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14. INCOME TAXES | 12 Months Ended
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Sep. 30, 2022
Income Tax Disclosure [Abstract] |
INCOME TAXES | 14. INCOME TAXES The Company provides for income taxes under FASB ASC 740, Accounting for Income Taxes. FASB ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect currently. FASB ASC 740 requires the reduction of deferred tax assets by a valuation allowance, if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In the Company’s opinion, it is uncertain whether they will generate sufficient taxable income in the future to fully utilize the net deferred tax asset. Accordingly, a valuation allowance equal to the deferred tax asset has been recorded. Due to the enactment of the Tax Reform Act of 2017, we have calculated our deferred tax assets using an estimated corporate tax rate of 21%. U.S. Tax codes and laws may be subject to further reform or adjustment which may have a material impact to the Company’s deferred tax assets and liabilities. For the years ended September 30, 2022 and 2021 the Company's income (loss) from continuing operations before provision for income taxes were as follows:
|  | September 30, 2022 |  |  | September 30, 2021 |
Domestic |  | $ | (40,089,393 | ) |  | $ | (8,229,162 | )
Foreign |  |  | - |  |  |  | - |
Loss before income taxes |  | $ | (40,089,393 | ) |  | $ | (8,229,162 | )
The component of the provision for income taxes in the years ended September 30, 2022, 2021, and 2020 were as follows:
|  | September 30, 2022 |  |  | September 30, 2021 |
Current: |  |  |  |  |  |
Federal |  | $ | - |  |  | $ | - |
State |  |  | - |  |  |  | - |
Deferred: |  |  |  |  |  |
Federal |  | $ | - |  |  | $ | - |
State |  |  | - |  |  |  | - |
Provision for income taxes |  | $ | - |  |  | $ | - |
Income tax benefit attributable to loss from continuing operations differed from the amounts computed by applying the statutory U.S federal income tax rate of 21% to pretax loss from continuing operations as a result of the following:
|  | September 30, 2022 |  |  | September 30, 2021 |
Tax Benefit at Federal statutory rate |  | $ | (8,417,258 | ) |  | $ | (1,728,117 | )
Tax Benefit at State rate |  |  | (303,448 | ) |  |  | (62,300 | )
Meals and Entertainment |  |  | 30,339 |  |  |  | 114 |
Stock Based Compensation |  |  | 2,060,702 |  |  |  | - |
Non deductible Payroll expense |  |  | - |  |  |  | (231,134 | )
ISO - Disqualifying Dispositions |  |  | (58,493 | ) |  |  |
Penalties |  |  | - |  |  |  | 375 |
True Ups |  |  | 4,407,634 |  |  |  | 323,497 |
R&D Credits |  |  | (200,000 | ) |  |  | (200,457 | )
Discontinued Operations |  |  | (3,750,257 | ) |  |  | (2,955,236 | )
Other |  |  | (1,569 | ) |  |  | (1,172 | )
Change in Valuation Allowance |  |  | 6,232,350 |  |  |  | 4,854,430 |
|  | $ | - |  |  | $ | - |
The significant components of the Company's deferred tax assets and liabilities as of September 30, 2022 and 2021 were as follows:
|  | September 30, 2022 |  |  | September 30, 2021 |
Deferred Tax Assets: |  |  |  |  |  |
Right of Use - Lease Liability |  | $ | 268,771 |  |  | $ | - |
Charitable Contributions |  |  | 7,034 |  |  |  | 507 |
Section 1231 Loss Carryforwards |  |  | 1,183,440 |  |  |  | 2,995,030 |
Tax Credits |  |  | 400,457 |  |  |  | 200,457 |
Stock Based Compensation |  |  | 3,740,106 |  |  |  | 135,366 |
Interest Expense Carryforwards |  |  | 193,804 |  |  |  | - |
Net Operating Loss carryforwards |  |  | 93,052,447 |  |  |  | 42,880,598 |
Gross Deferred Tax Assets |  | $ | 98,846,059 |  |  | $ | 46,211,958 |
Valuation Allowance |  |  | (28,756,392 | ) |  |  | (22,524,043 | )
Total deferred tax assets, net of valuation allowance |  | $ | 70,089,667 |  |  | $ | 23,687,915 |
Deferred Tax Liabilities |  |  |  |  |  |
Right of Use - Lease Asset |  | $ | (264,566 | ) |  | $ | - |
Prepaid Expenses |  |  | (222,566 | ) |  |  | (187,790 | )
Unrealized Gain on Derivative Asset |  |  | (85,415 | ) |  |  | (857,243 | )
Unrealized Gain on Equity Security |  |  | (62,859 | ) |  |  | (63,261 | )
Gain/Loss on Sale of Assets not on TR |  |  | (25,732 | ) |  |  | (602 | )
Fixed Assets & Intangible Assets |  |  | (69,428,529 | ) |  |  | (22,579,019 | )
Net Deferred Tax Assets |  | $ | - |  |  | $ | - |
For the year ended September 30, 2022, based on all available objective evidence, including the existence of cumulative losses, the Company determined that it was not more likely than not that the net deferred tax assets were fully realizable as of September 30, 2022. Accordingly, the Company established a full valuation allowance against its deferred tax assets. As of September 30, 2022, the Company had $417.8 million of federal and $91.6 million of state net operating loss carryforwards available to reduce future taxable income, of which federal net operating loss carryforwards of $358.6 million have an indefinite life. The federal net operating losses began to expire in 2007, while state net operating losses begin to expire in 2025. The Company's ability to utilize its federal and state net operating loss carryforwards and federal tax credit carryforwards to reduce future taxable income and future taxes, respectively, may be subject to restrictions attributable to equity transactions that may have resulted in a change in ownership as defined by Internal Revenue Code ("IRC") Section 382, for which the Company is in the process of completing a study. In the event that the Company has such a change in ownership, the Company's utilization of these carryforwards could be severely restricted and could result in the expiration of a significant amount of these carryforwards prior to the Company recognizing their benefit. The Company files income tax returns in the U.S. federal and state jurisdictions. The 2018-2021 tax years generally remain subject to examination by the IRS and various state taxing authorities, although the Company is not currently under examination in any jurisdiction. The Coronavirus Aid, Relief and Economic Security (CARES) Act was enacted March 27, 2020. Among the business provisions, the CARES Act provided for various payroll tax incentives, changes to net operating loss carryback and carryforward rules, business interest expense limitation increases, and bonus depreciation on qualified improvement property. Additionally, the Consolidated Appropriations Act of 2021 was signed on December 27, 2020 which provided additional COVID relief provisions for businesses. The Company has evaluated the impact of both the Acts and has determined that any impact is not material to its financial statements.

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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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