RESTATEMENT OF THE MARCH 31, 2013 BALANCES

9 Months Ended

Jun. 30, 2014

Restatement of Prior Year Income [Abstract]

RESTATEMENT OF THE JUNE 30, 2013 BALANCES

As a result of certain  adjustments affecting quarters of the fiscal year ended September 30, 2013, that were made as of September 30, 2013, the previously reported condensed consolidated statements of operations for the three and nine months ended June 30, 2013 and the consolidated statement of cash flow for the nine months ended June 30, 2013 have been restated. The restatements are a result of the following:

· Certain warrants with price protection features as described in Note 6, were not accounted for as derivatives for the three and nine months ended June 30, 2013. This resulted in an over and understatement of expense by $1,276,187 and $8,546,411, respectively for the three months and nine months ended June 30, 2013.

· The Company incorrectly calculated the expense related to the issuance of stock options for the three and nine months ended June 30, 2013. This resulted in an aggregate understatement of general and administrative and sales and marketing expenses of $201,079 and $1,485,875, respectively for the three and nine months ended June 30, 2013.

· The Company incorrectly calculated interest expense. This resulted in an over and understatement of interest expense of $208,334 and $797,910 for the three and nine months ended June 30, 2013, respectively.

· The Company recorded an overstatement of expense for loss on warrant inducement of $316,274 for the three and nine months ended June 30, 2013.

· The Company incorrectly recorded gain from beneficial conversion feature of $524,576 for the three months ended June 30, 2013 and loss from beneficial conversion features of $481,668 for the nine months ended June 30, 2013.

 Detailed below are the account balances, which were restated to reflect the accounting for the previously described transactions.

	Three months Ended June 30, 2013 Restated				Three months Ended June 30, 2013 (Originally Issued)			Effect of the Change
General and administrative expense		$	(1,984,467	)		(1,783,388	)		(201,079	)
Sales and marketing		$	(461,800	)		(461,800	)		-
Interest expense		$	(1,599,554	)		(1,807,888	)		208,334
Loss on warrant  inducement		$	-			(316,274	)		316,274
Change in fair value of warrant derivative liabilities		$	1,276,187			-			1,276,187
Beneficial conversion features of convertible notes payable		$	-			524,576			(524,576	)
Net loss		$	(2,568,290	)		(3,637,039	)		1,068,749
Loss per share, basic and diluted		$	(2.13	)		(3.01	)		(0.88	)

	Nine Months Ended June 30, 2013 Restated				Nine Months Ended June 30, 2013 (Originally Issued)			Effect of the Change
General and administrative expense		$	(5,285,412	)		(4,277,662	)		(1,007,750	)
Sales and marketing		$	(2,447,947	)		(1,969,822	)		(478,125	)
Interest expense		$	(2,962,246	)		(2,164,336	)		(797,910	)
Expense on issuance of derivative liabilities		$	(1,283,103	)		-			(1,283,103	)
Loss on warrant inducement			-			(316,274	)		316,274
Change in fair value of warrant derivative liabilities		$	(8,546,411	)		-			(8,546,411	)
Beneficial conversion features of convertible notes payable		$	-			(481,668	)		481,668
Net loss		$	(20,266,533	)		(8,944,785	)		(11,321,748	)
Loss per share, basic and diluted		$	(17.30	)		(7.64	)		(9.66	)