Annual report pursuant to Section 13 and 15(d)

CONSOLIDATED STATEMENTS OF CASH FLOWS

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
 12 Months Ended
Sep. 30, 2012
Sep. 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (3,406,800) $ (8,866,600)
Adjustments to reconcile net loss to net cash used in operating activities:    
Net loss from discontinued operations 490,500 538,200
Depreciation & amortization 18,800 11,900
Amortization of discount on bridge notes issued 3,544,200 4,197,800
Gain on derivative liability valuation (6,950,300) (6,826,700)
Stock based compensation 1,350,800 1,605,400
Extinguishment of debt 0 1,968,000
Issuance of warrants for financing services 56,800 183,500
Reversal of prior period accruals 0 (458,800)
Non-cash interest expense 664,300 3,366,800
Changes in operating assets and liabilities:    
Accounts receivable 6,800 8,100
Prepaids and other 28,000 13,600
Accounts payable and accrued liabilities 1,386,300 640,400
Accrued compensation and others 469,000 49,500
Security deposit on new lease 4,600 3,200
Net cash used in operating activities (2,337,000) (3,565,700)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Acquisition of Furniture & Equipment (4,300) (21,600)
Acquisition of Brain Clinics (21,200) 0
Net cash used in investing activities (25,500) (21,600)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Repayment of convertible debt with accrued interest 0 15,900
Repayment of debt 0 (26,200)
Repayment of a capital lease (6,100) (6,100)
Proceeds from the sale of common stock, net of offering costs 900 0
Net proceeds from promissory note 200,000 0
Net proceeds from secured convertible notes 0 1,840,000
Net proceeds from subordinated convertible notes 1,905,300 2,395,000
Net proceeds from unsecured convertible notes 90,000 0
Net proceeds from unperfected senior convertible promissory notes 400,000 0
Net cash provided by financing activities 2,590,100 4,218,600
DISCONTINUED OPERATIONS    
Net cash used in operating activities (293,500) (613,100)
Net cash used in discontinued operations (293,500) (613,100)
NET INCREASE (DECREASE) IN CASH (65,900) 18,200
CASH- BEGINNING OF YEAR 73,600 55,400
CASH- END OF YEAR 7,700 73,600
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:    
Interest 9,300 3,200
Income taxes 1,900 1,300
Fair value of equipment acquired through lease 0 16,300
Non-cash financing activities:    
Shares issued for accounts payable 0 44,000
Shares issued for converting bridge note 1,900 0
Offering costs $ 0 $ 103,000