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Income Taxes | 12 Months Ended
--- | ---
Sep. 30, 2016
Income Tax Disclosure [Abstract] |
Income Taxes |
| Note 10 | Income Taxes
The tax effects of the temporary differences that give rise to the Company’s estimated deferred tax assets and liabilities are as follows:
|  | 2016 |  |  | 2015 |
Assumed Tax rate |  | 34% |  |  | 34% |
Net operating loss carryforwards |  | $ | 11,223,000 |  |  | $ | 9,177,000 |
Research and development tax credits |  |  | 1,036,000 |  |  |  | 794,000 |
Foreign exchange |  |  | (25,000 | ) |  |  | (10,000 | )
Unpaid charges |  |  | 152,000 |  |  |  | 832,000 |
Intangible asset costs |  |  | 57,000 |  |  |  | 64,000 |
Stock-based compensation |  |  | 2,004,000 |  |  |  | 581,000 |
Valuation allowance for deferred tax assets |  |  | (14,447,000 | ) |  |  | (11,438,000 | )
Net deferred tax assets |  | $ | - |  |  | $ | - |
The provision for income taxes differ from the amount established using the statutory income tax rate as follows:
|  | 2016 |  |  | 2015 |  |  | 2014 |
Income benefit at statutory rate of 34% |  | $ | (5,010,000 | ) |  | $ | (4,117,000 | ) |  | $ | (3,865,000 | )
Foreign income taxed at other rates |  |  | 132,000 |  |  |  | 80,000 |  |  |  | 13,000 |
Permanent differences |  |  |  |  |  |  |  |  |  |  |  |
Effect of stock based compensation |  |  | - |  |  |  | - |  |  |  | 202,000 |
Debt extinguishment |  |  | - |  |  |  | (29,000 | ) |  |  | 2,736,000 |
Mark-to-market deriative liability adjustment |  |  | - |  |  |  | 193,000 |  |  |  | (994,000 | )
Non-deductible finance and accretion expenses |  |  | 5,000 |  |  |  | 1,511,000 |  |  |  | 808,000 |
Non-deductible compensation costs |  |  | 738,000 |  |  |  |  |  |  |  |  |
Other permanent differences |  |  | - |  |  |  | (5,000 | ) |  |  | (16,000 | )
Research and development tax credit |  |  | 628,000 |  |  |  | 502,000 |  |  |  | (26,000 | )
Expiry of foreign net operating loss carryforwards |  |  | 333,000 |  |  |  | - |  |  |  | - |
Adjustment and true up to prior years' tax provision |  |  | 176,000 |  |  |  | 100,000 |  |  |  | 14,000 |
Effect of foreign exchange and other |  |  | (11,000 | ) |  |  | - |  |  |  | - |
Change in valuation allowance related to current year provision |  |  | 3,009,000 |  |  |  | 1,765,000 |  |  |  | 2,528,000 |
Income Tax Recovery |  | $ | - |  |  | $ | - |  |  | $ | 1,400,000 |
As of September 30, 2016, the Company had net operating loss carry-forwards of approximately $33,000,000 (2015: $25,000,000) in the United States and approximately $250,000 (2015: $Nil) in Australia, available to offset future taxable income in those jurisdictions. The carry-forwards will begin to expire in 2027. The Company evaluates its valuation allowance requirements based on projected future operations. When circumstances change and this causes a change in management’s judgment about the recoverability of deferred tax assets, the impact of the change on the valuation allowance is reflected in current income. Because management of the Company does not currently believe that it is more likely than not that the Company will receive the benefit of these assets, a valuation allowance equal to the deferred tax asset has been established at both September 30, 2016 and 2015. Uncertain Tax Positions The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The Company’s tax returns are subject to tax examinations by U.S. federal and state tax authorities, or examinations by foreign tax authorities until the respective statutes of limitation expire. The Company is subject to tax examinations by tax authorities for all taxation years commencing on or after 2008. The Company’s net operating loss carryforwards of approximately $33,000,000 in the United States may be subject to limitations by Section 382 of the Internal Revenue Code with respect to the amount utilizable each year. This limitation reduces the Company’s ability to utilize net operating loss carry-forwards, under certain circumstances. The Company completed a Section 382 analysis through the fiscal year ended September 30, 2016 and currently does not believe Section 382 will apply to limit the utilization of these tax losses.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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