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, 2011
Sep. 30, 2010
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net loss $ (8,866,600) $ (8,174,000)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation & amortization 11,900 9,400
Amortization of discount on bridge notes issued 4,197,800 335,900
Gain on derivative liability valuation (6,826,700) 0
Stock based compensation 1,605,400 1,302,100
Extinguishment of debt 1,968,000 1,094,300
Issuance of warrants for consulting services 0 199,000
Issuance of warrants for financing services 183,500 193,400
Reversal of prior period accruals (458,800)  
Non-cash interest expense 3,366,800 21,600
Write-off of doubtful accounts 0 12,950
Changes in operating assets and liabilities:    
Accounts receivable (5,500) (150)
Prepaids and other 12,800 4,600
Accounts payable and accrued liabilities 615,300 231,900
Deferred compensation and others 27,300 43,500
Accrued patient costs 0 (170,500)
Security deposit on new lease 3,200 (14,600)
Net cash used in operating activities (4,165,600) (4,910,600)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Acquisition of Furniture & Equipment (21,600) (14,900)
Net cash used in investing activities (21,600) (14,900)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Repayment of convertible debt with accrued interest 15,900 0
Repayment of debt (26,200) (94,100)
Repayment of lease payable (6,100) (1,900)
Proceeds from the sale of common stock, net of offering costs 0 2,995,400
Net proceeds from secured convertible notes 1,840,000 1,000,000
Net proceeds from subordinated convertible notes 2,395,000 0
Proceeds from related party loan 0 100,000
Net cash provided by financing activities 4,218,600 3,999,400
NET INCREASE (DECREASE) IN CASH 31,400 (926,100)
CASH- BEGINNING OF YEAR 62,000 988,100
CASH- END OF YEAR 93,400 62,000
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:    
Interest 3,200 7,900
Income taxes 1,300 800
Fair value of note payable to officer issued for acquisition 0 24,700
Fair value of equipment acquired through lease 16,300 6,600
Non-cash financing activities:    
Shares issued for accounts payable 44,000 0
Offering costs $ 103,000