XML 29 R16.htm IDEA: XBRL DOCUMENT
v3.21.4

Income Taxes | 12 Months Ended
--- | ---
Sep. 30, 2021
Income Taxes |
Income Taxes | 10. Income Taxes ​ In March 2020, the CARES Act was signed into law providing numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of NOLs. The CARES Act amends the NOL provisions of the Tax Act, allowing for the carryback of losses arising in tax years beginning before December 31, 2017, to each of the two taxable years preceding the taxable year of loss. Approximately $1,500,000 of pre-tax NOL was carried back two years to fully offset taxable income. This carryback frees up previously utilized R&D credits, resulting in an estimated increase in R&D credit carryforward of $196,000. The carryback created approximately $16,000 of AMT tax, which was refunded. The cash impact of this carryback was $309,412. A receivable was setup for this amount as of March 31, 2020 and the cash has since been received. ​ In December 2020, the CAA was enacted as a supplement to the CARES Act legislation providing additional financial relief to taxpayers adversely impacted by restrictions put into place in response to the COVID-19 pandemic. In addition, the CCA provides funding for public health initiatives in response to the pandemic. This legislation did not have a material impact on the Company’s tax position. ​ On March 11, 2021, the ARPA, which includes certain business tax provisions, was signed into law. This legislation did not have a material impact on the Company’s tax position. ​ The components of income taxes are as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the Fiscal Year Ended September 30,
​ |  | 2021 |  | 2020 |  | 2019
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Current provision (benefit): | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Federal | ​ | $ | 95,818 | ​ | $ | (309,401) | ​ | $ | —
State | ​ |  | 9,911 | ​ |  | 481 | ​ |  | 1,749
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total current provision (benefit) | ​ |  | 105,729 | ​ |  | (308,920) | ​ |  | 1,749
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Deferred provision (benefit) | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Federal | ​ |  | (754,995) | ​ |  | — | ​ |  | —
State | ​ |  | (438,517) | ​ |  | 38 | ​ |  | 56
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total deferred provision (benefit) | ​ |  | (1,193,511) | ​ |  | 38 | ​ |  | 56
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total current and deferred provision (benefit) | ​ | $ | (1,087,783) | ​ | $ | (308,882) | ​ | $ | 1,805
​ Following is a reconciliation of the statutory federal rate to the Company’s effective income tax rate: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the Fiscal Year Ended September 30, |
​ |  | 2021 |  | 2020 |  | 2019 |
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
U.S. Federal statutory tax rate |  | 21.00 | % | 21.00 | % | 21.0 | %
Rate change due to tax reform | ​ | 0.0 | % | 0.0 | % | 0.0 | %
State income taxes, net of federal benefit |  | 0.6 | % | (2.2) | % | (0.9) | %
Permanent items |  | 0.2 | % | (6.3) | % | 0.8 | %
Research and development tax credits |  | (0.6) | % | (10.6) | % | (0.8) | %
Valuation allowance |  | (47.9) | % | (15.2) | % | (20.2) | %
Change in unrecognized tax benefits |  | (0.7) | % | 2.2 | % | 0.2 | %
Tax Law Changes: CARES Act | ​ | 0.0 | % | 0.3 | % | 0.0 | %
Other | ​ | 0.0 | % | 0.3 | % | 0.0 | %
Effective income tax rate |  | (27.4) | % | (10.4) | % | 0.1 | %
​ The deferred tax effect of temporary differences giving rise to the Company’s deferred tax assets and liabilities consists of the components below: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | As of September 30, | ​ | ​ | ​
​ | ​ | 2021 | ​ | 2020 | ​ | 2019
​ |  | Non Current |  | Non Current |  | Non Current
Deferred tax assets: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Reserves and accruals | ​ | $ | 654,624 | ​ | $ | 698,233 | ​ | $ | 690,148
Research and development credit | ​ | ​ | 1,327,162 | ​ | ​ | 1,589,247 | ​ | ​ | 1,331,170
NOL carryforwards -fed/state | ​ | ​ | 1,612,043 | ​ | ​ | 2,192,018 | ​ | ​ | 2,590,791
Depreciation | ​ | ​ | ​ | ​ | ​ | (807,522) | ​ | ​ | (826,724)
Stock options | ​ | ​ | 41,652 | ​ | ​ | 5,296 | ​ | ​ | 348,624
​ | ​ | ​ | 3,635,481 | ​ | ​ | 3,677,272 | ​ | ​ | 4,134,009
Less: Valuation allowance | ​ | ​ | (1,449,204) | ​ | ​ | (3,471,164) | ​ | ​ | (3,922,620)
Total deferred tax assets | ​ | ​ | 2,186,277 | ​ | ​ | 206,108 | ​ | ​ | 211,389
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Deferred tax liabilities: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Depreciation | ​ | ​ | (1,122,455) | ​ | ​ | (335,797) | ​ | ​ | (341,040)
Total deferred tax liabilities | ​ | ​ | (1,122,455) | ​ | ​ | (335,797) | ​ | ​ | (341,040)
Net deferred tax asset (liability) | ​ | $ | 1,063,822 | ​ | $ | (129,689) | ​ | $ | (129,651)
​ At September 30, 2021 and 2020, the Company had state NOL carryforwards of approximately $22,221,000 and $24,392,000, respectively, which begin to expire in varying amounts after the fiscal year ending September 30, 2026. The Company has federal R&D Tax Credit carryforwards of approximately $1,327,000 and $1,589,000 in fiscal 2021 and 2020, respectively, which begin to expire in varying amounts after fiscal year ending September 30, 2033. Deferred tax assets are reduced by valuation allowances if, based on the consideration of all available evidence, it is more likely than not that some portion of the deferred tax asset will not be realized. Significant weight is given to evidence that can be verified objectively, and significant management judgment is required in determining any valuation allowance recorded against net deferred tax assets. The Company evaluates deferred income taxes on a quarterly basis to determine if valuation allowances are required by considering available evidence, including historical and projected taxable income and tax planning strategies which are both prudent and feasible. ASC Topic 740 requires the consideration of a valuation allowance to reflect the likelihood of realization of deferred tax assets. Significant management judgment is required in determining any valuation allowance recorded against net deferred tax assets. The change in the valuation allowance for the period ended September 30, 2021 and September 30, 2020 was approximately $2,022,000 and $451,000, respectively. ​ For the year ended September 30, 2021, the valuation allowance was released against all federal and state deferred tax assets with the exception of certain state net operating losses due to positive evidence that the assets are more likely than not to be realized in future years. The Company will continue to assess all available evidence during future periods to evaluate any changes to the realization of its deferred tax assets. If the Company were to determine that it would be able to realize additional state deferred tax assets in the future, it would make an adjustment to the valuation allowance which would reduce the provision for income taxes. ​ Following is a reconciliation of beginning and ending balances of total amounts of gross unrecognized tax benefits: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | For the Fiscal Year Ended September 30,
​ |  | 2021 |  | 2020 |  | 2019
Balance at beginning of year | ​ | $ | 615,000 | ​ | $ | 546,000 | ​ | $ | 540,000
Unrecognized tax benefits related to prior years | ​ |  | — | ​ |  | 39,000 | ​ |  | —
Unrecognized tax benefits related to current year | ​ |  | 7,000 | ​ |  | 37,000 | ​ |  | 6,000
Decrease in unrecognized tax benefits due to the lapse of applicable statute of limitations | ​ |  | (32,000) | ​ |  | (7,000) | ​ |  | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Balance at end of year | ​ | $ | 590,000 | ​ | $ | 615,000 | ​ | $ | 546,000
​ The total liabilities associated with the unrecognized tax benefits that, if recognized, would impact the Company’s effective tax rate were $590,000, $615,000 and $546,000 at September 30, 2021, 2020 and 2019, respectively. It is not anticipated that the balance of unrecognized tax benefits at September 30, 2021 will change significantly over the next twelve months. The balance of unrecognized tax benefits as reflected in the table above at September 30, 2021 are recorded on the balance sheet as a reduction to deferred tax assets. ​ The Company’s policy is to recognize interest accrued and, if applicable, penalties related to unrecognized tax benefits in income tax expense for all periods presented. At September 30, 2021, the Company currently has no unrecognized tax benefits against which interest has been accrued, and there is no accrual recorded for penalties. ​ For the fiscal years ended September 30, 2021, 2020 and 2019, the Company did not recognize any expense for interest (net of federal impact) within income tax expense. ​ The Company is subject to income taxes in the U.S. federal and various state jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of related tax laws and regulations and require significant judgment to apply. The Company’s federal income tax returns for the fiscal years ended September 30, 2017 and thereafter are open years subject to examination by the Internal Revenue Service. The Company files income tax returns in various state jurisdictions, as appropriate, with varying statutes of limitation. There are no state income tax examinations in process at this time.

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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://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 http://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 http://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 http://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 http://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 http://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 http://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 http://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 http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration