Fair Value Measurements

12 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurements

 The Company measures the fair value of applicable financial and non-financial assets and liabilities based on the following levels of inputs.

• Level 1 inputs: Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date.

• Level 2 inputs: Level 2 inputs are from other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

• Level 3 inputs: Level 3 inputs are unobservable and should be used to measure fair value to the extent that observable inputs are not available.

 The hierarchy noted above requires the Company to minimize the use of unobservable inputs and to use observable market data, if available, when determining fair value. There were no transfers between Level 1, Level 2 and/or Level 3 during Fiscal 2013. Financial liabilities carried at fair value as of September 30, 2013 are classified below:

	Level 1		Level 2		Level 3		Total
Derivative liabilities	$	-	$	-	$	19,245,000	$	19,245,000

 The table below sets forth a summary of changes in the fair value of our Level 3 financial instruments for the year ended September 30, 2013:

	September 30, 2012		Recorded New Derivative Liabilities		Reclass from equity to derivative liability		Change in estimated fair value recognized in results of operations		September 30, 2013
Derivative liabilities	$	19,925,000	$	3,922,000	$	-	$	(4,602,000)	$	19,245,000

 Fair Value of Financial Instruments. The Company estimates the fair value of financial instruments that are not required to be carried in the condensed consolidated balance sheet at fair value on either a recurring or non-recurring basis as follows:

	September 30, 2013				September 30, 2012				Level in fair
	Carrying amount		Fair value		Carrying amount		Fair value		value hierarchy
Cash and cash equivalents	$	136,000	$	136,000	$	1,738,000	$	1,738,000		1
Accounts Receivable, net	$	119,000	$	119,000	$	-	$	-		2
Accounts Payable	$	1,024,000	$	1,024,000	$	604,000	$	604,000		2

 The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and approximated fair value due to their short-term nature.