Annual report pursuant to section 13 and 15(d)


12 Months Ended
Sep. 30, 2011

As part of the Company’s strategy to evaluate each of its business segments as separate entities, management noted that the Direct Sales business segment had incurred operating losses and declining revenues and did not fit with the Company’s change in strategic direction.  Accordingly, in March 2011, the Company made the strategic decision to discontinue its Direct Sales business and product offerings. Prior year financial statements have been restated to present the Direct Sales business segment as a discontinued operation.

The Company initiated shutdown activities in March 2011 and closed the Direct Sales business segment in May 2011.  In conjunction with the discontinued operations, the Company recorded the following charges in the year ended September 30, 2011:

· Employee contract termination charges of $7,083 reflecting the reduction in force of 7 employees;

· Non cash impairment charges of $367,588 consisting of the write-off of net intangible assets;

The Direct Sales business segment accounted for $1,341,430 and $3,838,479 of net revenues for the years ended September 30, 2011 and 2010, respectively, which are now included as part of income (loss) from discontinued component, including disposal costs, in the accompanying consolidated statements of operations.