10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934   For the quarterly period ended June 30, 2013

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT   For the transition period from N/A to N/A

Commission File No. 000-28745

Cloud Medical Doctor Software Corporation

(Name of small business issuer as specified in its charter)

(formerly National Scientific Corporation)

Texas	86-0837077
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

1291 Galleria Drive, Suite 200

Henderson, NV 89014

(Address of principal executive offices) (Zip Code)

(702) 818-9011

Registrant’s telephone number, including area code

Indicate by check mark whether the Registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days:  

Yes  o   No  x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes o     No x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non–Accelerated filer	¨	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b–2 of the Exchange Act). Yes  ¨    No  x

 Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at  February 26, 2014
Common stock, $0.01 par value	215,159,216

EXPLANATORY NOTE

The purpose of this Amendment No. 1 to the registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2013, filed with the Securities and Exchange Commission on March 3, 2014 (the “Form 10-Q”), is solely to furnish Exhibit 101 to the Form 10-Q, Exhibit 101 provides the financial statements and related notes from the Form 10-Q formatted in XBRL (Extensible Business Reporting Language).

No other changes have been made to the Form 10-Q. This Amendment No. 1 to the Form 10-Q speaks as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing date and does not modify or update in any way disclosures made in the original Form 10-Q.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Registrant Date: March 5, 2014	Cloud Medical Doctor Software Corporation By: /s/ Michael De La Garza
	Michael De La Garza
	Chief Executive Officer (Principal Executive Officer)

Registrant Date: March 5, 2014	Cloud Medical Doctor Software Corporation By: /s/ Pamela Thompson
	Pamela Thompson
	Principal Financial Officer

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11. SUBSEQUENT EVENTS (Details Narrative) (USD $)

3 Months Ended

6 Months Ended

9 Months Ended

12 Months Ended

Dec. 31, 2013

Mar. 31, 2013

Dec. 31, 2012

Sep. 30, 2013

Sep. 30, 2013

Jun. 30, 2013

Jun. 30, 2012

Sep. 30, 2014

Sep. 30, 2012

Jan. 10, 2014

Shares Issued, Shares, Acquisition

500,000

100,000

300,000

200,000

100,000

Shares Issued, Shares, Deposit

200,000

Shares Issued, Value, Acquisition

$ 4,000

$ 2,800

$ 6,000

$ 6,000

Impairment of Acquired Asset

10,000

4,000

Stock Issued, Software Licensing, Shares

120,000

50,000

400,000

606,333

200,000

Stock Issued, Software Licensing, Value

3,600

1,250

123,132

9,251

6,000

Credit Line, Amount

5,000

21,763

65,000

Line of Credit, Interest Rate

4.00%

Line of Credit, Amount Outstanding

36,500

Convertible Preferred Stock, Conversion Ratio

1

Stock Issued for Cash, Shares

20,000

197,000

190,000

25,000

Stock Issued for Cash, Value

2,000

141,000

68,000

5,000

Stock Issued for Compensation, Shares

220,000

945,000

19,000

Stock Issued for Compensation, Value

4,800

31,829

204

Stock Issued, Replacement of Lost Shares, Shares

180,000

Employment Agreements

Employment Agreements

The Company entered into an employment agreement with its Chief Executive Officer on January 1, 2013.  The employment agreement will expire on January 1, 2018 and shall automatically renew for another 5 years unless terminated in accordance with the provisions of the employment agreement. The employment agreement provides for:

i.	A monthly salary of $20,833 subject to an annual increase of 10% and consistent with the Company policy applicable to other senior executives and officers and approval by the Board of Directors.
ii.	A cash bonus of 25% of his annual base salary each year if the Company reaches the following milestones (none of which were attained in 2013):
a.		The Company posts annual gross revenues on a consolidated basis of at least $5,000,000;
b.		The Company's earnings before the deduction of income taxes and amortization expenses (“EBITA”), including cash extraordinary items but before officer's bonuses, on a consolidated basis for any year is at least $1,000,000; or the completion of the delinquent SEC filings for five (5) years through September 30, 2013 or the Company obtains FINRA approval for any reverse stock splits.
iii.	The issuance of shares equal to greater of 3,000,000 restricted common shares, or 1% of the outstanding shares.
iv.	The issuance of common stock on each anniversary date of the employment agreement of 5,000,000 shares and issuance of common stock for every acquisition granting 5,000,000 shares for DNA, 5,000,000 shares for CipherSmith, LLC, and 1,000,000 shares for MediSouth, LLC.
v.	An automobile allowance of $1,500 per month.
vi.	A medical insurance allowance of $1,500 per month.
vii.	In the event the Executive's employment is terminated without cause, he will receive the entire contract remaining on the agreement.

The Company entered into an employment agreement with its Chief Financial Officer on January 1, 2013.  The employment agreement will expire January 1, 2018 and shall automatically renew for another 5 years unless terminated in accordance with the provisions of the employment agreement. The employment agreement provides for:

i.	A monthly salary of $12,500 per month subject to an annual increase of 10% per year and consistent with the Company policy applicable to other senior executives and officers and approval by the Board of Directors.
ii.	A cash bonus of 25% of her annual base salary each year if the Company reaches the following milestones (none of which were attained in 2013):
a.		The Company posts annual gross revenues on a consolidated basis of at least $5,000,000;
b.		The Company's EBITA, including cash extraordinary items but before officer's bonuses, on a consolidated basis for any year is at least $1,000,000; or the completion of the delinquent SEC filings for five (5) years through September 30, 2013 or the Company obtains FINRA approval for any reverse stock splits.
iii.	The issuance of shares equal to greater of 3,000,000 restricted common shares, or 1% of the outstanding shares.
iv.	The issuance of common stock on each anniversary date of the employment agreement of 5,000,000 shares and issuance of common stock for every acquisition granting 3,000,000 shares for DNA, 3,000,000 shares for CipherSmith, LLC, and 750,000 shares for MediSouth, LLC.
v.	An automobile allowance of $1,000 per month.
vi.	A medical insurance allowance of $1,500 per month.
vii.	In the event the Executive's employment is terminated without cause, she will receive the entire contract remaining on the agreement.

Software Licensing Subscription Agreements [Member]

Stock Issued, Software Licensing, Shares

120,000

Stock Issued, Software Licensing, Value

3,600

Cash 2 [Member]

Stock Issued for Cash, Shares

10,000

Stock Issued for Cash, Value

$ 10,000

Antree Systems [Member]

Stock Issued, Replacement of Lost Shares, Shares

180,000

Ilicerl [Member]

Stock Issued, Replacement of Lost Shares, Shares

20,000

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Details) (USD $)	Jun. 30, 2013	Sep. 30, 2012	Jun. 30, 2013 Level 1	Sep. 30, 2012 Level 1	Jun. 30, 2013 Level 2	Sep. 30, 2012 Level 2	Sep. 30, 2013 Level 3	Jun. 30, 2013 Level 3
Proprietary Technology	$ 937,431	$ 1,022,591					$ 1,022,591	$ 937,431
Total Proprietary Technology	$ 937,431	$ 1,022,591					$ 1,022,591	$ 937,431

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America. Significant accounting policies are as follows:

Use of Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and (iii) the reported amount of net revenues and expenses recognized during the periods presented. Adjustments made with respect to the use of estimates often relate to improved information not previously available. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of financial statements; accordingly, actual results could differ from these estimates. The Company’s most significant estimates relate to the valuation of its proprietary technology and its valuation of its common stock.

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.  At June 30, 2013, cash and cash equivalents include cash on hand and cash in the bank and the FDIC insures these deposits up to $250,000.

Impairment of Long-Lived Assets

Long-lived assets are evaluated for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value. The acquired software technologies are reviewed annually for impairment.

Fair Value of Financial Instruments

The Company's financial instruments consist primarily of cash, accounts payable and accrued expenses, and debt. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.  

Fair value is focused on an exit price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  Within the measurement of fair value, the use of market-based information is prioritized over entity specific information and a three-level hierarchy for fair value measurements is used based on the nature of inputs used in the valuation of an asset or liability as of the measurement date.

The three-level hierarchy for fair value measurements is defined as follows:

• Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; liabilities in active markets;

• Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets that are not considered to be active; or directly or indirectly including inputs in markets that are not considered to be active;

• Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The following table summarizes fair value measurements by level at June 30, 2013 and September 30, 2012 for assets measured at fair value on a recurring basis:

	Level 1		Level 2		Level 3		Total
At December 31, 2012
Proprietary Technology	$	—	$	—	$	879,076	$	879,076
Total Proprietary Technology	$	—	$	—	$	879,076	$	879,076
At September 30, 2012
Proprietary Technology	$	—	$	—	$	1,022,591	$	1,022,591
Total Proprietary Technology	$	—	$	—	$	1,022,591	$	1,022,591

Accounts Receivable and Allowance for Uncollectible Accounts

Substantially all of the Company’s accounts receivable balance is related to trade receivables. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company will maintain allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments for services. Accounts with known financial issues are first reviewed and specific estimates are recorded. The remaining accounts receivable balances are then grouped in categories by the number of days the balance is past due, and the estimated loss is calculated as a percentage of the total category based upon past history. Account balances are charged against the allowance when it is probable the receivable will not be recovered. As of June 30, 2013 and 2012, the Company had no valuation allowance for the Company’s accounts receivable.

Income Taxes

The Company utilizes the asset and liability method in accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for operating loss and tax credit carry-forwards and for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets unless it is more likely than not that the value of such assets will be realized.

The Company uses the two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not, that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating the Company's tax positions and tax benefits, which may require periodic adjustments. At June 30, 2013, the Company did not record any liabilities for uncertain tax positions.

Revenue Recognition

License revenue consists principally of revenue earned under software license agreements. The Company sells its software to a medical practitioner for direct payment or through a third party leasing company for direct payment to the Company. The third party lease agreement is a non-recourse debt and the Company is not responsible for the default of the medical practitioner. License revenue is generally recognized when a signed contract or other persuasive evidence of an arrangement exists, the software has been electronically delivered, the license fee is fixed or is measured on a paid user basis; and collection of the resulting receivable is probable. When contracts contain multiple elements wherein Vendor-Specific Objective Evidence (“VSOE”) exists for all undelivered elements, we account for the delivered elements in accordance with the “Residual Method.”

VSOE of fair value for maintenance and support is established by a stated renewal rate, if substantive, included in the license arrangement or rates charged in stand-alone sales of maintenance and support. Revenue from subscription license agreements, which include software, rights to unspecified future products and maintenance, is recognized ratably over the term of the subscription period.

Provided all other revenue criteria are met, the upfront, minimum, non-refundable license fees from customers are generally recognized upon delivery and on-going royalty fees are generally recognized upon reports of new licenses issued. If there is significant uncertainty about the project completion or receipt of payment for professional services, revenue is deferred until the uncertainty is sufficiently resolved. VSOE of fair value of services is based upon stand-alone sales of those services.

Subscription revenue is generated from bandwidth and information storage. In the first year and each year thereafter, the software is purchased and installed, the purchaser will pay an annual fee of $1,200, $1,500, $1,800, and $2,400, respectively. Subscription revenue is recognized ratably over the term of the agreement.

Transaction revenue is generated from the following services and recognized when a transaction occurs:

· Electronic Remittance Advise $0.35 Electronic remittance transaction fee;

· Paper Claims $1.00 Paper claim fee;

· Carrier Direct $0.16 Carrier direct fee;

· Fast Forward $0.35 Fast forward transaction fee; and,

· Patient Credit $2.50 Automatic Debit processing per transaction paid by the patient

The Company had not received any transaction revenues in the nine months ended June 30, 2012.

Cost of License, and Subscriptions Revenues

Cost of license revenue is primarily comprised of the license-based royalties to third parties and production and distribution costs for initial product licenses. No costs were incurred for license-based royalties during the nine months ended June 30, 2013 and 2012.

Cost of subscription revenue is primarily comprised of the costs associated with the customer support personnel that provide maintenance, enhancement and support services to customers. No costs were incurred for customer support during the nine months ended June 30, 2013 and 2012.

The amortization of acquired technology for products acquired through business combinations are considered as the cost of revenues. The acquired software technologies are amortized over their useful lives of 5 years.

Sales Commissions

The Company pays commissions, including sales bonuses, to the direct sales force related to revenue transactions under sales compensation plans which are established annually. The commission payments are typically paid in full in the month or quarter following execution of the customer contracts. The Company paid commissions of $10,000 and $28,028 for the three months ended June 30, 2013 and 2012, respectively. The Company paid commissions of $50,260 and $53,205 for the nine months ended June 30, 2013 and 2012, respectively.

Research and Development and Software Development Costs

Capitalization of certain software development costs subsequent to the establishment of technological feasibility. Based on our product development process, technological feasibility is established upon the completion of a working model. To date, costs incurred by us from the completion of the working model to the point at which the product is ready for general release have been insignificant. Accordingly, we have charged all such costs to research and development expense in the period incurred. The Company recorded research and development costs of $58,044 and $55,000 for the three months ended June 30, 2013 and 2012, respectively. The Company recorded research and development cost of $153,044 and $97,000 for the nine months ended June 30, 2013 and 2012 respectively.

Share-Based Compensation

The Company measures the cost of services received in exchange for an award of an equity instrument based on the grant-date fair value of the award.  Compensation cost is recognized over the vesting or requisite service period.

Basic and Diluted Net Income (Loss) per Common Share

Basic income (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. The weighted average number of shares is calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding.  Diluted earnings per share reflects the potential dilution that could occur if stock options, warrants, and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company. As of June 30, 2013 and 2012, the Company had no potentially dilutive instruments outstanding.

Diluted loss per share is the same as basic loss per share during periods where net losses are incurred since the inclusion of the potential common stock equivalents would be anti-dilutive as a result of the net loss.  

Concentration of Credit Risk

All of the Company’s cash and cash equivalents are maintained in regional and national financial institutions. The Company has exposure to credit risk to the extent that its cash and cash equivalents exceed amounts covered by the U.S. federal deposit insurance; however, the Company has not experienced any losses in such accounts. In management’s opinion, the capitalization and operating history of the financial institutions are such that the likelihood of material loss is remote.

Subsequent Events

The Company has evaluated all transactions occurring between the Nine months ended June 30, 2013, through the date of issuance of the financial statements for subsequent event disclosure.

Recent Accounting Pronouncements

No accounting standards or interpretations issued recently are expected to a have a material impact on the Company’s financial position, operations or cash flows.

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6. DISCONTINUED OPERATIONS (Details Narrative) (USD $)	12 Months Ended
	Sep. 30, 2011	Sep. 30, 2006	Sep. 30, 2005	Jun. 30, 2013	Sep. 30, 2012	Oct. 02, 2011	Jan. 02, 2011	Sep. 30, 2007	May 31, 2006	Apr. 27, 2006	Nov. 01, 2005	May 27, 2005
Discontinued Operations and Disposal Groups [Abstract]
Sale of Assets, Purchase Price	$ 100,000
Note Payable									20,000	16,625	175,000
Note Payable, Interest Rate							8.00%	8.00%	12.00%	12.00%	8.00%	6.00%
Shares Issued, Financing Program			1,200,000
Per Share Conversion Price											$ 0.0525
Shares Issued, Price Per Share				$ 0.02		$ 0.008					$ 0.043
Debt Discount											51,600
Beneficial Conversion Feature			9,933
Deferred Financing Costs, Issuance of Shares											24,000
Related Party Payable					25,591			13,300				159,000
Due to Related Party				0	25,591
Interest Payable								13,300
Origination/Placement Fee		500
Warrants Issued		$ 100,000
Purchase Price Per Share									$ 0.036	$ 0.036
Royalty Revenue Receivable	2.00%

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5. SOFTWARE (Details Narrative) (USD $)

3 Months Ended

9 Months Ended

12 Months Ended

Jun. 30, 2013

Mar. 31, 2013

Dec. 31, 2012

Jun. 30, 2012

Jun. 30, 2013

Jun. 30, 2012

Sep. 30, 2012

Oct. 02, 2011

Jan. 02, 2011

Sep. 30, 2007

May 31, 2006

Apr. 27, 2006

Nov. 01, 2005

May 27, 2005

Research and Development [Abstract]

Amortization Expense

$ 120,010

$ 182,315

Investment Impairment

4,000

Software License Agreement

On August 14, 2012, the Company, through a comprehensive agreement (the “License Agreement”) with MediSouth, LLC, (“MediSouth”) has purchased a complete source code license and will integrate and enhance this feature set as part of its Cloud-MD Office product suite.

The License Agreement requires the following:

a)	That MediSouth will provide the Companywith all software updates for the license within 5 working days of MediSouthimplementing those same software updates in its own production version of the license.
b)	The Company has the right to modify the software contained in the license to meet its operational needs.
c)	The Company shall provide to MediSouth, with the permission of each affected Company client, the de-identified purchasing data which is any data that would identify a patient such as social security numbers, date of birth, health condition, among others that it collects as a result of the Company’s clients utilizing the embedded Medical Supplies and Pharmaceutical Inventory Management functionality provided by the license.
e)	MediSouth shall receive 100,000 shares of the Company’s non-dilutable, commonstock with a one (1) year trading restriction.
f)	The Company may not sell the license, transfer the license, allow any other entity to use the license as part of that entity's software application or transfer any rights to another party to use the license separately from the Company’s products in which the license is embedded.

The fair value of the consideration and the assets acquired is based on the aggregate value of the 100,000 shares of common stock issued in exchange for the software. The total fair value on August 14, 2012 was $2,500.

Stock Issued, Shares, Purchase of Software

100,000

Stock Issued, Value, Purchase of Software

12,313

9,251

2,500

Convertible Promissory Note

1,200,106

Note Payable, Interest Rate

8.00%

8.00%

12.00%

12.00%

8.00%

6.00%

Shares Issued, Shares, Payment of Promissory Note

30,000,000

Market Price Per Share on Date of Grant

$ 0.02

$ 0.02

$ 0.008

$ 0.043

Shares Issued, Shares, Acquisition

500,000

100,000

300,000

200,000

100,000

Shares Issued, Value, Acquisition

4,000

2,800

6,000

6,000

Shares Issued, Shares, Deposit

200,000

Impairment of Acquired Asset

$ 6,000

$ 4,000

$ 6,000

$ 4,000

$ 4,000

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8. COMMITMENT AND CONTINGENCIES (Details Narrative) (USD $)	9 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
COMMITMENTS AND CONTINGENCIES
Rent Expense	$ 0	$ 0
Payable Write Offs	$ 58,984	$ 1,573,591

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9. RELATED PARTY TRANSACTIONS (Details Narrative) (USD $)	9 Months Ended		12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Sep. 30, 2012
Related Party Transactions [Abstract]
Shares Issued, Shares, Payment of Promissory Note			30,000,000
Convertible Promissory Note		$ 1,200,106
Repayment of Due to Related Party	25,591	148,654
Owed to Related Party	$ 0		$ 25,591

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3. GOING CONCERN ISSUES

9 Months Ended

Jun. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

3. GOING CONCERN ISSUES

NOTE 3 - GOING CONCERN ISSUES

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. However, the Company has an accumulated deficit at June 30, 2013 of $26,267,542 and needs additional cash to maintain its operations.

These factors raise doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company’s continued existence is dependent upon management’s ability to develop profitable operations, continued contributions from the Company’s executive officers to finance its operations and the ability to obtain additional funding sources to explore potential strategic relationships and to provide capital and other resources for the further development and marketing of the Company’s products and business.

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10. EQUITY (Details Narrative) (USD $)	3 Months Ended			6 Months Ended	9 Months Ended			12 Months Ended
	Dec. 31, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2013	Sep. 30, 2013	Jun. 30, 2013	Jun. 30, 2012	Sep. 30, 2014	Sep. 30, 2012	Oct. 02, 2011	Nov. 01, 2005
Equity [Abstract]
Common Stock, Shares Authorized						650,000,000			650,000,000
Preferred Stock, Shares Authorized						4,000,000			4,000,000
Preferred Stock, Par Value						$ 0.01			$ 0.01
Stock Issued for Cash, Shares				20,000		197,000	190,000	25,000
Stock Issued for Cash, Value				$ 2,000		$ 141,000	$ 68,000	$ 5,000
Stock Issued, Software Licensing, Shares	120,000			50,000		400,000	606,333	200,000
Stock Issued, Software Licensing, Value	3,600			1,250		123,132	9,251	6,000
Stock Issued for Compensation, Shares				220,000		945,000	19,000
Stock Issued for Compensation, Value				4,800		31,829	204
Shares Issued, Shares, Acquisition		500,000	100,000			300,000	200,000		100,000
Shares Issued, Value, Acquisition		4,000	2,800			6,000	6,000
Shares Issued, Shares, Payment of Promissory Note									30,000,000
Convertible Promissory Note							1,200,106
Shares Issued, Shares, Deposit		200,000
Price Per Share Issued						$ 0.02				$ 0.008	$ 0.043
Investment						4,000
Preferred Stock, Shares Issued				4,000,000	4,000,000				4,000,000
Preferred Stock, Votes Per Share					150
Trading Price Per Share					$ 0.0095
Compensation Expense					38,000
Value of Shares Issued CipherSmith						500,004
Sahres Issued Acquisition CipherSmith						$ 15,800

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Balance Sheets (USD $)	Jun. 30, 2013	Sep. 30, 2012
CURRENT ASSETS:
Cash	$ 99,812	$ 51,356
Accounts receivable	4,756	4,888
Assets attributable to discontinued operations	16,701
Total current assets	121,269	56,244
Proprietary technology, net	879,076	1,022,591
TOTAL ASSETS	1,000,345	1,078,835
CURRENT LIABILITIES:
Accounts payable and accrued liabilities	327,508	229,736
Advances from officers		25,591
Liabilities attributable to discontinued operations	15,601
Line of credit	5,000	21,763
Total current liabilities	348,109	277,090
TOTAL LIABILITIES	348,109	277,090
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value, 4,000,000 shares authorized; 4,000,000 shares issued and outstanding	40,000	40,000
Common stock, $0.01 par value, 650,000,000 shares authorized; 214,334,216 and 211,991,212shares issued and outstanding, respectively	2,143,342	2,119,912
Additional paid-in capital	24,736,436	24,556,607
Accumulated deficit	(26,267,542)	(25,914,774)
Total stockholders' equity	652,236	801,745
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 1,000,345	$ 1,078,835

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1. DESCRIPTION OF BUSINESS

9 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

1. DESCRIPTION OF BUSINESS

NOTE 1- DESCRIPTION OF BUSINESS

Cloud Medical Doctor Software Corporation (the “Company”) was incorporated in Texas on June 22, 1953 as American Mortgage Company. On May 16, 1996, the Company changed its name to National Scientific Corporation. On April 3, 2012, the Company changed its name to Cloud Medical Doctor Software Corporation. 

In the year ended September 30, 2011, Cloud-MD introduced the Cloud-MD Office, a “Cloud Based”, 5010 ready and ICD-10 compliant, fully integrated and interoperable suite of medical software and services, designed by experienced healthcare analysts and programmers for healthcare providers, that produces “Actionable Information” to help Independent Physician Practices, New Care Delivery Models (ACO), Healthcare Systems and Billing Services optimize a wide range of business processes resulting in Increased Profits, Higher Quality, Greater Efficiency, Noticeable Cost Reductions and Better Patient Care. Current software product offerings include Practice Management, Electronic Medical Records, Revenue Management, Patient Financial Solutions, Medical and Pharmaceutical Supply Management, Claims Management and PHI Exchange.

In the year ended September 30, 2012, Cloud-MD launched Cloud-MD Billing Services which provides management of medical claims from posting physician charges and payments into our medical billing software. The software uses a continuous insurance claim follow-up system to track and research all rejected or denied medical claims; a Comprehensive Reporting module that includes monthly financial statements sent to our clients so they can see how their practice is performing and a variety of detailed reports giving our clients the necessary information and tools used to assist in the increased production which leads to more profit; and patient account inquiries and support to assist patients with their billing and insurance questions.

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5. SOFTWARE -(Details) (USD $)	Jun. 30, 2013	Sep. 30, 2012
Source Code License	$ 410,000	$ 4,000
Acquisition of Doctors Network of America	(240,020)	1,206,606
Total intangible assets	1,251,406	1,206,106
Accumulated amortization of intangible assets	(362,330)	(180,015)
Accumulated impairment of assets	(410,000)	(4,000)
Total intangible assets	876,076	1,022,591
Source Code License
Source Code License	2,500	2,500
Software License
Source Code License	1,200,106	1,200,106
EMR Certification
Source Code License	23,000
Encryption Software Code
Source Code License	$ 15,800

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5. SOFTWARE (Details) (USD $)	9 Months Ended
	Jun. 30, 2013
Research and Development [Abstract]
Absolute Medical Software Systems LLC development costs from inception	$ 1,011,222
Impairment of software on September 10, 2008 to value	(11,222)
Total Value at September 10, 2008	1,000,000
Absolute Medical Software Systems LLC development costs	200,106
Total Cost Basis at January 1, 2011	$ 1,200,106

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2. BASIS OF PRESENTATION OF INTERIM FINANCIAL STATEMENTS

9 Months Ended

Jun. 30, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

2. BASIS OF PRESENTATION OF INTERIM FINANCIAL STATEMENTS

NOTE 2 – BASIS OF PRESENTATION OF INTERIM FINANCIAL STATEMENTS

The Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America.  The accompanying interim unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. In our opinion, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.

Operating results for the Nine months ended June 30, 2013 are not necessarily indicative of the results that may be expected for the year ending September 30, 2013. Notes to the unaudited interim financial statements that would substantially duplicate the disclosures contained in the audited financial statements for the year ended September 30, 2012 have been omitted; this report should be read in conjunction with the audited financial statements and the footnotes thereto for the fiscal year ended September 30, 2012 included within the Company’s Form 10-K as filed with the Securities and Exchange Commission.

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Balance Sheets (Parenthetical) (USD $)	Jun. 30, 2013	Sep. 30, 2012
Statement of Financial Position [Abstract]
Preferred Stock, Par Value	$ 0.01	$ 0.01
Preferred Stock, Shares Authorized	4,000,000	4,000,000
Preferred Stock, Shares Issued		4,000,000
Preferred Stock, Shares Outstandng	4,000,000	4,000,000
Common Stock, Par Value	$ 0.01	$ 0.01
Common Stock, Shares Authorized	650,000,000	650,000,000
Common Stock, Shares Issued	213,715,712	211,991,212
Common Stock, Shares Outstanding	213,715,712	211,991,212

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Use of Estimates and Assumptions

Use of Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect (i) the reported amounts of assets and liabilities, (ii) the disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and (iii) the reported amount of net revenues and expenses recognized during the periods presented. Adjustments made with respect to the use of estimates often relate to improved information not previously available. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of financial statements; accordingly, actual results could differ from these estimates. The Company’s most significant estimates relate to the valuation of its proprietary technology and its valuation of its common stock.

Cash and Cash Equivalents

Fair Value of Financial Instruments

The Company's financial instruments consist primarily of cash, accounts payable and accrued expenses, and debt. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.  

Fair value is focused on an exit price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  Within the measurement of fair value, the use of market-based information is prioritized over entity specific information and a three-level hierarchy for fair value measurements is used based on the nature of inputs used in the valuation of an asset or liability as of the measurement date.  

The three-level hierarchy for fair value measurements is defined as follows:

• Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; liabilities in active markets;

• Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets that are not considered to be active; or directly or indirectly including inputs in markets that are not considered to be active;

• Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The following table summarizes fair value measurements by level at June 30, 2013 and September 30, 2012 for assets measured at fair value on a recurring basis:

	Level 1		Level 2		Level 3		Total
At June 30, 2013
Proprietary Technology	$	—	$	—	$	879,076	$	879,076
Total Proprietary Technology	$	—	$	—	$	879,076	$	879,076
At September 30, 2012
Proprietary Technology	$	—	$	—	$	1,022,591	$	1,022,591
Total Proprietary Technology	$	—	$	—	$	1,022,591	$	1,022,591

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

Long-lived assets are evaluated for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value. The acquired software technologies are reviewed annually for impairment.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company's financial instruments consist primarily of cash, accounts payable and accrued expenses, and debt. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.  

Fair value is focused on an exit price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  Within the measurement of fair value, the use of market-based information is prioritized over entity specific information and a three-level hierarchy for fair value measurements is used based on the nature of inputs used in the valuation of an asset or liability as of the measurement date.

The three-level hierarchy for fair value measurements is defined as follows:

• Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; liabilities in active markets;

• Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets that are not considered to be active; or directly or indirectly including inputs in markets that are not considered to be active;

• Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The following table summarizes fair value measurements by level at December 31, 2012 and September 30, 2012 for assets measured at fair value on a recurring basis:

	Level 1		Level 2		Level 3		Total
At December 31, 2012
Proprietary Technology	$	—	$	—	$	937,431	$	937,431
Total Proprietary Technology	$	—	$	—	$	937,431	$	937,431
At September 30, 2012
Proprietary Technology	$	—	$	—	$	1,022,591	$	1,022,591
Total Proprietary Technology	$	—	$	—	$	1,022,591	$	1,022,591

Accounts Receivable and Allowance for Uncollectible Accounts

Accounts Receivable and Allowance for Uncollectible Accounts

Substantially all of the Company’s accounts receivable balance is related to trade receivables. Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company will maintain allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments for services. Accounts with known financial issues are first reviewed and specific estimates are recorded. The remaining accounts receivable balances are then grouped in categories by the number of days the balance is past due, and the estimated loss is calculated as a percentage of the total category based upon past history. Account balances are charged against the allowance when it is probable the receivable will not be recovered. As of June 30, 2013 and 2012, the Company had no valuation allowance for the Company’s accounts receivable.

Income Taxes

Income Taxes

The Company utilizes the asset and liability method in accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for operating loss and tax credit carry-forwards and for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is recorded to reduce the carrying amounts of deferred tax assets unless it is more likely than not that the value of such assets will be realized.

The Company uses the two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not, that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating the Company's tax positions and tax benefits, which may require periodic adjustments. At June 30, 2013, the Company did not record any liabilities for uncertain tax positions.

Revenue Recognition

Revenue Recognition

License revenue consists principally of revenue earned under software license agreements. The Company sells its software to a medical practitioner for direct payment or through a third party leasing company for direct payment to the Company. The third party lease agreement is a non-recourse debt and the Company is not responsible for the default of the medical practitioner. License revenue is generally recognized when a signed contract or other persuasive evidence of an arrangement exists, the software has been electronically delivered, the license fee is fixed or is measured on a paid user basis; and collection of the resulting receivable is probable. When contracts contain multiple elements wherein Vendor-Specific Objective Evidence (“VSOE”) exists for all undelivered elements, we account for the delivered elements in accordance with the “Residual Method.”

VSOE of fair value for maintenance and support is established by a stated renewal rate, if substantive, included in the license arrangement or rates charged in stand-alone sales of maintenance and support. Revenue from subscription license agreements, which include software, rights to unspecified future products and maintenance, is recognized ratably over the term of the subscription period.

Provided all other revenue criteria are met, the upfront, minimum, non-refundable license fees from customers are generally recognized upon delivery and on-going royalty fees are generally recognized upon reports of new licenses issued. If there is significant uncertainty about the project completion or receipt of payment for professional services, revenue is deferred until the uncertainty is sufficiently resolved. VSOE of fair value of services is based upon stand-alone sales of those services.

Subscription revenue is generated from bandwidth and information storage. In the first year and each year thereafter, the software is purchased and installed, the purchaser will pay an annual fee of $1,200, $1,500, $1,800, and $2,400, respectively. Subscription revenue is recognized ratably over the term of the agreement.

Transaction revenue is generated from the following services and recognized when a transaction occurs:

· Electronic Remittance Advise $0.35 Electronic remittance transaction fee;

· Paper Claims $1.00 Paper claim fee;

· Carrier Direct $0.16 Carrier direct fee;

· Fast Forward $0.35 Fast forward transaction fee; and,

· Patient Credit $2.50 Automatic Debit processing per transaction paid by the patient

The Company had not received any transaction revenues in the nine months ended June 30, 2013.

Cost of License, and Subscriptions Revenues

Cost of License, and Subscriptions Revenues

Cost of license revenue is primarily comprised of the license-based royalties to third parties and production and distribution costs for initial product licenses. No costs were incurred for license-based royalties during the nine months ended June 30, 2013 and 2012.

Cost of subscription revenue is primarily comprised of the costs associated with the customer support personnel that provide maintenance, enhancement and support services to customers. No costs were incurred for customer support during the nine months ended June 30, 2013 and 2012.

The amortization of acquired technology for products acquired through business combinations are considered as the cost of revenues. The acquired software technologies are amortized over their useful lives of 5 years.

Sales Commissions

Sales Commissions

The Company pays commissions, including sales bonuses, to the direct sales force related to revenue transactions under sales compensation plans which are established annually. The commission payments are typically paid in full in the month or quarter following execution of the customer contracts. The Company paid commissions of $10,000 and $28,028 for the three months ended June 30, 2013 and 2012, respectively. The Company paid commissions of $50,260 and $53,205 for the nine months ended June 30, 2013 and 2012, respectively.

Research and Development and Software Development Costs

Research and Development and Software Development Costs

Capitalization of certain software development costs subsequent to the establishment of technological feasibility. Based on our product development process, technological feasibility is established upon the completion of a working model. To date, costs incurred by us from the completion of the working model to the point at which the product is ready for general release have been insignificant. Accordingly, we have charged all such costs to research and development expense in the period incurred. The Company recorded research and development costs of $58,044 and $55,000 for the three months ended June 30, 2013 and 2012, respectively. The Company recorded research and development costs of $153,044 and $97,000 for the nine months ended June 30, 2013 and 2012, respectively.

Share-Based Compensation

Share-Based Compensation

The Company measures the cost of services received in exchange for an award of an equity instrument based on the grant-date fair value of the award.  Compensation cost is recognized over the vesting or requisite service period.

Basic and Diluted Net Income (Loss) per Common Share

Basic and Diluted Net Income (Loss) per Common Share

Basic income (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. The weighted average number of shares is calculated by taking the number of shares outstanding and weighting them by the amount of time that they were outstanding.  Diluted earnings per share reflects the potential dilution that could occur if stock options, warrants, and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company. As of June 30, 2013 and 2012, the Company had no potentially dilutive instruments outstanding.

Diluted loss per share is the same as basic loss per share during periods where net losses are incurred since the inclusion of the potential common stock equivalents would be anti-dilutive as a result of the net loss.  

Concentration of Credit Risk

Concentration of Credit Risk

All of the Company’s cash and cash equivalents are maintained in regional and national financial institutions. The Company has exposure to credit risk to the extent that its cash and cash equivalents exceed amounts covered by the U.S. federal deposit insurance; however, the Company has not experienced any losses in such accounts. In management’s opinion, the capitalization and operating history of the financial institutions are such that the likelihood of material loss is remote.

Subsequent Events

Subsequent Events

The Company has evaluated all transactions occurring between the nine months ended June 30, 2013, through the date of issuance of the financial statements for subsequent event disclosure.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

No accounting standards or interpretations issued recently are expected to a have a material impact on the Company’s financial position, operations or cash flows.

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Document and Entity Information	9 Months Ended
	Jun. 30, 2013
Document And Entity Information
Entity Registrant Name	NATIONAL SCIENTIFIC CORP/AZ
Entity Central Index Key	0001022505
Document Type	10-Q
Document Period End Date	Jun. 30, 2013
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?	No
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding	214,334,216
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2012

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Fair Value Measurements On a Recurring Basis

	Level 1		Level 2		Level 3		Total
At June 30, 2013
Proprietary Technology	$	—	$	—	$	879,076	$	879,076
Total Proprietary Technology	$	—	$	—	$	879,076	$	879,076
At September 30, 2012
Proprietary Technology	$	—	$	—	$	1,022,591	$	1,022,591
Total Proprietary Technology	$	—	$	—	$	1,022,591	$	1,022,591

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Statements of Operations (USD $)	3 Months Ended		9 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Income Statement [Abstract]
REVENUES	$ 137,941	$ 243,480	$ 461,512	$ 460,165
COST OF REVENUES	61,155	61,729	182,315	121,734
GROSS PROFIT	76,786	181,751	279,197	338,431
OPERATING EXPENSES:
Selling, general and administrative	202,005	78,612	537,830	153,045
Research and development	58,044	55,000	153,044	97,000
Impairment of assets	6,000	4,000	6,000	4,000
Total operating expenses	266,049	137,612	696,874	254,045
OPERATING INCOME (LOSS)	(189,263)	44,139	(417,677)	84,386
OTHER INCOME (EXPENSE)
Interest expense	(15)	(181)	(211)	(1,283)
Gain on the disposal of assets			1,353
Total other income (expense)	(15)	(181)	1,142	(1,283)
INCOME (LOSS) FROM CONTINUING OPERATIONS	(189,278)	43,958	(416,535)	83,103
INCOME FROM DISCONTINUED OPERATIONS	1,138		60,084	323,868
NET INCOME (LOSS)	$ (188,140)	$ 43,958	$ (356,451)	$ 406,971
NET INCOME (LOSS) PER COMMON SHARE:
Basic and diluted	$ 0	$ 0	$ 0	$ 0
Continuing operations	$ 0.00	$ 0.00	$ 0.00	$ 0.00
Discontinued operations	$ 0.00	$ 0.00	$ 0.00	$ 0.00
Total	$ 0	$ 0	$ 0	$ 0
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic and diluted	214,211,293	210,980,411	213,052,263	209,237,211

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7. DEBT MITIGATION PROGRAM

9 Months Ended

Jun. 30, 2013

OTHER INCOME (EXPENSE)

7. DEBT MITIGATION PROGRAM

NOTE 7 – DEBT MITIGATION PROGRAM

The Company determined that the statute of limitations for certain of the Company’s creditors to enforce collection of any amounts they might be owed has now elapsed. Based on the determinations and findings, during nine months ended June 30, 2013 and year ended September 30, 2012, the Company recognized a gain on the write-off of liabilities in the amount of $58,984 and $410,482 from third party liabilities, respectively, which was recorded in income from discontinued operations, and additional paid-in capital of $0 and $1,163,109 for related party liabilities, respectively. The Company will continue to conduct this analysis going forward and write-off obligations when such obligations are no longer enforceable based on applicable law.

The following liabilities, through the opinion of legal counsel, were determined by the Company as unenforceable.

	June 30,			September 30,
		2013			2012
Debt Mitigation Program:
Accounts payable and accrued expenses	$	58,984		$	66,281
Disputed salaries & vacation of former officers		—			968,645
Disputed salary – former employee		—			20,256
Disputed payroll taxes for back pay of former officers		—			84,701
Disputed interest		—			227,083
Shareholders demand note payable at 12%		—			11,625
Shareholders demand note payable at 12%		—			20,000
Unsecured note payable at 8% interest due in November 2010, interest payments in default		—			175,000
Total debt mitigation program	$	58,984		$	1,573,591
Gain on write-off of debt	$	(58,984	)	$	(410,483	)
Additional paid-in capital (1)	$	—		$	(1,163,108	)

(1) All amounts that were owed to related parties in prior years were recorded to paid-in-capital.

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6. DISCONTINUED OPERATIONS

9 Months Ended

Jun. 30, 2013

Discontinued Operations and Disposal Groups [Abstract]

6. DISCONTINUED OPERATIONS

NOTE 6- DISCONTINUED OPERATIONS

The Company’s former Board of Directors believed that it was in the best interest of the Company to discontinue the business operation of the GPS operational device business. In 2011, this business was transferred to National Scientific, LLC, a company owned by the Company’s prior CEO, by prior management in which the Company’s former CEO was to pay $100,000 plus 2% of revenues for that technology. The former officer never paid the required compensation.

Accordingly, the Company reclassified the assets, liabilities and operations related to its GPS operational device business as discontinued operations.  Consequently, the accompanying financial statements reflect the assets, liabilities and operations of the GPS operational device business as net assets of discontinued operations, net liabilities of discontinued operations and results from discontinued operations.

The Company closed the acquisition with the final payment for DNA on March 16, 2013. Subsequent to the transaction closing, the sellers refused to pay the transaction fees for medical billing contracts that were processed. The Company filed a lawsuit against the sellers for Breach of Contract among other things in June of 2013. During that time, the Company believes the sellers began contacting all billing contract holders and interfered with the acquisition of all the assets from the transaction. Consequently, the accompanying consolidated financial statements reflect the assets, liabilities and operations of DNA as net assets of discontinued operations, net liabilities of discontinued operations and results from discontinued operations.

Details of the classifications for net assets, liabilities and operations are shown below.

	June 30, 2013		September 30, 2012
Net assets of discontinued operations:
Accounts receivable	$	16,701	$	—
Net assets of discontinued operations	$	16,701	$	—

	June 30, 2013		September 30, 2012
Net liabilities of discontinued operations:
Accounts payable	$	15,601	$	—
Net liabilities of discontinued operations	$	15,601	$	—

	Three Months Ended June 30,
	2013		2012
Discontinued operations:
Revenues	$	266,246	$	—
Cost of sales		—		—
Operating expenses		265,108		—
Interest expense		—		(4,467	)
Gain from write-off of debt		—		4,467
Income from discontinued operations	$	1,138	$	—

	Nine Months Ended June 30,
	2013			2012
Discontinued operations:
Revenues	$	267,146		$	—
Cost of sales		—			—
Operating expenses		(266,046	)		—
Interest expense		—			(13,401	)
Gain from write-off of debt		58,984			337,269
Income from discontinued operations	$	60,084		$	323,868

Commitments and contingencies that were discontinued as a result of the transfer of the assets to National Scientific LLC as follows:

On November 1, 2005, the Company entered into a financing program with Strategic Working Capital Fund, LP. The terms of this program included a five-year note payable at maturity in November 2010 for $175,000, at an annual interest rate of 8%. Interest was due and payable semi-annually on May 1st and November 1st for each year in which the note is outstanding The transaction also included 1,200,000 restricted common shares and a conversion/exchange option to convert the principal amount and any unpaid interest of the Note into common shares at a per share conversion price of $0.0525. These shares included weighted average anti-dilution provisions, as well as piggyback registration rights. Additionally, the note had various put and call rights, and has a right to early payment under certain conditions after 2 years. The 1,200,000 restricted common shares were recorded at $0.043, which was the five-day average market closing price of our stock. The note and common stock were issued with a debt discount of $51,600 and a beneficial conversion feature of $9,933. The discount and beneficial conversion feature are being amortized to interest expense over the term of the note, which is approximately 60 months. The issuance of the shares resulted in deferred financing costs of $24,000. The deferred financing costs were amortized over term of the note, which is approximately 60 months, and are included in the statement of operations as offering costs. Management received a legal opinion and determined that this note is unenforceable and has been written off during the fiscal year ended September 30, 2012 (See Note 7 – Debt Mitigation Program).

On February 24, 2005, March 28, 2005, May 2, 2005, and May 27, 2005 the Company’s former Chairman Michael Grollman made personal loans to the Company totaling $159,000 to assist it with working capital needs. The loans are evidenced by a demand note that provides for repayment within five business days of a demand notice from Mr. Grollman, with interest of 6% compounded annually from June 1, 2005. These loans were secured by an interest in the copyrights in the Company’s iBus

software and designs.  During the three months ended September 30, 2007, these loans were paid down by $11,000. As of September 30, 2007, these loans had a balance outstanding of $148,000 and the interest rate going forward was adjusted to 8% compounded annually from October 1, 2007.  On September 30, 2007, the Company converted unpaid interest of $13,300 on demand notes payable to Michael Grollman into a new demand note of $13,300 that provided for repayment within five business days of a demand notice from Mr. Grollman, with interest of 8% compounded annually on October 1^st. Management received a legal opinion and determined this note is unenforceable and has been written off during the fiscal year ended September 30, 2012 (See Note 7 – Debt Mitigation Program).

On April 27, 2006, the Company secured a short-term loan of $16,625 from a shareholder. The loan carries an origination/placement fee of $500 and has a perfectible security interest a) prior to delivery in any assets purchased for the fulfillment of a customer’s order dated March 16, 2006, and b) in any receivable resulting from the fulfillment of the customer’s purchase order. The interest rate on the loan was 12%. The transaction also included 100,000 warrants to purchase our common stock at $0.036 at any time before April 27, 2009 which have expired unexercised. The note had an approximate maturity date of June 15, 2006. Management received a legal opinion and determined this note is unenforceable and has been written off during the fiscal year ended September 30, 2012 (See Note 7 – Debt Mitigation Program).

On May 31, 2006, we secured a short-term loan of $20,000 from a shareholder. The loan carried an origination/placement fee of $500 and has a perfectible security interest a) prior to delivery in any assets purchased for the fulfillment of Clover Park, WA’s order and b) in any receivable resulting from the fulfillment of the Clover Park purchase order. The interest rate on the loan was 12%. The transaction also included 100,000 warrants to purchase our common stock at $0.036 at any time before May 31, 2009 which expired unexercised. The note had a maturity date of July 10, 2006. Management received a legal opinion and determined this note is unenforceable and has been written off during the fiscal year ended September 30, 2012 (See Note 7 – Debt Mitigation Program).

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7. DEBT MITIGATION PROGRAM - (Details) (USD $)	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	6 Months Ended	12 Months Ended	6 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended
	Jun. 30, 2013	Sep. 30, 2012	Jun. 30, 2013 Accounts Payable and Accrued Liabilities [Member]	Sep. 30, 2012 Accounts Payable and Accrued Liabilities [Member]	Jun. 30, 2013 Disputed Salaries & Vacation of Former Officers	Sep. 30, 2012 Disputed Salaries & Vacation of Former Officers	Jun. 30, 2013 Disputed Salaries of Former Employee	Sep. 30, 2012 Disputed Salaries of Former Employee	Jun. 30, 2013 Disputed Payroll Taxes for Back Pay of Former Officers	Sep. 30, 2012 Disputed Payroll Taxes for Back Pay of Former Officers	Jun. 30, 2013 Disputed Interest	Sep. 30, 2012 Disputed Interest	Jun. 30, 2013 Shareholders Demand Note payable at 12% (1)	Sep. 30, 2012 Shareholders Demand Note payable at 12% (1)	Jun. 30, 2013 Shareholders Demand Note payable at 12% (2)	Sep. 30, 2012 Shareholders Demand Note payable at 12% (2)	Jun. 30, 2013 Unsecured Note Payable at 8% interest due in November 2010, interest payments in default	Sep. 30, 2012 Unsecured Note Payable at 8% interest due in November 2010, interest payments in default
Total debt mitigation program	$ 58,984	$ 1,573,591	$ 58,984	$ 66,281		$ 968,645		$ 20,256		$ 84,701		$ 227,083		$ 11,625		$ 20,000		$ 175,000
Gain on write-off of debt	(58,984)	(410,483)
Additional paid-in capital		$ (1,163,108)

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5. SOFTWARE (Tables)

9 Months Ended

Jun. 30, 2012

Research and Development [Abstract]

Research and Development

	June 30, 2013			September 30, 2012
Source Code License	$	2,500		$	2,500
Software License		1,200,106			1,200,106
EMR Certification		23,000			—
Encryption Software Code		15,800			—
Acquisition of Doctor’s Network of America		10,000			4,000
Total intangible assets		1,251,406			1,206,106
Accumulated amortization of intangible assets		(362,330	)		(180,015	)
Impairment of assets		(10,000	)		(4,000	)
Total intangible assets	$	879,076		$	1,022,591

Cost Basis for for Assets Acquired under Common Control

Cost basis for assets acquired  under Common Control	Cost Basis
Cost basis of Consideration:
Absolute Medical Software Systems LLC development costs from inception	$	1,011,222
Impairment of software on September 10, 2008 to value		(11,222	)
Total Value at September 10, 2008	$	1,000,000
Software Update to Operate on Cloud Based Platform
Absolute Medical Software Systems LLC development costs	$	200,106
Total Cost Basis at January 1, 2011	$	1,200,106

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10. EQUITY

9 Months Ended

Jun. 30, 2013

Equity [Abstract]

10. EQUITY

NOTE 10 - EQUITY

As of June 30, 2013, the Company was authorized to issue 650,000,000 common shares and 4,000,000 preferred shares at a par value of $0.01.

Nine Months Ended June 30, 2013

Stock Issued for Cash

During the nine months ended June 30, 2013, the Company issued 197,500 shares of common stock for $141,000 in net cash proceeds as follows:

Date		Number of Shares		Proceeds
	October 14, 2012		20,000	$	20,000
	October 14, 2012		15,000		3,000
	October 14, 2012		18,750		2,500
	October 14, 2012		18,750		2,500
	December 6, 2012		15,000		3,000
	March 12, 2013		20,000		20,000
	March 12, 2013		20,000		20,000
	March 31, 2013		50,000		50,000
	March 27, 2013		20,000		20,000
	Total		197,500	$	141,000

Stock Issued in Connection with Software Licensing and Subscription Agreements

During the nine months ended June 30, 2013, the Company issued 400,000 shares of common stock valued at $12,313 based on the market price on the date of grant, to customers, in regards to the purchase of software from the Company in accordance with the Software Licensing and Subscription Agreements. The fair values of the shares issued were recorded as a reduction of software revenue recognized during the three months ended June 30, 2013.

Date		Number of Shares		Fair Value
	October 14, 2012		50,000	$	1,300
	December 6, 2012		100,000		2,800
	March 12, 2013		50,000		1,750
	March 21, 2013		50,000		1,750
	March 21, 2013		50,000		1,750
	April 17, 2013		25,000		838
	April 17, 2013		50,000		1,675
	June 26, 2013		25,000		450
	Total		400,000	$	12,313

Stock Issued for Services

During the nine months ended June 30, 2013, the Company issued 945,500 shares of common stock as compensation. The fair values of the shares were a total of $31,829 and were recorded at the market price on the date of grant. The issuances of stock were as follows:

Date		Number of Shares		Fair Value		Description of Services
	October 14, 2012		10,000	$	260	Commission
	December 6, 2012		100,000		2,800	Compensation
	March 12, 2013		50,000		1,750	Consulting
	March 21, 2013		167,000		5,845	Compensation
	March 21, 2013		500,000		17,500	Compensation
	April 17, 2013		78,500		2,630	Compensation
	May 1, 2013		20,000		522	Programming
	May 10, 2013		20,000		522	Programming
	Total		945,500	$	31,829

Stock Issued for Assets Acquisition

On April 17, 2013, the Company issued 300,000 shares of common stock valued at $6,000, based on the market price on the date of grant, to Krooss Family Trust LLP for the acquisition of Doctors Network of America in Flowood, Mississippi and all of the assets of that company.

During the nine months ended June 30, 2013, the Company issued 500,004 shares of common stock for the acquisition of CipherSmith software. Those shares were valued at $15,800 based on the market price on the dates of grant.

Nine Month Ended June 30, 2012

Stock Issued for Cash

During the nine months ended June 30, 2012, the Company issued 190,000 shares of common stock for proceeds of $68,000 as follows:

Date		Number of Shares		Proceeds
	October 15, 2011		25,000	$	5,000
	December 29, 2011		100,000		50,000
	June 21, 2012		65,000		13,000
	Total		190,000	$	68,000

Stock Issued in Connection with Software Licensing and Subscription Agreements

During the nine months ended June 30, 2012, the Company issued 606,333 shares of common stock valued at $9,251 based on the market price on the date of grant, to customers, in regards to the purchase of software from the Company in accordance with the Software Licensing and Subscription Agreements. The fair values of the shares issued were recorded as a reduction of software revenue recognized during the nine months ended June 30, 2012.

Date		Number of Shares		Fair Value
	December 29, 2011		100,000	$	1,150
	May 29, 2012		25,000		400
	May 29, 2012		50,000		800
	May 29, 2012		100,000		1,600
	May 29, 2012		150,000		2,400
	May 29, 2012		181,333		2,901
	Total		606,333	$	9,251

Stock Issued for Services

During the nine months ended June 30, 2012, the Company issued 19,000 shares of common stock for compensation. The fair values of the shares were a total of $204 and were recorded at the market price on the date of grant. The issuances of stock were as follows:

Date		Number of Shares		Fair Value		Description of Services
	December 5, 2011		8,000	$	82	Legal services
	December 5, 2011		10,000		102	Advisory service
	June 21, 2012		1,000		20	Commission
	Total		19,000	$	204

Stock Issued for Debt Settlement

On October 15, 2011, the Company issued 30,000,000 shares of common stock for the conversion of debt from our CEO in the principal amount of $1,200,106.

Stock Issued for Assets Acquisition

The Company issued 200,000 shares of common stock on June 21, 2012 to Krooss Medical Management in accordance with the acquisition agreement for Doctors Network of America and recorded it at the market price of the common shares of $0.02 and as an investment in Krooss Medical Management of $4,000.

Preferred Stock

The Company has authorized 4,000,000 shares of preferred stock, at $0.01 par value and 4,000,000 are issued and outstanding as of September 30, 2013. Each share of the Preferred Stock has 150 votes on all matters presented to be voted by the holders of our common stock. All 4,000,000 shares of preferred stock have been granted to our CEO & CFO on November 30, 2010 and issued on April 11, 2012 which was valued at the trading price of the common stock of $0.0095 and recorded as an expense of $38,000.

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8. COMMITMENT AND CONTINGENCIES

9 Months Ended

Jun. 30, 2013

COMMITMENTS AND CONTINGENCIES

8. COMMITMENT AND CONTINGENCIES

NOTE 8 – COMMITMENT AND CONTINGENCIES

Rent expense for the nine months ended June 30, 2013 and 2012 was $0 for both periods.

The Company has issued shares to new investors since January 2, 2011, that have an anti-reverse common stock split clause if the Company reverse splits the common stock. The reverse split of common stock is determined by management but must be approved by Financial Industry Regulation Authority (“FINRA”). Presently FINRA has denied the Company the right to reverse split the common stock until all Securities and Exchange Commission filings are current and at that point and time the Company will submit a request to FINRA to execute a reverse split of the common stock of the Company. The current investors holding anti-reverse split stock will have the right to hold the same number of shares of common stock as status quo after the reverse split. The anti-reverse split common stock protection is only for stock subject to reverse split and once the Company declares a reverse split and it is completed, the anti-reverse split protection will be terminate and shareholders that received anti-reverse split stock will be held with regular stockholders as the Company proceeds forward. In accordance with the anti-reverse split provision, no further shares will be issued to the anti-reverse split shareholders once the reverse split is approved and completed.

As discussed in Note 7, the Company has written off $58,984 and $1,573,591 in accounts payable, accrued liabilities and notes payable based on the opinion of legal counsel for the nine months ended June 30, 2012 and the year ended September 30, 2012. However, the related creditors could make a claim in the future in regards to these liabilities.

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9. RELATED PARTY TRANSACTIONS

9 Months Ended

Jun. 30, 2013

Related Party Transactions [Abstract]

9. RELATED PARTY TRANSACTIONS

NOTE 9– RELATED PARTY TRANSACTIONS

On October 15, 2011 the Company issued 30,000,000 shares of common stock to Absolute Medical Software Systems, LLC, an entity owned by MDLG, in full payment of the promissory note and interest accrued in the principal amount of $1,200,106, as of the date of conversion. The market price per share on the date of grant was $0.008 per share. No gain or loss was recorded on the conversion of the convertible promissory note.

The Company repaid $25,591 and $148,654 of the advances from the Company’s CEO in the nine months ended June 30, 2013 and 2012, respectively. The advances from the CEO are due on demand and do not accrue interest. As of June 30, 2013 and September 30, 2012, the amount owed to the CEO for advances was $0 and $25,591, respectively.

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11. SUBSEQUENT EVENTS

9 Months Ended

Jun. 30, 2013

Subsequent Events [Abstract]

11. SUBSEQUENT EVENTS

NOTE 11 – SUBSEQUENT EVENTS

In October 2013, the Company through a purchase agreement with Antree Systems Limited has purchased a complete source code, intellectual property rights, all computer software, patents, or formulas, algorithm licensed or sold under a project known as Compass Rose and appropriate copyrights, patents, mask works, trademarks, service marks, internet domain names and world wide web uniform resource locators (“URLs”) from Antree Systems Limited. The Company issued 200,000 shares of its common stock as consideration for the purchase. The fair value of the consideration and the assets acquired is based on the fair value of the common stock issued in exchange for the software. The total fair value, based on the market price on the date of grant, was $6,000. The Company evaluated this acquisition and determined that it did not meet the definition of a significant business acquisition.

In November 2013, the Company entered into a revolving line of credit with Mutual of Omaha for a line of credit in the amount of $65,000 at 4.00% interest rate which renews annually. As of January 10, 2014, the Company had borrowed $36,500.

On December 17, 2013, the Company amended its Articles of Incorporation that gave the right to the holders of Preferred A shares to convert 1 share of Convertible Preferred A shares to 150 Common Shares of the Company. The holders of the Preferred A shares can convert the shares upon proper notice and approval of the Board of Directors. Presently, the holders of the Preferred A shares have not sent notice to the Board of Directors.

Stock issuances

Period from July 1, 2013 to September 30, 2013

Stock Issued for Cash

During the three months ended September 30, 2013, the Company issued 20,000 shares of common stock for $2,000 in net proceeds as follows:

Date		Number of Shares		Proceeds
	August 26, 2013		20,000	$	2,000
	Total		20,000	$	2,000

Stock Issued in Connection with Software Licensing and Subscription Agreements

During the three months ended September 30, 2013, the Company issued 50,000 shares of common stock valued at $1,250 based on the market price on the date of grant, to customers, in regards to the purchase of software from the Company in accordance with the Software Licensing and Subscription Agreements. The fair values of the shares issued were recorded against software revenue recognized during the year ended September 30, 2013.

Date		Number of Shares		Fair Value
	September 30, 2013		50,000	$	1,250
	Total		50,000	$	1,250

Stock Issued for Services

During the three months ended September 30, 2013, the Company issued 220,000 shares of common stock as compensation. The fair values of the shares were a total of $4,800 and were recorded at the market price on the date of grant. The issuances of stock were as follows:

Date		Number of Shares		Fair Value		Description of Services
	August 26, 2013		100,000	$	1,800	Software Sales
	September 30, 2013		60,000		1,500	Programming
	September 30, 2013		60,000		1,500	Programming
	Total		220,000	$	4,800

Fiscal Year Ending September 30, 2014

In October 2013, the Company issued 25,000 shares of common stock for net cash proceeds of $5,000.

In October 2013, the Company issued 200,000 shares of common stock for purchase of assets from Antree Systems Limited. These shares were valued at $6,000 based on the market price on the date of grant.

In November 2013, the Company issued 180,000 shares of common stock as replacement shares for the 160,000 shares of common stock issued to Antree Systems Limited and 20,000 shares of common stock to Kimberly Ilicerl. The Company intends to cancel the original shares because the shares were lost during delivery to Antree Systems. The Company replaced those lost shares and canceled the shares that were lost when delivered to Ireland the office of Antree Systems.

On December 4, 2013, the Company issued 120,000 shares of common stock valued at $3,600 based on the market price on the date of grant, for the purchase of the software licensing and subscription agreements.

On January 12, 2014, the Company issued 10,000 shares of common stock for net cash proceeds of $10,000. 

Employment Agreements

The Company entered into an employment agreement with its Chief Executive Officer on January 1, 2013.  The employment agreement will expire on January 1, 2018 and shall automatically renew for another 5 years unless terminated in accordance with the provisions of the employment agreement. The employment agreement provides for:

i.	A monthly salary of $20,833 subject to an annual increase of 10% and consistent with the Company policy applicable to other senior executives and officers and approval by the Board of Directors.
ii.	A cash bonus of 25% of his annual base salary each year if the Company reaches the following milestones (none of which were attained in 2013):
a.		The Company posts annual gross revenues on a consolidated basis of at least $5,000,000;
b.		The Company's earnings before the deduction of income taxes and amortization expenses (“EBITA”), including cash extraordinary items but before officer's bonuses, on a consolidated basis for any year is at least $1,000,000; or the completion of the delinquent SEC filings for five (5) years through September 30, 2013 or the Company obtains FINRA approval for any reverse stock splits.
iii.	The issuance of shares equal to greater of 3,000,000 restricted common shares, or 1% of the outstanding shares.
iv.	The issuance of common stock on each anniversary date of the employment agreement of 5,000,000 shares and issuance of common stock for every acquisition granting 5,000,000 shares for DNA, 5,000,000 shares for CipherSmith, LLC, and 1,000,000 shares for MediSouth, LLC.
v.	An automobile allowance of $1,500 per month.
vi.	A medical insurance allowance of $1,500 per month.
vii.	In the event the Executive's employment is terminated without cause, he will receive the entire contract remaining on the agreement.

The Company entered into an employment agreement with its Chief Financial Officer on January 1, 2013.  The employment agreement will expire January 1, 2018 and shall automatically renew for another 5 years unless terminated in accordance with the provisions of the employment agreement. The employment agreement provides for:

i.	A monthly salary of $12,500 per month subject to an annual increase of 10% per year and consistent with the Company policy applicable to other senior executives and officers and approval by the Board of Directors.
ii.	A cash bonus of 25% of her annual base salary each year if the Company reaches the following milestones (none of which were attained in 2013):
a.		The Company posts annual gross revenues on a consolidated basis of at least $5,000,000;
b.		The Company's EBITA, including cash extraordinary items but before officer's bonuses, on a consolidated basis for any year is at least $1,000,000; or the completion of the delinquent SEC filings for five (5) years through September 30, 2013 or the Company obtains FINRA approval for any reverse stock splits.
iii.	The issuance of shares equal to greater of 3,000,000 restricted common shares, or 1% of the outstanding shares.
iv.	The issuance of common stock on each anniversary date of the employment agreement of 5,000,000 shares and issuance of common stock for every acquisition granting 3,000,000 shares for DNA, 3,000,000 shares for CipherSmith, LLC, and 750,000 shares for MediSouth, LLC.
v.	An automobile allowance of $1,000 per month.
vi.	A medical insurance allowance of $1,500 per month.
vii.	In the event the Executive's employment is terminated without cause, she will receive the entire contract remaining on the agreement.

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7. DEBT MITIGATION PROGRAM (Tables)

9 Months Ended

Jun. 30, 2013

OTHER INCOME (EXPENSE)

Debt Mitigation Program

	June 30,			September 30,
		2012			2012
Debt Mitigation Program:
Accounts payable and accrued expenses	$	58,984		$	66,281
Disputed salaries & vacation of former officers		—			968,645
Disputed salary – former employee		—			20,256
Disputed payroll taxes for back pay of former officers		—			84,701
Disputed interest		—			227,083
Shareholders demand note payable at 12%		—			11,625
Shareholders demand note payable at 12%		—			20,000
Unsecured note payable at 8% interest due in November 2010, interest payments in default		—			175,000
Total debt mitigation program	$	58,984		$	1,573,591
Gain on write-off of debt	$	(58,984	)	$	(410,483	)
Additional paid-in capital (1)	$	—		$	(1,163,108	)

(1) All amounts that were owed to related parties in prior years were recorded to paid-in-capital.

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3. GOING CONCERN ISSUES (Details Narrative) (USD $)	Jun. 30, 2103	Jun. 30, 2013	Sep. 30, 2012
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accumulated Deficit	$ (26,267,542)	$ (26,267,542)	$ (25,914,774)

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Statements of Cash Flows (USD $)	9 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$ (356,451)	$ 406,971
Income from discontinued operations	60,084	323,868
Income (loss) from continuing operations	(416,535)	83,103
Depreciation and amortization	182,315	120,010
Impairment of assets	6,000	4,000
Gain on the disposal of assets	(1,353)
Stock issued for compensation	31,829	204
Accounts receivable	132	(2,300)
Accounts payable and accrued liabilities	145,256	11,474
Net cash (used in) provided by operating activities	(40,043)	225,742
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of assets	1,353
Purchase of intangible asset	(11,500)
Net cash (used in) investing activities	(10,147)
Advances from officer		33,462
Repayment of advances from officer	(25,591)	(148,654)
Proceeds from line of credit	5,664
Repayment of line of credit	(22,427)	(22,512)
Common stock issued for cash	141,000	68,000
Net cash provided by (used in) financing activities	98,646	(69,704)
INCREASE IN CASH	48,456	156,038
CASH, BEGINNING OF PERIOD	51,356	11,016
CASH, END OF PERIOD	99,812	167,054
CASH PAID FOR:
Interest
Taxes
NONCASH OPERATING, INVESTING AND FINANCING ACTIVITIES:
Common stock issued for purchase of intangible assets	21,800	4,000
Accrual of software acquisition costs	11,500
Reclass from discontinued operations to accounts payable		213,779
Write-off of debt - related parties		1,222,812
Common stock issued for settlement of debt		$ 1,200,106

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5. SOFTWARE

9 Months Ended

Jun. 30, 2013

Research and Development [Abstract]

5. SOFTWARE

NOTE 5 – SOFTWARE

The following is a detail of software at March 31, 2013 and September 30, 2012:

	June 30, 2013			September 30, 2012
Source Code License	$	2,500		$	2,500
Software License		1,200,106			1,200,106
EMR Certification		23,000			—
Encryption Software Code		15,800			—
Acquisition of Doctor’s Network of America		10,000			4,000
Total intangible assets		1,251,406			1,206,106
Accumulated amortization of intangible assets		(362,330	)		(180,015	)
Impairment of assets		(10,000	)		(4,000	)
Total intangible assets	$	879,076		$	1,022,591

The Company’s software was placed into service starting in the second quarter of fiscal year ended September 30, 2012. The amortization expense was $182,315 and $120,010 for the nine months ended June 30, 2013 and 2012, respectively. The Company recognized a $6,000 and $4,000 impairment of Doctors Network of America (“DNA”) operating in Flowood, Mississippi during the nine months ended June 30, 2013 and the year ended September 30, 2012, respectively. The Company is currently in litigation with the sellers of DNA relating to the collection of certain medical billings owed to the Company. As a result of the litigation, the Company deemed the investment to be impaired.

Source Code License

On August 14, 2012, the Company, through a comprehensive agreement with MediSouth, LLC, (“MediSouth”) has purchased a complete source code license and will integrate and enhance this feature set as part of its Cloud-MD Office product suite.

The License Agreement requires the following:

a)	That MediSouth will provide the Companywith all software updates for the license within 5 working days of MediSouthimplementing those same software updates in its own production version of the license.
b)	The Company has the right to modify the software contained in the license to meet its operational needs.
c)	The Company shall provide to MediSouth, with the permission of each affected Company client, the de-identified purchasing data which is any data that would identify a patient such as social security numbers, date of birth, health condition, among others that it collects as a result of the Company’s clients utilizing the embedded Medical Supplies and Pharmaceutical Inventory Management functionality provided by the license.
e)	MediSouth shall receive 100,000 shares of the Company’s non-dilutable, commonstock with a one (1) year trading restriction.
f)	The Company may not sell the license, transfer the license, allow any other entity to use the license as part of that entity's software application or transfer any rights to another party to use the license separately from the Company’s products in which the license is embedded.

The fair value of the consideration and the assets acquired is based on the aggregate value of the 100,000 shares of common stock issued in exchange for the software. The total fair value on August 14, 2012 was $2,500.

Software License

On January 2, 2011, the Company entered into an asset purchase agreement with certain private companies owned by Michael de la Garza (“MDLG”), the Company’s CEO, whereby the Company acquired the rights to proprietary medical billing and practice management software developed by the private companies.

The Company issued a $1,200,106 convertible promissory note with an 8% interest rate and convertible into common stock of the Company at a price to be determined later in exchange for the purchase of the software. The note matures on April 30, 2021.

In October 2011, the Company issued Absolute Medical Software Systems, LLC, an entity owned by MDLG, 30,000,000 shares of common stock in full payment of this promissory note and interest accrued as of the date of conversion. The market price per share on the date of grant was $0.008 per share. No gain or loss was recorded on the conversion of the convertible promissory note.

The Company has determined that due to the voting rights of the Preferred A shares owned by MDLG, that the transaction occurred between parties under common control. Accordingly, the Company has determined that the cost basis of the software acquired should become the cost basis of the Company.

Cost basis for assets acquired  under Common Control	Cost Basis
Cost basis of Consideration:
Absolute Medical Software Systems LLC development costs from inception	$	1,011,222
Impairment of software on September 10, 2008 to value		(11,222	)
Total Value at September 10, 2008	$	1,000,000
Software Update to Operate on Cloud Based Platform
Absolute Medical Software Systems LLC development costs	$	200,106
Total Cost Basis at January 1, 2011	$	1,200,106

Encryption Software Code

On November 21, 2012, the Company purchased from CipherSmith, LLC, a complete source code, intellectual property rights, all computer software or algorithm licensed or sold under CipherSmith, and appropriate copy rights, patents, mask works, trademarks, service marks, internet domain names or world wide web URS. The Company issued 500,004 shares of its common stock as payment for the acquisition. The fair value of the consideration and the assets acquired is based on the aggregate fair value of the common stock issued in exchange for the software. The total fair value of the shares of common stock issued on the date of grant was $15,800

Doctors Network of America

On June 22, 2012, the Company entered into an acquisition agreement that closed on March 16, 2013. The Company agreed to acquire DNA in Flowood, Mississippi from Krooss Medical Management Systems, LLC (“Krooss”) for 500,000 shares of common stock. As of September 30, 2012, only 200,000 shares of common stock were issued as a deposit, which was valued at $4,000 based on the market value on the date of grant. At the closing of the transaction on March 16, 2013, the Company issued an additional 300,000 shares of common stock which were valued at $6,000 based on the market value on the date of grant.

Subsequent to the transaction closing on March 16, 2013, the sellers refused to pay for medical billing process transaction fees in accordance with their contracts in the amount of approximately $200,000. The Company and the sellers are currently in litigation over the disputed transaction fees of $200,000. The Company has recorded an impairment of the acquired asset in the amount of $6,000 and $4,000 for the nine months ended June 30, 2013 and the year ended September 30, 2012, respectively.

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $)	3 Months Ended		9 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Accounting Policies [Abstract]
FDIC Cash Insured	$ 250,000		$ 250,000
Subscription Revenue in Year One	1,200
Subscription Revenue in Year Two	1,500
Subscription Revenue in Year Three	1,800
Subscription Revenue in Year Four	2,400
Sales Commissions	10,000	28,028	50,260	53,205
Research and Development Costs	$ 58,044	$ 55,000	$ 153,044	$ 97,000

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6. DISCONTINUED OPERATIONS (Tables)

9 Months Ended

Jun. 30, 2013

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

	June 30, 2013		September 30, 2012
Net assets of discontinued operations:
Accounts receivable	$	16,701	$	-
Net assets of discontinued operations	$	16,701	$	-

	June 30, 2013		September 30, 2012
Net liabilities of discontinued operations:
Accounts payable	$	15,601	$	-
Net liabilities of discontinued operations	$	15,601	$	-

		Three Months Ended June 30,
		2013	2012
Discontinued operations:
Revenues	$	266,246	$	-
Cost of sales		-		-
Operating expenses		265,108		-
Interest expense		-		(4,467)
Gain from write-off of debt		-		4,467
Income from discontinued operations	$	1,138	$	-

		Nine Months Ended June 30,
		2013	2012
Discontinued operations:
Revenues	$	267,146	$	-
Cost of sales		-		-
Operating expenses		(266,046)		-
Interest expense		-		(13,401)
Gain from write-off of debt		58,984		337,269
Income from discontinued operations	$	60,084	$	323,868