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10. INCOME TAXES (Tables) | 12 Months Ended
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Sep. 30, 2020
Income Tax Disclosure [Abstract] |
Schedule of income tax provision | The following table summarizes the Company’s consolidated provision/(benefit) for U.S. federal, state and foreign taxes on income:
|  | Fiscal 2020 |  |  | Fiscal 2019 |
Current: |  |  |  |  |  |  |  |
Federal |  | $ | (4,000 | ) |  | $ | (4,000 | )
State |  |  | 13,000 |  |  |  | – |
Foreign |  |  | – |  |  |  | – |
Deferred: |  |  |  |  |  |  |  |
Federal |  |  | 414,000 |  |  |  | (713,000 | )
State |  |  | 82,000 |  |  |  | (127,000 | )
Foreign |  |  | 283,000 |  |  |  | (46,000 | )
|  |  | 788,000 |  |  |  | (890,000 | )
Change in valuation allowance |  |  | (779,000 | ) |  |  | 886,000 |
Income tax provision/(benefit) |  | $ | 9,000 |  |  | $ | (4,000 | )
Schedule of deferred income taxes | The Company’s deferred tax assets and liabilities are comprised of the following:
|  | September 30, |
|  | 2020 |  |  | 2019 |
Deferred tax assets |  |  |  |  |  |  |  |
Net operating losses |  | $ | 1,812,000 |  |  | $ | 2,311,000 |
Capital loss carryforwards |  |  | – |  |  |  | 38,000 |
Share-based compensation |  |  | 180,000 |  |  |  | 169,000 |
Alternative minimum and other tax credits |  |  | 5,000 |  |  |  | 9,000 |
Excess tax over book basis in inventory |  |  | 20,000 |  |  |  | 32,000 |
Reserves and other allowances |  |  | 155,000 |  |  |  | 535,000 |
Deferred rent |  |  | 13,000 |  |  |  | 19,000 |
Accrued compensation |  |  | 70,000 |  |  |  | 9,000 |
Accrued expenses |  |  | – |  |  |  | 151,000 |
Depreciation |  |  | 31,000 |  |  |  | 27,000 |
Charitable contributions |  |  | 3,000 |  |  |  | 1,000 |
Total deferred tax assets |  |  | 2,289,000 |  |  |  | 3,301,000 |
Deferred tax liabilities |  |  |  |  |  |  |  |
Prepaid expenses |  |  | (58,000 | ) |  |  | (141,000 | )
Intangible assets |  |  | (245,000 | ) |  |  | (298,000 | )
481 Election (IPS) |  |  | (99,000 | ) |  |  | (196,000 | )
Total deferred tax liabilities |  |  | (402,000 | ) |  |  | (635,000 | )
Valuation allowance |  |  | (1,887,000 | ) |  |  | (2,666,000 | )
Net deferred tax assets |  | $ | – |  |  | $ | – |
Reconciliation of effective tax rate | The significant elements contributing to the difference between the U.S. federal statutory tax rate and the Company’s effective tax rate are as follows:
|  | Fiscal 2020 |  |  | Fiscal 2019 |
U.S. federal statutory rate |  |  | 21.0% |  |  |  | 21.0% |
State tax rate, net of federal benefit |  |  | (1.9% | ) |  |  | 2.8% |
Foreign rate differential |  |  | (14.9% | ) |  |  | 1.4% |
Other |  |  | (10.6% | ) |  |  | 1.9% |
Change in tax credits |  |  | (0.2% | ) |  |  | (0.1% | )
Effect of state tax rate change |  |  | 1.5% |  |  |  | – |
Capital loss - expiration |  |  | (2.1% | ) |  |  | – |
Change in valuation allowance |  |  | 41.1% |  |  |  | (26.6% | )
State income taxes |  |  | (0.7% | ) |  |  | – |
Federal AMT |  |  | 0.2% |  |  |  | 0.1% |
Permanent differences |  |  | (33.9% | ) |  |  | (0.4% | )
Effective tax rate |  |  | (0.5% | ) |  |  | 0.1% |

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