Know Labs (KNW) 10-Q 10 Feb 15 2015 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Dec. 31, 2014	Feb. 10, 2015
Document And Entity Information
Entity Registrant Name	VISUALANT INC
Entity Central Index Key	1074828
Document Type	10-Q
Document Period End Date	31-Dec-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 Common Stock, Shares Outstanding		169,538,674
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2015

CONSOLIDATED_BALANCE_SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)	Dec. 31, 2014	Sep. 30, 2014
CURRENT ASSETS:
Cash and cash equivalents	$87,319	$70,386
Accounts receivable, net of allowance of $42,000 and $40,750, respectively	980,117	815,460
Prepaid expenses	33,858	25,067
Inventories	333,073	412,831
Refundable tax assets	28,927	29,590
Total current assets	1,463,294	1,353,334
EQUIPMENT, NET	426,255	447,236
OTHER ASSETS
Intangible assets, net	346,846	431,653
Goodwill	983,645	983,645
Other assets	5,070	5,070
TOTAL ASSETS	3,225,110	3,220,938
CURRENT LIABILITIES:
Accounts payable - trade	2,333,873	2,234,123
Accounts payable - related parties	44,969	66,729
Accrued expenses	38,290	31,369
Accrued expenses - related parties	307,521	260,687
Derivative liability - warrants	5,230,164	2,579,157
Convertible notes payable	166,500	166,500
Notes payable - current portion of long term debt	1,346,354	1,290,960
Total current liabilities	9,467,671	6,629,525
LONG TERM LIABILITIES:
Long term debt	0	0
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT
Preferred stock - $0.001 par value, 43,000,000 shares authorized, 0 shares issued and outstanding; Series A Convertible Preferred stock - $0.001 par value, 7,000,000 shares authorized, 3,000,000 shares issued and outstanding	0	0
Common stock - $0.001 par value, 500,000,000 shares authorized, 168,188,674 and 168,163,674 shares issued and outstanding at 12/31/14 and 9/30/14, respectively	168,189	168,164
Additional paid in capital	18,278,678	17,958,368
Accumulated deficit	-24,692,428	-21,535,119
Total stockholders' deficit	-6,242,561	-3,408,587
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	3,225,110	3,220,938
Series A Convertible Preferred stock
STOCKHOLDERS' DEFICIT
Preferred stock - $0.001 par value, 43,000,000 shares authorized, 0 shares issued and outstanding; Series A Convertible Preferred stock - $0.001 par value, 7,000,000 shares authorized, 3,000,000 shares issued and outstanding	$3,000	$0

CONSOLIDATED_BALANCE_SHEETS_Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Dec. 31, 2014	Sep. 30, 2014
CURRENT ASSETS:
Allowance for Accounts receivable	$42,000	$40,750
EQUITY (DEFICIT)
Preferred stock par value	$0.00	$0.00
Preferred stock shares authorized	43,000,000	43,000,000
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	168,188,674	168,163,674
Common stock shares outstanding	168,188,674	168,163,674
Series A Convertible Preferred stock
EQUITY (DEFICIT)
Preferred stock par value	$0.00	$0.00
Preferred stock shares authorized	7,000,000	7,000,000
Preferred stock shares issued	3,000,000	0
Preferred stock shares outstanding	3,000,000	0

CONSOLIDATED_STATEMENTS_OF_OPE

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Income Statement [Abstract]
REVENUE	$1,843,213	$1,877,089
COST OF SALES	1,545,449	1,571,021
GROSS PROFIT	297,764	306,068
RESEARCH AND DEVELOPMENT EXPENSES	119,387	312,987
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	653,203	842,496
OPERATING LOSS	-474,826	-849,415
OTHER INCOME (EXPENSE):
Interest expense	-37,130	-17,948
Other income	6,317	7,722
(Loss) gain on change - derivative liability warrants	-2,651,007	12,865
Total other (expense) income	-2,681,820	2,639
LOSS BEFORE INCOME TAXES	-3,156,646	-846,776
Income taxes - current benefit	663	-1,177
NET LOSS	-3,157,309	-845,599
NONCONTROLLING INTEREST	0	16,168
NET (LOSS) ATTRIBUTABLE TO VISUALANT, INC. AND SUBSIDIARIES COMMON SHAREHOLDERS	($3,157,309)	($861,767)
Basic and diluted income (loss) per common share attributable to Visualant, Inc. and subsidiaries common shareholders-
Basic and diluted income (loss) per share	($0.02)	($0.01)
Weighted average shares of common stock outstanding- basic and diluted	168,168,294	165,263,674

CONSOLIDATED_STATEMENTS_OF_CAS

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	3 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	($3,157,309)	($845,599)
Adjustments to reconcile net loss to net cash (used in) operating activities
Depreciation and amortization	104,378	97,688
Issuance of capital stock for services and expenses	2,500	0
Stock based compensation	20,835	23,503
(Gain) loss on sale of assets	-900	-1,111
Loss (gain) on change - derivative liability warrants	2,651,007	-12,865
Provision for losses on accounts receivable	3,036	0
Changes in operating assets and liabilities:
Accounts receivable	-167,693	404,109
Prepaid expenses	-8,791	13,926
Inventory	79,758	90,721
Accounts payable - trade and accrued expenses	131,745	-158,719
Deferred revenue	0	201,130
Income tax receivable	663	-1,177
CASH (USED IN) OPERATING ACTIVITIES	-340,771	-188,394
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of equipment	2,310	1,600
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES:	2,310	1,600
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds (repayments) from line of credit	56,126	-507,670
Proceeds from sale of preferred stock	300,000
Repayments of capital leases	-732	-1,112
NET CASH PROVIDED BY FINANCING ACTIVITIES	355,394	-508,782
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	16,933	-695,576
CASH AND CASH EQUIVALENTS, beginning of period	70,386	747,129
CASH AND CASH EQUIVALENTS, end of period	87,319	51,553
Supplemental disclosures of cash flow information:
Interest paid	52,755	12,525
Taxes paid	$0	$0

1_ORGANIZATION

1. ORGANIZATION	3 Months Ended
	Dec. 31, 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 Note 4 for more detailed information regarding the Company’s patents and business.

2_GOING_CONCERN

2. GOING CONCERN	3 Months Ended
	Dec. 31, 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 $340,771 and $1,379,397 for the three months ended December 31, 2014 and the year ended September 30, 2014, respectively.
	The Company anticipates that it will record losses from operations for the foreseeable future. As of December 31, 2014, our accumulated deficit was $24,692,428.  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	3 Months Ended
	Dec. 31, 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”).
	The unaudited consolidated financial statements of the Company and the accompanying notes included in this Quarterly Report on Form 10-Q are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of the Consolidated Financial Statements have been included. Such adjustments are of a normal, recurring nature. The Consolidated Financial Statements, and the accompanying notes, are prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and do not contain certain information included in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2014. The interim Condensed Consolidated Financial Statements should be read in conjunction with that Annual Report on Form 10-K.
	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 $15,000 and $10,000 reserve for impaired inventory as of December 31, 2014 and September 30, 2014, respectively.
	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		31-Dec-14
	Liabilities:
	Derivative Instruments - Warrants	$	-		$	4,393,201	$	-	$	4,393,201
	Total	$	-		$	4,393,201	$	-	$	4,393,201
	Liabilities measured at fair value on a recurring basis are summarized as follows:
		31-Dec-14
	Market price and estimated fair value of common stock:	$	0.11
	Exercise price	$	0.15-0.20
	Expected term (years)	3-5 years
	Divident yield		-
	Expected volatility		76.7	%
	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. During the three months ended December 31, 2014, the Company recognized $2,301,202 of other expense resulting from the decrease in the fair value of the warrant liability at December 31, 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		31-Dec-14
	Liabilities:
	Derivative Instruments - Warrants	$	-		$	670,463	$	-	$	670,463
	Total	$	-		$	670,463	$	-	$	670,463
	Liabilities measured at fair value on a recurring basis are summarized as follows:
		31-Dec-14
	Market price and estimated fair value of common stock:		0.11
	Exercise price		0.2
	Expected term (years)		5
	Divident yield		-
	Expected volatility		76.7	%
	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. During the three months ended December 31, 2014, the Company recognized $349,807 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		31-Dec-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:
		31-Dec-14
	Market price and estimated fair value of common stock:		0.11
	Exercise price		0.07
	Expected term (years)		0.75
	Divident yield		-
	Expected volatility		76.7	%
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 December 31, 2014 and September 30, 2014.
Derivative Instrument – Convertible Note Payable
								Carrying
	Fair Value Measurements Using Inputs							Amount at
Financial Instruments	Level 1			Level 2		Level 3		31-Dec-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:
	31-Dec-14
Market price and estimated fair value of common stock:		0.11
Exercise price		0.07
Expected term (years)		0.75
Divident yield		-
Expected volatility		76.7	%
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 December 31, 2014 and September 30, 2014 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.
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 December 31, 2014 and September 30, 2014, the Company had refundable tax assets related to TransTech of $28,927 and $29,590, 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 December 31, 2014, there were options outstanding for the purchase of 12,900,000 common shares, warrants for the purchase of 134,555,286 common shares, preferred stock for the conversion of 3,000,000 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 December 31, 2013, there were options outstanding for the purchase of 12,710,000 common shares, warrants for the purchase of 128,072,223 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.

4_DEVELOPMENT_OF_CHROMAIDTM_TE

4. DEVELOPMENT OF CHROMAID(TM) TECHNOLOGY	3 Months Ended
	Dec. 31, 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:
	Three months ended December 31, 2014- $119,387
	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 pursues 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.

5_AGREEMENT_WITH_SUMITOMO_PREC

5. AGREEMENT WITH SUMITOMO PRECISION PRODUCTS CO., LTD.	3 Months Ended
	Dec. 31, 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, which expired December 31, 2013.   The Agreements 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.	3 Months Ended
	Dec. 31, 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. 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.

7_ACCOUNTS_RECEIVABLECUSTOMER_

7. ACCOUNTS RECEIVABLE/CUSTOMER CONCENTRATION	3 Months Ended
	Dec. 31, 2014
Notes to Financial Statements
7. ACCOUNTS RECEIVABLE/CUSTOMER CONCENTRATION	Accounts receivable were $980,117 and $815,460, net of allowance, as of December 31, 2014 and September 30, 2014, respectively. The Company had one customer (12.0%) in excess of 10% of our consolidated revenues for the three months ended December 31, 2014. The Company had two customers (21.6% and 12.9%) with accounts receivable in excess of 10% as of December 31, 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	3 Months Ended
	Dec. 31, 2014
Notes to Financial Statements
8. INVENTORIES	Inventories were $333,073 and $412,831 as of December 31, 2014 and September 30, 2014, 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 $15,000 and $10,000 reserve for impaired inventory as of December 31, 2014 and September 30, 2014, respectively.

9_FIXED_ASSETS

9. FIXED ASSETS	3 Months Ended
	Dec. 31, 2014
Notes to Financial Statements
9. FIXED ASSETS	Fixed assets, net of accumulated depreciation, was $426,255 and $447,236 as of December 31, 2014 and September 30, 2014, respectively. Accumulated depreciation was $762,248 and $742,676 as of December 31, 2014 and September 30, 2014, respectively. Total depreciation expense, was $19,571 and $12,794 for the three months ended December 31, 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 December 31, 2014 was comprised of the following:
		Estimated	31-Dec-14
		Useful Lives	Purchased			Capital Leases			Total
	Machinery and equipment	2-10 years	$	210,922		$	87,038		$	297,960
	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			(533,265	)		(228,983	)		(762,248	)
			$	422,091		$	4,164		$	426,255

10_INTANGIBLE_ASSETS

10. INTANGIBLE ASSETS	3 Months Ended
	Dec. 31, 2014
Notes to Financial Statements
10. INTANGIBLE ASSETS	Intangible assets as of December 31, 2014 and September 30, 2014 consisted of the following:
		Estimated	December 31,			September 30,
		Useful Lives	2014			2014
	Customer contracts	5 years	$	983,645		$	983,645
	Technology	5 years		712,500		$	712,500
	Less: accumulated amortization			(1,349,299	)		(1,264,492	)
	Intangible assets, net		$	346,846		$	431,653
	Total amortization expense was $84,807 and $84,808 for the three months ended December 31, 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	3 Months Ended
	Dec. 31, 2014
Notes to Financial Statements
11. ACCOUNTS PAYABLE	Accounts payable were $2,333,873 and $2,234,123 as of December 31, 2014 and September 30, 2014, 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.  The Company had 2 vendors (17.4% and 12.7%) with accounts payable in excess of 10% of its accounts payable as of December 31, 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	3 Months Ended
	Dec. 31, 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 $4,293 as of December 31, 2014.  The Company has recorded a derivative liability for the conversion discount in the amount of $166,500 at December 31, 2014.

13_NOTES_PAYABLE_CAPITALIZED_L

13. NOTES PAYABLE, CAPITALIZED LEASES AND LONG TERM DEBT	3 Months Ended
	Dec. 31, 2014
Notes to Financial Statements
13. NOTES PAYABLE, CAPITALIZED LEASES AND LONG TERM DEBT	Notes payable, capitalized leases and long term debt as of December 31, 2014 and September 30, 2014 consisted of the following:
		December 31,			September 30,
		2014			2014
	BFI Business Finance Secured Credit Facility	$	544,524		$	488,398
	Note payable to Umpqua Bank		200,000			200,000
	Secured note payable to J3E2A2Z LP - related party		600,000			600,000
	TransTech capitalized leases, net of capitalized interest		1,830			2,562
	Total debt		1,346,354			1,290,960
	Less current portion of long term debt		(1,346,354	)		(1,290,960	)
	Long term debt	$	-		$	-
	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 ($72,481 as of December 31, 2014) on a daily basis. The remaining balance on the accounts receivable line ($544,524) as of December 31, 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 recorded accrued interest of $5,852 as of December 31, 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 recorded accrued interest of $6,781 as of December 31, 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 recorded accrued interest of $4,142 as of December 31, 2014.
	Capitalized Leases
	TransTech has capitalized leases for equipment. The leases have a remaining lease term of seven months. The imputed interest rate in the capitalized leases is approximately 10.5%.
	Aggregate maturities totaling $1,346,354 are all due within twelve months.

14_EQUITY

14. EQUITY	3 Months Ended
	Dec. 31, 2014
Notes to Financial Statements
14. EQUITY	Series A Convertible Preferred Stock
	On January 26, 2015, the Board of Directors and the Nevada Secretary of State approved a Certificate of Designations, Preference and Rights for Series A Convertible Preferred Stock. The Company’s Series A Preferred is $0.10 par value, with 50,000,000 shares authorized and as of January 13, 2015, we had 3,000,000 shares issued and outstanding. Each holder of outstanding shares of Series A Preferred shall be entitled to the number of votes equal to the number of whole shares of common stock of the Corporation into which the shares of Series A Preferred held by such holder are then convertible as of the applicable record date. The Company cannot not amend, alter or repeal any preferences, rights, or other terms of the Series A Preferred so as to adversely affect the Series A Preferred, without the written consent or affirmative vote of the holders of at least sixty-six and two-thirds percent (66.66%) of the then outstanding shares of Series A Preferred, voting as a separate voting group, given by written consent or by vote at a meeting called for such purpose for which notice shall have been duly given to the holders of the Series A Preferred.
	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.
	Common Stock
	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.
	The Company has 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.
	The following equity issuances occurred during the three months ended December 31, 2014:
	On December 14, 2014, we entered into an Advisory Agreement with Lester Garfinkel for financial consulting services. Under the Advisory Agreement, Mr. Garfinkel was awarded 25,000 shares of our common stock. The shares were valued at $0.20 per share by the parties. We expensed $2,500 during the three months ended December 31, 2014 or $0.10, the closing price on December 14, 2014.
	Warrants to Purchase Common Stock
	The following warrant issuances occurred during the three months ended December 31, 2014:
	The Company 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. 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.
	During the three months ended December 31, 2014, the Company expensed $0 related to warrants.
	A summary of the warrants issued as of December 31, 2014 were as follows:
			31-Dec-14
							Weighted
							Average
							Exercise
			Shares				Price
	Outstanding at beginning of period			128,555,286			$	0.175
	Issued			6,000,000				0.25
	Exercised			-				-
	Forfeited			-				-
	Expired			-				-
	Outstanding at end of period			134,555,286			$	0.178
	Exerciseable at end of period			134,555,286
	A summary of the status of the warrants outstanding as of December 31, 2014 is presented below:
					31-Dec-14
					Weighted				Weighted				Weighted
					Average				Average				Average
	Number of				Remaining				Exercise		Shares		Exercise
	Warrants				Life ( In Years)				Price		Exerciseable		Price
		6,330,000				2.86			$	0.10-.13		6,330,000	$	0.10-.13
		52,300,000				3.38				0.15		52,300,000		0.15
		75,925,286				3.59				0.2		75,925,286		0.2
		134,555,286				3.5				0.178		134,555,286		0.178
	The significant weighted average assumptions relating to the valuation of the Company’s warrants for the period ended December 31, 2014 were as follows:
	Dividend yield	0%
	Expected life	3
	Expected volatility	90%
	Risk free interest rate	0.70%
	There were vested warrants of 5,830,000 as of December 31, 2014 with an aggregate intrinsic value of $58,300.

15_STOCK_OPTIONS

15. STOCK OPTIONS	3 Months Ended
	Dec. 31, 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 three months ended December 31, 2014:
	During the three months ended December 31, 2014, two employees of TransTech, forfeited stock option grants for 200,000 shares of common stock at $0.12 per share.
	There are currently 12,900,000 options to purchase common stock at an average exercise price of $0.125 per share outstanding as of December 31, 2014 under the 2011 Stock Incentive Plan. The Company recorded $20,835 and $23,503 of compensation expense, net of related tax effects, relative to stock options for the three months ended December 31, 2014 and 2013 in accordance with ASC 505. Net loss per share (basic and diluted) associated with this expense was approximately ($0.00). At December 31, 2014, there is approximately $308,565 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 5.09 years.
	Stock option activity for the three months ended December 31, 2014 and the years 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	)		(0.240	)			(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
	Granted		-			-				-
	Exercised		-			-				-
	Forfeitures		(200,000	)		(0.120	)			(24,000	)
	Outstanding as of December 31, 2014		12,900,000		$	0.125			$	1,618,200
	The following table summarizes information about stock options outstanding and exercisable as of December 31, 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	5.39 years		$	0.09				500,000	$	0.09
	0.1			4,020,000	5.36 years			0.1				2,765,417		0.1
	0.13			5,100,000	4.93 years			0.13				4,683,333		0.13
	0.15			3,100,000	5.39 years			0.15				3,100,000		0.15
	0.24			180,000	.63 years			0.24				180,000		0.24
				12,900,000	5.09 years		$	0.125				11,228,750	$	0.133
	There were exercisable options of 3,265,417 as of December 31, 2014 with an aggregate intrinsic value of $37,654.

16_OTHER_SIGNIFICANT_TRANSACTI

16. OTHER SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES	3 Months Ended
	Dec. 31, 2014
Notes to Financial Statements
16. OTHER SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES	Related Party Transactions with Ronald P. Erickson
	See Note 13 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 $268,010 as of December 31, 2014 as accrued liabilities – related parties.

17_COMMITMENTS_CONTINGENCIES_A

17. COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS	3 Months Ended
	Dec. 31, 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 December 31, 2014 were $62,162 and $9,502 for the years ended December 31, 2014 and 2013, respectively.

18_SUBSEQUENT_EVENTS

18. SUBSEQUENT EVENTS	3 Months Ended
	Dec. 31, 2014
Subsequent Events [Abstract]
18. SUBSEQUENT EVENTS	The Company evaluates subsequent events, for the purpose of adjustment or disclosure, up through the date the financial statements are available.
	Subsequent to December 31, 2014, the following material transactions occurred:
	On January 26, 2015, the Company approved (i) the cancellation of 1,150,000 in previous issued stock option grants from two employees; (ii) the issuance of 1,350,000 shares of common stock to board members and employees at $.10 per share in accordance with the 2011 Stock Incentive Plan; and (iii) the issuance of stock option grants to employees totaling 1,700,000 shares at $.10 per share in accordance with the 2011 Stock Incentive Plan. The stock option grants vest upon the achievement of performance targets during 2015.
	The Company entered into a Convertible Note Payable with KBM Worldwide, Inc. on January 27, 2015 for $64,000. The Note is due October 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 Notes are not convertible until the first quarter of fiscal year 2016. The Note provides short term working capital while funding closes and the Company expects to repay the Notes at the closing of funding.

3_SIGNIFICANT_ACCOUNTING_POLIC1

3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS (Policies)	3 Months Ended
	Dec. 31, 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”).
	The unaudited consolidated financial statements of the Company and the accompanying notes included in this Quarterly Report on Form 10-Q are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of the Consolidated Financial Statements have been included. Such adjustments are of a normal, recurring nature. The Consolidated Financial Statements, and the accompanying notes, are prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and do not contain certain information included in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2014. The interim Condensed Consolidated Financial Statements should be read in conjunction with that Annual Report on Form 10-K.
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 $15,000 and $10,000 reserve for impaired inventory as of December 31, 2014 and September 30, 2014, respectively.
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		31-Dec-14
	Liabilities:
	Derivative Instruments - Warrants	$	-		$	4,393,201	$	-	$	4,393,201
	Total	$	-		$	4,393,201	$	-	$	4,393,201
	Liabilities measured at fair value on a recurring basis are summarized as follows:
		31-Dec-14
	Market price and estimated fair value of common stock:	$	0.11
	Exercise price	$	0.15-0.20
	Expected term (years)	3-5 years
	Divident yield		-
	Expected volatility		76.7	%
	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. During the three months ended December 31, 2014, the Company recognized $2,301,202 of other expense resulting from the decrease in the fair value of the warrant liability at December 31, 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		31-Dec-14
	Liabilities:
	Derivative Instruments - Warrants	$	-		$	670,463	$	-	$	670,463
	Total	$	-		$	670,463	$	-	$	670,463
	Liabilities measured at fair value on a recurring basis are summarized as follows:
		31-Dec-14
	Market price and estimated fair value of common stock:		0.11
	Exercise price		0.2
	Expected term (years)		5
	Divident yield		-
	Expected volatility		76.7	%
	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. During the three months ended December 31, 2014, the Company recognized $349,807 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		31-Dec-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:
		31-Dec-14
	Market price and estimated fair value of common stock:		0.11
	Exercise price		0.07
	Expected term (years)		0.75
	Divident yield		-
	Expected volatility		76.7	%
	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 December 31, 2014 and September 30, 2014.
	Derivative Instrument – Convertible Note Payable
									Carrying
		Fair Value Measurements Using Inputs							Amount at
	Financial Instruments	Level 1			Level 2		Level 3		31-Dec-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:
	31-Dec-14
Market price and estimated fair value of common stock:		0.11
Exercise price		0.07
Expected term (years)		0.75
Divident yield		-
Expected volatility		76.7	%
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 December 31, 2014 and September 30, 2014 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.
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 December 31, 2014 and September 30, 2014, the Company had refundable tax assets related to TransTech of $28,927 and $29,590, 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 December 31, 2014, there were options outstanding for the purchase of 12,900,000 common shares, warrants for the purchase of 134,555,286 common shares, preferred stock for the conversion of 3,000,000 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 December 31, 2013, there were options outstanding for the purchase of 12,710,000 common shares, warrants for the purchase of 128,072,223 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	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.

3_SIGNIFICANT_ACCOUNTING_POLIC2

3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS (Tables)	3 Months Ended
	Dec. 31, 2014
Convertible Note Payable
Fair value of financial Instruments									Carrying
		Fair Value Measurements Using Inputs							Amount at
	Financial Instruments	Level 1			Level 2		Level 3		31-Dec-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		31-Dec-14
	Market price and estimated fair value of common stock:		0.11
	Exercise price		0.07
	Expected term (years)		0.75
	Divident yield		-
	Expected volatility		76.7	%
	Risk-free interest rate		0.78	%
Convertible Note Payable 2
Fair value of financial Instruments									Carrying
		Fair Value Measurements Using Inputs							Amount at
	Financial Instruments	Level 1			Level 2		Level 3		31-Dec-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		31-Dec-14
	Market price and estimated fair value of common stock:		0.11
	Exercise price		0.07
	Expected term (years)		0.75
	Divident yield		-
	Expected volatility		76.7	%
	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		31-Dec-14
	Liabilities:
	Derivative Instruments - Warrants	$	-		$	4,393,201	$	-	$	4,393,201
	Total	$	-		$	4,393,201	$	-	$	4,393,201
Valuation assumptions for liabilities measured at fair value on a recurring basis									Carrying
		Fair Value Measurements Using Inputs							Amount at
	Financial Instruments	Level 1			Level 2		Level 3		31-Dec-14
	Liabilities:
	Derivative Instruments - Warrants	$	-		$	4,393,201	$	-	$	4,393,201
	Total	$	-		$	4,393,201	$	-	$	4,393,201
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		31-Dec-14
	Liabilities:
	Derivative Instruments - Warrants	$	-		$	670,463	$	-	$	670,463
	Total	$	-		$	670,463	$	-	$	670,463
Valuation assumptions for liabilities measured at fair value on a recurring basis		31-Dec-14
	Market price and estimated fair value of common stock:		0.11
	Exercise price		0.2
	Expected term (years)		5
	Divident yield		-
	Expected volatility		76.7	%
	Risk-free interest rate		0.78	%

9_FIXED_ASSETS_Tables

9. FIXED ASSETS (Tables)	3 Months Ended
	Dec. 31, 2014
Notes to Financial Statements
Schedule of Property and equipment		Estimated	31-Dec-14
		Useful Lives	Purchased			Capital Leases			Total
	Machinery and equipment	2-10 years	$	210,922		$	87,038		$	297,960
	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			(533,265	)		(228,983	)		(762,248	)
			$	422,091		$	4,164		$	426,255

10_INTANGIBLE_ASSETS_Tables

10. INTANGIBLE ASSETS (Tables)	3 Months Ended
	Dec. 31, 2014
Notes to Financial Statements
Schedule Of Intangible Assets		Estimated	December 31,			September 30,
		Useful Lives	2014			2014
	Customer contracts	5 years	$	983,645		$	983,645
	Technology	5 years		712,500		$	712,500
	Less: accumulated amortization			(1,349,299	)		(1,264,492	)
	Intangible assets, net		$	346,846		$	431,653

13_NOTES_PAYABLE_CAPITALIZED_L1

13. NOTES PAYABLE, CAPITALIZED LEASES AND LONG TERM DEBT (Tables)	3 Months Ended
	Dec. 31, 2014
Notes to Financial Statements
Notes payable, capitalized leases and long term debt		December 31,			September 30,
		2014			2014
	BFI Business Finance Secured Credit Facility	$	544,524		$	488,398
	Note payable to Umpqua Bank		200,000			200,000
	Secured note payable to J3E2A2Z LP - related party		600,000			600,000
	TransTech capitalized leases, net of capitalized interest		1,830			2,562
	Total debt		1,346,354			1,290,960
	Less current portion of long term debt		(1,346,354	)		(1,290,960	)
	Long term debt	$	-		$	-

14_EQUITY_Tables

14. EQUITY (Tables)	3 Months Ended
	Dec. 31, 2014
Notes to Financial Statements
Summary of the warrants issued			31-Dec-14
							Weighted
							Average
							Exercise
			Shares				Price
	Outstanding at beginning of period			128,555,286			$	0.175
	Issued			6,000,000				0.25
	Exercised			-				-
	Forfeited			-				-
	Expired			-				-
	Outstanding at end of period			134,555,286			$	0.178
	Exerciseable at end of period			134,555,286
Summary of the status of the warrants outstanding					31-Dec-14
					Weighted				Weighted				Weighted
					Average				Average				Average
	Number of				Remaining				Exercise		Shares		Exercise
	Warrants				Life ( In Years)				Price		Exerciseable		Price
		6,330,000				2.86			$	0.10-.13		6,330,000	$	0.10-.13
		52,300,000				3.38				0.15		52,300,000		0.15
		75,925,286				3.59				0.2		75,925,286		0.2
		134,555,286				3.5				0.178		134,555,286		0.178
Weighted average assumptions relating to the valuation of the Companys warrants	Dividend yield	0%
	Expected life	3
	Expected volatility	90%
	Risk free interest rate	0.70%

15_STOCK_OPTIONS_Tables

15. STOCK OPTIONS (Tables)	3 Months Ended
	Dec. 31, 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	)		(0.240	)			(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
	Granted		-			-				-
	Exercised		-			-				-
	Forfeitures		(200,000	)		(0.120	)			(24,000	)
	Outstanding as of December 31, 2014		12,900,000		$	0.125			$	1,618,200
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	5.39 years		$	0.09				500,000	$	0.09
	0.1			4,020,000	5.36 years			0.1				2,765,417		0.1
	0.13			5,100,000	4.93 years			0.13				4,683,333		0.13
	0.15			3,100,000	5.39 years			0.15				3,100,000		0.15
	0.24			180,000	.63 years			0.24				180,000		0.24
				12,900,000	5.09 years		$	0.125				11,228,750	$	0.133

2_GOING_CONCERN_Details_Narrat

2. GOING CONCERN (Details Narrative) (USD $)	3 Months Ended		12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Sep. 30, 2014	Sep. 30, 2013
Notes to Financial Statements
Net loss	$3,157,309	$845,599	$1,017,281	$6,604,631
CASH (USED IN) OPERATING ACTIVITIES	-340,771	-188,394	-1,379,397
Accumulated Deficit	$24,692,428		$21,535,119

3_SIGNIFICANT_ACCOUNTING_POLIC3

3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS (Details) (USD $)	Dec. 31, 2014
Fair Value Measurements Level 1 [Member] | Warrants June 2013 Private Placement
Liabilities:
Derivative Instruments	$0
Total	0
Fair Value Measurements Level 1 [Member] | Warrants November 2013 IDMC Services and License Agreement
Liabilities:
Derivative Instruments	0
Total	0
Fair Value Measurements Level 1 [Member] | Convertible Note Payable 1
Liabilities:
Derivative Instruments	0
Total	0
Fair Value Measurements Level 1 [Member] | Convertible Note Payable 2
Liabilities:
Derivative Instruments	0
Total	0
Fair Value Measurements Level 2 [Member] | Warrants June 2013 Private Placement
Liabilities:
Derivative Instruments	4,393,201
Total	4,393,201
Fair Value Measurements Level 2 [Member] | Warrants November 2013 IDMC Services and License Agreement
Liabilities:
Derivative Instruments	670,463
Total	670,463
Fair Value Measurements Level 2 [Member] | Convertible Note Payable 1
Liabilities:
Derivative Instruments	103,500
Total	103,500
Fair Value Measurements Level 2 [Member] | Convertible Note Payable 2
Liabilities:
Derivative Instruments	63,000
Total	63,000
Fair Value Measurements Level 3 [Member] | Warrants June 2013 Private Placement
Liabilities:
Derivative Instruments	0
Total	0
Fair Value Measurements Level 3 [Member] | Warrants November 2013 IDMC Services and License Agreement
Liabilities:
Derivative Instruments	0
Total	0
Fair Value Measurements Level 3 [Member] | Convertible Note Payable 1
Liabilities:
Derivative Instruments	0
Total	0
Fair Value Measurements Level 3 [Member] | Convertible Note Payable 2
Liabilities:
Derivative Instruments	0
Total	0
Carrying Value [Member] | Warrants June 2013 Private Placement
Liabilities:
Derivative Instruments	4,393,201
Total	4,393,201
Carrying Value [Member] | Warrants November 2013 IDMC Services and License Agreement
Liabilities:
Derivative Instruments	670,463
Total	670,463
Carrying Value [Member] | Convertible Note Payable 1
Liabilities:
Derivative Instruments	103,500
Total	103,500
Carrying Value [Member] | Convertible Note Payable 2
Liabilities:
Derivative Instruments	63,000
Total	$63,000

3_SIGNIFICANT_ACCOUNTING_POLIC4

3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS (Details1) (USD $)	3 Months Ended
	Dec. 31, 2014
Warrants - June 2013 Private Placement
Market price and estimated fair value of common stock:	$0.11
Exercise price	0.15-0.20
Expected term (years)	3-5 years
Dividend yield	0.00%
Expected volatility	76.70%
Risk-free interest rate	78.00%
Warrants - November 2013 IDMC Services and License Agreement
Market price and estimated fair value of common stock:	$0.11
Exercise price	0.2
Expected term (years)	5 years
Dividend yield	0.00%
Expected volatility	76.70%
Risk-free interest rate	78.00%
Convertible Note Payable 1
Market price and estimated fair value of common stock:	$0.11
Exercise price	0.7
Expected term (years)	.75 years
Dividend yield	0.00%
Expected volatility	76.70%
Risk-free interest rate	78.00%
Convertible Note Payable 2
Market price and estimated fair value of common stock:	$0.11
Exercise price	0.7
Expected term (years)	.75 years
Dividend yield	0.00%
Expected volatility	76.70%
Risk-free interest rate	78.00%

3_SIGNIFICANT_ACCOUNTING_POLIC5

3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS (Details Narrative) (USD $)	3 Months Ended
	Dec. 31, 2014	Sep. 30, 2013
Reserve for impaired inventory	15,000	$10,000
Options outstanding	12,900,000	12,710,000
Warrants outstanding	134,555,286	128,072,223
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 $)	Dec. 31, 2014	Sep. 30, 2014	Sep. 30, 2013
Notes to Financial Statements
Accounts receivable, net of allowance	$980,117	$815,460	$815,460

8_INVENTORIES_Details_Narrativ

8. INVENTORIES (Details Narrative) (USD $)	Dec. 31, 2014	Sep. 30, 2014	Sep. 30, 2013
Notes to Financial Statements
Inventories	$333,073	$412,831
Reserve for impaired inventory	$15,000		$10,000

9_FIXED_ASSETS_Details

9. FIXED ASSETS (Details) (USD $)	Dec. 31, 2014	Sep. 30, 2014	Sep. 30, 2013
Machinery and equipment (2-10 years)	$297,960
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	-762,248		-742,676
Property and equipment, net	426,255	447,236	447,236
PurchasedMember
Machinery and equipment (2-10 years)	210,922
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	-533,265
Property and equipment, net	422,091
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	-228,983
Property and equipment, net	$4,164

9_FIXED_ASSETS_Details_Narrati

9. FIXED ASSETS (Details Narrative) (USD $)	3 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Sep. 30, 2014	Sep. 30, 2013
Notes to Financial Statements
Property and equipment, net	$426,255		$447,236	$447,236
Property and equipment, accumulated depreciation	762,248			742,676
Depreciation expense	$19,571	$12,794

10_INTANGIBLE_ASSETS_Details

10. INTANGIBLE ASSETS (Details) (USD $)	Dec. 31, 2014	Sep. 30, 2014	Sep. 30, 2013
Less: accumulated amortization	($1,349,299)		($1,264,492)
Intangible assets, net	346,846	431,653	431,653
Customer Contracts [Member]
Intangible Assets Gross	983,645	983,645
Technology [Member]
Intangible Assets Gross	$712,500	$712,500

10_INTANGIBLE_ASSETS_Details_N

10. INTANGIBLE ASSETS (Details Narrative) (USD $)	3 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Notes to Financial Statements
Amortization expense	$84,807	$84,808

11_ACCOUNTS_PAYABLE_Details_Na

11. ACCOUNTS PAYABLE (Details Narrative) (USD $)	Dec. 31, 2014	Sep. 30, 2014	Sep. 30, 2013
Notes to Financial Statements
Accounts payable	$2,333,873	$2,234,123	$2,234,123
Vendor1 with accounts payble on excess of 10%	17.40%
Vendor2 with accounts payble on excess of 10%	12.70%

13_NOTES_PAYABLE_CAPITALIZED_L2

13. NOTES PAYABLE, CAPITALIZED LEASES AND LONG TERM DEBT (Details) (USD $)	Dec. 31, 2014	Sep. 30, 2014
Notes Payable Capitalized Leases And Long Term Debt Details
BFI Business Finance Secured Credit Facility	$544,524	$488,398
Note payable to Umpqua Bank	200,000	200,000
Secured note payable to J3E2A2Z LP - related party	600,000	600,000
TransTech capitalized leases, net of capitalized interest	1,830	2,562
Total debt	1,346,354	1,290,960
Less current portion of long term debt	-1,346,354	-1,290,960
Long term debt	$0	$0

14_EQUITY_Details

14. EQUITY (Details) (Warrant [Member], USD $)	3 Months Ended
	Dec. 31, 2014
Warrant [Member]
Shares
Outstanding at beginning of period	128,555,286
Issued	6,000,000
Exercised	0
Forfeited	0
Expired	0
Outstanding at end of period	134,555,286
Exerciseable at end of period	134,555,286
Weighted Average Exercise Price:
Outstanding at beginning of period	$0.18
Issued	$0.25
Exercised
Forfeited
Expired
Outstanding at end of period	$0.18

14_EQUITY_Details_1

14. EQUITY (Details 1) (USD $)	3 Months Ended
	Dec. 31, 2014
0.10-013 [Member]
Number of Warrants	6,330,000
Weighted Average Remaining Life (years)	2 years 10 months 10 days
Shares Exercisable	6,330,000
0.10-013 [Member] | Minimum [Member]
Weighted Average Exercise Price	0.1
0.10-013 [Member] | Maximum [Member]
Weighted Average Exercise Price	0.13
0.150 [Member]
Number of Warrants	52,300,000
Weighted Average Remaining Life (years)	3 years 4 months 17 days
Weighted Average Exercise Price	0.15
Shares Exercisable	52,300,000
0.200 [Member]
Number of Warrants	75,925,286
Weighted Average Remaining Life (years)	2 months 12 days
Weighted Average Exercise Price	0.2
Shares Exercisable	75,925,286
0.178 [Member]
Number of Warrants	134,555,286
Weighted Average Remaining Life (years)	3 years 6 months
Weighted Average Exercise Price	0.178
Shares Exercisable	134,555,286

14_EQUITY_Details_2

14. EQUITY (Details 2)	3 Months Ended
	Dec. 31, 2014
Equity Details 2
Dividend yield	0.00%
Expected life	3 years
Expected volatility	90.00%
Risk free interest rate	0.70%

14_EQUITY_Details_Narrative

14. EQUITY (Details Narrative) (USD $)	3 Months Ended
	Dec. 31, 2014
Notes to Financial Statements
Expenses related to warrants	$0
Intrinsic value	$58,300

15_STOCK_OPTIONS_Details

15. STOCK OPTIONS (Details) (USD $)	3 Months Ended	12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Sep. 30, 2013
Aggregate Intrinsic Value
Aggregate Intrinsic Value Outstanding, End	$58,300
Stock Options
Shares:
Outstanding at beginning of period	13,100,000	12,735,000	5,920,000
Shares granted	0	395,000	6,830,000
Shares exercised	0	0	0
Shares forfeitures	-200,000	-30,000	-15,000
Outstanding at end of period	12,900,000	13,100,000	12,735,000
Weighted Average Exercise Price:
Outstanding at beginning of period	$0.13	$0.13	$0.13
Shares granted		$0.10	$0.12
Shares exercised
Shares forfeitures	($0.12)	($0.22)	($0.24)
Outstanding at end of period	$0.13	$0.13	$0.13
Aggregate Intrinsic Value
Aggregate Intrinsic Value Outstanding, Beginning	1,642,200	1,609,200	776,800
Aggregate Intrinsic Value Outstanding, Granted	$0	$39,500	$836,000
Aggregate Intrinsic Value Outstanding, Exercised	0	0	0
Aggregate Intrinsic Value Outstanding, Forefeitures	($24,000)	($6,500)	($3,600)
Aggregate Intrinsic Value Outstanding, End	$1,618,200	$1,642,200	$1,609,200

15_STOCK_OPTIONS_Details_1

15. STOCK OPTIONS (Details 1) (USD $)	3 Months Ended
	Dec. 31, 2014
Stock Options
Number of Outstanding Stock Options	12,900,000
Weighted Average Remaining Life (years)	5 years 1 month 2 days
Weighted Average Exercise Price Exerciseable	$0.13
Number Exercisable	11,228,750
Exercise Price 0.090 [Member]
Number of Outstanding Stock Options	500,000
Weighted Average Remaining Life (years)	5 years 4 months 20 days
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 4 months 10 days
Weighted Average Exercise Price Exerciseable	$0.10
Number Exercisable	2,765,417
Exercise Price 0.130 [Member]
Number of Outstanding Stock Options	5,100,000
Weighted Average Remaining Life (years)	4 years 11 months 5 days
Weighted Average Exercise Price Exerciseable	$0.13
Number Exercisable	4,683,333
Exercise Price 0.150 [Member]
Number of Outstanding Stock Options	3,100,000
Weighted Average Remaining Life (years)	5 years 4 months 20 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)	7 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 $)	3 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Compensation expense	$20,835	$23,503
2011 Stock Incentive Plan
Options to purchase common stock under 2011 Stock Incentive Plan	12,900,000
Average exercise price under 2011 Stock Incentive Plan	$0.13
Unrecognized costs related to employee granted stock options that are not vested	$308,565
Period for recognition	5 years 1 month 2 days

15_OTHER_SIGNIFICANT_TRANSACTI

15. OTHER SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES (Details narrative) (USD $)	Dec. 31, 2014
Notes to Financial Statements
Accrued liabilities related parties	$268,010