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Income Taxes | 12 Months Ended
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Sep. 30, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | NOTE 10. - INCOME TAXES The Company utilizes the guidance issued by the FASB for accounting for income taxes which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes represents the tax payable for the period and the change during the period in deferred tax assets and liabilities. Components of the net deferred tax asset (liability) at September 30, 2019 and 2018 are as follows:
|  | 2019 |  |  | 2018 |
Deferred tax assets: |  |  |  |  |  |  |
Accrued compensation | $ | 1,310,466 |  |  | $ | 1,085,908 |
Stock compensation |  | 3,609,756 |  |  |  | 4,188,368 |
Capitalized research and development |  | 926,026 |  |  |  | 1,227,137 |
Fixed Assets |  | 438,882 |  |  |  | 404,836 |
Net operating losses |  | 105,372,571 |  |  |  | 114,142,741 |
Intangible Assets |  | 3,590,090 |  |  |  | 3,854,752 |
California Alternative Minimum Tax |  | 173,553 |  |  |  | — |
Deferred Rent |  | 821,317 |  |  |  | 566,535 |
Capital Loss |  | 709,779 |  |  |  | 709,779 |
Total deferred tax assets |  | 116,952,440 |  |  |  | 126,180,056 |
Valuation allowance |  | (108,232,402 | ) |  |  | (116,875,075 | )
Deferred tax liabilities: |  |  |  |  |  |  |
State taxes |  | (8,720,038 | ) |  |  | (9,304,981 | )
Total deferred tax liability |  | (8,720,038 | ) |  |  | (9,304,981 | )
Net deferred tax assets (liabilities) | $ | — |  |  | $ | — |
The Company has concluded, in accordance with the applicable accounting standards, that it is more likely than not that the Company may not realize the benefit of all of its deferred tax assets. Accordingly, management has provided a 100% valuation allowance against its deferred tax assets until such time as management believes that its projections of future profits as well as expected future tax rates make the realization of these deferred tax assets more-likely-than-not. Significant judgment is required in the evaluation of deferred tax benefits and differences in future results from our estimates could result in material differences in the realization of these assets. The Company has recorded a full valuation allowance related to all of its deferred tax assets. The Company has performed an assessment of positive and negative evidence regarding the realization of the net deferred tax asset in accordance with FASB ASC 740-10, “Accounting for Income Taxes.” This assessment included the evaluation of scheduled reversals of deferred tax liabilities, the availability of carry forwards and estimates of projected future taxable income. As of September 30, 2019, the Company had available gross federal net operating loss (NOL) carry forwards of approximately $314.8 million and gross state NOL carry forwards of $211.5 million. The NOLs expire at various dates through 2039. The provisions for income taxes for the years ended September 30, 2019 and 2018 are as follows:
| 2019 |  |  | 2018 |
Federal: |  |  |  |  |  |  |
Current | $ | — |  |  | $ | — |
Deferred |  | — |  |  |  | — |
Total Federal | $ | — |  |  | $ | — |
State: |  |  |  |  |  |  |
Current | $ | 173,553 |  |  | $ | 2,400 |
Deferred |  | — |  |  |  | — |
Total State | $ | 173,553 |  |  | $ | 2,400 |
Provision from income taxes | $ | 173,553 |  |  | $ | 2,400 |
The Company’s effective income tax rate differs from the statutory federal income tax rate as follows for the years ended September 30, 2019 and 2018:
|  | 2019 |  |  | 2018 |
At U.S. federal statutory rate |  | 21.0 | % |  |  | 21.0 | %
State taxes, net of federal effect |  | 7.3 |  |  |  | 7.9 |
Stock compensation |  | (15.0 | ) |  |  | 2.6 |
Mark-to-market adjustments |  | 0.0 |  |  |  | 0.2 |
Valuation allowance |  | (13.0 | ) |  |  | 36.2 |
Federal tax rate change in 2018 |  | — |  |  |  | (67.9 | )
Effective income tax rate |  | 0.3 | % |  |  | 0.0 | %
In December 2017, the President of the United States signed into law the Tax Cuts and Jobs Act, or TCJA, tax reform legislation. The TCJA makes significant changes in U.S. tax law including a reduction in the corporate tax rates, changes to net operating loss carryforwards and carrybacks, and a repeal of the corporate alternative minimum tax. The TCJA reduced the U.S. corporate tax rate from the current rate of 35 percent down to 21 percent starting on January 1, 2018. As a result of the TCJA, the Company was required to revalue deferred tax assets and liabilities at 21 percent during the year ended September 30, 2018. This revaluation resulted in a provision of $37.0 million to income tax expense in continuing operations and a corresponding reduction in the valuation allowance during the year ended September 30, 2018. As a result, there was no impact to our Consolidated Statements of Comprehensive Income (Loss) as a result of the reduction in tax rates. The other provisions of the TCJA did not have a material impact on our Consolidated Financial Statements. The Company has adopted guidance issued by the FASB that clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold of more likely than not and a measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In making this assessment, a company must determine whether it is more likely than not that a tax position will be sustained upon examination, based solely on the technical merits of the position and must assume that the tax position will be examined by taxing authorities. The Company’s policy is to include interest and penalties related to unrecognized tax benefits in income tax expense. The Company has not recognized any unrecognized tax benefits and does not have any interest or penalties related to uncertain tax positions as of September 30, 2019 and 2018. The Company files income tax returns with the Internal Revenue Service (“IRS”), the state of California, the Australia Tax Office (“ATO”) and certain other taxing jurisdictions. The Company is subject to income tax examinations by the IRS and by state tax authorities until the net operating losses are settled. During the year ended September 30, 2016, the IRS commenced an audit for the tax year ended September 30, 2015. The IRS audit concluded without any material adjustments.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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