Know Labs (KNWN) 10-Q/A 5 Jun 17 2017 Q1 Quarterly report (amended) Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Dec. 31, 2016	Feb. 21, 2017
Document And Entity Information
Entity Registrant Name	VISUALANT INC
Entity Central Index Key	1,074,828
Document Type	10-Q/A
Document Period End Date	Dec. 31, 2016
Amendment Flag	true
Amendment Description	This Amendment No. 1 on Form 10-Q/A amends the Company's Quarterly Report on Form 10-Q/A for the quarter ended December 31, 2016, as filed with the Securities and Exchange Commission (the "SEC") on February 21, 2017 (the "Original Filing"). The purpose of this Amendment No. 1 on Form 10-Q/A is to respond to certain comments received from the Staff of the SEC. For convenience and ease of reference, the Company is filing this Form 10-Q/A in its entirety with all applicable changes and unless otherwise stated, all information contained in this amendment is as of the filing date of the Original Filing. Except as stated herein, this Form 10-Q/A does not reflect events or transactions occurring after such filing date or modify or update those disclosures in the original Form 10-Q that may have been affected by events or transactions occurring subsequent to such filing date.
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 Common Stock, Shares Outstanding		3,750,962
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,017

CONSOLIDATED BALANCE SHEETS (Un

CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Dec. 31, 2016	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015
CURRENT ASSETS:
Cash and cash equivalents	$ 180,847	$ 188,309	$ 141,059	$ 82,266
Accounts receivable, net of allowance of $175,000 and $55,000, respectively	635,471	808,955
Prepaid expenses	17,233	20,483
Inventories, net	210,717	295,218
Total current assets	1,044,268	1,312,965
EQUIPMENT, NET	276,213	285,415
OTHER ASSETS
Intangible assets, net	30,625	43,750
Goodwill	0	983,645
Other assets	5,070	5,070
TOTAL ASSETS	1,356,176	2,630,845
CURRENT LIABILITIES:
Accounts payable - trade	2,098,895	1,984,326
Accounts payable - related parties	33,334	41,365
Accrued expenses	66,706	80,481
Accrued expenses - related parties	1,082,839	1,109,046
Derivative liability	562,714	145,282
Convertible notes payable	555,000	909,500
Notes payable - current portion of long term debt	1,100,071	1,170,339
Total current liabilities	5,499,559	5,440,339
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT
Common stock - $0.001 par value, 100,000,000 shares authorized, 3,570,010 and 2,356,152 shares issued and outstanding at 12/31/2016 and 9/30/2016, respectively	3,570	2,356
Additional paid in capital	26,090,915	24,259,702
Accumulated deficit	(30,240,056)	(27,073,365)
Total stockholders' deficit	(4,143,383)	(2,809,494)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	1,356,176	2,630,845
Series A Convertible Preferred stock [Member]
STOCKHOLDERS' DEFICIT
Preferred stock	0	0
Series C Convertible Preferred stock [Member]
STOCKHOLDERS' DEFICIT
Preferred stock	23	23
Series D Convertible Preferred stock [Member]
STOCKHOLDERS' DEFICIT
Preferred stock	$ 1,790	$ 1,790

CONSOLIDATED BALANCE SHEETS (U3

CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($)	Dec. 31, 2016	Sep. 30, 2016
CURRENT ASSETS:
Allowance for Accounts receivable	$ 175,000	$ 55,000
EQUITY (DEFICIT)
Preferred stock par value	$ 0.001	$ 0.001
Preferred stock shares authorized	5,000,000	5,000,000
Preferred stock shares issued	0	0
Preferred stock shares outstanding	0	0
Common stock par value	$ 0.001	$ 0.001
Common stock shares authorized	100,000,000	100,000,000
Common stock shares issued	3,570,010	2,356,152
Common stock shares outstanding	3,570,010	2,356,152
Series A Convertible Preferred stock [Member]
EQUITY (DEFICIT)
Preferred stock par value	$ 0.001	$ 0.001
Preferred stock shares authorized	23,334	23,334
Preferred stock shares issued	23,334	23,334
Preferred stock shares outstanding	23,334	23,334
Series C Convertible Preferred stock [Member]
EQUITY (DEFICIT)
Preferred stock par value	$ 0.001	$ 0.001
Preferred stock shares authorized	1,785,715	1,785,715
Preferred stock shares issued	1,785,715	1,785,715
Preferred stock shares outstanding	1,785,715	1,785,715
Series D Convertible Preferred stock [Member]
EQUITY (DEFICIT)
Preferred stock par value	$ 0.001	$ 0.001
Preferred stock shares authorized	3,906,250	3,906,250
Preferred stock shares issued	375,000	0
Preferred stock shares outstanding	375,000	0

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Income Statement [Abstract]
REVENUE	$ 1,148,800	$ 1,284,800
COST OF SALES	958,442	1,086,678
GROSS PROFIT	190,358	198,122
RESEARCH AND DEVELOPMENT EXPENSES	40,608	91,962
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	1,307,568	736,207
IMPAIRMENT OF GOODWILL	983,645	0
OPERATING LOSS	(2,141,463)	(630,047)
OTHER INCOME (EXPENSE):
Interest expense	(52,273)	(38,639)
Other income	3,607	2,320
(Loss) on change - derivative liability	(417,432)	(1,346,264)
Total other expense	(466,098)	(1,382,279)
(LOSS) BEFORE INCOME TAXES	(2,607,561)	(2,012,326)
Income taxes - current provision	0	0
NET (LOSS)	$ (2,607,561)	$ (2,012,326)
Basic and diluted loss per common share attributable to Visualant, Inc. and subsidiaries common shareholders- Basic and diluted loss per share	$ (0.81)	$ (1.73)
Weighted average shares of common stock outstanding- basic and diluted	3,227,351	1,161,366

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	3 Months Ended		12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Sep. 30, 2016	Sep. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (2,607,561)	$ (2,012,326)
Adjustments to reconcile net loss to net cash (used in) operating activities
Depreciation and amortization	22,327	53,722
Issuance of capital stock for services and expenses	206,831	104,476
Conversion of interest	56,454	0
Stock based compensation	10,887	11,837
Gain on sale of assets	(1,034)	0
Loss on change - derivative liability	417,432	1,346,264
Amortization of debt discount	10,000	0
Provision for losses on accounts receivable	121,041	0
Impairment of goodwill	983,645	0
Changes in operating assets and liabilities:
Accounts receivable	52,443	7,768
Prepaid expenses	3,250	(5,861)
Inventory	84,501	28,888
Accounts payable - trade and accrued expenses	66,556	(81,196)
Deferred revenue	0	(2,500)
NET CASH (USED IN) OPERATING ACTIVITIES	(573,228)	(548,928)	$ (3,373,734)	$ (239,877)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in BioMedx, Inc., net	0	0
Capital expenditures	0
Proceeds from sale of equipment	1,034	0
NET CASH PROVIDED BY INVESTING ACTIVITIES:	1,034	0
CASH FLOWS FROM FINANCING ACTIVITIES:
(Repayments) proceeds from line of credit	(35,268)	221,457
Proeeds from warrant exercises	0	16,264
Proceeds from convertible notes payable	300,000	370,000
Proceeds from issuance of common/preferred stock, net of costs	300,000	0
NET CASH PROVIDED BY FINANCING ACTIVITIES	564,732	607,721
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(7,462)	58,793
CASH AND CASH EQUIVALENTS, beginning of period	188,309	82,266	82,266
CASH AND CASH EQUIVALENTS, end of period	180,847	141,059	$ 188,309	$ 82,266
Supplemental disclosures of cash flow information:
Interest paid	14,245	15,190
Taxes paid	$ 0	$ 0

1. RESTATEMENT OF FINANCIAL STA

1. RESTATEMENT OF FINANCIAL STATEMENTS	3 Months Ended
	Dec. 31, 2016
Restatement Of Financial Statements
1. RESTATEMENT OF FINANCIAL STATEMENTS	The management of the Company has concluded that we should restate our financial statements as of and for the quarter ended December 31, 2016. Subsequent to the filing of 10-Q for the three months ended December 31, 2016, the management of the Company has concluded that its goodwill in Transtech should have been reduced to $0. The assumptions management used to determine goodwill were incorrect and through additional analysis management has determined that a full impairment of goodwill is appropriate. The effect of the restatement on the Consolidates Balance Sheet at December 31, 2016, Consolidated Statement of Operations for the three months ended December 31, 2016, and the Consolidated Statement of Cash Flows for the three months ended December 31, 2016 are shown below: VISUALANT, INCORPORATED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS Previously Reported Adjustment As Restated ASSETS CURRENT ASSETS: Cash and cash equivalents $ 180,847 $ - $ 180,847 Accounts receivable, net of allowance of $175,000 and $40,000, respectively 635,471 - 635,471 Prepaid expenses 17,233 - 17,233 Inventories, net 210,717 - 210,717 Total current assets 1,044,268 - 1,044,268 EQUIPMENT, NET 276,213 - 276,213 OTHER ASSETS Intangible assets, net 30,625 - 30,625 Goodwill 500,000 (500,000 ) - Other assets 5,070 - 5,070 TOTAL ASSETS $ 1,856,176 $ (500,000 ) $ 1,356,176 LIABILITIES AND STOCKHOLDERS' (DEFICIT) CURRENT LIABILITIES: Accounts payable - trade $ 2,098,895 $ - $ 2,098,895 Accounts payable - related parties 33,334 - 33,334 Accrued expenses 66,706 - 66,706 Accrued expenses - related parties 1,082,839 - 1,082,839 Derivative liability 562,714 - 562,714 Convertible notes payable 555,000 - 555,000 Notes payable - current portion of long term debt 1,100,071 - 1,100,071 Total current liabilities 5,499,559 - 5,499,559 COMMITMENTS AND CONTINGENCIES - - - STOCKHOLDERS' DEFICIT Preferred stock - $0.001 par value, 5,000,000 shares authorized, 0 shares issued and outstanding at 12/31/2016 and 9/30/2016, respectively - - - Series A Convertible Preferred stock - $0.001 par value, 23,334 shares authorized, 23,334 issued and outstanding at 12/31/2016 and 9/30/2016, respectively 23 - 23 Series C Convertible Preferred stock - $0.001 par value, 1,785,715 shares authorized, 1,785,715 shares issued and outstanding at 12/31/2016 and 9/30/2016, respectively 1,790 - 1,790 Series D Convertible Preferred stock - $0.001 par value, 3,906,250 shares authorized, 375,000 and 0 shares issued and outstanding at 12/31/2016 and 9/30/2016, respectively 375 - 375 Common stock - $0.001 par value, 100,000,000 shares authorized, 3,570,010 and 2,356,152 shares issued and outstanding at 12/31.2016 and 9/30/2016, respectively 3,570 - 3,570 Additional paid in capital 26,090,915 - 26,090,915 Accumulated deficit (29,740,056 ) (500,000 ) (30,240,056 ) Total stockholders' deficit (3,643,383 ) (500,000 ) (4,143,383 ) TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 1,856,176 $ (500,000 ) $ 1,356,176 VISUALANT, INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended, December 31, 2016 Adjustment As Restated REVENUE $ 1,148,800 $ - $ 1,148,800 COST OF SALES 958,442 - 958,442 GROSS PROFIT 190,358 - 190,358 RESEARCH AND DEVELOPMENT EXPENSES 40,608 - 40,608 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 1,791,213 (483,645 ) 1,307,568 IMPAIRMENT OF GOODWILL 983,645 983,645 OPERATING LOSS (1,641,463 ) (500,000 ) (2,141,463 ) OTHER INCOME (EXPENSE): Interest expense (52,273 ) - (52,273 ) Other (expense) income 3,607 - 3,607 (Loss) on change - derivative liability (417,432 ) - (417,432 ) Total other expense (466,098 ) - (466,098 ) (LOSS) BEFORE INCOME TAXES (2,107,561 ) (500,000 ) (2,607,561 ) Income taxes - current provision - - . . NET (LOSS) $ (2,107,561 ) $ (500,000 ) $ (2,607,561 ) Basic and diluted loss per common share attributable to Visualant, Inc. and subsidiaries common shareholders- Basic and diluted loss per share $ (0.65 ) $ (0.15 ) $ (0.80 ) Weighted average shares of common stock outstanding- basic and diluted 3,227,351 3,227,351 3,227,351 VISUALANT, INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months Ended, December 31, 2016 Adjusment As Restated CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (2,107,561 ) $ (500,000 ) $ (2,607,561 ) Adjustments to reconcile net loss to net cash (used in) - operating activities - Depreciation and amortization 22,327 - 22,327 Issuance of capital stock for services and expenses 206,831 - 206,831 Conversion of interest 56,454 Stock based compensation 10,887 - 10,887 Loss (gain) on sale of assets (1,034 ) - (1,034 ) (Gain) loss on change - derivative liability 417,432 - 417,432 Amortization of debt discount 10,000 Provision for losses on accounts receivable 121,041 - 121,041 Impairment of goodwill 483,645 500,000 983,645 - Changes in operating assets and liabilities: - Accounts receivable 52,443 - 52,443 Prepaid expenses 3,250 - 3,250 Inventory 84,501 - 84,501 Accounts payable - trade and accrued expenses 66,556 - 66,556 Deferred revenue - - - NET CASH (USED IN) OPERATING ACTIVITIES (573,228 ) - (573,228 ) 0 CASH FLOWS FROM INVESTING ACTIVITIES: - Capital expenditures - - - Proceeds from sale of equipment 1,034 - 1,034 NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES: 1,034 - 1,034 - CASH FLOWS FROM FINANCING ACTIVITIES: - Proceeds (repayments) from line of credit (35,268 ) - (35,268 ) Proceeds from sale of common and preferred stock, net 300,000 - 300,000 Proceeds from warrant exercises - - - Proceeds from convertible notes payable 300,000 - 300,000 NET CASH PROVIDED BY FINANCING ACTIVITIES 564,732 - 564,732 - NET INCREASE IN CASH AND CASH EQUIVALENTS (7,462 ) - (7,462 ) - CASH AND CASH EQUIVALENTS, beginning of period 188,309 - 188,309 - CASH AND CASH EQUIVALENTS, end of period $ 180,847 $ - $ 180,847 - Supplemental disclosures of cash flow information: - Interest paid $ 14,245 $ - $ 14,245 Taxes paid $ - $ - $ -

2. GOING CONCERN

2. GOING CONCERN	3 Months Ended
	Dec. 31, 2016
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 $2,107,561, $1,746,495 and $2,631,037 for the three months ended December 31, 2016 and the years ended September 30, 2016 and 2015, respectively. Net cash used in operating activities was $(573,228), $(3,373,734) and $(239,877) for the three months ended December 31, 2017 and the years ended September 30, 2016 and 2015, respectively. The Company anticipates that it will record losses from operations for the foreseeable future. As of December 31, 2016, the Company’s accumulated deficit was $30,240,056. 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, 2016 includes an explanatory paragraph expressing the substantial doubt about the Company’s ability to continue as a going concern. We believe that our cash on hand will be sufficient to fund our operations until February 28, 2017. We need additional financing to implement our business plan and to service our ongoing operations and pay our current debts. There can be no assurance that we will be able to secure any needed funding, or that if such funding is available, the terms or conditions would be acceptable to us. If we are unable to obtain additional financing when it is needed, we will need to restructure our operations, and divest all or a portion of our business. We may seek additional capital through a combination of private and public equity offerings, debt financings and strategic collaborations. Debt financing, if obtained, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, and could increase our expenses and require that our assets secure such debt. Equity financing, if obtained, could result in dilution to our then-existing stockholders and/or require such stockholders to waive certain rights and preferences. If such financing is not available on satisfactory terms, or is not available at all, we may be required to delay, scale back, eliminate the development of business opportunities or file for bankruptcy and our operations and financial condition may be materially adversely affected.

3. ORGANIZATION

3. ORGANIZATION	3 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
3. 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 Nevada Secretary of State an Amended and Restated Certificate of Designations, Preferences and Rights for its Series A Convertible Preferred Stock. Among other things, the Amended and Restated Certificate changed the conversion price and the stated value 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. As a result of the foregoing, the Company currently has 23,334 Series A Preferred Stock issued and outstanding, with a conversion price of $0.70 per share. On August 11, 2016, the Company applied with the State of Nevada for the approval of the Certificate of Designations, Preferences, and Rights of Series C Convertible Preferred Stock. The Certificate designated 1,250,000 shares as Series C Convertible Preferred Stock with a par value of $.001 per share. The Series C Convertible Preferred Stock is convertible into common stock at $0.70 per share, with certain adjustments as set forth in the Certificate. On August 31, 2016, the Company filed with the State of Nevada a Certificate of Correction to the Certificate of Designations of Preferences, Powers, Rights and Limitations for the Series C Convertible Preferred Stock to correct the number of authorized shares. The Certificate authorized 1,785,715 shares of Series C Preferred Stock with a par value of $.001 per share. The Series C Convertible Preferred Stock is convertible into common stock at $0.70 per share, with certain adjustments as set forth in the Certificate. As a result of the foregoing, the Company currently has 1,785,715 shares of Series C Preferred Stock issued and outstanding, with a conversion price of $0.70 per share. On November 8, 2016, the Company applied with the State of Nevada for the approval of the Certificate of Designations, Preferences, and Rights of Series D Convertible Preferred Stock. The Certificate designated up to 3,906,250 shares with a par value of $.001 per share. The Series D Convertible Preferred Stock is convertible into common stock at $0.80 per share, with certain adjustments as set forth in the Certificate. The Company has issued 375,000 shares of Series D Convertible Preferred Stock through February 21, 2017, and intends to issue up to 3,125,000 Series D Shares (and an equal number of warrants) for gross proceeds of $2,500,000 pursuant on a “best efforts” basis. 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 License Agreements with Sumitomo Precision Products Co., Ltd. and Intellicheck, Inc. In addition, it has a strategic relationship with Xinova., formerly Invention Development Management Company, a subsidiary of Intellectual Ventures. 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 intellectual property strategy and have been granted ten patents. The Company also has 20 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, Xinova In June 2015, the Company effected a 1-for-150 reverse stock split of our common stock. All warrant, option, share and per share information in this Form 10-Q gives retroactive effect to the 1-for-150 reverse split with all numbers rounded up to the nearest whole share.

4. SIGNIFICANT ACCOUNTING POLIC

4. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS	3 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
4. 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 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The recorded value of other financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable, other current assets, and accounts payable and accrued expenses approximate the fair value of the respective assets and liabilities at December 31, 2016 and 2015 based upon the short-term nature of the assets and liabilities. Derivative financial instruments - Revenue Recognition Stock Based Compensation Convertible Securities 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 the Company’s consolidated financial statements.

5. DEVELOPMENT OF CHROMAID(TM)

5. DEVELOPMENT OF CHROMAID(TM) TECHNOLOGY	3 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
5. 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 Company has developed a proprietary technology to uniquely identify and authenticate almost any substance. This patented technology utilizes light at the photon (elementary particle of light) level through a series of emitters and detectors to generate a unique signature or “fingerprint” from a scan of almost any solid, liquid or gaseous material. This signature of reflected or transmitted light is digitized, creating a unique ChromaID signature. Each ChromaID signature is comprised of from hundreds or thousands of specific data points. 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 Xinova 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 intellectual property strategy and has been granted nine patents. The Company currently has 20 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, Xinova. Xinova Relationship In November 2013, the Company entered into a strategic relationship with Xinova, formerly Invention Development Management Company, a subsidiary of Intellectual Ventures, a private intellectual property fund. Xinova 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 us. 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 Xinova are described in greater detail below. The Company’s next planned product should be an exemplar product is a prototype that will be produced to address several markets. The primary purpose of this prototype will be to demonstrate the technology to prospective business partners, and will consist of a small, hand held, battery powered, Bluetooth enabled scanning device. The scanner should wirelessly connect to a smart phone or tablet to transfer the scanned data. The smart phone application will include two or three industry specific but generic applications that allow for the demonstration of the scanning and matching of the ChromaID signatures. The applications will focus on drug identification, food safety and liquid detection. The prototype device will lend itself to consumer applications and can be a consumer product as well. 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 $325,803 and $362,661 during the years ended September 30, 2016 and 2015, respectively, on research and development activities. The Company’s Patents The Company believes that it’s ten patents, 20 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. On April 19, 2016, the Company was issued patent US Patent No. 9,316,581 B2 entitled “Method, Apparatus, and Article to Facilitate Evaluation of Substances Using Electromagnetic Energy” by the United States Office of Patents and Trademarks. The patent expires March 12, 2033. The Company pursues a patent strategy to expand its unique intellectual property in the United States and other countries. Services and License Agreement with Xinova In November 2013, the Company entered into a strategic relationship with Xinova, formerly Invention Development Management Company, a subsidiary of Intellectual Ventures, a private intellectual property fund. Xinova 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 us. The agreement requires Xinova 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. Xinova is responsible for the development and patent costs. The Company provided the Chroma ID Lab Kits to Xinova 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 Xinova 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 Xinova network during December 2013 and January 2014. The Company has received a worldwide, nontransferable, exclusive license to the intellectual property developed under the Xinova 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 Xinova 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. Xinova is providing global business development services to us for geographies not being pursued by Visualant. Also, Xinova 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 Xinova 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 Xinova 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 Xinova as consideration for the exclusive intellectual property license and application development services. The warrant has a current exercise price of $0.70 per share and expires November 10, 2018. The per share price is subject to adjustment based on any issuances below $0.70 per share except as described in the warrant. The Company agreed to pay Xinova a percentage of license revenue for the global development business services and a percentage of revenue received from any company introduced to us by Xinova. The Company also have also agreed to pay Xinova a royalty when the Company receives royalty product revenue from an Xinova-introduced company. Xinova 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.

6. AGREEMENTS WITH SUMITOMO PRE

6. AGREEMENTS WITH SUMITOMO PRECISION PRODUCTS CO., LTD.	3 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
6. AGREEMENTS 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).

7. ACCOUNTS RECEIVABLE_CUSTOMER

7. ACCOUNTS RECEIVABLE/CUSTOMER CONCENTRATION	3 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
7. ACCOUNTS RECEIVABLE/CUSTOMER CONCENTRATION	Accounts receivable were $635,471 and $808,955, net of allowance, as of December 31, 2016 and September 30, 2016, respectively. The Company had no customers in excess of 10% of the Company’s consolidated revenues for the three months ended December 31, 2016. The Company had one customer (31.9%) with accounts receivable in excess of 10% as of December 31, 2016. The customer has not made a payment on the account since December 31, 2016 and the Company reserved $120,000 during the three months ended December 31, 2016 as selling, general and administrative expenses. The Company intends to aggressively pursue collection of the balance.

8. INVENTORIES

8. INVENTORIES	3 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
8. INVENTORIES	Inventories were $210,717 and $295,218 as of December 31, 2016 and September 30, 2016, 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 $25,000 reserve for impaired inventory as of December 31, 2016 and September 30, 2016, respectively.

9. NOTES RECEIVABLE

9. NOTES RECEIVABLE	3 Months Ended
	Dec. 31, 2016
Notes Receivable
9. NOTES RECEIVABLE	On November 1, 2016, the Company purchased an Original Issue Discount Convertible Promissory Note from BioMedx, Inc. The Company paid $260,000 for the Note with a principal amount of $286,000. The Note matures one year from issuance and bears interest at 5%. The principal and interest can be converted to Biologic common stock at the option of the Company. The Company received 150,000 shares of Pulse Biologics common stock as partial consideration for purchasing the Note. In addition, if BioMedx does not repay the Promissory Note, the Company will have the right to convert the Promissory Note into 51% of the ownership of BioMedx. In addition, the Company and Pulse Biologics agreed to negotiate in good faith to enter into a joint development agreement and subsequent merger transaction prior to December 31, 2017. BioMedx is an early stage company that owns a royalty bearing license, for medical applications, to certain technology developed by Pulse Evolution. The Company’s management concluded BioMedx’s ability to repay Promissory Note is contingent on BioMedx obtaining additional financing. In addition, BioMedx will require additional financing to commercialize the licensed technology. Due to the inherent uncertainty involved in these activities, the Company’s management has determined the value of the Promissory Note and BioMedx common stock is zero at December 31, 2016 and recorded a reserve for the full value.

10. FIXED ASSETS

10. FIXED ASSETS	3 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
10. FIXED ASSETS	Fixed assets, net of accumulated depreciation, was $276,213 and $285,415 as of December 31, 2016 and September 30, 2016, respectively. Accumulated depreciation was $805,251 and $796,481 as of December 31, 2016 and September 30, 2016, respectively. Total depreciation expense, was $9,700 and $18,097 for the three months ended December 31, 2016 and 2015, respectively. All equipment is used for selling, general and administrative purposes and accordingly all depreciation is classified in selling, general and administrative expenses. Property and equipment as of December 31, 2016 was comprised of the following: Estimated December 31, 2016 Useful Lives Purchased Capital Leases Total Machinery and equipment 2-10 years $ 252,204 $ 69,581 $ 321,785 Leasehold improvements 5-20 years 548,612 - 548,612 Furniture and fixtures 3-10 years 73,977 101,260 175,237 Software and websites 3- 7 years 35,830 - 35,830 Less: accumulated depreciation (634,410 ) (170,841 ) (805,251 ) $ 276,213 $ - $ 276,213

11. INTANGIBLE ASSETS

11. INTANGIBLE ASSETS	3 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
11. INTANGIBLE ASSETS	Intangible assets as of December 31, 2016 and September 30, 2016 consisted of the following: Estimated December 31, September 30, Useful Lives 2016 2016 Customer contracts 5 years $ 983,645 $ 983,645 Technology 5 years 712,500 712,500 Less: accumulated amortization (1,665,520 ) (1,652,395 ) Intangible assets, net $ 30,625 $ 43,750 Total amortization expense was $13,125 and $35,625 for the three months ended December 31, 2016 and 2015, 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 December 31, 2016. 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 RATLab intellectual property was fully amortized as of December 31, 2016. 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.

12. GOODWILL

12. GOODWILL	3 Months Ended
	Dec. 31, 2016
Goodwill Abstract
12. GOODWILL	The Company’s TransTech business is very capital intensive. The Company reviewed TransTech’s operations based on its overall financial constraints and determined the value has been impaired. The Company recorded an impairment of goodwill associated with TransTech of $983,645 during the three months December 31, 2016. (See further discussion at Note 1)

13. ACCOUNTS PAYABLE

13. ACCOUNTS PAYABLE	3 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
13. ACCOUNTS PAYABLE	Accounts payable were $2,098,895 and $1,984,326 as of December 31, 2016 and 2015, 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 (11.1%) with accounts payable in excess of 10% of its accounts payable as of December 31, 2016. The Company does expect to have vendors with accounts payable balances of 10% of total accounts payable in the foreseeable future.

14. DERIVATIVE INSTRUMENTS

14. DERIVATIVE INSTRUMENTS	3 Months Ended
	Dec. 31, 2016
Derivative Instruments and Hedging Activities Disclosure [Abstract]
14. DERIVATIVE INSTRUMENTS	In April 2008, the FASB issued a pronouncement that provides guidance on determining what types of instruments or embedded features in an instrument held by a reporting entity can be considered indexed to its own stock for the purpose of evaluating the first criteria of the scope exception in the pronouncement on accounting for derivatives. This pronouncement was effective for financial statements issued for fiscal years beginning after December 15, 2008. The adoption of these requirements can affect the accounting for warrants and many convertible instruments with provisions that protect holders from a decline in the stock price (or “down-round” provisions). For example, warrants or conversion features with such provisions are no longer recorded in equity. Down-round provisions reduce the exercise price of a warrant or convertible instrument if a company either issues equity shares for a price that is lower than the exercise price of those instruments or issues new warrants or convertible instruments that have a lower exercise price. Derivative liability as of December 31, 2016 is as follows: Carrying Fair Value Measurements Using Inputs Amount at Financial Instruments Level 1 Level 2 Level 3 December 31, 2016 Liabilities: Derivative Instruments $ - $ 562,714 $ - $ 562,714 Total $ - $ 562,714 $ - $ 562,714 Derivative liability as of September 30, 2016 is as follows: Carrying Fair Value Measurements Using Inputs Amount at Financial Instruments Level 1 Level 2 Level 3 September 30, 2016 Liabilities: Derivative Instruments $ - $ 145,282 $ - $ 145,282 Total $ - $ 145,282 $ - $ 145,282 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, historical volatility was 130% and the stock price was $0.70 at December 31, 2016. Derivative Instruments – Warrants with the June 2013 Private Placement 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 per share price is subject to adjustment. In August 2016 the exercise price was reset to $0.70 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. During the year ended September 30, 2016, the Company recognized $2,085,536 of other income resulting from the decrease in the fair value of the warrant liability at September 30, 2016. During the three months December 31, 2016, the Company recognized $67,170 of other expense resulting from the increase in the fair value of the warrant liability at December 31, 2016. Derivative Instruments – Warrant with the November 2013 Xinova Services and License Agreement The Company issued a warrant to purchase 97,169 shares of common stock in connection with the November 2013 Xinova 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. In August 2016 the exercise price was reset to $0.70 per share. 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 Xinova warrant. During the year ended September 30, 2015, the Company recognized $14,574 of other income related to the Xinova warrant. During the year ended September 30, 2016, the Company recognized $286,260 of other income from the increase in the fair value of the warrant liability at September 30, 2016. During the quarter ended December 31, 2016, the Company recognized $13,118 of other expense resulting from the increase in the fair value of the warrant liability at December 31, 2016. Derivative Instrument – 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 stockholder’s equity and $116,678 to the derivative warrant liability. The warrants were issued with a down round provision. The warrants have a term of five years, 23,334 are exercisable at $30 per common share and 23,334 are exercisable at $45 per common share. On August 4, 2016 the exercise price was adjusted to $0.70 per share. During the year ended September 30, 2015, the Company recognized $30,338 of other expense related to the warrant liability. During the year ended September 30, 2016, the Company recognized $132,724 of other income resulting from the increase in the fair value of the warrant liability at September 30, 2016. During the three months December 31, 2016, the Company recognized $9,520 of other expense resulting from the increase in the fair value of the warrant liability at December 31, 2016.

15. CONVERTIBLE NOTES PAYABLE

15. CONVERTIBLE NOTES PAYABLE	3 Months Ended
	Dec. 31, 2016
Convertible Notes Payable
15. CONVERTIBLE NOTES PAYABLE	Convertible notes payable as of December 31, 2016 and September 30, 2016 consisted of the following: The Company entered into Convertible Promissory Notes totaling $710,000 with accredited investors during September 2015 to February 2016 to fund short-term working capital. The Notes accrue interest at a rate of 8% per annum and become due September 2016 to February 2017 and are convertible into common stock at the same price of our next financing. On November 31, 2016 holders of $695,000 of the Convertible Promissory Notes converted to 944,948 shares of common stock and five year warrants to purchase common stock at a price of $1.00 per share. The Company recorded accrued interest of $14,687 during the three months ended December 31, 2016. On September 30, 2016, the Company entered into a $175,000 Convertible Promissory Note with Clayton A. Struve, an accredited investor and affiliate of the Company, to fund short-term working capital. The Convertible Promissory Note accrues interest at a rate of 10% per annum and becomes due on March 30, 2017. The Note holder can convert to common stock at $0.70 per share. During the three months ended December 31, 2016 the Company recorded interest of $5,367 related to the convertible note. The Company entered into two Convertible Promissory Notes totaling $330,000 with accredited investors during on November 1, 2016. The Notes accrue interest at a rate of 10% per annum and become due May 1,2017 and are convertible into Preferred stock at a conversion price of $0.80 per share and a five-year warrant to purchase a share of common stock at $1.00 per share. The company first allocated the value received the warrants based on the Black Scholes value assuming a 1 year life, 130% volatility and .7% risk free interest rate. The remaining value was below the fair market value on the date of issuance and as a result the company recorded and beneficial conversion dividend of $326,687 at the time issuance. The Company recorded accrued interest of $5,683 as of December 31, 2016.

16. NOTES PAYABLE, CAPITALIZED

16. NOTES PAYABLE, CAPITALIZED LEASES AND LONG TERM DEBT	3 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
16. NOTES PAYABLE, CAPITALIZED LEASES AND LONG TERM DEBT	Notes payable, capitalized leases and long term debt as of December 31, 2016 and September 30, 2016 consisted of the following: December 31, September 30, 2016 2016 Capital Source Business Finance Group $ 300,136 $ 370,404 Note payable to Umpqua Bank 199,935 199,935 Secured note payable to J3E2A2Z LP - related party 600,000 600,000 Total debt 1,100,071 1,170,339 Less current portion of long term debt (1,100,071 ) (1,170,339 ) Long term debt $ - $ - Capital Source Business Finance Group 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 matures on December 31, 2017 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 $17,852 as of December 31, 2016. 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 March 31, 2017. The notes payable also provide for a second lien on our assets if not repaid by March 31, 2017 or converted into convertible debentures or equity on terms acceptable to the Mr. Erickson. The Company recorded accrued interest of $44,704 as of December 31, 2016.

17. EQUITY

17. EQUITY	3 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
17. 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. Series A Convertible Preferred Stock On July 21, 2015, the Company filed with the Nevada Secretary of State an Amended and Restated Certificate of Designations, Preferences and Rights for its Series A Convertible Preferred Stock. Among other things, the Amended and Restated Certificate changed the conversion price and the stated value 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. As a result of the foregoing, the Company currently have 23,334 Series A Preferred Stock issued and outstanding, with a conversion price of $0.70 per share. Under the Amended and Restated Certificate, the Company has 23,334 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. During the year ended September 30, 2015, the Company sold 11,667 Series A Preferred Stock to two investors for total consideration of $350,000. These shares are were 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 to these investors (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 4, 2016, the conversion price of the Series A Preferred Stock was adjusted to $0.70 per share due to the Company’s issuance of common stock at that price. On March 8, 2016, the Company received approval from the State of Nevada for a Correction to the Company’s Amended and Restated Certificate of Designations, Preferences and Rights of its Series A Convertible Preferred Stock. The Amended and Restated Certificate filed July 21, 2015 changed the conversion price and the stated value 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. On February 19, 2016, the holders of Series A Convertible Preferred Stock entered into Amendment 2 of Series A Preferred Stock Terms and increased the number of Preferred Stock Shares to properly account for the reverse stock split. As a result of the foregoing, we currently have 23,334 Series A Preferred Stock issued and outstanding, with a conversion price of $0.70 per share. Series C Convertible Preferred Stock On August 5, 2016, the Company closed a Series C Preferred Stock and Warrant Purchase Agreement with an accredited investor for the purchase of $1,250,000 of preferred stock with a conversion price of $0.70 per share. The Series C Convertible Preferred Stock has a yield of 8% and an ownership blocker of 4.99%. In addition, the investor received 100% warrant coverage with five-year warrants with an exercise price of $0.70. Shares issuable upon the conversion of the Series C Convertible Preferred Stock and the shares issuable upon exercise of the warrants were included in a registration statement filed by the Company. On August 11, 2016, the Company applied with the State of Nevada for the approval of the Certificate of Designations, Preferences, and Rights of Series C Convertible Preferred Stock. The Certificate designated 1,785,715 shares as Series C Convertible Preferred Stock with a par value of $.001 per share. The Series C Convertible Preferred Stock is convertible into common stock at $0.70 per share, with certain adjustments as set forth in the Certificate. On August 31, 2016, the Company filed with the State of Nevada a Certificate of Correction to the Certificate of Designations of Preferences, Powers, Rights and Limitations for the Series C Convertible Preferred Stock to correct the number of authorized shares. The Certificate authorized 1,785,715 shares of Series C Preferred Stock with a par value of $.001 per share. The Series C Convertible Preferred Stock is convertible into common stock at $0.70 per share, with certain adjustments as set forth in the Certificate. As a result of the foregoing, the Company currently has 1,785,715 shares of Series C Preferred Stock issued and outstanding, with a conversion price of $0.70 per share. To determine the effective conversion price, a portion of the proceeds received by the Company upon issuance of the Series C Preferred Stock was first allocated to the freestanding warrants issued as part of this transaction. Given that the warrants will not subsequently be measured at fair value, the Company determined that the warrants should receive an allocation of the proceeds based on their relative fair value. This is based on the understanding that the FASB staff and the SEC staff believe that a freestanding instrument issued in a basket transaction should be initially measured at fair value if it is required to be subsequently measured at fair value pursuant to US generally accepted accounting principles (“GAAP”), with the residual proceeds from the transaction allocated to any remaining instruments based on their relative fair values. As such, the warrants were allocated a fair value of approximately $514,706 upon issuance, with the remaining $735,294 of proceeds allocated to the Series C Preferred Stock. Proportionately, this allocation resulted in approximately 59% of the face amount of the Series C Preferred Stock issuance remaining, which applied to the stated conversion price of $0.70 resulted in an effective conversion price of approximately $0.41. Having determined the effective conversion price, the Company then compared this to the fair value of the underlying Common Stock as of the commitment date, which was approximately $1.06 per share, and concluded that the conversion feature did have an intrinsic value of $0.65 per share. As such, the Company concluded that the Series C Preferred Stock did contain a beneficial conversion feature and an accounting entry and additional financial statement disclosure was required. Because the Company’s preferred stock is perpetual, with no stated maturity date, and the conversions may occur any time from inception, the dividend is recognized immediately when a beneficial conversion exists at issuance. During the year ending September 30, 2016, the Company recognized preferred stock dividends of $1.16 million on Series C preferred stock related to the beneficial conversion feature arising from a common stock effective conversion rate of $0.41 versus a current market price of $1.06 per common share. Series D Convertible Preferred Stock On November 14, 2016, the Company issued 187,500 shares of Series D Convertible Preferred Stock and a warrant to purchase 187,500 shares of common stock in a private placement to certain accredited investors for gross proceeds of $150,000 pursuant to a Series D Preferred Stock and Warrant Purchase Agreement dated November 10, 2016. On December 19, 2016, the Company issued 187,500 shares of Series D Convertible Preferred Stock and a warrant to purchase 187,500 shares of common stock in a private placement to an accredited investor for gross proceeds of $150,000 pursuant to a Series D Preferred Stock and Warrant Purchase Agreement dated December 14, 2016. The initial conversion price of the Series D Shares is $0.80 per share, subject to certain adjustments. The initial exercise price of the warrant is $1.00 per share, also subject to certain adjustments. As part of the Purchase Agreement, the Company has agreed to register the shares of common stock sold in the private placement and the shares of common stock issuable upon exercise of the warrant for resale or other disposition. On November 8, 2016, the Company applied with the State of Nevada for the approval of the Certificate of Designations, Preferences, and Rights of Series D Convertible Preferred Stock. The Certificate designated up to 3,906,250 shares with a par value of $.001 per share. The Series D Convertible Preferred Stock is convertible into common stock at $0.80 per share, with certain adjustments as set forth in the Certificate. The Company has issued 375,000 shares of Series D Convertible Preferred Stock through February 21, 2017, and intends to issue up to 3,125,000 Series D Shares (and an equal number of warrants) for gross proceeds of $2,500,000 pursuant on a “best efforts” basis. To determine the effective conversion price, a portion of the proceeds received by the Company upon issuance of the Series D Preferred Stock was first allocated to the freestanding warrants issued as part of this transaction. Given that the warrants are subject to repricing in the event of a future financing below $0.80 per share, the Company determined that the warrants should receive an allocation of the proceeds based on their relative fair value. As such, the warrants associated with the November 14, 2016 issuance were allocated a fair value of approximately $56,539 upon issuance, with the remaining $63,539 of net proceeds allocated to the Series D Preferred Stock. Proportionately, this allocation resulted in approximately 53% of the amount of the Series D Preferred Stock issuance remaining, which applied to the stated conversion price of $0.80 resulted in an effective conversion price of approximately $0.34. Having determined the effective conversion price, the Company then compared this to the fair value of the underlying Common Stock as of the commitment date, which was approximately $1.14 per share, and concluded that the conversion feature did have an intrinsic value of $0.80 per share. As such, the Company concluded that the Series D Preferred Stock did contain a beneficial conversion feature of $150,211 which was recorded as a beneficial conversion in stockholders’ equity. The warrants associated with the December 19, 2016 issuance were allocated a fair value of approximately $60,357 upon issuance, with the remaining $69,643 of net proceeds allocated to the Series D Preferred Stock. Proportionately, this allocation resulted in approximately 54% of the amount of the Series D Preferred Stock issuance remaining, which applied to the stated conversion price of $0.80 resulted in an effective conversion price of approximately $0.37. Having determined the effective conversion price, the Company then compared this to the fair value of the underlying Common Stock as of the commitment date, which was approximately $0.81 per share, and concluded that the conversion feature did have an intrinsic value of $0.44 per share. As such, the Company concluded that the Series C Preferred Stock did contain a beneficial conversion feature of 82,232 which was recorded as a beneficial conversion in stockholders’ equity. 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 three months ended December 31, 2016: On October 21, 2015, the Company entered into a Public Relations Agreement with Financial Genetics LLC for public relation services. On October 18, 2016, the Company entered into an Amendment to Public Relations Agreement with Financial Genetics LLC. Under the Agreements, Financial Genetics was issued 168,910 shares of our common stock during the three months ended December 31, 2016. The Company expensed $136,833 during the three months ended December 31, 2016. On October 6, 2016, the Company entered into a Services Agreement with Redwood Investment Group LLC for financial services. Under the Agreement, Redwood was issued 100,000 shares of our common stock. The Company expensed $70,000 during the three months ended December 31, 2016. The Company entered into Convertible Promissory Notes totaling $710,000 with accredited investors during September 2015 to February 2016 to fund short-term working capital. The Notes accrued interest at a rate of 8% per annum and became due September 2016 to February 2017 and were convertible into common stock as part of our next financing. On November 30, 2016, the Company converted $695,000 of the /Convertible Promissory Notes and interest of $54,078 into 936,348 shares of comment stock at $0.80 per share. The Company also issued warrants to purchase 936,348 shares of the Company’s common stock. The five year warrants are exercisable at $1.00 per share, subject to adjustment. On December 22, 2016, a supplier converted accounts payable totaling $6,880 into 8,600 shares of common stock valued at $0.80 per share. 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 or 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-Q gives retroactive effect for a 1-for-150 split with all numbers rounded up to the nearest whole share. Warrants to Purchase Common Stock The following warrants were issued during the three months ended December 31, 2016: The Company entered into Convertible Promissory Notes totaling $710,000 with accredited investors during September 2015 to February 2016 to fund short-term working capital. The Notes accrued interest at a rate of 8% per annum and became due September 2016 to February 2017 and were convertible into common stock as part of our next financing. On November 30, 2016, the Company converted $695,000 of the /Convertible Promissory Notes and interest of $54,078 into 936,348 shares of comment stock at $0.80 per share. The Company also issued warrants to purchase 936,348 shares of the Company’s common stock. The five year warrants are exercisable at $1.00 per share, subject to adjustment. On November 14, 2016, the Company issued 187,500 shares of Series D Convertible Preferred Stock and a warrant to purchase 187,500 shares of common stock in a private placement to certain accredited investors for gross proceeds of $150,000 pursuant to a Series D Preferred Stock and Warrant Purchase Agreement dated November 10, 2016. On December 19, 2016, the Company issued 187,500 shares of Series D Convertible Preferred Stock and a warrant to purchase 187,500 shares of common stock in a private placement to an accredited investor for gross proceeds of $150,000 pursuant to a Series D Preferred Stock and Warrant Purchase Agreement dated December 14, 2016. The initial conversion price of the Series D Shares is $0.80 per share, subject to certain adjustments. The initial exercise price of the warrant is $1.00 per share, also subject to certain adjustments. During the three months ended December 31, 2016, the Company revised five year placement agent warrants to purchase 312,500 shares of common stock. The price was reduced from $1.00 to $0.70 per share and the exercise price is now subject to adjustment. The Company recorded 250,000 shares during the year ended September 30, 2016 the fair value of these warrants is $104,125 at December 31, 2016. A summary of the warrants outstanding as of December 31, 2016 were as follows: December 31, 2016 Weighted Average Exercise Shares Price Outstanding at beginning of period 3,453,171 $ 0.84 Issued 1,373,849 0.93 Exercised - - Forfeited - - Expired - - Outstanding at end of period 4,827,020 $ 0.87 Exercisable at end of period 4,827,020 A summary of the status of the warrants outstanding as of December 31, 2016 is presented below: December 31, 2016 Weighted Weighted Weighted Average Average Average Number of Remaining Exercise Shares Exercise Warrants Life ( In Years) Price Exercisable Price 3,501,336 3.94 $ 0.70 3,501,336 $ 0.70 1,311,348 4.92 1.00 1,311,348 1.00 14,336 1.12 30.00 14,336 30.00 4,827,020 3.96 $ 0.87 4,827,020 $ 0.87 The significant weighted average assumptions relating to the valuation of the Company’s warrants for the period ended December 31, 2016 were as follows: Dividend yield 0% Expected life .25-3 Expected volatility 130% Risk free interest rate .01-.07% There were vested warrants of 4,827,020 as of December 31, 2016 with an aggregate intrinsic value of $0.

18. STOCK OPTIONS

18. STOCK OPTIONS	3 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
18. 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 no stock option transactions during the three months ended December 31, 2016: There are currently 50,908 options to purchase common stock at an average exercise price of $18.05 per share outstanding as of December 31, 2016 under the 2011 Stock Incentive Plan. The Company recorded $10,887 and $11,837 of compensation expense, net of related tax effects, relative to stock options for the three months ended December 31, 2016 and 2015 in accordance with ASC 505. Net loss per share (basic and diluted) associated with this expense was approximately ($0.00) and ($0.01) per share, respectively. As of December 31, 2016, there is approximately $102,276 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 2.78 years. Stock option activity for the three months ended December 31, 2016 and the years ended September 30, 2016 and 2015 was as follows: Weighted Average Options Exercise Price $ Outstanding as of September 30, 2014 87,333 18.80 1,642,200 Granted 11,335 15.00 170,025 Exercised - - - Forfeitures (41,261 ) (18.29 ) (754,500 ) Outstanding as of September 30, 2015 57,407 18.43 1,057,725 Granted - - - Exercised - - - Forfeitures (6,499 ) (21.40 ) (139,098 ) Outstanding as of September 30, 2016 50,908 18.04 918,627 Granted - - - Exercised - - - Forfeitures - - - Outstanding as of December 31, 2016 50,908 $ 18.045 $ 918,627 The following table summarizes information about stock options outstanding and exercisable as of December 31, 2016: Weighted Weighted Weighted Average Average Average Range of Number Remaining Life Exercise Price Number Exercise Price Exercise Prices Outstanding In Years Exercisable Exercisable Exercisable 13.500 3,334 1.75 $ 13.50 3,334 $ 13.50 15.000 20,906 2.58 15.00 9,514 15.00 19.500 13,334 2.67 19.50 13,334 19.50 22.500 13,334 3.38 22.50 13,334 22.50 50,908 2.87 $ 18.04 39,516 $ 18.92 There were exercisable options of 50,908 as of December 31, 2016 with an aggregate intrinsic value of $0.

19. OTHER SIGNIFICANT TRANSACTI

19. OTHER SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES	3 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
19. 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. Note Payable to Umpqua Bank The Company has a $199,935 Business Loan Agreement with Umpqua Bank (the “Umpqua Loan”), which matures on December 31, 2017 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 $17,852 as of December 31, 2016. 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 was issued between January and July 2014, provides for interest of 3% per year and now matures on March 31, 2017. The notes payable also provide for a second lien on our assets if not repaid by March 31, 2017 or converted into convertible debentures or equity on terms acceptable to the Mr. Erickson. The Company recorded accrued interest of $44,704 as of December 31, 2016. Other Amounts Due to Mr. Erickson Mr. Erickson and/or entities with which he is affiliated also have advanced $529,833 and have unreimbursed expenses and compensation of approximately $430,056. The Company owes Mr. Erickson, or entities with which he is affiliated, $1,559,889 as of December 31, 2016.

20. COMMITMENTS, CONTINGENCIES

20. COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS	3 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
20. 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 preceding 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 1,014 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. The Company leases this office on a month to month basis at $6,942 per month. The aggregate future minimum lease payments under operating leases as of December 31, 2016 were $10,030.

21. SUBSEQUENT EVENTS

21. SUBSEQUENT EVENTS	3 Months Ended
	Dec. 31, 2016
Subsequent Events [Abstract]
21. SUBSEQUENT EVENTS	The Company evaluates subsequent events, for the purpose of adjustment or disclosure, up through the date the financial statements are available. Subsequent to December 31, 2016, there were the following material transactions that require disclosure: Extension of Related Party Notes On January 9, 2017, the Company entered into amendments to two demand promissory notes, totaling $600,000, and a note payable for $200,000 related to the Umpqua Bank Business Loan Agreement with Mr. Erickson, our Chief Executive Officer and/or entities in which Mr. Erickson has a beneficial interest. The amendments extend the due date from December 31, 2016 to March 31, 2017 and continue to provide for interest of 3% per annum and a second lien on company assets if not repaid by March 31, 2017 or converted into convertible debentures or equity on terms acceptable to the Holder. Issuance of Equity On October 21, 2015, the Company entered into a Public Relations Agreement with Financial Genetics LLC for public relation services. On October 18, 2016, the Company entered into an Amendment to Public Relations Agreement with Financial Genetics LLC. Under the Agreements, Financial Genetics was issued 80,952 shares of our common stock and expensed $66,666 subsequent to the three months ended December 31, 2016. On October 6, 2015, the Company entered into a Services Agreement with Redwood Investment Group LLC for financial services. Under the Agreement, Redwood was issued 100,000 shares of our common stock and expensed $70,000 subsequent to the three months ended December 31, 2016.

4. SIGNIFICANT ACCOUNTING POL27

4. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS (Policies)	3 Months Ended
	Dec. 31, 2016
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 $25,000 reserve for impaired inventory as of December 31, 2016 and September 30, 2016, respectively.
Equipment	Equipment consists of machinery, leasehold improvements, furniture and fixtures and software, which are stated at cost less accumulated depreciation and amortization. Depreciation is computed by the straight-line method over the estimated useful lives or lease period of the relevant asset, generally 2-10 years, except for leasehold improvements which are depreciated over 5-20 years.
Intangible Assets/ Intellectual Property	The Company amortizes the intangible assets and intellectual property acquired in connection with the acquisition of TransTech, over sixty months on a straight - line basis, which was the time frame that the management of the Company was able to project forward for future revenue, either under agreement or through expected continued business activities. Intangible assets and intellectual property acquired from RATLab LLC and Javelin are recorded likewise. The Company performs annual assessments and has determined that no impairment is necessary. On June 7, 2011, the Company closed the acquisition of all Visualant related assets of the RATLab LLC, namely the rights to the medical field of use of the Chroma ID technology. On July 31, 2012, the Company closed the acquisition of all rights to the ChromaID technology in the environmental field of use from Javelin LLC.
Goodwill	Goodwill is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities assumed in a business combination. With the adoption of ASC 350, goodwill is not amortized, rather it is tested for impairment annually, and will be tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. Impairment testing for goodwill is done at a reporting unit level. Reporting units are one level below the business segment level, but are combined when reporting units within the same segment have similar economic characteristics. Under the criteria set forth by ASC 350, the Company has one reporting unit based on the current structure. An impairment loss generally would be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit. The Company determined that its goodwill related to the 2010 acquisition of TransTech Systems was impaired and recorded an impairment of $983,645 as selling, general and administrative expenses during the three months ended December 31, 2016.
Long-Lived Assets	The Company reviews its long-lived assets for impairment annually or when changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Long-lived assets under certain circumstances are reported at the lower of carrying amount or fair value. Assets to be disposed of and assets not expected to provide any future service potential to the Company are recorded at the lower of carrying amount or fair value (less the projected cost associated with selling the asset). To the extent carrying values exceed fair values, an impairment loss is recognized in operating results.
Fair Value Measurements and Financial Instruments	ASC Topic 820, Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy, which requires classification based on observable and unobservable inputs when measuring fair value. The fair value hierarchy distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs). The hierarchy consists of three levels: Level 1 – Quoted prices in active markets for identical assets and liabilities; Level 2 – Inputs other than level one inputs that are either directly or indirectly observable; and. Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The recorded value of other financial assets and liabilities, which consist primarily of cash and cash equivalents, accounts receivable, other current assets, and accounts payable and accrued expenses approximate the fair value of the respective assets and liabilities at December 31, 2016 and 2015 based upon the short-term nature of the assets and liabilities.
Derivative financial instruments	The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. For stock-based derivative financial instruments, the Company uses a Black-Scholes-Merton option pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within twelve months of the balance sheet date.
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.
Convertible Securities	Based upon ASC 815-15, we have adopted a sequencing approach regarding the application of ASC 815-40 to convertible securities issued subsequent to September 30, 2015. We will evaluate our contracts based upon the earliest issuance date. In the event partial reclassification of contracts subject to ASC 815-40-25 is necessary, due to our inability to demonstrate we have sufficient shares authorized and unissued, shares will be allocated on the basis of issuance date, with the earliest issuance date receiving first allocation of shares. If a reclassification of an instrument were required, it would result in the instrument issued latest being reclassified first.
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 stockholders by the weighted average number of shares of common stock outstanding for the periods presented. Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that would then share in the income of the Company, subject to anti-dilution limitations. The common stock equivalents have not been included as they are anti-dilutive. As of December 31, 2016, there were options outstanding for the purchase of 50,908 common shares, warrants for the purchase of 4,494,080 common shares, 2,184,048 shares of our common stock issuable upon the conversion of Series A, Series C and Series D Convertible Preferred Stock and up to 332,940 shares of our common stock issuable upon the exercise of placement agent warrants. As of December 31, 2015, there were options outstanding for the purchase of 56,641 common shares, warrants for the purchase of 893,244 common shares, 11,667 shares of our common stock issuable upon the conversion of Series A Convertible Preferred Stock, up to 34,031 shares of our common stock issuable upon the exercise of placement agent warrants and an unknown number of shares related to the conversion of $479,000 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 the Company’s consolidated financial statements.

1. RESTATEMENT OF FINANCIAL S28

1. RESTATEMENT OF FINANCIAL STATEMENTS (Tables)	3 Months Ended
	Dec. 31, 2016
Restatement Of Financial Statements Tables
Restatement of financial statements	VISUALANT, INCORPORATED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS Previously Reported Adjustment As Restated ASSETS CURRENT ASSETS: Cash and cash equivalents $ 180,847 $ - $ 180,847 Accounts receivable, net of allowance of $175,000 and $40,000, respectively 635,471 - 635,471 Prepaid expenses 17,233 - 17,233 Inventories, net 210,717 - 210,717 Total current assets 1,044,268 - 1,044,268 EQUIPMENT, NET 276,213 - 276,213 OTHER ASSETS Intangible assets, net 30,625 - 30,625 Goodwill 500,000 (500,000 ) - Other assets 5,070 - 5,070 TOTAL ASSETS $ 1,856,176 $ (500,000 ) $ 1,356,176 LIABILITIES AND STOCKHOLDERS' (DEFICIT) CURRENT LIABILITIES: Accounts payable - trade $ 2,098,895 $ - $ 2,098,895 Accounts payable - related parties 33,334 - 33,334 Accrued expenses 66,706 - 66,706 Accrued expenses - related parties 1,082,839 - 1,082,839 Derivative liability 562,714 - 562,714 Convertible notes payable 555,000 - 555,000 Notes payable - current portion of long term debt 1,100,071 - 1,100,071 Total current liabilities 5,499,559 - 5,499,559 COMMITMENTS AND CONTINGENCIES - - - STOCKHOLDERS' DEFICIT Preferred stock - $0.001 par value, 5,000,000 shares authorized, 0 shares issued and outstanding at 12/31/2016 and 9/30/2016, respectively - - - Series A Convertible Preferred stock - $0.001 par value, 23,334 shares authorized, 23,334 issued and outstanding at 12/31/2016 and 9/30/2016, respectively 23 - 23 Series C Convertible Preferred stock - $0.001 par value, 1,785,715 shares authorized, 1,785,715 shares issued and outstanding at 12/31/2016 and 9/30/2016, respectively 1,790 - 1,790 Series D Convertible Preferred stock - $0.001 par value, 3,906,250 shares authorized, 375,000 and 0 shares issued and outstanding at 12/31/2016 and 9/30/2016, respectively 375 - 375 Common stock - $0.001 par value, 100,000,000 shares authorized, 3,570,010 and 2,356,152 shares issued and outstanding at 12/31.2016 and 9/30/2016, respectively 3,570 - 3,570 Additional paid in capital 26,090,915 - 26,090,915 Accumulated deficit (29,740,056 ) (500,000 ) (30,240,056 ) Total stockholders' deficit (3,643,383 ) (500,000 ) (4,143,383 ) TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 1,856,176 $ (500,000 ) $ 1,356,176 VISUALANT, INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended, December 31, 2016 Adjustment As Restated REVENUE $ 1,148,800 $ - $ 1,148,800 COST OF SALES 958,442 - 958,442 GROSS PROFIT 190,358 - 190,358 RESEARCH AND DEVELOPMENT EXPENSES 40,608 - 40,608 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 1,791,213 (483,645 ) 1,307,568 IMPAIRMENT OF GOODWILL 983,645 983,645 OPERATING LOSS (1,641,463 ) (500,000 ) (2,141,463 ) OTHER INCOME (EXPENSE): Interest expense (52,273 ) - (52,273 ) Other (expense) income 3,607 - 3,607 (Loss) on change - derivative liability (417,432 ) - (417,432 ) Total other expense (466,098 ) - (466,098 ) (LOSS) BEFORE INCOME TAXES (2,107,561 ) (500,000 ) (2,607,561 ) Income taxes - current provision - - . . NET (LOSS) $ (2,107,561 ) $ (500,000 ) $ (2,607,561 ) Basic and diluted loss per common share attributable to Visualant, Inc. and subsidiaries common shareholders- Basic and diluted loss per share $ (0.65 ) $ (0.15 ) $ (0.80 ) Weighted average shares of common stock outstanding- basic and diluted 3,227,351 3,227,351 3,227,351 VISUALANT, INCORPORATED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months Ended, December 31, 2016 Adjusment As Restated CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (2,107,561 ) $ (500,000 ) $ (2,607,561 ) Adjustments to reconcile net loss to net cash (used in) - operating activities - Depreciation and amortization 22,327 - 22,327 Issuance of capital stock for services and expenses 206,831 - 206,831 Conversion of interest 56,454 Stock based compensation 10,887 - 10,887 Loss (gain) on sale of assets (1,034 ) - (1,034 ) (Gain) loss on change - derivative liability 417,432 - 417,432 Amortization of debt discount 10,000 Provision for losses on accounts receivable 121,041 - 121,041 Impairment of goodwill 483,645 500,000 983,645 - Changes in operating assets and liabilities: - Accounts receivable 52,443 - 52,443 Prepaid expenses 3,250 - 3,250 Inventory 84,501 - 84,501 Accounts payable - trade and accrued expenses 66,556 - 66,556 Deferred revenue - - - NET CASH (USED IN) OPERATING ACTIVITIES (573,228 ) - (573,228 ) 0 CASH FLOWS FROM INVESTING ACTIVITIES: - Capital expenditures - - - Proceeds from sale of equipment 1,034 - 1,034 NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES: 1,034 - 1,034 - CASH FLOWS FROM FINANCING ACTIVITIES: - Proceeds (repayments) from line of credit (35,268 ) - (35,268 ) Proceeds from sale of common and preferred stock, net 300,000 - 300,000 Proceeds from warrant exercises - - - Proceeds from convertible notes payable 300,000 - 300,000 NET CASH PROVIDED BY FINANCING ACTIVITIES 564,732 - 564,732 - NET INCREASE IN CASH AND CASH EQUIVALENTS (7,462 ) - (7,462 ) - CASH AND CASH EQUIVALENTS, beginning of period 188,309 - 188,309 - CASH AND CASH EQUIVALENTS, end of period $ 180,847 $ - $ 180,847 - Supplemental disclosures of cash flow information: - Interest paid $ 14,245 $ - $ 14,245 Taxes paid $ - $ - $ -

10. FIXED ASSETS (Tables)

10. FIXED ASSETS (Tables)	3 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
Schedule of Property and equipment	Estimated December 31, 2016 Useful Lives Purchased Capital Leases Total Machinery and equipment 2-10 years $ 252,204 $ 69,581 $ 321,785 Leasehold improvements 5-20 years 548,612 - 548,612 Furniture and fixtures 3-10 years 73,977 101,260 175,237 Software and websites 3- 7 years 35,830 - 35,830 Less: accumulated depreciation (634,410 ) (170,841 ) (805,251 ) $ 276,213 $ - $ 276,213

11. INTANGIBLE ASSETS (Tables)

11. INTANGIBLE ASSETS (Tables)	3 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
Schedule Of Intangible Assets	Estimated December 31, September 30, Useful Lives 2016 2016 Customer contracts 5 years $ 983,645 $ 983,645 Technology 5 years 712,500 712,500 Less: accumulated amortization (1,665,520 ) (1,652,395 ) Intangible assets, net $ 30,625 $ 43,750

14. DERIVATIVE INSTRUMENTS (Tab

14. DERIVATIVE INSTRUMENTS (Tables)	3 Months Ended
	Dec. 31, 2016
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative liability	Carrying Fair Value Measurements Using Inputs Amount at Financial Instruments Level 1 Level 2 Level 3 December 31, 2016 Liabilities: Derivative Instruments $ - $ 562,714 $ - $ 562,714 Total $ - $ 562,714 $ - $ 562,714 Derivative liability as of September 30, 2016 is as follows: Carrying Fair Value Measurements Using Inputs Amount at Financial Instruments Level 1 Level 2 Level 3 September 30, 2016 Liabilities: Derivative Instruments $ - $ 145,282 $ - $ 145,282 Total $ - $ 145,282 $ - $ 145,282

16. NOTES PAYABLE, CAPITALIZE32

16. NOTES PAYABLE, CAPITALIZED LEASES AND LONG TERM DEBT (Tables)	3 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
Notes payable, capitalized leases and long term debt	December 31, September 30, 2016 2016 Capital Source Business Finance Group $ 300,136 $ 370,404 Note payable to Umpqua Bank 199,935 199,935 Secured note payable to J3E2A2Z LP - related party 600,000 600,000 Total debt 1,100,071 1,170,339 Less current portion of long term debt (1,100,071 ) (1,170,339 ) Long term debt $ - $ -

17. EQUITY (Tables)

17. EQUITY (Tables)	3 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
Summary of the warrants issued	December 31, 2016 Weighted Average Exercise Shares Price Outstanding at beginning of period 3,453,171 $ 0.84 Issued 1,373,849 0.93 Exercised - - Forfeited - - Expired - - Outstanding at end of period 4,827,020 $ 0.87 Exercisable at end of period 4,827,020
Summary of the status of the warrants outstanding	December 31, 2016 Weighted Weighted Weighted Average Average Average Number of Remaining Exercise Shares Exercise Warrants Life ( In Years) Price Exercisable Price 3,501,336 3.94 $ 0.70 3,501,336 $ 0.70 1,311,348 4.92 1.00 1,311,348 1.00 14,336 1.12 30.00 14,336 30.00 4,827,020 3.96 $ 0.87 4,827,020 $ 0.87
Weighted average assumptions relating to the valuation of the Companys warrants	Dividend yield 0% Expected life .25-3 Expected volatility 130% Risk free interest rate .01-.07%

18. STOCK OPTIONS (Tables)

18. STOCK OPTIONS (Tables)	3 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
Stock option activity	Weighted Average Options Exercise Price $ Outstanding as of September 30, 2014 87,333 18.80 1,642,200 Granted 11,335 15.00 170,025 Exercised - - - Forfeitures (41,261 ) (18.29 ) (754,500 ) Outstanding as of September 30, 2015 57,407 18.43 1,057,725 Granted - - - Exercised - - - Forfeitures (6,499 ) (21.40 ) (139,098 ) Outstanding as of September 30, 2016 50,908 18.04 918,627 Granted - - - Exercised - - - Forfeitures - - - Outstanding as of December 31, 2016 50,908 $ 18.045 $ 918,627
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 Exercisable Exercisable Exercisable 13.500 3,334 1.75 $ 13.50 3,334 $ 13.50 15.000 20,906 2.58 15.00 9,514 15.00 19.500 13,334 2.67 19.50 13,334 19.50 22.500 13,334 3.38 22.50 13,334 22.50 50,908 2.87 $ 18.04 39,516 $ 18.92

1. RESTATEMENT OF FINANCIAL S35

1. RESTATEMENT OF FINANCIAL STATEMENTS (Details) - USD ($)	Dec. 31, 2016	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015
CURRENT ASSETS:
Cash and cash equivalents	$ 180,847	$ 188,309	$ 141,059	$ 82,266
Accounts receivable, net of allowance of $175,000 and $55,000, respectively	635,471	808,955
Prepaid expenses	17,233	20,483
Inventories, net	210,717	295,218
Total current assets	1,044,268	1,312,965
EQUIPMENT, NET	276,213	285,415
OTHER ASSETS
Intangible assets, net	30,625	43,750
Goodwill	0	983,645
Other assets	5,070	5,070
TOTAL ASSETS	1,356,176	2,630,845
CURRENT LIABILITIES:
Accounts payable - trade	2,098,895	1,984,326
Accounts payable - related parties	33,334	41,365
Accrued expenses	66,706	80,481
Accrued expenses - related parties	1,082,839	1,109,046
Derivative liability	562,714	145,282
Convertible notes payable	555,000	909,500
Notes payable - current portion of long term debt	1,100,071	1,170,339
Total current liabilities	5,499,559	5,440,339
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT
Common stock - $0.001 par value, 100,000,000 shares authorized, 3,570,010 and 2,356,152 shares issued and outstanding at 12/31/2016 and 9/30/2016, respectively	3,570	2,356
Additional paid in capital	26,090,915	24,259,702
Accumulated deficit	(30,240,056)	(27,073,365)
Total stockholders' deficit	(4,143,383)	(2,809,494)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	1,356,176	2,630,845
Series A Convertible Preferred stock [Member]
STOCKHOLDERS' DEFICIT
Preferred stock	0	0
Series C Convertible Preferred stock [Member]
STOCKHOLDERS' DEFICIT
Preferred stock	23	23
Series D Convertible Preferred stock [Member]
STOCKHOLDERS' DEFICIT
Preferred stock	1,790	1,790
Previously Reported
CURRENT ASSETS:
Cash and cash equivalents	180,847	188,309
Accounts receivable, net of allowance of $175,000 and $55,000, respectively	635,471
Prepaid expenses	17,233
Inventories, net	210,717
Total current assets	1,044,268
EQUIPMENT, NET	276,213
OTHER ASSETS
Intangible assets, net	30,625
Goodwill	500,000
Other assets	5,070
TOTAL ASSETS	1,856,176
CURRENT LIABILITIES:
Accounts payable - trade	2,098,895
Accounts payable - related parties	33,334
Accrued expenses	66,706
Accrued expenses - related parties	1,082,839
Derivative liability	562,714
Convertible notes payable	555,000
Notes payable - current portion of long term debt	1,100,071
Total current liabilities	5,499,559
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT
Common stock - $0.001 par value, 100,000,000 shares authorized, 3,570,010 and 2,356,152 shares issued and outstanding at 12/31/2016 and 9/30/2016, respectively	3,570
Additional paid in capital	26,090,915
Accumulated deficit	(29,740,056)
Total stockholders' deficit	(3,643,383)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	1,856,176
Previously Reported | Series A Convertible Preferred stock [Member]
STOCKHOLDERS' DEFICIT
Preferred stock	0
Previously Reported | Series C Convertible Preferred stock [Member]
STOCKHOLDERS' DEFICIT
Preferred stock	23
Previously Reported | Series D Convertible Preferred stock [Member]
STOCKHOLDERS' DEFICIT
Preferred stock	4,790
Adjustment
CURRENT ASSETS:
Cash and cash equivalents	0	$ 0
Accounts receivable, net of allowance of $175,000 and $55,000, respectively	0
Prepaid expenses	0
Inventories, net	0
Total current assets	0
EQUIPMENT, NET	0
OTHER ASSETS
Intangible assets, net	0
Goodwill	(500,000)
Other assets	0
TOTAL ASSETS	(500,000)
CURRENT LIABILITIES:
Accounts payable - trade	0
Accounts payable - related parties	0
Accrued expenses	0
Accrued expenses - related parties	0
Derivative liability	0
Convertible notes payable	0
Notes payable - current portion of long term debt	0
Total current liabilities	0
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT
Common stock - $0.001 par value, 100,000,000 shares authorized, 3,570,010 and 2,356,152 shares issued and outstanding at 12/31/2016 and 9/30/2016, respectively	0
Additional paid in capital	0
Accumulated deficit	(500,000)
Total stockholders' deficit	(500,000)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	(500,000)
Adjustment | Series A Convertible Preferred stock [Member]
STOCKHOLDERS' DEFICIT
Preferred stock	0
Adjustment | Series C Convertible Preferred stock [Member]
STOCKHOLDERS' DEFICIT
Preferred stock	0
Adjustment | Series D Convertible Preferred stock [Member]
STOCKHOLDERS' DEFICIT
Preferred stock	$ 0

1. RESTATEMENT OF FINANCIAL S36

1. RESTATEMENT OF FINANCIAL STATEMENTS (Details 1) - USD ($)	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
REVENUE	$ 1,148,800	$ 1,284,800
COST OF SALES	958,442	1,086,678
GROSS PROFIT	190,358	198,122
RESEARCH AND DEVELOPMENT EXPENSES	40,608	91,962
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	1,307,568	736,207
IMPAIRMENT OF GOODWILL	983,645	0
OPERATING LOSS	(2,141,463)	(630,047)
OTHER INCOME (EXPENSE):
Interest expense	(52,273)	(38,639)
Other income	3,607	2,320
(Loss) on change - derivative liability	(417,432)	(1,346,264)
Total other expense	(466,098)	(1,382,279)
(LOSS) BEFORE INCOME TAXES	(2,607,561)	(2,012,326)
Income taxes - current provision	0	0
NET (LOSS)	$ (2,607,561)	$ (2,012,326)
Basic and diluted loss per common share attributable to Visualant, Inc. and subsidiaries common shareholders- Basic and diluted loss per share	$ (0.81)	$ (1.73)
Weighted average shares of common stock outstanding- basic and diluted	3,227,351	1,161,366
Previously Reported
REVENUE	$ 1,148,800
COST OF SALES	958,442
GROSS PROFIT	190,358
RESEARCH AND DEVELOPMENT EXPENSES	40,608
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	1,791,213
IMPAIRMENT OF GOODWILL	483,645
OPERATING LOSS	(1,641,463)
OTHER INCOME (EXPENSE):
Interest expense	(52,273)
Other income	3,607
(Loss) on change - derivative liability	(417,432)
Total other expense	(466,098)
(LOSS) BEFORE INCOME TAXES	(2,107,561)
Income taxes - current provision	0
NET (LOSS)	$ (2,107,561)
Basic and diluted loss per common share attributable to Visualant, Inc. and subsidiaries common shareholders- Basic and diluted loss per share	$ (0.65)
Weighted average shares of common stock outstanding- basic and diluted	3,227,351
Adjustment
REVENUE	$ 0
COST OF SALES	0
GROSS PROFIT	0
RESEARCH AND DEVELOPMENT EXPENSES	0
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	(483,645)
IMPAIRMENT OF GOODWILL	500,000
OPERATING LOSS	(500,000)
OTHER INCOME (EXPENSE):
Interest expense	0
Other income	0
(Loss) on change - derivative liability	0
Total other expense	0
(LOSS) BEFORE INCOME TAXES	(500,000)
Income taxes - current provision	0
NET (LOSS)	$ (500,000)
Basic and diluted loss per common share attributable to Visualant, Inc. and subsidiaries common shareholders- Basic and diluted loss per share	$ (0.15)
Weighted average shares of common stock outstanding- basic and diluted	3,227,351

1. RESTATEMENT OF FINANCIAL S37

1. RESTATEMENT OF FINANCIAL STATEMENTS (Details 2) - USD ($)	3 Months Ended		12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Sep. 30, 2016	Sep. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (2,607,561)	$ (2,012,326)
Adjustments to reconcile net loss to net cash (used in) operating activities
Depreciation and amortization	22,327	53,722
Issuance of capital stock for services and expenses	206,831	104,476
Conversion of interest	56,454	0
Stock based compensation	10,887	11,837
Gain on sale of assets	(1,034)	0
Loss on change - derivative liability	417,432	1,346,264
Amortization of debt discount	10,000	0
Provision for losses on accounts receivable	121,041	0
Impairment of goodwill	983,645	0
Changes in operating assets and liabilities:
Accounts receivable	52,443	7,768
Prepaid expenses	3,250	(5,861)
Inventory	84,501	28,888
Accounts payable - trade and accrued expenses	66,556	(81,196)
Deferred revenue	0	(2,500)
NET CASH (USED IN) OPERATING ACTIVITIES	(573,228)	(548,928)	$ (3,373,734)	$ (239,877)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in BioMedx, Inc., net	0	0
Capital expenditures	0
Proceeds from sale of equipment	1,034	0
NET CASH PROVIDED BY INVESTING ACTIVITIES:	1,034	0
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds (repayments) from line of credit	(35,268)	221,457
Proceeds from sale of preferred stock	300,000
Proeeds from warrant exercises	0	16,264
Proceeds from convertible notes payable	300,000	370,000
Proceeds from issuance of common/preferred stock, net of costs	300,000	0
NET CASH PROVIDED BY FINANCING ACTIVITIES	564,732	607,721
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(7,462)	58,793
CASH AND CASH EQUIVALENTS, beginning of period	188,309	82,266	82,266
CASH AND CASH EQUIVALENTS, end of period	180,847	141,059	188,309	$ 82,266
Supplemental disclosures of cash flow information:
Interest paid	14,245	15,190
Taxes paid	0	$ 0
Previously Reported
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	(2,107,561)
Adjustments to reconcile net loss to net cash (used in) operating activities
Depreciation and amortization	22,327
Issuance of capital stock for services and expenses	206,831
Conversion of interest	56,454
Stock based compensation	10,887
Gain on sale of assets	(1,034)
Loss on change - derivative liability	417,432
Amortization of debt discount	10,000
Provision for losses on accounts receivable	121,041
Impairment of goodwill	483,645
Changes in operating assets and liabilities:
Accounts receivable	52,443
Prepaid expenses	3,250
Inventory	84,501
Accounts payable - trade and accrued expenses	66,556
Deferred revenue	0
NET CASH (USED IN) OPERATING ACTIVITIES	(573,228)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	0
Proceeds from sale of equipment	1,034
NET CASH PROVIDED BY INVESTING ACTIVITIES:	1,034
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds (repayments) from line of credit	(35,268)
Proceeds from sale of preferred stock	300,000
Proeeds from warrant exercises	0
Proceeds from convertible notes payable	300,000
NET CASH PROVIDED BY FINANCING ACTIVITIES	564,732
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(7,462)
CASH AND CASH EQUIVALENTS, beginning of period	188,309
CASH AND CASH EQUIVALENTS, end of period	180,847		188,309
Supplemental disclosures of cash flow information:
Interest paid	14,245
Taxes paid	0
Adjustment
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	(500,000)
Adjustments to reconcile net loss to net cash (used in) operating activities
Depreciation and amortization	0
Issuance of capital stock for services and expenses	0
Conversion of interest	0
Stock based compensation	0
Gain on sale of assets	0
Loss on change - derivative liability	0
Amortization of debt discount	0
Provision for losses on accounts receivable	0
Impairment of goodwill	500,000
Changes in operating assets and liabilities:
Accounts receivable	0
Prepaid expenses	0
Inventory	0
Accounts payable - trade and accrued expenses	0
Deferred revenue	0
NET CASH (USED IN) OPERATING ACTIVITIES	0
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	0
Proceeds from sale of equipment	0
NET CASH PROVIDED BY INVESTING ACTIVITIES:	0
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds (repayments) from line of credit	0
Proceeds from sale of preferred stock	0
Proeeds from warrant exercises	0
Proceeds from convertible notes payable	0
NET CASH PROVIDED BY FINANCING ACTIVITIES	0
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	0
CASH AND CASH EQUIVALENTS, beginning of period	0
CASH AND CASH EQUIVALENTS, end of period	0		$ 0
Supplemental disclosures of cash flow information:
Interest paid	0
Taxes paid	$ 0

2. GOING CONCERN (Details Narra

2. GOING CONCERN (Details Narrative) - USD ($)	3 Months Ended		12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Sep. 30, 2016	Sep. 30, 2015
Notes to Financial Statements
Net loss			$ (1,746,495)	$ (2,631,037)
Net cash used in operating activities	$ (573,228)	$ (548,928)	(3,373,734)	$ (239,877)
Accumulated Deficit	$ 30,240,056		$ 27,073,365

4. SIGNIFICANT ACCOUNTING POL39

4. SIGNIFICANT ACCOUNTING POLICIES: ADOPTION OF ACCOUNTING STANDARDS (Details Narrative) - USD ($)	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Sep. 30, 2016
Reserve for impaired inventory	$ 25,000		$ 25,000
Goodwill impairment	$ 983,645	$ 0
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

5. DEVELOPMENT OF CHROMAID(TM40

5. DEVELOPMENT OF CHROMAID(TM) TECHNOLOGY (Details Narrative) - USD ($)	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Notes to Financial Statements
Research and development expense	$ 40,608	$ 91,962

7. ACCOUNTS RECEIVABLE_CUSTOM41

7. ACCOUNTS RECEIVABLE/CUSTOMER CONCENTRATION (Details Narrative) - USD ($)	Dec. 31, 2016	Sep. 30, 2016
Notes to Financial Statements
Accounts receivable, net of allowance	$ 635,471	$ 808,955

8. INVENTORIES (Details Narrati

8. INVENTORIES (Details Narrative) - USD ($)	Dec. 31, 2016	Sep. 30, 2016
Notes to Financial Statements
Inventories	$ 210,717	$ 295,218
Reserve for impaired inventory	$ 25,000	$ 25,000

10. FIXED ASSETS (Details)

10. FIXED ASSETS (Details) - USD ($)	Dec. 31, 2016	Sep. 30, 2016
Machinery and equipment (2-10 years)	$ 321,785
Leasehold improvements (5-20 years)	548,612
Furniture and fixtures (3-10 years)	175,237
Software and websites (3- 7 years)	35,830
Less: accumulated depreciation	(805,251)	$ (796,481)
Property and equipment, net	276,213	$ 285,415
Purchased [Member]
Machinery and equipment (2-10 years)	252,204
Leasehold improvements (5-20 years)	548,612
Furniture and fixtures (3-10 years)	73,977
Software and websites (3- 7 years)	35,830
Less: accumulated depreciation	(634,410)
Property and equipment, net	276,213
Capital Leases [Member]
Machinery and equipment (2-10 years)	69,581
Leasehold improvements (5-20 years)	0
Furniture and fixtures (3-10 years)	101,260
Software and websites (3- 7 years)	0
Less: accumulated depreciation	(170,841)
Property and equipment, net	$ 0

10. FIXED ASSETS (Details Narra

10. FIXED ASSETS (Details Narrative) - USD ($)	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Sep. 30, 2016
Notes to Financial Statements
Property and equipment, net	$ 276,213		$ 285,415
Property and equipment, accumulated depreciation	805,251		$ 796,481
Depreciation expense	$ 9,700	$ 18,097

11. INTANGIBLE ASSETS (Details)

11. INTANGIBLE ASSETS (Details) - USD ($)	3 Months Ended
	Dec. 31, 2016	Sep. 30, 2016
Less: accumulated amortization	$ (1,665,520)	$ (1,652,395)
Intangible assets, net	30,625	43,750
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

11. INTANGIBLE ASSETS (Details

11. INTANGIBLE ASSETS (Details Narrative) - USD ($)	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Notes to Financial Statements
Amortization expense	$ 13,125	$ 35,625

13. ACCOUNTS PAYABLE (Details N

13. ACCOUNTS PAYABLE (Details Narrative) - USD ($)	Dec. 31, 2016	Sep. 30, 2016
Notes to Financial Statements
Accounts payable	$ 2,098,895	$ 1,984,326
Vendor One with accounts payble on excess of 10%	11.10%

14. DERIVATIVE INSTRUMENTS (Det

14. DERIVATIVE INSTRUMENTS (Details) - USD ($)	Dec. 31, 2016	Sep. 30, 2016
Fair Value Measurements Level 1 [Member]
Liabilities:
Derivative Instruments	$ 0	$ 0
Total	0	0
Fair Value Measurements Level 2 [Member]
Liabilities:
Derivative Instruments	562,714	145,282
Total	562,714	145,282
Fair Value Measurements Level 3 [Member]
Liabilities:
Derivative Instruments	0	0
Total	0	0
Carrying Amount [Member]
Liabilities:
Derivative Instruments	562,714	145,282
Total	$ 562,714	$ 145,282

14. DERIVATIVE INSTRUMENTS (D49

14. DERIVATIVE INSTRUMENTS (Details Narrative) - USD ($)	3 Months Ended	12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2014
Warrants June 2013 Private Placement [Member]
Fair value of the warrant liability	$ 67,170	$ 2,085,536	$ 104,716	$ 2,092,000
Warrant November 2013 IDMC Services and License Agreement [Member]
Fair value of the warrant liability	286,260	320,657	14,574
Series A Convertible Preferred Stock [Member]
Fair value of the warrant liability			116,678
Other expense	$ 9,520		$ 30,338
Other income		$ 132,724

15. CONVERTIBLE NOTES PAYABLE (

15. CONVERTIBLE NOTES PAYABLE (Details Narrative)	Dec. 31, 2016USD ($)
Vis Vires Group, Inc [Member]
Accrued interest	$ 14,687

16. NOTES PAYABLE, CAPITALIZE51

16. NOTES PAYABLE, CAPITALIZED LEASES AND LONG TERM DEBT (Details) - USD ($)	Dec. 31, 2016	Sep. 30, 2016
Notes Payable Capitalized Leases And Long Term Debt Details
Capital Source Business Finance Group	$ 300,136	$ 370,404
Note payable to Umpqua Bank	199,935	199,935
Secured note payable to J3E2A2Z LP - related party	600,000	600,000
Total debt	1,100,071	1,170,339
Less current portion of long term debt	(1,100,071)	(1,170,339)
Long term debt	$ 0	$ 0

17. EQUITY (Details)

17. EQUITY (Details)	3 Months Ended
	Dec. 31, 2016$ / sharesshares
Shares
Outstanding at beginning of period	3,453,171
Issued	1,373,849
Exercised	0
Forfeited	0
Expired	0
Outstanding at end of period	4,827,020
Exercisable at end of period	4,827,020
Weighted Average Exercise Price:
Outstanding at beginning of period | $ / shares	$ 0.84
Issued | $ / shares	0.93
Exercised | $ / shares	0
Forfeited | $ / shares	0
Expired | $ / shares	0
Outstanding at end of period | $ / shares	$ 0.87

17. EQUITY (Details 1)

17. EQUITY (Details 1)	3 Months Ended
	Dec. 31, 2016$ / sharesshares
Number of Warrants | shares	4,827,020
Weighted Average Remaining Life (years)	3 years 11 months 16 days
Weighted Average Exercise Price, outstanding | $ / shares	$ 0.87
Shares Exercisable | shares	4,827,020
Weighted Average Exercise Price, exerciseable | $ / shares	$ 0.87
Warrant One [Member]
Number of Warrants | shares	3,501,336
Weighted Average Remaining Life (years)	3 years 11 months 8 days
Weighted Average Exercise Price, outstanding | $ / shares	$ 0.70
Shares Exercisable | shares	3,501,336
Weighted Average Exercise Price, exerciseable | $ / shares	$ 0.70
Warrant Two [Member]
Number of Warrants | shares	1,311,348
Weighted Average Remaining Life (years)	4 years 11 months 1 day
Weighted Average Exercise Price, outstanding | $ / shares	$ 1
Shares Exercisable | shares	1,311,348
Weighted Average Exercise Price, exerciseable | $ / shares	$ 1
Warrant Three [Member]
Number of Warrants | shares	14,336
Weighted Average Remaining Life (years)	1 year 1 month 13 days
Weighted Average Exercise Price, outstanding | $ / shares	$ 30
Shares Exercisable | shares	14,336
Weighted Average Exercise Price, exerciseable | $ / shares	$ 30

17. EQUITY (Details 2)

17. EQUITY (Details 2)	3 Months Ended
	Dec. 31, 2016
Dividend yield	0.00%
Expected volatility	130.00%
Minimum [Member]
Expected life	3 months
Risk free interest rate	0.01%
Maximum [Member]
Expected life	3 years
Risk free interest rate	0.07%

17. EQUITY (Details Narrative)

17. EQUITY (Details Narrative)	Dec. 31, 2016USD ($)shares
Notes to Financial Statements
Intrinsic value | $	$ 0
Warrants Vested | shares	4,827,020

18. STOCK OPTIONS (Details)

18. STOCK OPTIONS (Details) - USD ($)	3 Months Ended	12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Sep. 30, 2015
Shares:
Outstanding at beginning of period	3,453,171
Shares granted	1,373,849
Shares exercised	0
Shares forfeitures	0
Outstanding at end of period	4,827,020	3,453,171
Weighted Average Exercise Price:
Outstanding at beginning of period	$ 0.84
Shares granted	0.93
Shares exercised	0
Shares forfeitures	0
Outstanding at end of period	$ 0.87	$ 0.84
Aggregate Intrinsic Value
Aggregate Intrinsic Value Outstanding, End	$ 0
Stock Options
Shares:
Outstanding at beginning of period	50,908	57,407	87,333
Shares granted	0	0	11,335
Shares exercised	0	0	0
Shares forfeitures	0	(6,499)	(41,261)
Outstanding at end of period	50,908	50,908	57,407
Weighted Average Exercise Price:
Outstanding at beginning of period	$ 18.04	$ 18.43	$ 18.80
Shares granted	0	0	15
Shares exercised	0	0	0
Shares forfeitures	0	(21.40)	(18.29)
Outstanding at end of period	$ 18.045	$ 18.04	$ 18.43
Aggregate Intrinsic Value
Aggregate Intrinsic Value Outstanding, Beginning	$ 918,627	$ 1,057,725	$ 1,642,200
Aggregate Intrinsic Value Outstanding, Granted	$ 0	$ 0	$ 170,025
Aggregate Intrinsic Value Outstanding, Exercised	$ 0	$ 0	$ 0
Aggregate Intrinsic Value Outstanding, Forefeitures	$ 0	$ (139,098)	$ (754,500)
Aggregate Intrinsic Value Outstanding, End	$ 918,627	$ 918,627	$ 1,057,725

18. STOCK OPTIONS (Details 1)

18. STOCK OPTIONS (Details 1)	3 Months Ended
	Dec. 31, 2016$ / sharesshares
Number of Outstanding Stock Options	4,827,020
Weighted Average Remaining Life (years)	3 years 11 months 16 days
Weighted Average Exercise Price Exerciseable | $ / shares	$ 0.87
Number Exercisable	4,827,020
Exercise Price 13.500
Number of Outstanding Stock Options	3,334
Weighted Average Remaining Life (years)	1 year 9 months
Weighted Average Exercise Price Exerciseable | $ / shares	$ 13.5
Number Exercisable	3,334
Weighted Average Exercise Price Exerciseable | $ / shares	$ 13.5
Exercise Price 15.000
Number of Outstanding Stock Options	20,906
Weighted Average Remaining Life (years)	2 years 6 months 29 days
Weighted Average Exercise Price Exerciseable | $ / shares	$ 15
Number Exercisable	9,514
Weighted Average Exercise Price Exerciseable | $ / shares	$ 15
Exercise Price 19.500
Number of Outstanding Stock Options	13,334
Weighted Average Remaining Life (years)	2 years 8 months 1 day
Weighted Average Exercise Price Exerciseable | $ / shares	$ 19.5
Number Exercisable	13,334
Weighted Average Exercise Price Exerciseable | $ / shares	$ 19.5
Exercise Price 22.500
Number of Outstanding Stock Options	13,334
Weighted Average Remaining Life (years)	3 years 4 months 17 days
Weighted Average Exercise Price Exerciseable | $ / shares	$ 22.5
Number Exercisable	13,334
Weighted Average Exercise Price Exerciseable | $ / shares	$ 22.5
Exercise Price Total
Number of Outstanding Stock Options	50,908
Weighted Average Exercise Price Exerciseable | $ / shares	$ 18.04
Number Exercisable	39,516
Weighted Average Exercise Price Exerciseable | $ / shares	$ 18.92

18. STOCK OPTIONS (Details Narr

18. STOCK OPTIONS (Details Narrative) - USD ($)	3 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Compensation expense	$ 10,887	$ 11,837
Unrecognized compensation costs	$ 102,276
Period for recognition	2 years 9 months 11 days
Options to purchase common stock under 2011 Stock Incentive Plan	4,827,020
Average exercise price under 2011 Stock Incentive Plan	$ 0.87
Exercisable at end of period	4,827,020
2011 Stock Incentive Plan
Options to purchase common stock under 2011 Stock Incentive Plan	50,908
Average exercise price under 2011 Stock Incentive Plan	$ 18.05

19. OTHER SIGNIFICANT TRANSAC59

19. OTHER SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES (Details narrative)	3 Months Ended
	Dec. 31, 2016USD ($)
Accrued liabilities related parties from advances	$ 44,704
Business loan	$ 199,935
Business loan maturity date	Dec. 31, 2017
Business loan rate of interest	3.25%
Chief Executive Officer
Accrued liabilities related parties from advances	$ 1,559,889

20. COMMITMENTS, CONTINGENCIE60

20. COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS (Details Narrative)	Dec. 31, 2016USD ($)
Notes to Financial Statements
Aggregate future minimum lease payments under operating leases	$ 10,030