Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Sep. 30, 2013 | Jan. 14, 2014 | Mar. 31, 2013 | |
Document and Entity Information [Abstract] | ' | ' | ' |
Document Type | '10-K | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 30-Sep-13 | ' | ' |
Entity Registrant Name | 'ICEWEB INC | ' | ' |
Entity Central Index Key | '0001097718 | ' | ' |
Current Fiscal Year End Date | '--09-30 | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 473,460,779 | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Public Float | ' | ' | $9,288,089 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2013 | Sep. 30, 2012 |
CURRENT ASSETS: | ' | ' |
Cash | $9,652 | $269,594 |
Other receivable | 28 | ' |
Accounts receivable | 58,140 | 563,320 |
Inventory | 163,168 | 282,231 |
Marketable securities, current | 820 | 72,000 |
Other current assets | 175,551 | 6,875 |
Prepaid expenses | 36,925 | 19,702 |
Total Current Assets | 444,284 | 1,213,722 |
OTHER ASSETS: | ' | ' |
Property and equipment, net of accumulated depreciation of $1,422,488 and $1,207,252, respectively | 307,868 | 499,785 |
Deposits | 13,320 | 13,320 |
Marketable Securities, net | ' | 237,600 |
Deferred financing costs, net | ' | 114,395 |
Other assets | 1,545 | 1,545 |
Total Assets | 767,017 | 2,080,367 |
CURRENT LIABILITIES: | ' | ' |
Accounts payable and accrued liabilities | 649,294 | 824,128 |
Notes payable | ' | 2,059,582 |
Note payable, related parties | 186,000 | ' |
Deferred revenue | 2,996 | 24,896 |
Convertible notes payable, net of discount | 181,878 | 105,176 |
Derivative liability | 117,424 | 1,104,499 |
Total Current Liabilities | 1,137,592 | 4,118,281 |
Stockholders' Deficit | ' | ' |
Series B convertible preferred stock ($0.001 par value; 10,000,000 shares authorized; 626,667 shares issued and outstanding) | 626 | 626 |
Common stock ($.001 par value; 1,000,000,000 shares authorized; 410,424,772 shares issued and 410,262,272 shares outstanding, respectively and 216,443,809 shares issued and 216,281,309 shares outstanding, respectively) | 410,262 | 215,945 |
Additional paid in capital | 47,233,663 | 38,343,043 |
Accumulated deficit | -47,921,946 | -40,813,128 |
Accumulated other comprehensive income (loss) | -80,180 | 228,600 |
Treasury stock, at cost, (162,500 shares) | -13,000 | -13,000 |
Total stockholders' deficit | -370,575 | -2,037,914 |
Total Liabilities and Stockholders' Deficit | $767,017 | $2,080,367 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Sep. 30, 2012 |
Consolidated Balance Sheets [Abstract] | ' | ' |
Property and equipment, accumulated depreciation | $1,422,488 | $1,207,252 |
Stockholders' Deficit | ' | ' |
Par value per share | $0.00 | $0.00 |
Shares authorized | 10,000,000 | 10,000,000 |
Series B convertible preferred stock, shares issued | 626,667 | 626,667 |
Series B convertible preferred stock, shares outstanding | 626,667 | 626,667 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 410,424,772 | 216,443,809 |
Common stock, shares outstanding | 410,262,272 | 216,281,309 |
Treasury stock, shares | 162,500 | 162,500 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Consolidated Statements of Operations [Abstract] | ' | ' |
Sales | $977,368 | $2,640,520 |
Cost of sales | 555,228 | 1,780,246 |
Gross profit | 422,140 | 860,274 |
Operating expenses: | ' | ' |
Sales and marketing expense | 841,625 | 1,116,340 |
Depreciation and amortization expense | 215,237 | 202,130 |
Research and development | 1,246,060 | 1,046,026 |
General and administrative | 5,283,363 | 2,722,049 |
Total operating expenses | 7,586,285 | 5,086,545 |
Loss From Operations | -7,164,145 | -4,226,271 |
Other income (expenses): | ' | ' |
Gain on change in derivative liability | 987,075 | 645,501 |
Loss on extinguishment of debt | -481,588 | ' |
Interest income | ' | 22 |
Interest expense | -450,161 | -2,904,300 |
Total other income (expenses): | 55,326 | -2,258,777 |
Net loss | ($7,108,819) | ($6,485,048) |
Net loss per common share - basic and diluted | ($0.02) | ($0.04) |
Weighted average common shares outstanding - basic and diluted | 290,864,883 | 173,207,111 |
Statement_of_Consolidated_Comp
Statement of Consolidated Comprehensive Loss (USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Statement of Consolidated Comprehensive Loss [Abstract] | ' | ' |
Net loss | ($7,108,819) | ($6,485,048) |
Other comprehensive loss, net of tax: | ' | ' |
Unrealized gain (loss) on securities | -308,780 | 161,400 |
Other comprehensive income (loss) | -308,780 | 161,400 |
Comprehensive income (loss) | ($7,417,599) | ($6,323,648) |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Stockholders' Equity (Deficit) and Comprehensive Income (Loss) (USD $) | Total | Series B Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income [Member] | Treasury Stock [Member] |
Balance at Sep. 30, 2011 | ($1,248,079) | $626 | $157,960 | $32,866,315 | ($34,328,080) | $67,200 | ($13,000) |
Balance, shares | 216,281,309 | 626,667 | 215,943,809 | ' | ' | ' | -162,500 |
Net loss for the year | -6,485,048 | ' | ' | ' | -6,485,048 | ' | ' |
Unrealized gain (loss) on marketable securities | 161,400 | ' | ' | ' | ' | 161,400 | ' |
Comprehensive income (loss) | -6,323,648 | ' | ' | ' | -6,485,048 | 161,400 | ' |
Amortization of deferred compensation | 62,228 | ' | ' | 62,228 | ' | ' | ' |
Loss on extinguishment of debt | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock for cash | 2,249,860 | ' | 22,171 | 2,227,689 | ' | ' | ' |
Issuance of common stock for cash, shares | ' | ' | 22,171,111 | ' | ' | ' | ' |
Common stock issued for services | 533,628 | ' | 5,137 | 528,491 | ' | ' | ' |
Common stock issued for services, shares | ' | ' | 5,137,105 | ' | ' | ' | ' |
Common stock issued to employees | 310,250 | ' | 3,635 | 306,615 | ' | ' | ' |
Common stock issued to employees, shares | ' | ' | 3,634,871 | ' | ' | ' | ' |
Common stock issued for exercise of options | 255,716 | ' | 1,532 | 254,184 | ' | ' | ' |
Common stock issued for exercise of options, shares | ' | ' | 1,532,326 | ' | ' | ' | ' |
Exercise of common stock warrants | 275,001 | ' | 3,170 | 271,831 | ' | ' | ' |
Exercise of common stock warrants, shares | ' | ' | 3,169,628 | ' | ' | ' | ' |
Common stock issued as payment on convertible notes | 1,848,031 | ' | 22,340 | 1,825,691 | ' | ' | ' |
Common stock issued as payment on convertible notes, shares | ' | ' | 22,339,702 | ' | ' | ' | ' |
Balance at Sep. 30, 2012 | -2,037,914 | 626 | 215,945 | 38,343,043 | -40,813,128 | 228,600 | -13,000 |
Balance, shares at Sep. 30, 2012 | 216,281,309 | 626,667 | 215,943,809 | ' | ' | ' | -162,500 |
Balance, shares | 410,262,272 | 626,667 | 410,262,072 | ' | ' | ' | -162,500 |
Net loss for the year | -7,108,819 | ' | ' | ' | -7,108,819 | ' | ' |
Unrealized gain (loss) on marketable securities | -308,780 | ' | ' | ' | ' | -308,780 | ' |
Comprehensive income (loss) | -7,417,599 | ' | ' | ' | -7,108,819 | -308,780 | ' |
Amortization of deferred compensation | 762,677 | ' | ' | 762,677 | ' | ' | ' |
Loss on extinguishment of debt | 481,588 | ' | ' | 481,588 | ' | ' | ' |
Issuance of common stock for cash | 245,000 | ' | 10,376 | 234,624 | ' | ' | ' |
Issuance of common stock for cash, shares | ' | ' | 10,375,676 | ' | ' | ' | ' |
Common stock issued for services | 486,485 | ' | 13,330 | 473,155 | ' | ' | ' |
Common stock issued for services, shares | ' | ' | 13,329,657 | ' | ' | ' | ' |
Common stock issued to employees | 969,600 | ' | 30,296 | 939,304 | ' | ' | ' |
Common stock issued to employees, shares | ' | ' | 30,297,630 | ' | ' | ' | ' |
Common stock issued for exercise of options | 3,772,649 | ' | 91,224 | 3,681,425 | ' | ' | ' |
Common stock issued for exercise of options, shares | ' | ' | 91,224,000 | ' | ' | ' | ' |
Exercise of common stock warrants | 53,480 | ' | 1,910 | 51,570 | ' | ' | ' |
Exercise of common stock warrants, shares | ' | ' | 1,910,000 | ' | ' | ' | ' |
Common stock issued as payment on convertible notes | 2,313,458 | ' | 47,181 | 2,266,277 | ' | ' | ' |
Common stock issued as payment on convertible notes, shares | ' | ' | 47,181,300 | ' | ' | ' | ' |
Balance at Sep. 30, 2013 | ($370,575) | $626 | $410,262 | $47,233,664 | ($47,921,947) | ($80,180) | ($13,000) |
Balance, shares at Sep. 30, 2013 | 410,262,272 | 626,667 | 410,262,072 | ' | ' | ' | -162,500 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Consolidated Statements of Cash Flows [Abstract] | ' | ' |
Net loss | ($7,108,819) | ($6,485,048) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ' | ' |
Depreciation | 215,237 | 202,130 |
Share-based compensation | 969,600 | 310,250 |
Amortization of deferred compensation | 762,677 | 62,228 |
Loss on extinguishment of debt | 481,588 | ' |
Change in fair value of derivative liability | -987,075 | -645,501 |
Common stock and options issued for services rendered | 2,532,773 | 533,628 |
Write off of subscription receivable | ' | 83,000 |
Interest on amortization of debt discount | 73,172 | 2,315,337 |
Amortization of deferred finance costs | 153,033 | 525,016 |
(Increase) decrease in: | ' | ' |
Accounts receivable | 505,152 | 618,740 |
Prepaid expense | -17,223 | 10,545 |
Other | -175,551 | -1,545 |
Inventory | 119,063 | -226,250 |
Increase (decrease) in: | ' | ' |
Accounts payable and accrued liabilities | -174,835 | -1,362,562 |
Deferred loan fees | -27,500 | -27,500 |
Deferred revenue | -21,901 | 19,993 |
NET CASH USED IN OPERATING ACTIVITIES | -2,700,609 | -4,067,538 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Purchase of property and equipment | -23,319 | -449,082 |
Investment in marketable securities | ' | -33,000 |
NET CASH USED IN INVESTING ACTIVITIES | -23,319 | -482,082 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Proceeds from notes payable | 297,940 | 395,233 |
Payments on notes payable | -212,794 | -406,225 |
Proceeds from subscription receivable | ' | 1,171,520 |
Proceeds from conversion of warrants | 53,480 | 275,001 |
Proceeds from convertible note payable | 168,000 | 1,750,000 |
Payment of deferred finance costs | ' | -876,012 |
Proceeds from notes payable, related party | 186,000 | ' |
Proceeds from sale of common stock | 245,000 | 2,249,861 |
Proceeds from exercise of common stock options | 1,726,360 | 255,717 |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 2,463,986 | 4,815,094 |
NET INCREASE (DECREASE) IN CASH | -259,942 | 265,474 |
CASH - beginning of year | 269,594 | 4,120 |
CASH - end of year | 9,652 | 269,594 |
Cash paid for: | ' | ' |
Interest | 15,075 | 395,223 |
Income taxes | ' | ' |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ' | ' |
Common stock issued for debt and interest | $2,313,458 | $1,848,031 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Sep. 30, 2013 | |
ORGANIZATION [Abstract] | ' |
ORGANIZATION | ' |
NOTE 1 - ORGANIZATION | |
IceWEB, Inc. (the "Company") began trading publicly in April 2002. Utilizing resources gained through acquisitions, we have developed our IceWEB data storage products. During fiscal 2013 and 2012 we had one wholly owned operating subsidiary, IceWEB Storage Corporation (formerly known as Inline Corporation). | |
BUSINESS OF ICEWEB | |
Since 2005, the Company had been focused on serving the commercial and federal markets with network security products and proprietary on-line software solutions. In 2008, the Company narrowed its focus and expanded its capabilities by acquiring INLINE Corporation, a data storage manufacturing company. | |
In March, 2009, the Company sold its wholly owned subsidiary, IceWEB Virginia, Inc. to an unrelated third party, and in the process exited its low-margin IT re-seller business products business to further focus on the higher margin data storage manufacturing business. | |
With our acquisition of Computers & Telecom, Inc. and KCNAP, LLC, (collectively "CTC") in October 2013, IceWEB provides wireless and fiber broadband service, co-location space and related services and operates a Network Access Point ("NAP") where customers directly interconnect with a network ecosystem of partners and customers. This access to Internet routes provides CTC customers improved reliability and streamlined connectivity while significantly reducing costs by reaching a critical mass of networks within a centralized physical location. In addition, through our IceWEB Storage Corporation subsidiary we deliver on-line cloud computing application services, and manufacture and market cloud-attached and network storage. | |
CTC operates a wireless internet service business, providing WIMAX broadband to small and medium size businesses in the metro Kansas-City, Missouri area. In addition CTC offers the following solutions: (i) premium data center co-location, (ii) interconnection and (iii) exchange and outsourced IT infrastructure services. | |
We leverage our NAP which allows our customers to increase information and application delivery performance while significantly reducing costs. Our platform enables scalable, reliable and cost-effective co-location, interconnection and traffic exchange thus lowering overall cost and increasing flexibility. | |
Our customer base includes U.S. government agencies, enterprise companies, and small to medium sized businesses ("SMB"). |
BASIS_OF_PRESENTATION_AND_SUMM
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Sep. 30, 2013 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' |
NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation | |
The accompanying consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles and include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. | |
Reclassifications | |
Certain reclassifications have been made to previously reported amounts to conform to 2013 amounts. The reclassifications had no impact on previously reported results of operations or shareholders' deficit. | |
Going Concern | |
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company had net losses and net cash used in operating activities of $7,108,819 and $2,700,609, respectively, for the year ended September 30, 2013. The Company also had an accumulated deficit of $47,921,946 at September 30, 2013. These matters raise substantial doubt about the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. | |
Management has established plans intended to increase the sales of our products and services. Management intends to seek new capital from new equity securities offerings to provide funds needed to increase liquidity, fund growth, and implement its business plan. However, no assurances can be given that we will be able to raise any additional funds. | |
Marketable Securities | |
IceWEB accounts for the purchase of marketable equity securities in accordance with FASB Accounting Standards Codification (ASC) 320, "Investment - Debt and Equity Securities" with any unrealized gains and losses included as a net amount as a separate component of stockholders' equity. However, those securities may not have the trading volume to support the stock price if the Company were to sell all their shares in the open market at once, so the Company may have a loss on the sale of marketable securities even though they record marketable equity securities at the current market value. | |
Use of Estimates | |
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America 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 balance sheets and the reported amounts of sales and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates in 2013 and 2012 include the valuation of stock-based compensation, the allowance for inventory obsolescence and the useful life of property and equipment and intangible assets, derivative liabilities, and litigation reserves. | |
Cash and Cash Equivalents | |
We consider all highly liquid debt instruments with original maturities of three months or less to be cash equivalents. | |
Accounts Receivable | |
Accounts receivable consists of normal trade receivables. We recorded a bad debt allowance of $0 and $409,000 as of September 30, 2013 and 2012, respectively. Management performs ongoing evaluations of its accounts receivable. Management believes that all remaining receivables are fully collectable. Bad debt expense amounted to $114,918 and $0 for years ended September 30, 2013 and 2012, respectively. | |
Other Receivables | |
We have a purchase order arrangement with a key vendor that provides us the flexibility to make purchases of inventory components on credit with our customer remitting payment to the vendor. This arrangement provides us with the cash needed to finance certain of our on-going costs and expenses, and provides that we collect on our receivables once the vendor has been paid. This vendor had collected $28 on our behalf that had not been remitted to us as of September 30, 2013. | |
Derivative Liability | |
The Company issued warrants to purchase the Company's common stock in connection with the issuance of convertible debt, which contain certain ratchet provisions that reduce the exercise price of the warrants or the conversion price in certain circumstances. In accordance with ASC 815 the Company determined that the warrants and/or the conversion features with provisions that reduce the exercise price of the warrants did not qualify for a scope exception under ASC 815 as they were determined not to be indexed to the Company's stock. | |
Derivatives are required to be recorded on the balance sheet at fair value (see Note 11). These derivatives, including embedded derivatives in the Company's structured borrowings, are separately valued and accounted for on the Company's balance sheet. Fair values for exchange traded securities and derivatives are based on quoted market prices. Where market prices are not readily available, fair values are determined using market based pricing models incorporating readily observable market data and requiring judgment and estimates. In addition, additional disclosures are required about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for and (c) how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. | |
Fair Value Measurements | |
Fair value is defined 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. The established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: | |
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. | |
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities that are not active; and model-driven valuations whose inputs are observable or whose significant value drivers are observable. Valuations may be obtained from, or corroborated by, third-party pricing services. | |
Level 3: Unobservable inputs to measure fair value of assets and liabilities for which there is little, if any market activity at the measurement date, using reasonable inputs and assumptions based upon the best information at the time, to the extent that inputs are available without undue cost and effort. | |
Fair Value of Financial Instruments | |
The Company's financial instruments, including cash and cash equivalents, receivables, accounts payable and accrued liabilities and notes payable are carried at cost, which approximates their fair value, due to the relatively short maturity of these instruments. | |
Our derivative financial instruments, consisting of embedded conversion features in our convertible debt, which are required to be measured at fair value on a recurring basis under FASB ASC 815-15-25 or FASB ASC 815 as of September 30, 2013 are measured at fair value, using a Black-Scholes valuation model which approximates a binomial lattice valuation methodology utilizing Level 3 inputs. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities (see Note 11). | |
Inventory | |
Inventory is valued at the lower of cost or market, on an average cost basis. | |
Property and Equipment | |
Property and equipment is stated at cost, net of accumulated depreciation. Depreciation expense is recorded by using the straight-line method over the estimated useful lives of the related assets. | |
Product Warranties | |
The Company's products typically carry a warranty for periods of up to three years. We have not had any significant warranty claims on our products. | |
Software Development Costs | |
The costs for the development of new software products and substantial enhancements to existing software products are expensed as incurred until technological feasibility has been established, at which time any additional costs would be capitalized in accordance with the accounting guidance for software. | |
Because our current process for developing software is essentially completed concurrently with the establishment of technological feasibility, which occurs upon the completion of a working model, no costs have been capitalized for any of the periods presented. | |
Intangible Assets | |
Intangible assets, net consists of the cost of acquired customer relationships. We capitalize and amortize the cost of acquired intangible assets over their estimated useful lives on a straight-line basis. The Company periodically reevaluates the carrying value of its intangible assets for events or changes in circumstances that indicate that the carrying value may not be recoverable. As part of this reevaluation, the Company estimates the future cash flows expected to result from the use of the asset. If the sum of the expected future cash flows is less than the carrying amount of the asset, an impairment loss is recognized to reduce the carrying value of the intangible asset to the estimated fair value of the asset. | |
Long-lived Assets | |
In accordance with ASC Topic 360, "Property, Plant, and Equipment" (formerly SFAS 144, "Accounting for the Impairment or Disposal of Long-Lived Assets"), we review the carrying value of intangibles and other long-lived assets for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets is measured by comparison of its carrying amount to the undiscounted cash flows that the asset or asset group is expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the property, if any, exceeds its fair market value. | |
Advertising | |
Advertising costs are expensed as incurred and amounted to $20,813 in fiscal 2013 and $93,975 in fiscal 2012. | |
Revenue Recognition | |
We follow the guidance of ASC Topic 605, "Revenue Recognition" (formerly Staff Accounting Bulletin (SAB) No. 104, "Revenue Recognition") for revenue recognition. In general, we record revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The following policies reflect specific criteria for our various revenues streams: | |
Revenues from sales of products are generally recognized when products are shipped unless the Company has obligations remaining under sales or licensing agreements, in which case revenue is either deferred until all obligations are satisfied or recognized ratably over the term of the contract. | |
Deferred Financing Costs | |
Debt issuance costs incurred in connection with the issuance of debt are capitalized and amortized to interest expense based on the related debt agreements on a straight-line basis, which approximates the effective interest method. Unamortized amounts are included in the related debt payable, net, in the accompanying consolidated balance sheets. | |
Earnings per Share | |
We compute earnings per share in accordance with ASC Topic 260, "Earnings Per Share" Under the provisions of ASC Topic 260, basic earnings per share is computed by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing the net income (loss) for the period by the weighted average number of common and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares consist of the common shares issuable upon | |
the exercise of stock options and warrants (using the treasury stock method) and upon the conversion of convertible notes and preferred stock (using the if-converted method). Potentially dilutive common shares are excluded from the calculation if their effect is antidilutive. At September 30, 2013, there were options and warrants to purchase 106,238,245 shares of common stock, and 626,667 shares issuable upon conversion of Series B preferred stock outstanding which could potentially dilute future earnings per share. | |
Stock-Based Compensation | |
As more fully described in Note 13, we have two stock option plans that provide for non-qualified options to be issued to directors, officers, employees and consultants (the 2012 Equity Compensation Plan and the 2013 Equity Plan (the "Plans"). | |
Prior to October 1, 2005, we accounted for stock options issued under the Plan under the recognition and measurement provisions of APB Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations, as permitted by ASC Topic 718, "Compensation - Stock Compensation, "Share-Based Payments". No stock-based compensation cost related to employee stock options was recognized in the Consolidated Statement of Operations for the year ended September 30, 2005 as all options granted under the Plan had an exercise price equal to the market value of the underlying common stock on the date of grant. | |
Recently Issued Accounting Standards | |
In July 2013, the FASB issued ASU 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists." This standard requires that an unrecognized tax benefits, or a portion of an unrecognized tax benefit be presented on a reduction to a deferred tax asset for an NOL carryforward, a similar tax loss, or a tax credit carryforward with certain exceptions to this rule. If certain exception conditions exists, an entity should present an unrecognized tax benefit in the financial statements as a liability and should not net the unrecognized tax benefit with a deferred tax asset. This standard is effective for fiscal years and interim periods within those years beginning after December 15, 2013. The Company does not expect the adoption of the new provisions to have a material impact on our financial condition or results of operations. | |
The Company believes that there were no other accounting standards recently issued that had or are expected to have a material impact on our financial position or results of operations. |
PROPERTY_AND_EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended | |||||||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||||||
PROPERTY AND EQUIPMENT [Abstract] | ' | |||||||||||||||||||||||||||
PROPERTY AND EQUIPMENT | ' | |||||||||||||||||||||||||||
NOTE 3 - PROPERTY AND EQUIPMENT | ||||||||||||||||||||||||||||
At September 30, property and equipment consisted of the following: | ||||||||||||||||||||||||||||
Estimated Life | 2013 | 2012 | ||||||||||||||||||||||||||
Office equipment | 5 years | $ | 644,020 | $ | 644,020 | |||||||||||||||||||||||
Computer software | 3 years | 52,841 | 29,523 | |||||||||||||||||||||||||
Furniture and fixtures | 5 years | - | - | |||||||||||||||||||||||||
Leasehold improvements | 5 years | 1,033,495 | 1,033,495 | |||||||||||||||||||||||||
1,730,356 | 1,707,038 | |||||||||||||||||||||||||||
Less: accumulated depreciation | (1,422,488 | ) | (1,207,253 | ) | ||||||||||||||||||||||||
$ | 307,868 | $ | 499,785 | |||||||||||||||||||||||||
Depreciation expense for the years ended September 30, 2013 and 2012 was $215,237 and $202,130 respectively. | ||||||||||||||||||||||||||||
OTHER_CURRENT_ASSETS
OTHER CURRENT ASSETS | 12 Months Ended |
Sep. 30, 2013 | |
OTHER CURRENT ASSETS | ' |
OTHER CURRENT ASSETS | ' |
NOTE 4 - OTHER CURRENT ASSETS | |
Other current assets totaled $175,551 at September 30, 2013, and consisted of advances made to Computers & Tele-com, Inc. This amount was reimbursable to IceWEB in the event that the acquisition of Computers & Telecom, Inc. did not occur. IceWEB, Inc. successfully completed the acquisition of Computers & Telecom, Inc. in October, 2013. See footnote 20. |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Sep. 30, 2013 | |
RELATED PARTY TRANSACTIONS [Abstract] | ' |
RELATED PARTY TRANSACTIONS | ' |
NOTE 5 - RELATED PARTY TRANSACTIONS | |
On November 2, 2012 IceWEB, Inc. entered into a Loan Agreement with IWEB Growth Fund, LLC, a Virginia limited liability company ("IWEB Growth Fund") which was recently established by Messrs. Compton, Bush, Carosi, Pirtle and Stavish and General Soyster, our independent directors. Ms. My Le Phuong, an employee of our company, serves as manager of the IWEB Growth Fund. Under the terms of the Loan Agreement, IWEB Growth Fund agreed to make one or more loans to us up to the total principal amount of $1.5 million. The lending of any amounts under the Loan Agreement is conditioned upon the negotiation of notes and related loan documents which contain terms and conditions that are acceptable to the lender to be determined at the time of the loans. We agreed to grant IWEB Growth Fund a security interest in our assets as collateral for these loans, which such security interest is subordinate to the interest of our primary lender Sand Hill Finance, LLC. In the event we should default under the terms of the Loan Agreement, IWEB Growth Fund is entitled to declare all amounts advanced under the various notes immediately due and payable. An event of default includes a breach by us of any covenant, representation or warranty in the Loan Agreement or a default under any note entered into with the lender. | |
Between November 9, 2012 and July 11, 2013, IWEB Growth Fund lent us an aggregate of $186,000 under the terms of 9 separate Confession of Judgment Promissory Notes. These notes, which are identical in their terms other than the dates and principal amounts, are for a one year term and bear interest at 12% per annum payable at maturity. Embodied in each of the notes is a confession of judgment which means that should we default upon the payment of the note, we have agreed to permit IWEB Growth Fund to enter a judgment against us in the appropriate court in Virginia before filing suit against us for collection of the amounts. Pursuant to the terms of the Loan Agreement, we paid IWEB Growth Fund's expenses of $1,500 for the preparation of the Loan Agreement and related documents. We are using the net proceeds from these initial loans for general working capital. | |
While six out of the seven board members qualify as unrelated and independent, as they are independent from management and free from any interest, function, business or other relationship that could, or could reasonably be perceived to, materially interfere with the Director's ability to act in the our best interest, we do not have any policies or procedures for the review, approval or ratification of any related party transactions and no review or ratification of any of the foregoing related party transactions by our board has occurred. |
NOTES_PAYABLE
NOTES PAYABLE | 12 Months Ended |
Sep. 30, 2013 | |
NOTES PAYABLE [Abstract] | ' |
NOTES PAYABLE | ' |
NOTE 6 - NOTES PAYABLE | |
Sand Hill Finance, LLC | |
On December 19, 2005, the Company entered into a Financing Agreement with Sand Hill Finance, LLC pursuant to which, together with related amendments, the Company may borrow up to 80% on the Company's accounts receivable balances up to a maximum of $1,800,000. In conjunction with the acquisition of Inline Corporation in December, 2008, the lending limit on the credit facility was increased to $2,750,000. In addition, the Company and Sand Hill Finance, LLC entered into a 36 month term note agreement in the amount of $1,000,000. Amounts borrowed under the Financing Agreement are secured by a first security interest in substantially all of the Company's assets. | |
Interest on the accounts receivable-based borrowings was payable at a rate of 1.75% per month on the average loan balance outstanding during the year, equal to an annual interest rate of approximately 21% per year. The Company also agreed to pay an upfront commitment fee of 1% of the credit line upon signing the Financing Agreement, half of which was due and paid upon signing (amounting to $9,000) and half of which is due on the first anniversary of the Financing Agreement. In addition, the Company is obligated to pay a commitment fee of 1% of the credit limit annually, such amounts are payable on the anniversary of the agreement. | |
In connection with the term note, the Company issued Sand Hill Finance, LLC a seven-year common stock purchase warrant to purchase 120,000 shares of our common stock at an exercise price of $1.00 per share. The exercise price was subsequently reduced to $0.50 per share pursuant to Warrant Amendment Agreement which was executed in conjunction with the convertible debenture. The warrant contains a cashless exercise provision which means that at the option of the holder, the warrant is convertible into a number of shares of our common stock as determined by dividing the aggregate fair market value of the Company's common stock minus the aggregate exercise price of the warrant by the fair market value of one share of common stock. | |
The number of shares issuable upon the exercise of the warrant and the exercise price are subject to adjustment in the event of stock dividends, stock splits and reclassifications. The fair value of the warrant of $13,589 has been recorded as an addition to paid-in capital and deferred finance costs during the year ended September 30, 2009. | |
The Financing Agreement had a term of one year, subject to mutual extension by both parties. As a result, the balance due to Sand Hill Finance, LLC was classified as a current liability on the accompanying consolidated balance sheet. | |
The terms of the Financing Agreement also restrict the Company from undertaking certain transactions without the written consent of the creditor including (i) permit or suffer a change in control involving 20% of its securities, (ii) acquire assets, except in the ordinary course of business, involving payment of $100,000 or more, (iii) sell, lease, or transfer any of its property except for sales of inventory and equipment in the ordinary course of business, (iv) transfer, sell or license any intellectual property, (v) declare or pay a dividend on stock, except payable in the form of stock dividends (vi) incur any indebtedness other than trade credit in the ordinary course of business and (vii) permit any lien or security interest to attach to any collateral. | |
In November, 2011, in connection with the Company's private placement of convertible notes and Securities Purchase Agreement (see NOTE 6), Sand Hill Finance, LLC executed an amendment to the Financing Agreement in which Sand Hill Finance LLC agreed that they would not pursue any remedies of default under the Financing Agreement until at least the ninety-first day after the obligations under the convertible notes have been fully satisfied. | |
On September 7, 2012, Sand Hill Finance, LLC and IceWEB, Inc. entered into an agreement to amend the Financing Agreement in which Sand Hill Finance, LLC agreed to lower the interest rate on Iceweb's existing debt from 21% per annum to 12% per annum. | |
On April 12, 2013 the Company entered into an agreement with Sand Hill Finance, LLC to amend the existing Financing Agreement by issuing a convertible debenture to replace IceWEB's existing note payable, in the amount of $2,139,235. The debenture was convertible into common stock at a fixed price of $0.075 per share, bore interest at 12% annually, and had a two year term. In addition, the terms of the note call for monthly payments of $15,000, which increases to $25,000 in the event that IceWEB raises $3,000,000 or more in an equity financing. In April, 2013 Sand Hill Finance, LLC converted $506,250 of the debenture balance into 6,750,000 shares of IceWEB, Inc. $0.001 par value common stock. | |
On August 20, 2013 IceWEB, Inc. entered into an Agreement for the Cancellation of Secured Convertible Debenture with Sand Hill Finance, LLC pursuant to which SHF converted $1,642,739 of principal and accrued but unpaid interest due it under the Secured Convertible Debenture dated April 15, 2013 into 37,000,000 shares of our common stock. The conversion price per share was $0.0444 when the market price per share was $0.0319 per share. The Company recognized a loss on the extinguishment of debt of $481,588 as a result of this transaction. | |
As part of the agreement, within five days SHF was required to file UCC-3 financing statements to release its security interest in our assets which were pledged as collateral under the debenture. The agreement also contains mutual general releases. As a result of this transaction, at September 30, 2013, the principal amount due under the Financing Agreement amounted to $0. |
INVENTORY
INVENTORY | 12 Months Ended | |||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||
INVENTORY [Abstract] | ' | |||||||||||||||||
INVENTORY | ' | |||||||||||||||||
NOTE 7 - INVENTORY | ||||||||||||||||||
Inventory consisted of the following: | ||||||||||||||||||
September 30, 2013 | September 30, 2012 | |||||||||||||||||
Raw materials | $ | 130,534 | $ | 175,258 | ||||||||||||||
Work in progress | 24,476 | 42,335 | ||||||||||||||||
Finished goods | 8,158 | 64,638 | ||||||||||||||||
$ | 163,168 | $ | 282,231 | |||||||||||||||
COMMITMENTS
COMMITMENTS | 12 Months Ended |
Sep. 30, 2013 | |
COMMITMENTS [Abstract] | ' |
COMMITMENTS | ' |
NOTE 8 - COMMITMENTS | |
We leased office space in Sterling, Virginia under a two-year operating lease that expired on March 31, 2011. We occupied the office space on a month-to-month basis until October 31, 2013, when we relocated our corporate offices to Kansas City, Missouri in conjunction with our acquisition of Computers & Telecom, Inc. and subsidiary. | |
Rent expense was $73,894 and $75,177 for the years ended September 30, 2013 and 2012. |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
INCOME TAXES [Abstract] | ' | ||||||||||||||||
INCOME TAXES | ' | ||||||||||||||||
NOTE 9 - INCOME TAXES | |||||||||||||||||
We account for income taxes under the provisions of ASC 740-10-25. ASC 740-10-25 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Benefits from tax positions should be recognized in the financial statements only when it is more likely than not that the tax position will be sustained upon examination by the appropriate taxing authority that would have full knowledge of all the relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. ASC 740-10-25 also provides guidance on the accounting for and disclosure of unrecognized tax benefits, interest, and penalties. ASC 740-10-25 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statements and the tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax losses and tax credit carryforwards. ASC 740-10-25 additionally requires the establishment of a valuation allowance to reflect the likelihood of realization of deferred tax assets. At September 30, 2013 and 2012 the Company has no unrecognized tax benefits, interest, or penalties. At September 30, 2013 tax years ending September 30, 2012, 2011, and 2010 remain subject to examination. | |||||||||||||||||
A summary of our deferred tax is as follows: | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Deferred Tax Assets: | |||||||||||||||||
Tax benefit of net operating loss carry forward | $ | 7,089,500 | $ | 5,637,000 | |||||||||||||
Unpaid accrued salaries | 48,500 | 13,000 | |||||||||||||||
Allowance for doubtful accounts | - | 154,000 | |||||||||||||||
Amortization of leasehold improvements | - | 339,000 | |||||||||||||||
7,131,000 | 6,143,000 | ||||||||||||||||
Less: valuation allowance | (7,131,000 | ) | (6,143,000 | ) | |||||||||||||
Net deferred tax assets | $ | - | $ | - | |||||||||||||
As of September 30, 2013 we had unused net operating loss carry forwards of approximately $18,855,000 available to reduce our future federal taxable income. Net operating loss carryforwards expire through fiscal years ending 2033. Internal Revenue Code Section 382 places a limitation on the amount of taxable income that can be offset by carryforwards after a change in control (generally a greater than 50% change in ownership). | |||||||||||||||||
The valuation allowance at September 30, 2013 was $7,131,000. The increase during fiscal 2013 was approximately $988,000. | |||||||||||||||||
The table below summarizes the differences between our effective tax rate and the statutory federal rate as follows for fiscal 2013 and 2012. The effective tax rate is 34% Federal and 3.6% State after Federal tax benefit: | |||||||||||||||||
2013 | 2012 | ||||||||||||||||
Computed "expected" tax benefit | (34.0 | )% | (34.0 | )% | |||||||||||||
State income taxes, net of federal tax benefit | (3.6 | )% | (3.6 | )% | |||||||||||||
Other permanent differences | 15 | % | 13.6 | % | |||||||||||||
Change in valuation allowance | 22.6 | % | 24 | % | |||||||||||||
Effective tax rate | 0 | % | 0 | % | |||||||||||||
CONVERTIBLE_NOTES
CONVERTIBLE NOTES | 12 Months Ended | |||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||
CONVERTIBLE NOTES [Abstract] | ' | |||||||||||||||||||||||
CONVERTIBLE NOTES | ' | |||||||||||||||||||||||
NOTE 10 - CONVERTIBLE NOTES | ||||||||||||||||||||||||
On November 23, 2011, the Company entered into a Securities Purchase Agreement with three accredited investors pursuant to which the Company sold $2,012,500 in principal amount of senior convertible notes and issued the investors Series O, Series P and Series Q Warrants to purchase up to an aggregate of 81,588,029 shares, as adjusted, of the Company's common stock for an aggregate purchase price of $1,750,000 in a private transaction exempt from registration under the Securities Act of 1933, as amended (the "Securities Act") in reliance on an exemption from registration pursuant to Section 4(2) and Regulation D of the Securities Act. The Company issued the notes at an original issue discount of 13%. | ||||||||||||||||||||||||
The convertible notes were fully converted in March, 2013. The remaining unamortized discount was written off as interest expense. The balance of this note was as follows as of September 30, 2013 and 2012: | ||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||
Principal balance of convertible notes | $ | - | $ | 164,469 | ||||||||||||||||||||
Original issue discount, net | - | (5,399 | ) | |||||||||||||||||||||
Debt discount | - | (53,895 | ) | |||||||||||||||||||||
Convertible notes, net of discount | $ | - | $ | 105,175 | ||||||||||||||||||||
On April 10, 2013 when the closing price of the Company's stock was $0.034, the Company entered into a promissory note agreement with JMJ Financial for an amount of up to $500,000. The note bears interest at 12% which is prepaid at the time of funding, and was issued with a 10% original issue discount. Each note draw has a seven month term and is repayable in cash or stock with a minimum conversion price per share of the lesser of $0.075 per share or 60% of the lowest trade price in the 25 trading days previous to the conversion, but in no case shall the conversion price be less than $0.075. As of September 30, 2013, the Company had borrowed $186,667 under this agreement. | ||||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||
Principal balance of convertible notes | $ | 186,667 | $ | - | ||||||||||||||||||||
Original issue discount, net | (4,789 | ) | - | |||||||||||||||||||||
Debt discount | - | - | ||||||||||||||||||||||
Convertible notes, net of discount | $ | 181,878 | $ | - | ||||||||||||||||||||
The effective interest rate on notes issued with original issue discount for the years ending September 30, 2013 and 2012 was 36.8% and 31.9%, respectively. Total interest cost, including contractual rate and original issue discount was $256,376 and $2,144,900 for the years ending September 30 2013 and 2012, respectively. |
DERIVATIVE_LIABILITIES
DERIVATIVE LIABILITIES | 12 Months Ended | |||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||
DERIVATIVE LIABILITIES [Abstract] | ' | |||||||||||||||||
DERIVATIVE LIABILITIES | ' | |||||||||||||||||
NOTE 11 - DERIVATIVE LIABILITIES | ||||||||||||||||||
Derivative warrant liability | ||||||||||||||||||
The Company has warrants issued in connection with our convertible notes payable outstanding with price protection provisions that allow for the reduction in the exercise price of the warrants in the event the Company subsequently issues stock or securities convertible into stock at a price lower than the exercise price of the warrants. Simultaneously with any reduction to the exercise price, the number of shares of common stock that may be purchased upon exercise of each of these warrants shall be increased or decreased proportionately, so that after such adjustment the aggregate exercise price payable for the adjusted number of warrants shall be the same as the aggregate exercise price in effect immediately prior to such adjustment. The Company accounted for its warrants with price protection in accordance with FASB ASC Topic 815. | ||||||||||||||||||
Accounting for Derivative Warrant Liability | ||||||||||||||||||
The Company's derivative warrant instruments have been measured at fair value at September 30, 2013 using the Black-Scholes model, which approximates a binomial or lattice model. The Company recognizes all of its warrants with price protection in its consolidated balance sheet as liabilities. The liability is revalued at each reporting period and changes in fair value are recognized currently in the consolidated statements of operations. The initial recognition and subsequent changes in fair value of the derivative warrant liability have no effect on the Company's cash flows. | ||||||||||||||||||
The derivative warrants outstanding at September 30, 2013 are all currently exercisable with a weighted-average remaining life of 3.04 years. | ||||||||||||||||||
The revaluation of the warrants at each reporting period, as well as the charges associated with issuing additional warrants due to the price protection features, resulted in the recognition of income of $987,075 and $645,501 within the Company's consolidated statements of operations for the year ended September 30, 2013 and 2012, respectively, under the caption "Gain on change in derivative liability". The fair value of the warrants at September 30, 2013 is $117,424 which is reported on the consolidated balance sheet under the caption "Derivative Liability". The following summarizes the changes in the value of the derivative warrant liability from the date of the Company's issuance of derivative warrant instruments on November 23, 2011 until September 30, 2013: | ||||||||||||||||||
Value | No. of Warrants | |||||||||||||||||
Warrants Issued on November 23, 2011- Derivative warrant liability | $ | 1,750,000 | 115,446,100 | |||||||||||||||
Decrease in fair value of derivative warrant liability | (645,501 | ) | (2,669,628 | ) | ||||||||||||||
Balance at September 30, 2012 - Derivative warrant liability | $ | 1,104,499 | 112,776,472 | |||||||||||||||
Decrease in fair value of derivative warrant liability | (987,075 | ) | (23,957,751 | ) | ||||||||||||||
Balance at September 30, 2013 - Derivative warrant liability | $ | 117,424 | 88,818,721 | |||||||||||||||
Fair Value Assumptions Used in Accounting for Derivative Warrant Liability | ||||||||||||||||||
The Company has determined its derivative warrant liability to be a Level 3 fair value measurement and has used the Black-Scholes pricing model to calculate the fair value as of September 30, 2013. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. The key inputs used in the September 30, 2013 fair value calculations were as follows: | ||||||||||||||||||
September 30, | ||||||||||||||||||
2013 | ||||||||||||||||||
Exercise price | $ | 0.028 | ||||||||||||||||
Time to expiration | 3.04 - 3.75 years | |||||||||||||||||
Risk-free interest rate | 0.62% - 0.77% | |||||||||||||||||
Estimated volatility | 280 | % | ||||||||||||||||
Dividend | -0- | |||||||||||||||||
Stock price on September 30, 2013 | $ | 0.0229 | ||||||||||||||||
Expected forfeiture rate | 90% |
CONCENTRATION_OF_CREDIT_RISK
CONCENTRATION OF CREDIT RISK | 12 Months Ended | |||
Sep. 30, 2013 | ||||
CONCENTRATION OF CREDIT RISK [Abstract] | ' | |||
CONCENTRATION OF CREDIT RISK | ' | |||
NOTE 12 - CONCENTRATION OF CREDIT RISK | ||||
Bank Balances | ||||
The Company maintains cash in financial institutions insured by the Federal Deposit Insurance Corporation ("FDIC"), including non-interest bearing transaction account deposits protected in full in accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act"). At September 30, 2013 all of the Company's cash balances were fully insured. The Company has not experienced any losses in such accounts. | ||||
Major Customers | ||||
Sales to 2 customers represented approximately 39% and 60% of total sales for the years ended September 30, 2013 and 2012, respectively. | ||||
2013 | 2012 | |||
Customer A | 26% | 41% | ||
Customer B | 13% | 19% | ||
All others | 61% | 40% | ||
100% | 100% | |||
As of September 30, 2013 and 2012, respectively, approximately 93% and 91% of our accounts receivable was due from three customers. | ||||
2013 | 2012 | |||
Customer A | 47% | 54% | ||
Customer B | 23% | 26% | ||
Customer C | 22% | 11% | ||
All others | 8% | 9% | ||
100% | 100% | |||
STOCKHOLDERS_EQUITY_DEFICIT
STOCKHOLDERS' EQUITY (DEFICIT) | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS' EQUITY (DEFICIT) [Abstract] | ' | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS' EQUITY (DEFICIT) | ' | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NOTE 13 - STOCKHOLDERS' EQUITY (DEFICIT) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Our authorized capital includes 10,000,000 shares of blank check preferred stock, par value $0.001 per share. Our Board of Directors, without further stockholder approval, may issue our preferred stock in one or more series from time to time and fix or alter the designations, relative rights, priorities, preferences, qualifications, limitations and restrictions of the shares of each series. In March 2005, our Board of Directors authorized a series of 1,666,667 shares of blank check preferred stock be designated as Series A Convertible Preferred Stock and on April 1, 2005 we filed a Certificate of Designations of Preferences, Rights and Limitations of Series A Convertible Preferred Stock with the Secretary of State of Delaware. In September 2005, our Board of Directors authorized a series of 833,334 shares of blank check preferred stock be designated as Series B Convertible Preferred Stock and on September 28, 2005, we filed a Certificate of Designations of Preferences, Rights and Limitations of Series B Preferred with the Secretary of State of Delaware. On December 29, 2005, we filed an Amended and Restated Certificate of Designations of Preferences, Rights and Limitations of Series B Convertible Preferred Stock increasing the number of shares authorized under this series to 1,833,334 shares. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
A) Series B Convertible Preferred Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The designations, rights and preferences of the Series B Convertible Preferred Stock provide: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | no dividends are payable on the Series B Convertible Preferred Stock. So long as these shares are outstanding, we cannot pay dividends on our common stock nor can it redeem any shares of its common stock, the shares of Series B Convertible Preferred Stock do not have any voting rights, except as may be provided under Delaware law, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | so long as the shares are outstanding, we cannot change the designations of the Series B Convertible Preferred Stock, create a class of securities that in the instance of payment of dividends or distribution of assets upon our liquidation ranks senior to or pari passu with the Series B Convertible Preferred Stock or increase the number of authorized shares of Series B Convertible Preferred Stock. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | each share of Series B Convertible Preferred Stock is convertible at the option of the holder into one share of our common stock based upon an initial conversion value of $0.2727 per share. The conversation ratio is subject to adjustment in the event of stock dividends, stock splits or reclassification of our common stock. No conversion of the Series B Convertible Preferred Stock may occur if a conversion would result in the holder, and any of its affiliates beneficially owning more than 4.9% of our outstanding common shares following such conversion. This provision may be waived or amended only with the consent of the holders of all of the Series B Convertible Preferred Stock and the consent of the holders of a majority of our outstanding shares of common stock who are not affiliates, and | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
• | the shares of Series B Convertible Preferred Stock automatically convert into shares of our common stock in the event of change of control of the Company. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fiscal 2013 Transactions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuances of Restricted Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In November, 2012 we issued 918,919 shares at a share price of $0.074/share to our executive officers and recognized stock based compensation expense of $68,000. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In December, 2012, we issued 112,000 shares of common stock at a per share price of $0.074, valued at $8,228 to an accredited investor for services rendered. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In December, 2012, we sold 500,000 shares of common stock at a per share price of $0.074, valued at $37,000 to an accredited investor. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In January, 2013 we issued 216,216 shares at a share price of $0.074/share to our executive officers and recognized stock based compensation expense of $16,000. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In January, 2013 we sold 500,000 shares of common stock at a per share price of $0.074, valued at $37,000 to an accredited investor. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In January, 2013, we issued 112,000 shares of common stock at a per share price of $0.074, valued at $8,228 to an accredited investor for services rendered. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In February, 2013, we issued 175,000 shares of common stock at a per share price of $0.074, valued at $12,950 to an accredited investor for services rendered. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In February, 2013 we issued 1,950,000 shares of common stock at a per share price of $0.0396, valued at $77,300 to two accredited investors for services rendered. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In February, 2013, we issued 112,000 shares of common stock at a per share price of $0.039, valued at $4,368 to an accredited investor for services rendered. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In March, 2013, we issued 5,000,000 shares of common stock at a per share price of $0.04, valued at $200,000 to an accredited investor for services rendered. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In March, 2013 we sold 1,200,000 shares of common stock at a per share price of $0.021, valued at $25,000 to an accredited investor. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In March, 2013 we issued 362,000 shares of common stock at a per share price of $0.0309, valued at $11,196 to two accredited investors for services rendered. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In April, 2013 we issued 18,000,000 shares at a share price of $0.033/share to our executive officers and employees and recognized stock based compensation expense of $594,000. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In April, 2013, we issued 2,250,000 shares of common stock at a per share price of $0.0305, valued at $68,675 to two accredited investor for services rendered. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In April, 2013, we sold 2,500,000 shares of common stock at a per share price of $0.02, valued at $50,000 to an accredited investor. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In May, 2013, we issued 224,000 shares of common stock at a per share price of $0.028, valued at $6,272 to an accredited investor for services rendered. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In June, 2013, we issued 708,333 shares of common stock at a per share price of $0.0254, valued at $18,008 to two accredited investors for services rendered. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In June, 2013, we sold 2,500,000 shares of common stock at a per share price of $0.02, valued at $50,000 to an accredited investor. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In July, 2013 we issued 6,000,000 shares at a share price of $0.0236/share to our executive officers and employees and recognized stock based compensation expense of $141,600. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In July, 2013, we issued 2,000,000 shares of common stock at a per share price of $0.0236, valued at $47,200 to an accredited investor for services rendered. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In July, 2013, we sold 3,500,000 shares of common stock at a per share price of $0.02, valued at $70,000 to an accredited investor. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In September, 2013, we issued 5,000,000 shares of common stock at a per share price of $0.03, valued at $150,000 to an accredited investor for services rendered. The issuance was exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of that act. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
All stock based transactions listed above were valued at fair market value (quoted market prices) or the contractual rate which approximates fair market value, as applicable. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unregistered shares issued in connection with the Conversion of Notes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Company issued 43,750,000 shares upon the conversion of notes payable at exercise prices ranging from $0.0444 to $ 0.075 per share. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Registered shares issued related to the exercise of common stock options | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Company issued 91,224,000 shares upon the exercise of stock options at various contractual exercise prices ranging from $0.001 to $ 0.075 per share. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Registered shares issued in connection with the Conversion of Notes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Company issued 3,431,300 shares upon the conversion of notes payable at various contractual exercise prices ranging from $0.03627 to $ 0.0527 per share. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Registered shares issued in connection with the Exercise of Warrants | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Company issued 1,910,000 shares upon the exercise of common stock warrants at the contractual exercise prices of $ 0.028 per share. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fiscal 2012 Transactions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In July and August, 2012 we issued 2,434,871 shares of restricted common stock at an average per share price of $0.094, valued at $228,250, in lieu of pay to five of our employees, including three of our executive officers. The recipients were accredited investors and the issuances were exempt from registration under the Securities Act of 1933 in reliance on exemptions provided by Section 4(2) of that act. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
In May, 2012 we executed a Finders' Agreement pursuant to which the finder acted as the exclusive finder with respect to sales by us in a private placement transaction of up to $2.5 million in aggregate principal amount of equity or equity-related securities. We sold 13,455,958 units in exchange for gross proceeds of $1,614,715. These sales were made in a private transaction exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(2) of the Act and Regulation D thereunder. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
On November 23, 2011, we entered into a Securities Purchase Agreement with three accredited investors pursuant to which we sold $2,012,500 in principal amount of senior convertible notes and issued the investors Series O, Series P and Series Q warrants to purchase up to an aggregate of 35,514,789 shares of our common stock for an aggregate purchase price of $1,750,000 in a private transaction exempt from registration under the Securities Act. We issued the senior convertible notes at an original issue discount of 13%. We also entered into a Registration Rights Agreement with investors in which we agreed to register the shares underlying the senior convertible notes and the warrants. We paid Rodman & Renshaw, LLC, a broker-dealer and member of FINRA who acted as the exclusive placement agent for us in the offering, a cash commission of $155,000, issued it warrants to purchase an aggregate of 911,765 shares of our common stock with an exercise price of $0.17 per share which are identical to the Series O warrants, and reimbursed it for legal expenses of $20,000. We reimbursed Iroquois Master Fund Ltd., an investor in the offering, $60,000 for its non-accountable expenses related to the investment. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock Warrants | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
A summary of the status of our outstanding common stock warrants as of September 30, 2013 and 2012 and changes during the period ending on that date is as follows: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The following table summarizes information about common stock warrants outstanding at September 30, 2013: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year Ended September 30, 2013 | Year Ended September 30, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of Warrants | Weighted Average Exercise Price | Number of Warrants | Weighted Average Exercise Price | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock Warrants | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at beginning of year | 118,434,173 | $ | 0.17 | 11,528,934 | $ | 0.17 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Granted | 46,195,745 | 0.052 | 110,074,867 | 0.0816 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercised | (1,910,000 | ) | 0.028 | (3,169,628 | ) | 0.0737 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Forfeited | (59,899,643 | ) | 0.08 | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at end of year | 102,820,275 | $ | 0.028 | 118,434,173 | $ | 0.0853 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants exercisable at end of year | 102,820,275 | $ | 0.046 | 118,434,173 | 0.0844 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted average fair value of warrants granted or re-priced during the year | $ | 0.028 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants Outstanding | Warrants Exercisable | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number | Average | Weighted | Number | Weighted | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Range of | Outstanding at | Remaining | Average | Exercisable at | Average | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise | September 30, | Contractual | Exercise | September 30, | Exercise | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Price | 2013 | Life | Price | 2013 | Price | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ | 0.028 | 88,018,721 | 3.04 Years | $ | 0.028 | 88,018,721 | $ | 0.028 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ | 0.15 | 14,801,554 | 3.75 Years | $ | 0.15 | 14,801,554 | $ | 0.15 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
102,820,275 | $ | 0.046 | 103,620,275 | $ | 0.046 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK_OPTION_PLAN
STOCK OPTION PLAN | 12 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
STOCK OPTION PLAN [Abstract] | ' | |||||||||||||||||||
STOCK OPTION PLAN | ' | |||||||||||||||||||
NOTE 14 - STOCK OPTION PLAN | ||||||||||||||||||||
In August 2000, the Board of Directors adopted the 2000 Management and Director Equity Incentive and Compensation Plan (the "Plan") for directors, officers and employees that provides for non-qualified and incentive stock options to be issued enabling holders thereof to purchase common shares of our stock at exercise prices determined by our Board of Directors. The Plan was approved by our stockholders in August 2001, and the Plan terminated in August, 2010. | ||||||||||||||||||||
The purpose of this Plan was to advance our interests and those of its stockholders by providing a means of attracting and retaining key employees, directors and consultants. Participants in the Plan included our officers, directors, other key employees and consultants who had responsibilities affecting our management, development or financial success. | ||||||||||||||||||||
Awards may have been made under the Plan in the form of Plan options, shares of our common stock subject to a vesting schedule based upon certain performance objectives ("Performance Shares") and shares subject to a vesting schedule based on the recipient's continued employment ("restricted shares"). Plan options could have either been options qualifying as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended or options that do not so qualify. Any incentive stock option granted under the Plan had to provide for an exercise price of not less than 100% of the fair market value of the underlying shares on the date of such grant, but the exercise price of any incentive option granted to an eligible employee owning more than 10% of our common stock had to be at least 110% of such fair market value as determined on the date of the grant. Only persons who were officers or other key employees are eligible to receive incentive stock options and performance share grants. Any non-qualified stock option granted under the Plan had to provide for an exercise price of not less than 50% of the fair market value of the underlying shares on the date of such grant. | ||||||||||||||||||||
As amended in fiscal 2012, the Plan permitted the grant of options and shares for up to 60,000,000 shares of our common stock. | ||||||||||||||||||||
The term of each Plan option and the manner in which it may have been exercised was determined by the Board of Directors, provided that no Plan option could be exercisable more than three years after the date of its grant and, in the case of an incentive option granted to an eligible employee owning more than 10% of our common stock, no more than five years after the date of the grant. The exercise price of the stock options could be paid in either cash, or delivery of unrestricted shares of common stock having a fair market value on the date of delivery equal to the exercise price, or by surrender of shares of common stock subject to the stock option which had a fair market value equal to the total exercise price at the time of exercise, or a combination of the foregoing methods. | ||||||||||||||||||||
In August 2012, the Board of Directors adopted the 2012 Equity Compensation Plan (the "2012 Plan") for directors, officers and employees that provides for non-qualified and incentive stock options to be issued enabling holders thereof to purchase common shares of our stock at exercise prices determined by our Board of Directors. | ||||||||||||||||||||
The purpose of the 2012 Plan is to advance our interests and those of its stockholders by providing a means of attracting and retaining key employees, directors and consultants. In order to serve this purpose, we believe the 2012 Plan encourages and enables key employees, directors and consultants to participate in its future prosperity and growth by providing them with incentives and compensation based on its performance, development and financial success. Participants in the Plan may include our officers, directors, other key employees and consultants who have responsibilities affecting our management, development or financial success. | ||||||||||||||||||||
Awards may be made under the 2012 Plan in the form of plan options, shares of our common stock subject to a vesting schedule based upon certain performance objectives ("Performance Shares") and shares subject to a vesting schedule based on the recipient's continued employment ("restricted shares"). Plan options may either be options qualifying as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended or options that do not so qualify. Any incentive stock option granted under the 2012 Plan must provide for an exercise price of not less than 100% of the fair market value of the underlying shares on the date of such grant, but the exercise price of any incentive option granted to an eligible employee owning more than 10% of our common stock must be at least 110% of such fair market value as determined on the date of the grant. Only persons who are officers or other key employees are eligible to receive incentive stock options and performance share grants. Any non-qualified stock option granted under the 2012 Plan must provide for an exercise price of not less than 50% of the fair market value of the underlying shares on the date of such grant. | ||||||||||||||||||||
The 2012 Plan, as amended permits the grant of options and shares for up to 80,000,000 shares of our common stock. The 2012 Plan terminates 10 years from the date of the 2012 Plan's adoption by our stockholders. The term of each 2012 Plan option and the manner in which it may be exercised is determined by the Board of Directors, provided that no 2012 Plan option may be exercisable more than three years after the date of its grant and, in the case of an incentive option granted to an eligible employee owning more than 10% of our common stock, no more than five years after the date of the grant. The exercise price of the stock options may be paid in either cash, or delivery of unrestricted shares of common stock having a fair market value on the date of delivery equal to the exercise price, or surrender of shares of common stock subject to the stock option which has a fair market value equal to the total exercise price at the time of exercise, or a combination of the foregoing methods. | ||||||||||||||||||||
The fair value of stock options granted was estimated at the date of grant using the Black-Scholes options pricing model. We used the following assumptions for determining the fair value of options granted under the Black-Scholes option pricing model: | ||||||||||||||||||||
Year Ended September 30, | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Expected volatility | 13% - 278% | 36% -278 | % | |||||||||||||||||
Expected term | 1-3 years | 1 - 3 Years | ||||||||||||||||||
Risk-free interest rate | 0.01% - 0.34 | % | 0.67% - 0.77 | % | ||||||||||||||||
Forfeiture Rate | 0% -45 | % | 0% -45 | % | ||||||||||||||||
Expected dividend yield | 0 | % | 0 | % | ||||||||||||||||
The expected volatility was determined with reference to the historical volatility of our stock. We use historical data to estimate option exercise, employee termination, and forfeiture rate within the valuation model. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury rate in effect at the time of grant. | ||||||||||||||||||||
For the year ended September 30, 2013, total stock-based compensation charged to operations for option-based arrangements amounted to $762,677. At September 30, 2013, there was approximately $95,785 of total unrecognized compensation expense related to non-vested option-based compensation arrangements under the Plan. | ||||||||||||||||||||
A summary of the status of our outstanding stock options as of September 30, 2013 and changes during the period ending on that date is as follows: | ||||||||||||||||||||
Year Ended September 30, | Year Ended September 30, | |||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Weighted | Weighted | |||||||||||||||||||
Average | Aggregate | Average | Aggregate | |||||||||||||||||
Exercise | Intrinsic | Exercise | Intrinsic | |||||||||||||||||
Price | Value | Price | Value | |||||||||||||||||
Stock options | ||||||||||||||||||||
Balance at beginning of year | 8,353,185 | $ | 0.0773 | $ | 4,104,487 | $ | 0.375 | $ | ||||||||||||
Granted | 90,963,785 | 0.042 | - | 8,079,185 | 0.079 | - | ||||||||||||||
Exercised | (91,224,000 | ) | $ | 0.042 | - | (1,532,325 | ) | $ | 0.167 | - | ||||||||||
Forfeited | (4,675,000 | ) | $ | 0.079 | (2,298,162 | ) | $ | 0.554 | ||||||||||||
Balance at end of year | 3,417,970 | $ | 0.086 | $ | - | 8,353,185 | $ | 0.0773 | $ | - | ||||||||||
Options exercisable at end of year | 3,045,852 | $ | 0.087 | $ | - | 1,307,333 | $ | 0.0649 | $ | - | ||||||||||
Weighted average fair value of options granted during the year | $ | 0.079 | $ | - | ||||||||||||||||
The following table summarizes information about employee stock options outstanding at September 30, 2013: | ||||||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||||
Weighted | ||||||||||||||||||||
Number | Average | Weighted | Number | Weighted | ||||||||||||||||
Range of | Outstanding at | Remaining | Average | Exercisable at | Average | |||||||||||||||
Exercise | September 30, | Contractual | Exercise | September 30, | Exercise | |||||||||||||||
Price | 2013 | Life | Price | 2013 | Price | |||||||||||||||
$ | 0.077 | 275,000 | 3.96 Years | $ | 0.077 | 91,667 | $ | 0.077 | ||||||||||||
0.0814 | 188,785 | 4.10 Years | 0.0814 | - | 0.0814 | |||||||||||||||
0.847 | 2,454,185 | 3.96 Years | 0.847 | 2,454,185 | 0.847 | |||||||||||||||
0.1 | 500,000 | 0.44 Years | 0.1 | 500,000 | 0.1 | |||||||||||||||
3,417,970 | $ | 0.086 | 3,045,852 | $ | 0.087 |
INVESTMENTS
INVESTMENTS | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||||||||||||||||
INVESTMENTS [Abstract] | ' | ||||||||||||||||||||||||||||||||||||||||||
INVESTMENTS | ' | ||||||||||||||||||||||||||||||||||||||||||
NOTE 15 - INVESTMENTS | |||||||||||||||||||||||||||||||||||||||||||
(a) Summary of Investments | |||||||||||||||||||||||||||||||||||||||||||
Marketable Equity Securities: | |||||||||||||||||||||||||||||||||||||||||||
In November, 2009 we acquired 800,000 shares of VOIS Inc. common stock for $48,000, and in March, 2012 we acquired an additional 3,300,000 shares of VOIS Inc. common stock for $33,000. In both instances the Company was able to negotiate a purchase price less than the then trading price of VOIS' common stock based upon the illiquid nature of the investment and the lack of any other willing purchasers for VOIS securities. | |||||||||||||||||||||||||||||||||||||||||||
As of September 30, 2013, the Company's investments in marketable equity securities are based on the September 30, 2013 stock price as reflected on the OTCBB. These marketable equity securities are summarized as follows: | |||||||||||||||||||||||||||||||||||||||||||
30-Sep-13 | Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||||||||||||||||||||||
Publicly traded equity securities | $ | 81,000 | $ | - | $ | (80,180 | ) | $ | 820 | ||||||||||||||||||||||||||||||||||
Total | $ | 81,000 | $ | - | $ | (80,180 | ) | $ | 820 | ||||||||||||||||||||||||||||||||||
The unrealized losses are presented in comprehensive income in the consolidated statement of operations and comprehensive income. | |||||||||||||||||||||||||||||||||||||||||||
(b) Gains and Losses on Investments | |||||||||||||||||||||||||||||||||||||||||||
The following table summarizes the realized net gains (losses) associated with the Company's investments: | |||||||||||||||||||||||||||||||||||||||||||
Fiscal Year Ended | |||||||||||||||||||||||||||||||||||||||||||
30-Sep | |||||||||||||||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||||||||||||||
Net gains/(loss) on investments in publicly traded equity securities | $ | (308,780 | ) | $ | 192,360 | ||||||||||||||||||||||||||||||||||||||
Net gains on investments | $ | (308,780 | ) | $ | 192,360 | ||||||||||||||||||||||||||||||||||||||
On January 1, 2008, the Company adopted ASC 820, which, among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. The Company did not adopt the ASC 820 fair value framework for nonfinancial assets and liabilities, except for items that are recognized or disclosed at fair value in the financial statements at least annually. ASC 820 clarifies that fair value is an exit price, representing the amount that would either be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: | |||||||||||||||||||||||||||||||||||||||||||
Level 1.Observable inputs such as quoted prices in active markets for identical assets or liabilities; | |||||||||||||||||||||||||||||||||||||||||||
Level 2.Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and | |||||||||||||||||||||||||||||||||||||||||||
Level 3.Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. | |||||||||||||||||||||||||||||||||||||||||||
Investments Measured at Fair Value on a Recurring Basis: | |||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements Using: | |||||||||||||||||||||||||||||||||||||||||||
Quoted | Significant | Significant | |||||||||||||||||||||||||||||||||||||||||
Prices | Other | Unobservable | |||||||||||||||||||||||||||||||||||||||||
in Active | Observable | Inputs | |||||||||||||||||||||||||||||||||||||||||
Markets | Inputs | (Level 3) | |||||||||||||||||||||||||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||||||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||||||||||||||||||||||||
Marketable Equity Securities | $ | 820 1 | $ | - | $ | - | |||||||||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||||||||
Derivative liabilities | $ | - | $ | - | $ | 117,424 | |||||||||||||||||||||||||||||||||||||
September 30, 2012 | |||||||||||||||||||||||||||||||||||||||||||
Marketable Equity Securities, net of discount for effect of restriction | $ | - | $ | - | $ | 309,600 1 | |||||||||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||||||||
Derivative liabilities | $ | - | $ | - | $ | 1,104,499 | |||||||||||||||||||||||||||||||||||||
1 Previously Level 3 due to Rule 144 restrictions on trading and application of 20% discount; moved to Level 1 when restrictions expired. | |||||||||||||||||||||||||||||||||||||||||||
We categorize the securities as investments in marketable securities available for sale. These securities are quoted either on an exchange or inter-dealer quotation (pink sheet) system. The securities are restricted and cannot be readily resold by us absent a registration of those securities under the Securities Act or the availabilities of an exemption from the registration requirements under the Securities Act. As these securities are often restricted, we are unable to liquidate them until the restriction is removed. Unrealized gains or losses on marketable securities available for sale are recognized as an element of comprehensive income based on changes in the fair value of the security. Once liquidated, realized gains or losses on the sale of marketable securities available for sale are reflected in our net income for the period in which the security was liquidated. | |||||||||||||||||||||||||||||||||||||||||||
Under the guidance of ASC 320, "Investments", we periodically evaluate other-than-temporary impairment (OTTI) of securities to determine whether a decline in their value is other than temporary. Management utilizes criteria such as the magnitude and duration of the decline, in addition to the reasons underlying the decline, to determine whether the loss in value is other than temporary. The term "other-than-temporary" is not intended to indicate that the decline is permanent. It indicates that the prospects for a near term recovery of value are not necessarily favorable, or that there is a lack of evidence to support fair values equal to, or greater than, the carrying value of the investment. Once a decline in value is determined to be other than temporary, the value of the security is reduced and a corresponding impairment charge to earnings is recognized. In the assessment of OTTI for various securities at September 30, 2013 the guidance in ASC 320, "the Investment-Debt and Equity Securities," is carefully followed. | |||||||||||||||||||||||||||||||||||||||||||
There were no impairment charges on investments in publicly traded equity securities for the year ended September 30, 2013 or for the year ended September 30, 2012. | |||||||||||||||||||||||||||||||||||||||||||
The Company has evaluated its publicly traded equity securities as of September 30, 2013, and has determined that there were no unrealized losses that indicate an other-than-temporary impairment. This determination was based on several factors, which include the length of time and extent to which fair value has been less than the cost basis and the financial condition and near-term prospects of the issuer, and the Company's intent and ability to hold the publicly traded equity securities for a period of time sufficient to allow for any anticipated recovery in market value. | |||||||||||||||||||||||||||||||||||||||||||
EMPLOYEE_BENEFIT_PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
EMPLOYEE BENEFIT PLANS [Abstract] | ' | |||||||||||||
EMPLOYEE BENEFIT PLANS | ' | |||||||||||||
NOTE 16-EMPLOYEE BENEFIT PLANS | ||||||||||||||
The Company maintained a retirement savings plan for its employees under Section 401(k) of the Internal Revenue Code (the "401(k) Plan") until December, 2012, at which time the 401(k) Plan was discontinued. Under the 401(k) portion of the plan, participants could contribute eligible compensation up to the maximum allowed by the Internal Revenue Code. The Company did not make any matching contributions to the 401(k) Plan during the years ending September 30, 2013 and 2012. |
COMPREHENSIVE_INCOME_LOSS
COMPREHENSIVE INCOME (LOSS) | 12 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
COMPREHENSIVE INCOME (LOSS) [Abstract] | ' | |||||||||||||
COMPREHENSIVE INCOME (LOSS) | ' | |||||||||||||
NOTE 17 - COMPREHENSIVE INCOME (LOSS) | ||||||||||||||
Comprehensive income is comprised of net income and other comprehensive income or loss. Other comprehensive income or loss refers to revenue, expenses, gains and losses that under accounting principles generally accepted in the United States are included in comprehensive income but excluded from net income as these amounts are recorded directly as an adjustment to stockholders' equity. | ||||||||||||||
Our other comprehensive income at September 30, 2013 consists of unrealized losses on marketable securities available for sale of $80,180. |
SEGMENT_REPORTING
SEGMENT REPORTING | 12 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
SEGMENT REPORTING [Abstract] | ' | |||||||||||||
SEGMENT REPORTING | ' | |||||||||||||
NOTE 18 - SEGMENT REPORTING | ||||||||||||||
Although the Company has a number of operating divisions, separate segment data has not been presented as they meet the criteria for aggregation as permitted by ASC Topic 280, "Segment Reporting" (formerly Statement of Financial Accounting Standards (SFAS) No. 131, "Disclosures About Segments of an Enterprise and Related Information"). | ||||||||||||||
Our chief operating decision-maker is considered to be our Chief Executive Officer (CEO). The CEO reviews financial information presented on a consolidated basis for purposes of making operating decisions and assessing financial performance. The financial information reviewed by the CEO is identical to the information presented in the accompanying consolidated statements of operations. Therefore, the Company has determined that it operates in a single operating segment, specifically, data storage manufacturing and cloud-based services. For the periods ended September 30, 2013 and 2012 all material assets and revenues of the Company were in the United States. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
COMMITMENTS AND CONTINGENCIES [Abstract] | ' | |||||||||||||
COMMITMENTS AND CONTINGENCIES | ' | |||||||||||||
NOTE 19 - COMMITMENTS AND CONTINGENCIES | ||||||||||||||
We are a party to litigation which arises primarily in the ordinary course of business. In the opinion of management, the ultimate disposition of such litigation should not have a material adverse effect on our financial position or results of operations. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended | |||||
Sep. 30, 2013 | ||||||
SUBSEQUENT EVENTS [Abstract] | ' | |||||
SUBSEQUENT EVENTS | ' | |||||
NOTE 20 - SUBSEQUENT EVENTS | ||||||
On October 1, 2013 (the "Closing Date"), IceWEB, Inc. (the "Company") entered into a share exchange agreement (the "Exchange Agreement") by and among the Company, Computers and Tele-Comm., Inc., a Missouri corporation ("CTCI"), KC NAP, LLC ("KC NAP"), the stockholders of CTCI, and Streamside Partners, LLC, a third party, pursuant to which the Company purchased all of the outstanding common stock of CTCI and the outstanding membership interests in KC NAP, in exchange for 9,568,400 shares of our $0.001 par value common stock. Concurrently, and as part of the share exchange agreement, the Company issued shares to retire an outstanding debt owing by CTCI to Streamside Partners, LLC, which totaled $155,000, and other third party debts of CTCI totaling $267,823, in exchange for 13,485,799 shares of our $0.001 par value common stock (such transactions taken together are sometimes referred to herein as the "Share Exchange"). As a result of the Share Exchange, we are now the holding company of CTCI and we now operate a company in the business of operating data centers and providing Information Technology ("IT") services. | ||||||
On the Closing Date, pursuant to the Exchange Agreement, the shareholders of CTCI exchanged 250,000 shares of common stock of CTCI, representing 100% of the issued and outstanding stock of CTCI, for 9,568,400 newly issued shares of $0.001 par value common stock, which represents 2.2% of the Company's issued and outstanding common stock, immediately following the Share Exchange. In addition, we issued 13,485,799 shares of IceWEB common stock to pay a debt owing by CTCI to Streamside Partners, LLC, and other liabilities of CTCI which together totaled $422,823, at an effective exchange rate of $0.0314/share. | ||||||
On October 1, 2013, in conjunction with the acquisition, we entered into an equipment lease agreement with Agility Ventures, LLC in the principal amount of $1,417,672 which is secured by all of the assets of IceWEB, Inc. The lease agreement has a term of 36 months and bears interest at 15% per annum. We also issued Agility Ventures 1,000,000 shares of IceWEB, Inc. restricted common stock, and a Series T common stock warrant covering a total of 3,675,000 shares with a term of two years and a conversion price of $0.055 per share. | ||||||
The purchase of Computers and Tele-Comm, Inc. and Subsidiary ("CTCI") included the acquisition of assets of $3,110,192, and liabilities of $2,545,364. The aggregate purchase price consisted of the following: | ||||||
Fair value of common stock issued to seller | $ | 234,426 | ||||
Fair value of common stock issued in exchange for debt | 330,402 | |||||
$ | 564,828 | |||||
The following table summarizes the estimated fair values of CTCI's assets acquired and liabilities assumed at the date of the acquisition: | ||||||
Cash | $ | 4,443 | ||||
Accounts Receivable | 68,529 | |||||
Lease Deposits | 188,874 | |||||
Prepaid expenses | 87,903 | |||||
Other assets | 917 | |||||
Property and equipment, net | 827,383 | |||||
Intangible asset | 1,932,143 | |||||
Accounts payable and accrued expenses | (648,961 | ) | ||||
Deferred revenue | (59,396 | ) | ||||
Notes Payable | (1,837,007 | ) | ||||
$ | 564,828 | |||||
We have not completed the determination as to the allocation of the intangible asset as of the date of this report. | ||||||
On November 26, 2013, the Company issued an 8% convertible promissory note in the aggregate principal amount of $83,500 to an accredited investor. The note has a maturity date of August 29, 2014. The note is convertible into shares of its common stock at a conversion price of 60% of the lowest three (3) Trading Prices for our Common Stock during the ten trading day period ending on the latest complete trading day prior to the Conversion Date. | ||||||
On December 18, 2013, the Company issued a 10% convertible promissory note to an accredited investor in the aggregate principal amount of $500,000, of which the Company has drawn down $132,000. The holder of the note reserves the right to fund additional amounts under the loan agreement at its sole discretion, and the Company is not responsible to repay any unfunded portion of the note. The note has a maturity date of December 18, 2014. The note is convertible into shares of its common stock at a conversion price of 60% of the lowest trading price for any fifteen (15) consecutive trading days prior to the date on which the holder elects to convert all or part of the note. | ||||||
The Company has evaluated subsequent events through the filing date of this Form 10-K, and determined that no subsequent events have occurred that would require recognition in the financial statements or disclosure in the notes thereto other than as discussed in the accompanying notes. |
BASIS_OF_PRESENTATION_AND_SUMM1
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policy) | 12 Months Ended |
Sep. 30, 2013 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' |
Principles of Consolidation | ' |
Principles of Consolidation | |
The accompanying consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles and include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. | |
Reclassifications | ' |
Reclassifications | |
Certain reclassifications have been made to previously reported amounts to conform to 2013 amounts. The reclassifications had no impact on previously reported results of operations or shareholders' deficit. | |
Going Concern | ' |
Going Concern | |
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company had net losses and net cash used in operating activities of $7,108,819 and $2,700,609, respectively, for the year ended September 30, 2013. The Company also had an accumulated deficit of $47,921,946 at September 30, 2013. These matters raise substantial doubt about the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. | |
Management has established plans intended to increase the sales of our products and services. Management intends to seek new capital from new equity securities offerings to provide funds needed to increase liquidity, fund growth, and implement its business plan. However, no assurances can be given that we will be able to raise any additional funds. | |
Marketable Securities | ' |
Marketable Securities | |
IceWEB accounts for the purchase of marketable equity securities in accordance with FASB Accounting Standards Codification (ASC) 320, "Investment - Debt and Equity Securities" with any unrealized gains and losses included as a net amount as a separate component of stockholders' equity. However, those securities may not have the trading volume to support the stock price if the Company were to sell all their shares in the open market at once, so the Company may have a loss on the sale of marketable securities even though they record marketable equity securities at the current market value. | |
Use of Estimates | ' |
Use of Estimates | |
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America 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 balance sheets and the reported amounts of sales and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates in 2013 and 2012 include the valuation of stock-based compensation, the allowance for inventory obsolescence and the useful life of property and equipment and intangible assets, derivative liabilities, and litigation reserves. | |
Cash and Cash Equivalents | ' |
Cash and Cash Equivalents | |
We consider all highly liquid debt instruments with original maturities of three months or less to be cash equivalents. | |
Accounts Receivable | ' |
Accounts Receivable | |
Accounts receivable consists of normal trade receivables. We recorded a bad debt allowance of $0 and $409,000 as of September 30, 2013 and 2012, respectively. Management performs ongoing evaluations of its accounts receivable. Management believes that all remaining receivables are fully collectable. Bad debt expense amounted to $114,918 and $0 for years ended September 30, 2013 and 2012, respectively. | |
Other Receivables | ' |
Other Receivables | |
We have a purchase order arrangement with a key vendor that provides us the flexibility to make purchases of inventory components on credit with our customer remitting payment to the vendor. This arrangement provides us with the cash needed to finance certain of our on-going costs and expenses, and provides that we collect on our receivables once the vendor has been paid. This vendor had collected $28 on our behalf that had not been remitted to us as of September 30, 2013. | |
Derivative Liability | ' |
Derivative Liability | |
The Company issued warrants to purchase the Company's common stock in connection with the issuance of convertible debt, which contain certain ratchet provisions that reduce the exercise price of the warrants or the conversion price in certain circumstances. In accordance with ASC 815 the Company determined that the warrants and/or the conversion features with provisions that reduce the exercise price of the warrants did not qualify for a scope exception under ASC 815 as they were determined not to be indexed to the Company's stock. | |
Derivatives are required to be recorded on the balance sheet at fair value (see Note 11). These derivatives, including embedded derivatives in the Company's structured borrowings, are separately valued and accounted for on the Company's balance sheet. Fair values for exchange traded securities and derivatives are based on quoted market prices. Where market prices are not readily available, fair values are determined using market based pricing models incorporating readily observable market data and requiring judgment and estimates. In addition, additional disclosures are required about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for and (c) how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. | |
Fair Value Measurements | ' |
Fair Value Measurements | |
Fair value is defined 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. The established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: | |
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities. | |
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities that are not active; and model-driven valuations whose inputs are observable or whose significant value drivers are observable. Valuations may be obtained from, or corroborated by, third-party pricing services. | |
Level 3: Unobservable inputs to measure fair value of assets and liabilities for which there is little, if any market activity at the measurement date, using reasonable inputs and assumptions based upon the best information at the time, to the extent that inputs are available without undue cost and effort. | |
Fair Value of Financial Instruments | ' |
Fair Value of Financial Instruments | |
The Company's financial instruments, including cash and cash equivalents, receivables, accounts payable and accrued liabilities and notes payable are carried at cost, which approximates their fair value, due to the relatively short maturity of these instruments. | |
Our derivative financial instruments, consisting of embedded conversion features in our convertible debt, which are required to be measured at fair value on a recurring basis under FASB ASC 815-15-25 or FASB ASC 815 as of September 30, 2013 are measured at fair value, using a Black-Scholes valuation model which approximates a binomial lattice valuation methodology utilizing Level 3 inputs. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities (see Note 11). | |
Inventory | ' |
Inventory | |
Inventory is valued at the lower of cost or market, on an average cost basis. | |
Property and Equipment | ' |
Property and Equipment | |
Property and equipment is stated at cost, net of accumulated depreciation. Depreciation expense is recorded by using the straight-line method over the estimated useful lives of the related assets. | |
Product Warranties | ' |
Product Warranties | |
The Company's products typically carry a warranty for periods of up to three years. We have not had any significant warranty claims on our products. | |
Software Development Costs | ' |
Software Development Costs | |
The costs for the development of new software products and substantial enhancements to existing software products are expensed as incurred until technological feasibility has been established, at which time any additional costs would be capitalized in accordance with the accounting guidance for software. | |
Because our current process for developing software is essentially completed concurrently with the establishment of technological feasibility, which occurs upon the completion of a working model, no costs have been capitalized for any of the periods presented. | |
Intangible Assets | ' |
Intangible Assets | |
Intangible assets, net consists of the cost of acquired customer relationships. We capitalize and amortize the cost of acquired intangible assets over their estimated useful lives on a straight-line basis. The Company periodically reevaluates the carrying value of its intangible assets for events or changes in circumstances that indicate that the carrying value may not be recoverable. As part of this reevaluation, the Company estimates the future cash flows expected to result from the use of the asset. If the sum of the expected future cash flows is less than the carrying amount of the asset, an impairment loss is recognized to reduce the carrying value of the intangible asset to the estimated fair value of the asset. | |
Long-lived Assets | ' |
Long-lived Assets | |
In accordance with ASC Topic 360, "Property, Plant, and Equipment" (formerly SFAS 144, "Accounting for the Impairment or Disposal of Long-Lived Assets"), we review the carrying value of intangibles and other long-lived assets for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets is measured by comparison of its carrying amount to the undiscounted cash flows that the asset or asset group is expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the property, if any, exceeds its fair market value. | |
Advertising | ' |
Advertising | |
Advertising costs are expensed as incurred and amounted to $20,813 in fiscal 2013 and $93,975 in fiscal 2012. | |
Revenue Recognition | ' |
Revenue Recognition | |
We follow the guidance of ASC Topic 605, "Revenue Recognition" (formerly Staff Accounting Bulletin (SAB) No. 104, "Revenue Recognition") for revenue recognition. In general, we record revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The following policies reflect specific criteria for our various revenues streams: | |
Revenues from sales of products are generally recognized when products are shipped unless the Company has obligations remaining under sales or licensing agreements, in which case revenue is either deferred until all obligations are satisfied or recognized ratably over the term of the contract. | |
Deferred Financing Costs | ' |
Deferred Financing Costs | |
Debt issuance costs incurred in connection with the issuance of debt are capitalized and amortized to interest expense based on the related debt agreements on a straight-line basis, which approximates the effective interest method. Unamortized amounts are included in the related debt payable, net, in the accompanying consolidated balance sheets. | |
Earnings per Share | ' |
Earnings per Share | |
We compute earnings per share in accordance with ASC Topic 260, "Earnings Per Share" Under the provisions of ASC Topic 260, basic earnings per share is computed by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing the net income (loss) for the period by the weighted average number of common and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares consist of the common shares issuable upon | |
the exercise of stock options and warrants (using the treasury stock method) and upon the conversion of convertible notes and preferred stock (using the if-converted method). Potentially dilutive common shares are excluded from the calculation if their effect is antidilutive. At September 30, 2013, there were options and warrants to purchase 106,238,245 shares of common stock, and 626,667 shares issuable upon conversion of Series B preferred stock outstanding which could potentially dilute future earnings per share. | |
Stock-Based Compensation | ' |
Stock-Based Compensation | |
As more fully described in Note 13, we have two stock option plans that provide for non-qualified options to be issued to directors, officers, employees and consultants (the 2012 Equity Compensation Plan and the 2013 Equity Plan (the "Plans"). | |
Prior to October 1, 2005, we accounted for stock options issued under the Plan under the recognition and measurement provisions of APB Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations, as permitted by ASC Topic 718, "Compensation - Stock Compensation, "Share-Based Payments". No stock-based compensation cost related to employee stock options was recognized in the Consolidated Statement of Operations for the year ended September 30, 2005 as all options granted under the Plan had an exercise price equal to the market value of the underlying common stock on the date of grant. | |
Recently Issued Accounting Standards | ' |
Recently Issued Accounting Standards | |
In July 2013, the FASB issued ASU 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists." This standard requires that an unrecognized tax benefits, or a portion of an unrecognized tax benefit be presented on a reduction to a deferred tax asset for an NOL carryforward, a similar tax loss, or a tax credit carryforward with certain exceptions to this rule. If certain exception conditions exists, an entity should present an unrecognized tax benefit in the financial statements as a liability and should not net the unrecognized tax benefit with a deferred tax asset. This standard is effective for fiscal years and interim periods within those years beginning after December 15, 2013. The Company does not expect the adoption of the new provisions to have a material impact on our financial condition or results of operations. | |
The Company believes that there were no other accounting standards recently issued that had or are expected to have a material impact on our financial position or results of operations. |
PROPERTY_AND_EQUIPMENT_Tables
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended | |||||||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||||||||||||||||||||||
Schedule of Property and Equipment | ' | |||||||||||||||||||||||||||
Estimated Life | 2013 | 2012 | ||||||||||||||||||||||||||
Office equipment | 5 years | $ | 644,020 | $ | 644,020 | |||||||||||||||||||||||
Computer software | 3 years | 52,841 | 29,523 | |||||||||||||||||||||||||
Furniture and fixtures | 5 years | - | - | |||||||||||||||||||||||||
Leasehold improvements | 5 years | 1,033,495 | 1,033,495 | |||||||||||||||||||||||||
1,730,356 | 1,707,038 | |||||||||||||||||||||||||||
Less: accumulated depreciation | (1,422,488 | ) | (1,207,253 | ) | ||||||||||||||||||||||||
$ | 307,868 | $ | 499,785 | |||||||||||||||||||||||||
INVENTORY_Tables
INVENTORY (Tables) | 12 Months Ended | |||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||
INVENTORY [Abstract] | ' | |||||||||||||||||
Schedule of Inventory | ' | |||||||||||||||||
September 30, 2013 | September 30, 2012 | |||||||||||||||||
Raw materials | $ | 130,534 | $ | 175,258 | ||||||||||||||
Work in progress | 24,476 | 42,335 | ||||||||||||||||
Finished goods | 8,158 | 64,638 | ||||||||||||||||
$ | 163,168 | $ | 282,231 | |||||||||||||||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
INCOME TAXES [Abstract] | ' | ||||||||||||||||
Schedule of Deferred Tax Assets | ' | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Deferred Tax Assets: | |||||||||||||||||
Tax benefit of net operating loss carry forward | $ | 7,089,500 | $ | 5,637,000 | |||||||||||||
Unpaid accrued salaries | 48,500 | 13,000 | |||||||||||||||
Allowance for doubtful accounts | - | 154,000 | |||||||||||||||
Amortization of leasehold improvements | - | 339,000 | |||||||||||||||
7,131,000 | 6,143,000 | ||||||||||||||||
Less: valuation allowance | (7,131,000 | ) | (6,143,000 | ) | |||||||||||||
Net deferred tax assets | $ | - | $ | - | |||||||||||||
Reconciliation of Effective Tax Rate | ' | ||||||||||||||||
2013 | 2012 | ||||||||||||||||
Computed "expected" tax benefit | (34.0 | )% | (34.0 | )% | |||||||||||||
State income taxes, net of federal tax benefit | (3.6 | )% | (3.6 | )% | |||||||||||||
Other permanent differences | 15 | % | 13.6 | % | |||||||||||||
Change in valuation allowance | 22.6 | % | 24 | % | |||||||||||||
Effective tax rate | 0 | % | 0 | % | |||||||||||||
CONVERTIBLE_NOTES_Tables
CONVERTIBLE NOTES (Tables) | 12 Months Ended | |||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||
CONVERTIBLE NOTES [Abstract] | ' | |||||||||||||||||||||||
Schedule of Securities Purchase Agreement Convertible Notes | ' | |||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||
Principal balance of convertible notes | $ | - | $ | 164,469 | ||||||||||||||||||||
Original issue discount, net | - | (5,399 | ) | |||||||||||||||||||||
Debt discount | - | (53,895 | ) | |||||||||||||||||||||
Convertible notes, net of discount | $ | - | $ | 105,175 | ||||||||||||||||||||
Schedule of Convertible Notes | ' | |||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||||||
Principal balance of convertible notes | $ | 186,667 | $ | - | ||||||||||||||||||||
Original issue discount, net | (4,789 | ) | - | |||||||||||||||||||||
Debt discount | - | - | ||||||||||||||||||||||
Convertible notes, net of discount | $ | 181,878 | $ | - | ||||||||||||||||||||
DERIVATIVE_LIABILITIES_Tables
DERIVATIVE LIABILITIES (Tables) | 12 Months Ended | |||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||
DERIVATIVE LIABILITIES [Abstract] | ' | |||||||||||||||||
Schedule of Derivative Warrant Liability | ' | |||||||||||||||||
Value | No. of Warrants | |||||||||||||||||
Warrants Issued on November 23, 2011- Derivative warrant liability | $ | 1,750,000 | 115,446,100 | |||||||||||||||
Decrease in fair value of derivative warrant liability | (645,501 | ) | (2,669,628 | ) | ||||||||||||||
Balance at September 30, 2012 - Derivative warrant liability | $ | 1,104,499 | 112,776,472 | |||||||||||||||
Decrease in fair value of derivative warrant liability | (987,075 | ) | (23,957,751 | ) | ||||||||||||||
Balance at September 30, 2013 - Derivative warrant liability | $ | 117,424 | 88,818,721 | |||||||||||||||
Schedule of Fair Value Assumptions Used for Derivative Warrant Liability | ' | |||||||||||||||||
September 30, | ||||||||||||||||||
2013 | ||||||||||||||||||
Exercise price | $ | 0.028 | ||||||||||||||||
Time to expiration | 3.04 - 3.75 years | |||||||||||||||||
Risk-free interest rate | 0.62% - 0.77% | |||||||||||||||||
Estimated volatility | 280 | % | ||||||||||||||||
Dividend | -0- | |||||||||||||||||
Stock price on September 30, 2013 | $ | 0.0229 | ||||||||||||||||
Expected forfeiture rate | 90% |
CONCENTRATION_OF_CREDIT_RISK_T
CONCENTRATION OF CREDIT RISK (Tables) | 12 Months Ended | |||
Sep. 30, 2013 | ||||
CONCENTRATION OF CREDIT RISK [Abstract] | ' | |||
Schedule of Major Customers | ' | |||
Major Customers | ||||
Sales to 2 customers represented approximately 39% and 60% of total sales for the years ended September 30, 2013 and 2012, respectively. | ||||
2013 | 2012 | |||
Customer A | 26% | 41% | ||
Customer B | 13% | 19% | ||
All others | 61% | 40% | ||
100% | 100% | |||
As of September 30, 2013 and 2012, respectively, approximately 93% and 91% of our accounts receivable was due from three customers. | ||||
2013 | 2012 | |||
Customer A | 47% | 54% | ||
Customer B | 23% | 26% | ||
Customer C | 22% | 11% | ||
All others | 8% | 9% | ||
100% | 100% | |||
STOCKHOLDERS_EQUITY_DEFICIT_Ta
STOCKHOLDERS' EQUITY (DEFICIT) (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS' EQUITY (DEFICIT) [Abstract] | ' | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Outstanding Common Stock Warrants | ' | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Year Ended September 30, 2013 | Year Ended September 30, 2012 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of Warrants | Weighted Average Exercise Price | Number of Warrants | Weighted Average Exercise Price | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock Warrants | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at beginning of year | 118,434,173 | $ | 0.17 | 11,528,934 | $ | 0.17 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Granted | 46,195,745 | 0.052 | 110,074,867 | 0.0816 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercised | (1,910,000 | ) | 0.028 | (3,169,628 | ) | 0.0737 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Forfeited | (59,899,643 | ) | 0.08 | - | - | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at end of year | 102,820,275 | $ | 0.028 | 118,434,173 | $ | 0.0853 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants exercisable at end of year | 102,820,275 | $ | 0.046 | 118,434,173 | 0.0844 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted average fair value of warrants granted or re-priced during the year | $ | 0.028 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Information about Common Stock Warrants | ' | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants Outstanding | Warrants Exercisable | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number | Average | Weighted | Number | Weighted | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Range of | Outstanding at | Remaining | Average | Exercisable at | Average | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise | September 30, | Contractual | Exercise | September 30, | Exercise | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Price | 2013 | Life | Price | 2013 | Price | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ | 0.028 | 88,018,721 | 3.04 Years | $ | 0.028 | 88,018,721 | $ | 0.028 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
$ | 0.15 | 14,801,554 | 3.75 Years | $ | 0.15 | 14,801,554 | $ | 0.15 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
102,820,275 | $ | 0.046 | 103,620,275 | $ | 0.046 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK_OPTION_PLAN_Tables
STOCK OPTION PLAN (Tables) | 12 Months Ended | |||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||
STOCK OPTION PLAN [Abstract] | ' | |||||||||||||||||||
Schedule of Assumptions Used to Determine Options Value | ' | |||||||||||||||||||
Year Ended September 30, | ||||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Expected volatility | 13% - 278% | 36% -278 | % | |||||||||||||||||
Expected term | 1-3 years | 1 - 3 Years | ||||||||||||||||||
Risk-free interest rate | 0.01% - 0.34 | % | 0.67% - 0.77 | % | ||||||||||||||||
Forfeiture Rate | 0% -45 | % | 0% -45 | % | ||||||||||||||||
Expected dividend yield | 0 | % | 0 | % | ||||||||||||||||
Schedule of Changes in Outstanding Stock Options | ' | |||||||||||||||||||
Year Ended September 30, | Year Ended September 30, | |||||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Weighted | Weighted | |||||||||||||||||||
Average | Aggregate | Average | Aggregate | |||||||||||||||||
Exercise | Intrinsic | Exercise | Intrinsic | |||||||||||||||||
Price | Value | Price | Value | |||||||||||||||||
Stock options | ||||||||||||||||||||
Balance at beginning of year | 8,353,185 | $ | 0.0773 | $ | 4,104,487 | $ | 0.375 | $ | ||||||||||||
Granted | 90,963,785 | 0.042 | - | 8,079,185 | 0.079 | - | ||||||||||||||
Exercised | (91,224,000 | ) | $ | 0.042 | - | (1,532,325 | ) | $ | 0.167 | - | ||||||||||
Forfeited | (4,675,000 | ) | $ | 0.079 | (2,298,162 | ) | $ | 0.554 | ||||||||||||
Balance at end of year | 3,417,970 | $ | 0.086 | $ | - | 8,353,185 | $ | 0.0773 | $ | - | ||||||||||
Options exercisable at end of year | 3,045,852 | $ | 0.087 | $ | - | 1,307,333 | $ | 0.0649 | $ | - | ||||||||||
Weighted average fair value of options granted during the year | $ | 0.079 | $ | - | ||||||||||||||||
Schedule of Information about Stock Options | ' | |||||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||||
Weighted | ||||||||||||||||||||
Number | Average | Weighted | Number | Weighted | ||||||||||||||||
Range of | Outstanding at | Remaining | Average | Exercisable at | Average | |||||||||||||||
Exercise | September 30, | Contractual | Exercise | September 30, | Exercise | |||||||||||||||
Price | 2013 | Life | Price | 2013 | Price | |||||||||||||||
$ | 0.077 | 275,000 | 3.96 Years | $ | 0.077 | 91,667 | $ | 0.077 | ||||||||||||
0.0814 | 188,785 | 4.10 Years | 0.0814 | - | 0.0814 | |||||||||||||||
0.847 | 2,454,185 | 3.96 Years | 0.847 | 2,454,185 | 0.847 | |||||||||||||||
0.1 | 500,000 | 0.44 Years | 0.1 | 500,000 | 0.1 | |||||||||||||||
3,417,970 | $ | 0.086 | 3,045,852 | $ | 0.087 | |||||||||||||||
INVESTMENTS_Tables
INVESTMENTS (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||||||||||||||||||||||||||||
INVESTMENTS [Abstract] | ' | ||||||||||||||||||||||||||||||||||||||||||
Schedule of Marketable Equity Securities | ' | ||||||||||||||||||||||||||||||||||||||||||
30-Sep-13 | Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||||||||||||||||||||||||||
Publicly traded equity securities | $ | 81,000 | $ | - | $ | (80,180 | ) | $ | 820 | ||||||||||||||||||||||||||||||||||
Total | $ | 81,000 | $ | - | $ | (80,180 | ) | $ | 820 | ||||||||||||||||||||||||||||||||||
Schedule of Realized Net Gains (Losses) | ' | ||||||||||||||||||||||||||||||||||||||||||
Fiscal Year Ended | |||||||||||||||||||||||||||||||||||||||||||
30-Sep | |||||||||||||||||||||||||||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||||||||||||||||||||||||
Net gains/(loss) on investments in publicly traded equity securities | $ | (308,780 | ) | $ | 192,360 | ||||||||||||||||||||||||||||||||||||||
Net gains on investments | $ | (308,780 | ) | $ | 192,360 | ||||||||||||||||||||||||||||||||||||||
Schedule of Investment Measured at Fair Value on a Recurring Basis | ' | ||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements Using: | |||||||||||||||||||||||||||||||||||||||||||
Quoted | Significant | Significant | |||||||||||||||||||||||||||||||||||||||||
Prices | Other | Unobservable | |||||||||||||||||||||||||||||||||||||||||
in Active | Observable | Inputs | |||||||||||||||||||||||||||||||||||||||||
Markets | Inputs | (Level 3) | |||||||||||||||||||||||||||||||||||||||||
(Level 1) | (Level 2) | ||||||||||||||||||||||||||||||||||||||||||
September 30, 2013 | |||||||||||||||||||||||||||||||||||||||||||
Marketable Equity Securities | $ | 820 1 | $ | - | $ | - | |||||||||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||||||||
Derivative liabilities | $ | - | $ | - | $ | 117,424 | |||||||||||||||||||||||||||||||||||||
September 30, 2012 | |||||||||||||||||||||||||||||||||||||||||||
Marketable Equity Securities, net of discount for effect of restriction | $ | - | $ | - | $ | 309,600 1 | |||||||||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||||||||
Derivative liabilities | $ | - | $ | - | $ | 1,104,499 | |||||||||||||||||||||||||||||||||||||
1 Previously Level 3 due to Rule 144 restrictions on trading and application of 20% discount; moved to Level 1 when restrictions expired. |
SUBSEQUENT_EVENTS_Tables
SUBSEQUENT EVENTS (Tables) | 12 Months Ended | |||||
Sep. 30, 2013 | ||||||
SUBSEQUENT EVENTS [Abstract] | ' | |||||
Schedule of Purchase Price | ' | |||||
Fair value of common stock issued to seller | $ | 234,426 | ||||
Fair value of common stock issued in exchange for debt | 330,402 | |||||
$ | 564,828 | |||||
Schedule of Assets Acquired and Liabilities Assumed | ' | |||||
Cash | $ | 4,443 | ||||
Accounts Receivable | 68,529 | |||||
Lease Deposits | 188,874 | |||||
Prepaid expenses | 87,903 | |||||
Other assets | 917 | |||||
Property and equipment, net | 827,383 | |||||
Intangible asset | 1,932,143 | |||||
Accounts payable and accrued expenses | (648,961 | ) | ||||
Deferred revenue | (59,396 | ) | ||||
Notes Payable | (1,837,007 | ) | ||||
$ | 564,828 |
BASIS_OF_PRESENTATION_AND_SUMM2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | ' | ' |
Net loss | ($7,108,819) | ($6,485,048) |
Net cash used in operating activities | -2,700,609 | -4,067,538 |
Accumulated deficit | -47,921,946 | -40,813,128 |
Accounts receivable, allowance for doubtful accounts | 0 | 409,000 |
Bad debt expense | 114,918 | 0 |
Other receivable | 28 | ' |
Advertising expense | $20,813 | $93,975 |
Options and warrants to purchase, number of shares | 106,238,245 | ' |
Shares issuable upon conversion of Series B preferred stock | 626,667 | ' |
PROPERTY_AND_EQUIPMENT_Details
PROPERTY AND EQUIPMENT (Details) (USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | $1,730,356 | $1,707,038 |
Less: accumulated depreciation | -1,422,488 | -1,207,252 |
Property and equipment, net | 307,868 | 499,785 |
Depreciation expense | 215,237 | 202,130 |
Office equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Estimated Life | '5 years | ' |
Property and equipment, gross | 644,020 | 644,020 |
Computer software [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Estimated Life | '3 years | ' |
Property and equipment, gross | 52,841 | 29,523 |
Furniture and fixtures [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Estimated Life | '5 years | ' |
Property and equipment, gross | ' | ' |
Leasehold improvements [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Estimated Life | '5 years | ' |
Property and equipment, gross | $1,033,495 | $1,033,495 |
OTHER_CURRENT_ASSETS_Details
OTHER CURRENT ASSETS (Details) (USD $) | Sep. 30, 2013 | Sep. 30, 2012 |
OTHER CURRENT ASSETS | ' | ' |
Other current assets | $175,551 | $6,875 |
RELATED_PARTY_TRANSACTIONS_Det
RELATED PARTY TRANSACTIONS (Details) (USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Related Party Transaction [Line Items] | ' | ' |
Proceeds from notes payable, related party | $186,000 | ' |
IWEB Growth Fund [Member] | ' | ' |
Related Party Transaction [Line Items] | ' | ' |
Maximum borrowing capacity | 1,500,000 | ' |
Proceeds from notes payable, related party | 186,000 | ' |
Loan term | '1 year | ' |
Annual interest rate | 12.00% | ' |
Debt issuance costs | $1,500 | ' |
NOTES_PAYABLE_Details
NOTES PAYABLE (Details) (USD $) | 12 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | |||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Aug. 20, 2013 | Apr. 10, 2013 | Nov. 23, 2011 | Sep. 30, 2009 | Dec. 20, 2005 | Dec. 19, 2005 | Sep. 30, 2013 | Sep. 30, 2012 | Aug. 31, 2013 | Apr. 30, 2013 | Dec. 31, 2008 | Sep. 30, 2013 | Dec. 19, 2005 | Dec. 19, 2005 | |
Warrant Related To Term Loan [Member] | Warrant Related To Term Loan [Member] | Warrant Related To Term Loan [Member] | Accounts Receivable [Member] | Accounts Receivable [Member] | Sand Hill Finance LLC [Member] | Sand Hill Finance LLC [Member] | Sand Hill Finance LLC [Member] | Sand Hill Finance LLC [Member] | Sand Hill Finance LLC [Member] | Sand Hill Finance LLC [Member] | ||||||
Accounts Receivable [Member] | ||||||||||||||||
Credit Concentration Risk [Member] | ||||||||||||||||
Line of Credit Facility [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Concentration risk percentage | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | 100.00% | ' | ' | ' | ' | ' | 80.00% |
Maximum borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2,750,000 | ' | $1,800,000 | ' |
Amount borrowed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' |
Notes payable | ' | 2,059,582 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,059,582 | ' | ' |
Monthly interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.75% | ' | ' |
Annual interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12.00% | ' | 12.00% | 21.00% | ' |
Commitment fee percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.00% | ' | ' | ' |
Commitment fee amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,000 | ' | ' | ' |
Percentage of change in securities threshold | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20.00% | ' | ' |
Change in securities threshold, amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | ' | ' |
Proceeds from convertible note payable | 168,000 | 1,750,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,139,235 | ' | ' | ' | ' |
Conversion price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.04 | $0.08 | ' | ' | ' | ' |
Loan term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2 years | ' | ' | ' | ' |
Monthly payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15,000 | ' | ' | ' | ' |
Contingent monthly payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000 | ' | ' | ' | ' |
Minimum equity financing | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,000,000 | ' | ' | ' | ' |
Amount of note converted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,642,739 | 506,250 | ' | ' | ' | ' |
Conversion of notes payable, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 37,000,000 | 6,750,000 | ' | ' | ' | ' |
Common stock, par value | $0.00 | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.00 | ' | ' | ' | ' |
Common stock, price per share | ' | ' | $0.03 | $0.03 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Loss on extinguishment of debt | -481,588 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class of Warrant or Right [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrant term | ' | ' | ' | ' | ' | ' | ' | '7 years | ' | ' | ' | ' | ' | ' | ' | ' |
Number of Warrants | 88,818,721 | 112,776,472 | ' | ' | 115,446,100 | ' | ' | 120,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price of warrant issued | ' | ' | ' | ' | ' | ' | 0.5 | 1 | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of warrants | ' | ' | ' | ' | ' | $13,589 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
INVENTORY_Details
INVENTORY (Details) (USD $) | Sep. 30, 2013 | Sep. 30, 2012 |
INVENTORY [Abstract] | ' | ' |
Raw materials | $130,534 | $175,258 |
Work in progress | 24,476 | 42,335 |
Finished goods | 8,158 | 64,638 |
Total net inventory | $163,168 | $282,231 |
COMMITMENTS_Details
COMMITMENTS (Details) (USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
COMMITMENTS [Abstract] | ' | ' |
Rent expenses | $73,894 | $75,177 |
INCOME_TAXES_Schedule_of_Defer
INCOME TAXES (Schedule of Deferred Tax Assets) (Details) (USD $) | Sep. 30, 2013 | Sep. 30, 2012 |
Deferred Tax Assets: | ' | ' |
Tax benefit of net operating loss carryforward | $7,089,500 | $5,637,000 |
Unpaid accrued salaries | 48,500 | 13,000 |
Allowance for doubtful accounts | ' | 154,000 |
Amortization of leasehold improvements | ' | 339,000 |
Deferred tax assets, gross | 7,131,000 | 6,143,000 |
Less: valuation allowance | -7,131,000 | -6,143,000 |
Net deferred tax assets | ' | ' |
INCOME_TAXES_Narrative_Details
INCOME TAXES (Narrative) (Details) (USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
INCOME TAXES [Abstract] | ' | ' |
Net operating loss carry forwards | $18,855,000 | ' |
Net operating loss carry forwards, expiration date | 30-Sep-33 | ' |
Ownership threshold | 50.00% | ' |
Valuation allowance | 7,131,000 | 6,143,000 |
Increase in valuation allowance | $988,000 | ' |
Federal tax rate | 34.00% | 34.00% |
State tax rate | 3.60% | 3.60% |
INCOME_TAXES_Reconciliation_of
INCOME TAXES (Reconciliation of Effective Tax Rate) (Details) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
INCOME TAXES [Abstract] | ' | ' |
Computed "expected" tax benefit | -34.00% | -34.00% |
State income taxes, net of federal tax benefit | -3.60% | -3.60% |
Other permanent differences | 15.00% | 13.60% |
Change in valuation allowance | 22.60% | 24.00% |
Effective tax rate | 0.00% | 0.00% |
CONVERTIBLE_NOTES_Narrative_De
CONVERTIBLE NOTES (Narrative) (Details) (USD $) | 12 Months Ended | 1 Months Ended | |||||||
Sep. 30, 2013 | Sep. 30, 2012 | Aug. 20, 2013 | Apr. 10, 2013 | Nov. 23, 2011 | Sep. 30, 2013 | Nov. 23, 2011 | Apr. 10, 2013 | Sep. 30, 2013 | |
Minimum [Member] | Convertible Notes [Member] | Promissory Notes [Member] | Promissory Notes [Member] | ||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt issued | ' | ' | ' | ' | ' | ' | $2,012,500 | $500,000 | ' |
Annual interest rate | ' | ' | ' | ' | ' | ' | ' | 12.00% | ' |
Number of Warrants | 88,818,721 | 112,776,472 | ' | ' | 115,446,100 | ' | 81,588,029 | ' | ' |
Proceeds from convertible note payable | 168,000 | 1,750,000 | ' | ' | ' | ' | 1,750,000 | ' | ' |
Original issue discount | ' | ' | ' | ' | ' | ' | 13.00% | 10.00% | ' |
Principal balance of convertible notes | 186,667 | 164,469 | ' | ' | ' | ' | ' | ' | 186,667 |
Loan term | ' | ' | ' | ' | ' | ' | ' | '7 months | ' |
Common stock, price per share | ' | ' | $0.03 | $0.03 | ' | ' | ' | ' | ' |
Conversion price | ' | ' | ' | ' | ' | $0.08 | ' | ' | ' |
Percentage of lowest trading price | ' | ' | ' | ' | ' | ' | ' | 60.00% | ' |
Effective interest rate | 36.80% | 31.90% | ' | ' | ' | ' | ' | ' | ' |
Interest expense | $256,376 | $2,144,900 | ' | ' | ' | ' | ' | ' | ' |
CONVERTIBLE_NOTES_Schedule_of_
CONVERTIBLE NOTES (Schedule of Securities Purchase Agreement Convertible Notes) (Details) (USD $) | Sep. 30, 2013 | Sep. 30, 2012 |
Debt Instrument [Line Items] | ' | ' |
Principal balance of convertible notes | $186,667 | $164,469 |
Original issue discount, net | -4,789 | -5,399 |
Debt discount | ' | ' |
Convertible notes, net of unamortized discount | 181,878 | 105,176 |
Securities Purchase Agreement [Member] | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Principal balance of convertible notes | ' | 164,469 |
Original issue discount, net | ' | -5,399 |
Debt discount | ' | -53,895 |
Convertible notes, net of unamortized discount | ' | $105,175 |
CONVERTIBLE_NOTES_Schedule_of_1
CONVERTIBLE NOTES (Schedule of Convertible Notes) (Details) (USD $) | Sep. 30, 2013 | Sep. 30, 2012 |
CONVERTIBLE NOTES [Abstract] | ' | ' |
Principal balance of convertible notes | $186,667 | $164,469 |
Original issue discount, net | -4,789 | -5,399 |
Debt discount | ' | ' |
Convertible notes, net of unamortized discount | $181,878 | $105,176 |
DERIVATIVE_LIABILITIES_Narrati
DERIVATIVE LIABILITIES (Narrative) (Details) (USD $) | 10 Months Ended | 12 Months Ended | |
Sep. 30, 2012 | Sep. 30, 2013 | Nov. 23, 2011 | |
DERIVATIVE LIABILITIES [Abstract] | ' | ' | ' |
Weighted-average remaining life | ' | '3 years 15 days | ' |
Change in derivative liabilities | $645,501 | $987,075 | ' |
Derivative liability | $1,104,499 | $117,424 | $1,750,000 |
DERIVATIVE_LIABILITIES_Schedul
DERIVATIVE LIABILITIES (Schedule of Derivative Warrant Liability) (Details) (USD $) | 10 Months Ended | 12 Months Ended | |
Sep. 30, 2012 | Sep. 30, 2013 | Nov. 23, 2011 | |
DERIVATIVE LIABILITIES [Abstract] | ' | ' | ' |
Warrants Issued, beginning balance | $1,750,000 | $1,104,499 | ' |
Decrease in fair value of derivative warrant liability | -645,501 | -987,075 | ' |
Warrants Issued, ending balance | $1,104,499 | $117,424 | ' |
Number of Warrants | 112,776,472 | 88,818,721 | 115,446,100 |
Decrease in fair value, number of warrants | -2,669,628 | -23,957,751 | ' |
DERIVATIVE_LIABILITIES_Schedul1
DERIVATIVE LIABILITIES (Schedule of Fair Value Assumptions Used for Derivative Warrant Liability) (Details) (USD $) | Aug. 20, 2013 | Apr. 10, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 |
Warrant [Member] | Warrant [Member] | Warrant [Member] | |||
Minimum [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Exercise price | ' | ' | $0.03 | ' | ' |
Time to expiration | ' | ' | ' | '3 years 15 days | '3 years 9 months |
Risk-free interest rate, minimum | ' | ' | 0.62% | ' | ' |
Risk-free interest rate, maximum | ' | ' | 0.77% | ' | ' |
Estimated volatility | ' | ' | 280.00% | ' | ' |
Dividend | ' | ' | 0.00% | ' | ' |
Stock price on September 30, 2013 | $0.03 | $0.03 | $0.02 | ' | ' |
Expected forfeiture rate | ' | ' | 90.00% | ' | ' |
CONCENTRATION_OF_CREDIT_RISK_N
CONCENTRATION OF CREDIT RISK (Narrative) (Details) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Sales [Member] | Customer Concentration Risk [Member] | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration risk percentage | 39.00% | 60.00% |
Number of customers | 2 | 2 |
Accounts Receivable [Member] | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration risk percentage | 100.00% | 100.00% |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration risk percentage | 93.00% | 91.00% |
Number of customers | 3 | 3 |
CONCENTRATION_OF_CREDIT_RISK_S
CONCENTRATION OF CREDIT RISK (Schedule of Major Customers) (Details) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Sales [Member] | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration risk percentage | 100.00% | 100.00% |
Sales [Member] | Customer A [Member] | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration risk percentage | 26.00% | 41.00% |
Sales [Member] | Customer B [Member] | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration risk percentage | 13.00% | 19.00% |
Sales [Member] | All Other Customers [Member] | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration risk percentage | 61.00% | 40.00% |
Accounts Receivable [Member] | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration risk percentage | 100.00% | 100.00% |
Accounts Receivable [Member] | Customer A [Member] | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration risk percentage | 47.00% | 54.00% |
Accounts Receivable [Member] | Customer B [Member] | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration risk percentage | 23.00% | 26.00% |
Accounts Receivable [Member] | Customer C [Member] | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration risk percentage | 22.00% | 11.00% |
Accounts Receivable [Member] | All Other Customers [Member] | ' | ' |
Concentration Risk [Line Items] | ' | ' |
Concentration risk percentage | 8.00% | 9.00% |
STOCKHOLDERS_EQUITY_DEFICIT_Pr
STOCKHOLDERS' EQUITY (DEFICIT) (Preferred Stock Narrative) (Details) (USD $) | Sep. 30, 2013 | Sep. 30, 2012 | Mar. 31, 2005 | Dec. 29, 2005 | Sep. 30, 2005 |
Series A Preferred Stock [Member] | Series B Preferred Stock [Member] | Series B Preferred Stock [Member] | |||
Preferred shares | ' | ' | ' | ' | ' |
Shares authorized | 10,000,000 | 10,000,000 | 1,666,667 | 1,833,334 | 833,334 |
Par value per share | $0.00 | $0.00 | ' | ' | ' |
Liquidation preference | ' | ' | ' | $0.27 | ' |
Maximum percent of beneficial ownership after conversion, by holder | 4.90% | ' | ' | ' | ' |
STOCKHOLDERS_EQUITY_DEFICIT_Co
STOCKHOLDERS' EQUITY (DEFICIT) (Common Stock Narrative) (Details) (USD $) | 12 Months Ended | 12 Months Ended | 1 Months Ended | 1 Months Ended | 2 Months Ended | 12 Months Ended | 1 Months Ended | ||||||||||||||||||||||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Nov. 23, 2011 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Nov. 23, 2011 | Nov. 23, 2011 | Sep. 30, 2013 | 31-May-13 | Nov. 30, 2012 | 31-May-12 | Aug. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Jul. 31, 2013 | Jun. 30, 2013 | Apr. 30, 2013 | Mar. 31, 2013 | Feb. 28, 2013 | Jan. 31, 2013 | Dec. 31, 2012 | Jul. 31, 2013 | Jun. 30, 2013 | Apr. 30, 2013 | Mar. 31, 2013 | Feb. 28, 2013 | Jan. 31, 2013 | Dec. 31, 2012 | Jul. 31, 2013 | Apr. 30, 2013 | Mar. 31, 2013 | Feb. 28, 2013 | Jan. 31, 2013 | Sep. 30, 2013 | Nov. 23, 2011 | |
Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes Payable [Member] | Convertible Notes [Member] | Series O Warrants [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | ||||
Minimum [Member] | Maximum [Member] | Convertible Notes [Member] | Minimum [Member] | Maximum [Member] | Transaction One [Member] | Transaction One [Member] | Transaction One [Member] | Transaction One [Member] | Transaction One [Member] | Transaction One [Member] | Transaction One [Member] | Transaction Two [Member] | Transaction Two [Member] | Transaction Two [Member] | Transaction Two [Member] | Transaction Two [Member] | Transaction Two [Member] | Transaction Two [Member] | Transaction Three [Member] | Transaction Three [Member] | Transaction Three [Member] | Transaction Three [Member] | Transaction Three [Member] | Warrant [Member] | Convertible Notes [Member] | ||||||||||||
Common Stock: | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Restricted stock issuances, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 13,455,958 | 2,434,871 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Restricted stock issuances, price per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.09 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Restricted stock issuances | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $228,250 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of common stock for cash | 245,000 | 2,249,860 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of warrants | 88,818,721 | 112,776,472 | 115,446,100 | ' | ' | ' | 81,588,029 | 911,765 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 35,514,789 |
Warrant exercise price | ' | ' | ' | ' | ' | ' | ' | 0.17 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from sale of common stock | 245,000 | 2,249,861 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,614,715 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt issued | ' | ' | ' | ' | ' | ' | 2,012,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from convertible note payable | 168,000 | 1,750,000 | ' | ' | ' | ' | 1,750,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Original issue discount, net | 4,789 | 5,399 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Original issue discount | ' | ' | ' | ' | ' | ' | 13.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash commission | ' | ' | ' | ' | ' | ' | 155,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Legal expenses | ' | ' | ' | ' | ' | ' | 20,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expenses related to the investment | ' | ' | ' | ' | ' | ' | 60,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares sold, shares | ' | ' | ' | ' | ' | ' | ' | ' | 5,000,000 | 224,000 | 918,919 | ' | ' | ' | ' | ' | 6,000,000 | 708,333 | 18,000,000 | 5,000,000 | 175,000 | 216,216 | 112,000 | 2,000,000 | 2,500,000 | 2,250,000 | 1,200,000 | 1,950,000 | 500,000 | 500,000 | 3,500,000 | 2,500,000 | 362,000 | 112,000 | 112,000 | ' | ' |
Shares sold | ' | ' | ' | ' | ' | ' | ' | ' | $150,000 | $6,272 | $68,000 | ' | ' | ' | ' | ' | $141,600 | $18,008 | $594,000 | $200,000 | $12,950 | $16,000 | $8,228 | $47,200 | $50,000 | $68,675 | $25,000 | $77,300 | $37,000 | $37,000 | $70,000 | $50,000 | $11,196 | $4,368 | $8,228 | ' | ' |
Shares sold, price per share | ' | ' | ' | ' | $0.04 | $0.08 | ' | ' | $0.03 | $0.03 | $0.07 | ' | ' | $0.03 | $0.04 | $0.05 | $0.02 | $0.03 | $0.03 | $0.04 | $0.07 | $0.07 | $0.07 | $0.02 | $0.02 | $0.03 | $0.02 | $0.04 | $0.07 | $0.07 | $0.02 | $0.02 | $0.03 | $0.04 | $0.07 | $0.03 | ' |
Stock options exercised | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 91,224,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options exercised, exercise price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.00 | $0.08 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock issued as payment on convertible notes, shares | ' | ' | ' | 43,750,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,431,300 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise of common stock warrants, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,910,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
STOCKHOLDERS_EQUITY_DEFICIT_Sc
STOCKHOLDERS' EQUITY (DEFICIT) (Schedule of Changes in Outstanding Common Stock Warrants) (Details) (Warrant [Member], USD $) | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Nov. 23, 2011 | |
Warrant [Member] | ' | ' | ' |
Number of Options | ' | ' | ' |
Balance at beginning of year | 118,434,173 | 11,528,934 | 11,528,934 |
Granted | 46,195,745 | 110,074,867 | ' |
Exercised | -1,910,000 | -3,169,628 | ' |
Forfeited | -59,899,643 | ' | ' |
Balance at end of year | 102,820,275 | 118,434,173 | 11,528,934 |
Options exercisable at end of year | 102,820,275 | 118,434,173 | ' |
Weighted Average Exercise Price | ' | ' | ' |
Balance at beginning of year | $0.09 | $0.17 | $0.17 |
Granted | $0.05 | $0.08 | ' |
Exercised | $0.03 | $0.07 | ' |
Forfeited | $0.08 | $0 | ' |
Balance at end of year | $0.03 | $0.09 | $0.17 |
Options exercisable at end of year | $0.05 | $0.08 | ' |
Weighted average fair value of options granted or re-priced during the year | $0.03 | ' | ' |
STOCKHOLDERS_EQUITY_DEFICIT_Sc1
STOCKHOLDERS' EQUITY (DEFICIT) (Schedule of Information about Common Stock Warrants) (Details) (Warrant [Member], USD $) | 12 Months Ended |
Sep. 30, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Number Outstanding at September 30, 2013 | 102,820,275 |
Outstanding, Weighted Average Exercise Price | $0.05 |
Number Exercisable at September 30, 2013 | 103,620,275 |
Exercisable, Weighted Average Exercise Price | $0.05 |
$0.028 [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Range of Exercise Price, minimum | $0.03 |
Number Outstanding at September 30, 2013 | 88,018,721 |
Outstanding, Weighted Average Remaining Contractual Life | '3 years 15 days |
Outstanding, Weighted Average Exercise Price | $0.03 |
Number Exercisable at September 30, 2013 | 88,018,721 |
Exercisable, Weighted Average Exercise Price | $0.03 |
$0.150 [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Range of Exercise Price, minimum | $0.15 |
Number Outstanding at September 30, 2013 | 14,801,554 |
Outstanding, Weighted Average Remaining Contractual Life | '3 years 9 months |
Outstanding, Weighted Average Exercise Price | $0.15 |
Number Exercisable at September 30, 2013 | 14,801,554 |
Exercisable, Weighted Average Exercise Price | $0.15 |
STOCK_OPTION_PLAN_Narrative_De
STOCK OPTION PLAN (Narrative) (Details) (USD $) | 1 Months Ended | 12 Months Ended | |
Aug. 31, 2012 | Sep. 30, 2013 | Aug. 31, 2000 | |
STOCK OPTION PLAN [Abstract] | ' | ' | ' |
Price per share, minimum percentage of fair market value | ' | 100.00% | ' |
Stock owned, maximum percentage of total combined voting power | ' | 10.00% | ' |
Price per share for employees owning more than 10% of voting power, minimum percentage of fair market value | ' | 110.00% | ' |
Price per share, minimum percentage of fair market value for non-qualified stock options granted | ' | 50.00% | ' |
Number of shares authorized | 80,000,000 | ' | 60,000,000 |
Stock option plan longevity term | '10 years | ' | ' |
Stock options expiration term, maximum | ' | '3 years | ' |
Stock options expiration term for employees owning more than 10% of voting power, maximum | ' | '5 years | ' |
Share-based compensation | ' | $762,677 | ' |
Unrecognized compensation expense | ' | $95,785 | ' |
STOCK_OPTION_PLAN_Schedule_of_
STOCK OPTION PLAN (Schedule of Assumptions Used to Determine Options Value) (Details) (Employee Stock Option [Member]) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Expected volatility, minimum | 13.00% | 36.00% |
Expected volatility, maximum | 278.00% | 278.00% |
Risk-free interest rate, minimum | 0.01% | 0.67% |
Risk-free interest rate, maximum | 0.34% | 0.77% |
Forfeiture Rate, minimum | 0.00% | 0.00% |
Forfeiture Rate, maximum | 45.00% | 45.00% |
Expected dividend yield | 0.00% | 0.00% |
Minimum [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Expected term | '1 year | '1 year |
Maximum [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Expected term | '3 years | '3 years |
STOCK_OPTION_PLAN_Schedule_of_1
STOCK OPTION PLAN (Schedule of Changes in Outstanding Stock Options) (Details) (Employee Stock Option [Member], USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Employee Stock Option [Member] | ' | ' |
Number of Options | ' | ' |
Balance at beginning of year | 8,353,185 | 4,104,487 |
Granted | 90,963,785 | 8,079,185 |
Exercised | -91,224,000 | -1,532,325 |
Forfeited | -4,675,000 | -2,298,162 |
Balance at end of year | 3,417,970 | 8,353,185 |
Options exercisable at end of year | 3,045,852 | 1,307,333 |
Weighted Average Exercise Price | ' | ' |
Balance at beginning of year | $0.08 | $0.38 |
Granted | $0.04 | $0.08 |
Exercised | $0.04 | $0.17 |
Forfeited | $0.08 | $0.55 |
Balance at end of year | $0.09 | $0.08 |
Options exercisable at end of year | $0.09 | $0.06 |
Weighted average fair value of options granted or re-priced during the year | $0.08 | $0 |
Aggregate Intrinsic Value | ' | ' |
Granted | $0 | $0 |
Exercised | ' | ' |
Balance at end of year | ' | ' |
Options exercisable at end of year | ' | ' |
STOCK_OPTION_PLAN_Schedule_of_2
STOCK OPTION PLAN (Schedule of Information about Stock Options) (Details) (Employee Stock Option [Member], USD $) | 12 Months Ended |
Sep. 30, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Number Outstanding at September 30, 2013 | 3,417,970 |
Outstanding, Weighted Average Exercise Price | $0.09 |
Number Exercisable at September 30, 2013 | 3,045,852 |
Exercisable, Weighted Average Exercise Price | $0.09 |
$0.0770 [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Range of Exercise Price, minimum | $0.08 |
Number Outstanding at September 30, 2013 | 275,000 |
Outstanding, Weighted Average Remaining Contractual Life | '3 years 11 months 16 days |
Outstanding, Weighted Average Exercise Price | $0.08 |
Number Exercisable at September 30, 2013 | 91,667 |
Exercisable, Weighted Average Exercise Price | $0.08 |
$0.0814 [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Range of Exercise Price, minimum | $0.08 |
Number Outstanding at September 30, 2013 | 188,785 |
Outstanding, Weighted Average Remaining Contractual Life | '4 years 1 month 6 days |
Outstanding, Weighted Average Exercise Price | $0.08 |
Number Exercisable at September 30, 2013 | ' |
Exercisable, Weighted Average Exercise Price | $0.08 |
$0.8470 [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Range of Exercise Price, minimum | $0.85 |
Number Outstanding at September 30, 2013 | 2,454,185 |
Outstanding, Weighted Average Remaining Contractual Life | '3 years 11 months 16 days |
Outstanding, Weighted Average Exercise Price | $0.85 |
Number Exercisable at September 30, 2013 | 2,454,185 |
Exercisable, Weighted Average Exercise Price | $0.85 |
$0.10000 [Member] | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Range of Exercise Price, minimum | $0.10 |
Number Outstanding at September 30, 2013 | 500,000 |
Outstanding, Weighted Average Remaining Contractual Life | '5 months 9 days |
Outstanding, Weighted Average Exercise Price | $0.10 |
Number Exercisable at September 30, 2013 | 500,000 |
Exercisable, Weighted Average Exercise Price | $0.10 |
INVESTMENTS_Narrative_Details
INVESTMENTS (Narrative) (Details) (USD $) | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2012 | Nov. 30, 2009 | Sep. 30, 2013 | Sep. 30, 2012 | |
INVESTMENTS [Abstract] | ' | ' | ' | ' |
Number of shares acquired | 3,300,000 | 800,000 | ' | ' |
Investment in marketable securities | $33,000 | $48,000 | ' | $33,000 |
INVESTMENTS_Schedule_of_Market
INVESTMENTS (Schedule of Marketable Equity Securities) (Details) (USD $) | 12 Months Ended |
Sep. 30, 2013 | |
Marketable Equity Securities: | ' |
Cost | $81,000 |
Gross Unrealized Gains | ' |
Gross Unrealized Losses | -80,180 |
Fair value | 820 |
Publicly Traded Equity Securities [Member] | ' |
Marketable Equity Securities: | ' |
Cost | 81,000 |
Gross Unrealized Gains | ' |
Gross Unrealized Losses | -80,180 |
Fair value | $820 |
INVESTMENTS_Schedule_of_Realiz
INVESTMENTS (Schedule of Realized Net Gains (Losses)) (Details) (USD $) | 12 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Unrealized Gains and Losses on Investments | ' | ' |
Net gains/(loss) on investments | ($308,780) | $192,360 |
Publicly Traded Equity Securities [Member] | ' | ' |
Unrealized Gains and Losses on Investments | ' | ' |
Net gains/(loss) on investments | ($308,780) | $192,360 |
INVESTMENTS_Schedule_of_Invest
INVESTMENTS (Schedule of Investment Measured at Fair Value on a Recurring Basis) (Details) (USD $) | 12 Months Ended | ||
Sep. 30, 2012 | Sep. 30, 2013 | ||
Assets: | ' | ' | |
Marketable Equity Securities, net of discount for effect of restriction | ' | $820 | |
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets (Level 1) [Member] | ' | ' | |
Assets: | ' | ' | |
Marketable Equity Securities, net of discount for effect of restriction | ' | 820 | |
Liabilities: | ' | ' | |
Derivative liabilities | ' | ' | |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | ' | ' | |
Assets: | ' | ' | |
Marketable Equity Securities, net of discount for effect of restriction | ' | ' | |
Liabilities: | ' | ' | |
Derivative liabilities | ' | ' | |
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | ' | ' | |
Assets: | ' | ' | |
Marketable Equity Securities, net of discount for effect of restriction | 309,600 | [1] | ' |
Liabilities: | ' | ' | |
Derivative liabilities | $1,104,499 | $117,424 | |
Discount rate | 20.00% | ' | |
[1] | Previously Level 3 due to Rule 144 restrictions on trading and application of 20% discount; moved to Level 1 when restrictions expired. |
COMPREHENSIVE_INCOME_LOSS_Deta
COMPREHENSIVE INCOME (LOSS) (Details) (USD $) | 12 Months Ended |
Sep. 30, 2013 | |
COMPREHENSIVE INCOME (LOSS) [Abstract] | ' |
Unrealized losses on marketable securities | ($80,180) |
SUBSEQUENT_EVENTS_Narrative_De
SUBSEQUENT EVENTS (Narrative) (Details) (USD $) | Sep. 30, 2013 | Sep. 30, 2012 | Nov. 23, 2011 | Oct. 01, 2013 | Dec. 18, 2013 | Nov. 26, 2013 | Oct. 01, 2013 |
Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | ||||
Convertible Debt [Member] | Convertible Debt [Member] | Lease Agreements [Member] | |||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Stock issued for acquisiton, shares | ' | ' | ' | 9,568,400 | ' | ' | ' |
Stock issued for acquisition, percentage of issued and outstanding common stock | ' | ' | ' | 2.20% | ' | ' | ' |
Common stock, par value | $0.00 | $0.00 | ' | $0.00 | ' | ' | ' |
Amount of note converted | ' | ' | ' | $155,000 | ' | ' | ' |
Amount of other debt converted | ' | ' | ' | 267,823 | ' | ' | ' |
Total amount of debt assumed | ' | ' | ' | 422,823 | ' | ' | ' |
Common stock issued as payment on convertible notes, shares | ' | ' | ' | 13,485,799 | ' | ' | ' |
Shares issued in business acquisition | ' | ' | ' | 250,000 | ' | ' | ' |
Percent of entity acquired | ' | ' | ' | 100.00% | ' | ' | ' |
Conversion price | ' | ' | ' | $0.03 | ' | ' | $0.06 |
Lease agreement, principal amount | ' | ' | ' | 1,417,672 | ' | ' | ' |
Loan term | ' | ' | ' | '36 months | ' | ' | ' |
Annual interest rate | ' | ' | ' | 15.00% | 10.00% | 8.00% | ' |
Restricted stock issued | ' | ' | ' | 1,000,000 | ' | ' | ' |
Number of Warrants | 88,818,721 | 112,776,472 | 115,446,100 | 3,675,000 | ' | ' | ' |
Warrant term | ' | ' | ' | '2 years | ' | ' | ' |
Total assets acquired | ' | ' | ' | 3,110,192 | ' | ' | ' |
Total liabilities assumed | ' | ' | ' | 2,545,364 | ' | ' | ' |
Debt issued | ' | ' | ' | ' | 500,000 | 83,500 | ' |
Maturity date | ' | ' | ' | ' | 18-Dec-14 | 29-Aug-14 | ' |
Percentage of lowest trading price | ' | ' | ' | ' | 60.00% | 60.00% | ' |
Short-term debt | ' | ' | ' | ' | $132,000 | ' | ' |
SUBSEQUENT_EVENTS_Schedule_of_
SUBSEQUENT EVENTS (Schedule of Purchase Price) (Details) (Subsequent Event [Member], USD $) | 1 Months Ended |
Oct. 01, 2013 | |
Subsequent Event [Member] | ' |
Subsequent Event [Line Items] | ' |
Fair value of common stock issued to seller | $234,426 |
Fair value of common stock issued in exchange | 330,402 |
Total purchase price | $564,828 |
SUBSEQUENT_EVENTS_Schedule_of_1
SUBSEQUENT EVENTS (Schedule of Assets Acquired and Liabilities Assumed) (Details) (Subsequent Event [Member], USD $) | Oct. 01, 2013 |
Subsequent Event [Member] | ' |
Subsequent Event [Line Items] | ' |
Cash | $4,443 |
Accounts Receivable | 68,529 |
Lease Deposits | 188,874 |
Prepaid expenses | 87,903 |
Other assets | 917 |
Property and equipment, net | 827,383 |
Intangible asset | 1,932,143 |
Accounts payable and accrued expenses | -648,961 |
Deferred revenue | -59,396 |
Notes Payable | -1,837,007 |
Net assets acquired | $564,828 |