Note 13 - Warrants Liabilities

9 Months Ended

Jun. 30, 2013

Notes

Note 13 - Warrants Liabilities

Note 13 – Warrants Liabilities

In March and June 2010, the Company issued 4,200,000 shares of common stock and warrants to purchase 4,000,000 shares of Common Stock (Series B warrants) to three accredited institutional funds and an accredited investor for $2,000,000.

The exercise price of the Series B Warrants was subject to adjustments in certain circumstances for stock splits, combinations, dividends and distributions, reclassification, exchange or substitution, reorganization, merger, consolidation or sales of assets, issuance of additional shares of common stock or equivalents. As a result of its interpretation, the Company concluded that the Series B Warrants and Option to purchase additional common stock and Series B Warrants should be treated as derivative liabilities because the warrants are entitled to a price adjustment provision to allow the exercise price to be reduced in the event the Company issues or sells any additional shares of common stock at a price per share less than the then-applicable exercise price or without consideration, which is typically referred to as a “down-round protection” or “anti-dilution” provision.

The fair values of the warrant liabilities as of June 30, 2013 and September 30, 2012 were as follows:

	2013	2012
Opening balance	$   363,958	$1,545,098
Change in warrant liabilities	(363,958)	(1,181,140)
Ending balance	$              -	$   363,958

As of June 30, 2013, 4,000,000 warrants have expired and none were exercised.