Fair Value Measures and Disclosures

3 Months Ended

Jun. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

NOTE 3 - FAIR VALUE OF FINANCIAL INSTRUMENTS

The table below sets forth the Company's financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2012 and September 30, 2011, respectively, and the fair value calculation input hierarchy that the Company has determined has applied to each asset and liability category.

			June 30, 2012		September 30, 2011	Input HierarchyLevel
Assets:
	Cash and cash equivalents	$	30,847	$	52,912	Level 1
Liabilities:
	Conversion option derivative		305,782		286,498	Level 2
	Warrant derivative		136,611		299,947	Level 2

Disclosure Text Block [Abstract]

Derivatives and Fair Value [Text Block]

NOTE 6 - DERIVATIVE LIABILITIES

As discussed in Note 7, the Company entered into three separate issuances of convertible debentures, dated December 14, 2009, April 23, 2010 and October 20, 2010, which contained provisions allowing holders of the debentures to convert outstanding debt to shares of the Company's common stock. The debentures contain ‘down-round’ provisions which call for the debt conversion and warrant exercise prices to be reduced based on future issues of debt or equity with more favorable provisions.  Management has determined that these provisions cause the conversion options and warrants to require derivative liability accounting.  As such, management has valued them at fair value at the date of issuance and bifurcated from the host instruments. 

The debentures are convertible at any time after the original issue date into a number of shares of the Company’s common stock, determined by dividing the amount to be converted by a conversion price as of June 30, 2012, of $0.05 per share or an aggregate of 23,279,993 shares.  Additionally common share purchase warrants were issued, expiring 42 months from the original issue date.  The warrants were exercisable by purchase of the Company’s common stock for cash, or alternatively, in a cashless exercise, the number of shares being determined in accordance with a predetermined formula based on the Company’s then current stock price.

Conversion option derivative

At June 30, 2012 and September 30, 2011, the fair value of conversion options was estimated at the date of grant using the Black-Scholes option pricing model using the following weighted average assumptions and the associated revaluation range of assumptions over the past two years:

	June 30, 2012	September 30, 2011
Risk-free interest rate	0.09%	0.01% to 1.60%
Expected dividend rate	-	-
Expected term	.25 years	.21 years to 3 years
Expected volatility	202.7% to 217.9%	120.1% to 184%
Per unit fair value of conversion option derivative liability	$0.0131	$0.006 to $0.90

At June 30, 2012, the associated debentures have matured and are in default.  Management has estimated the remaining life of the conversion option to be 3 months. 

Below is detail of the conversion option liability balance at June 30, 2012, and September 30, 2011:

			June 30, 2012		September 30, 2011
Beginning balance		$	286,498	$	848,300
	Initial fair value of conversion option liability		-		388,889
	Change in conversion option liability resulting from extinguishment of debt		763,718		-
	Revaluation of conversion option liability resulting from conversion of debentures		(71,383)		(119,683)
	Net change in fair value of conversion option liability		(673,051)		(831,008)
Ending balance		$	305,782	$	286,498
Conversion option shares outstanding			23,279,993		10,658,333
	Weighted average fair value per unit	$	0.0131	$	0.03
		$	305,782	$	286,498

Warrant derivative

For periods ended June 30, 2012 and September 30, 2011, respectively,  the fair value of warrants was estimated using the Black-Scholes option pricing model using the following weighted average assumptions and the associated  revaluation range of assumptions on designated event dates over the associated period:

	June 30, 2012	September 30, 2011
Risk-free interest rate	0.21% to 0.33%	0.25% to 1.70%
Expected dividend rate	-	-
Expected term	.96 years to 1.82 years	3 to 5 years
Expected volatility	170.2% to 199.7%	136.6% to 172.8%
Per unit fair value of warrant derivative liability	$0.027	$0.03 to $1.44
Number of warrants valued	4,999,113	4,999,113

Below is detail of the warrant derivative balance at June 30, 2012 and September 30, 2011:

			June 30, 2012		September 30, 2011
Beginning balance		$	299,947	$	498,180
	Initial fair value of warrant derivative				453,298
	Change in derivative liability resulting from modification of warrant exercise price		159,271		-
	Net change in fair value of warrant derivative		(322,607)		(651,531)
Ending balance		$	136,611	$	299,947
Conversion option shares outstanding			4,999,113		4,999,113
	Weighted average fair value per unit	$	0.027	$	0.06
		$	136,611	$	299,947