
In August 2014, FASB issued ASU 2014-15—Presentation of Financial Statements—Going Concern (ASC Subtopic 205-40): “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”.   The update requires management to assess a company’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances.  All entities are required to apply the new requirements in annual periods ending after December 15, 2016, and interim periods thereafter. Early application is permitted.  The Company is required to adopt these provisions for the annual period ending October 1, 2017.  The Company is currently evaluating the impact of FASB ASU 2014-15 but does not expect the adoption thereof to have a material effect on its financial statements.
In May 2014, FASB issued ASU 2014-09—Revenue from Contracts with Customers (Topic 606): “Section A—Summary and Amendments That Create Revenue from Contracts with Customers, (Topic 606) and Other Assets and Deferred Costs—Contracts with Customers (Subtopic 340-40), Section B—Conforming Amendments to Other Topics and Subtopics in the Codification and Status Tables, Section C—Background Information and Basis for Conclusions”.   The guidance in this update affects any entity that enters into contracts with customers to transfer goods or services and supersedes the revenue recognition requirements in Topic 605, Revenue Recognition. The update is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted.  The Company is required to adopt these provisions as of October 1, 2017, the beginning of the annual period ending September 30, 2018 and at the beginning of all interim periods ending after October 1, 2017.  The Company is currently evaluating the impact of FASB ASU 2014-09 but does not expect the adoption thereof to have a material effect on its financial statements.
In July 2013, FASB issued ASU 2013-11—Income Taxes (ASC Topic 740): “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force)”. The amendments in this update provide explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. The update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The Company adopted these provisions at the beginning of the interim period ending March 30, 2014. Adoption FASB ASU 2013-11 did not have a material effect on the Company’s financial statements.

4_DEVELOPMENT_OF_CHROMAIDTM_TE

4. DEVELOPMENT OF CHROMAID(TM) TECHNOLOGY	12 Months Ended
	Sep. 30, 2014
Notes to Financial Statements
4. DEVELOPMENT OF CHROMAID(TM) TECHNOLOGY	The Company’s ChromaID™ Technology
	The Company has invented a way to project light at a material (solid surface, liquid, or gas) and measure the amount of light that is reflected back. The pattern of this reflected light is compared to other patterns the company has captured and this allows us to identify, detect, or diagnose materials that cannot be identified by the human eye. The Company refers to this pattern of reflected light as a ChromaID™. The Company designs ChromaID scanning devices made with electronic, optical, and software parts to produce and capture the light.
	The Company’s first product, the ChromaID Lab Kit, scans and identifies solid surfaces. The Company is marketing this product to customers who are considering licensing the technology. Target markets include, but are not limited to, commercial paint manufacturers, pharmaceutical equipment manufacturers, process control companies, currency paper and ink manufacturers, security card, reader, and scanner manufacturers, food processing, and electronic gaming.
	There is no current requirement for FDA or other government approval for the current applications of the Company’s ChromaID technology. Over time, as the Company explores the application of its ChromaID technology for medical diagnostics and other applications, the Company expects that there will be requirements for FDA and other government approvals before applications using the technology in medical and other regulated fields can enter the marketplace.
	The Company’s research and development expenses were as follows:
	Year ended September 30, 2014- $670,742
	Year ended September 30, 2013- $1,169,281
	The Company’s research and development efforts are supported internally and through contractors at the RATLab LLC, the Invention Development Management Company LLC and other suppliers.
	The Company’s Patents
	On August 9, 2011, the Company was issued US Patent No. 7,996,173 B2 entitled “Method, Apparatus and Article to Facilitate Distributed Evaluation of Objects Using Electromagnetic Energy,” by the United States Office of Patents and Trademarks. The patent expires August 24, 2029.
	On December 13, 2011, the Company was issued US Patent No. 8,076,630 B2 entitled “System and Method of Evaluating an Object Using Electromagnetic Energy” by the United States Office of Patents and Trademarks. The patent expires November 7, 2028.
	On December 20, 2011, the Company was issued US Patent No. 8,081,304 B2 entitled “Method, Apparatus and Article to Facilitate Evaluation of Objects Using Electromagnetic Energy” by the United States Office of Patents and Trademarks. The patent expires July 28, 2030.
	On October 9, 2012, the Company was issued US Patent No. 8,285,510 B2 entitled “Method, Apparatus, and Article to Facilitate Distributed Evaluation of Objects Using Electromagnetic Energy” by the United States Office of Patents and Trademarks. The patent expires July 31, 2027.
	On February 5, 2013, the Company was issued US Patent No. 8,368,878 B2 entitled “Method, Apparatus and Article To Facilitate Evaluation of Objects Using Electromagnetic Energy by the United States Office of Patents and Trademarks. The patent expires July 31, 2027.
	On November 12, 2013, the Company was issued US Patent No. 8,583,394 B2 entitled “Method, Apparatus and Article To Facilitate Distributed Evaluation of Objects Using Electromagnetic Energy by the United States Office of Patents and Trademarks. The patent expires July 31, 2027.
	On November 21, 2014, the Company was issued US Patent No. 8,888,207 entitled “Systems, Methods, and Articles Related to Machine-Readable Indicia and Symbols” by the United States Office of Patents and Trademarks. The patent expires February 7, 2033.
	The Company pursue an aggressive patent strategy to expand our unique intellectual property in the United States and other countries.
	Services and License Agreement Invention Development Management Company, L.L.C.
	On November 11, 2013, the Company entered into a Services and License Agreement with Invention Development Management Company, L.L.C. (“IDMC”), a Delaware limited liability company. IDMC is affiliated with Intellectual Ventures, which collaborates with inventors, partners with pioneering companies and invests both expertise and capital in the process of invention. On November 19, 2014, the Company entered into an Amendment to Services and License Agreement with IDMC. This Amendment exclusively licenses ten filed patents to the Company.
	The Agreement required IDMC to identify and engage investors to develop new applications of the Company’s ChromaID™ development kits, present the developments to the Company for approval, and file at least ten patent applications to protect the developments. IDMC is responsible for the development and patent costs. The Company provided the development kits to IDMC at no cost and is providing ongoing technical support. In addition, to provide time for this accelerated expansion of its intellectual property the Company delayed the selling of the ChromaID development kits for 140 days except for certain select accounts. The Company has continued its business development efforts during this period and has worked with IDMC and their global business development services to secure potential customers and licensees for its technology. The Company shipped twenty ChromaID Lab Kits to inventors in the IDMC network during December 2013 and January 2014.
	The Company received a worldwide, nontransferable, exclusive license to the licensed IP developed under this IDMC Agreement dated November 11, 2013, during the term of the Agreement, and solely within the identification, authentication and diagnostics field of use, to (a) make, have made, use, import, sell and offer for sale products and services; (b) make improvements; and (c) grant sublicenses of any and all of the foregoing rights (including the right to grant further sublicenses).
	The Company received a nonexclusive and nontransferrable option to acquire a worldwide, nontransferrable, nonexclusive license to the useful IP held by IDMC within the identification, authentication and diagnostics field of use to (a) make, have made, use, import, sell and offer to sell products and services and (b) grant sublicenses to any and all of the foregoing rights. The option to acquire this license may be exercised for up to two years from the effective date of the Agreement.
	IDMC is providing global business development services to the Company, including present Visualant IP and any licensed IP, if applicable, to potential customers, licensees, and distributors in markets or geographies not being pursued by Visualant. Also, IDMC has introduced Visualant to potential customers, licensees, or distributors for the purpose of identifying and closing a license, sale, or distribution deal or other monetization event.
	Visualant granted to IDMC a nonexclusive, worldwide, fully paid up, nontransferable, sublicenseable, perpetual license to the Visualant IP, solely outside the identification, authentication and diagnostics field of use to (a) make, have made, use, import, sell and offer for sale products and services and (b) grant sublicenses of any and all of the foregoing rights (including the right to grant further sublicenses).
	The Company granted to IDMC a nonexclusive, worldwide, fully paid up, royalty-free, nontransferable, nonsublicenseable, perpetual license to access and use Visualant Technology solely for the purpose of marketing the aforementioned sublicenses to the Visualant IP to third parties outside the designated fields of use.
	The Company issued a warrant to purchase 14,575,286 shares of common stock as consideration for the exclusive IP license and application development services to IDMC signed on November 11, 2013. The warrant price of $0.20 per share expires November 10, 2018 and the per share price is subject to adjustment.
	The Company has agreed to pay IDMC a percentage of license revenue for the global development business services and a percentage of revenue received from any IDMC introduced company. The Company has also agreed to pay IDMC a royalty when Visualant receives royalty product revenue from an IDMC introduced company.
	IDMC has agreed to pay Visualant a license fee for the nonexclusive license of the Visualant IP.
	The term of the exclusive IP license and the nonexclusive IP license commences on the effective date of November 11, 2013, and terminates when all claims of the patents expire or are held in valid or unenforceable by a court of competent jurisdiction from which no appeal can be taken.
	The term of the Agreement commences on the effective date until either party terminates the Agreement at any time following the fifth anniversary of the effective date by providing at least ninety days’ prior written notice to the other party.
	The Company’s Acquisition of Visualant Related Assets of the RATLab LLC
	On June 7, 2011, the Company closed the acquisition of all Visualant related assets of the RATLab namely the rights to the medical field of use of the Chroma ID technology. The RATLab is a Seattle based research and development laboratory created by Dr. Tom Furness, founder and Director of the HITLab International, with labs at Seattle, University of Canterbury in New Zealand, and the University of Tasmania in Australia. With this acquisition, we consolidated all intellectual property relating to the ChromaID technology, except for environmental field of use which was held by Javelin LLC and which was acquired separately (see below).  The Company acquired these assets of the RATLab for (i) 1,000,000 shares of our common stock at closing valued at $0.20 per share, the price during the negotiation of this agreement; (ii) payment of $250,000; and (iii) payment of the outstanding promissory note owing to Mr. Furness in the amount of $65,000 with accrued interest of $24,675.
	On October 23, 2008, the Company and RATLab entered into definitive agreements which provide for a non-commercial non-exclusive license of the Company’s technology to RATLab for the purpose of continuing research and development with a license back to the Company for enhancements that are developed.  Further, an exclusive license was entered into between the Company and RATLab for selected fields of use.
	The Company’s Acquisition of Environmental Field of Use Rights from Javelin LLC
	On July 31, 2012, the Company closed the acquisition of all rights to the ChromaID technology in the environmental field of use from Javelin LLC. The Company acquired these assets of Javelin for (i) 1,250,000 shares of our common stock valued at $0.13 per share, the price during the negotiation of the acquisition agreement; and (ii) $100,000 in cash, with $20,000 payable at closing and $80,000 to be paid in four equal installments over a period of eight months, all of which have now been paid. In addition the Company entered into a business development agreement with Javelin LLC which will pay them a fee equal to ten percent of the gross margin revenues received from sales of ChromaID through their business development efforts. To date, Javelin has not earned any fees from business development efforts; however the business development agreement remains in effect.

5_AGREEMENT_WITH_SUMITOMO_PREC

5. AGREEMENT WITH SUMITOMO PRECISION PRODUCTS CO., LTD.	12 Months Ended
	Sep. 30, 2014
Notes to Financial Statements
5. AGREEMENT WITH SUMITOMO PRECISION PRODUCTS CO., LTD.	On May 31, 2012, the Company entered into a Joint Research and Product Development Agreement with Sumitomo, a publicly-traded Japanese corporation, for the commercialization of our ChromaID™ technology.   On March 29, 2013, the Company entered into an Amendment to Joint Research and Product Development Agreement or Amended Agreement with Sumitomo. The Amended Agreement extended the Joint Development Agreement from March 31, 2013 to December 31, 2013.   The extension provided for continuing work between Sumitomo and Visualant focused upon advancing the ChromaID technology and market research aimed at identifying the most significant markets for the ChromaID technology.  The current version of the technology, identified as Version 6D, was introduced to the marketplace as a part of our ChromaID Lab Kit during the three months ended December 31, 2013. The Amended Agreement expired December 31, 2013.
	Sumitomo invested $2,250,000 in exchange for 17,307,693 shares of restricted common shares priced at $0.13 per share that was funded on June 21, 2012.  Sumitomo also paid the Company an initial payment of $1 million in accordance for an exclusive License Agreement for the Spectral Pattern Matching technology which covers Japan, China, Taiwan, Korea and the entirety of Southeast Asia (Burma, Indonesia, Thailand, Cambodia, Laos, Vietnam, Singapore and the Philippines). The Sumitomo License fee was recorded as revenue over the life the Joint Development Agreement and was fully recorded as of May 31, 2013.
	Sumitomo is publicly traded in Japan and has operations in Japan, United States, China, United Kingdom, Canada and other parts of the world.

6_ACQUISITION_OF_TRANSTECH_SYS

6. ACQUISITION OF TRANSTECH SYSTEMS, INC.	12 Months Ended
	Sep. 30, 2014
Notes to Financial Statements
ACQUISITION OF TRANSTECH SYSTEMS, INC.	The Company’s wholly owned subsidiary, TransTech Systems, Inc., based in Aurora, Oregon, is a distributor of products, including systems solutions, components and consumables, for employee and government identification, document authentication, access control, and radio frequency identification.  TransTech provides these products and services, along with marketing and business development assistance to a growing channel of value-added resellers and system integrators throughout North America.
	TransTech provides its channel partners pre-and post-sales support in the industry.  Technical Services covers training and installation support, in-warranty repair, out of warranty repair, and spares programs.  Our customer service team provides full sales, configuration, and logistics services.  An increasing number of manufacturers are turning to TransTech Systems for channel development and introduction of their products to our market space.
	The Company closed the acquisition of TransTech on June 8, 2010. The Company acquired our 100% interest in TransTech by issuing a Promissory Note to James Gingo, the President and sole shareholder of TransTech, in the amount of $2,300,000, plus interest at the rate of three and one-half percent per annum from the date of the Note. The Note was secured by a security interest in the stock and assets of TransTech, and was payable over a period of three years. The final balance of $1,000,000 on the Note and accrued interest of $30,397 were paid to Mr. Gingo on June 12, 2013, to complete payment of the purchase price for the TransTech stock.
	On June 8, 2010 in connection with the acquisition of TransTech, the Company issued a total of 3,800,000 shares of restricted common stock of the Company to James Gingo, Jeff Kruse and Steve Waddle, executives of TransTech, and Paul Bonderson, a TransTech investor.  The parties valued the shares in this transaction at $76,000 or $0.02 per share, the closing bid price during negotiations.
	This acquisition is expected to accelerate market entry and penetration through well-operated and positioned dealers of security and authentication systems, thus creating a natural distribution channel for products featuring the company’s proprietary ChromaID technology.
	On September 30, 2014, TransTech sold its 51% controlling interest in IDVAL for $25,000. Total fair value of assets deconsolidated was $48,424 and the total fair value of liabilities deconsolidated was $21,020.  The gain/loss on the sale of TransTech’s investment in IDVAL was $25,065. TransTech Systems, Inc. has no financial investment in IDVAL as of September 30, 2014.

7_ACCOUNTS_RECEIVABLECUSTOMER_

7. ACCOUNTS RECEIVABLE/CUSTOMER CONCENTRATION	12 Months Ended
	Sep. 30, 2014
Notes to Financial Statements
7. ACCOUNTS RECEIVABLE/CUSTOMER CONCENTRATION	Accounts receivable were $814,460 and $1,007,074, net of allowance, as of September 30, 2014 and 2013, respectively. The Company had one customer (10.7%) in excess of 10% of our consolidated revenues for the year ended September 30, 2014. The Company had two customers (13.1% and 10.3%) with accounts receivable in excess of 10% as of September 30, 2014. The Company does expect to have customers with consolidated revenues or accounts receivable balances of 10% of total accounts receivable in the foreseeable future.

8_INVENTORIES

8. INVENTORIES	12 Months Ended
	Sep. 30, 2014
Notes to Financial Statements
8. INVENTORIES	Inventories were $412,831 and $600,790 as of September 30, 2014 and 2013, respectively. Inventories consist primarily of printers and consumable supplies, including ribbons and cards, badge accessories, capture devices, and access control components held for resale. There is a $10,000 reserve for impaired inventory as of September 30, 2014 and 2013.

9_FIXED_ASSETS

9. FIXED ASSETS	12 Months Ended
	Sep. 30, 2014
Notes to Financial Statements
9. FIXED ASSETS	Fixed assets, net of accumulated depreciation, was $447,236 and $427,215 as of September 30, 2014 and 2013, respectively. Accumulated depreciation was $742,676 and $663,213 as of September 30, 2014 and 2013, respectively. Total depreciation expense, was $64,357 and $66,557 for the years ended September 30, 2014 and 2013, respectively. All equipment is used for selling, general and administrative purposes and accordingly all depreciation is classified in selling, general and administrative expenses.
	Property and equipment as of September 30, 2014 was comprised of the following:
		Estimated	30-Sep-14
		Useful Lives	Purchased			Capital Leases			Total
	Machinery and equipment	2-10 years	$	212,331		$	87,038		$	299,369
	Leasehold improvements	5-20 years		603,612			-			603,612
	Furniture and fixtures	3-10 years		77,039			101,260			178,299
	Software and websites	3- 7 years		63,783			44,849			108,632
	Less: accumulated depreciation			(515,841	)		(226,835	)		(742,676	)
			$	440,924		$	6,312		$	447,236

10_INTANGIBLE_ASSETS

10. INTANGIBLE ASSETS	12 Months Ended
	Sep. 30, 2014
Notes to Financial Statements
10. INTANGIBLE ASSETS	Intangible assets as of September 30, and 2014 and 2013 consisted of the following:
		Estimated	September 30,			September 30,
		Useful Lives	2014			2013
	Customer contracts	5 years	$	983,645		$	983,645
	Technology	5 years		712,500		$	712,500
	Less: accumulated amortization			(1,264,492	)		(925,263	)
	Intangible assets, net		$	431,653		$	770,882
	Total amortization expense was $339,229 for the years ended September 30, 2014 and 2013, respectively.
	The fair value of the TransTech intellectual property acquired was $983,645, estimated by using a discounted cash flow approach based on future economic benefits associated with agreements with customers, or through expected continued business activities with its customers. In summary, the estimate was based on a projected income approach and related discounted cash flows over five years, with applicable risk factors assigned to assumptions in the forecasted results.
	The fair value of the RATLab intellectual property associated with the assets acquired was $450,000 estimated by using a discounted cash flow approach based on future economic benefits. In summary, the estimate was based on a projected income approach and related discounted cash flows over five years, with applicable risk factors assigned to assumptions in the forecasted results.
	The fair value of the Javelin intellectual property acquired was $262,500 estimated by using a discounted cash flow approach based on future economic benefits associated with the assets acquired. In summary, the estimate was based on a projected income approach and related discounted cash flows over five years, with applicable risk factors assigned to assumptions in the forecasted results.

11_ACCOUNTS_PAYABLE

11. ACCOUNTS PAYABLE	12 Months Ended
	Sep. 30, 2014
Notes to Financial Statements
11. ACCOUNTS PAYABLE	Accounts payable were $2,234,123 and $2,301,149 as of September 30, 2014 and 2013, respectively. Such liabilities consisted of amounts due to vendors for inventory purchases and technology development, external audit, legal and other expenses incurred by the Company.  TransTech had 2 vendors (22.6% and 12.0%) with accounts payable in excess of 10% of its accounts payable as of September 30, 2014. The Company does expect to have vendors with accounts payable balances of 10% of total accounts payable in the foreseeable future.

12_CONVERTIBLE_NOTES_PAYABLE

12. CONVERTIBLE NOTES PAYABLE	12 Months Ended
	Sep. 30, 2014
Notes to Financial Statements
12. CONVERTIBLE NOTES PAYABLE	The Company entered into a Convertible Note Payable with KBM Worldwide, Inc. on August 25, 2014 for $103,500. The Note is due May 27, 2015 and provides for interest at 8%. The Company entered into a Convertible Note Payable with KBM Worldwide, Inc. on September 23, 2014 for $63,000. The Note is due June 26, 2015 and provides for interest at 8%. The Notes are convertible at 65% of the average of the lowest three day trading price in the 10 days prior to conversion; however, the Notes are not convertible until the second quarter of fiscal year 2015. The Notes provided short term working capital while funding closes and the Company expects to repay the Notes at the closing of funding. The Company has accrued interest of $936 as of September 30, 2014.  The Company has recorded a derivative liability for the conversion discount in the amount of $166,500 at September 30, 2014.

13_NOTES_PAYABLE_CAPITALIZED_L

13. NOTES PAYABLE, CAPITALIZED LEASES AND LONG TERM DEBT	12 Months Ended
	Sep. 30, 2014
Notes to Financial Statements
13. NOTES PAYABLE, CAPITALIZED LEASES AND LONG TERM DEBT	Notes payable, capitalized leases and long term debt as of September 30, 2014 and 2013 consisted of the following:
		September 30,			September 30,
		2014			2013
	Capital Source Business Finance Group	$	488,398		$	749,323
	Note payable to Umpqua Bank		200,000			-
	Secured note payable to J3E2A2Z LP - related party		600,000			-
	TransTech capitalized leases, net of capitalized interest		2,562			5,700
	Total debt		1,290,960			755,023
	Less current portion of long term debt		(1,290,960	)		(753,129	)
	Long term debt	$	-		$	1,894
	Capital Source Business Finance Group Secured Credit Facility
	The Company finances its TransTech operations from operations and a Secured Credit Facility with Capital Source Business Finance Group. On December 9, 2008 TransTech entered into a $1,000,000 secured credit facility with Capital Source to fund its operations.   On December 12, 2014, the secured credit facility was renewed for an additional six months, with a floor for prime interest of 4.5% (currently 4.5%) plus 2.5%. The eligible borrowing is based on 80% of eligible trade accounts receivable, not to exceed $1,000,000. The secured credit facility is collateralized by the assets of TransTech, with a guarantee by Visualant, including all assets of Visualant. Availability under this Secured Credit ranges from $0 to $175,000 ($57,309 as of September 30, 2014) on a daily basis. The remaining balance on the accounts receivable line ($488,398) as of September 30, 2014 must be repaid by the time the secured credit facility expires on June 12, 2015, or the Company renews by automatic extension for the next successive six month term.
	Note Payable to Umpqua Bank/ Ronald P. Erickson or J3E2A2Z LP
	On December 19, 2013, the Company entered into a $200,000 Note Payable with Umpqua Bank.  The Note Payable has a maturity date of December 31, 2014 and provided for interest of 2.79%, subject to adjustment annually. On December 19, 2014, this Note Payable maturity date was extended to December 31, 2015 and provides for interest at 3.25%.
	The cash from the Note Payable was received on January 14, 2014.  Related to this Note Payable and in the case of a default by the Company, the Company entered into a Demand Promissory Note for $200,000 on January 10, 2014 with Mr. Erickson, our Chief Executive Officer and/or entities in which Mr. Erickson has a beneficial interest. On March 31, 2014, the Company entered into an Amendment to the Demand Promissory Note which extended the due date of this from March 31, 2014 to June 30, 2014. On July 17, 2014, the Company entered into Amendment 2 to the Demand Promissory Note which extended the due date from June 30, 2014 to September 30, 2014. On December 31, 2014, the Company entered into Amendment 3 to the Demand Promissory Note which extended the due date from September 30, 2014 to March 31, 2015. The Note provides for interest of 3% per annum and provides for a second lien on company assets if not repaid by March 31, 2015 or converted into convertible debentures or equity on terms acceptable to the Holder. The Company has accrued interest of $4,340 as of September 30, 2014.
	Note Payables to Ronald P. Erickson or J3E2A2Z LP
	On March 31, 2014, the Company entered into a Demand Promissory Note for $300,000 with Mr. Erickson, our Chief Executive Officer and/or entities in which Mr. Erickson has a beneficial interest. On July 17, 2014, the Company entered into an Amendment to Demand Promissory Note which extended the due date of this from June 30, 2014 to September 30, 2014. On December 31, 2014, the Company entered into Amendment 2 to Demand Promissory Note which extended the due date of this from September 30, 2014 to March 31, 2015. The Note provides for interest of 3% per annum and provides for a second lien on company assets if not repaid by March 31, 2015 or converted into convertible debentures or equity on terms acceptable to the Holder. The Company has accrued interest of $4,512 as of September 30, 2014.
	On July 17, 2014, the Company entered into a Demand Promissory Note for $300,000 with Mr. Erickson, our Chief Executive Officer and/or entities in which Mr. Erickson has a beneficial interest. On December 31, 2014, the Company entered into an Amendment to Demand Promissory Note for $300,000 which extended the due date of this from September 30, 2014 to March 31, 2015. The Note provides for a second lien on company assets if not repaid by March 31, 2015 or converted into convertible debentures or equity on terms acceptable to the Holder.  The Company has accrued interest of $1,874 as of September 30, 2014.
	Capitalized Leases
	TransTech has capitalized leases for equipment. The leases have a remaining lease term of ten months. The aggregate future minimum lease payments under capital leases, to the extent the leases have early cancellation options and excluding escalation charges, are as follows:
	Years Ended September 30,	Total
	2015	$	2,562
	2016		-
	2017		-
	2018		-
	2019		-
	Total		2,562
	Less current portion of capitalized leases		(2,562	)
	Long term capital leases	$	-
	The imputed interest rate in the capitalized leases is approximately 10.5%.
	Aggregate maturities for notes payable, capitalized leases and long term debt by year are as follows:
	Years Ended September 30,	Total
	2015	$	1,290,960
	2016		-
	2017		-
	2018		-
	2019		-
	Total	$	1,290,960

14_EQUITY

14. EQUITY

12 Months Ended

Sep. 30, 2014

Notes to Financial Statements

14. EQUITY

Unless otherwise indicated, all of the following sales or issuances of Company securities were conducted under the exemption from registration as provided under Section 4(2) of the Securities Act of 1933 (and also qualified for exemption under 4(5), formerly 4(6) of the Securities Act of 1933, except as noted below). All of the shares issued were issued in transactions not involving a public offering, are considered to be restricted stock as defined in Rule 144 promulgated under the Securities Act of 1933 and stock certificates issued with respect thereto bear legends to that effect.

We have compensated consultants and service providers with restricted common stock during the development of our technology and when our capital resources were not adequate to provide payment in cash.

All of the following transactions were to accredited investors (with the exception of a few issuances which are noted below). All issuances to accredited and non-accredited investors were structured to comply with the requirements of the safe harbor afforded by Rule 506 of Regulation D, including limiting the number of non-accredited investors to no more than 35.

The Company had the following equity transactions during the year ended September 30, 2014:

On May 15, 2014, the Company issued 1,600,000 shares of common stock to White Oak Capital LLC related to a conversion under a 7% Convertible Debenture. The shares were valued at $160,000 or $0.10 per share.

On June 12, 2014, the Company issued 300,000 shares of common stock to Dynasty Wealth, Inc. related to Financial Public Relations Group dated June 9, 2014. The shares were valued at $60,000 or $0.20 per share.

On August 27, 2014, we entered into an Addendum to a Financial Consultant Agreement or Agreement with D. Weckstein and Co, Inc. for financial consulting and investment banking services. Under the Addendum, Weckstein was awarded 1,000,000 shares of our common stock on August 27, 2014. The shares were valued at $0.20 per share by the parties. We expensed $70,000 during the year ended September 30, 2014 or $0.07, the closing price on August 27, 2014.

The Company had the following equity transactions during the year ended September 30, 2013:

On October 22, 2012, the Company filed an Amended Registration Statement on Form S-1 for 7,600,000 shares of common stock. The Registration Statement primarily registered shares for Ascendiant, Coventry Capital LLC and National Securities Corporation and affiliates and was declared effective by the SEC on October 25, 2012.

On October 8, 2012, Ascendiant converted $50,000 of principal and interest of $6,959 into 1,139,178 shares of common stock at $.050 per share under the Securities Purchase Agreement dated May 19, 2011.

On June 17, 2011, the Company entered into a Securities Purchase Agreement with Ascendiant Capital Partners LLC or Ascendiant, pursuant to which Ascendiant agreed to purchase up to $3,000,000 worth of shares of our common stock from time to time over a 24-month period, provided that certain conditions were met. The financing arrangement entered into by the Company and Ascendiant is commonly referred to as an “equity line of credit” or an “equity drawdown facility.”

As of October 17, 2012, the Company issued to Ascendiant 6,358,933 shares for $483,141 or $.076 per share under the Securities Purchase Agreement dated June 17, 2011.  In addition, the Company issued to Ascendiant during 2011 a total of 1,490,943 shares for $193,370 or $.131 per share under the Securities Purchase Agreement for commitment and legal fees.

On October 26, 2012, the Company issued 150,000 shares of restricted common stock to Manna Advisory Services, LLC for investor relation services. The shares were valued at $0.13 per share. The Company expensed $19,500 during the nine months ended June 30, 2013. The shares do not have registration rights.

On November 28, 2012, Ascendiant converted $50,000 of principal and interest of $7,644 into 1,152,877 shares of common stock at $.050 per share under the Securities Purchase Agreement dated May 19, 2011.

On January 24, 2013, Gemini converted $300,000 of principal and $50,630 of accrued interest into 7,012,603 shares of common stock at $.050 per share under the Securities Purchase Agreement dated May 19, 2011.

On January 24, 2013, Ascendiant converted $50,000 of principal and $8,438 of accrued interest into 1,168,767 shares of common stock at $.050 per share under the Securities Purchase Agreement dated May 19, 2011.

On January 28, 2013, Gemini converted $300,000 of principal and $50,959 of accrued interest into 7,019,178 shares of common stock at $.050 per share under the Securities Purchase Agreement dated May 19, 2011.

On February 11, 2013, the Company entered into a Consulting Services Agreement with Integrated Consulting Services for strategic advice on our product roadmap. We issued a warrant for the purchase of 250,000 shares of our common stock.  The warrants are exercisable at $.13 per share and expire February 10, 2016. The Company valued the warrant at $0.10 per share and expensed $25,000 during the year ended September 30, 2013. Pursuant to the Consulting Services Agreement, the Company issued an additional warrant for the purchase of 250,000 shares of our common stock on August 12, 2013. The warrants are exercisable at $.13 per share and expire August 10, 2016. The Company valued the warrant at $0.0444 per share and expensed $11,100 during the year ended September 30, 2013. The warrants do not have piggyback registration rights.

On February 13, 2013, the Company issued 150,000 shares of restricted common stock to Manna Advisory Services, LLC, for investor relation services. The shares were valued at $0.10 per share. The Company expensed $15,000 during the year ended September 30, 2013.The shares do not have registration rights.

On February 13, 2013, the Company issued 150,000 shares of restricted common stock to David Markowski for services related to the acquisition of TransTech. The shares were valued at $0.10 per share. The Company expensed $15,000 during the year ended September 30, 2013. The shares do not have registration rights.

On February 13, 2013, the Company issued 2,000,000 shares of restricted common stock to two employees (1,200,000 shares for Ronald Erickson our Chief Executive Officer and 200,000 for Mark Scott, our Chief Financial Officer) and two directors (400,000 shares for Marco Hegyi and 200,000 shares for Jon Pepper) for services during 2012. The shares were valued at $0.10 per share. The Company expensed $200,000 during the year ended September 30, 2013. The shares do not have registration rights.

On March 1, 2013, the Company issued 50,000 shares of restricted common stock to Manna Advisory Services, LLC, for investor relation services. The shares were valued at $0.10 per share. The Company expensed $5,000 during the year ended September 30, 2013. The shares do not have registration rights.

On April 26, 2013, Ascendiant was issued a total of 4,565,068 shares of common stock as a result of Ascendiant’s cashless exercise of a warrant.  The warrant had an adjustable exercise price based on the Company’s stock price during the 3 trading days prior to the time of exercise as well as for any subsequent sales of stock or stock equivalents at an effective price less than the then exercise price of the warrant.  On January 23, 2013, the Company agreed to repurchase the Ascendiant Warrant for a purchase price of $300,000, payment of which was due by March 31, 2013; however, the Company did not complete that purchase, thereby enabling Ascendiant to exercise the Ascendiant Warrant on April 26, 2013.

The Company entered into an Option Agreement with Ascendiant dated April 26, 2013, pursuant to which the Company had the option to purchase from Ascendiant 4,000,000 shares of our common stock (the “Option Shares”) for an aggregate purchase price of $300,000.  On May 31, 2013, the Company exercised its option to purchase the 4,000,000 Option Shares from Ascendiant and paid to Ascendiant the $300,000 purchase price.  The option was required to be exercised and payment for the shares made on or before May 31, 2013.  On May 31, 2013, the Company exercised our option to purchase 4,000,000 Option Shares from Ascendiant and paid to Ascendiant the $300,000 purchase price.   Ascendiant delivered only 2,284,525 of the 4,000,000 Option Shares purchased by the Company and had failed to deliver the remaining 1,715,475 Option Shares. On June 17, 2013, the Company filed a complaint (the “Complaint”) against Ascendiant Capital Partners, LLC (“Ascendiant”) in the California Superior Court, County of Orange (Case No. 30-2013-00656770-CU-BC-CJC) for breach of contract, seeking damages, specific performance and injunctive relief against Ascendiant. On September 24, 2013, the California Superior Court granted Visualant’s motion, finding that Visualant was likely to prevail on the merits of its claim against Ascendiant.  The Court ordered Ascendiant to deliver 1,715,475 Option Shares to the Company by 4:00PM, September 27, 2013. The delivery occurred on September 27, 2013. The Company expects to pursue its damage claim.

On April 30, 2013, the Company issued 120,000 shares of restricted common stock to David Markowski for services related to the acquisition of TransTech. The shares were valued at $0.10 per share. The Company expensed $12,000 during the year ended September 30, 2013. The shares do not have registration rights.

On June 10, 2013, the Sterling Group forfeited a warrant to purchase 300,000 shares of common stock at $0.20 per share.

On June 10, 2013, the Company entered into a Purchase Agreement, Warrants, and Registration Rights Agreement with Special Situations Technology Funds and forty other accredited investors, pursuant to which we issued 52,300,000 shares of common stock at $0.10 per share for a total of $5,230,000, which amount includes the conversion of $500,000 in outstanding debt of the Company owed to one of its officers.  As part of the transaction, which closed on June 14, 2013, we issued to the investors (i) five year Series A Warrants to purchase a total of 52,300,000 shares of common stock at $0.15 per share; and (ii) five year Series B Warrants to purchase a total of 52,300,000 shares of common stock at $0.20 per share.  In addition, GVC Capital LLC, the placement agent in that transaction, was issued five-year warrants to purchase a total of 5,230,000 shares of common stock at $0.10 per share. The Company has an obligation to issue up to 5,230,000 additional placement agent warrants exercisable at $0.15 per share.  The $0.15 placement agent warrants shall issue only upon the exercise of the Series A Warrants by the Investors, and are issuable ratably based upon the number of Warrants exercised by the Investors.  The Company filed a Registration Statement and Amended Registration Statements on Form S-1 for 162,130,000 shares of common stock and warrants related to these Agreements that was declared effective by the SEC on October 11, 2013.

On September 4, 2013, the Company issued 300,000 shares to the Liolios Group related to public relation services.  The Company expensed $60,000 during the year ended September 30, 2013. The shares have piggyback registration rights. In addition, the Company issued a warrant for 200,000 shares of common stock to Liolios related to public relation services. The warrants vested on September 4, 2013, are exercisable at $.20 per share expire on September 3, 2016. The Company valued the warrant at $0.0444 per share and expensed $8,880 during the year ended September 30, 2013. The warrant has piggyback registration rights.

The issued a warrant to Genesis Select Corporation related to a Strategic Consulting Services Agreement dated September 15, 2013 for 200,000 shares of common stock. The warrants vested on September 15, 2013, are exercisable at $.20 per share and expire on September 14, 2016. The Company valued the warrant at $0.0444 per share and expensed $8,880 during the year ended September 30, 2013. The warrant does not have piggyback registration rights.

The Company issued a warrant to Jason Eichenholz on September 18, 2013 related to a Technical Advisor Agreement dated July 18, 2013 for 500,000 shares of common stock. The warrants vested on September 18, 2013, are exercisable at $.20 per share and expire on September 17, 2016. The Company valued the warrant at $0.0444 per share and expensed $22,220 during the year ended September 30, 2013. The warrant does not have piggyback registration rights.

A summary of the warrants issued as of September 30, 2014 were as follows:

Weighted

Average

Exercise

Shares

Price

Outstanding at beginning of period

113,507,050

$

0.173

Issued

16,725,286

0.2

Exercised

-

-

Forfeited

-

-

Expired

(1,677,050

)

(0.309

)

Outstanding at end of period

128,555,286

$

0.175

Exerciseable at end of period

128,555,286

A summary of the status of the warrants outstanding as of September 30, 2014 is presented below:

30-Sep-14

Weighted

Weighted

Weighted

Average

Average

Average

Number of

Remaining

Exercise

Shares

Exercise

Warrants

Life

Price

Exerciseable

Price

6,330,000

3.14

$

0.10-013

6,330,000

$

0.10-013

52,300,000

3.63

0.15

52,300,000

0.15

69,925,286

3.71

0.2

69,925,286

0.2

128,555,286

3.67

0.175

128,555,286

0.175

The significant weighted average assumptions relating to the valuation of the Company’s warrants for the year ended September 30, 2014 were as follows:

Dividend yield

0

%

Expected life

3

Expected volatility

90

%

Risk free interest rate

0.7

%

At September 30, 2014, vested warrants totaling 128,555,286 shares had an aggregate intrinsic value of $0.

15_STOCK_OPTIONS

15. STOCK OPTIONS	12 Months Ended
	Sep. 30, 2014
Notes to Financial Statements
15. STOCK OPTIONS	Description of Stock Option Plan
	On April 29, 2011, the 2011 Stock Incentive Plan was approved at the Annual Stockholder Meeting. The Company was authorized to issue options for, and has reserved for issuance, up to 7,000,000 shares of common stock under the 2011 Stock Incentive Plan. On March 21, 2013, an amendment to the Stock Option Plan was approved by the stockholders of the Company, increasing the number of shares reserved for issuance under the Plan to 14,000,000 shares.
	Determining Fair Value under ASC 505
	The Company records compensation expense associated with stock options and other equity-based compensation using the Black-Scholes-Merton option valuation model for estimating fair value of stock options granted under our plan. The Company amortizes the fair value of stock options on a ratable basis over the requisite service periods, which are generally the vesting periods. The expected life of awards granted represents the period of time that they are expected to be outstanding.  The Company estimates the volatility of our common stock based on the historical volatility of its own common stock over the most recent period corresponding with the estimated expected life of the award. The Company bases the risk-free interest rate used in the Black Scholes-Merton option valuation model on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term equal to the expected life of the award. The Company has not paid any cash dividends on our common stock and does not anticipate paying any cash dividends in the foreseeable future. Consequently, the Company uses an expected dividend yield of zero in the Black-Scholes-Merton option valuation model and adjusts share-based compensation for changes to the estimate of expected equity award forfeitures based on actual forfeiture experience. The effect of adjusting the forfeiture rate is recognized in the period the forfeiture estimate is changed.
	Stock Option Activity
	The Company had the following stock option transactions during the year ended September 30, 2014:
	During the nine months ended June 30, 2014, two employees of TransTech, forfeited stock option grants for 30,000 shares of common stock at $0.22 per share.
	On April 2, 2014, the Company issued stock option grants to two employees totaling 395,000 shares at $0.10 per share. The grants vest quarterly over three years and expire on April 1, 2019.
	The Company had the following stock option transactions during the year ended September 30, 2013:
	Stock option grants totaling 5,100,000 shares of common stock valued at $0.13 per share have been made to three directors and four employees (Ron Erickson- 1,000,000 shares vesting June 6, 2013, Yoshitami Arai- 500,000 shares that vested immediately, Masahiro Kawahata- 500,000 shares that vested immediately, Mark Scott- 1,000,000 shares that vested on June 6, 2013, Richard Mander- 1,000,000 shares that vest quarterly from June 26, 2012 and Todd M. Sames- 1,000,000 shares that vest quarterly over three years from September 5, 2012 and Derek Jensen- 100,000 shares that vest quarterly from October 22, 2012) for services provided during 2012. These options were authorized for issuance under the 2011 Stock Incentive Plan and were effective March 21, 2013, when the Company was authorized to issue options up to 14,000,000 shares under the 2011 Stock Incentive Plan at the Annual Stockholder Meeting.
	On August 27, 2013, the Company issued a stock option grant for 500,000 shares of common stock to Richard Mander, an employee, valued at $0.10 per share. The stock grant vested quarterly over three years.
	On August 27, 2013, the Company issued stock option grants for 1,230,000 shares of common stock to twelve employees of TransTech valued at $0.10 per share. The stock grant vested quarterly over three years.
	On March 31, 2013 an employee of TransTech, forfeited a stock option grant for 15,000 shares of common stock at $0.24 per share.
	There are currently 13,100,000 options to purchase common stock at an average exercise price of $0.125 per share outstanding as of September 30, 2014 under the 2011 Stock Incentive Plan. The Company recorded $87,550 and $250,013 of compensation expense, net of related tax effects, relative to stock options for the year ended September 30, 2014 and 2013 in accordance with ASC 505. Net loss per share (basic and diluted) associated with this expense was approximately ($0.00). As of September 30, 2014, there is approximately $306,254 of total unrecognized costs related to employee granted stock options that are not vested. These costs are expected to be recognized over a period of approximately 5.26 years.
	Stock option activity for the year ended September 30, 2014 and 2013 was as follows:
							Weighted Average
			Options				Exercise Price			$
	Outstanding as of September 30, 2012			5,920,000				0.131			776,800
	Granted			6,830,000				0.122			836,000
	Exercised			-				-			-
	Forfeitures			(15,000	)			0.24			(3,600	)
	Outstanding as of September 30, 2013			12,735,000				0.126			1,609,200
	Granted			395,000				0.1			39,500
	Exercised			-				-			-
	Forfeitures			(30,000	)			0.217			(6,500	)
	Outstanding as of September 30, 2014			13,100,000			$	0.125		$	1,642,200
	The following table summarizes information about stock options outstanding and exercisable at September 30, 2014:
								Weighted	Weighted						Weighted
								Average	Average						Average
	Range of				Number			Remaining Life	Exercise Price				Number		Exercise Price
	Exercise Prices				Outstanding			In Years	Exerciseable				Exerciseable		Exerciseable
		0.09				500,000		5.75 years	$	0.09				500,000	$	0.09
		0.1				4,020,000		5.61 years		0.1				2,555,834		0.1
		0.12				200,000		.13 years		0.12				172,226		0.12
		0.13				5,100,000		5.18 years		0.13				4,508,333		0.13
		0.15				3,100,000		5.65 years		0.15				3,100,000		0.15
		0.24				180,000		.88 years		0.24				180,000		0.24
						13,100,000		5.26 years	$	0.125				11,016,393	$	0.133
	There is no aggregate intrinsic value of the exercisable options as of September 30, 2014.

16_OTHER_SIGNIFICANT_TRANSACTI

16. OTHER SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES	12 Months Ended
	Sep. 30, 2014
Notes to Financial Statements
16. OTHER SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES	Related Party Transactions with Ronald P. Erickson
	See Notes 13 and 19 for Notes Payable to Ronald P. Erickson, our Chief Executive Officer Chief and/or entities in which Mr. Erickson has a beneficial interest. In addition, the Company recorded advances from Mr. Erickson of $236,617 as of September 30, 2014 as accrued liabilities – related parties.
	Mr. Erickson, our Chief Executive Officer and/or entities in which Mr. Erickson has a beneficial interest have made advances and loans to the Company in the total principal amount of $960,000 on or before the date hereof at an average annual interest rate of 4.2%. In addition, Mr. Erickson and/or entities in which Mr. Erickson has a beneficial interest also have unreimbursed 2013 expenses and unpaid salary and interest from 2013 on the outstanding principal amount of the Loans totaling approximately $65,000 as of June 14, 2013. Mr. Erickson and related entities converted $500,000 of the advances and loans as part of the PPM which closed June 14, 2013. The remaining amounts were paid to Mr. Erickson and related entities prior to June 30, 2013.
	Related Party Transaction with Mark Scott
	Mr. Mark Scott, our Chief Financial Offer, invested $10,000 in the Private Placement which closed June 14, 2013.

17_COMMITMENTS_CONTINGENCIES_A

17. COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS	12 Months Ended
	Sep. 30, 2014
Notes to Financial Statements
17. COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS	LEGAL PROCEEDINGS
	There are no pending legal proceedings against the Company that are expected to have a material adverse effect on its cash flows, financial condition or results of operations.
	EMPLOYMENT AGREEMENTS
	Mr. Erickson, Mr. Scott and other named executive officers of Visualant do not have employment agreements.
	LEASES
	The Company is obligated under various non-cancelable operating leases for their various facilities and certain equipment.
	Corporate Offices
	The Company’s executive office is located at 500 Union Street, Suite 420, Seattle, Washington, USA, 98101. On August 1, 2012, the Company entered into an Office Lease with Logan Building LLC for 2,244 square feet and which expired August 31, 2014. The monthly lease rate was $1,944 for the year ending August 31, 2013 and $2,028 for the year ending August 31, 2014. On June 14, 2013, the Company entered into Amendment One to the Office Lease, increasing our monthly payment to $3,978 through August 31, 2013, $4,057 from September 1, 2013 to May 31, 2014 and $4,140 from June 1, 2014 through August 31, 2014. On June 18, 2014, the Company entered into the Second Amendment to the Office Lease, which maintained our net monthly payment at $4,057.  On December 18, 2014, the Company entered into the Third Amendment to the Office Lease reducing our square footage to 2,244 square feet and decreasing our net monthly payment to $2,535 through the expiration date of February 28, 2015.
	TransTech Facilities
	TransTech is located at 12142 NE Sky Lane, Suite 130, Aurora, OR 97002. TransTech leases a total of approximately 9,750 square feet of office and warehouse space for its administrative offices, product inventory and shipping operations, at a monthly rental of $4,292. The lease was extended from March 2011 for an additional five year term at a monthly rental of $4,751. There are two additional five year renewals with a set accelerating increase of 10% per 5 year term.
	The aggregate future minimum lease payments under operating leases as of September 30, 2014, to the extent the leases have early cancellation options and excluding escalation charges, are as follows:
	Years Ended September 30,	Total
	2015	$	69,273
	2016		23,755
	2017		-
	2018		-
	2019		-
	Beyond		-
	Total	$	93,028

18_INCOME_TAXES

18. INCOME TAXES	12 Months Ended
	Sep. 30, 2014
Income Tax Disclosure [Abstract]
18. INCOME TAXES	The Company has incurred losses since inception, which have generated net operating loss carryforwards.  The net operating loss carryforwards arise from United States sources.
	Pretax losses arising from United States operations were approximately $835,000 for the year ended September 30, 2014.
	Pretax losses arising from United States operations were approximately $5,084,000 for the year ended September 30, 2013.
	The Company has net operating loss carryforwards of approximately $18,090,000, which expire in 2020-2033. Because it is not more likely than not that sufficient tax earnings will be generated to utilize the net operating loss carryforwards, a corresponding valuation allowance of approximately $18,090,000 was established as of September 30, 2014. Additionally, under the Tax Reform Act of 1986, the amounts of, and benefits from, net operating losses may be limited in certain circumstances, including a change in control.
	Section 382 of the Internal Revenue Code generally imposes an annual limitation on the amount of net operating loss carryforwards that may be used to offset taxable income when a corporation has undergone significant changes in its stock ownership. There can be no assurance that the Company will be able to utilize any net operating loss carryforwards in the future.
	For the year ended September 30, 2014, the Company’s effective tax rate differs from the federal statutory rate principally due to net operating losses and warrants issued for services.
	The principal components of the Company’s deferred tax assets at September 30, 2014 are as follows:
		2014			2013
	U.S. operations loss carry forward at statutory rate of 34%	$	(6,150,117	)	$	(5,866,156	)
	Non-U.S. operations loss carry forward at statutory rate of 20.5%		0			0
	Total		(6,150,117	)		(5,866,156	)
	Less Valuation Allowance		6,150,117			5,866,156
	Net Deferred Tax Assets		-			-
	Change in Valuation allowance	$	6,150,117		$	5,866,156
	A reconciliation of the United States Federal Statutory rate to the Company’s effective tax rate for the period ended September 30, 2014 and 2013 is as follows:
	Federal Statutory Rate		-34	%		-34	%
	Increase in Income Taxes Resulting from:
	Change in Valuation allowance		34	%		34	%
	Effective Tax Rate		0	%		0	%

19_SUBSEQUENT_EVENTS

19. SUBSEQUENT EVENTS	12 Months Ended
	Sep. 30, 2014
Subsequent Events [Abstract]
19. SUBSEQUENT EVENTS	The Company evaluated subsequent events, for the purpose of adjustment or disclosure, up through the date the financial statements were issued.
	Resignation of Dr. Richard Mander
	On November 7, 2014, the Company accepted the resignation of Dr. Richard Mander as Chief Technology Officer. The Company expects to utilize Mr. Mander on a consulting basis. The Company is utilizing Dr. Tom Furness, the inventor of our ChromaID™ technology and our existing supplier base to develop the Company’s products.
	Issuance of Seventh Patent on its ChromaID™ technology for Invisible Bar Codes
	On November 21, 2014, the Company announced that it received its seventh patent on its ChromaID™ technology.
	The Company’s latest patent provides for invisible bar codes or adds a new element to the encoding process by leveraging the Visualant ChromaID  scanner’s ability to recognize differences in molecular and atomic structures allowing new data to be added using conventional printing processes without changing the visual appearance of today’s codes.
	The patent issued by the United States Office of Patents and Trademarks is US Patent No. 8,888,207 and is entitled “Systems, Methods, and Articles Related to Machine-Readable Indicia and Symbols.”
	Amendment to Services and License Agreement with Invention Development Management Company, LLC (“IDMC”)
	On November 19, 2014, the Company entered into an Amendment to Services and License Agreement with Invention Development Management Company, LLC. This Amendment exclusively licenses ten filed patents to Visualant, Inc.
	On November 11, 2013, the Company entered into a Services and License Agreement with IDMC”), a Delaware limited liability company. IDMC is affiliated with Intellectual Ventures, which collaborates with inventors, partners with pioneering companies and invests both expertise and capital in the process of invention.
	The Agreement required IDMC to identify and engage investors to develop new applications of the Company’s ChromaID™ development kits, present the developments to the Company for approval, and file patent applications to protect the developments. IDMC was responsible for the development and patent costs.
	The Company received a worldwide, nontransferable, exclusive license to the licensed IP developed under this Agreement, during the term of the Agreement, and solely within the identification, authentication and diagnostics field of use, to (a) make, have made, use, import, sell and offer for sale products and services; (b) make improvements; and (c) grant sublicenses of any and all of the foregoing rights (including the right to grant further sublicenses).
	The Company received a nonexclusive and nontransferrable option to acquire a worldwide, nontransferrable, nonexclusive license to the useful IP held by IDMC within the identification, authentication and diagnostics field of use to (a) make, have made, use, import, sell and offer to sell products and services and (b) grant sublicenses to any and all of the foregoing rights. The option to acquire this license may be exercised for up to two years from the effective date of the Agreement.
	IDMC is providing global business development services to the Company, including present Visualant IP and any licensed IP, if applicable, to potential customers, licensees, and distributors in markets or geographies not being pursued by Visualant. Also, IDMC may introduce Visualant to a potential customer, licensee, or distributor for the purpose of identifying and closing a license, sale, or distribution deal or other monetization event.
	Capital Source Business Finance Group Secured Credit Facility
	The Company finances its TransTech operations from operations and a Secured Credit Facility with Capital Source Business Finance Group. On December 9, 2008 TransTech entered into a $1,000,000 secured credit facility with Capital Source to fund its operations.   On December 12, 2014, the secured credit facility was renewed for an additional six months, with a floor for prime interest of 4.5% (currently 4.5%) plus 2.5%. The eligible borrowing is based on 80% of eligible trade accounts receivable, not to exceed $1,000,000. The secured credit facility is collateralized by the assets of TransTech, with a guarantee by Visualant, including all assets of Visualant. Availability under this Secured Credit ranges from $0 to $175,000 ($57,309 as of September 30, 2014) on a daily basis. The remaining balance on the accounts receivable line ($488,398) as of September 30, 2014 must be repaid by the time the secured credit facility expires on June 12, 2015, or the Company renews by automatic extension for the next successive six month term.
	Series A Convertible Preferred Stock
	During the three months ended December 31, 2014, the Company sold 3,000,000 Series A Preferred to one accredited investor of Series A Convertible Preferred Stock totaling $300,000 that is convertible into 3,000,000 shares of common stock at $0.10 over the next five years.  The Preferred Series A has voting rights and may not be called. The Company also issued (i) a Series C five year Warrant for 3,000,000 shares of common stock at $0.20 per share, which is callable at $0.40 per share; and (ii) ) a Series D five year Warrant for 3,000,000 shares of common stock at $0.30 per share, which is callable at $0.60 per share. The Preferred Series A and Series C and D Warrants have registration rights upon the closing of the offering. A notice filing under Regulation D will be filed with the SEC upon the closing of the offering.
	Related Party Transactions with Ronald P. Erickson
	On December 31, 2014, the Company entered into an Amendment to Demand Promissory Note for $300,000 with Mr. Erickson, our Chief Executive Officer and/or entities in which Mr. Erickson has a beneficial interest. The December 31, 2014 Amendment to Demand Promissory Note for $300,000 provides for interest of 3% per annum and is due March 31, 2015. The Amendment to Demand Promissory Note provides for a second lien on company assets if not repaid by March 31, 2015 or converted into convertible debentures or equity on terms acceptable to the Holder.
	On December 31, 2014, the Company entered into an Amendment 2 to Demand Promissory Note dated March 31, 2014 and as Amended on July 17, 2014 with Mr. Erickson, our Chief Executive Officer and/or entities in which Mr. Erickson has a beneficial interest. The Amendment 2 to Demand Promissory Note for $300,000 extended the due date of this from September 30, 2014 to March 31, 2015. The Note provides for interest of 3% per annum and provides for a second lien on company assets if not repaid by March 31, 2015 or converted into convertible debentures or equity on terms acceptable to the Holder.
	On December 31, 2014, the Company entered into an Amendment 3 to the Demand Promissory Note dated January 10, 2014 and as Amended on March 31, 2014 and July 17, 2014 with Mr. Erickson, our Chief Executive Officer and/or entities in which Mr. Erickson has a beneficial interest. The Amendment 3 to the Demand Promissory Note for $200,000 extended the due date from September 30, 2014 to March 31, 2015. The Note provides for interest of 3% per annum and provides for a second lien on company assets if not repaid by March 31, 2015 or converted into convertible debentures or equity on terms acceptable to the Holder.
	On December 19, 2013, the Company entered into a $200,000 Note Payable with Umpqua Bank.  The Note Payable has a maturity date of December 31, 2014 and provided for interest of 2.79%, subject to adjustment annually. This Note Payable maturity date was extended to December 31, 2015 and provides for interest at 3.25%.

3_SIGNIFICANT_ACCOUNTING_POLIC1

3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS (Policies)	12 Months Ended
	Sep. 30, 2014
Notes to Financial Statements
BASIS OF PRESENTATION	BASIS OF PRESENTATION - The accompanying unaudited consolidated financial statements include the accounts of the Company. Intercompany accounts and transactions have been eliminated. The preparation of these unaudited condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”).
PRINCIPLES OF CONSOLIDATION	PRINCIPLES OF CONSOLIDATION - The consolidated financial statements include the accounts of the Company and its wholly owned and majority-owned subsidiaries, TransTech Systems, Inc. Inter-Company items and transactions have been eliminated in consolidation.
CASH AND CASH EQUIVALENTS	CASH AND CASH EQUIVALENTS - The Company classifies highly liquid temporary investments with an original maturity of three months or less when purchased as cash equivalents. The Company maintains cash balances at various financial institutions. Balances at US banks are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risk for cash on deposit.
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS	ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS - Accounts receivable consist primarily of amounts due to the Company from normal business activities. The Company maintains an allowance for doubtful accounts to reflect the expected non-collection of accounts receivable based on past collection history and specific risks identified within the portfolio. If the financial condition of the customers were to deteriorate resulting in an impairment of their ability to make payments, or if payments from customers are significantly delayed, additional allowances might be required.
INVENTORIES	INVENTORIES - Inventories consist primarily of printers and consumable supplies, including ribbons and cards, badge accessories, capture devices, and access control components held for resale and are stated at the lower of cost or market on the first-in, first-out (“FIFO”) method.  Inventories are considered available for resale when drop shipped and invoiced directly to a customer from a vendor, or when physically received by TransTech at a warehouse location.  The Company records a provision for excess and obsolete inventory whenever an impairment has been identified. There is a $10,000 reserve for impaired inventory as of September 30, 2014 and 2013.
EQUIPMENT	EQUIPMENT - Equipment consists of machinery, leasehold improvements, furniture and fixtures and software, which are stated at cost less accumulated depreciation and amortization. Depreciation is computed by the straight-line method over the estimated useful lives or lease period of the relevant asset, generally 2-10 years, except for leasehold improvements which are depreciated over 5-20 years.
INTANGIBLE ASSETS / INTELLECTUAL PROPERTY	INTANGIBLE ASSETS / INTELLECTUAL PROPERTY – The Company amortizes the intangible assets and intellectual property acquired in connection with the acquisition of TransTech, over sixty months on a straight - line basis, which was the time frame that the management of the Company was able to project forward for future revenue, either under agreement or through expected continued business activities.  Intangible assets and intellectual property acquired from RATLab LLC and Javelin are recorded likewise. The Company performs annual assessments and has determined that no impairment is necessary. On June 7, 2011, the Company closed the acquisition of all Visualant related assets of the RATLab LLC, namely the rights to the medical field of use of the Chroma ID technology. On July 31, 2012, the Company closed the acquisition of all rights to the ChromaID technology in the environmental field of use from Javelin LLC.
GOODWILL	GOODWILL – Goodwill is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities assumed in a business combination. With the adoption of ASC 350, goodwill is not amortized, rather it is tested for impairment annually, and will be tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. Impairment testing for goodwill is done at a reporting unit level. Reporting units are one level below the business segment level, but are combined when reporting units within the same segment have similar economic characteristics. Under the criteria set forth by ASC 350, the Company has one reporting unit based on the current structure.  An impairment loss generally would be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit.  The Company performs annual assessments and has determined that no impairment is necessary.
LONG-LIVED ASSETS	LONG-LIVED ASSETS – The Company reviews its long-lived assets for impairment annually or when changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Long-lived assets under certain circumstances are reported at the lower of carrying amount or fair value. Assets to be disposed of and assets not expected to provide any future service potential to the Company are recorded at the lower of carrying amount or fair value (less the projected cost associated with selling the asset). To the extent carrying values exceed fair values, an impairment loss is recognized in operating results.
FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS	FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS – ASC Topic 820, Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  This topic also establishes a fair value hierarchy, which requires classification based on observable and unobservable inputs when measuring fair value.  The fair value hierarchy distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs).  The hierarchy consists of three levels:
	Level 1 – Quoted prices in active markets for identical assets and liabilities;
	Level 2 – Inputs other than level one inputs that are either directly or indirectly observable; and
	Level 3 – Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use.
	Derivative Instruments – Warrants with the June 2013 Private Placement
									Carrying
		Fair Value Measurements Using Inputs							Amount at
	Financial Instruments	Level 1			Level 2		Level 3		30-Sep-14
	Liabilities:
	Derivative Instruments - Warrants	$	-		$	2,092,000	$	-	$	2,092,000
	Total	$	-		$	2,092,000	$	-	$	2,092,000
	Liabilities measured at fair value on a recurring basis are summarized as follows:
		30-Sep-14
	Market price and estimated fair value of common stock:	$	0.08
	Exercise price	$	0.15-0.20
	Expected term (years)	3-5 years
	Divident yield		-
	Expected volatility		65.5	%
	Risk-free interest rate		0.78	%
	The risk-free rate of return reflects the interest rate for the United States Treasury Note with similar time-to-maturity to that of the warrants.
	The Company issued warrants to 104,600,000 shares of common stock in connection with the June 2013 Private Placement of 52,300,000 shares of common stock.  The strike price of these warrants is $0.15 to $0.20 per share.  These warrants were not issued with the intent of effectively hedging any future cash flow, fair value of any asset, liability or any net investment in a foreign operation.  These warrants were issued with a down-round provision whereby the exercise price would be adjusted downward in the event that additional shares of the Company’s common stock or securities exercisable, convertible or exchangeable for the Company’s common stock were issued at a price less than the exercise price.  Therefore, the fair value of these warrants were recorded as a liability in the consolidated balance sheet and are marked to market each reporting period until they are exercised or expire or otherwise extinguished.
	The proceeds from the Private Placement were allocated between the Common Shares and the Warrants issued in connection with the Private Placement based upon their estimated fair values as of the closing date at June 14, 2013, resulting in the aggregate amount of $2,494,710 to the Stockholders’ Equity and $2,735,290 to the warrant derivative.  The Company recognized $1,448,710 of other expense resulting from the increase in the fair value of the warrant liability at September 30, 2013. During the year ended September 30, 2014, the Company recognized $2,092,000 of other income resulting from the decrease in the fair value of the warrant liability at June 30, 2014.
	Derivative Instruments – Warrant with the November 2013 IDMC Services and License Agreement:
									Carrying
		Fair Value Measurements Using Inputs							Amount at
	Financial Instruments	Level 1			Level 2		Level 3		30-Sep-14
	Liabilities:
	Derivative Instruments - Warrants	$	-		$	320,657	$	-	$	320,657
	Total	$	-		$	320,657	$	-	$	320,657
	Liabilities measured at fair value on a recurring basis are summarized as follows:
		30-Sep-14
	Market price and estimated fair value of common stock:		0.08
	Exercise price		0.2
	Expected term (years)		5
	Divident yield		-
	Expected volatility		65.5	%
	Risk-free interest rate		0.78	%
	The risk-free rate of return reflects the interest rate for the United States Treasury Note with similar time-to-maturity to that of the warrants.
	The Company issued a warrant to purchase 14,575,286 shares of common stock as consideration for the exclusive IP license and application development services to IDMC signed on November 11, 2013. The warrant price of $0.20 per share expires November 10, 2018 and the per share price is subject to adjustment.  This warrant was not issued with the intent of effectively hedging any future cash flow, fair value of any asset, liability or any net investment in a foreign operation.  This warrant was issued with a down-round provision whereby the exercise price would be adjusted downward in the event that additional shares of the Company’s common stock or securities exercisable, convertible or exchangeable for the Company’s common stock were issued at a price less than the exercise price.  Therefore, the fair value of these warrants were recorded as a liability in the consolidated balance sheet and are marked to market each reporting period until they are exercised or expire or otherwise extinguished.
	During the year ended September 30, 2014, the Company recognized $320,657 of other expense related to the IDMC warrant.
	Derivative Instrument – Convertible Note Payable
									Carrying
		Fair Value Measurements Using Inputs							Amount at
	Financial Instruments	Level 1			Level 2		Level 3		30-Sep-14
	Liabilities:
	Derivative Instruments - Convertible Promissory Note	$	-		$	103,500	$	-	$	103,500
	Total	$	-		$	103,500	$	-	$	103,500
	Liabilities measured at fair value on a recurring basis are summarized as follows:
		30-Sep-14
	Market price and estimated fair value of common stock:		0.07
	Exercise price		0.07
	Expected term (years)		0.75
	Divident yield		-
	Expected volatility		65.5	%
	Risk-free interest rate		0.78	%
	The risk-free rate of return reflects the interest rate for the United States Treasury Note with similar time-to-maturity to that of the Convertible Note Payable.
	The Company entered into a Convertible Note Payable with KBM Worldwide, Inc. on August 25, 2014 for $103,500. The Note is due May 27, 2015 and provides for interest at 8%. The Note is convertible at 65% of the average of the lowest three day trading price in the 10 days prior to conversion; however, the Note is not convertible until the second quarter of fiscal year 2015. The Note provides short term working capital while funding closes and the Company expects to repay the Note at the closing of funding.
	The Company has recorded a derivative liability for the conversion discount in the amount of $103,500 at September 30, 2014.
	Derivative Instrument – Convertible Note Payable
									Carrying
		Fair Value Measurements Using Inputs							Amount at
	Financial Instruments	Level 1			Level 2		Level 3		30-Sep-14
	Liabilities:
	Derivative Instruments - Convertible Promissory Note	$	-		$	63,000	$	-	$	63,000
Total	$	-		$	63,000	$	-	$	63,000
Liabilities measured at fair value on a recurring basis are summarized as follows:
	30-Sep-14
Market price and estimated fair value of common stock:		0.08
Exercise price		0.07
Expected term (years)		0.75
Divident yield		-
Expected volatility		65.5	%
Risk-free interest rate		0.78	%
The risk-free rate of return reflects the interest rate for the United States Treasury Note with similar time-to-maturity to that of the Convertible Note Payable.
The Company entered into a Convertible Note Payable with KBM Worldwide, Inc. on September 23, 2014 for $63,000. The Note is due June 26, 2015 and provides for interest at 8%. The Note is convertible at 65% of the average of the lowest three day trading price in the 10 days prior to conversion; however, the Note is not convertible until the second quarter of fiscal year 2015. The Note provides short term working capital while funding closes and the Company expects to repay the Note at the closing of funding.
The Company has recorded a derivative liability for the conversion discount in the amount of $63,000 at September 30, 2014.
The recorded value of other financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable, other current assets, and accounts payable and accrued expenses approximate the fair value of the respective assets and liabilities at September 30, 2014 and 2013 based upon the short-term nature of the assets and liabilities.
REVENUE RECOGNITION	REVENUE RECOGNITION – Visualant and TransTech revenue are derived from other products and services. Revenue is considered realized when the services have been provided to the customer, the work has been accepted by the customer and collectability is reasonably assured. Furthermore, if an actual measurement of revenue cannot be determined, we defer all revenue recognition until such time that an actual measurement can be determined. If during the course of a contract management determines that losses are expected to be incurred, such costs are charged to operations in the period such losses are determined. Revenues are deferred when cash has been received from the customer but the revenue has not been earned. The Sumitomo License fee was recorded as revenue over the life the Joint Development Agreement and was fully recorded as of May 31, 2013.
STOCK BASED COMPENSATION	STOCK BASED COMPENSATION - The Company has share-based compensation plans under which employees, consultants, suppliers and directors may be granted restricted stock, as well as options to purchase shares of Company common stock at the fair market value at the time of grant. Stock-based compensation cost is measured by the Company at the grant date, based on the fair value of the award, over the requisite service period. For options issued to employees, the Company recognizes stock compensation costs utilizing the fair value methodology over the related period of benefit.  Grants of stock options and stock to non-employees and other parties are accounted for in accordance with the ASC 505.
INCOME TAXES	INCOME TAXES - Income tax benefit is based on reported loss before income taxes. Deferred income taxes reflect the effect of temporary differences between asset and liability amounts that are recognized for financial reporting purposes and the amounts that are recognized for income tax purposes. These deferred taxes are measured by applying currently enacted tax laws where that company operates out of. The Company recognizes refundable and deferred assets to the extent that management has determined their realization. As of September 30, 2014 and September 30, 2013, the Company had refundable tax assets related to TransTech of $29,590 and $29,773, respectively.
NET LOSS PER SHARE	NET LOSS PER SHARE – Under the provisions of ASC 260, “Earnings Per Share,” basic loss per common share is computed by dividing net loss available to common shareholders by the weighted average number of shares of common stock outstanding for the periods presented. Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that would then share in the income of the Company, subject to anti-dilution limitations. The common stock equivalents have not been included as they are anti-dilutive. As of September 30, 2014, there were options outstanding for the purchase of 13,100,000 common shares, warrants for the purchase of 128,555,286 common shares and an unknown number of shares related to the conversion of $166,500 in Convertible Promissory Notes due to KBM Worldwide, Inc. which could potentially dilute future earnings per share. As of September 30, 2013, there were options outstanding for the purchase of 12,735,000 common shares, warrants for the purchase of 113,507,050 common shares which could potentially dilute future earnings per share.
DIVIDEND POLICY	DIVIDEND POLICY - The Company has never paid any cash dividends and intends, for the foreseeable future, to retain any future earnings for the development of our business. Our future dividend policy will be determined by the board of directors on the basis of various factors, including our results of operations, financial condition, capital requirements and investment opportunities.
USE OF ESTIMATES	USE OF ESTIMATES - The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
RECENT ACCOUNTING PRONOUNCEMENTS	A variety of proposed or otherwise potential accounting standards are currently under study by standard setting organizations and various regulatory agencies. Due to the tentative and preliminary nature of those proposed standards, management has not determined whether implementation of such proposed standards would be material to our consolidated financial statements.
	In August 2014, FASB issued ASU 2014-15—Presentation of Financial Statements—Going Concern (ASC Subtopic 205-40): “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”.   The update requires management to assess a company’s ability to continue as a going concern and to provide related footnote disclosures in certain circumstances.  All entities are required to apply the new requirements in annual periods ending after December 15, 2016, and interim periods thereafter. Early application is permitted.  The Company is required to adopt these provisions for the annual period ending October 1, 2017.  The Company is currently evaluating the impact of FASB ASU 2014-15 but does not expect the adoption thereof to have a material effect on its financial statements.
	In May 2014, FASB issued ASU 2014-09—Revenue from Contracts with Customers (Topic 606): “Section A—Summary and Amendments That Create Revenue from Contracts with Customers, (Topic 606) and Other Assets and Deferred Costs—Contracts with Customers (Subtopic 340-40), Section B—Conforming Amendments to Other Topics and Subtopics in the Codification and Status Tables, Section C—Background Information and Basis for Conclusions”.   The guidance in this update affects any entity that enters into contracts with customers to transfer goods or services and supersedes the revenue recognition requirements in Topic 605, Revenue Recognition. The update is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted.  The Company is required to adopt these provisions as of October 1, 2017, the beginning of the annual period ending September 30, 2018 and at the beginning of all interim periods ending after October 1, 2017.  The Company is currently evaluating the impact of FASB ASU 2014-09 but does not expect the adoption thereof to have a material effect on its financial statements.
	In July 2013, FASB issued ASU 2013-11—Income Taxes (ASC Topic 740): “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force)”. The amendments in this update provide explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. The update is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The Company adopted these provisions at the beginning of the interim period ending March 30, 2014. Adoption FASB ASU 2013-11 did not have a material effect on the Company’s financial statements.

3_SIGNIFICANT_ACCOUNTING_POLIC2

3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS (Tables)	12 Months Ended
	Sep. 30, 2014
Derivative Instrument B Convertible Note Payable
Fair value of financial Instruments									Carrying
		Fair Value Measurements Using Inputs							Amount at
	Financial Instruments	Level 1			Level 2		Level 3		30-Sep-14
	Liabilities:
	Derivative Instruments - Convertible Promissory Note	$	-		$	103,500	$	-	$	103,500
	Total	$	-		$	103,500	$	-	$	103,500
Valuation assumptions for liabilities measured at fair value on a recurring basis		30-Sep-14
	Market price and estimated fair value of common stock:		0.07
	Exercise price		0.07
	Expected term (years)		0.75
	Divident yield		-
	Expected volatility		65.5	%
	Risk-free interest rate		0.78	%
Derivative Instrument Number 2B Convertible Note Payable
Fair value of financial Instruments									Carrying
		Fair Value Measurements Using Inputs							Amount at
	Financial Instruments	Level 1			Level 2		Level 3		30-Sep-14
	Liabilities:
	Derivative Instruments - Convertible Promissory Note	$	-		$	63,000	$	-	$	63,000
	Total	$	-		$	63,000	$	-	$	63,000
Valuation assumptions for liabilities measured at fair value on a recurring basis		30-Sep-14
	Market price and estimated fair value of common stock:		0.08
	Exercise price		0.07
	Expected term (years)		0.75
	Divident yield		-
	Expected volatility		65.5	%
	Risk-free interest rate		0.78	%
Warrants with the June 2013 Private Placement
Fair value of financial Instruments									Carrying
		Fair Value Measurements Using Inputs							Amount at
	Financial Instruments	Level 1			Level 2		Level 3		30-Sep-14
	Liabilities:
	Derivative Instruments - Warrants	$	-		$	2,092,000	$	-	$	2,092,000
	Total	$	-		$	2,092,000	$	-	$	2,092,000
Valuation assumptions for liabilities measured at fair value on a recurring basis		30-Sep-14
	Market price and estimated fair value of common stock:	$	0.08
	Exercise price	$	0.15-0.20
	Expected term (years)	3-5 years
	Divident yield		-
	Expected volatility		65.5	%
	Risk-free interest rate		0.78	%
Warrant with the November 2013 IDMC Services and License Agreement
Fair value of financial Instruments									Carrying
		Fair Value Measurements Using Inputs							Amount at
	Financial Instruments	Level 1			Level 2		Level 3		30-Sep-14
	Liabilities:
	Derivative Instruments - Warrants	$	-		$	320,657	$	-	$	320,657
	Total	$	-		$	320,657	$	-	$	320,657
Valuation assumptions for liabilities measured at fair value on a recurring basis		30-Sep-14
	Market price and estimated fair value of common stock:		0.08
	Exercise price		0.2
	Expected term (years)		5
	Divident yield		-
	Expected volatility		65.5	%
	Risk-free interest rate		0.78	%

9_FIXED_ASSETS_Tables

9. FIXED ASSETS (Tables)	12 Months Ended
	Sep. 30, 2014
Notes to Financial Statements
Schedule of Property and equipment		Estimated	30-Sep-14
		Useful Lives	Purchased			Capital Leases			Total
	Machinery and equipment	2-10 years	$	212,331		$	87,038		$	299,369
	Leasehold improvements	5-20 years		603,612			-			603,612
	Furniture and fixtures	3-10 years		77,039			101,260			178,299
	Software and websites	3- 7 years		63,783			44,849			108,632
	Less: accumulated depreciation			(515,841	)		(226,835	)		(742,676	)
			$	440,924		$	6,312		$	447,236

10_INTANGIBLE_ASSETS_Tables

10. INTANGIBLE ASSETS (Tables)	12 Months Ended
	Sep. 30, 2014
Notes to Financial Statements
Schedule Of Intangible Assets		Estimated	September 30,			September 30,
		Useful Lives	2014			2013
	Customer contracts	5 years	$	983,645		$	983,645
	Technology	5 years		712,500		$	712,500
	Less: accumulated amortization			(1,264,492	)		(925,263	)
	Intangible assets, net		$	431,653		$	770,882

13_NOTES_PAYABLE_CAPITALIZED_L1

13. NOTES PAYABLE, CAPITALIZED LEASES AND LONG TERM DEBT (Tables)	12 Months Ended
	Sep. 30, 2014
Notes to Financial Statements
Notes payable, capitalized leases and long term debt		September 30,			September 30,
		2014			2013
	Capital Source Business Finance Group	$	488,398		$	749,323
	Note payable to Umpqua Bank		200,000			-
	Secured note payable to J3E2A2Z LP - related party		600,000			-
	TransTech capitalized leases, net of capitalized interest		2,562			5,700
	Total debt		1,290,960			755,023
	Less current portion of long term debt		(1,290,960	)		(753,129	)
	Long term debt	$	-		$	1,894
Schedule Of Future Minimum Lease Payments For Capital Leases	Years Ended September 30,	Total
	2015	$	2,562
	2016		-
	2017		-
	2018		-
	2019		-
	Total		2,562
	Less current portion of capitalized leases		(2,562	)
	Long term capital leases	$	-
Schedule Of Maturities Of Long Term Debt	Years Ended September 30,	Total
	2015	$	1,290,960
	2016		-
	2017		-
	2018		-
	2019		-
	Total	$	1,290,960

14_EQUITY_Tables

14. EQUITY (Tables)	12 Months Ended
	Sep. 30, 2014
Notes to Financial Statements
Summary of the warrants issued							Weighted
							Average
							Exercise
			Shares				Price
	Outstanding at beginning of period			113,507,050			$	0.173
	Issued			16,725,286				0.2
	Exercised			-				-
	Forfeited			-				-
	Expired			(1,677,050	)			(0.309	)
	Outstanding at end of period			128,555,286			$	0.175
	Exerciseable at end of period			128,555,286
Summary of the status of the warrants outstanding					30-Sep-14
					Weighted				Weighted				Weighted
					Average				Average				Average
	Number of				Remaining				Exercise		Shares		Exercise
	Warrants				Life				Price		Exerciseable		Price
		6,330,000				3.14			$	0.10-013		6,330,000	$	0.10-013
		52,300,000				3.63				0.15		52,300,000		0.15
		69,925,286				3.71				0.2		69,925,286		0.2
		128,555,286				3.67				0.175		128,555,286		0.175
Weighted average assumptions relating to the valuation of the Companys warrants	Dividend yield			0	%
	Expected life			3
	Expected volatility			90	%
	Risk free interest rate			0.7	%

15_STOCK_OPTIONS_Tables

15. STOCK OPTIONS (Tables)	12 Months Ended
	Sep. 30, 2014
Notes to Financial Statements
Stock option activity							Weighted Average
			Options				Exercise Price			$
	Outstanding as of September 30, 2012			5,920,000				0.131			776,800
	Granted			6,830,000				0.122			836,000
	Exercised			-				-			-
	Forfeitures			(15,000	)			0.24			(3,600	)
	Outstanding as of September 30, 2013			12,735,000				0.126			1,609,200
	Granted			395,000				0.1			39,500
	Exercised			-				-			-
	Forfeitures			(30,000	)			0.217			(6,500	)
	Outstanding as of September 30, 2014			13,100,000			$	0.125		$	1,642,200
Stock options outstanding and exercisable								Weighted	Weighted						Weighted
								Average	Average						Average
	Range of				Number			Remaining Life	Exercise Price				Number		Exercise Price
	Exercise Prices				Outstanding			In Years	Exerciseable				Exerciseable		Exerciseable
		0.09				500,000		5.75 years	$	0.09				500,000	$	0.09
		0.1				4,020,000		5.61 years		0.1				2,555,834		0.1
		0.12				200,000		.13 years		0.12				172,226		0.12
		0.13				5,100,000		5.18 years		0.13				4,508,333		0.13
		0.15				3,100,000		5.65 years		0.15				3,100,000		0.15
		0.24				180,000		.88 years		0.24				180,000		0.24
						13,100,000		5.26 years	$	0.125				11,016,393	$	0.133

17_COMMITMENTS_CONTINGENCIES_A1

17. COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS (Tables)	12 Months Ended
	Sep. 30, 2014
Notes to Financial Statements
Schedule Of Future Minimum Lease Payments For Operating Leases	Years Ended September 30,	Total
	2015	$	69,273
	2016		23,755
	2017		-
	2018		-
	2019		-
	Beyond		-
	Total	$	93,028

18_INCOME_TAXES_Tables

18. INCOME TAXES (Tables)	12 Months Ended
	Sep. 30, 2014
Income Tax Disclosure [Abstract]
Schedule of components of the Companybs deferred tax assets		2014			2013
	U.S. operations loss carry forward at statutory rate of 34%	$	(6,150,117	)	$	(5,866,156	)
	Non-U.S. operations loss carry forward at statutory rate of 20.5%		0			0
	Total		(6,150,117	)		(5,866,156	)
	Less Valuation Allowance		6,150,117			5,866,156
	Net Deferred Tax Assets		-			-
	Change in Valuation allowance	$	6,150,117		$	5,866,156
Schedule of effective tax rate reconciliation	Federal Statutory Rate		-34	%		-34	%
	Increase in Income Taxes Resulting from:
	Change in Valuation allowance		34	%		34	%
	Effective Tax Rate		0	%		0	%

3_SIGNIFICANT_ACCOUNTING_POLIC3

3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS (Details) (USD $)	Sep. 30, 2014
Fair Value Measurements Level 1 [Member] | Derivative Instrument B Convertible Note Payable
Liabilities:
Derivative Instruments - Convertible Promissory Note	$0
Total	0
Fair Value Measurements Level 1 [Member] | Derivative Instrument Number 2B Convertible Note Payable
Liabilities:
Derivative Instruments - Convertible Promissory Note	0
Total	0
Fair Value Measurements Level 1 [Member] | Warrants with the June 2013 Private Placement
Liabilities:
Derivative Instruments - Warrants with the June 2013 Private Placement	0
Total	0
Fair Value Measurements Level 1 [Member] | Warrants - November 2013 IDMC Services and License Agreement
Liabilities:
Derivative Instruments - Warrants with the June 2013 Private Placement	0
Total	0
Fair Value Measurements Level 2 [Member] | Derivative Instrument B Convertible Note Payable
Liabilities:
Derivative Instruments - Convertible Promissory Note	103,500
Total	103,500
Fair Value Measurements Level 2 [Member] | Derivative Instrument Number 2B Convertible Note Payable
Liabilities:
Derivative Instruments - Convertible Promissory Note	63,000
Total	63,000
Fair Value Measurements Level 2 [Member] | Warrants with the June 2013 Private Placement
Liabilities:
Derivative Instruments - Warrants with the June 2013 Private Placement	2,092,000
Total	2,092,000
Fair Value Measurements Level 2 [Member] | Warrants - November 2013 IDMC Services and License Agreement
Liabilities:
Derivative Instruments - Warrants with the June 2013 Private Placement	320,657
Total	320,657
Fair Value Measurements Level 3 [Member] | Derivative Instrument B Convertible Note Payable
Liabilities:
Derivative Instruments - Convertible Promissory Note	0
Total	0
Fair Value Measurements Level 3 [Member] | Derivative Instrument Number 2B Convertible Note Payable
Liabilities:
Derivative Instruments - Convertible Promissory Note	0
Total	0
Fair Value Measurements Level 3 [Member] | Warrants with the June 2013 Private Placement
Liabilities:
Derivative Instruments - Warrants with the June 2013 Private Placement	0
Total	0
Fair Value Measurements Level 3 [Member] | Warrants - November 2013 IDMC Services and License Agreement
Liabilities:
Derivative Instruments - Warrants with the June 2013 Private Placement	0
Total	0
Carrying Value [Member] | Derivative Instrument B Convertible Note Payable
Liabilities:
Derivative Instruments - Convertible Promissory Note	103,500
Total	103,500
Carrying Value [Member] | Derivative Instrument Number 2B Convertible Note Payable
Liabilities:
Derivative Instruments - Convertible Promissory Note	63,000
Total	63,000
Carrying Value [Member] | Warrants with the June 2013 Private Placement
Liabilities:
Derivative Instruments - Warrants with the June 2013 Private Placement	2,092,000
Total	2,092,000
Carrying Value [Member] | Warrants - November 2013 IDMC Services and License Agreement
Liabilities:
Derivative Instruments - Warrants with the June 2013 Private Placement	320,657
Total	$320,657

3_SIGNIFICANT_ACCOUNTING_POLIC4

3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS (Details1) (USD $)	12 Months Ended
	Sep. 30, 2014
Derivative Instrument B Convertible Note Payable
Market price and estimated fair value of common stock:	$0.07
Exercise price	0.07 per share
Expected term (years)	0.75 years
Dividend yield	0.00%
Expected volatility	65.50%
Risk-free interest rate	0.78%
Derivative Instrument Number 2B Convertible Note Payable
Market price and estimated fair value of common stock:	$0.08
Exercise price	0.07 per share
Expected term (years)	0.75 years
Dividend yield	0.00%
Expected volatility	65.50%
Risk-free interest rate	0.78%
Warrants - June 2013 Private Placement
Market price and estimated fair value of common stock:	$0.08
Exercise price	0.15-0.20 per share
Expected term (years)	3-5 years
Dividend yield	0.00%
Expected volatility	65.50%
Risk-free interest rate	0.78%
Warrants - November 2013 IDMC Services and License Agreement
Market price and estimated fair value of common stock:	$0.08
Exercise price	0.2 per share
Expected term (years)	5 years
Dividend yield	0.00%
Expected volatility	65.50%
Risk-free interest rate	0.78%

3_SIGNIFICANT_ACCOUNTING_POLIC5

3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS (Details Narrative) (USD $)	12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Reserve for impaired inventory	10,000	$10,000
Options outstanding	13,100,000	12,735,000
Warrants outstanding	128,555,286	113,507,050
Tax assets related to TransTech	29,590	$29,773
Minimum [Member]
Estimated useful lives of assets	2 years
Minimum [Member] | Leasehold Improvements [Member]
Estimated useful lives of assets	5 years
Maximum [Member]
Estimated useful lives of assets	10 years
Maximum [Member] | Leasehold Improvements [Member]
Estimated useful lives of assets	20 years

7_ACCOUNTS_RECEIVABLECUSTOMER_1

7. ACCOUNTS RECEIVABLE/CUSTOMER CONCENTRATION (Details Narrative) (USD $)	Sep. 30, 2014	Sep. 30, 2013
Notes to Financial Statements
Accounts receivable, net of allowance	$815,460	$1,007,074

9_FIXED_ASSETS_Details

9. FIXED ASSETS (Details) (USD $)	Sep. 30, 2014	Sep. 30, 2013
Machinery and equipment (2-10 years)	$299,369
Leasehold improvements (5-20 years)	603,612
Furniture and fixtures (3-10 years)	178,299
Software and websites (3- 7 years)	108,632
Less: accumulated depreciation	-742,676	-663,213
Property and equipment, net	447,236	427,215
PurchasedMember
Machinery and equipment (2-10 years)	212,331
Leasehold improvements (5-20 years)	603,612
Furniture and fixtures (3-10 years)	77,039
Software and websites (3- 7 years)	63,783
Less: accumulated depreciation	-515,841
Property and equipment, net	440,924
CapitalLeaseObligationsMember
Machinery and equipment (2-10 years)	87,038
Leasehold improvements (5-20 years)	0
Furniture and fixtures (3-10 years)	101,260
Software and websites (3- 7 years)	44,849
Less: accumulated depreciation	-226,835
Property and equipment, net	$6,312

9_FIXED_ASSETS_Details_Narrati

9. FIXED ASSETS (Details Narrative) (USD $)	12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Notes to Financial Statements
Property and equipment, net	$447,236	$427,215
Property and equipment, accumulated depreciation	742,676	663,213
Depreciation expense	$64,357	$66,557

10_INTANGIBLE_ASSETS_Details

10. INTANGIBLE ASSETS (Details) (USD $)	12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Less: accumulated amortization	($1,264,492)	($925,263)
Intangible assets, net	431,653	770,882
Customer Contracts [Member]
Intangible Assets Gross	983,645	983,645
Estimated Useful life	5 years
Technology [Member]
Intangible Assets Gross	$712,500	$712,500
Estimated Useful life	5 years

10_INTANGIBLE_ASSETS_Details_N

10. INTANGIBLE ASSETS (Details Narrative) (USD $)	12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Notes to Financial Statements
Amortization expense	$339,229	$339,229

11_ACCOUNTS_PAYABLE_Details_Na

11. ACCOUNTS PAYABLE (Details Narrative) (USD $)	Sep. 30, 2014	Sep. 30, 2013
Notes to Financial Statements
Accounts payable	$2,234,123	$2,301,149
Percentage of accounts payable by 2 vendors with accounts payble on excess of 10%	22.60%	12.00%

13_NOTES_PAYABLE_CAPITALIZED_L2

13. NOTES PAYABLE, CAPITALIZED LEASES AND LONG TERM DEBT (Details) (USD $)	Sep. 30, 2014	Sep. 30, 2013
Notes Payable Capitalized Leases And Long Term Debt Details
Capital SourceB BusinessB FinanceB Group	$488,398	$749,323
Note payable to Umpqua Bank	200,000	0
Secured note payable to J3E2A2Z LP - related party	600,000	0
TransTech capitalized leases, net of capitalized interest	2,562	5,700
Total debt	1,290,960	755,023
Less current portion of long term debt	-1,290,960	-753,129
Long term debt	$0	$1,894

13_NOTES_PAYABLE_CAPITALIZED_L3

13. NOTES PAYABLE, CAPITALIZED LEASES AND LONG TERM DEBT (Details 1) (USD $)	Sep. 30, 2014
Notes to Financial Statements
2015	$2,562
2016	0
2017	0
2018	0
2019	0
Total	2,562
Less current portion of capitalized leases	-2,562
Long term capital leases	$0

13_NOTES_PAYABLE_CAPITALIZED_L4

13. NOTES PAYABLE, CAPITALIZED LEASES AND LONG TERM DEBT (Details 2) (USD $)	Sep. 30, 2014
Notes to Financial Statements
2015	$1,290,960
2016	0
2017	0
2018	0
2019	0
Total	$1,290,960

14_EQUITY_Details

14. EQUITY (Details) (Warrants, USD $)	12 Months Ended
	Sep. 30, 2014
Warrants
Shares
Outstanding at beginning of period	113,507,050
Issued	16,725,286
Exercised	0
Forfeited	0
Expired	-1,677,050
Outstanding at end of period	128,555,286
Exerciseable at end of period	128,555,286
Weighted Average Exercise Price:
Outstanding at beginning of period	$0.17
Issued	$0.20
Exercised
Forfeited
Expired	($0.31)
Outstanding at end of period	$0.18

14_EQUITY_Details_1

14. EQUITY (Details 1) (USD $)	12 Months Ended
	Sep. 30, 2014
Number of Warrants	128,555,286
Weighted Average Remaining Life (years)	3 years 8 months 8 days
Weighted Average Exercise Price	$0.18
Shares Exercisable	128,555,286
0.10-013 [Member]
Number of Warrants	6,330,000
Weighted Average Remaining Life (years)	3 years 1 month 20 days
Shares Exercisable	6,330,000
0.10-013 [Member] | Minimum [Member]
Weighted Average Exercise Price	$0.01
0.10-013 [Member] | Maximum [Member]
Weighted Average Exercise Price	$0.10
0.150 [Member]
Number of Warrants	52,300,000
Weighted Average Remaining Life (years)	3 years 7 months 17 days
Weighted Average Exercise Price	$0.15
Shares Exercisable	52,300,000
0.200 [Member]
Number of Warrants	69,925,286
Weighted Average Remaining Life (years)	3 years 8 months 16 days
Weighted Average Exercise Price	$0.20
Shares Exercisable	69,925,286

14_EQUITY_Details_2

14. EQUITY (Details 2)	12 Months Ended
	Sep. 30, 2014
Equity Details 2
Dividend yield	0.00%
Expected life	3 years
Expected volatility	90.00%
Risk free interest rate	0.70%

15_STOCK_OPTIONS_Details

15. STOCK OPTIONS (Details) (Stock Options, USD $)	12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Stock Options
Shares:
Outstanding at beginning of period	12,735,000	5,920,000
Shares granted	395,000	6,830,000
Shares exercised
Shares forfeitures	-30,000	-15,000
Outstanding at end of period	13,100,000	12,735,000
Weighted Average Exercise Price:
Outstanding at beginning of period	$0.13	$0.13
Shares granted	$0.10	$0.12
Shares exercised
Shares forfeitures	$0.22	$0.24
Outstanding at end of period	$0.13	$0.13
Aggregate Intrinsic Value
Aggregate Intrinsic Value Outstanding, Beginning	$1,609,200	$776,800
Aggregate Intrinsic Value Outstanding, Granted	$39,500	$836,000
Aggregate Intrinsic Value Outstanding, Exercised
Aggregate Intrinsic Value Outstanding, Forefeitures	($6,500)	($3,600)
Aggregate Intrinsic Value Outstanding, End	$1,642,200	$1,609,200

15_STOCK_OPTIONS_Details_1

15. STOCK OPTIONS (Details 1) (USD $)	12 Months Ended
	Sep. 30, 2014
Number of Outstanding Stock Options	128,555,286
Weighted Average Remaining Life (years)	3 years 8 months 8 days
Weighted Average Exercise Price Exerciseable	$0.18
Number Exercisable	128,555,286
Stock Options
Number of Outstanding Stock Options	13,100,000
Weighted Average Remaining Life (years)	5 years 3 months 4 days
Weighted Average Exercise Price Exerciseable	$0.13
Number Exercisable	11,016,393
Exercise Price 0.090 [Member]
Number of Outstanding Stock Options	500,000
Weighted Average Remaining Life (years)	5 years 9 months
Weighted Average Exercise Price Exerciseable	$0.09
Number Exercisable	500,000
Exercise Price 0.100 [Member]
Number of Outstanding Stock Options	4,020,000
Weighted Average Remaining Life (years)	5 years 7 months 10 days
Weighted Average Exercise Price Exerciseable	$0.10
Number Exercisable	2,555,834
Exercise Price 0.120 [Member]
Number of Outstanding Stock Options	200,000
Weighted Average Remaining Life (years)	1 month 17 days
Weighted Average Exercise Price Exerciseable	$0.12
Number Exercisable	172,226
Exercise Price 0.130 [Member]
Number of Outstanding Stock Options	5,100,000
Weighted Average Remaining Life (years)	5 years 2 months 5 days
Weighted Average Exercise Price Exerciseable	$0.13
Number Exercisable	4,508,333
Exercise Price 0.150 [Member]
Number of Outstanding Stock Options	3,100,000
Weighted Average Remaining Life (years)	1 month 24 days
Weighted Average Exercise Price Exerciseable	$0.15
Number Exercisable	3,100,000
Exercise Price 0.240 [Member]
Number of Outstanding Stock Options	180,000
Weighted Average Remaining Life (years)	10 months 17 days
Weighted Average Exercise Price Exerciseable	$0.24
Number Exercisable	180,000

15_STOCK_OPTIONS_Details_Narra

15. STOCK OPTIONS (Details Narrative) (USD $)	12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Compensation expense	$87,550	$250,013
Options to purchase common stock under 2011 Stock Incentive Plan	128,555,286
2011 Stock Incentive Plan
Options to purchase common stock under 2011 Stock Incentive Plan	13,100,000
Average exercise price under 2011 Stock Incentive Plan	$0.13

16_OTHER_SIGNIFICANT_TRANSACTI1

16. OTHER SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES (Details narrative) (Chief Executive Officer, USD $)	12 Months Ended
	Sep. 30, 2014
Chief Executive Officer
Accrued liabilities related parties from advances from Ronald P. Erickson	$236,617

17_COMMITMENTS_CONTINGENCIES_A2

17. COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS (Details) (USD $)	Sep. 30, 2014
Notes to Financial Statements
2015	$69,273
2016	23,755
2017	0
2018	0
2019	0
Beyond	0
Total	$93,028

18_INCOME_TAXES_Deferred_tax_a

18. INCOME TAXES - Deferred tax assets (Details) (USD $)	12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Income Taxes - Deferred Tax Assets Details
U.S. operations loss carry forward at statutory rate of 34%	($6,150,117)	($5,866,156)
Non-U.S. operations loss carry forward at statutory rate of 20.5%	0	0
Total	-6,150,117	-5,866,156
Less Valuation Allowance	6,150,117	5,866,156
Net Deferred Tax Assets	0	0
Change in Valuation allowance	$6,150,117	$5,866,156

18_INCOME_TAXES_Effective_tax_

18. INCOME TAXES - Effective tax rate (Details)	12 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Income Taxes - Effective Tax Rate Details
Federal Statutory Rate	-34.00%	-34.00%
Increase in Income Taxes Resulting from:
Change in Valuation allowance	34.00%	34.00%
Effective Tax Rate	0.00%	0.00%