Know Labs (KNWN) 10-K 4 Nov 15 2015 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Sep. 30, 2015	Nov. 03, 2015	Mar. 31, 2015
Document And Entity Information
Entity Registrant Name	VISUALANT INC
Entity Central Index Key	1,074,828
Document Type	10-K
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--09-30
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$ 8,339,737
Entity Common Stock, Shares Outstanding		1,156,831
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2,015

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2015	Sep. 30, 2014
CURRENT ASSETS:
Cash and cash equivalents	$ 82,266	$ 70,386
Accounts receivable, net of allowance of $40,000 and $39,000, respectively	619,849	815,460
Prepaid expenses	27,774	25,067
Inventories, net	217,824	412,831
Refundable tax assets	0	29,590
Total current assets	947,713	1,353,334
EQUIPMENT, NET	366,250	447,236
OTHER ASSETS
Intangible assets, net	158,000	431,653
Goodwill	983,645	983,645
Other assets	5,070	5,070
TOTAL ASSETS	2,460,678	3,220,938
CURRENT LIABILITIES:
Accounts payable - trade	2,520,223	2,234,123
Accounts payable - related parties	73,455	66,729
Accrued expenses	4,068	31,369
Accrued expenses - related parties	1,256,861	260,687
Derivative liability - warrants	2,704,840	2,579,157
Convertible notes payable	109,000	166,500
Notes payable - current portion of long term debt	1,164,692	1,290,960
Deferred revenue	5,833	0
Total current liabilities	7,838,972	6,629,525
LONG TERM LIABILITIES:
Long term debt	0	$ 0
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT
Series A Convertible Preferred stock - $0.001 par value, 5,000,000 shares authorized, 11,667 and 0 shares issued and outstanding at 9/30/2015 and 9/30/2014, respectively	12	$ 0
Common stock - $0.001 par value, 100,000,000 shares authorized, 1,155,991 and 1,121,150 shares issued and outstanding at 9/30/2015 and 9/30/2014, respectively	1,156	1,121
Additional paid in capital	18,786,694	18,125,411
Accumulated deficit	(24,166,156)	(21,535,119)
Total stockholders' deficit	(5,378,294)	(3,408,587)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 2,460,678	$ 3,220,938

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)	Sep. 30, 2015	Sep. 30, 2014
CURRENT ASSETS:
Allowance for Accounts receivable	$ 40,000	$ 39,000
EQUITY (DEFICIT)
Preferred stock par value	$ 0.001	$ 0.001
Preferred stock shares authorized	5,000,000	5,000,000
Preferred stock shares issued	11,667	0
Preferred stock shares outstanding	11,667	0
Common stock par value	$ 0.001	$ 0.001
Common stock shares authorized	100,000,000	100,000,000
Common stock shares issued	1,155,991	1,121,150
Common stock shares outstanding	1,155,991	1,121,150

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Income Statement [Abstract]
REVENUE	$ 6,290,794	$ 7,983,352
COST OF SALES	5,274,334	6,694,274
GROSS PROFIT	1,016,460	1,289,078
RESEARCH AND DEVELOPMENT EXPENSES	362,661	670,742
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	2,983,751	3,179,699
OPERATING LOSS	(2,329,952)	(2,561,363)
OTHER INCOME (EXPENSE):
Interest expense	(170,157)	(104,808)
Other income	40,653	38,534
Loss on conversion of debt	(34,035)	0
(Loss) gain on change - derivative liability warrants	(107,956)	1,604,843
Total other (expense) income	(271,495)	1,538,569
LOSS BEFORE INCOME TAXES	(2,601,447)	(1,022,794)
Income taxes - current provision (benefit)	29,590	(5,513)
NET LOSS	(2,631,037)	(1,017,281)
NONCONTROLLING INTEREST	0	0
NET (LOSS) ATTRIBUTABLE TO VISUALANT, INC. AND SUBSIDIARIES COMMON SHAREHOLDERS	$ (2,631,037)	$ (1,017,281)
Basic and diluted income (loss) per common share attributable to Visualant, Inc. and subsidiaries common shareholders-
Basic and diluted income (loss) per share	$ (2.33)	$ (0.92)
Weighted average shares of common stock outstanding- basic and diluted	1,131,622	1,108,964

CONSOLIDATED STATEMENT OF SHARE

CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY - USD ($)	Preferred Stock [Member]	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Total
Beginning Balance, Amount at Sep. 30, 2013	$ 0	$ 1,101	$ 17,729,731	$ (20,537,825)	$ (2,806,993)
Beginning Balance, Shares at Sep. 30, 2013	0	1,101,817
Stock compensation expense - employee options	$ 0	$ 0	87,550	0	87,550
Issuance of common stock for services, Amount	$ 0	$ 9	90,991	0	91,000
Issuance of common stock for services, Shares	0	8,667
Issuance of common stock for debt conversion, Amount	$ 0	$ 11	159,989	0	160,000
Issuance of common stock for debt conversion, Shares	0	10,667
Issuance of warrants for services, Amount	$ 0	$ 0	57,150	0	57,150
Loss on conversion of debt					0
Sale of noncontroling interest	0	0	0	19,987	19,987
Net loss	0	0	0	(1,017,281)	(1,017,281)
Comprehensive loss					(1,017,281)
Ending Balance, Amount at Sep. 30, 2014	$ 0	$ 1,121	18,125,411	(21,535,119)	(3,408,587)
Ending Balance, Shares at Sep. 30, 2014	0	1,121,150
Stock compensation expense - employee options	$ 0	$ 0	65,463	0	65,463
Issuance of common stock for services, Amount	$ 0	$ 9	137,491	0	137,500
Issuance of common stock for services, Shares	0	9,169
Issuance of preferred stock, Amount	$ 12	$ 0	233,310	0	233,322
Issuance of preffered stock, Shares	11,667
Issuance of common stock for debt conversion, Amount	$ 0	$ 25	91,781	0	91,806
Issuance of common stock for debt conversion, Shares	0	24,710
Reversal of derivative liability for debt repayment	$ 0	$ 0	98,940	0	98,940
Effect of reverse stock split, Amount	$ 0	$ 1	263	0	264
Effect of reverse stock split, Shares	0	962
Loss on conversion of debt	$ 0	$ 0	34,035	0	34,035
Net loss	0	0	0	(2,631,037)	(2,631,037)
Comprehensive loss					(2,631,037)
Ending Balance, Amount at Sep. 30, 2015	$ 12	$ 1,156	$ 18,786,694	$ (24,166,156)	$ (5,378,294)
Ending Balance, Shares at Sep. 30, 2015	11,667	1,155,991

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (2,631,037)	$ (1,017,281)
Adjustments to reconcile net loss to net cash (used in) operating activities
Depreciation and amortization	353,229	418,271
Issuance of capital stock for services and expenses	137,500	91,000
Issuance of warrants for services and expenses	0	57,150
Issuance of capital stock for accrued liabilities	0	160,000
Stock based compensation	65,463	87,550
Loss on sale of assets	(20,042)	(28,363)
(Gain) loss on change - derivative liability warrants	107,956	(1,604,843)
Provision for losses on accounts receivable	28,266	36
Loss on conversion of debt	34,035	0
Changes in operating assets and liabilities:
Accounts receivable	167,345	191,578
Prepaid expenses	(2,707)	31,464
Inventory	195,007	87,959
Other assets	0	1,091
Accounts payable - trade and accrued expenses	1,289,685	144,808
Income tax receivable	29,590	183
Deferred revenue	5,833	0
CASH (USED IN) OPERATING ACTIVITIES	(239,877)	(1,379,397)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of equipment	21,452	29,300
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES:	21,452	29,300
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments from line of credit	(123,633)	(260,925)
Proceeds from sale of preferred stock	350,000	0
Proceeds from notes payable	0	200,000
Proceeds from notes payable- related party	0	600,000
Repayment of convertible notes	(166,500)	0
Proceeds from convertible notes payable	173,000	166,500
Repayments of capital leases	(2,562)	(3,138)
Change in noncontrolling interest	0	(29,083)
NET CASH PROVIDED BY FINANCING ACTIVITIES	230,305	673,354
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	11,880	(676,743)
CASH AND CASH EQUIVALENTS, beginning of period	70,386	747,129
CASH AND CASH EQUIVALENTS, end of period	82,266	70,386
Supplemental disclosures of cash flow information:
Interest paid	114,907	52,755
Taxes paid	0	0
Non-cash investing and financing activities:
Loss (gain) on change - derivative liability warrants	17,727	0
Issuance of common stock for debt conversion	$ 91,806	$ 0

1. ORGANIZATION

1. ORGANIZATION	12 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
1. ORGANIZATION	Visualant, Incorporated (the “Company,” “Visualant, Inc.” or “Visualant”) was incorporated under the laws of the State of Nevada in 1998. The Company has authorized 105,000,000 shares of capital stock, of which 100,000,000 are shares of voting common stock, par value $0.001 per share, and 5,000,000 are shares preferred stock, par value $0.001 per share. On July 21, 2015, the Company filed with the Secretary of State of Nevada an Amended and Restated Certificate of Designations, Preferences and Rights for our Series A Convertible Preferred Stock. Since 2007 the Company has been focused primarily on the development of a proprietary technology which is capable of uniquely identifying and authenticating almost any substance using light at the “photon” level to detect the unique digital “signature” of the substance. The Company calls this its “ChromaID™” technology. In 2010, the Company acquired TransTech Systems, Inc. as an adjunct to its business. TransTech is a distributor of products for employee and personnel identification. TransTech currently provides substantially all of the Company’s revenues. The Company is in the process of commercializing its ChromaID™ technology. To date, the Company has entered into one License Agreement with Sumitomo Precision Products Co., Ltd. and has a strategic relationship with Invention Development Management Company, L.L.C. (“IDMC”). The Company believes that its commercialization success is dependent upon its ability to significantly increase the number of customers that are purchasing and using its products. To date the Company has generated minimal revenue from sales of its ChromaID products. The Company is currently not profitable. Even if the Company succeeds in introducing the ChromaID technology and related products to its target markets, the Company may not be able to generate sufficient revenue to achieve or sustain profitability. ChromaID was invented by scientists from the University of Washington under contract with Visualant. The Company has pursued an aggressive intellectual property strategy and have been granted eight patents. The Company also has 22 patents pending. The Company possess all right, title and interest to the issued patents. Ten of the pending patents are licensed exclusively to the Company in perpetuity by the Company’s strategic partner, Intellectual Ventures through its subsidiary IDMC. On May 6, 2015, the Company’s stockholders approved a reverse split of our common stock, in a ratio to be determined by the Company’s Board of Directors, of not less than 1-for-50 nor more than 1-for-150. On June 9, 2015, the Company’s Board of Directors determined that the ratio of the reverse split would be 1-for-150. All warrant, option, share and per share information in this Form 10-K gives retroactive effect for a 1-for-150 split with all numbers rounded up to the nearest whole share.

2. GOING CONCERN

2. GOING CONCERN	12 Months Ended
	Sep. 30, 2015
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 $2,631,037 and $1,017,291 for the years ended September 30, 2015 and 2014, respectively. Net cash used in operating activities was $(239,877) and $(1,379,397) for the years ended September 30, 2015 and 2014, respectively. The Company anticipates that it will record losses from operations for the foreseeable future. As of September 30, 2015, the Company’s accumulated deficit was $24,166,156. 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, or entities with which he is affiliated. These conditions raise substantial doubt about our ability to continue as a going concern. The audit report prepared by the Company’s independent registered public accounting firm relating to our financial statements for the year ended September 30, 2015 includes an explanatory paragraph expressing the substantial doubt about the Company’s ability to continue as a going concern. Continuation of the Company as a going concern is dependent upon obtaining additional working capital. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

3. SIGNIFICANT ACCOUNTING POLIC

3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS	12 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS	Basis of Presentation Principles of Consolidation Cash and Cash Equivalents Accounts Receivable and Allowance for Doubtful Accounts Inventories Equipment Intangible Assets/ Intellectual Property Goodwill Long-Lived Assets Fair Value Measurements and Financial Instruments Fair Value Measurement and Disclosures 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 Liabilities measured at fair value on a recurring basis are summarized as follows: Carrying Fair Value Measurements Using Inputs Amount at Financial Instruments Level 1 Level 2 Level 3 September 30, 2015 Liabilities: Derivative Instruments - Warrants $ - $ 2,196,716 $ - $ 2,196,716 Total $ - $ 2,196,716 $ - $ 2,196,716 September 30, 2015 Market price and estimated fair value of common stock: $ 5.600 Exercise price 2.50 Expected term (years) 0.25 Dividend yield - Expected volatility 105.1 % Risk-free interest rate 0.001 % 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 purchase 697,370 shares of common stock in connection with our June 2013 private placement of 348,685 shares of common stock. The exercise price of these warrants is $2.50 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 our 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 shares of common stock 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 allocated to stockholders’ equity and $2,735,290 allocated 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 September 30, 2014. During the year ended September 30, 2015, the Company recognized $104,716 of other expense resulting from the decrease in the fair value of the warrant liability at September 30, 2015. Carrying Fair Value Measurements Using Inputs Amount at Financial Instruments Level 1 Level 2 Level 3 September 30, 2015 Liabilities: Derivative Instruments - Warrants $ - $ 306,082 $ - $ 306,082 Total $ - $ 306,082 $ - $ 306,082 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. September 30, 2015 Market price and estimated fair value of common stock: $ 5.60 Exercise price 2.50 Expected term (years) 0.25 Dividend yield - Expected volatility 105.1 % Risk-free interest rate 0.001 % The Company issued a warrant to purchase 97,169 shares of common stock in connection with the November 2013 IDMC Services and License Agreement. The warrant price of $30.00 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 our common stock or securities exercisable, convertible or exchangeable for our common stock were issued at a price less than the exercise price. Therefore, the fair value of these warrants was 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 year ended September 30, 2015, the Company recognized $14,574 of other income related to the IDMC warrant. Derivative Instrument – Convertible Note Payable KBM Worldwide, Inc. The Company entered into a Convertible Note Payable with KBM Worldwide, Inc. on August 25, 2014 for $103,500. The Note was paid off on March 2, 2015. The Company entered into a Convertible Note Payable with KBM on September 24, 2014 for $63,000. The Note was repaid March 27, 2015. The Company entered into a Convertible Note Payable with KBM on January 27, 2015 for $64,000. The KBM Note accrued interest at a rate of 8% per annum and becomes due on October 27, 2015 and was convertible into common stock on July 26, 2015. On August 3, 10, 13 and 14, 2015, the Company issued a total of 23,010 shares of common stock to KBM Worldwide, Inc. related to the conversion of $64,000 of debt and interest of $2,560 pursuant to a Securities Purchase Agreement dated January 27, 2015. The shares were issued at an average of $2.785 per share, with a low price of $2.50 per share. During the year ended September 30, 2014, the Company recognized $166,500 of other expense related to the KBM Note. During the year ended September 30, 2015, the Company recognized $29,529 of other income and allocated $98,940 to stockholder’s equity related to the KBM Note. The Company recorded accrued interest of $898 as of June 30, 2015. The Company recorded on a loss on conversion of $34,035 and allocated $34,035 to stockholder’s equity. Derivative Instrument – Series A Convertible Preferred Stock Carrying Fair Value Measurements Using Inputs Amount at Financial Instruments Level 1 Level 2 Level 3 September 30, 2015 Liabilities: Derivative Instruments - Warrants $ - $ 147,004 $ - $ 147,004 Total $ - $ 147,004 $ - $ 147,004 Liabilities measured at fair value on a recurring basis are summarized as follows: September 30, 2015 Market price and estimated fair value of common stock: $ 5.60 Exercise price 2.50 Expected term (years) 0.25 Dividend yield - Expected volatility 105.1 % Risk-free interest rate 0.001 % 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 Series A Convertible Preferred Stock. The Company issued 11,667 shares of Series A Convertible Preferred Stock with attached warrants during the year ended September 30, 2015. The Company allocated $233,322 to stockholders equity and $116,678 to the derivative warrant liability. The warrants were issued with a down round provision. During the year ended September 30, 2015, the Company recognized $30,338 of other expense related to the warrant liability. Derivative Instrument – Convertible Note Payable Vis Vires Group, Inc. Carrying Fair Value Measurements Using Inputs Amount at Financial Instruments Level 1 Level 2 Level 3 September 30, 2015 Liabilities: Derivative Instruments - Convertible Promissory Note $ - $ 55,038 $ - $ 55,038 Total $ - $ 55,038 $ - $ 55,038 Liabilities measured at fair value on a recurring basis are summarized as follows: September 30, 2015 Market price and estimated fair value of common stock: $ 5.60 Exercise price 3.64 Expected term (years) 0.375 Dividend yield - Expected volatility 105.1 % Risk-free interest rate 0.75 % The Company entered into a Convertible Note Payable with Vis Vires Group, Inc. on August 10, 2015 for $84,000 to fund short-term working capital. The Vis Vires Note accrues interest at a rate of 8% per annum and becomes due on May 12, 2016 and is convertible into common stock on February 5, 2016. The Vis Vires Note is convertible at 65% of the average of the lowest three day trading price in the 10 days prior to conversion. The Company recorded accrued interest of $405 as of September 30, 2015. During the year ended September 30, 2015, the Company recognized $55,038 of other expense related to the Vis Vires Note. The recorded value of other financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable, other current assets, and accounts payable and accrued expenses approximate the fair value of the respective assets and liabilities at September 30, 2015 and 2014 based upon the short-term nature of the assets and liabilities. Revenue Recognition Stock Based Compensation Convertible Securities Income Taxes . The Company recognizes refundable and deferred assets to the extent that management has determined their realization. As of September 30, 2015 and 2014, the Company had refundable tax assets related to TransTech of $0 and $29,590, respectively. Net Loss per Share Dividend Policy Use of Estimates Recent Accounting Pronouncements A variety of proposed or otherwise potential accounting standards are currently under study by standard setting organizations and various regulatory agencies. Due to the tentative and preliminary nature of those proposed standards, management has not determined whether implementation of such proposed standards would be material to our consolidated financial statements. In August 2014, FASB issued ASU 2014-15—Presentation of Financial Statements—Going Concern (ASC Subtopic 205-40): “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. In May 2014, FASB issued ASU 2014-09—Revenue from Contracts with Customers (Topic 606): “Section A—Summary and Amendments That Create Revenue from Contracts with Customers, (Topic 606) and Other Assets and Deferred Costs—Contracts with Customers (Subtopic 340-40), Section B—Conforming Amendments to Other Topics and Subtopics in the Codification and Status Tables, Section C—Background Information and Basis for Conclusions”. In July 2013, FASB issued ASU 2013-11—Income Taxes (ASC Topic 740): “ Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists New Accounting Standards Issued But Not Yet Adopted In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”)

4. DEVELOPMENT OF CHROMAID(TM)

4. DEVELOPMENT OF CHROMAID(TM) TECHNOLOGY	12 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
4. DEVELOPMENT OF CHROMAID(TM) TECHNOLOGY	The Company is focused primarily on the development of a proprietary technology which is capable of uniquely identifying and authenticating almost any substance using light to create, record and detect the unique digital “signature” of the substance. The Company calls this its “ChromaID™” technology. The Company’s ChromaID™ Technology The ChromaID technology looks beyond visible light frequencies to areas of near infra-red and ultraviolet light that are outside the humanly visible light spectrum. The data obtained allows the Company to create a very specific and unique ChromaID signature of the substance for a myriad of authentication and verification applications. Traditional light-based identification technology, called spectrophotometry, has relied upon a complex system of prisms, mirrors and visible light. Spectrophotometers typically have a higher cost and utilize a form factor more suited to a laboratory setting and require trained laboratory personnel to interpret the information. The ChromaID technology uses lower cost LEDs and photodiodes and specific frequencies of light resulting in a more accurate, portable and easy-to-use solution for a wide variety of applications. The ChromaID technology not only has significant cost advantages as compared to spectrophotometry, it is also completely flexible is size, shape and configuration. The ChromaID scan head can range in size from endoscopic to a scale that could be the size of a large ceiling-mounted florescent light fixture. In normal operation, a ChromaID master or reference scan is generated and stored in a database. The Visualant scan head can then scan similar materials to identify, authenticate or diagnose them by comparing the new ChromaID digital signature scan to that of the original or reference ChromaID signature or scan result. The following summarizes the Company’s plans for its Company’s proprietary ChromaID technology. Based on the Company’s anticipated expenditures on this technology, the expected efforts of its management and its relationship with Intellectual Ventures and its subsidiary, IDMC, and the Company’s other strategic partner, Sumitomo Precision Products, Ltd., the Company expects its ChromaID technology to provide an increasing portion of its revenues in future years from product sales, licenses, royalties and other revenue streams., as discussed further below. ChromaID: A Foundational Platform Technology The Company’s ChromaID technology provides a platform upon which a myriad of applications can be developed. As a platform technology, it is analogous to a smartphone, upon which an enormous number of previously unforeseen applications have been developed. The ChromaID technology is an enabling technology that brings the science of light and photonics to low cost, real world commercialization opportunities across multiple industries. The technology is foundational and as such, the basis upon which the Company believes a significant business can be built. As with other foundational technologies, a single application may reach across multiple industries. The ChromaID technology can, for example effectively differentiate and identify different brands of clear vodkas that appear identical to the human eye. By extension this same technology can identify pure water from water with contaminants present. It can provide real time detection of liquid medicines such as morphine that have been adulterated or compromised. It can detect if jet fuel has water contamination present. It could determine when it is time to change oil in a deep fat fryer. These are but a few of the potential applications of the ChromaID technology based upon extensions of its ability to identify different clear liquids. The cornerstone of a company with a foundational platform technology is its intellectual property. ChromaID was invented by scientists from the University of Washington under contract with Visualant. The Company has pursued an aggressive intellectual property strategy and has been granted nine patents. The Company currently have 21 patents pending. The Company possesses all right, title and interest to the issued patents. Ten of the pending patents are licensed exclusively to us in perpetuity by our strategic partner, the IDMC subsidiary of Intellectual Ventures. At the Photonics West trade show held in San Francisco in February 2013, we were honored to receive a PRISM award from the Society of Photo-Optical Instrumentation Engineers International, better known as SPIE. The PRISM awards recognizes photonic products that break with conventional ideas, solve problems, and improve life through the application of light-based technologies. IDMC Relationship In November 2013, the Company entered into a strategic relationship with IDMC, a subsidiary of Intellectual Ventures, a private intellectual property fund with over $5 billion under management. Intellectual Ventures owns over 40,000 IP assets and has broad global relationships for the invention of technology, the filing of patents and the licensing of intellectual property. IDMC has worked to expand the reach and the potential application of the ChromaID technology and has filed ten patents base on the ChromaID technology, which it has licensed to the Company. In connection with IDMC’s work to expand the Company’s intellectual property portfolio, the Company agreed to curtail outbound marketing activities of its technology through the fourth fiscal quarter of 2014. Initial testing in the Company’s laboratories and the work of the IDMC inventors have shown that the ChromaID technology has a number of broad and useful applications a few of which include: · Milk identification for quality, protein and fat content and impurities · Identification of liquids for counterfeits or contaminants · Detecting adulterants in food and food products compromising its quality · Color grading of diamonds · Identifying real cosmetics versus counterfeit cosmetics · Identifying counterfeit medications versus real medications · Identifying regular flour versus gluten free flour · Authenticating secure identification cards Products The Company first delivered 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 cards, cosmetic companies, scanner manufactures and food processing companies. The Company’s second product, the ChromaID Liquid Lab Kit, scans and identifies liquids. This product is currently in prototype form. Similar to the Company’s first product, it will be marketed to customers who are considering licensing the technology. Rather than use an LED emitter to reflect light off of a surface that is captured by a photodiode to generate a ChromaID signature the liquid analysis product shines light through the liquid (transmissive) with the LEDs positioned on one side of the liquid sample and the photo detectors on the opposite side. This device is in a functional state in our laboratory and the Company anticipates having a Liquid ChromaID Lab Kit available for customers by the Company during the fall of 2015. Target markets include, but are not limited to, water companies, petrochemical companies, pharmaceutical companies, and numerous consumer applications. The ChromaID Lab Kits allows potential licensors of our technology to work with our technology and develop solutions for their particular application. Our contractual arrangements with IDMC are described in greater detail below. Our Commercialization Plans for the ChromaID Technology. The Company shipped its first ChromaID product, the ChromaID Lab Kits, to our strategic partner IDMC during the last calendar quarter of 2013 and first calendar quarter of 2014, after we completed final assembly and testing. As part of the Company’s agreement with IDMC, the Company curtailed its ChromaID marketing efforts through the fourth calendar quarter of 2014 while IDMC worked to expand our intellectual property portfolio. Thereafter, the Company began to actively market the ChromaID Lab Kits to interested and qualified customers. Some ChromaID Lab Kits are provided free of charge to potential customers. Others are sold for a modest price. To date, the Company has achieved limited revenue from the sale of our ChromaID Lab Kits. The Lab Kit includes the following: ChromaID Scanner ChromaID Lab Software Software Development Toolkit · Sales of the ChromaID Lab Kit and ChromaID Liquid Lab Kit · Non Recurring Engineering (NRE) fees to assist customers with scan integration into their products · Licensing of the ChromaID technology · Royalties per unit generated from the sales of scan heads · Per click transaction revenue from accessing the unique ChromaID signatures · Developing custom product applications for customers · ChromaID database administration and management services The Company’s Acceleration of Business Development in the United States and Around the World There is no requirement for FDA or other government approval for the current applications of our 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. Research and Development The Company’s research and development efforts are primarily focused improving the core foundational ChromaID technology and developing new and unique applications for the technology. As part of this effort, the Company typically conduct testing to ensure that ChromaID application methods are compatible with the customer’s requirements, and that they can be implemented in a cost effective manner. The Company is also actively involved in identifying new application methods. Visualant’s team has considerable experience working with the application of light-based technologies and their application to various industries. The Company believes that its continued development of new and enhanced technologies relating to our core business is essential to its future success. The Company spent $362,661 and $670,742 during the years ended September 30, 2015 and 2014, respectively, on research and development activities. The Company’s research and development efforts are supported internally, through its relationship with IDMC and through contractors led by Dr. Tom Furness and his team at RATLab LLC. The Company’s Patents The Company believes that it’s nine patents, 21 patent applications, and two registered trademarks, and our trade secrets, copyrights and other intellectual property rights are important assets. The Company’s patents will expire at various times between 2027 and 2033. The duration of the Company’s trademark registrations varies from country to country. However, trademarks are generally valid and may be renewed indefinitely as long as they are in use and/or their registrations are properly maintained. The patents that have been granted to Visualant include: 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 B2 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. On March 23, 2015, the Company was issued US Patent No. 8,988,666 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 May 26, 2015, the Company was issued patent US Patent No. 9,041,920 B2 entitled “Device for Evaluation of Fluids using Electromagnetic Energy” by the United States Office of Patents and Trademarks. The patent expires March 12, 2033. The Company pursues an aggressive patent strategy to expand its unique intellectual property in the United States and other countries. Services and License Agreement Invention Development Management Company, L.L.C. In November 2013, the Company entered into a Services and License Agreement with IDMC. IDMC is affiliated with Intellectual Ventures, which collaborates with inventors and partners with pioneering companies and invests both expertise and capital in the process of invention. On November 19, 2014, the Company amended the Services and License Agreement with IDMC. This amendment exclusively licenses 10 filed patents to us. The agreement requires IDMC to identify and engage inventors to develop new applications of Visualant’s ChromaID™ technology, present the developments to us for approval, and file at least 10 patent applications to protect the developments. IDMC is responsible for the development and patent costs. The Company provided the Chroma ID Lab Kits to IDMC at no cost and are 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 Lab Kits for 140 days except for certain select accounts. The Company continued its business development efforts during this period and have worked with IDMC and their global business development resources to secure potential customers and licensees for the ChromaID technology. The Company shipped 20 ChromaID Lab Kits to inventors in the IDMC network during December 2013 and January 2014. As part of the agreement with IDMC, the Company curtailed its ChromaID marketing efforts through the fourth calendar quarter of 2014 while IDMC worked to expand our intellectual property portfolio. Thereafter, the Company began to actively market the ChromaID Lab Kits to interested and qualified customers. The Company has received a worldwide, nontransferable, exclusive license to the intellectual property developed under the IDMC agreement during the term of the agreement, and solely within the identification, authentication and diagnostics field of use, to (a) make, have made, use, import, sell and offer for sale products and services; (b) make improvements; and (c) grant sublicenses of any and all of the foregoing rights (including the right to grant further sublicenses). The Company received a nonexclusive and nontransferable option to acquire a worldwide, nontransferable, nonexclusive license to the useful intellectual property 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 us for geographies not being pursued by Visualant. Also, IDMC has introduced the Company to potential customers, licensees and distributors for the purpose of identifying and pursuing a license, sale or distribution arrangement or other monetization event. The Company granted to IDMC a nonexclusive, worldwide, fully paid, nontransferable, sublicenseable, perpetual license to our intellectual property 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, non-sublicenseable, perpetual license to access and use the Company’s technology solely for the purpose of marketing the aforementioned sublicenses of our intellectual property to third parties outside the designated fields of use. In connection with the original license agreement, the Company issued a warrant to purchase 97,169 shares of common stock to IDMC as consideration for the exclusive intellectual property license and application development services. The warrant has a current exercise price of $2.50 per share and expires November 10, 2018. The per share price is subject to adjustment based on any issuances below $2.50 per share except as described in the warrant. The Company agreed to pay IDMC a percentage of license revenue for the global development business services and a percentage of revenue received from any company introduced to us by IDMC. The Company also have also agreed to pay IDMC a royalty when the Company receives royalty product revenue from an IDMC-introduced company. IDMC has agreed to pay the Company a license fee for the nonexclusive license of the Company’s intellectual property. The term of both the exclusive intellectual property license and the nonexclusive intellectual property 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.	12 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
5. AGREEMENT WITH SUMITOMO PRECISION PRODUCTS CO., LTD.	In May 2012, the Company entered into a Joint Research and Product Development Agreement (the “Joint Development Agreement”) with Sumitomo Precision Products Co., Ltd., a publicly-traded Japanese corporation, for the commercialization of our ChromaID technology. In March 2013, the Company entered into an amendment to this agreement, which extended the Joint Development Agreement from March 31, 2013 to December 31, 2013. The extension provided for continuing work between Sumitomo and Visualant focused on advancing the ChromaID technology and market research aimed at identifying the most significant markets for the ChromaID technology. This agreement expired December 31, 2013. This collaborative work supported the development of the ChromaID Lab Kit. The current version of the technology was introduced to the marketplace as a part of our ChromaID Lab Kit during the fourth quarter of 2013. The Company also entered into a License Agreement with Sumitomo in May 2012 which provides for an exclusive license for the then-extant ChromaID technology. The territories covered by this license include Japan, China, Taiwan, Korea and the entirety of Southeast Asia (Burma, Indonesia, Thailand, Cambodia, Laos, Vietnam, Singapore and the Philippines). On May 21, 2015, the Company entered into an amendment to the License Agreement, which, effective as of June 18, 2014, which eliminated the Sumitomo exclusivity and provides that if the Company sells products in certain territories – Japan, China, Taiwan, Korea and the entirety of Southeast Asia (Burma, Indonesia, Thailand, Cambodia, Laos, Vietnam, Singapore and the Philippines) – the Company will pay Sumitomo a royalty rate of 2% of net sales (excluding non-recurring engineering revenues) over the remaining term of the five-year License Agreement (through May 2017).

6. ACQUISITION OF TRANSTECH SYS

6. ACQUISITION OF TRANSTECH SYSTEMS, INC.	12 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
ACQUISITION OF TRANSTECH SYSTEMS, INC.	The Company’s wholly owned subsidiary, TransTech Systems, Inc., is a distributor of products, including systems solutions, components and consumables, for employee and personnel identification in government and the private sector, document authentication, access control, and radio frequency identification. TransTech provides these products and services, along with marketing and business development assistance to value-added resellers and system integrators throughout North America.

7. ACCOUNTS RECEIVABLE_CUSTOMER

7. ACCOUNTS RECEIVABLE/CUSTOMER CONCENTRATION	12 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
7. ACCOUNTS RECEIVABLE/CUSTOMER CONCENTRATION	Accounts receivable were $619,845 and $815,460, net of allowance, as of September 30, 2015 and 2014, respectively. The Company had one customer (11.1%) in excess of 10% of the Company’s consolidated revenues for the year ended September 30, 2015. The Company had two customers (13.5% and 11.1%) with accounts receivable in excess of 10% as of September 30, 2015. The Company does expect to have customers with consolidated revenues or accounts receivable balances of 10% of total accounts receivable in the foreseeable future.

8. INVENTORIES

8. INVENTORIES	12 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
8. INVENTORIES	Inventories were $217,824 and $412,831 as of September 30, 2015 and 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 $20,000 and $10,000 reserve for impaired inventory as of September 30, 2015 and 2014, respectively.

9. FIXED ASSETS

9. FIXED ASSETS	12 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
9. FIXED ASSETS	Fixed assets, net of accumulated depreciation, was $366,250 and $447,236 as of September 30, 2015 and 2014, respectively. Accumulated depreciation was $803,705 and $742,676 as of September 30, 2015 and 2014, respectively. Total depreciation expense, was $79,576 and $64,357 for the years ended September 30, 2015 and 2014, respectively. All equipment is used for selling, general and administrative purposes and accordingly all depreciation is classified in selling, general and administrative expenses. Property and equipment as of September 30, 2015 was comprised of the following: Estimated June 30, 2015 Useful Lives Purchased Capital Leases Total Machinery and equipment 2-10 years $ 192,374 $ 87,038 $ 279,412 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 (570,558 ) (233,147 ) (803,705 ) $ 366,250 $ - $ 366,250

10. INTANGIBLE ASSETS

10. INTANGIBLE ASSETS	12 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
10. INTANGIBLE ASSETS	Intangible assets as of September 30, 2015 and 2014 consisted of the following: Estimated September 30, September 30, Useful Lives 2015 2014 Customer contracts 5 years $ 983,645 $ 983,645 Technology 5 years 712,500 712,500 Less: accumulated amortization (1,538,145 ) (1,264,492 ) Intangible assets, net $ 158,000 $ 431,653 Total amortization expense was $273,653 and $339,229 for the years ended September 30, 2015 and 2014, 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 TransTech intellectual property was fully amortized as of September 30, 2015. The fair value of the RATLab intellectual property associated with the assets acquired was $450,000 estimated by using a discounted cash flow approach based on future economic benefits. In summary, the estimate was based on a projected income approach and related discounted cash flows over five years, with applicable risk factors assigned to assumptions in the forecasted results. The fair value of the Javelin intellectual property acquired was $262,500 estimated by using a discounted cash flow approach based on future economic benefits associated with the assets acquired. In summary, the estimate was based on a projected income approach and related discounted cash flows over five years, with applicable risk factors assigned to assumptions in the forecasted results.

11. ACCOUNTS PAYABLE

11. ACCOUNTS PAYABLE	12 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
11. ACCOUNTS PAYABLE	Accounts payable were $2,520,223 and $2,234,123 as of September 30, 2015 and 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 one vendor (12.5%) with accounts payable in excess of 10% of its accounts payable as of September 30, 2015. The Company does expect to have vendors with accounts payable balances of 10% of total accounts payable in the foreseeable future.

12. CONVERTIBLE NOTES PAYABLE

12. CONVERTIBLE NOTES PAYABLE	12 Months Ended
	Sep. 30, 2015
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 was paid off on March 2, 2015. The Company entered into a Convertible Note Payable with KBM on September 24, 2014 for $63,000. The Note was repaid March 27, 2015. The Company entered into a Convertible Note Payable with KBM on January 27, 2015 for $64,000. The KBM Note accrued interest at a rate of 8% per annum and becomes due on October 27, 2015 and was convertible into common stock on July 26, 2015. On August 3, 10, 13 and 14, 2015, the Company issued a total of 23,010 shares of common stock to KBM Worldwide, Inc. related to the conversion of $64,000 of debt and interest of $2,560 pursuant to a Securities Purchase Agreement dated January 27, 2015. The shares were issued at an average of $2.785 per share, with a low price of $2.50 per share. During the year ended September 30, 2014, the Company recognized $166,500 of other expense related to the KBM Note. During the year ended September 30, 2015, the Company recognized $29,529 of other income and allocated $98,940 to stockholder’s equity related to the KBM Note. The Company recorded accrued interest of $898 as of June 30, 2015. The Company recorded on a loss on conversion of $34,035 and allocated $34,035 to stockholder’s equity. The Company entered into a Convertible Note Payable with Vis Vires Group, Inc. on August 10, 2015 for $84,000 to fund short-term working capital. The Vis Vires Note accrues interest at a rate of 8% per annum and becomes due on May 12, 2016 and is convertible into common stock on February 5, 2016. The Vis Vires Note is convertible at 65% of the average of the lowest three day trading price in the 10 days prior to conversion. The Company recorded accrued interest of $405 as of September 30, 2015. The Company entered into a Convertible Promissory Note with Planning Partners, Inc. on September 24, 2015 for $25,000 to fund short-term working capital. The Planning Partners Note accrues interest at a rate of 8% per annum and becomes due on September 23, 2016 and is convertible into common stock as part of our next financing. The Company recorded accrued interest of $38 as of September 30, 2015.

13. NOTES PAYABLE, CAPITALIZED

13. NOTES PAYABLE, CAPITALIZED LEASES AND LONG TERM DEBT	12 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
13. NOTES PAYABLE, CAPITALIZED LEASES AND LONG TERM DEBT	Notes payable, capitalized leases and long term debt as of September 30, 2015 and 2014 consisted of the following: September 30, September 30, 2015 2014 Capital Source Business Finance Group $ 364,757 $ 488,398 Note payable to Umpqua Bank 199,935 200,000 Secured note payable to J3E2A2Z LP - related party 600,000 600,000 TransTech capitalized leases, net of capitalized interest 0 2,562 Total debt 1,164,692 1,290,960 Less current portion of long term debt (1,164,692 ) (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 Note Payable to Umpqua Bank The Company has a $199,935 Business Loan Agreement with Umpqua Bank (the “Umpqua Loan”), which currently matures on December 31, 2015 and provides for interest at 3.25% per year. Related to this Umpqua Loan, the Company entered into a demand promissory note for $200,000 on January 10, 2014 with an entity affiliated with Ronald P. Erickson, our Chief Executive Officer. This demand promissory note will be effective in case of a default by the Company under the Umpqua Loan. The Company recorded accrued interest of $10,340 as of September 30, 2015. Note Payables to Ronald P. Erickson or J3E2A2Z LP The Company also has two other demand promissory notes payable to entities affiliated with Mr. Erickson, totaling $600,000. Each of these notes were issued between January and July 2014, provide for interest of 3% per year and now mature on December 31, 2015. They also provide for a second lien on our assets if not repaid by December 31, 2015 or converted into convertible debentures or equity on terms acceptable to the Mr. Erickson. The Company recorded accrued interest of $22,167 as of September 30, 2015. Aggregate maturities totaling $1,164,692 are all due within twelve months.

14. EQUITY

14. EQUITY	12 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
14. EQUITY	Authorized Capital Stock The Company has authorized 105,000,000 shares of capital stock, of which 100,000,000 are shares of voting common stock, par value $0.001 per share, and 5,000,000 are shares of voting preferred stock, par value $0.001 per share. Voting Preferred Stock The Company is authorized to issue up to 5,000,000 shares of preferred stock with a par value of $0.001. On July 21, 2015, the Company filed with the Nevada Secretary of State an Amended and Restated Certificate of Designations, Preferences and Rights for our Series A Convertible Preferred Stock. Among other things, the Amended and Restated Certificate changed the conversion price and the stated value of the Series A Preferred from $0.10 (pre reverse stock split) to $30.00 (post-reverse stock split), and added a provision adjusting the conversion price upon the occurrence of certain events. Under the Amended and Restated Certificate, the Company has 11,667 shares of Series A Preferred authorized, all of which are outstanding. Each holder of outstanding shares of Series A Preferred is entitled to the number of votes equal to the number of whole shares of common stock into which the shares of Series A Preferred held by such holder are then convertible as of the applicable record date. The Company cannot 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 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 year ended September 30, 2015, the Company sold 11,667 Series A Preferred Stock to two investors totaling $350,000. These shares are expected to be convertible into 11,667 shares of common stock at $30.00 per share, subject to adjustment, for a period of five years. The Series A Preferred Stock has voting rights and may not be redeemed without the consent of the holder. The Company also issued (i) a Series C five-year Warrant for 23,334 shares of common stock at an exercise price of $30.00 per share, which is callable at $60.00 per share; and (ii) a Series D five-year Warrant for 23,334 shares of common stock at an exercise price of $45.00 per share, which is callable at $90.00 per share. The Series A Preferred Stock and Series C and D Warrants had registration rights. On July 20, 2015, the two investors entered into an Amendment to Series A Preferred Stock Terms whereby they agreed to the terms of the Amended and Restated Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock and waived all registration rights. On August 14, 2015, the warrant exercise price was adjusted to $2.50 per share due to the issuance of common stock at that price. Common Stock All of the offerings and sales described below were deemed to be exempt under Rule 506 of Regulation D and/or Section 4(a)(2) of the Securities Act. No advertising or general solicitation was employed in offering the securities, the offerings and sales were made to a limited number of persons, all of whom were accredited investors and transfer was restricted by the company in accordance with the requirements of Regulation D and the Securities Act. All issuances to accredited and non-accredited investors were structured to comply with the requirements of the safe harbor afforded by Rule 506 of Regulation D, including limiting the number of non-accredited investors to no more than 35 investors who have sufficient knowledge and experience in financial and business matters to make them capable of evaluating the merits and risks of an investment in our securities. The following equity issuances occurred during the year ended September 30, 2015: On December 14, 2014, the Company entered into an Advisory Agreement with Lester Garfinkel for financial consulting services. Under the Advisory Agreement, Mr. Garfinkel was awarded 167 shares of our common stock. The Company expensed $2,500 during the year ended September 30, 2015. On January 23, 2015, the Company issued 9,002 shares of restricted common stock to seven employees and directors for services during 2014. The shares were issued in accordance with the 2011 Stock Incentive Plan and were valued at $15.00 per share, the market price of our common stock. The Company expensed $135,000 during the year ended September 30, 2015. On February 23, 2015, the Company issued 1,700 shares of common stock to NVPR LLC related to a conversion of $25,499 under a 7% Convertible Debenture. On April 24, 2015, the Company filed a registration statement on Form S-1 to register $10 million of Company securities in a proposed public offering. The Company has applied for listing of the Company’s common stock and the warrants on The NASDAQ Capital Market. On May 6, 2015, the Company’s stockholders approved a reverse split of our common stock, in a ratio to be determined by the Company’s Board of Directors, of not less than 1-for-50 nor more than 1-for-150. On June 9, 2015, the Company’s Board of Directors determined that the ratio of the reverse split would be 1-for-150 , and the reverse split became effective on June 17, 2015. All warrant, option, share and per share information in this Form 10-Q gives retroactive effect for a 1-for-150 split with all numbers rounded up to the nearest whole share. The Company issued 962 fractional shares related to the reverse split. On August 3, 10, 13 and 14, 2015, the Company issued a total of 23,010 shares of common stock to KBM Worldwide, Inc. related to the conversion of $64,000 of debt and interest of $2,560 pursuant to a Securities Purchase Agreement dated January 27, 2015. The shares were issued at an average of $2.785 per share, with a low price of $2.50 per share. The Company recorded on a loss on conversion of $34,035 and allocated $34,035 to stockholder’s equity. On May 15, 2014, the Company issued 10,667 shares of common stock to White Oak Capital LLC related to a conversion under a 7% Convertible Debenture. The shares were valued at $160,000 or $15.00 per share. On June 12, 2014, the Company issued 2,000 shares of common stock to Dynasty Wealth, Inc. related to Financial Public Relations Group dated June 9, 2014. The shares were valued at $60,000 or $30.00 per share. On August 27, 2014, the Company entered into an Addendum to a Financial Consultant Agreement or Agreement with D. Weckstein and Co, Inc. for financial consulting and investment banking services. Under the Addendum, Weckstein was awarded 6,667 shares of the Company’s common stock on August 27, 2014. The shares were valued at $30.00 per share by the parties. The Company expensed $70,000 during the year ended September 30, 2014 or $10.50, the closing price on August 27, 2014. Warrants to Purchase Common Stock The following warrant issuances occurred during the year ended September 30, 2015: On June 14, 2013, the Company entered into a Purchase Agreement, Warrants, and Registration Rights Agreement with Special Situations Technology Funds and forty other accredited investors, pursuant to which the Company issued 348,685 shares of common stock at $15.00 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 348,685 shares of common stock at $22.50 per share; and (ii) five year Series B Warrants to purchase a total of 348,685 shares of common stock at $30.00 per share. The Company also issued 34,871 placement agent warrants exercisable at $15.00 per share to GVC Capital, with an obligation to issue up to 34,871 additional placement agent warrants exercisable at $22.50 per share. The placement agent warrants shall issue only upon the exercise of the Series A Warrants by the investors, and are issuable ratably based upon the number of Warrants exercised by the investors. The placement agent warrants have a term of five years from the date of closing of the transaction. On August 14, 2015, the warrant exercise price was adjusted to $2.50 per share due the issuance of common stock at this price. Warrants to purchase 4,000 shares of common stock at $15.00 per share were forfeited. The following warrant issuances occurred during the year ended September 30, 2014: The Company issued a warrant to purchase 97,169 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 $30.00 per share expires November 10, 2018 and the per share price is subject to adjustment. On August 14, 2015, the warrant exercise price was adjusted to $2.50 per share due the issuance of common stock at this price. On April 2, 2014, the Company issued a warrant to purchase 6,667 shares of common stock to Thomas Furness, a supplier, at an exercise price of $30.00 per share. The Warrant expires on April 1, 2019. On April 2, 2014, the Company issued a warrant to purchase 1,334 shares of common stock to Delacore LLC, a supplier, at an exercise price of $30.00 per share. The Warrant expires on April 1, 2017. On June 11, 2014, the Company issued a warrant to purchase 3,334 shares of common stock to Designsense Ltd, a supplier, at an exercise price of $30.00 per share. The Warrant expires on June 10, 2017. On June 11, 2014, the Company issued a warrant to purchase 1,667 shares of common stock to Alan Tompkins, a supplier, at an exercise price of $30.00 per share. The Warrant expires on June 10, 2017. On June 12, 2014, the Company issued a warrant for 1,334 shares of common stock to Dynasty Wealth, Inc. The warrants vested on June 12, 2014, are exercisable at $30.00 per share expire on September 3, 2016. Warrants to purchase 11,180 shares of common stock at $46.35 per share were forfeited. A summary of the warrants issued as of September 30, 2015 were as follows: September 30, 2015 Weighted Average Exercise Shares Price Outstanding at beginning of period 857,083 $ 26.28 Issued 46,667 37.50 Exercised - - Forfeited - - Expired (4,000 ) 15.00 Outstanding at end of period 899,750 $ 3.18 Exerciseable at end of period 899,750 A summary of the status of the warrants outstanding as of September 30, 2015 is presented below: September 30, 2015 Weighted Weighted Weighted Average Average Average Number of Remaining Exercise Shares Exercise Warrants Life ( In Years) Price Exerciseable Price 876,078 3.31 $ 2.50 876,078 $ 2.50 3,334 1.13 19.50-22.50 3,334 19.50-22.50 20,338 1.83 30.00 20,338 30.00 899,750 2.94 $ 3.18 899,750 $ 3.18 The significant weighted average assumptions relating to the valuation of the Company’s warrants for the year ended September 30, 2015 were as follows: Dividend yield 0% Expected life 3 Expected volatility 90% Risk free interest rate 0.7% At September 30, 2015, vested warrants totaling 876,078 shares had an aggregate intrinsic value of $2,715,842.

15. STOCK OPTIONS

15. STOCK OPTIONS	12 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
15. STOCK OPTIONS	Description of Stock Option Plan On April 29, 2011, the Company’s 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 46,667 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 93,333 shares. Determining Fair Value under ASC 505 The Company records compensation expense associated with stock options and other equity-based compensation using the Black-Scholes-Merton option valuation model for estimating fair value of stock options granted under our plan. The Company amortizes the fair value of stock options on a ratable basis over the requisite service periods, which are generally the vesting periods. The expected life of awards granted represents the period of time that they are expected to be outstanding. The Company estimates the volatility of our common stock based on the historical volatility of its own common stock over the most recent period corresponding with the estimated expected life of the award. The Company bases the risk-free interest rate used in the Black Scholes-Merton option valuation model on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent remaining term equal to the expected life of the award. The Company has not paid any cash dividends on our common stock and does not anticipate paying any cash dividends in the foreseeable future. Consequently, the Company uses an expected dividend yield of zero in the Black-Scholes-Merton option valuation model and adjusts share-based compensation for changes to the estimate of expected equity award forfeitures based on actual forfeiture experience. The effect of adjusting the forfeiture rate is recognized in the period the forfeiture estimate is changed. Stock Option Activity The Company had the following stock option transactions during the year ended September 30, 2015: During the year ended September 30, 2015, twelve employees and directors, forfeited stock option grants for 41,621 shares of common stock at $18.29 per share. On January 23, 2015, three employees were issued performance grants for 11,335 shares of common stock at $15.00 per share. The grants were issued in accordance with the 2011 Stock Incentive Plan, vest quarterly over three years after being earned and expire January 22, 2020. As of September 30, 2015, none of the stock option grants were earned. The Company had the following stock option transactions during the year ended September 30, 2014: During the year ended September 30, 2015, two employees of TransTech, forfeited stock option grants for 200 shares of common stock at $31.50 per share. On April 2, 2014, the Company issued stock option grants to two employees totaling 2,633 shares at $15.00 per share. The grants vest quarterly over three years and expire on April 1, 2019. There are currently 57,407 options to purchase common stock at an average exercise price of $18.435 per share outstanding as of September 30, 2015 under the 2011 Stock Incentive Plan. The Company recorded $65,463 and $87,550 of compensation expense, net of related tax effects, relative to stock options for the years ended September 30, 2015 and 2014 in accordance with ASC 505. Net loss per share (basic and diluted) associated with this expense was approximately ($0.058) and ($.079) per share, respectively. At September 30, 2015, there is approximately $185,211 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 4.24 years. Stock option activity for the year ended September 30, 2015 and 2014 was as follows: Weighted Average Options Exercise Price $ Outstanding as of September 30, 2013 84,900 18.954 1,609,200 Granted 2,633 15.000 39,500 Exercised - - - Forfeitures (200 ) (32.500 ) (6,500 ) Outstanding as of September 30, 2014 87,333 18.804 1,642,200 Granted 11,335 15.000 170,025 Exercised - - - Forfeitures (41,261 ) (18.286 ) (754,500 ) Outstanding as of September 30, 2015 57,407 $ 18.425 $ 1,057,725 The following table summarizes information about stock options outstanding and exercisable at September 30, 2015: Weighted Weighted Weighted Average Average Average Range of Number Remaining Life Exercise Price Number Exercise Price Exercise Prices Outstanding In Years Exerciseable Exerciseable Exerciseable 13.500 3,334 2.38 $ 13.50 3,334 $ 13.50 15.000 20,970 3.83 15.00 6,837 15.00 19.500 19,002 4.50 19.50 19,002 19.50 22.500 13,334 4.63 22.50 13,334 22.50 36.000 767 - 36.00 934 36.00 57,407 4.24 $ 18.43 43,441 $ 20.35 There is no aggregate intrinsic value of the exercisable options as of September 30, 2015.

16. OTHER SIGNIFICANT TRANSACTI

16. OTHER SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES	12 Months Ended
	Sep. 30, 2015
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. The Company a $199,935 Business Loan Agreement with Umpqua Bank (the “Umpqua Loan”), which currently matures on December 31, 2015 and provides for interest at 3.25% per year. Related to the Umpqua Loan, the Company entered into a demand promissory note for $200,000 on January 10, 2014 with an entity with which Ronald P. Erickson, our Chief Executive Officer, is affiliated. This demand promissory note will be effective in case of a default by us under the Umpqua Loan. The Company have two other demand promissory notes payable to entities affiliated with Mr. Erickson, totaling $600,000. Each of these notes were issued between January and July 2014, provide for interest of 3% per year and now mature on December 31, 2015. They also provide for a second lien on our assets if not repaid by December 31, 2015 or converted into convertible debentures or equity on terms acceptable to the Mr. Erickson. Mr. Erickson and/or entities with which he is affiliated also have advanced $708,500 and have unreimbursed expenses and compensation of approximately $344,221. The Company Mr. Erickson, or entities with which he is affiliated, $1,652,721 as of September 30, 2015.

17. COMMITMENTS, CONTINGENCIES

17. COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS	12 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
17. COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS	Legal Proceedings The Company may from time to time become a party to various legal proceedings arising in the ordinary course of our business. The Company is currently not a party to any pending legal proceeding that is not ordinary routine litigation incidental to our business. Properties and Operating Leases The Company is obligated under various non-cancelable operating leases for its various facilities and certain equipment. Corporate Offices The Company’s executive office is located at 500 Union Street, Suite 420, Seattle, Washington, USA, 98101. The Company leases 2,244 square feet and its net monthly payment is $2,535. The Company leases this office on a month to month basis. 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. In March 2011, the lease was extended for a five year term at a monthly rental of $4,751. There are two additional five year renewals available with a set accelerating increase of 10% per 5 year term. The aggregate future minimum lease payments under operating leases as of June 30, 2015 were $26,330.

18. INCOME TAXES

18. INCOME TAXES	12 Months Ended
	Sep. 30, 2015
Income Tax Disclosure [Abstract]
18. INCOME TAXES	The Company has incurred losses since inception, which have generated net operating loss carryforwards. The net operating loss carryforwards arise from United States sources. Pretax losses arising from United States operations were approximately $773,000 for the year ended September 30, 2015. Pretax losses arising from United States operations were approximately $835,000 for the year ended September 30, 2014. Section 382 of the Internal Revenue Code generally imposes an annual limitation on the amount of net operating loss carryforwards that may be used to offset taxable income when a corporation has undergone significant changes in its stock ownership. There can be no assurance that the Company will be able to utilize any net operating loss carryforwards in the future. For the year ended September 30, 2015, the Company’s effective tax rate differs from the federal statutory rate principally due to net operating losses and warrants issued for services. The principal components of the Company’s deferred tax assets at September 30, 2015 are as follows: 2015 2014 U.S. operations loss carry forward at statutory rate of 34% $ (6,426,360 ) $ (6,163,645 ) Non-U.S. operations loss carry forward at statutory rate of 20.5% 0 0 Total (6,426,360 ) (6,163,645 ) Less Valuation Allowance 6,426,360 6,163,645 Net Deferred Tax Assets - - Change in Valuation allowance $ 6,426,360 $ 6,163,645 A reconciliation of the United States Federal Statutory rate to the Company’s effective tax rate for the period ended September 30, 2015 and 2014 is as follows: 2015 2014 Federal Statutory Rate -34.0 % -34.0 % Increase in Income Taxes Resulting from: Change in Valuation allowance 34.0 % 34.0 % Effective Tax Rate 0.0 % 0.0 %

19. SUBSEQUENT EVENTS

19. SUBSEQUENT EVENTS	12 Months Ended
	Sep. 30, 2015
Subsequent Events [Abstract]
19. SUBSEQUENT EVENTS	The Company evaluated subsequent events, for the purpose of adjustment or disclosure, up through the date the financial statements were issued. As of November 3, 2015, the Company received commitments from debtors to convert $1,000,000 into common stock of the Company as part of the Company’s proposed listing on The NASDAQ Capital Market. These conversions are expected to increase stockholder’s equity by $1,000,000. The Company entered into convertible notes payable with accredited investors during September 2015 and October 2015 totaling $255,000 to fund short-term working capital. Notes payable accrue interest at a rate of 8% per annum and becomes due during September and October 2016 and are convertible into common stock as part of the Company’s next financing.

3. SIGNIFICANT ACCOUNTING POL26

3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS (Policies)	12 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
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 were prepared in conformity with U.S. generally accepted accounting principles (“GAAP”).
PRINCIPLES OF CONSOLIDATION	The consolidated financial statements include the accounts of the Company and its wholly owned and majority-owned subsidiaries, TransTech Systems, Inc. Inter-Company items and transactions have been eliminated in consolidation.
CASH AND CASH EQUIVALENTS	The Company classifies highly liquid temporary investments with an original maturity of three months or less when purchased as cash equivalents. The Company maintains cash balances at various financial institutions. Balances at US banks are insured by the Federal Deposit Insurance Corporation up to $250,000. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risk for cash on deposit.
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS	Accounts receivable consist primarily of amounts due to the Company from normal business activities. The Company maintains an allowance for doubtful accounts to reflect the expected non-collection of accounts receivable based on past collection history and specific risks identified within the portfolio. If the financial condition of the customers were to deteriorate resulting in an impairment of their ability to make payments, or if payments from customers are significantly delayed, additional allowances might be required.
INVENTORIES	Inventories consist primarily of printers and consumable supplies, including ribbons and cards, badge accessories, capture devices, and access control components held for resale and are stated at the lower of cost or market on the first-in, first-out (“FIFO”) method. Inventories are considered available for resale when drop shipped and invoiced directly to a customer from a vendor, or when physically received by TransTech at a warehouse location. The Company records a provision for excess and obsolete inventory whenever an impairment has been identified. There is a $20,000 and $10,000 reserve for impaired inventory as of September 30, 2015 and 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 amortized 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 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 Liabilities measured at fair value on a recurring basis are summarized as follows: Carrying Fair Value Measurements Using Inputs Amount at Financial Instruments Level 1 Level 2 Level 3 September 30, 2015 Liabilities: Derivative Instruments - Warrants $ - $ 2,196,716 $ - $ 2,196,716 Total $ - $ 2,196,716 $ - $ 2,196,716 September 30, 2015 Market price and estimated fair value of common stock: $ 5.600 Exercise price 2.50 Expected term (years) 0.25 Dividend yield - Expected volatility 105.1 % Risk-free interest rate 0.001 % 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 purchase 697,370 shares of common stock in connection with our June 2013 private placement of 348,685 shares of common stock. The exercise price of these warrants is $2.50 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 our 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 shares of common stock 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 allocated to stockholders’ equity and $2,735,290 allocated 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 September 30, 2014. During the year ended September 30, 2015, the Company recognized $104,716 of other expense resulting from the decrease in the fair value of the warrant liability at September 30, 2015. Carrying Fair Value Measurements Using Inputs Amount at Financial Instruments Level 1 Level 2 Level 3 September 30, 2015 Liabilities: Derivative Instruments - Warrants $ - $ 306,082 $ - $ 306,082 Total $ - $ 306,082 $ - $ 306,082 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. September 30, 2015 Market price and estimated fair value of common stock: $ 5.60 Exercise price 2.50 Expected term (years) 0.25 Dividend yield - Expected volatility 105.1 % Risk-free interest rate 0.001 % The Company issued a warrant to purchase 97,169 shares of common stock in connection with the November 2013 IDMC Services and License Agreement. The warrant price of $30.00 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 our common stock or securities exercisable, convertible or exchangeable for our common stock were issued at a price less than the exercise price. Therefore, the fair value of these warrants was 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 year ended September 30, 2015, the Company recognized $14,574 of other income related to the IDMC warrant. Derivative Instrument – Convertible Note Payable KBM Worldwide, Inc. The Company entered into a Convertible Note Payable with KBM Worldwide, Inc. on August 25, 2014 for $103,500. The Note was paid off on March 2, 2015. The Company entered into a Convertible Note Payable with KBM on September 24, 2014 for $63,000. The Note was repaid March 27, 2015. The Company entered into a Convertible Note Payable with KBM on January 27, 2015 for $64,000. The KBM Note accrued interest at a rate of 8% per annum and becomes due on October 27, 2015 and was convertible into common stock on July 26, 2015. On August 3, 10, 13 and 14, 2015, the Company issued a total of 23,010 shares of common stock to KBM Worldwide, Inc. related to the conversion of $64,000 of debt and interest of $2,560 pursuant to a Securities Purchase Agreement dated January 27, 2015. The shares were issued at an average of $2.785 per share, with a low price of $2.50 per share. During the year ended September 30, 2014, the Company recognized $166,500 of other expense related to the KBM Note. During the year ended September 30, 2015, the Company recognized $29,529 of other income and allocated $98,940 to stockholder’s equity related to the KBM Note. The Company recorded accrued interest of $898 as of June 30, 2015. The Company recorded on a loss on conversion of $34,035 and allocated $34,035 to stockholder’s equity. Derivative Instrument – Series A Convertible Preferred Stock Carrying Fair Value Measurements Using Inputs Amount at Financial Instruments Level 1 Level 2 Level 3 September 30, 2015 Liabilities: Derivative Instruments - Warrants $ - $ 147,004 $ - $ 147,004 Total $ - $ 147,004 $ - $ 147,004 Liabilities measured at fair value on a recurring basis are summarized as follows: September 30, 2015 Market price and estimated fair value of common stock: $ 5.60 Exercise price 2.50 Expected term (years) 0.25 Dividend yield - Expected volatility 105.1 % Risk-free interest rate 0.001 % 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 Series A Convertible Preferred Stock. The Company issued 11,667 shares of Series A Convertible Preferred Stock with attached warrants during the year ended September 30, 2015. The Company allocated $233,322 to stockholders equity and $116,678 to the derivative warrant liability. The warrants were issued with a down round provision. During the year ended September 30, 2015, the Company recognized $30,338 of other expense related to the warrant liability. Derivative Instrument – Convertible Note Payable Vis Vires Group, Inc. Carrying Fair Value Measurements Using Inputs Amount at Financial Instruments Level 1 Level 2 Level 3 September 30, 2015 Liabilities: Derivative Instruments - Convertible Promissory Note $ - $ 55,038 $ - $ 55,038 Total $ - $ 55,038 $ - $ 55,038 Liabilities measured at fair value on a recurring basis are summarized as follows: September 30, 2015 Market price and estimated fair value of common stock: $ 5.60 Exercise price 3.64 Expected term (years) 0.375 Dividend yield - Expected volatility 105.1 % Risk-free interest rate 0.75 % The Company entered into a Convertible Note Payable with Vis Vires Group, Inc. on August 10, 2015 for $84,000 to fund short-term working capital. The Vis Vires Note accrues interest at a rate of 8% per annum and becomes due on May 12, 2016 and is convertible into common stock on February 5, 2016. The Vis Vires Note is convertible at 65% of the average of the lowest three day trading price in the 10 days prior to conversion. The Company recorded accrued interest of $405 as of September 30, 2015. During the year ended September 30, 2015, the Company recognized $55,038 of other expense related to the Vis Vires Note. The recorded value of other financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable, other current assets, and accounts payable and accrued expenses approximate the fair value of the respective assets and liabilities at September 30, 2015 and 2014 based upon the short-term nature of the assets and liabilities.
REVENUE RECOGNITION	Visualant and TransTech revenue are derived from products and services. Revenue is considered realized when the products or 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, the Company defers 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 taxes are calculated based upon the asset and liability method of accounting. Deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the “more likely than not” standard to allow for recognition of such an asset. In addition, realization of an uncertain income tax position must be estimated as “more likely than not” (i.e., greater than 50% likelihood of receiving a benefit) before it can be recognized in the financial statements . The Company recognizes refundable and deferred assets to the extent that management has determined their realization. As of September 30, 2015 and 2014, the Company had refundable tax assets related to TransTech of $0 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 September 30, 2015, there were options outstanding for the purchase of 57,407 common shares, warrants for the purchase of 899,750 common shares, 11,667 shares of our common stock issuable upon the conversion of Series A Convertible Preferred Stock, up to 34,871 shares of our common stock issuable upon the exercise of placement agent warrants and an unknown number of shares related to the conversion of $109,000 in convertible promissory notes which could potentially dilute future earnings per share. As of September 30, 2014, there were options outstanding for the purchase of 87,333 common shares, warrants for the purchase of 857,083 common shares and up to 34,871 shares of our common stock issuable upon the exercise of placement agent warrants and an unknown number of shares related to the conversion of $166,500 in convertible promissory notes which could potentially dilute future earnings per share.
DIVIDEND POLICY	The Company has never paid any cash dividends and intends, for the foreseeable future, to retain any future earnings for the development of our business. Our future dividend policy will be determined by the board of directors on the basis of various factors, including our results of operations, financial condition, capital requirements and investment opportunities.
USE OF ESTIMATES	The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
RECENT ACCOUNTING PRONOUNCEMENTS	A variety of proposed or otherwise potential accounting standards are currently under study by standard setting organizations and various regulatory agencies. Due to the tentative and preliminary nature of those proposed standards, management has not determined whether implementation of such proposed standards would be material to our consolidated financial statements. In August 2014, FASB issued ASU 2014-15—Presentation of Financial Statements—Going Concern (ASC Subtopic 205-40): “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. In May 2014, FASB issued ASU 2014-09—Revenue from Contracts with Customers (Topic 606): “Section A—Summary and Amendments That Create Revenue from Contracts with Customers, (Topic 606) and Other Assets and Deferred Costs—Contracts with Customers (Subtopic 340-40), Section B—Conforming Amendments to Other Topics and Subtopics in the Codification and Status Tables, Section C—Background Information and Basis for Conclusions”. In July 2013, FASB issued ASU 2013-11—Income Taxes (ASC Topic 740): “ Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists New Accounting Standards Issued But Not Yet Adopted In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis In April 2015, the FASB issued ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”)

3. SIGNIFICANT ACCOUNTING POL27

3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS (Tables)	12 Months Ended
	Sep. 30, 2015
Derivative Instrument Convertible Note Payable
Fair value of financial Instruments	Carrying Fair Value Measurements Using Inputs Amount at Financial Instruments Level 1 Level 2 Level 3 September 30, 2015 Liabilities: Derivative Instruments - Warrants $ - $ 147,004 $ - $ 147,004 Total $ - $ 147,004 $ - $ 147,004
Valuation assumptions for liabilities measured at fair value on a recurring basis	September 30, 2015 Market price and estimated fair value of common stock: $ 5.60 Exercise price 2.50 Expected term (years) 0.25 Dividend yield - Expected volatility 105.1 % Risk-free interest rate 0.001 %
Derivative Instrument Number 2 Convertible Note Payable
Fair value of financial Instruments	Carrying Fair Value Measurements Using Inputs Amount at Financial Instruments Level 1 Level 2 Level 3 September 30, 2015 Liabilities: Derivative Instruments - Convertible Promissory Note $ - $ 55,038 $ - $ 55,038 Total $ - $ 55,038 $ - $ 55,038
Valuation assumptions for liabilities measured at fair value on a recurring basis	September 30, 2015 Market price and estimated fair value of common stock: $ 5.60 Exercise price 3.64 Expected term (years) 0.375 Dividend yield - Expected volatility 105.1 % Risk-free interest rate 0.75 %
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 September 30, 2015 Liabilities: Derivative Instruments - Warrants $ - $ 2,196,716 $ - $ 2,196,716 Total $ - $ 2,196,716 $ - $ 2,196,716
Valuation assumptions for liabilities measured at fair value on a recurring basis	September 30, 2015 Market price and estimated fair value of common stock: $ 5.600 Exercise price 2.50 Expected term (years) 0.25 Dividend yield - Expected volatility 105.1 % Risk-free interest rate 0.001 %
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 September 30, 2015 Liabilities: Derivative Instruments - Warrants $ - $ 306,082 $ - $ 306,082 Total $ - $ 306,082 $ - $ 306,082
Valuation assumptions for liabilities measured at fair value on a recurring basis	September 30, 2015 Market price and estimated fair value of common stock: $ 5.60 Exercise price 2.50 Expected term (years) 0.25 Dividend yield - Expected volatility 105.1 % Risk-free interest rate 0.001 %

9. FIXED ASSETS (Tables)

9. FIXED ASSETS (Tables)	12 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Schedule of Property and equipment	Estimated June 30, 2015 Useful Lives Purchased Capital Leases Total Machinery and equipment 2-10 years $ 192,374 $ 87,038 $ 279,412 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 (570,558 ) (233,147 ) (803,705 ) $ 366,250 $ - $ 366,250

10. INTANGIBLE ASSETS (Tables)

10. INTANGIBLE ASSETS (Tables)	12 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Schedule Of Intangible Assets	Estimated September 30, September 30, Useful Lives 2015 2014 Customer contracts 5 years $ 983,645 $ 983,645 Technology 5 years 712,500 712,500 Less: accumulated amortization (1,538,145 ) (1,264,492 ) Intangible assets, net $ 158,000 $ 431,653

13. NOTES PAYABLE, CAPITALIZE30

13. NOTES PAYABLE, CAPITALIZED LEASES AND LONG TERM DEBT (Tables)	12 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Notes payable, capitalized leases and long term debt	September 30, September 30, 2015 2014 Capital Source Business Finance Group $ 364,757 $ 488,398 Note payable to Umpqua Bank 199,935 200,000 Secured note payable to J3E2A2Z LP - related party 600,000 600,000 TransTech capitalized leases, net of capitalized interest 0 2,562 Total debt 1,164,692 1,290,960 Less current portion of long term debt (1,164,692 ) (1,290,960 ) Long term debt $ - $ -

14. EQUITY (Tables)

14. EQUITY (Tables)	12 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Summary of the warrants issued	September 30, 2015 Weighted Average Exercise Shares Price Outstanding at beginning of period 857,083 $ 26.28 Issued 46,667 37.50 Exercised - - Forfeited - - Expired (4,000 ) 15.00 Outstanding at end of period 899,750 $ 3.18 Exerciseable at end of period 899,750
Summary of the status of the warrants outstanding	September 30, 2015 Weighted Weighted Weighted Average Average Average Number of Remaining Exercise Shares Exercise Warrants Life ( In Years) Price Exerciseable Price 876,078 3.31 $ 2.50 876,078 $ 2.50 3,334 1.13 19.50-22.50 3,334 19.50-22.50 20,338 1.83 30.00 20,338 30.00 899,750 2.94 $ 3.18 899,750 $ 3.18
Weighted average assumptions relating to the valuation of the Companys warrants	Dividend yield 0% Expected life 3 Expected volatility 90% Risk free interest rate 0.7%

15. STOCK OPTIONS (Tables)

15. STOCK OPTIONS (Tables)	12 Months Ended
	Sep. 30, 2015
Notes to Financial Statements
Stock option activity	Weighted Average Options Exercise Price $ Outstanding as of September 30, 2013 84,900 18.954 1,609,200 Granted 2,633 15.000 39,500 Exercised - - - Forfeitures (200 ) (32.500 ) (6,500 ) Outstanding as of September 30, 2014 87,333 18.804 1,642,200 Granted 11,335 15.000 170,025 Exercised - - - Forfeitures (41,261 ) (18.286 ) (754,500 ) Outstanding as of September 30, 2015 57,407 $ 18.425 $ 1,057,725
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 13.500 3,334 2.38 $ 13.50 3,334 $ 13.50 15.000 20,970 3.83 15.00 6,837 15.00 19.500 19,002 4.50 19.50 19,002 19.50 22.500 13,334 4.63 22.50 13,334 22.50 36.000 767 - 36.00 934 36.00 57,407 4.24 $ 18.43 43,441 $ 20.35

18. INCOME TAXES (Tables)

18. INCOME TAXES (Tables)	12 Months Ended
	Sep. 30, 2015
Income Tax Disclosure [Abstract]
Schedule of components of the Company’s deferred tax assets	2015 2014 U.S. operations loss carry forward at statutory rate of 34% $ (6,426,360 ) $ (6,163,645 ) Non-U.S. operations loss carry forward at statutory rate of 20.5% 0 0 Total (6,426,360 ) (6,163,645 ) Less Valuation Allowance 6,426,360 6,163,645 Net Deferred Tax Assets - - Change in Valuation allowance $ 6,426,360 $ 6,163,645
Schedule of effective tax rate reconciliation	2015 2014 Federal Statutory Rate -34.0 % -34.0 % Increase in Income Taxes Resulting from: Change in Valuation allowance 34.0 % 34.0 % Effective Tax Rate 0.0 % 0.0 %

3. SIGNIFICANT ACCOUNTING POL34

3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS (Details)	Sep. 30, 2015USD ($)
Fair Value Measurements Level 1 [Member] | Derivative Instrument Convertible Note Payable
Liabilities:
Derivative Instruments - Convertible Promissory Note	$ 0
Total	0
Fair Value Measurements Level 1 [Member] | Derivative Instrument Number 2 Convertible Note Payable
Liabilities:
Derivative Instruments - Convertible Promissory Note	0
Total	0
Fair Value Measurements Level 1 [Member] | Warrants with the June 2013 Private Placement
Liabilities:
Derivative Instruments - Warrants with the June 2013 Private Placement	0
Total	0
Fair Value Measurements Level 1 [Member] | Warrants - November 2013 IDMC Services and License Agreement
Liabilities:
Derivative Instruments - Warrants with the June 2013 Private Placement	0
Total	0
Fair Value Measurements Level 2 [Member] | Derivative Instrument Convertible Note Payable
Liabilities:
Derivative Instruments - Convertible Promissory Note	147,004
Total	147,004
Fair Value Measurements Level 2 [Member] | Derivative Instrument Number 2 Convertible Note Payable
Liabilities:
Derivative Instruments - Convertible Promissory Note	55,038
Total	55,038
Fair Value Measurements Level 2 [Member] | Warrants with the June 2013 Private Placement
Liabilities:
Derivative Instruments - Warrants with the June 2013 Private Placement	2,196,716
Total	2,196,716
Fair Value Measurements Level 2 [Member] | Warrants - November 2013 IDMC Services and License Agreement
Liabilities:
Derivative Instruments - Warrants with the June 2013 Private Placement	306,082
Total	306,082
Fair Value Measurements Level 3 [Member] | Derivative Instrument Convertible Note Payable
Liabilities:
Derivative Instruments - Convertible Promissory Note	0
Total	0
Fair Value Measurements Level 3 [Member] | Derivative Instrument Number 2 Convertible Note Payable
Liabilities:
Derivative Instruments - Convertible Promissory Note	0
Total	0
Fair Value Measurements Level 3 [Member] | Warrants with the June 2013 Private Placement
Liabilities:
Derivative Instruments - Warrants with the June 2013 Private Placement	0
Total	0
Fair Value Measurements Level 3 [Member] | Warrants - November 2013 IDMC Services and License Agreement
Liabilities:
Derivative Instruments - Warrants with the June 2013 Private Placement	0
Total	0
Carrying Value [Member] | Derivative Instrument Convertible Note Payable
Liabilities:
Derivative Instruments - Convertible Promissory Note	147,004
Total	147,004
Carrying Value [Member] | Derivative Instrument Number 2 Convertible Note Payable
Liabilities:
Derivative Instruments - Convertible Promissory Note	55,038
Total	55,038
Carrying Value [Member] | Warrants with the June 2013 Private Placement
Liabilities:
Derivative Instruments - Warrants with the June 2013 Private Placement	2,196,716
Total	2,196,716
Carrying Value [Member] | Warrants - November 2013 IDMC Services and License Agreement
Liabilities:
Derivative Instruments - Warrants with the June 2013 Private Placement	306,082
Total	$ 306,082

3. SIGNIFICANT ACCOUNTING POL35

3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS (Details1)	12 Months Ended
	Sep. 30, 2015$ / shares
Derivative Instrument Convertible Note Payable
Market price and estimated fair value of common stock:	$ 5.60
Exercise price	2.50
Expected term (years)	3 months
Dividend yield	0.00%
Expected volatility	105.10%
Risk-free interest rate	0.001%
Derivative Instrument Number 2 Convertible Note Payable
Market price and estimated fair value of common stock:	$ 5.60
Exercise price	3.64
Expected term (years)	4 months 15 days
Dividend yield	0.00%
Expected volatility	105.10%
Risk-free interest rate	0.75%
Warrants - June 2013 Private Placement
Market price and estimated fair value of common stock:	$ 5.600
Exercise price	2.50
Expected term (years)	3 months
Dividend yield	0.00%
Expected volatility	105.10%
Risk-free interest rate	0.001%
Warrants - November 2013 IDMC Services and License Agreement
Market price and estimated fair value of common stock:	$ 5.60
Exercise price	2.50
Expected term (years)	3 months
Dividend yield	0.00%
Expected volatility	105.10%
Risk-free interest rate	0.001%

3. SIGNIFICANT ACCOUNTING POL36

3. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS (Details Narrative) - USD ($)	12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Reserve for impaired inventory	$ 20,000	$ 10,000
Tax assets related to TransTech	$ 0	$ 29,590
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 RECEIVABLE_CUSTOM37

7. ACCOUNTS RECEIVABLE/CUSTOMER CONCENTRATION (Details Narrative) - USD ($)	Sep. 30, 2015	Sep. 30, 2014
Notes to Financial Statements
Accounts receivable, net of allowance	$ 619,849	$ 815,460

9. FIXED ASSETS (Details)

9. FIXED ASSETS (Details) - USD ($)	Sep. 30, 2015	Sep. 30, 2014
Machinery and equipment (2-10 years)	$ 279,412
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	(803,705)	$ (742,676)
Property and equipment, net	366,250	$ 447,236
PurchasedMember
Machinery and equipment (2-10 years)	192,374
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	(570,558)
Property and equipment, net	366,250
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	(233,147)
Property and equipment, net	$ 0

9. FIXED ASSETS (Details Narrat

9. FIXED ASSETS (Details Narrative) - USD ($)	12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Notes to Financial Statements
Property and equipment, net	$ 366,250	$ 447,236
Property and equipment, accumulated depreciation	803,705	742,676
Depreciation expense	$ 79,576	$ 64,357

10. INTANGIBLE ASSETS (Details)

10. INTANGIBLE ASSETS (Details) - USD ($)	12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Less: accumulated amortization	$ (1,538,145)	$ (1,264,492)
Intangible assets, net	158,000	431,653
Customer Contracts [Member]
Intangible Assets Gross	$ 983,645	983,645
Estimated Useful life	5 years
Technology [Member]
Intangible Assets Gross	$ 712,500	$ 712,500
Estimated Useful life	5 years

10. INTANGIBLE ASSETS (Details

10. INTANGIBLE ASSETS (Details Narrative) - USD ($)	12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Notes to Financial Statements
Amortization expense	$ 273,653	$ 339,229

11. ACCOUNTS PAYABLE (Details N

11. ACCOUNTS PAYABLE (Details Narrative) - USD ($)	Sep. 30, 2015	Sep. 30, 2014
Notes to Financial Statements
Accounts payable	$ 2,520,223	$ 2,234,123
Percentage of accounts payable by 2 vendors with accounts payble on excess of 10%	12.50%	22.60%

13. NOTES PAYABLE, CAPITALIZE43

13. NOTES PAYABLE, CAPITALIZED LEASES AND LONG TERM DEBT (Details) - USD ($)	Sep. 30, 2015	Sep. 30, 2014
Notes Payable Capitalized Leases And Long Term Debt Details
Capital Source Business Finance Group	$ 364,757	$ 488,398
Note payable to Umpqua Bank	199,935	200,000
Secured note payable to J3E2A2Z LP - related party	600,000	600,000
TransTech capitalized leases, net of capitalized interest	0	2,562
Total debt	1,164,692	1,290,960
Less current portion of long term debt	(1,164,692)	(1,290,960)
Long term debt	$ 0	$ 0

14. EQUITY (Details)

14. EQUITY (Details) - Warrants	12 Months Ended
	Sep. 30, 2015$ / sharesshares
Shares
Outstanding at beginning of period	857,083
Issued	46,667
Exercised	0
Forfeited	0
Expired	(4,000)
Outstanding at end of period	899,750
Exerciseable at end of period	899,750
Weighted Average Exercise Price:
Outstanding at beginning of period | $ / shares	$ 26.28
Issued | $ / shares	37.50
Exercised | $ / shares	0
Forfeited | $ / shares	0
Expired | $ / shares	15
Outstanding at end of period | $ / shares	$ 3.18

14. EQUITY (Details 1)

14. EQUITY (Details 1)	12 Months Ended
	Sep. 30, 2015$ / sharesshares
Number of Warrants | shares	899,750
Weighted Average Remaining Life (years)	2 years 11 months 8 days
Weighted Average Exercise Price	$ 3.18
Shares Exercisable | shares	899,750
Weighted Average Exercise Price	$ 3.18
Warrant 1
Number of Warrants | shares	876,078
Weighted Average Remaining Life (years)	3 years 3 months 22 days
Weighted Average Exercise Price	$ 2.50
Shares Exercisable | shares	876,078
Weighted Average Exercise Price	$ 2.50
Warrant 2
Number of Warrants | shares	3,334
Weighted Average Remaining Life (years)	1 year 1 month 17 days
Shares Exercisable | shares	3,334
Warrant 2 | Minimum [Member]
Weighted Average Exercise Price	$ 19.50
Weighted Average Exercise Price	19.50
Warrant 2 | Maximum [Member]
Weighted Average Exercise Price	22.50
Weighted Average Exercise Price	$ 22.50
Warrant 3
Number of Warrants | shares	20,338
Weighted Average Remaining Life (years)	1 year 9 months 29 days
Weighted Average Exercise Price	$ 30
Shares Exercisable | shares	20,338
Weighted Average Exercise Price	$ 30

14. EQUITY (Details 2)

14. EQUITY (Details 2)	12 Months Ended
	Sep. 30, 2015
Equity Details 2
Dividend yield	0.00%
Expected life	3 years
Expected volatility	90.00%
Risk free interest rate	0.70%

15. STOCK OPTIONS (Details)

15. STOCK OPTIONS (Details) - Stock Options - USD ($)	12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Shares:
Outstanding at beginning of period	87,333	84,900
Shares granted	11,335	2,633
Shares exercised	0	0
Shares forfeitures	(41,261)	(200)
Outstanding at end of period	57,407	87,333
Weighted Average Exercise Price:
Outstanding at beginning of period	$ 18.804	$ 18.954
Shares granted	15	15
Shares exercised	0	0
Shares forfeitures	(18.286)	(32.500)
Outstanding at end of period	$ 18.425	$ 18.804
Aggregate Intrinsic Value
Aggregate Intrinsic Value Outstanding, Beginning	$ 1,642,200	$ 1,609,200
Aggregate Intrinsic Value Outstanding, Granted	$ 170,025	$ 39,500
Aggregate Intrinsic Value Outstanding, Exercised	$ 0	$ 0
Aggregate Intrinsic Value Outstanding, Forefeitures	$ (754,500)	$ (6,500)
Aggregate Intrinsic Value Outstanding, End	$ 1,057,725	$ 1,642,200

15. STOCK OPTIONS (Details 1)

15. STOCK OPTIONS (Details 1)	12 Months Ended
	Sep. 30, 2015$ / sharesshares
Number of Outstanding Stock Options | shares	899,750
Weighted Average Remaining Life (years)	2 years 11 months 8 days
Weighted Average Exercise Price Exerciseable	$ 3.18
Number Exercisable | shares	899,750
Weighted Average Exercise Price Exerciseable	$ 3.18
Stock Options
Number of Outstanding Stock Options | shares	57,407
Weighted Average Remaining Life (years)	4 years 2 months 26 days
Weighted Average Exercise Price Exerciseable	$ 18.43
Number Exercisable | shares	43,441
Weighted Average Exercise Price Exerciseable	$ 20.35
Exercise Price 13.500
Number of Outstanding Stock Options | shares	3,334
Weighted Average Remaining Life (years)	2 years 4 months 17 days
Weighted Average Exercise Price Exerciseable	$ 13.50
Number Exercisable | shares	3,334
Weighted Average Exercise Price Exerciseable	$ 13.50
Exercise Price 15.000
Number of Outstanding Stock Options | shares	20,970
Weighted Average Remaining Life (years)	3 years 9 months 28 days
Weighted Average Exercise Price Exerciseable	$ 15
Number Exercisable | shares	6,837
Weighted Average Exercise Price Exerciseable	$ 15
Exercise Price 19.500
Number of Outstanding Stock Options | shares	19,002
Weighted Average Remaining Life (years)	4 years 6 months
Weighted Average Exercise Price Exerciseable	$ 19.50
Number Exercisable | shares	19,002
Weighted Average Exercise Price Exerciseable	$ 19.50
Exercise Price 22.500
Number of Outstanding Stock Options | shares	13,334
Weighted Average Remaining Life (years)	4 years 7 months 17 days
Weighted Average Exercise Price Exerciseable	$ 22.50
Number Exercisable | shares	13,334
Weighted Average Exercise Price Exerciseable	$ 22.50
Exercise Price 36.000
Number of Outstanding Stock Options | shares	767
Weighted Average Exercise Price Exerciseable	$ 36
Number Exercisable | shares	934
Weighted Average Exercise Price Exerciseable	$ 36

15. STOCK OPTIONS (Details Narr

15. STOCK OPTIONS (Details Narrative) - USD ($)	12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Compensation expense	$ 65,463	$ 87,550
Options to purchase common stock under 2011 Stock Incentive Plan	899,750
2011 Stock Incentive Plan
Options to purchase common stock under 2011 Stock Incentive Plan	57,407
Average exercise price under 2011 Stock Incentive Plan	$ 18.435

16. OTHER SIGNIFICANT TRANSAC50

16. OTHER SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES (Details narrative)	12 Months Ended
	Sep. 30, 2015USD ($)
Chief Executive Officer
Accrued liabilities related parties from advances from Ronald P. Erickson	$ 708,500

18. INCOME TAXES - Deferred tax

18. INCOME TAXES - Deferred tax assets (Details) - USD ($)	12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Income Taxes - Deferred Tax Assets Details
U.S. operations loss carry forward at statutory rate of 34%	$ (6,426,360)	$ (6,163,645)
Non-U.S. operations loss carry forward at statutory rate of 20.5%	0	0
Total	(6,426,360)	(6,163,645)
Less Valuation Allowance	6,426,360	6,163,645
Net Deferred Tax Assets	0	0
Change in Valuation allowance	$ 6,426,360	$ 6,163,645

18. INCOME TAXES - Effective ta

18. INCOME TAXES - Effective tax rate (Details)	12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Income Taxes - Effective Tax Rate Details
Federal Statutory Rate	(34.00%)	(34.00%)
Increase in Income Taxes Resulting from:
Change in Valuation allowance	34.00%	34.00%
Effective Tax Rate	0.00%	0.00%