Quarterly report pursuant to sections 13 or 15(d)

Note 7. Warrants

Note 7. Warrants

6 Months Ended

Mar. 31, 2013

As discussed in Note 6, the Company issued several Notes and converted them resulting in the issuance of warrants.

	Number of Units		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)		Intrinsic Value
Outstanding at September 30, 2012		109,139	$	2.85		4.95		253,202

Granted		846,363		1.78

Outstanding at March 31, 2013		955,502	$	1.90		4.89		1,855,472

Exercisable at March 31, 2013		955,502	$	1.90		4.89		1,855,472

As discussed in Note 6, the Company issued several Notes and converted them resulting in the issuance of warrants. The warrants were valued using the Black-Scholes pricing model with the following assumptions:

Volatility		121%-127%
Risk-free interest rate		.74% -.89%
Expected term		5 years
Forfeiture rate		0%
Dividend yield rate		0%