Document and Entity Information (USD $)	12 Months Ended
Document and Entity Information (USD $)	Sep. 30, 2012	Nov. 20, 2012	Mar. 31, 2012
Document And Entity Information
Entity Registrant Name	Parametric Sound Corp
Entity Central Index Key	0001493761
Document Type	10-K
Document Period End Date	Sep. 30, 2012
Amendment Flag	false
Current Fiscal Year End Date	--09-30
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$ 18,815,760
Entity Common Stock, Shares Outstanding		6,409,497
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2012

Consolidated Balance Sheets (USD $) (USD $)	Sep. 30, 2012	Sep. 30, 2011
Current assets:
Cash and cash equivalents	$ 5,527,647	$ 491,764
Accounts receivable	39,371
Inventories, net	443,704	273,268
Prepaid expenses and other assets	62,828	64,971
Total current assets	6,073,550	830,003
Property and equipment, net	176,912	145,252
Intangible assets, net	1,314,861	148,540
Total assets	7,565,323	1,123,795
Current liabilities:
Accounts payable	173,337	164,190
Accrued liabilities	139,875	14,750
Deferred officer compensation		224,400
Total current liabilities	313,212	403,340
Stockholders' equity:
Preferred stock, $0.001 par value, authorized 1,000,000 shares, none issued and outstanding
Common stock, $0.001 par value, authorized 50,000,000 shares, 6,408,151 and 3,903,784 shares issued and outstanding, respectively	6,408	3,904
Additional paid-in capital	13,878,294	2,886,960
Accumulated deficit	(6,632,591)	(2,170,409)
Total stockholders' equity	7,252,111	720,455
Total liabilities and stockholders' equity	$ 7,565,323	$ 1,123,795

Consolidated Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2012	Sep. 30, 2011
Statement of Financial Position [Abstract]
Preferred stock par value	$ 0.001	$ 0.001
Preferred stock shares authorized	1,000,000	1,000,000
Preferred stock shares issued	0	0
Preferred stock shares outstanding	0	0
Common stock par value	$ 0.001	$ 0.001
Common stock shares authorized	50,000,000	50,000,000
Common stock shares issued	6,408,151	3,903,784
Common stock shares outstanding	6,408,151	3,903,784

Number of shares of common stock outstanding. Common stock represent the ownership interest in a corporation.

+ References+ Details

- Definition

Face amount or stated value per share of nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer); generally not indicative of the fair market value per share.

+ References+ Details

Consolidated Statements of Operations (USD $)

12 Months Ended

Sep. 30, 2012

Sep. 30, 2011

Revenues:

Product sales

$ 222,016

$ 78,540

Other revenue

11,633

627

Total revenues

233,649

79,167

Cost of revenues

120,142

35,524

Gross profit

113,507

43,643

Operating expenses:

Selling, general and administrative

3,247,698

572,325

Research and development

1,340,054

647,994

Total operating expenses

4,587,752

1,220,319

Loss from operations

(4,474,245)

(1,176,676)

Other income (expense):

Interest income

15,027

2,901

Interest and note discount amortization

(308,499)

Other

(2,964)

(2,184)

Total other income (expense)

12,063

(307,782)

Net loss

$ (4,462,182)

$ (1,484,458)

Net loss per basic and diluted common share (1)

$ (0.85)

^[1]

$ (0.44)

^[1]

Weighted average common shares used to compute net loss per basic and diluted common share (1)

5,258,020

^[1]

3,393,979

^[1]

[1]	Net loss per share and weighted average common shares outstanding for all periods reflect the 1-for-5 reverse stock split that was effective March 21, 2012 (see Note 1).

Consolidated Statements of Stockholders' Equity (USD $)	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Total
Balance at September 30 at Sep. 30, 2010	$ 3,062	$ 715,371	$ (685,951)	$ 32,482
Balance at September 30 (in Shares) at Sep. 30, 2010	3,061,591
Sale of common stock and warrants at $2.50 per share, net of offering costs of $43,554	400	956,046		956,446
Sale of common stock and warrants at $2.50 per share, net of offering costs of $43,554 (in Shares)	400,000
Common shares issued upon exercise of warrants at $1.50 per share applied to reduce subordinated notes	280	419,720		420,000
Common shares issued upon exercise of warrants at $1.50 per share applied to reduce subordinated notes (in Shares)	280,000
Common shares issued at $3.50 per share to pay subordinated notes	82	287,592		287,674
Common shares issued at $3.50 per share to pay subordinated notes (in Shares)	82,193
Common shares issued upon exercise of warrants at $3.75 per shares	80	299,920		300,000
Common shares issued upon exercise of warrants at $3.75 per shares (in Shares)	80,000
Share-based compensation expense		188,311		188,311
Stock options issued for tooling costs		20,000		20,000
Common shares issued upon exercise of stock options (in Shares)
Net loss			(1,484,458)	(1,484,458)
Balance at September 30 at Sep. 30, 2011	3,904	2,886,960	(2,170,409)	720,455
Balance at September 30 (in Shares) at Sep. 30, 2011	3,903,784
Share-based compensation expense		1,686,909		1,686,909
Common shares issued upon exercise of stock options	120	192,218		192,338
Common shares issued upon exercise of stock options (in Shares)	119,856
Common shares issued for assignment of patents and intellectual property from related party	300	974,700		975,000
Common shares issued for assignment of patents and intellectual property from related party (in Shares)	300,000
Issuance of common shares at $4.50 per share and underwriter warrants in secondary public offering, net of issuance costs of $1,863,442	2,053	7,997,538		7,999,591
Issuance of common shares at $4.50 per share and underwriter warrants in secondary public offering, net of issuance costs of $1,863,442 (in Shares)	2,053,400
Common shares issued to officers for deferred compensation	31	139,969		140,000
Common shares issued to officers for deferred compensation (in Shares)	31,111
Net loss			(4,462,182)	(4,462,182)
Balance at September 30 at Sep. 30, 2012	$ 6,408	$ 13,878,294	$ (6,632,591)	$ 7,252,111
Balance at September 30 (in Shares) at Sep. 30, 2012	6,408,151

Consolidated Statements of Cash Flows (USD $)	12 Months Ended
Consolidated Statements of Cash Flows (USD $)	Sep. 30, 2012	Sep. 30, 2011
Cash Flows From Operating Activities:
Net loss	$ (4,462,182)	$ (1,484,458)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	180,900	62,957
Debt discount and deferred financing cost amortization		303,423
Warranty provision	10,612	1,534
Share-based compensation	1,686,909	188,311
Inventory obsolescence	(7,604)	(32,062)
Impairment of patents		28,616
Changes in assets and liabilities:
Accounts receivable	(39,371)
Prepaid expenses and other assets	2,143	(46,943)
Inventories	(162,832)	(241,000)
Accounts payable	9,147	16,520
Deferred officer compensation	(84,400)	224,400
Warranty settlements	(7,904)
Accrued liabilities	122,417	(13,817)
Net cash used in operating activities	(2,752,165)	(992,519)
Cash Flows From Investing Activities:
Capital expenditures for equipment	(108,785)	(140,561)
Patent costs paid	(295,096)	(40,987)
Net cash used in investing activities	(403,881)	(181,548)
Cash Flows From Financing Activities:
Proceeds from sale of common stock and warrants	9,240,304	1,000,000
Offering costs paid in connection with sale of common stock	(1,240,713)	(43,554)
Proceeds from exercise of stock options	192,338
Payments on 8% subordinated notes		(30,000)
Proceeds from exercise of warrants		300,000
Net cash provided by financing activities	8,191,929	1,226,446
Net increase in cash and cash equivalents	5,035,883	52,379
Cash and cash equivalents, beginning of year	491,764	439,385
Cash and cash equivalents, end of year	5,527,647	491,764
Supplemental Disclosure of Cash Flow Information:
Interest paid		5,112
Income taxes paid	800	800
Common stock issued for technology purchased from related party	975,000
Stock options issues as payment for tooling obligation		20,000
Common stock issued on warrant exercise exchanged for subordinated notes		420,000
Common stock exchanged for subordinated notes		287,674
Deferred officer compensation paid in common shares	140,000
Issuance costs relating to warrants issued to underwriter	$ 622,729

1. Organization and Significant Accounting Policies

12 Months Ended

Sep. 30, 2012

Organization And Significant Accounting Policies

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Organization and Business Description

Parametric Sound Corporation (“Parametric Sound” or the “Company”) is a technology company focused on delivering novel audio solutions through its HyperSound™ or “HSS®” technology platform, which pioneered the practical application of parametric acoustic technology for generating audible sound along a directional ultrasonic column. The creation of sound using the Company’s technology also creates a unique sound image distinct from traditional audio systems. In addition to its digital signage product business, the Company is targeting its technology for new uses in commercial and consumer markets including kiosks and point-of-sale terminals, electronic gaming, computers, video gaming, televisions, home audio, health care, movies and cinema and mobile devices.

The Company was incorporated in Nevada on June 2, 2010 as a new, wholly owned subsidiary of LRAD Corporation in order to effect the separation and spin-off of the HSS business (the “Spin-Off”). On September 27, 2010, the 100% Spin-Off was completed and the Company became a stand-alone, independent, publicly traded company. In June 2012 the Company formed a wholly-owned subsidiary, PSC Licensing Corp. and in October 2012 the Company formed a new wholly-owned subsidiary, HyperSound Health, Inc. The Company’s corporate headquarters are located in Poway, California. Principal markets for the Company’s products are North America, Europe and Asia.

During March and April 2012, the Company completed a secondary public offering of 2,053,400 shares of its common stock at $4.50 per share (after a 1-for-5 reverse stock split described below) for gross proceeds of $9.24 million. The net proceeds of the offering after deducting underwriting discounts and commissions and offering expenses was $8.0 million.

Basis of Presentation

The consolidated financial statements include the Company and its wholly owned subsidiary, PSC Licensing Corp. Intercompany balances and transactions have been eliminated in consolidation. Where necessary, the prior year’s information has been reclassified to conform to the fiscal 2012 statement presentation. These reclassifications had no effect on previously reported results of operations or accumulated deficit.

Reverse Stock Split

On March 21, 2012, the Company completed a 1-for-5 reverse split of its common stock. The objective in effecting the reverse split was to enable the Company to list its common stock on the NASDAQ Capital Market and complete its secondary public offering. As a result of the reverse stock split, each five shares of common stock that were issued and outstanding or held in treasury on March 21, 2012 were automatically combined into one share. The reverse stock split reduced the number of issued and outstanding shares of common stock as of March 21, 2012 from approximately 21.5 million shares to approximately 4.3 million shares. Fractional shares were rounded up to the nearest whole number. The reverse stock split affected all of the holders of common stock uniformly. Shares of common stock underlying outstanding options and warrants were proportionately reduced and the exercise price of outstanding options and warrants was proportionately increased in accordance with the terms of the agreements governing such securities. All common stock share and per share information in the accompanying consolidated financial statements and notes thereto have been adjusted to reflect retrospective application of the reverse stock split, except for par value per share and the number of authorized shares, which were not affected by the reverse stock split.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions (e.g., valuation of inventory, valuation of intangible assets, warranty reserve, the grant date fair value of stock options and warrants, share-based compensation expense and valuation allowance related to deferred tax assets that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and affect the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.

Loss Per Share

Basic loss per common share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per common share reflects the potential dilution of securities that could share in the earnings of an entity. The Company’s losses for the periods presented cause the inclusion of potential common stock instruments outstanding to be antidilutive. Stock options and warrants exercisable into a total of 1,693,839 and 667,000 shares of common stock were outstanding at September 30, 2012 and 2011, respectively. These securities are not included in the computation of diluted net loss per common share for the periods presented as their inclusion would be antidilutive due to losses incurred by the Company. Previously reported share and earnings per share amounts have been restated to reflect the 1-for-5 reverse stock split effected in March 2012.

Fair Value of Financial Instruments

The carrying amounts of cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair values due to the short maturity of these instruments. The fair value of warrants issued in March and April 2012 were estimated using a Black-Scholes valuation model (see Note 8).

The Company does not have any financial assets and liabilities that are measured at fair value on a recurring basis.

Concentrations of Credit Risk

The Company sells its products to a large number of geographically diverse customers. The Company only recently began offering terms to certain customers. At September 30, 2012, accounts receivable from one customer accounted for 98% of total accounts receivable.

Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less, when purchased, to be cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

The Company only recently began offering terms to certain customers. The Company’s policy is to evaluate the collectability of accounts receivable based on an assessment of the collectability of specific customer accounts and record an allowance for doubtful accounts to reduce the receivables to an amount that management reasonably estimates will be collected. There was no allowance for doubtful accounts recorded at September 30, 2012. Accounts that are deemed uncollectible will be written off against the allowance for doubtful accounts. If a major customer’s creditworthiness deteriorates, or actual defaults exceed our historical experience, such estimates could change and impact our reported financial results.

Contract Manufacturers

The Company uses contract manufacturers for production of certain components and sub-assemblies. The Company may provide parts and components to such parties from time to time but recognizes no revenue or markup on such transactions. The Company performs assembly of products in-house using components and sub-assemblies from a variety of contract manufacturers and suppliers.

Inventories

Inventories are valued at the lower of cost or net realizable value. The cost of substantially all of the Company’s inventory is determined by the weighted average cost method. Inventory is comprised of raw materials, assemblies and finished products intended for sale to customers. The Company evaluates the need for reserves for excess and obsolete inventories determined primarily based upon estimates of future demand for the Company’s products. At September 30, 2012 and 2011, the reserve for obsolescence included certain raw materials obtained at the Spin-Off, some of which are being used to produce the Company’s products.

Property, Equipment and Depreciation

Property and equipment is stated at cost. Depreciation on property and equipment is computed over the estimated useful lives of two to three years using the straight-line method. Leasehold improvements are amortized over the life of the lease. Upon retirement or disposition of property and equipment, the related cost and accumulated depreciation is removed and a gain or loss is recorded based on the difference between proceeds received, if any, and the carrying value of the asset on the date of retirement or disposition.

Intangible Assets

Patents, licenses, purchased technology and trademarks are carried at cost less accumulated amortization. Intangible assets acquired through a transaction that is not a business combination are measured based on the cash consideration paid plus either the fair value of the non-cash consideration given or the fair value of the assets acquired, whichever is more clearly evident. Legal costs incurred to file, renew, or extend the term of recognized intangible assets are capitalized.

Intangible assets are amortized over their estimated useful lives, which have been estimated to be 15 years for patents, licenses, purchased technology and trademarks protecting the Company’s products. The Company amortizes certain patents acquired in the Spin-Off, classified as defensive patents, over a weighted average of three years. The carrying value of intangibles is periodically reviewed and impairments, if any, are recognized when the expected future benefit to be derived from an individual intangible asset is less than its carrying value.

Revenue Recognition

The Company recognizes revenue when (i) persuasive evidence of an arrangement exists, (ii) all obligations have been substantially performed pursuant to the terms of sale or agreement, (iii) amounts are fixed or determinable and (iv) collectability of amounts is reasonably assured. During fiscal 2012 the Company began pursuing licensing of its patents and technologies and entered into its first license agreement in July 2012, which is currently in the product development phase. No licensing revenues were recognized during the year ended September 30, 2012.

Product Sales

Revenues derived from product sales to customers, including resellers and system integrators, are recognized in the periods that products are shipped to customers (FOB shipping point) or when product is received by the customer (FOB destination), when the fee is fixed and determinable, when collection of resulting receivables is probable and there are no remaining obligations on the part of the Company. Most revenues to resellers and system integrators are based on firm commitments from the end user; as a result, resellers and system integrators carry little or no inventory.

Licensing

The Company’s strategy is to derive licensing revenues primarily from royalties paid by licensees of the Company’s intellectual property rights, including patents, trademarks, and know-how. Revenues generated from license agreements are recognized in the period earned, provided that amounts are fixed or determinable and collectability is reasonably assured. Deferred revenue is reported for amounts that are expected to be recognized as revenue including upfront license fees, but for which not all revenue recognition criteria have been met.

Shipping and Handling Costs

Shipping and handling costs are included in cost of revenues. The amount of shipping and handling costs invoiced to customers is included in revenue. Shipping and handling costs were $11,233 and $628 for the fiscal years ended September 30, 2012 and 2011, respectively.

Research and Development Costs

Research and development expenses include costs and expenses associated with the development of our technology and the design and development of new products, including initial nonrecurring engineering and product verification charges. Research and development is expensed as incurred.

Warranty Reserves

The Company warrants its products to be free from defects in materials and workmanship for a period of one year from the date of purchase. The warranty is generally a limited warranty. The Company currently provides direct warranty service. The Company establishes a warranty reserve based on anticipated warranty claims at the time revenue from product sales is recognized. Factors affecting warranty reserve levels include the number of units sold and anticipated cost of warranty repairs and anticipated rates of warranty claims. The Company evaluates the adequacy of the provision for warranty costs each reporting period.

Deferred Financing Costs

Costs related to the issuance of debt are capitalized and amortized to interest expense over the life of the related debt on a straight line basis which is not materially different from the results obtained using the effective interest method.

Classification and Valuation of Warrants

The Company accounts for warrants as either equity or liabilities based upon the characteristics and provisions of each particular instrument. Warrants valued and classified as equity are recorded as additional paid-in capital based on the issue date fair value and no further adjustment to valuation is made. Warrants that do not qualify for equity classification are recorded as derivative liabilities based on the issue date fair value and are subject to adjustment to fair value at each reporting period. As of September 30, 2012 and 2011 the Company has no warrants or other derivative financial instruments that require separate accounting as liabilities and periodic revaluation.

Income Taxes

The Company accounts for its income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on temporary differences between financial statement and tax basis of assets and liabilities and net operating loss and credit carry-forwards using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established when it is more likely than not that some portion of the deferred tax assets will not be realized.

Financial statement effects of a tax position are initially recognized when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. A tax position that meets the more-likely-than not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a more likely than not likelihood of being realized upon ultimate settlement with a taxing authority. The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits as income tax expense.

Comprehensive Loss

Comprehensive loss consists of net loss and other gains and losses affecting stockholders’ equity that under U.S. generally accepted accounting principles are excluded from reported net loss. There were no differences between net loss and comprehensive loss for any of the periods presented.

Impairment of Long-Lived Assets

Long-lived assets and identifiable finite-lived intangibles held for use are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the sum of undiscounted expected future cash flows is less than the carrying amount of the asset or if changes in facts and circumstances indicate, an impairment loss is recognized and measured using the asset’s fair value.

Share-Based Compensation

The Company measures employee stock-based compensation awards using a fair-value method and records related compensation expense for all awards that are expected to vest over the requisite service period.

Share-Based Payments for Goods and Services

Stock options or stock awards issued to non-employees who are not directors of the Company are recorded at the fair value of the consideration received, when more reliably measurable, or the fair value of the equity instruments issued at the measurement date. Non-employee options are periodically revalued as the options vest so the cost ultimately recognized is equivalent to the fair value on the date performance is complete with such expense recognized over the related service period on a graded vesting method.

Recent Accounting Pronouncements

In December 2011, the Financial Account Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2011-11, Disclosures about Offsetting Assets and Liabilities. The amendments in this Update will enhance disclosures required by U.S. GAAP by requiring improved information about financial instruments and derivative instruments that are either (1) offset in accordance with either Section 210-20-45 or Section 815-10-45 or (2) subject to an enforceable master netting arrangement or similar agreement. The amendments are effective for fiscal years beginning after January 1, 2013 and for interim periods within those fiscal years. The amendments of ASU 2011-11 are not expected to have a material impact on the Company’s consolidated financial statements.

In July 2012, the FASB issued ASU 2012-02, “Testing Indefinite-Lived Intangible Assets for Impairment,” which allows companies to perform a qualitative assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary, similar in approach to the goodwill impairment test. The new guidance allows an entity the option to first assess qualitatively whether it is more likely than not (that is, a likelihood of more than 50 percent) that an indefinite-lived intangible asset is impaired, thus necessitating that it perform the quantitative impairment test. An entity is not required to calculate the fair value of an indefinite-lived intangible asset and perform the quantitative impairment test unless the entity determines that it is more likely than not that the asset is impaired. The new guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted for annual and interim impairment tests performed as of a date before July 27, 2012, if the financial statements for the most recent annual or interim period have not yet been issued. The Company will adopt the provisions of this new guidance on October 1, 2012. The Company does not expect the adoption of the new provisions to have a material impact on its financial condition or results of operations.

Subsequent Events

Management has evaluated events subsequent to September 30, 2012 through the date the accompanying consolidated financial statements were filed with the Securities and Exchange Commission for transactions and other events that may require adjustment of and/or disclosure in such financial statements.

2. Liquidity

12 Months Ended

Sep. 30, 2012

Liquidity

2. LIQUIDITY

The Company has sustained recurring losses and negative cash flows from operations. Over the past year, the Company’s operations have been funded primarily from proceeds from a secondary public offering of common stock completed in March and April 2012, as described more fully in Note 8. As of September 30, 2012 the Company had cash and cash equivalents of approximately $5.5 million and a working capital balance of approximately $5.8 million. The Company believes that it has sufficient liquidity to meet its funding requirements over the next year. However, the Company’s products have not yet generated significant revenues and the Company’s technology licensing strategy is in the early stages and has not generated any revenues to date. Although management believes that future growth in product and licensing revenues will result in profitable operations and positive cash flows, there can be no assurance that the Company will achieve profitable operations and sufficient cash flow to fund future operations. In the event that the Company is unable to achieve profitable operations and cash flows through expected product sales and/or licensing revenues, it may be necessary to seek additional debt or equity financing in order to accomplish its business plan over the next few years. There can be no assurance as to the availability or terms upon which such financing and capital might be available.

- Definition

Disclosure of accounting policy for reporting when there is a substantial doubt about an entity's ability to continue as a going concern for a reasonable period of time (generally a year from the balance sheet date). Disclose: (a) pertinent conditions and events giving rise to the assessment of substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time, (b) the possible effects of such conditions and events, (c) management's evaluation of the significance of those conditions and events and any mitigating factors, (d) possible discontinuance of operations, (e) management's plans (including relevant prospective financial information), and (f) information about the recoverability or classification of recorded asset amounts or the amounts or classification of liabilities. If management's plans alleviate the substantial doubt about the entity's ability to continue as a going concern, disclosure of the principal conditions and events that initially raised the substantial doubt about the entity's ability to continue as a going concern would be expected to be considered. Disclose whether operations for the current or prior years generated sufficient cash to cover current obligations, whether waivers were obtained from creditors relating to the company's default under the provisions of debt agreements and possible effects of such conditions and events, such as: whether there is a possible need to obtain additional financing (debt or equity) or to liquidate certain holdings to offset future cash flow deficiencies. Disclose appropriate parent company information when parent is dependent upon remittances from subsidiaries to satisfy its obligations.

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3. Inventories, net

12 Months Ended

Sep. 30, 2012

Inventories Net

3. INVENTORIES, NET

Inventories, net consist of the following:

At September 30,	2012			2011
Finished goods	$	143,430		$	44,648
Work in process		11,735			23,960
Raw materials		400,300			324,025
		555,465			392,633
Reserve for obsolescence		(111,761	)		(119,365	)
	$	443,704		$	273,268

The Company relies on one supplier for film used in its HSS products. The Company’s ability to manufacture its HSS product could be adversely affected if it were to lose a sole source supplier and was unable to find an alternative supplier.

The reserve for obsolescence was reduced by $25,020 and $32,062 for the years ended September 30, 2012 and 2011, respectively, through the use of legacy HSS parts and components obtained in connection with the Spin-Off and used in the production of HSS-3000 products and prototypes. The Company increased the reserve during the year ended September 30, 2012 by $17,416 for parts deemed obsolete due to model changes. The Company may continue to incur non-cash inventory reserve reductions through the use of reserved legacy HSS parts obtained in connection with the Spin-Off and will continue to evaluate inventory for excess or obsolete components.

- Definition

The entire disclosure for inventory. This may include, but is not limited to, the basis of stating inventory, the method of determining inventory cost, the major classes of inventory, and the nature of the cost elements included in inventory. If inventory is stated above cost, accrued net losses on firm purchase commitments for inventory and losses resulting from valuing inventory at the lower-of-cost-or-market may also be included. For LIFO inventory, may disclose the amount and basis for determining the excess of replacement or current cost over stated LIFO value and the effects of a LIFO quantities liquidation that impacts net income.

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4. Property and Equipment, net

12 Months Ended

Sep. 30, 2012

Property And Equipment Net

4. Equipment and Tooling, net

Property and equipment, net consist of the following:

At September 30,	2012			2011
Equipment	$	180,519		$	135,703
Tooling		124,299			124,299
Furniture and equipment		58,170			10,467
Leasehold improvements		16,266			–
		379,254			270,469
Accumulated depreciation		(202,342	)		(125,217	)
	$	176,912		$	145,252

Depreciation expense was $77,125 and $23,400 for the years ended September 30, 2012 and 2011, respectively.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References+ Details

5. Intangible Assets, net

12 Months Ended

Sep. 30, 2012

Intangible Assets Net

5. Intangible Assets, net

Intangible assets, net consist of the following:

At September 30,	2012			2011
Purchased technology	$	1,225,000		$	–
Patents		201,745			166,128
Defensive patents		183,498			154,952
Licenses and trademarks		15,462			34,529
		1,625,705			355,609
Accumulated amortization		(310,844	)		(207,069	)
	$	1,314,861		$	148,540

Purchased technology consists of patent applications and intellectual property acquired from a related party (see Note 11) in December 2011.

Aggregate amortization expense for the Company’s intangible assets was $103,775 and $39,557 during the years ended September 30, 2012 and 2011, respectively. In addition to amortization, the Company wrote off $28,616 of impaired patent costs during the year ended September 30, 2011.

The following table shows the estimated amortization expense for intangible assets for each of the five succeeding fiscal years and thereafter:

Estimated Amortization Expense Years Ending September 30,
	2013	$	117,570
	2014	$	108,850
	2015	$	101,887
	2016	$	95,650
	2017	$	89,277
	Thereafter	$	801,627

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References+ Details

6. Deferred Compensation and Accrued Liabilities

12 Months Ended

Sep. 30, 2012

Deferred Compensation And Accrued Liabilities

6. Deferred Compensation, Accrued and Other Related Party Liabilities

Deferred Compensation

Effective October 1, 2010 the Company began accruing monthly compensation for the services of two of its executive officers in the aggregate amount of $17,500 per month plus an estimate for related employment taxes. In March 2012, following the completion of the Company’s secondary public offering, the Company’s Board of Directors approved the payment of accrued deferred compensation of $315,000 and related estimated employment taxes of $21,600. A total of $140,000 was paid through the issuance of 31,111 shares of common stock at $4.50 per share and the remaining deferred compensation balance of $175,000 plus the Company’s share of employment taxes was paid in cash.

Accrued Liabilities

Accrued liabilities consist of the following:

At September 30,	2012		2011
Payroll and related	$	93,806	$	8,183
Warranty reserve		4,242		1,534
Customer deposits		2,187		4,600
Accrued research costs		32,566		–
Other		7,074		433
	$	139,875	$	14,750

Details of the estimated warranty liability are as follows:

Years Ended September 30,	2012			2011
Beginning balance	$	1,534		$	–
Warranty provision		10,612			1,534
Warranty settlements		(7,904	)		–
Ending balance	$	4,242		$	1,534

7. Income Taxes

12 Months Ended

Sep. 30, 2012

Income Tax Disclosure [Abstract]

7. INCOME TAXES

The Company recorded no income tax expense in 2012 or 2011 due to losses incurred. The Company generated federal tax net operating loss carryforwards related to expenditures incurred after the September 27, 2010 Spin-Off including costs incurred after incorporation and paid after the Spin-Off. At September 30, 2012 the Company had a federal and state net operating loss carryforward of approximately $4.5 million that will expire beginning in 2031 unless previously utilized. The Internal Revenue Code Section 382 limits net operating loss and tax credit carryforwards if an ownership change of more than fifty percent of the value of the stock in a loss corporation occurs within a three-year period. Any future equity issuances or significant ownership changes could result in Section 382 limits. Accordingly, the ability to utilize net operating loss and tax credit carryforwards could be restricted in the future.

The provision for income taxes consists of the following:

Years Ended September 30,	2012			2011
Current tax benefit	$	–		$	–
Deferred tax benefit		1,758,000			529,000
Change in valuation allowance		(1,758,000	)		(529,000	)
Income tax benefit (provision)	$	–		$	–

A reconciliation of income taxes at the federal statutory rate of 34% to the effective tax rate for the years ended September 30, 2012 and 2011 is as follows:

Years Ended September 30,	2012			2011
Income taxes benefit computed at federal statutory rate	$	1,517,000		$	505,000
State income taxes, net of federal effect		268,000			73,000
Research tax credits		–			26,000
Permanent differences and other		(27,000	)		(75,000	)
Change in valuation allowance		(1,758,000	)		(529,000	)
Income tax benefit (provision)	$	–		$	–

The Company did not benefit from any of the carryforward tax attributes from periods prior to the Spin-Off including net operating loss carryforwards. A valuation allowance has been established to offset the deferred tax assets as realization of such assets is uncertain. The components of the net deferred tax assets are as follows:

At September 30,	2012			2011
Deferred tax assets:
Net operating losses	$	1,805,000		$	561,000
Inventory reserve		382,000			382,000
Research tax credits		19,000			26,000
Stock-based and deferred compensation		683,000			165,000
Accruals and other		53,000			4,000
		2,942,000			1,138,000
Deferred tax liabilities:
Amortization, depreciation and other		137,000			91,000
		137,000			91,000
Net deferred tax assets		2,805,000			1,047,000
Less valuation allowance		(2,805,000	)		(1,047,000	)
Net deferred taxes after valuation allowance	$	–		$	–

The Company recognizes windfall tax benefits associated with the exercise of stock options directly to stockholders’ equity only when realized. Accordingly, deferred tax assets are not recognized for net operating loss carryforwards resulting from windfall tax benefits occurring from September 27, 2010 onward. At September 30, 2012 deferred tax assets do not include excess tax benefits from stock-based compensation of approximately $64,000.

The Company adopted ASC 740-10-25, Income Taxes—Recognition (formerly FIN 48) as of the date of incorporation. As of the date of the adoption, the Company had no unrecognized tax benefits and there were no material changes during the years ended September 30, 2012 and 2011. Due to the existence of the valuation allowance, future changes in the Company’s unrecognized tax benefits will not impact its effective tax rate. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. Upon adoption of ASC 740-10-25, the Company did not record any interest or penalties. The Company is subject to income tax in the U.S. federal jurisdiction and the state of California. All years since the Company’s 2010 organization remain subject to examination but there are currently no ongoing exams in any taxing jurisdiction.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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-Name Statement of Financial Accounting Standard (FAS)

-Number 109

-Paragraph 136, 172

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+ Details

8. Capital Stock

12 Months Ended

Sep. 30, 2012

Equity [Abstract]

8. CAPITAL STOCK

Common Stock

The Company is authorized to issue 50,000,000 shares of common stock, $0.001 par value. At September 30, 2012 and 2011, the Company had 6,408,151 and 3,903,784 shares issued and outstanding, respectively. All common stock share and per share information herein have been adjusted to reflect retrospective application of the 1-for-5 reverse stock split effected March 21,2012, except for par value per share and the number of authorized shares, which were not affected by the reverse stock split.

Preferred Stock

The Company is authorized to issue 1,000,000 shares of preferred stock, $0.001 par value. The Company is authorized under its certificate of incorporation and bylaws to issue the shares of preferred stock without any further action by the stockholders. The board of directors has the authority to divide any and all shares of preferred stock into series and to fix and determine the relative rights and preferences of the preferred stock, such as the designation of series and the number of shares constituting such series, dividend rights, redemption and sinking fund provisions, liquidation and dissolution preferences, conversion or exchange rights and voting rights, if any. Issuance of preferred stock by the board of directors could result in such shares having dividend and or liquidation preferences senior to the rights of the holders of common stock and could dilute the voting rights of the holders of common stock.

Equity Transactions

Private Placement

On February 22, 2011, the Company entered into a Securities Purchase Agreement with existing institutional shareholders (considered related parties due to greater than 10% ownership) and entities affiliated with its two executive officers, pursuant to which the Company issued and sold for cash 400,000 shares of common stock at a purchase price of $2.50 per share. In connection with the financing, the Company also issued warrants exercisable for an aggregate of 400,000 shares of common stock at an exercise price of $3.75 per share. The warrants are exercisable until February 22, 2016. On September 30, 2011, entities affiliated with the two executive officers exercised 80,000 of the warrants for cash of $300,000.

In connection with the financing, the Company also entered into a registration rights agreement with the investors, pursuant to which the Company agreed to prepare, file and effect a registration statement covering the resale of the shares of common stock sold in the financing and the shares of common stock issuable upon the exercise of the warrants. The required registration statement became effective on March 28, 2011 and the Company agreed to use commercially reasonable efforts to maintain effectiveness. If the registration statement becomes ineffective other than for certain allowable periods, the Company will be obligated to pay liquidated damages to the purchasers in the amount of 1.5% of the invested amount for each 30-day period thereafter with the obligation terminating when the securities are sold or otherwise available for unrestricted sale. No obligations have been accrued as of September 30, 2012 or 2011 as the Company determined that a liability for any such penalties was not probable.

Warrant Exercises

On June 30, 2011 a total of 280,000 warrants issued in September 2010 were exercised at a price of $1.50 per share and the Company exercised its right to offset the $420,000 of proceeds against principal of 8% Subordinated Promissory Notes (“Notes”). The warrants exercised included an aggregate 144,000 warrants held by the companies controlled by the Company’s President and its CFO, resulting in the reduction of the Note principal amounts held by these companies of $216,000.

As described above on September 30, 2011, entities affiliated with the two executive officers exercised 80,000 warrants for cash of $300,000.

Conversion of Subordinated Promissory Notes and Accrued Interest

On June 30, 2011, Notes with an outstanding principal balance of $250,000 plus related accrued interest of $37,674 were converted into an aggregate of 82,193 shares of common stock. The Notes and accrued interest converted included aggregate principal and accrued interest of $144,000 and $21,698, respectively, relating to Notes held by the companies controlled by the Company’s President and its CFO.

Secondary Public Offering

During March and April 2012 the Company completed a secondary public offering of 2,053,400 shares of common stock, at a price of $4.50 per share, for gross proceeds of $9.24 million. The net proceeds of the offering after deducting underwriting discounts and commissions and offering expenses was $8.0 million. In connection with the offering, the Company granted the underwriter warrants to purchase 205,339 shares of common stock at an exercise price of $5.625 per share. These warrants expire on March 21, 2017. The estimated fair value of these warrants was $622,729, as determined using the Black-Scholes methodology (assuming estimated volatility of 91% and 90%, risk-free interest rate of 0.89% and 0.87%, expected dividend yield of 0.0%). This amount was recorded as both an increase to additional paid in capital and as a non-cash issuance cost of the financing transaction.

Summary of Stock Purchase Warrants

The following table summarizes information on warrant activity during the years ended September 30, 2011 and 2012:

	Number			Average Purchase Price Per Share
Shares purchasable under outstanding warrants at October 1, 2010		280,000		$1.50
Stock purchase warrants issued		400,000		$3.75
Stock purchase warrants exercised		(360,000	)	$2.00
Shares purchasable under outstanding warrants at September 30, 2011		320,000		$3.75
Stock purchase warrants issued		205,339		$5.625
Stock purchase warrants exercised		–
Shares purchasable under outstanding warrants at September 30, 2012		525,339		$4.48

The Company has outstanding share warrants as of September 30, 2012 as follows:

	Number of		Exercise Price
Description	Common Shares		Per Share	Expiration Date
Stock Purchase Warrants (1)		320,000	$3.75	February 22, 2016
Stock Purchase Warrants		205,339	$5.625	March 21, 2017

(1)

warrants held by related parties.

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 5

-Paragraph 15

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef

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+ Details

9. Share-Based Compensation

12 Months Ended

Sep. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

9. Share-Based Compensation

On September 27, 2010 the Company adopted the 2010 Stock Option Plan (the “2010 Plan”). The 2010 Plan authorized the grant of options to purchase up to 600,000 shares of the Company’s common stock to directors, officers, employees and consultants. On December 29, 2011 the Company adopted, and shareholders subsequently approved, the 2012 Stock Option Plan (the “2012 Plan”) providing the Board of Directors with authority to grant options to purchase up to 253,000 of the shares of common stock remaining available for issuance under the 2010 Plan and up to an additional 600,000 shares of common stock. The 2012 Plan replaced the 2010 Plan but awards previously granted under the 2010 Plan remain outstanding in accordance with their terms. Any outstanding awards under the 2010 Plan that expire or terminate, other than through exercise or share settlement, will also become eligible for grant under the 2012 Plan. At September 30, 2012 a total of 7,500 shares were available for grant under the 2012 Plan.

In June and August 2012, in connection with offers of employment to two new employees, the Board of Directors granted inducement options to purchase up to 96,000 shares of the Company’s common stock exercisable for five years and vesting over three years. Such options were granted outside of the 2012 Plan.

In August 2012, the Company’s Board of Directors approved, subject to shareholder approval, an amendment to the 2012 Plan, which would provide the Company an additional 500,000 shares of common stock for option issuance. Under this amendment, in September 2012 the Company’s Board of Directors granted an option to purchase 25,000 shares of the Company’s common stock to one director for services, however, the option is not considered outstanding until the amendment is approved by shareholders. No expense has been recorded for the grant and the increase in the 2012 Plan is not included in the option totals below.

The Company uses the Black-Scholes option pricing model to determine the estimated fair value of each option as of its grant date or any revaluation date, and the grant date fair value is recognized as non-cash based compensation expense over the expected vesting term of options. The inputs to the Black-Scholes option pricing model are subjective and generally require significant analysis and judgment to develop. The following table sets forth the significant weighted-average assumptions used in the Black-Scholes model and the calculation of stock-based compensation cost (annualized percentages):

Years Ended September 30,	2012		2011
Volatility		90%		99%
Risk-free interest rate		0.92%		1.14%
Forfeiture rate		1.10%		0.00%
Dividend yield		0.00%		0.00%
Expected life in years		4.61		4.75
Weighted average fair value of options granted		$ 3.68		$ 1.25

The Company’s stock commenced trading in October 2010 and management estimated its expected volatility for fiscal 2011 by reviewing the historical volatility of the common stock of a group of selected peer public companies that operate in similar industries and are similar in terms of stage of development or size and then projecting this information toward future expected results. Judgment was used in selecting these companies, as well as in evaluating the available historical volatility for these peer companies. In fiscal 2012 the Company commenced using its historical volatility that did not vary significantly from prior estimates. The risk-free interest rate is based on rates published by the Federal Reserve Board. The dividend yield of zero is based on the fact that the Company has never paid cash dividends and has no present intention to pay cash dividends. The Company has a small number of option grants and limited exercise history and accordingly has for all new option grants applied the simplified method prescribed by SEC Staff Accounting Bulletin 110, Share-Based Payment: Certain Assumptions Used in Valuation Methods - Expected Term, to estimate expected life (computed as vesting term plus contractual term divided by two). In fiscal 2012, as the Company added employees and increased the number of grantees, management estimated a forfeiture rate on a specific grant basis. Forfeitures are estimated at the time of the grant and will be revised in subsequent periods if actual forfeitures differ from those estimates or if the Company updates its estimated forfeiture rate. Such amounts, if any, will be recorded as a cumulative adjustment in the period in which the estimate is changed.

The Company recorded share-based compensation in its statements of operations for the relevant periods as follows:

Years Ended September 30,		2012		2011
Selling, general and administrative	$	1,420,708	$	94,031
Research and development		266,201		94,280
	$	1,686,909	$	188,311

In addition the Company issued stock options valued at $20,000 during the year ended September 30, 2011 to a vendor as payment for tooling costs which was capitalized and included in equipment and tooling at September 30, 2011. The recorded value of these options was determined based on the value of the services provided as this was deemed to be a more reliable measurement of the consideration received.

As of September 30, 2012 total estimated compensation cost relating to stock options granted but not yet vested was $1,838,800. This cost is expected to be recognized over the weighted average period of 2.6 years.

The following table summarizes stock option activity for the period:

	Number			Weighted Average		Aggregate Intrinsic Value
	of Shares			Exercise Price		(2)
Fiscal 2011:
Outstanding October 1, 2010		–
Granted		347,000		$	1.80
Canceled/expired		–			–
Exercised		–			–
Outstanding September 30, 2011		347,000		$	1.80

Fiscal 2012:
Outstanding October 1, 2011		347,000		$	1.80
Granted		1,054,000		$	4.40
Canceled/expired		(112,500	)	$	4.20
Exercised		(120,000	)	$	1.61
Outstanding September 30, 2012 (1)		1,168,500		$	3.93	$	3,363,770
Exercisable September 30, 2012		608,771		$	2.90	$	2,216,082

(1)

Options outstanding are exercisable at prices ranging from $1.50 to $10.98 and expire in 2015 to 2017.

(2)

Aggregate intrinsic value is based on the closing price of our common stock on September 30, 2012 of $6.49.

The total intrinsic value of options exercised during fiscal 2012 was $314,899. Cash received from the exercise of stock options for the year ended September 30, 2012 was $192,338.

The following table summarizes information about stock options outstanding at September 30, 2012:

Range of exercise prices	Number outstanding at September 30, 2012		Number exercisable at September 30, 2012		Weighted Average exercise price	Weighted average remaining contractual life	Weighted average Exercise price of options exercisable at September 30, 2012
$1.50-$2.90		197,500		197,500	$1.59	3	$1.59
$3.10-$4.55		832,000		397,563	$3.66	4.3	$3.36
$5.12-$6.00		37,000		5,208	$5.39	4.5	$5.89
$9.25-$10.98		102,000		8,500	$10.17	4.8	$10.17

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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+ Details

10. Commitments and Contingencies

12 Months Ended

Sep. 30, 2012

Commitments And Contingencies

10. Commitments and Contingencies

Bank and Other Cash Equivalent Deposits in Excess of FDIC Insurance Limits

The Company maintains cash and cash equivalent accounts with Federal Deposit Insurance Corporation (“FDIC”) insured financial institutions. Under provisions of the Dodd Frank Wall Street Reform and Consumer Protection Act, unlimited FDIC insurance is provided for all funds in non-interest bearing transaction accounts through December 31, 2012. In addition, certain of the Company’s interest bearing collateral money market accounts are each insured up to $250,000 by the FDIC. The Company’s exposure for amounts in excess of FDIC insured limits at September 30, 2012 was approximately $5.5 million. The Company has not experienced any losses in such accounts.

Facility Leases

Commencing May 1, 2012 the Company leased approximately 6,800 square feet of improved office, laboratory, assembly and warehouse space in Poway, California for a period of 39 months terminating July 2015. The gross monthly base rent is approximately $7,200 increasing 3.5% per annum subject to other certain future adjustments. The agreement provided for concessions including a $17,000 tenant improvement allowance and three free months rent during the lease term.

Commencing June 1, 2011 the Company leased 3,498 square feet of space now used for warehousing in Poway, California for a period of 25 months terminating June 30, 2013. The gross monthly base rent is $3,603 per month for the remaining term of the lease, subject to certain future adjustments. The Company’s President, Mr. Norris, executed a personal guarantee of the lease without compensation.

The Company has no other operating leases and the remaining future annual minimum lease payment obligation under the foregoing facility leases are $117,521, $84,246 and $83,171 for the years ending September 30, 2013, 2014 and 2015, respectively.

Employment Agreement

In April 2012 the Company entered into a five-year employment agreement with Kenneth F. Potashner as Executive Chairman. Under the terms of the employment agreement, the Company may be obligated to pay to Mr. Potashner severance equal to one year of his annual base salary plus targeted bonus if his employment is terminated without cause. The Company also granted him an option to purchase up to 175,000 shares of common stock exercisable at $4.50 per share until April 3, 2017 vesting upon achievement of performance targets established by the Board of Directors. In connection with this employment option grant, the vesting of a December 2011 consultancy option to purchase 410,000 shares at an exercise price of $3.25 per share was modified such that 195,000 shares were vested as of April 3, 2012, 195,000 shares will vest equally over eight calendar quarters that commenced March 31, 2012 and 20,000 shares will vest upon achievement of performance targets established by the Board of Directors. A total of 20,000 performance shares vested during the year ended September 30, 2012. In April 2012 the Company paid Mr. Potashner $125,000 for consulting services from December 2011 through his April 2012 employment.

Bonus Plan

On May 1, 2012 the Company adopted a cash bonus plan for the period April 1, 2012 to December 31, 2012, pursuant to which each of the Company’s executive officers and certain other officers, consultants and employees designated by the Board of Directors are eligible to receive a target bonus equal to a percentage of the executive officer’s or other individual’s annualized base compensation if applicable performance objectives are met. The performance objectives are based 25% upon the Company achieving certain revenue performance targets, 25% upon the Company achieving certain licensing targets, 25% based upon the Company achieving certain technology development targets and 25% upon the Company or its licensees or partners achieving certain new HSS technology product launch targets. The performance objectives include both objective determinations and subjective determinations to be made by the Board of Directors. The maximum bonus percentage for each participant is 50% of his or her annual base compensation, except for the Company’s Executive Chairman whose maximum bonus percentage is 60% of his annual base compensation. All computations are adjusted to 75% to reflect the nine-month bonus period for the period April 1, 2012 to December 31, 2012 and payments of earned bonuses are deferred if certain cash generation targets are not met. At September 30, 2012 the Company had accrued an aggregate of $35,298 for bonuses under the plan.

Guarantees and Indemnifications

Our officers and directors are indemnified as to personal liability as provided by the Nevada Revised Statutes, the Company’s articles of incorporation and bylaws and by indemnification agreements with the Company. The Company may also undertake indemnification obligations in the ordinary course of business related to its products and the issuance of securities with customers, investors, vendors and business parties. The Company is unable to estimate with any reasonable accuracy the liability that may be incurred pursuant to any such indemnification obligations now or in the future. Because of the uncertainty surrounding these circumstances, the Company’s current or future indemnification obligations could range from immaterial to having a material adverse impact on its financial position and its ability to continue in the ordinary course of business. The Company has no liabilities recorded for such indemnities.

- Definition

The entire disclosure for commitments and contingencies.

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+ Details

11. Related Party Transactions

12 Months Ended

Sep. 30, 2012

11. Related Party Transactions

On December 29, 2011 the Company entered into an Assignment Agreement (“Assignment”) with Syzygy Licensing, LLC (“Syzygy”) pursuant to which the Company acquired all technology and intellectual property covered by the License and Royalty Agreement (“License”) dated September 27, 2010 previously entered into between the parties. The Assignment terminated the License and all future royalty obligations owed by the Company to Syzygy thereunder. Pending patent applications comprising part of the intellectual property were also assigned to the Company. Syzygy is owned by the Company’s President, Elwood G. Norris (65%), and by the Company’s Chief Financial Officer, Treasurer and Secretary, James A. Barnes (35%).

Under the terms of the Assignment, the Company issued 300,000 shares of its common stock to Syzygy (valued at $975,000 based on the closing price of the common stock of $3.25) and agreed to pay and in June 2012 paid $250,000 to Syzygy. The Company valued the technology in accordance with ASC 350-30-30, Intangible - Goodwill and Other - General Intangibles Other than Goodwill - Initial Measurement, and ASC 805-50-30, Business Combinations – Related Issues – Initial Measurement, which requires that intangible assets acquired through a transaction that is not a business combination be measured based on the cash consideration paid plus either the fair value of the non-cash consideration given or the fair value of the assets acquired, whichever is more clearly evident. As the Company had only recently begun selling products based on the acquired technology and intellectual property in the fourth quarter of fiscal 2011, management determined that the fair value of the common stock issued was more clearly evident, and accordingly, recorded the acquired intangible assets at the aggregate amount of $1,225,000. The Company incurred $3,194 of royalties for the three months ended December 31, 2011 prior to termination of the License and owed Syzygy an aggregate of $7,028 in royalties, which was paid in April 2012. The Company incurred $3,834 as royalties pursuant to License during the year ended September 30, 2011.

Prior to termination of the License the Company was obligated to reimburse Syzygy’s costs, in filing for, prosecuting and maintaining the licensed patents in the United States. The Company incurred and capitalized $2,852 and $28,237 related to such licensed patents during the fiscal year ended September 30, 2012 (prior to termination) and 2011, respectively.

See Notes 5, 6, 8 and 10 for additional related party transactions and information.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

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+ Details

12. Major Customers and Suppliers

12 Months Ended

Sep. 30, 2012

Major Customers And Suppliers

12. MAJOR CUSTOMERS AND SUPPLIERS

Major Customers

For the fiscal year ended September 30, 2012, revenues from three customers accounted for 30%, 16% and 16% of total revenues. No other single customer represented more than 10% of total revenues. For the fiscal year ended September 30, 2011, revenues from two customers accounted for 46% and 35% of total revenues. No other single customer represented more than 10% of total revenues.

Suppliers

The Company has a number of components and sub-assemblies produced by outside suppliers, some of which are sourced from a single supplier, which can magnify the risk of shortages and decrease the Company’s ability to negotiate with suppliers on the basis of price. In particular, the Company depends on its HSS piezo-film supplier to provide expertise and materials used in the Company’s proprietary HSS emitters. If supplier shortages occur, or quality problems arise, then production schedules could be significantly delayed or costs significantly increased, which could in turn have a material adverse effect on the Company’s financial condition, results of operation and cash flows.

At September 30, 2012 the Company was committed for approximately $46,000 for future inventory deliveries that are generally subject to modification or rescheduling in the normal course of business.

Segment and Related Information

We operate as a single reportable segment on an enterprise-wide basis. We generate revenue by selling our technology based products and expect future licensing revenues from such technology.

The following table summarizes revenues by geographic region. Revenues are attributed to countries based on customer location.

Years Ended September 30,	2012		2011
United States	$	91,124	$	6,369
Europe		37,048		64,250
Asia		83,337		2,950
Other		22,140		5,598
Total	$	233,649	$	79,167

1. Organization and Significant Accounting Policies (Policies)	12 Months Ended
	Sep. 30, 2012
Organization And Significant Accounting Policies Policies
Description of Business and Basis of Accounting/Presentation	Organization and Business Description Parametric Sound Corporation (“Parametric Sound” or the “Company”) is a technology company focused on delivering novel audio solutions through its HyperSound™ or “HSS®” technology platform, which pioneered the practical application of parametric acoustic technology for generating audible sound along a directional ultrasonic column. The creation of sound using the Company’s technology also creates a unique sound image distinct from traditional audio systems. In addition to its digital signage product business, the Company is targeting its technology for new uses in commercial and consumer markets including kiosks and point-of-sale terminals, electronic gaming, computers, video gaming, televisions, home audio, health care, movies and cinema and mobile devices. The Company was incorporated in Nevada on June 2, 2010 as a new, wholly owned subsidiary of LRAD Corporation in order to effect the separation and spin-off of the HSS business (the “Spin-Off”). On September 27, 2010, the 100% Spin-Off was completed and the Company became a stand-alone, independent, publicly traded company. In June 2012 the Company formed a wholly-owned subsidiary, PSC Licensing Corp. and in October 2012 the Company formed a new wholly-owned subsidiary, HyperSound Health, Inc. The Company’s corporate headquarters are located in Poway, California. Principal markets for the Company’s products are North America, Europe and Asia. During March and April 2012, the Company completed a secondary public offering of 2,053,400 shares of its common stock at $4.50 per share (after a 1-for-5 reverse stock split described below) for gross proceeds of $9.24 million. The net proceeds of the offering after deducting underwriting discounts and commissions and offering expenses was $8.0 million.
Basis of Presentation	Basis of Presentation The consolidated financial statements include the Company and its wholly owned subsidiary, PSC Licensing Corp. Intercompany balances and transactions have been eliminated in consolidation. Where necessary, the prior year’s information has been reclassified to conform to the fiscal 2012 statement presentation. These reclassifications had no effect on previously reported results of operations or accumulated deficit.
Reverse Stock Split	Reverse Stock Split On March 21, 2012, the Company completed a 1-for-5 reverse split of its common stock. The objective in effecting the reverse split was to enable the Company to list its common stock on the NASDAQ Capital Market and complete its secondary public offering. As a result of the reverse stock split, each five shares of common stock that were issued and outstanding or held in treasury on March 21, 2012 were automatically combined into one share. The reverse stock split reduced the number of issued and outstanding shares of common stock as of March 21, 2012 from approximately 21.5 million shares to approximately 4.3 million shares. Fractional shares were rounded up to the nearest whole number. The reverse stock split affected all of the holders of common stock uniformly. Shares of common stock underlying outstanding options and warrants were proportionately reduced and the exercise price of outstanding options and warrants was proportionately increased in accordance with the terms of the agreements governing such securities. All common stock share and per share information in the accompanying consolidated financial statements and notes thereto have been adjusted to reflect retrospective application of the reverse stock split, except for par value per share and the number of authorized shares, which were not affected by the reverse stock split.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions (e.g., valuation of inventory, valuation of intangible assets, warranty reserve, the grant date fair value of stock options and warrants, share-based compensation expense and valuation allowance related to deferred tax assets) that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and affect the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.
Financial Instruments	Fair Value of Financial Instruments The carrying amounts of cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair values due to the short maturity of these instruments. The fair value of warrants issued in March and April 2012 were estimated using a Black-Scholes valuation model (see Note 8). The Company does not have any financial assets and liabilities that are measured at fair value on a recurring basis.
Loss Per Share	Loss Per Share Basic loss per common share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per common share reflects the potential dilution of securities that could share in the earnings of an entity. The Company’s losses for the periods presented cause the inclusion of potential common stock instruments outstanding to be antidilutive. Stock options and warrants exercisable into a total of 1,693,839 and 667,000 shares of common stock were outstanding at September 30, 2012 and 2011, respectively. These securities are not included in the computation of diluted net loss per common share for the periods presented as their inclusion would be antidilutive due to losses incurred by the Company. Previously reported share and earnings per share amounts have been restated to reflect the 1-for-5 reverse stock split effected in March 2012.
Concentrations of Credit Risk	Concentrations of Credit Risk The Company sells its products to a large number of geographically diverse customers. The Company only recently began offering terms to certain customers. At September 30, 2012, accounts receivable from one customer accounted for 98% of total accounts receivable.
Cash Equivalents	Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less, when purchased, to be cash equivalents.
Accounts Receivable and Allowance for Doubtful Accounts	Accounts Receivable and Allowance for Doubtful Accounts The Company only recently began offering terms to certain customers. The Company’s policy is to evaluate the collectability of accounts receivable based on an assessment of the collectability of specific customer accounts and record an allowance for doubtful accounts to reduce the receivables to an amount that management reasonably estimates will be collected. There was no allowance for doubtful accounts recorded at September 30, 2012. Accounts that are deemed uncollectible will be written off against the allowance for doubtful accounts. If a major customer’s creditworthiness deteriorates, or actual defaults exceed our historical experience, such estimates could change and impact our reported financial results.
Contract Manufacturers	Contract Manufacturers The Company uses contract manufacturers for production of certain components and sub-assemblies. The Company may provide parts and components to such parties from time to time but recognizes no revenue or markup on such transactions. The Company performs assembly of products in-house using components and sub-assemblies from a variety of contract manufacturers and suppliers.
Inventories	Inventories Inventories are valued at the lower of cost or net realizable value. The cost of substantially all of the Company’s inventory is determined by the weighted average cost method. Inventory is comprised of raw materials, assemblies and finished products intended for sale to customers. The Company evaluates the need for reserves for excess and obsolete inventories determined primarily based upon estimates of future demand for the Company’s products. At September 30, 2012 and 2011, the reserve for obsolescence included certain raw materials obtained at the Spin-Off, some of which are being used to produce the Company’s products.
Property, Equipment and Depreciation	Property, Equipment and Depreciation Property and equipment is stated at cost. Depreciation on property and equipment is computed over the estimated useful lives of two to three years using the straight-line method. Leasehold improvements are amortized over the life of the lease. Upon retirement or disposition of property and equipment, the related cost and accumulated depreciation is removed and a gain or loss is recorded based on the difference between proceeds received, if any, and the carrying value of the asset on the date of retirement or disposition.
Intangible Assets	Intangible Assets Patents, licenses, purchased technology and trademarks are carried at cost less accumulated amortization. Intangible assets acquired through a transaction that is not a business combination are measured based on the cash consideration paid plus either the fair value of the non-cash consideration given or the fair value of the assets acquired, whichever is more clearly evident. Legal costs incurred to file, renew, or extend the term of recognized intangible assets are capitalized. Intangible assets are amortized over their estimated useful lives, which have been estimated to be 15 years for patents, licenses, purchased technology and trademarks protecting the Company’s products. The Company amortizes certain patents acquired in the Spin-Off, classified as defensive patents, over a weighted average of three years. The carrying value of intangibles is periodically reviewed and impairments, if any, are recognized when the expected future benefit to be derived from an individual intangible asset is less than its carrying value.
Revenue Recognition	Revenue Recognition The Company recognizes revenue when (i) persuasive evidence of an arrangement exists, (ii) all obligations have been substantially performed pursuant to the terms of sale or agreement, (iii) amounts are fixed or determinable and (iv) collectability of amounts is reasonably assured. During fiscal 2012 the Company began pursuing licensing of its patents and technologies and entered into its first license agreement in July 2012, which is currently in the product development phase. No licensing revenues were recognized during the year ended September 30, 2012. Product Sales Revenues derived from product sales to customers, including resellers and system integrators, are recognized in the periods that products are shipped to customers (FOB shipping point) or when product is received by the customer (FOB destination), when the fee is fixed and determinable, when collection of resulting receivables is probable and there are no remaining obligations on the part of the Company. Most revenues to resellers and system integrators are based on firm commitments from the end user; as a result, resellers and system integrators carry little or no inventory. Licensing The Company’s strategy is to derive licensing revenues primarily from royalties paid by licensees of the Company’s intellectual property rights, including patents, trademarks, and know-how. Revenues generated from license agreements are recognized in the period earned, provided that amounts are fixed or determinable and collectability is reasonably assured. Deferred revenue is reported for amounts that are expected to be recognized as revenue including upfront license fees, but for which not all revenue recognition criteria have been met.
Shipping and Handling Costs	Shipping and Handling Costs Shipping and handling costs are included in cost of revenues. The amount of shipping and handling costs invoiced to customers is included in revenue. Shipping and handling costs were $11,233 and $628 for the fiscal years ended September 30, 2012 and 2011, respectively.
Research and Development Costs	Research and Development Costs Research and development expenses include costs and expenses associated with the development of our technology and the design and development of new products, including initial nonrecurring engineering and product verification charges. Research and development is expensed as incurred.
Warranty Reserves	Warranty Reserves The Company warrants its products to be free from defects in materials and workmanship for a period of one year from the date of purchase. The warranty is generally a limited warranty. The Company currently provides direct warranty service. The Company establishes a warranty reserve based on anticipated warranty claims at the time revenue from product sales is recognized. Factors affecting warranty reserve levels include the number of units sold and anticipated cost of warranty repairs and anticipated rates of warranty claims. The Company evaluates the adequacy of the provision for warranty costs each reporting period.
Deferred Financing Costs	Deferred Financing Costs Costs related to the issuance of debt are capitalized and amortized to interest expense over the life of the related debt on a straight line basis which is not materially different from the results obtained using the effective interest method.
Classification and Valuation of Warrants	Classification and Valuation of Warrants The Company accounts for warrants as either equity or liabilities based upon the characteristics and provisions of each particular instrument. Warrants valued and classified as equity are recorded as additional paid-in capital based on the issue date fair value and no further adjustment to valuation is made. Warrants that do not qualify for equity classification are recorded as derivative liabilities based on the issue date fair value and are subject to adjustment to fair value at each reporting period. As of September 30, 2012 and 2011 the Company has no warrants or other derivative financial instruments that require separate accounting as liabilities and periodic revaluation.
Income Taxes	Income Taxes The Company accounts for its income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on temporary differences between financial statement and tax basis of assets and liabilities and net operating loss and credit carry-forwards using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are established when it is more likely than not that some portion of the deferred tax assets will not be realized. Financial statement effects of a tax position are initially recognized when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. A tax position that meets the more-likely-than not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a more likely than not likelihood of being realized upon ultimate settlement with a taxing authority. The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits as income tax expense.
Comprehensive Loss	Comprehensive Loss Comprehensive loss consists of net loss and other gains and losses affecting stockholders’ equity that under U.S. generally accepted accounting principles are excluded from reported net loss. There were no differences between net loss and comprehensive loss for any of the periods presented.
Impairment of Long-Lived Assets	Impairment of Long-Lived Assets Long-lived assets and identifiable finite-lived intangibles held for use are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the sum of undiscounted expected future cash flows is less than the carrying amount of the asset or if changes in facts and circumstances indicate, an impairment loss is recognized and measured using the asset’s fair value.
Share-Based Compensation	Share-Based Compensation The Company measures employee stock-based compensation awards using a fair-value method and records related compensation expense for all awards that are expected to vest over the requisite service period.
Share-Based Payments for Goods and Services	Share-Based Payments for Goods and Services Stock options or stock awards issued to non-employees who are not directors of the Company are recorded at the fair value of the consideration received, when more reliably measurable, or the fair value of the equity instruments issued at the measurement date. Non-employee options are periodically revalued as the options vest so the cost ultimately recognized is equivalent to the fair value on the date performance is complete with such expense recognized over the related service period on a graded vesting method.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In December 2011, the Financial Account Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2011-11, Disclosures about Offsetting Assets and Liabilities. The amendments in this Update will enhance disclosures required by U.S. GAAP by requiring improved information about financial instruments and derivative instruments that are either (1) offset in accordance with either Section 210-20-45 or Section 815-10-45 or (2) subject to an enforceable master netting arrangement or similar agreement. The amendments are effective for fiscal years beginning after January 1, 2013 and for interim periods within those fiscal years. The amendments of ASU 2011-11 are not expected to have a material impact on the Company’s consolidated financial statements. In July 2012, the FASB issued ASU 2012-02, “Testing Indefinite-Lived Intangible Assets for Impairment,” which allows companies to perform a qualitative assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary, similar in approach to the goodwill impairment test. The new guidance allows an entity the option to first assess qualitatively whether it is more likely than not (that is, a likelihood of more than 50 percent) that an indefinite-lived intangible asset is impaired, thus necessitating that it perform the quantitative impairment test. An entity is not required to calculate the fair value of an indefinite-lived intangible asset and perform the quantitative impairment test unless the entity determines that it is more likely than not that the asset is impaired. The new guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted for annual and interim impairment tests performed as of a date before July 27, 2012, if the financial statements for the most recent annual or interim period have not yet been issued. The Company will adopt the provisions of this new guidance on October 1, 2012. The Company does not expect the adoption of the new provisions to have a material impact on its financial condition or results of operations.
Subsequent Events	Subsequent Events Management has evaluated events subsequent to September 30, 2012 through the date the accompanying consolidated financial statements were filed with the Securities and Exchange Commission for transactions and other events that may require adjustment of and/or disclosure in such financial statements.

4. Property and Equipment, net (Tables)

12 Months Ended

Sep. 30, 2012

Property And Equipment Net Tables

Property and equipment

Property and equipment, net consist of the following:

At September 30,	2012			2011
Equipment	$	180,519		$	135,703
Tooling		124,299			124,299
Furniture and equipment		58,170			10,467
Leasehold improvements		16,266			–
		379,254			270,469
Accumulated depreciation		(202,342	)		(125,217	)
	$	176,912		$	145,252

- Definition

Tabular disclosure of the useful life and salvage value of long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software.

+ References+ Details

5. Intangible Assets, net (Tables)

12 Months Ended

Sep. 30, 2012

Intangible Assets Net Tables

Intangible assets

Intangible assets, net consist of the following:

At September 30,	2012			2011
Purchased technology	$	1,225,000		$	–
Patents		201,745			166,128
Defensive patents		183,498			154,952
Licenses and trademarks		15,462			34,529
		1,625,705			355,609
Accumulated amortization		(310,844	)		(207,069	)
	$	1,314,861		$	148,540

Intangible assets amortization expense

The following table shows the estimated amortization expense for intangible assets for each of the five succeeding fiscal years and thereafter:

Estimated Amortization Expense Years Ending September 30,
	2013	$	117,570
	2014	$	108,850
	2015	$	101,887
	2016	$	95,650
	2017	$	89,277
	Thereafter	$	801,627

6. Deferred Compensation and Accrued Liabilities (Tables)

12 Months Ended

Sep. 30, 2012

Deferred Compensation And Accrued Liabilities Tables

Accrued Liabilities

Accrued liabilities consist of the following:

At September 30,	2012		2011
Payroll and related	$	93,806	$	8,183
Warranty reserve		4,242		1,534
Customer deposits		2,187		4,600
Accrued research costs		32,566		–
Other		7,074		433
	$	139,875	$	14,750

Estimated warranty liability

Details of the estimated warranty liability are as follows:

Years Ended September 30,	2012			2011
Beginning balance	$	1,534		$	–
Warranty provision		10,612			1,534
Warranty settlements		(7,904	)		–
Ending balance	$	4,242		$	1,534

7. Income Taxes (Tables)

12 Months Ended

Sep. 30, 2012

Income Tax Disclosure [Abstract]

Provision for income taxes

Years Ended September 30,	2012			2011
Current tax benefit	$	–		$	–
Deferred tax benefit		1,758,000			529,000
Change in valuation allowance		(1,758,000	)		(529,000	)
Income tax benefit (provision)	$	–		$	–

Reconciliation of income taxes

Years Ended September 30,	2012			2011
Income taxes benefit computed at federal statutory rate	$	1,517,000		$	505,000
State income taxes, net of federal effect		268,000			73,000
Research tax credits		–			26,000
Permanent differences and other		(27,000	)		(75,000	)
Change in valuation allowance		(1,758,000	)		(529,000	)
Income tax benefit (provision)	$	–		$	–

Deferred tax assets

At September 30,	2012			2011
Deferred tax assets:
Net operating losses	$	1,805,000		$	561,000
Inventory reserve		382,000			382,000
Research tax credits		19,000			26,000
Stock-based and deferred compensation		683,000			165,000
Accruals and other		53,000			4,000
		2,942,000			1,138,000
Deferred tax liabilities:
Amortization, depreciation and other		137,000			91,000
		137,000			91,000
Net deferred tax assets		2,805,000			1,047,000
Less valuation allowance		(2,805,000	)		(1,047,000	)
Net deferred taxes after valuation allowance	$	–		$	–

8. Capital Stock (Tables)

12 Months Ended

Sep. 30, 2012

Equity [Abstract]

Warrant activity

	Number			Average Purchase Price Per Share
Shares purchasable under outstanding warrants at October 1, 2010		280,000		$1.50
Stock purchase warrants issued		400,000		$3.75
Stock purchase warrants exercised		(360,000	)	$2.00
Shares purchasable under outstanding warrants at September 30, 2011		320,000		$3.75
Stock purchase warrants issued		205,339		$5.625
Stock purchase warrants exercised		–
Shares purchasable under outstanding warrants at September 30, 2012		525,339		$4.48

Outstanding share warrants

	Number of		Exercise Price
Description	Common Shares		Per Share	Expiration Date
Stock Purchase Warrants (1)		320,000	$3.75	February 22, 2016
Stock Purchase Warrants		205,339	$5.625	March 21, 2017

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

+ References+ Details

9. Share-Based Compensation (Tables)

12 Months Ended

Sep. 30, 2012

Share-Based Compensation Tables

Weighted-average assumptions used in the Black-Scholes model

Years Ended September 30,	2012		2011
Volatility		90%		99%
Risk-free interest rate		0.92%		1.14%
Forfeiture rate		1.10%		0.00%
Dividend yield		0.00%		0.00%
Expected life in years		4.61		4.75
Weighted average fair value of options granted		$ 3.68		$ 1.25

Stock-based compensation cost

The Company recorded share-based compensation in its statements of operations for the relevant periods as follows:

Years Ended September 30,		2012		2011
Selling, general and administrative	$	1,420,708	$	94,031
Research and development		266,201		94,280
	$	1,686,909	$	188,311

Stock option activity

The following table summarizes stock option activity for the period:

	Number			Weighted Average		Aggregate Intrinsic Value
	of Shares			Exercise Price		(2)
Fiscal 2011:
Outstanding October 1, 2010		–
Granted		347,000		$	1.80
Canceled/expired		–			–
Exercised		–			–
Outstanding September 30, 2011		347,000		$	1.80

Fiscal 2012:
Outstanding October 1, 2011		347,000		$	1.80
Granted		1,054,000		$	4.40
Canceled/expired		(112,500	)	$	4.20
Exercised		(120,000	)	$	1.61
Outstanding September 30, 2012 (1)		1,168,500		$	3.93	$	3,363,770
Exercisable September 30, 2012		608,771		$	2.90	$	2,216,082

(1)

Options outstanding are exercisable at prices ranging from $1.50 to $10.98 and expire in 2015 to 2017.

(2)

Aggregate intrinsic value is based on the closing price of our common stock on September 30, 2012 of $6.49.

Summarizes stock option activity

The following table summarizes information about stock options outstanding at September 30, 2012:

Range of exercise prices	Number outstanding at September 30, 2012		Number exercisable at September 30, 2012		Weighted Average exercise price	Weighted average remaining contractual life	Weighted average Exercise price of options exercisable at September 30, 2012
$1.50-$2.90		197,500		197,500	$1.59	3	$1.59
$3.10-$4..55		832,000		397,563	$3.66	4.3	$3.36
$5.12-$6.00		37,000		5,208	$5.39	4.5	$5.89
$9.25-$10.98		102,000		8,500	$10.17	4.8	$10.17

12. Major Customers and Suppliers (Tables)

12 Months Ended

Sep. 30, 2012

Major Customers And Suppliers Tables

Revenues by geographic region

Years Ended September 30,	2012		2011
United States	$	91,124	$	6,369
Europe		37,048		64,250
Asia		83,337		2,950
Other		22,140		5,598
Total	$	233,649	$	79,167

- Definition

Tabular disclosure of the names of foreign countries from which revenue is material and the amount of revenue from external customers attributed to those countries. An entity may also provide subtotals of geographic information about groups of countries.

+ References+ Details

1. Description of Business and Basis of Accounting/Presentation ( Details Narrative) (USD $)	12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Description Of Business And Basis Of Accountingpresentation Details Narrative
Stock options and warrants exercisable	1,693,839	667,000
Percentage of accounts receivable from one customer	98.00%
Allowance for doubtful accounts accounts receivable	$ 0
Shipping and handling costs	$ 11,233	$ 628

- Definition

Securities (including those issuable pursuant to contingent stock agreements) that could potentially dilute basic earnings per share (EPS) or earnings per unit (EPU) in the future that were not included in the computation of diluted EPS or EPU because to do so would increase EPS or EPU amounts or decrease loss per share or unit amounts for the period presented.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

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+ Details

- Definition

Cost incurred during the reporting period in transporting goods and services to customers. Includes freight-out costs.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

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-Name Accounting Standards Codification

-Topic 235

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-Paragraph 3

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-Name Accounting Principles Board Opinion (APB)

-Number 22

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+ Details

3. Inventories, net (Details) (USD $)	Sep. 30, 2012	Sep. 30, 2011
Inventories, net
Finished goods	$ 143,430	$ 44,648
Work in process	11,735	23,960
Raw materials	400,300	324,025
Inventory total	555,465	392,633
Reserve for obsolescence	(111,761)	(119,365)
Inventory net	$ 443,704	$ 273,268

- Definition

The amount of the valuation account as of the balance sheet date which reduces the carrying amount of inventory to net realizable value; takes into consideration such factors as market value, excessive quantities based on expected sales, technological obsolescence, and shrinkage. May also provide for estimated product returns or price concessions pertaining to product cost.

+ References

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-Paragraph 1

-Subparagraph (SX 210.5-02.6(a))

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-Name Regulation S-X (SX)

-Number 210

-Section 02

-Paragraph 6

-Subparagraph a

-Article 5

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-Name Accounting Research Bulletin (ARB)

-Number 43

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Reference 9: http://www.xbrl.org/2003/role/presentationRef

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-Name Regulation S-X (SX)

-Number 210

-Section 09

-Article 12

+ Details

4. Property and Equipment, net (Details) (USD $)	Sep. 30, 2012	Sep. 30, 2011
Equipment and tooling
Equipment	$ 180,519	$ 135,703
Tooling	124,299	124,299
Furniture and equipment	58,170	10,467
Leasehold improvements	16,266
Property, Equipment and Tooling, Gross	379,254	270,469
Accumulated depreciation	(202,342)	(125,217)
Property, Equipment and Tooling, Net	$ 176,912	$ 145,252

- Definition

The cumulative amount of depreciation, depletion and amortization (related to property, plant and equipment, but not including land) that has been recognized in the income statement.

+ References+ Details

- Definition

Gross amount of long-lived physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, furniture and fixtures, and computer equipment.

+ References+ Details

- Definition

Amount, net of accumulated depreciation, depletion and amortization, of long-lived physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, furniture and fixtures, and computer equipment.

+ References+ Details

4. Property, Equipment and Tooling, net (Details Narrative) (USD $)	12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Property Equipment And Tooling Net Details Narrative
Depreciation expense	$ 77,125	$ 23,400

- Definition

The amount of expense recognized in the current period that reflects the allocation of the cost of tangible assets over the assets' useful lives. Includes production and non-production related depreciation.

+ References+ Details

5. Intangible Assets, net (Details) (USD $)	Sep. 30, 2012	Sep. 30, 2011
Intangible Assets
Purchased technology	$ 1,225,000
Patents	201,745	166,128
Defensive patents	183,498	154,952
Licenses and trademarks	15,462	34,529
Total	1,625,705	355,609
Accumulated amortization	(310,844)	(207,069)
Net	$ 1,314,861	$ 148,540

5. Intangible Assets, net (Details 1) (USD $)	Sep. 30, 2012
Estimated intangible assets amortization expense
2013	$ 117,570
2014	108,850
2015	101,887
2016	95,650
2017	89,277
Thereafter	$ 801,627

5. Intangible Assets, net (Details Narrative) (USD $)	12 Months Ended
5. Intangible Assets, net (Details Narrative) (USD $)	Sep. 30, 2012	Sep. 30, 2011
Intangible Assets, net
Aggregate amortization expense	$ 103,775	$ 39,557
Wrote off of impaired patent		$ 28,616

- Definition

The aggregate expense charged against earnings to allocate the cost of intangible assets (nonphysical assets not used in production) in a systematic and rational manner to the periods expected to benefit from such assets. As a noncash expense, this element is added back to net income when calculating cash provided by or used in operations using the indirect method.

+ References+ Details

6. Deferred Compensation and Accrued Liabilities (Details) (USD $)	Sep. 30, 2012	Sep. 30, 2011
Accrued liabilities
Payroll and related	$ 93,806	$ 8,183
Warranty reserve	4,242	1,534
Customer deposits	2,187	4,600
Accrued research costs	32,566
Other	7,074	433
Accrued liabilities	$ 139,875	$ 14,750

- Definition

Carrying value as of the balance sheet date of obligations incurred through that date and due after one year (or beyond the operating cycle if longer) for estimated claims under standard and extended warranty protection rights granted to customers.

+ References+ Details

6. Deferred Compensation and Accrued Liabilities (Details1) (USD $)	12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Deferred Compensation And Accrued Liabilities Details1
Beginning balance	$ 1,534
Warranty provision	10,612	1,534
Warranty settlements	(7,904)
Ending balance	$ 4,242	$ 1,534

- Definition

Carrying value as of the balance sheet date of obligations incurred through that date and payable for estimated claims under standard and extended warranty protection rights granted to customers.

+ References+ Details

6. Deferred Compensation and Accrued Liabilities (Details Narrative) (USD $)	12 Months Ended
	Sep. 30, 2012
Deferred Compensation, Accrued and Other Related Party Liabilities
Accrued deferred compensation approved	$ 315,000
Related estimated employment taxes included in deferred compensation	21,600
Common stock issued for accrued compensation, shares	31,111
Common stock issued for accrued compensation, amount	140,000
Common stock issued for accrued compensation, price per share	$ 4.50
Deferred compensation paid in cash	$ 175,000

7. Income Taxes (Details) (USD $)	12 Months Ended
7. Income Taxes (Details) (USD $)	Sep. 30, 2012	Sep. 30, 2011
Income Taxes Details
Current tax benefit
Deferred tax benefit	1,758,000	529,000
Change in valuation allowance	(1,758,000)	(529,000)
Income tax benefit (provision)

- Definition

The component of income tax expense for the period representing amounts of income taxes paid or payable (or refundable) for the period for all income tax obligations as determined by applying the provisions of relevant enacted tax laws to relevant amounts of taxable Income or Loss from continuing operations.

+ References

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-Topic 740

-SubTopic 10

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-Paragraph 1

-Subparagraph (SAB TOPIC 6.I.7)

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-Paragraph 9

-Subparagraph (a)

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Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 235

-SubTopic 10

-Section S99

-Paragraph 1

-Subparagraph (SX 210.4-08.(h))

-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 08

-Paragraph h

-Article 4

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Staff Accounting Bulletin (SAB)

-Number Topic 6

-Section I

-Subsection 7

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 109

-Paragraph 289

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 109

-Paragraph 45

-Subparagraph a

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

- Definition

The component of income tax expense for the period representing the increase (decrease) in the entity's deferred tax assets and liabilities pertaining to continuing operations.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 95

-Paragraph 28

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 230

-SubTopic 10

-Section 45

-Paragraph 28

-Subparagraph (b)

-URI http://asc.fasb.org/extlink&oid=6943989&loc=d3e3602-108585

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

-Section S99

-Paragraph 1

-Subparagraph (SAB TOPIC 6.I.7)

-URI http://asc.fasb.org/extlink&oid=6889476&loc=d3e330036-122817

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 235

-SubTopic 10

-Section S99

-Paragraph 1

-Subparagraph (SX 210.4-08.(h))

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Reference 5: http://www.xbrl.org/2003/role/presentationRef

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-Name Regulation S-X (SX)

-Number 210

-Section 08

-Paragraph h

-Article 4

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Staff Accounting Bulletin (SAB)

-Number Topic 6

-Section I

-Subsection 7

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 109

-Paragraph 289

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Glossary Deferred Tax Expense (or Benefit)

-URI http://asc.fasb.org/extlink&oid=6510177

Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

-Section 50

-Paragraph 9

-Subparagraph (b)

-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319

Reference 10: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 109

-Paragraph 45

-Subparagraph b

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

- Definition

The sum of the current income tax expense or benefit and the deferred income tax expense or benefit pertaining to continuing operations.

+ References+ Details

- Definition

The amount of the change in the period in the valuation allowance for a specified deferred tax asset.

+ References+ Details

7. Income Taxes (Details 1) (USD $)	12 Months Ended
7. Income Taxes (Details 1) (USD $)	Sep. 30, 2012	Sep. 30, 2011
Income Taxes Details 1
Income taxes benefit computed at federal statutory rate	$ 1,517,000	$ 505,000
State income taxes, net of federal effect	268,000	73,000
Research tax credits		26,000
Permanent differences and other	(27,000)	(75,000)
Change in valuation allowance	(1,758,000)	(529,000)
Income tax benefit (provision)

- Definition

The sum of the current income tax expense or benefit and the deferred income tax expense or benefit pertaining to continuing operations.

+ References+ Details

- Definition

The portion of the difference between total income tax expense or benefit as reported in the Income Statement and the expected income tax expense or benefit computed by applying the domestic federal statutory income tax rates to pretax income from continuing operations attributable to changes in the valuation allowance for deferred tax assets in the period.

+ References+ Details

- Definition

The amount of income tax expense or benefit for the period computed by applying the domestic federal statutory tax rates to pretax income from continuing operations.

+ References+ Details

7. Income Taxes (Details 2) (USD $)	Sep. 30, 2012	Sep. 30, 2011
Deferred tax assets:
Net operating losses	$ 1,805,000	$ 561,000
Inventory reserve	382,000	382,000
Research tax credits	19,000	26,000
Stock-based and deferred compensation	683,000	165,000
Accruals and other	53,000	4,000
Total deferred tax assets	2,942,000	1,138,000
Deferred tax liabilities:
Amortization, depreciation and other	137,000	91,000
Net deferred tax assets	2,805,000	1,047,000
Less valuation allowance	(2,805,000)	(1,047,000)
Net deferred taxes after valuation allowance

7. Income Taxes (Details Narrative) (USD $)	12 Months Ended
7. Income Taxes (Details Narrative) (USD $)	Sep. 30, 2012	Sep. 30, 2011
Income Taxes Details Narrative
Federal and state net operating loss carryforward	$ 4,500,000
Federal statutory rate	34.00%	34.00%
Excess tax benefits from stock-based compensation	$ 64,000

- Definition

The domestic federal statutory tax rate applicable under enacted tax laws to the Company's pretax income from continuing operations for the period. The "statutory" tax rate is the regular tax rate if there are alternative tax systems.

+ References+ Details

- Definition

Amount of an unrecognized tax benefit that is directly related to a position taken in a tax year that results in a net operating loss carryforward. This amount is presented as a reduction of the related deferred tax asset in the balance sheet if that deferred tax asset is not used. This amount is presented separately from the deferred tax asset for a net operating loss carryforward if this unrelated tax benefit is associated with a different tax position.

+ References+ Details

8. Capital Stock (Details) (USD $)	12 Months Ended
8. Capital Stock (Details) (USD $)	Sep. 30, 2012	Sep. 30, 2011
Stock Purchase Warrants
Shares purchasable under outstanding warrants at beginning of period	320,000	280,000
Stock purchase warrants issued	205,339	400,000
Stock purchase warrants exercised		(360,000)
Shares purchasable under outstanding warrants at end of period	525,339	320,000
Average Purchase Price Per Share
Shares purchasable under outstanding warrants at beginning of period	$ 3.75	$ 1.50
Stock purchase warrants issued	$ 5.625	$ 3.75
Stock purchase warrants exercised		$ 2.00
Shares purchasable under outstanding warrants at end of period	$ 4.48	$ 3.75

8. Capital Stock (Details Narrative) (USD $)	12 Months Ended
8. Capital Stock (Details Narrative) (USD $)	Sep. 30, 2012	Sep. 30, 2011
Stockholders' Equity
Warrants exercised for cash related parties, shares exercised		80,000
Warrants exercised for cash related parties		$ 300,000
Shares offered in public offering	2,053,400
Price per share in public offering	$ 4.50
Gross proceeds from public offering	9,240,000
Net proceeds from public offering	8,000,000
Warrants issued to underwriter in public offering	205,339
Warrants issued to underwriter in public offering, per share price	$ 5.625
Estimated fair value of the warrants	$ 622,729
Estimated volatility minimum	91.00%
Estimated Volatility maximum	90.00%
Risk-free interest rate minimum	89.00%
Risk-free interest rate maximum	87.00%
Expected dividend yield	0.00%

9. Share-Based Compensation (Details) (USD $)	12 Months Ended
9. Share-Based Compensation (Details) (USD $)	Sep. 30, 2012	Sep. 30, 2011
Share-Based Compensation
Volatility	90.00%	99.00%
Risk-free interest rate	0.92%	1.14%
Forfeiture rate	1.10%	0.00%
Dividend yield	0.00%
Expected life in years	P4Y7M10D	P4Y9M
Weighted average fair value of options granted	$ 3.68	$ 1.25

9. Share-Based Compensation (Details 2) (USD $)	12 Months Ended
9. Share-Based Compensation (Details 2) (USD $)	Sep. 30, 2012	Sep. 30, 2011
Number of Shares
Outstanding beginning of period	347,000
Granted	1,054,000	347,000
Canceled/expired	(112,500)
Exercised	(120,000)
Outstanding end of period	1,168,500	347,000
Exercisable September 30, 2012	608,771
Weighted Average Exercise Price
Outstanding beginning of period	$ 1.8
Granted	$ 4.4	$ 1.8
Canceled/expired	$ 4.2
Exercised	$ 1.61
Outstanding end of period	$ 3.93	$ 1.8
Exercisable September 30, 2012	$ 2.9
Aggregate Intrinsic Value
Outstanding September 30, 2012	$ 3,363,770
Exercisable September 30, 2012	$ 2,216,082

9. Share-Based Compensation (Details 3) (USD $)				12 Months Ended
9. Share-Based Compensation (Details 3) (USD $)	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2012 $1.50-$2.90	Sep. 30, 2012 $3.10-$4.55	Sep. 30, 2012 $5.12-$6.00	Sep. 30, 2012 $9.25-$10.98
Number outstanding at September 30, 2012	1,168,500	347,000		197,500	832,000	37,000	102,000
Number exercisable at September 30, 2012				197,500	397,563	5,208	8,500
Weighted Average exercise price	$ 3.93	$ 1.8		$ 1.59	$ 3.66	$ 5.39	$ 10.17
Weighted average remaining contractual life				3 years	4 years 3 months 21 days	4 years 6 months	4 years 9 months 26 days
Weighted average exercise price of options exercisable at September 30, 2012	$ 2.9			$ 1.59	$ 3.36	$ 5.89	$ 10.17

- Definition

The number of shares reserved for issuance under stock option agreements awarded under the plan that validly exist and are outstanding as of the balance sheet date, including vested options.

+ References+ Details

9. Share-Based Compensation (Details Narrative) (USD $)	12 Months Ended
9. Share-Based Compensation (Details Narrative) (USD $)	Sep. 30, 2012	Sep. 30, 2011
Share-Based Compensation
Options issued to vendor for services		$ 20,000
Stock option compensation costs to options granted, not yet vested	1,838,800
Intrinsic value of options exercised	314,899
Cash received from exercise of options	$ 192,338
2012 Plan
Share-Based Compensation
Options authorized for purchase	253,000
Options issuable under new plan	600,000
Option shares available for grant	7,500
Inducement Options
Share-Based Compensation
Options authorized for purchase	96,000

- Definition

The cash inflow associated with the amount received from holders exercising their stock options. This item inherently excludes any excess tax benefit, which the entity may have realized and reported separately.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Glossary Financing Activities

-URI http://asc.fasb.org/extlink&oid=6513228

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 95

-Paragraph 18

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 718

-SubTopic 10

-Section 50

-Paragraph 2

-Subparagraph (j)

-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 123R

-Paragraph A240

-Subparagraph i

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 230

-SubTopic 10

-Section 45

-Paragraph 14

-Subparagraph (a)

-URI http://asc.fasb.org/extlink&oid=6943989&loc=d3e3255-108585

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 95

-Paragraph 19

-Subparagraph a

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

10. Commitments and Contingencies (Details Narrative) (USD $)	12 Months Ended
	Sep. 30, 2012
Loss Contingencies [Line Items]
Future annual minimum lease payment - year 1	$ 117,521
Future annual minimum lease payment - year 2	84,246
Future annual minimum lease payment - year 3	83,171
Performance shares vested per employment contract	20,000
Consulting services paid	125,000
Bonus accrued under bonus plan	35,298
FDIC Member
Loss Contingencies [Line Items]
Company's exposure for amounts in excess of FDIC insured limits	$ 5,500,000

- Definition

Amount of required minimum rental payments maturing in the next fiscal year following the latest fiscal year for operating leases having an initial or remaining non-cancelable letter-terms in excess of one year.

+ References+ Details

- Definition

Amount of required minimum rental payments maturing in the third fiscal year following the latest fiscal year for operating leases having an initial or remaining non-cancelable letter-terms in excess of one year.

+ References+ Details

- Definition

Amount of required minimum rental payments maturing in the second fiscal year following the latest fiscal year for operating leases having an initial or remaining non-cancelable letter-terms in excess of one year.

+ References+ Details

11. Related Party Transactions (Details Narrative) (USD $)	12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Related Party Transactions Details Narrative
Royalties paid	$ 3,194	$ 3,834
Patent costs incurred and capitalized	$ 2,852	$ 28,237

Consolidated Statements of Stockholders' Equity (Parenthetical) (USD $)	12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Statement of Stockholders' Equity [Abstract]
Offering costs on sale of stock	$ 1,863,442	$ 43,554

2. Liquidity (Details Narrative) (USD $)	12 Months Ended
2. Liquidity (Details Narrative) (USD $)	Sep. 30, 2012
Liquidity Details Narrative
Working capital	$ 5,800,000

8. Capital Stock (Details 1) (USD $)	Sep. 30, 2012
StockPurchaseWarrants1Member
Class of Warrant or Right [Line Items]
Number of Common Shares	320,000
Exercise Price Per Share	$ 3.75
Expiration Date	2016-02-22
StockPurchaseWarrantsMember
Class of Warrant or Right [Line Items]
Number of Common Shares	205,339
Exercise Price Per Share	$ 5.63
Expiration Date	2017-03-21

12. Major Customers and Suppliers (Details Narrative) (USD $)	12 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Committed future inventory deliveries	$ 46,000
Customer One
Revenues from major customers	30.00%	46.00%
Customer Two
Revenues from major customers	16.00%	35.00%
Customer Three
Revenues from major customers	16.00%

9. Share-Based Compensation (Details 1) (USD $)	12 Months Ended
9. Share-Based Compensation (Details 1) (USD $)	Sep. 30, 2012	Sep. 30, 2011
DeferredCompensationShareBasedPaymentsMember
Share-Based Compensation
Share-based compensation expense	$ 1,686,909	$ 188,311
Selling, general and administrative
Share-Based Compensation
Share-based compensation expense	1,420,708	94,031
Research and development
Share-Based Compensation
Share-based compensation expense	$ 266,201	$ 94,280