STOCKHOLDERS’ DEFICIT (Details Textual)

v2.4.0.8

STOCKHOLDERS’ DEFICIT (Details Textual) (USD $)	3 Months Ended					6 Months Ended	9 Months Ended					9 Months Ended			9 Months Ended	12 Months Ended	9 Months Ended	1 Months Ended	9 Months Ended	12 Months Ended				9 Months Ended						3 Months Ended		6 Months Ended	9 Months Ended		3 Months Ended		6 Months Ended	9 Months Ended			9 Months Ended		12 Months Ended							9 Months Ended	12 Months Ended	9 Months Ended				9 Months Ended			9 Months Ended					1 Months Ended		9 Months Ended					12 Months Ended	9 Months Ended			12 Months Ended	9 Months Ended			12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended							9 Months Ended
	Jun. 30, 2013	Mar. 26, 2013	Mar. 31, 2013	Dec. 31, 2012	Jan. 14, 2013	Jun. 30, 2013	Jun. 30, 2013	Sep. 30, 2012	Apr. 02, 2012	Mar. 22, 2012	Sep. 30, 2011	Jun. 30, 2013 October 2012 Notes [Member]	Nov. 30, 2012 October 2012 Notes [Member]	Sep. 30, 2012 October 2012 Notes [Member]	Jun. 30, 2013 Private Placement [Member]	Sep. 30, 2012 Forfeiture and Exchange Agreements [Member]	Jun. 30, 2013 Plan 2012 [Member]	Mar. 31, 2010 Plan 2006 [Member]	Jun. 30, 2013 Plan 2006 [Member]	Sep. 30, 2011 Plan 2006 [Member]	Sep. 30, 2006 Plan 2006 [Member]	Jun. 03, 2011 Plan 2006 [Member]	Aug. 03, 2006 Plan 2006 [Member]	Jun. 30, 2013 Amendment Plan 2012 [Member]	Jun. 30, 2013 Secured Convertible Subordinated Notes Payable [Member]		Jun. 30, 2013 Unsecured Convertible Notes Payable [Member]		Jun. 30, 2013 Common Stock [Member]	Mar. 26, 2013 Minimum [Member]	Jan. 14, 2013 Minimum [Member]	Jun. 30, 2013 Minimum [Member]	Jun. 30, 2013 Minimum [Member]	Jun. 30, 2013 Minimum [Member] Plan 2012 [Member]	Mar. 26, 2013 Maximum [Member]	Jan. 14, 2013 Maximum [Member]	Jun. 30, 2013 Maximum [Member]	Jun. 30, 2013 Maximum [Member]	Jun. 30, 2013 Maximum [Member] Plan 2012 [Member]	Jun. 30, 2013 John Pappajohn [Member] October 2012 Notes [Member]	Jun. 30, 2013 John Pappajohn [Member] Secured Convertible Subordinated Notes Payable [Member]		Sep. 30, 2012 John Pappajohn [Member] Warrant Three [Member]	Sep. 30, 2012 Investor One [Member] Warrant Three [Member]	Sep. 30, 2012 Zanett Opportunity Fund Issue One [Member] Warrant Three [Member]	Sep. 30, 2012 Investor Two [Member] Warrant Three [Member]	Sep. 30, 2012 Zanett Opportunity Fund Issue Two [Member] Warrant Three [Member]	Sep. 30, 2012 Zanett Opportunity Fund Issue Three [Member] Warrant Three [Member]	Sep. 30, 2012 Investors Three [Member] Warrant Three [Member]	Jun. 30, 2013 Monarch Capital Group Llc [Member]	Sep. 30, 2010 Monarch Capital Group Llc [Member] October 2012 Notes [Member]	Jun. 30, 2013 Monarch Capital Group Llc [Member] Private Placement [Member]	Jun. 30, 2013 Monarch Capital Group Llc [Member] Warrant One [Member]	Dec. 31, 2010 Monarch Capital Group Llc [Member] Minimum [Member]	Dec. 31, 2010 Monarch Capital Group Llc [Member] Maximum [Member]	Jun. 30, 2013 Mr. Tony Pullen [Member] October 2012 Notes [Member]	Jun. 30, 2013 Mr. Tony Pullen [Member] Warrant Two [Member]	Jun. 30, 2013 Accredited Third Party Investor [Member] October 2012 Notes [Member]	Jun. 30, 2013 Accredited Third Party Investor [Member] Private Placement [Member]	Jun. 30, 2013 Meyer Proler Md [Member] October 2012 Notes [Member]	Jun. 30, 2013 Andy Sassine [Member] October 2012 Notes [Member]	Jun. 30, 2013 Andy Sassine [Member] Secured Convertible Subordinated Notes Payable [Member]		Mar. 31, 2011 Management [Member]	Mar. 31, 2010 Management [Member]	Jun. 30, 2013 Nineteen Accredited Investors [Member] Private Placement [Member]	Jun. 30, 2013 Two Affiliates [Member] Private Placement [Member]	Jun. 30, 2013 Tierney Family Trust [Member]	Jun. 30, 2013 Tierney Family Trust [Member] October 2012 Notes [Member]	Jun. 30, 2013 Paul Buck [Member]	Sep. 30, 2012 Paul Buck [Member] Forfeiture and Exchange Agreements [Member]	Jun. 30, 2013 Paul Buck [Member] Plan 2012 [Member]	Jun. 30, 2013 Key Consultants [Member]	Jun. 30, 2013 Nine Accredited Investors [Member] Private Placement [Member]	Sep. 30, 2012 Blu Mont Capital Corp [Member]	Jun. 30, 2013 Accredited Investor [Member] Private Placement [Member]	Mar. 22, 2012 Director One [Member]	Mar. 22, 2012 Director Two [Member]	Sep. 30, 2012 George Carpenter [Member] Forfeiture and Exchange Agreements [Member]	Jun. 30, 2013 George Carpenter [Member] Plan 2012 [Member]	Sep. 30, 2012 Michael Darkoch [Member] Forfeiture and Exchange Agreements [Member]	Jun. 30, 2013 Michael Darkoch [Member] Plan 2012 [Member]	Jun. 30, 2013 Three Existing and Four New Board [Member] Plan 2012 [Member]	Jun. 30, 2013 Five Former Directors [Member] Plan 2012 [Member]	Jun. 30, 2013 Staff [Member]	Jun. 30, 2013 CNS California [Member]	Jun. 30, 2013 Colorado CNS Response [Member]	Jun. 30, 2013 Neuro-Therapy Clinic Inc [Member]	Jun. 30, 2013 Dominick And Dominick Securities, Inc. [Member]	Jun. 30, 2013 Dominick And Dominick Securities, Inc. [Member] Accredited Investor [Member]
Common stock, shares authorized (in shares)	150,000,000		100,000,000			150,000,000	150,000,000	150,000,000																																																																														80,000,000	1,000,000	10,000
Common Stock Shares Authorized Increased Number	150,000,000					150,000,000	150,000,000
Common stock, par value (in dollars per share)	$ 0.001					$ 0.001	$ 0.001	$ 0.001							$ 0.001																																																			$ 0.001								$ 0.001
Common stock, shares issued (in shares)	49,843,710					49,843,710	49,843,710	1,914,175
Common stock, shares outstanding (in shares)	49,843,710					49,843,710	49,843,710	1,914,175
Preferred Stock, Shares Authorized	15,000,000		15,000,000			15,000,000	15,000,000																																																																															20,000,000
Common Stock, Capital Shares Reserved for Future Issuance									750,000,000	333,334								666,667					333,334
Share-based Compensation Arrangement by Share-based Payment Award, Maximum Number of Shares Per Employee																		133,333			100,000
Share-based Compensation Arrangement by Share-based Payment Award, Plan Modification, Description and Terms																					The option price for each share of stock subject to an option shall be (i) no less than the fair market value of a share of stock on the date the option is granted, if the option is an ISO, or (ii) no less than 85% of the fair market value of the stock on the date the option is granted, if the option is a NSO; provided, however, if the option is an ISO granted to an eligible employee who is a 10% shareholder, the option price for each share of stock subject to such ISO shall be no less than 110% of the fair market value of a share of stock on the date such ISO is granted. Stock options have a maximum term of ten years from the date of grant, except for ISOs granted to an eligible employee who is a 10% shareholder, in which case the maximum term is five years from the date of grant. ISOs may be granted only to eligible employees.
Debt Conversion, Converted Instrument, Warrants or Options Issued							713,631																		16,668	[1],[2],[3]	50,502	[3],[4]													0	[1],[2],[3],[5]	250,002	26,667	83,334	60,001	13,334	30,000	233,335													0	[1],[2],[3],[6]
Number of Shares, Granted	0		3,810,000	5,395,000													9,247,670							250,000																																								15,834	288,334								1,600,000												1,960,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Grant Date Intrinsic Value																																																																$ 14.10
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number										42,670												439,689																																																							8,334	8,334
Share Based Compensation Arrangement By Share Based Payment Award Number Of Shares Authorized Exercise Price										$ 3.00
Number of Shares, Exercised	0		0	0															70,825
Number of Shares, Outstanding at December 31, 2011	9,749,594		9,749,594	5,939,594		9,749,594	9,749,594	546,746											501,924
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	6,132					6,132	6,132
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit																				$ 3.60
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit																				$ 32.70
Warrants Outstanding Exercise Price																																$ 0.04718	$ 0.04718				$ 9.90	$ 9.90
Warrants Outstanding Weighted Average Exercise Price	$ 3.13					$ 3.13	$ 3.13
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized	$ 1,063,500					$ 1,063,500	$ 1,063,500
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant																	5,752,330		87,786
Debt Conversion, Original Debt, Amount							3,088,100					1,838,100																																																50,000	25,000								200,000						50,000
Debt Instrument, Face Amount	6,523,900					6,523,900	6,523,900					2,000,000	1,600,000	1,998,100											2,773,900	[1],[2],[3]	3,500,000	[3],[4]												500,000	761,700	[1],[2],[3],[5]	750,000	80,000	250,000	180,000	40,000	90,000	700,000		60,000		60,000				350,000				25,000	500,000	[1],[2],[3],[6]						200,000
Employee Compensation Terms Of Waiver																Pursuant to these agreements, the executives agreed to waive receipt of and release the Company from the payment of 50% of their salaries accrued from August 31, 2010 to September 30, 2012
Employee Compensation Amount Of Waiver																																																																							66,083								56,250		43,333
Shares Issued In Consideration For Waiver																																																																							66,083								56,250		43,333
Employee Compensation Payment Terms																Any remaining accrued salary remains outstanding and shall be paid (i) from time to time at the discretion of the Board of Directors to the extent the Board of Directors determines that such payment will not jeopardize the ability of the Company to continue as a going concern; or (ii) upon the closing of any single financing transaction (including a single financing transaction that contemplates multiple closings) in which the Company receives proceeds of $5 million or more.
Single Financing Transaction Minimum Proceeds																5,000,000
Indemnity Conversion Price Per Share Maximum Limit																$ 0.04718
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	5,500,000					5,500,000	5,500,000																	15,000,000										333,334					5,500,000																										305,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross																																																																								1,400,000								1,200,000		920,000	250,000	25,000
Weighted Average Exercise Price, Granted	$ 0		$ 0.06	$ 0.04718																				$ 0.25																																									$ 16.50								$ 0.04718										$ 0.04718	$ 0.04718	$ 0.04718
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period																								36 months																																																	36 months										36 months		48 months
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights																																																																								12.5								12.5		12.5
Volume Of Shares Traded On Open Market		283,400			36,700	319,100	15,000
Trading Days																														22 days	21 days	46 days	11 days		58 days	50 days	129 days	48 days
Per Share Value Of Shares Traded On Open Market																														$ 0.46	$ 0.49	$ 0.49	$ 0.76		$ 0.83	$ 2.50	$ 2.50	$ 0.83
Convertible Notes Payable	2,000,000					2,000,000	2,000,000
Debt Instrument, Convertible, Conversion Price												$ 0.04718																																										$ 1.00	$ 3.00			$ 0.04718		$ 0.04718	$ 0.04718								$ 0.04718						$ 0.04718
Warrants To Purchase Common Stock							67,170																																											152,000	127,173					296,735																																	100,000
Stock issued for purchase of common stock (in shares)																													5,890,000																																					4,180,000	450,000	400,000		50,000				1,710,000		5,900,000
Common Stock Issue Price Per Share															$ 0.25																																			$ 0.25																$ 0.25								$ 0.25		$ 0.25														$ 0.25
Proceeds from Issuance of Private Placement															2,500,000																																					380,000							695,000							1,045,000	1,045,000	100,000		12,500				427,500
Number Of Accredited Investors																																																		12																19								9																2
Preferred Stock, Par or Stated Value Per Share	$ 0.001		$ 0.001			$ 0.001	$ 0.001																																											$ 0.001
Warrants Outstanding	1,445,556					1,445,556	1,445,556	2,164,440			980,390
Total Stock Shares Authorized	165,000,000					165,000,000	165,000,000																																																																															100,000,000
Debt Conversion, Converted Instrument, Amount																																																																											1,900
Debt Conversion, Converted Instrument, Shares Issued							41,873,745					40,403,929																																																1,121,238	550,021								4,403,349						40,000
Stock Placed With Accredited Investors, Value																																																		380,000																																								350,000
Stock Issued During Period, Value, New Issues							$ 1,362,700																						$ 5,900																																															$ 1,500,000
[1] The October 2010 Notes: The October Purchase Agreement provides for the issuance and sale of October 2010 Notes, for cash or in exchange for outstanding convertible notes, in the aggregate principal amount of up to $3,000,000 plus an amount corresponding to accrued and unpaid interest on any exchanged notes, and warrants to purchase a number of shares corresponding to 50% of the number of shares issuable on conversion of the October 2010 Notes. The agreement provides for multiple closings, but mandates that no closings may occur after January 31, 2011. The October Purchase Agreement also provides that the Company and the holders of the October 2010 Notes will enter into a registration rights agreement covering the registration of the resale of the shares underlying the October 2010 Notes and the related warrants.Initially, the October 2010 Notes were to mature one year from the date of issuance (subject to earlier conversion or prepayment), earn interest equal to 9% per year with interest payable at maturity, and be convertible into shares of common stock of the Company at a conversion price of $9.00. The conversion price was subject to adjustment upon (i) the subdivision or combination of, or stock dividends paid on, the common stock; (ii) the issuance of cash dividends and distributions on the common stock; (iii) the distribution of other capital stock, indebtedness or other non-cash assets; and (iv) the completion of a financing at a price below the conversion price then in effect. The October 2010 Notes were furthermore convertible, at the option of the holder, into securities to be issued in subsequent financings at the lower of the then-applicable conversion price or price per share payable by purchasers of such securities. The October 2010 Notes can be declared due and payable upon an event of default, defined in the October 2010 Notes to occur, among other things, if the Company fails to pay principal and interest when due, in the case of voluntary or involuntary bankruptcy or if the Company fails to perform any covenant or agreement as required by the October Note.Our obligations under the terms of the October 2010 Notes are secured by a security interest in the tangible and intangible assets of the Company, pursuant to a Security Agreement, dated as of October 1, 2010, by and between the Company and John Pappajohn, as administrative agent for the holders of the October 2010 Notes. This agreement was subsequently amended.The warrants related to the October 2010 Notes were to expire seven years from the date of issuance and were exercisable for shares of common stock of the Company at an exercise price of $9.00. Exercise price and number of shares issuable upon exercise were subject to adjustment (1) upon the subdivision or combination of, or stock dividends paid on, the common stock; (2) in case of any reclassification, capital reorganization or change in capital stock and (3) upon the completion of a financing at a price below the exercise price then in effect. Any provision of the October 2010 Notes or related warrants could be amended, waived or modified upon the written consent of the Company and holders of a majority of the aggregate principal amount of such notes outstanding. Any such consent would affect all October 2010 Notes or warrants, as the case may be, and will be binding on all holders thereof.The October 2010 Notes were subsequently amended as detailed in (23) below. [2] Amendment of the October 2010 Notes and the January 2011 Notes: On October 11, 2011, the Company, with the consent of holders of a majority in aggregate principal amount outstanding (the “Majority Holders”) of our outstanding January 2011 Notes, amended all of the January 2011 Notes to extend the maturity of such notes until October 1, 2012 by means of an “Amendment and Conversion Agreement.” Pursuant to the terms of the amendment, which was effective as of September 30, 2011, the January 2011 Notes would receive a second position security interest in the assets of the Company (including its intellectual property). The Majority Holders of the January 2011 Notes also consented to the terms of a new $2 million bridge financing (the “2011 Bridge Financing”) and to granting the investors in such financing a second position security interest in the assets of the Company (including its intellectual property) that is pari passu with the second position security interest received by the holders of the January 2011 Notes. The amendment was also intended to add a mandatory conversion provision to the terms of the January 2011 Notes. Under that provision, the January 2011 Notes would be automatically converted upon the closing of a public offering by the Company of shares of its common stock and/or other securities with gross proceeds to the Company of at least $10 million (the “Qualified Offering”). If the public offering price were less than the conversion price then in effect, the conversion price would be adjusted to match the public offering price (the “Qualified Offering Price”).On October 12, 2011, the Company, with the consent of the Majority Holders of its October 2010 Notes, amended all of the October 2010 Notes to extend the maturity of such notes until October 1, 2012 by means of an Amendment and Conversion Agreement. The Majority Holders of the October 2010 Notes also consented to the terms of the Bridge Financing and to granting the investors in such financing as well as the holders of the Company’s January 2011 Notes a second position security interest in the assets of the Company (including its intellectual property). The guaranties that had been issued in 2010 to certain October Note investors by SAIL were extended accordingly. The amendment, which was effective as of September 30, 2011, was also intended to add the same mandatory conversion and conversion price adjustment provisions to the terms of the October 2010 Notes as were added to the terms of the January 2011 Notes.As a result of the issuance of October 2011 Notes (mentioned below) at a conversion price of $3.00 and the associated warrants to purchase common stock at an exercise price of $3.00, the ratchet provision in the October 2010 Notes and January 2011 Notes was triggered, with the result that the conversion price of such notes was lowered from $9.00 to $3.00, the exercise price of the associated warrants was lowered from $9.00 to $3.00 per share, and the number of shares underlying such notes and warrants was proportionately increased.The Amended and Restated Security Agreement, dated as of September 30, 2011, between the Company and Paul Buck, as administrative agent for the secured parties (the “Amended and Restated Security Agreement”), which replaced the existing security agreement from 2010, and the corresponding security interest terminate (1) with respect to the October 2010 Notes, if and when holders of a majority of the aggregate principal amount of October 2010 Notes issued have converted their notes into shares of common stock and, (2) with respect to the January 2011 Notes and the October 2011 Notes (defined below), if and when holders of a majority of the aggregate principal amount of January 2011 Notes and October 2011 Notes (on a combined basis) have converted their notes.On June 1, 2012, the Company, having received on or prior to such date the consent of the Majority Holders of the October 2010 and January 2011 Notes, amended all of the October 2010 Notes and the January 2011 Notes to add a mandatory conversion provision to the terms of such notes. Under that provision, the October 2010 Notes and January 2011 Notes would be automatically converted upon the closing of a public offering by the Company of shares of its securities with gross proceeds to the Company of at least $3 million. If the public offering price were less than the conversion price then in effect, the conversion price would be adjusted to match the public offering price. Pursuant to the agreements amending the October 2010 Notes and January 2011 Notes, which superseded the Amendment and Conversion Agreements, the exercise price of the warrants that were issued in connection with the notes would be adjusted to match such public offering price, if such price were lower than the exercise price then in effect. The warrants were also amended to remove the full-ratchet provision from the warrants for securities offerings occurring after any such public offering. The Company agreed to issue to each holder of the October 2010 and January 2011 Notes, as consideration for the above and, warrants to purchase a number of shares of common stock corresponding to 100% of the number of shares issuable upon conversion of the principal amount and accrued and unpaid interest of his or her notes. These warrants would be issued on or within 10 business days after any public offering.The Company evaluated the agreements amending the October 2010 Notes and January 2011 Notes (which superseded the Amendment and Conversion Agreements) as of September 30, 2012, under ASC 470. The Company noted the change in terms did not constitute a substantial modification under ASC470.The consents to the 2012 Bridge Financing obtained from holders of previously outstanding convertible promissory notes have taken effect, since the Company has raised more than $1.35 million in the 2012 Bridge Financing. Such consents had been given pursuant to the terms of the Amended and Restated Consent, Note Amendment and Warrant Forfeiture Agreement, dated as of October 24, 2012 (the “Consent Agreement”), between the Company and the holders of at least a majority in aggregate principal amount outstanding (“Majority Holders”) of each tranche of the Company’s secured convertible promissory notes issued in October and November 2010 (the “October 2010 Notes”), secured convertible promissory notes issued between January and April 2011 (the “January 2011 Notes”), secured convertible promissory notes issued between October 2011 and January 2012 (the “October 2011 Notes”) and an unsecured convertible promissory note issued in February 2012 (the “February 2012 Note”). As a result, all of such notes were amended to (a) extend the maturity date of October 1, 2013, (b) set the conversion price at $1.00, subject to adjustment as provided in the notes and (c) remove full-ratchet anti-dilution protection. In addition, the holders forfeited the warrants they received in connection with the issuance of the notes, and consented to the 2012 Bridge Financing, the issuance of the October 2012 Notes and to the subordination of their notes to these October 2012 Notes.The Company evaluated the Consent Agreement, effective November 28, 2012 under ASC 470-50-40 “Extinguishments of Debt” (“ASC 470”). ASC 470 requires modifications to debt instruments to be evaluated to assess whether the modifications are considered “substantial modifications”. A substantial modification of terms shall be accounted for like an extinguishment. For extinguished debt, a difference between the re-acquisition price and the net carrying amount of the extinguished debt shall be recognized currently in income of the period of extinguishment as losses or gains. The Company noted the change in terms per the Consent Agreement, met the criteria for substantial modification under ASC 470, and accordingly treated the modification as extinguishment of the original convertible notes, replaced by the new convertible notes under the modified terms. The Company recorded a gain on extinguishment of debt of $556,300 during the first quarter ended December 31, 2012 of fiscal 2013. [3] The 2012 Bridge Notes: On August 17, 2012, the Company entered into a new Note Purchase Agreement (the “2012 Bridge Financing Purchase Agreement”) in connection with a bridge financing (the “2012 Bridge Financing”), with SAIL Holdings LLC. The 2012 Bridge Financing Purchase Agreement initially provided for the issuance and sale of August 2012 Bridge Notes in the aggregate principal amount of up to $2,000,000, in one or multiple closings to occur no later than October 15, 2012. The consummation of the 2012 Bridge Financing and issuance of the August 2012 Bridge Notes, and corresponding security interest, had to be approved by the Majority Holders of each tranche of our October 2010 Notes, January 2011 Notes, October 2011 Notes and the Unsecured Note. If the Company did not obtain such consent, the holders could declare a default under such notes and seek all remedies available under such notes.On October 19, 2012 the original 2012 Bridge Financing Purchase Agreement in connection with the 2012 Bridge Financing was amended and restated (the “Amended and Restated Bridge Financing Purchase Agreement”) thereby extending the period for closing the sale of August 2012 Bridge Notes from October 15, 2012 to November 30, 2012. Additionally, the revised notes (“October 2012 Notes”) eliminated the mandatory conversion provision (upon a subsequent equity financing) included in the August 2012 Bridge Notes at the request of a prospective investor. Otherwise the October 2012 Bridge Notes have substantially the same terms as the August 2012 Notes.The Amended and Restated Bridge Financing Purchase Agreement provided for the issuance and sale of Bridge Notes in the aggregate principal amount of up to $2,000,000, in one or multiple closings to occur no later than November 30, 2012. Additionally this amended and restated agreement also provided for the reissuance and replacement of five August 2012 Notes with the revised October 2012 Notes. The Amended and Restated Bridge Financing Purchase Agreement also provides that the Company and the holders of the Bridge Notes will enter into a registration rights agreement covering the registration of the resale of the shares underlying the August 2012 Bridge Notes.The October 2012 Notes mature on the later of October 1, 2013 or one year from the date of issuance (subject to earlier conversion or prepayment), earn interest at a rate of 9% per year with interest payable at maturity, are convertible into shares of common stock of the Company at a conversion price of $0.04718 and are secured by a first position security interest in the Company’s assets, with the security interest of all previously outstanding convertible promissory notes subordinated. The conversion price is subject to adjustment upon (1) the subdivision or combination of, or stock dividends paid on, the common stock; (2) the issuance of cash dividends and distributions on the common stock; and (3) the distribution of other capital stock, indebtedness or other non-cash assets. The October 2012 Notes are convertible at any time at the option of their holders and can be declared due and payable upon an event of default, defined in the October 2012 Notes to occur, among other things, if the Company fails to pay principal and interest when due, in the case of voluntary or involuntary bankruptcy or if the Company fails to perform any covenant or agreement as required by the October 2012 Notes or materially breaches any representation or warranty in the October 2012 Notes or the Bridge Financing Purchase Agreement. Among the restrictive covenants imposed on the Company pursuant to the Bridge Financing Purchase Agreement is a covenant not to borrow, guaranty or otherwise incur indebtedness that is senior or pari passu with the October 2012 Bridge Notes in excess of $250,000, and a covenant not to effect a merger, reorganization, or sell, exclusively license or lease, or otherwise dispose of any assets of the Company with a value in excess of $20,000, other than in the ordinary course of business.The Company issued October 2012 Notes in the aggregate principal amount of $2.0 million. Furthermore, the consents to the 2012 Bridge Financing obtained from holders of previously outstanding convertible promissory notes have taken effect, since the Company raised more than $1.35 million in the 2012 Bridge Financing. Such consents had been given pursuant to the terms of the Amended and Restated Consent, Note Amendment and Warrant Forfeiture Agreement, dated as of October 24, 2012 (the “Consent Agreement”), between the Company and the holders of at least a majority in aggregate principal amount outstanding (“Majority Holders”) of each tranche of the Company’s secured convertible promissory notes issued in October and November 2010 (the “October 2010 Notes”), secured convertible promissory notes issued between January and April 2011 (the “January 2011 Notes”), secured convertible promissory notes issued between October 2011 and January 2012 (the “October 2011 Notes”) and an unsecured convertible promissory note issued in February 2012 (the “February 2012 Note”). As a result, all of such notes were amended to (a) extend the maturity date of October 1, 2013, (b) set the conversion price at $1.00, subject to adjustment as provided in the notes and (c) remove full-ratchet anti-dilution protection. In addition, the holders forfeited the warrants they received in connection with the issuance of the notes, and consented to the 2012 Bridge Financing, the issuance of the October 2012 Notes and to the subordination of their notes to these October 2012 Notes.The October 2012 Bridge Notes are secured by a first position security interest in the Company’s assets, with the security interest of all previously outstanding convertible promissory notes subordinated. Holders of the October 2010 Notes would hold a second position security interest and holders of the January 2011 and October 2011 Notes would hold a third position security interest, in the assets of the Company. The security interests relating to all such notes will be governed by the second amended and restated security agreement, dated as of August 16, 2012, between the Company and David Jones, as administrative agent for the secured parties (the “Second Amended and Restated Security Agreement”), which replaces the security agreement entered into in September 2011. Until his resignation from the Board on November 30, 2012, David Jones was the Chairman of our Board of Directors and a limited partner and former managing partner of SAIL Venture Partners LP.The Second Amended and Restated Security Agreement and the corresponding security interest terminate upon the earlier of (a) repayment of the notes and (b)(1) with respect to the August 2012 Bridge Notes, if and when the Majority Holders of August 2012 Bridge Notes have converted their notes into shares of common stock, (2) with respect to the October 2010 Notes, if and when the Majority Holders of October 2010 Notes have converted their notes into shares of common stock and (3) with respect to the January 2011 and October 2011 Notes, if and when holders of the Majority Holders of January 2011 and October 2011 Notes (on a combined basis) have converted their notes.The agreement also provides that the Company and the holders of the August 2012 Bridge Notes will enter into a registration rights agreement covering the registration of the resale of the shares underlying the August 2012 Bridge Notes.As of June 30, 2013 the majority of the October 2012 Notes had converted their notes to shares of common stock, consequently pursuant to section 7.13 of the Second Amended and Restated Security Agreement dated August 16, 2012, the security interest for the October 2012 Notes is terminated.The Company recorded a beneficial conversion feature for the August 2012 Bridge Notes, in accordance with FASB ASC 470-20. The Company measures the embedded beneficial conversion feature by allocating a portion of the proceeds equal to the intrinsic value of the embedded beneficial conversion feature to additional paid-in capital. Intrinsic value is calculated as the difference between the effective conversion price and the fair value of the common stock into which the debt is convertible, multiplied by the number of shares into which the debt is convertible. A beneficial conversion feature totaling $400,000 was recorded as loan discount for fiscal year 2012. The loan discount is amortized over the life of the convertible note. For the nine months ended June 30, 2013, $661,000 of amortization of loan discount was recorded as interest expense.The Company did not record a beneficial conversion feature for the October 2012 Bridge Notes as a very low volume of shares traded on the open market during the period from October 1, 2012 through November 30, 2012, the date of the closing of the 2012 Bridge Financing. Management judged that the Company’s stock was not actively traded as only $13,800 worth of stock was traded on 9 of 42 trading days during this period at prices ranging from $0.76 to $0.83. The contemporaneous bridge financing of $2 million of Senior Secured Convertible Notes (“October 2012 Notes”) with a conversion price of $0.04718 involving accredited third party investors was considered a better determinant of fair value. Consequently, management’s judgment was that the pricing of the October 2012 Notes at $0.04718 represented a better determinant of fair value of the convertible notes and therefore there was no beneficial conversion feature associated with the October 2012 Notes.From January 18, 2013 through June 30, 2013 October 2012 Notes in the aggregate amount of $1,838,100 plus interest thereon converted to 40,403,929 shares of common stock at a conversion price of $0.04718 per share. Additionally an October 2010 Note of $250,000 plus interest thereon and six January 2011 Notes in aggregate $1,000,000 plus interest thereon converted to 1,469,816 shares of common stock at a conversion price $1.00 per share. For the nine months ended June 30, 2013 $661,000 of amortization of loan discount was recorded as interest expense.As of June 30, 2013 outstanding senior subordinated convertible promissory notes (October 2010 Notes) were $2,773,900 (including $23,900 corresponding to accrued and unpaid interest on the exchanged notes) and debt discount was $0. During the nine months ended June 30, 2013 the Company amortized no debt discount.As of June 30, 2013 outstanding subordinated secured convertible promissory notes (January 2011 Notes) were $1,500,000 and debt discount was $0. During the nine months ended June 30, 2013 the Company amortized no debt discount.As of June 30, 2013 outstanding subordinated secured convertible promissory notes (October 2011 Notes) were $2,000,000 and debt discount was $0. During the nine months ended, June 30, 2013 the Company amortized $277,100 of the debt discount.As June 30, 2013 outstanding unsecured convertible promissory notes (Unsecured Bridge Notes) were $90,000 and debt discount was $0. During the nine months ended June 30, 2013 the Company amortized $15,000 of the debt discount.As of June 30, 2013 outstanding Unsecured convertible promissory note (October 2012) promissory notes (October 2012 Bridge Notes) were $160,000 and debt discount was $1,300. During the nine months ended June 30, 2013 the Company amortized $368,900 of the debt discount.The combined outstanding senior secured, subordinated secured and unsecured (including October 2012 Notes whose security has terminated) convertible promissory notes as of June 30, 2013 were $6,523,900 and debt discounts were $1,300. During the nine months ended June 30, 2013 the Company amortized $661,000 of the debt discount. [4] The October 2011 Bridge Notes: The 2011 Bridge Financing Purchase Agreement provides for the issuance and sale of October 2011 Notes (including the notes issued in October 2011) in the aggregate principal amount of up to $2,000,000, and warrants to purchase a number of shares corresponding to 100% of the number of shares issuable on conversion of the Bridge Notes, in one or multiple closings to occur no later than April 1, 2012. The 2011 Bridge Financing Purchase Agreement also provides that the Company and the holders of the October 2011 Notes will enter into a registration rights agreement covering the registration of the resale of the shares underlying the October 2011 Notes and the related warrants.Initially, the October 2011 Notes were to mature one year from the date of issuance (subject to earlier conversion or prepayment), earn interest equal to 9% per year with interest payable at maturity, be convertible into shares of common stock of the Company at a conversion price of $3.00, be secured by a second position security interest in the Company’s assets that is pari passu with the interest recently granted to the holders of the January 2011 Notes, be subordinated in all respects to the Company’s obligations under its October 2010 Notes and the related guaranties issued to certain investors by SAIL Venture Partners, L.P. be are pari passu to the obligations under the January 2011 Notes. The second position security interest is governed by the Amended and Restated Security Agreement.The conversion price of the October 2011 Notes was subject to adjustment upon (1) the subdivision or combination of, or stock dividends paid on, the common stock; (2) the issuance of cash dividends and distributions on the common stock; (3) the distribution of other capital stock, indebtedness or other non-cash assets; and (4) the completion of a financing at a price below the conversion price then in effect. At the closing of a public offering by the Company of shares of its common stock and/or other securities with gross proceeds to the Company of at least $10 million (the “Qualified Offering”), each 2011 Bridge Note would be either redeemed or converted (in whole or in part) at a conversion price equal to the lesser of the public offering price or the conversion price then in effect, with the choice between redemption and conversion being at the sole option of the holder. The October 2011 Notes can be declared due and payable upon an event of default, defined in the October 2011 Notes to occur, among other things, if the Company fails to pay principal and interest when due, in the case of voluntary or involuntary bankruptcy or if the Company fails to perform any covenant or agreement as required by the 2011 Bridge Note or materially breaches any representation or warranty in the 2011 Bridge Note or the 2011 Bridge Financing Purchase Agreement.The warrants related to the October 2011 Notes were to expire five years from the date of issuance and were exercisable for shares of common stock of the Company at an exercise price of $3.00. Exercise price and number of shares issuable upon exercise were subject to adjustment (1) upon the subdivision or combination of, or stock dividends paid on, the common stock; (2) in case of any reclassification, capital reorganization or change in capital stock and (3) upon the completion of a financing at a price below the exercise price then in effect (including the Qualified Offering), except that subsequent to the Qualified Offering, the exercise price would not be adjusted for any further financings. The warrants contained a cashless exercise provision.With the exception of each holder’s option to redeem or convert their 2011 Bridge Note at the closing of the Qualified Offering, any provision of the October 2011 Notes or related warrants can be amended, waived or modified upon the written consent of the Company and holders of a majority of the aggregate principal amount of such notes outstanding. Any such majority consent will affect all October 2011 Notes or warrants, as the case may be, and will be binding on the Company and all holders of the October 2011 Notes or warrants. Each holder’s option to redeem or convert the 2011 Bridge Note at the closing of the Qualified Offering cannot be amended, waived or modified without the written consent of the Company and such holder and such amendment, waiver or modification will be binding only on the Company and such holder.The Amended and Restated Security Agreement and the corresponding security interest terminate (1) with respect to the October 2010 Notes, if and when holders of a majority of the aggregate principal amount of October 2010 Notes issued have converted their notes into shares of common stock and (2) with respect to the January 2011 Notes and 2011 Bridge Notes, if and when holders of a majority of the aggregate principal amount of January 2011 Notes and October 2011 Notes (on a combined basis) have converted their notes.On June 1, 2012, the Company, having received on or prior to such date the consent of holders of October 2011 Notes in the aggregate principal amount of $1,860,000 (out of a total outstanding aggregate principal amount of $2,000,000), amended such notes to add a mandatory conversion provision to the terms of such notes. Under that provision, the October 2011 Notes would be automatically converted upon the closing of a public offering by the Company of shares of its securities with gross proceeds to the Company of at least $3 million (except for October 2011 Notes in the aggregate amount of $50,000 which were not subject to the mandatory conversion requirement upon a $3 million public offering, but rather a $5 million public offering). If the public offering price were less than the conversion price then in effect, the conversion price would be adjusted to match the public offering price. Pursuant to the agreements amending the October 2011 Notes, the exercise price of the warrants that were issued in connection with the notes would be adjusted to match such public offering price, if such price were lower than the exercise price then in effect. The warrants were also amended to remove the full-ratchet provision from the warrants for securities offerings occurring after any such public offering. The Company agreed to issue to each holder of the October 2011 Notes who executed the agreements, as consideration for the above, warrants to purchase a number of shares of common stock corresponding to 50% of the number of shares issuable upon conversion of the principal amount and accrued and unpaid interest of his or her notes. These warrants would be issued on or within 10 business days after any public offering. [5] Mr. John Pappajohn is a Director of the Company. On June 3, 2010, we entered into a Bridge Note and Warrant Purchase Agreement with John Pappajohn to purchase two secured promissory notes (each, a "Bridge Note") in the aggregate principal amount of $500,000, with each Bridge Note in the principal amount of $250,000 maturing on December 2, 2010. On June 3, 2010, Mr. Pappajohn loaned the Company $250,000 in exchange for the first Bridge Note (there were no warrants issued in connection with this first note) and on July 25, 2010, Mr. Pappajohn loaned the Company $250,000 in exchange for the second Bridge Note. In connection with his purchase of the second Bridge Note, Mr. Pappajohn received a warrant to purchase up to 8,334 shares of our common stock. The exercise price of the warrant (subject to anti-dilution adjustments, including for issuances of securities at prices below the then-effective exercise price) was $15.00 per share. Pursuant to a separate agreement that we entered into with Mr. Pappajohn on July 25, 2010, we granted him a right to convert his Bridge Notes into shares of our common stock at a conversion price of $15.00. The conversion price was subject to customary anti-dilution adjustments, but would never be less than $9.00. Each Bridge Note accrued interest at a rate of 9% per annum.On October 1, 2010, we entered into a Note and Warrant Purchase Agreement (the "October Purchase Agreement") with Mr. Pappajohn, pursuant to which we issued to Mr. Pappajohn October 2010 Notes in the aggregate principal amount of $761,700 and warrants to purchase up to 126,949 shares of common stock. The Company received $250,000 in gross proceeds from the issuance of October 2010 Notes in the aggregate principal amount of $250,000 and related warrants to purchase up to 41,667 shares. We also issued October 2010 Notes in the aggregate principal amount of $511,700, and related warrants to purchase up to 85,282 shares, to Mr. Pappajohn in exchange for the cancellation of the two Bridge Notes originally issued to him on June 3, 2010 and July 25, 2010 in the aggregate principal amount of $500,000 (and accrued and unpaid interest on those notes) and a warrant to purchase up to 8,334 shares originally issued to him on July 25, 2010. The transaction closed on October 1, 2010. On October 18, 2011, the Company entered into a new note and warrant purchase agreement in connection with a $2 million bridge financing (the "2011 Bridge Financing"), with Mr. Pappajohn. Pursuant to the agreement, the Company issued subordinated secured convertible notes (the "2011 Bridge Notes") in the aggregate principal amount of $250,000 and warrants to purchase 83,334 shares of common stock to Mr. Pappajohn for gross proceeds to the Company of $250,000.The new note and warrant purchase agreement initially provided for the issuance and sale of October 2011 Notes in the aggregate principal amount of up to $2,000,000, and warrants to purchase a number of shares corresponding to 50% of the number of shares issuable on conversion of the 2011 Bridge Notes, in one or multiple closings to occur no later than April 1, 2012. On November 11, 2011, the Company entered into an Amended and Restated Note and Warrant Purchase Agreement (the "2011 Bridge Financing Purchase Agreement") in connection with the Bridge Financing, which amended and restated the October agreement in that it increased the warrant coverage from 50% to 100%. In addition, each holder’s option to redeem or convert their 2011 Bridge Note at the closing of the Qualified Offering (defined below) can now only be amended, waived or modified with the consent of the Company and that holder. On each of November 10, 2011, and December 27, 2011, the Company issued a 2011 Bridge Note in the aggregate principal amount of $250,000 and warrants to purchase 83,334 shares of common stock to Mr. Pappajohn for gross proceeds to the Company of $250,000. The combined aggregate amount for these two 2011 Bridge Financings was $500,000 and warrants to purchase 166,668 shares of common stock for gross proceeds to the Company of $500,000. On November 28, 2012, we entered into an Amended and Restated Bridge Financing Purchase Agreement with Mr. Pappajohn pursuant to which we issued to Mr. Pappajohn a October 2012 Note in the aggregate principal amount of $500,000, inclusive of the exchange of $200,000 in aggregate principal amount of demand notes issued on April 26 and May 25, 2012 for an aggregate of $200,000. The gross new cash proceeds to the Company from the November 28 issuance to Mr. Pappajohn were $300,000. On January 25, 2013, Mr. Pappajohn converted $200,000 of the November 28, 2012 to purchase 4,300,551 shares of common stock at $0.04718 per share. On March 21, 2013, Mr. Pappajohn converted $300,000 of the November 28, 2012 to purchase 6,538,258 shares of common stock at $0.04718 per share. [6] Mr. Andy Sassine is a Director of the Company. On April 30, 2013, Mr. Sassine converted $25,000 of the November 29, 2012 to purchase 550,021 shares of common stock at $0.04718 per share.