Quarterly report pursuant to sections 13 or 15(d)

Note 7. Warrants

Note 7. Warrants

9 Months Ended

Jun. 30, 2013

Note 7: Warrants

As discussed in Note 6, the Company issued several Notes and converted them resulting in the issuance of warrants. The following table summarizes information about the Company’s warrants at June 30, 2013:

	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
Exercised		–		–
Outstanding at June 30, 2013		955,502	$	1.90		4.64		784,037
Exerciseable at June 30, 2013		955,502	$	1.90		4.64		784,037

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%