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Going concern
6 Months Ended
Mar. 31, 2013
Going Concern [Text Block]

Note 3. Going concern


The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of our Company as a going concern. Since inception, we have reported net losses, including losses of $999,544 and $1,633,217 during the years ended September 30, 2012 and 2011, respectively. We have reported a net loss of $1,152,227 during the six months ended March 31, 2013, and we expect losses to continue in the near future as we grow our operations. At March 31, 2013, we have a working capital deficit of $1,024,220 and an accumulated deficit of $57,302,150. Net cash used by operating activities was $376,926 and $584,478 during the six months ended March 31, 2013 and 2012, respectively. We have funded our operations primarily through sales of our common and preferred stock, short-term borrowings, and cash receipt from sales. In this regard, during the six months ended March 31, 2013, we raised $278,000 from our financing activities, and received $123,330 in cash pursuant to terms on sales contracts.


Investment funds received have not been sufficient to continue to support certain operating activities, which led to postponement in the deployment of our business strategy and the scaling back of research and development activities. We continue at reduced staffing levels as we focus on raising additional capital and engaging prospective customers. Without additional funding, our cash is estimated to support our operations into May 2013. These factors, and those of the preceding paragraph, raise substantial doubt about our ability to continue as a going concern.


We require additional financing to execute our business strategy and to satisfy our near-term working capital requirements. Our operating expenses will use a significant amount of our cash resources. Our management seeks to raise additional financing to fund future operations and to provide additional working capital to fund our business. There is no assurance that such financing will be obtained in sufficient amounts necessary or on terms favorable or on terms acceptable to us to meet our needs. In the event that we cannot obtain additional funds, on a timely basis or our operations do not generate sufficient cash flow, we may be forced to curtail our development or cease our operations altogether, which may include seeking protection under the bankruptcy laws.


The accompanying condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classifications of liabilities that may result from the outcome of this uncertainty