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Income Taxes | 12 Months Ended
--- | ---
Sep. 30, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES Income Tax Provision The provision for income taxes consisted of the following components:
| September 30,
| 2022 |  | 2021
| (in thousands)
Federal: |  |  |
Current | $ | — |  |  | $ | — |
Deferred | — |  |  | — |
| — |  |  | — |
State: |  |  |
Current | 304 |  |  | 2 |
Deferred | — |  |  | — |
| 304 |  |  | 2 |
Foreign: |  |  |
Current | 3,481 |  |  | — |
Deferred | — |  |  | — |
| 3,481 |  |  | — |
Total: |  |  |
Current | 3,785 |  |  | 2 |
Deferred | — |  |  | — |
Income tax provision | $ | 3,785 |  |  | $ | 2 |
The following table presents a reconciliation of the tax expense based on the statutory rate to the Company’s actual tax expense in the consolidated statements of operations:
| September 30,
| 2022 |  | 2021 |  | 2020
At U.S. federal statutory rate | -21.0 | % |  | -21.0 | % |  | -21.0 | %
State taxes, net of federal effect | -8.6 | % |  | -7.0 | % |  | -7.0 | %
Stock compensation | 1.7 | % |  | -1.3 | % |  | -13.3 | %
Valuation allowance | 28.4 | % |  | 29.3 | % |  | 43.3 | %
Other | 1.7 | % |  | 0.0 | % |  | -2.0 | %
Effective income tax rate | 2.2 | % |  | 0.0 | % |  | 0.0 | %
Deferred Income Taxes The following table presents the significant components of the Company’s net deferred tax assets and liabilities:
| September 30,
| 2022 |  | 2021
| (in thousands)
Deferred tax assets: |  |  |
Accrued Compensation | $ | 2,961 |  |  | $ | 2,371 |
Stock Compensation | 41,479 |  |  | 22,454 |
Capitalized Research & Development | 324 |  |  | 324 |
California Alternative Minimum Tax | 483 |  |  | 179 |
Net Operating Losses | 171,319 |  |  | 185,431 |
Intangible Assets | 2,973 |  |  | 3,562 |
Deferred Revenue | 38,810 |  |  | — |
Right of Use Assets/Lease Liabilities | 2,844 |  |  | 1,938 |
Capital Loss | 1,679 |  |  | — |
Total gross deferred tax assets | $ | 262,872 |  |  | $ | 216,259 |
Valuation allowance | $ | (242,394) |  |  | $ | (194,255) |
Deferred tax liabilities: |  |  |
Fixed Assets | $ | (1,088) |  |  | $ | (6,360) |
State taxes | (19,390) |  |  | (15,644) |
Total gross deferred tax liability | $ | (20,478) |  |  | $ | (22,004) |
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 the Company’s estimates could result in material differences in the realization of these assets. The Company has performed an assessment of positive and negative evidence regarding the realization of the net deferred tax asset. 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, 2022, the Company had available gross federal net operating loss (“NOL”) carry forwards of $504.8 million and gross state NOL carry forwards of $626.5 million. The NOLs expire at various dates through 2042. Uncertainty in Income Taxes 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 following table summarizes the Company’s gross unrecognized tax benefits:
| Year Ended September 30,
| 2022 |  | 2021 |  | 2020
| (in thousands)
Beginning balance of unrecognized tax benefits | $ | — |  |  | $ | — |  |  | $ | — |
Increase for prior period tax positions | 3,481 |  |  | — |  |  | — |
Ending balance of unrecognized tax benefits | $ | 3,481 |  |  | $ | — |  |  | $ | — |
Included in the balance of unrecognized tax benefits at September 30, 2022, 2021 and 2020 were $3.5 million, $0 and $0 respectively, that if the Company recognized, would affect its effective tax rate. The Company recognizes interest accrued related to unrecognized tax benefits and penalties as income tax expense. During the years ended September 30, 2022 and 2021, the Company recognized $1.4 million and $0, respectively, of accrued interest and penalties related to gross unrecognized tax benefits. The Company does not foresee any material changes to its gross unrecognized tax benefits within the next twelve months. The Company and its subsidiaries file income tax returns with the Internal Revenue Service, the state of California and certain other taxing jurisdictions. The Company is subject to income tax examinations by the Internal Revenue Service and by state tax authorities until the net operating losses are settled. The Company is under examination by the state of California for the years 2018 and 2019.

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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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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