XML 27 R13.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Income Taxes | 12 Months Ended
--- | ---
Sep. 30, 2018
Income Tax Disclosure [Abstract] |
Income Taxes |
Note 6 | Income Taxes
US Tax Reform On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (“Tax Reform Act”). The legislation significantly changes U.S. tax law by, among other things, lowering corporate income tax rates, implementing a territorial tax system and imposing a transition tax on deemed repatriated earnings of foreign subsidiaries. The Tax Reform Act permanently reduces the U.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. As a result of the reduction in the U.S. corporate income tax rate from 35% to 21% under the Tax Reform Act, the Company revalued its ending net deferred tax assets at September 30, 2018. The Company did not need to recognize any provisional tax expense for the year ended September 30, 2018 as it has recorded a full valuation allowance against its deferred tax assets. The Tax Reform Act also provided for a one-time deemed mandatory repatriation of post – 1986 undistributed foreign subsidiary earnings and profits (“E&P”) as well as Global Intangible Low-Taxed Income (“GILTI”) and Base-Erosion Anti-Abuse provisions. The Company had no adjustments related to these latter noted provisions at September 30, 2018. The tax effects of the temporary differences that give rise to the Company’s estimated deferred tax assets and liabilities are as follows:
|  | 2018 |  |  | 2017 |  |  | 2016 |
Assumed Tax rate |  |  | 21 | % |  |  | 34 | % |  |  | 34 | %
Net operating loss carryforwards |  | $ | 11,123,000 |  |  | $ | 14,240,000 |  |  | $ | 11,223,000 |
Research and development tax credits |  |  | 1,605,000 |  |  |  | 1,344,000 |  |  |  | 1,036,000 |
Foreign exchange and other |  |  | 13,000 |  |  |  | (25,000 | ) |  |  | (25,000 | )
Unpaid charges |  |  | 72,000 |  |  |  | 28,000 |  |  |  | 152,000 |
Intangible asset costs |  |  | 28,000 |  |  |  | 51,000 |  |  |  | 57,000 |
Stock-based compensation |  |  | 3,152,000 |  |  |  | 3,394,000 |  |  |  | 2,004,000 |
Valuation allowance for deferred tax assets |  |  | (15,993,000 | ) |  |  | (19,032,000 | ) |  |  | (14,447,000 | )
Net deferred tax assets |  | $ | — |  |  | $ | — |  |  | $ | — |
The provision for income taxes differ from the amount established using the statutory income tax rate as follows:
|  | 2018 |  |  | 2017 |  |  | 2016 |
Income benefit at statutory rate |  | $ | (4,215,000 | ) |  | $ | (4,577,000 | ) |  | $ | (5,010,000 | )
Foreign income taxed at other rates |  |  | (173,000 | ) |  |  | 68,000 |  |  |  | 132,000 |
Permanent differences |  |  |  |  |  |  |  |  |  |  |  |
Non-deductible finance and accretion expenses |  |  | — |  |  |  | — |  |  |  | 5,000 |
Non-deductible compensation costs |  |  | — |  |  |  | — |  |  |  | 738,000 |
Other permanent differences |  |  | 1,000 |  |  |  | 2,000 |  |  |  | — |
Research and development tax credit |  |  | (77,000 | ) |  |  | (23,000 | ) |  |  | 628,000 |
Expiry of foreign net operating loss carryforwards |  |  | — |  |  |  | — |  |  |  | 333,000 |
Adjustment and true up to prior years’ tax provision |  |  | 336,000 |  |  |  | (55,000 | ) |  |  | 176,000 |
Effect of changes in tax rates |  |  | 7,166,000 |  |  |  | — |  |  |  | (11,000 | )
Change in valuation allowance related to current year provision |  |  | (3,038,000 | ) |  |  | 4,585,000 |  |  |  | 3,009,000 |
Income Tax Recovery |  | $ | — |  |  | $ | — |  |  | $ | — |
As of September 30, 2018, the Company had net operating loss carry-forwards of approximately $50,557,000 (2017: $41,000,000; 2016: $33,000,000) in the United States, approximately $986,000 (Approximately AUD$1,365,000) (2017: $850,000; 2016: $250,000) in Australia and approximately $638,000 (Approximately €549,000) (2017: $13,000; 2016: $Nil) in Germany, 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 September 30, 2018, 2017 and 2016. 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 2009. Certain of the Company’s net operating loss carryforwards 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, 2018 and currently does not believe Section 382 will apply to limit the utilization of these tax losses.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration