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Income Taxes | 12 Months Ended
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Sep. 30, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | 14. INCOME TAXES Income taxes consisted of the following:
|  | Years ended September 30, |
|  | 2024 |  |  | 2023 |
Current tax provision |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | — |
State |  |  | 11 |  |  |  | 16 |
Foreign |  |  | 109 |  |  |  | 11 |
Total current tax provision |  |  | 120 |  |  |  | 27 |
Deferred provision |  |  |  |  |  |
Federal |  |  | (390 | ) |  |  | 6,266 |
State |  |  | (135 | ) |  |  | 1,107 |
Total deferred provision |  |  | (525 | ) |  |  | 7,373 |
Provision (benefit) for income taxes |  | $ | (405 | ) |  | $ | 7,400 |
A reconciliation of income taxes at the federal statutory rate of 21% to the effective tax rate was as follows:
|  | Years ended September 30, |
|  | 2024 |  |  | 2023 |
Income taxes computed at the federal statutory rate |  | $ | (6,744 | ) |  | $ | (2,309 | )
Change in valuation allowance |  |  | 3,466 |  |  |  | 10,376 |
Nondeductible compensation, interest expense and other |  |  | 956 |  |  |  | 232 |
State income taxes, net of federal tax benefit |  |  | (334 | ) |  |  | (605 | )
Change in R&D credit carryover |  |  | (379 | ) |  |  | (433 | )
NOL expirations and other prior year true-ups |  |  | 3,051 |  |  |  | 111 |
Foreign rate differential & foreign taxes |  |  | 104 |  |  |  | 28 |
Tax impacts of Evertel acquisition accounting |  |  | (525 | ) |  |  | — |
|  | $ | (405 | ) |  | $ | 7,400 |
The types of temporary differences between the tax basis of assets and liabilities and their approximate tax effects that give rise to a significant portion of the net deferred tax asset as of September 30, 2024 and 2023 were as follows:
|  | September 30, |
|  | 2024 |  |  | 2023 |
Deferred tax assets |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 12,357 |  |  | $ | 10,665 |
Research and development credit |  |  | 4,639 |  |  |  | 4,929 |
Share-based compensation |  |  | 562 |  |  |  | 650 |
Patents |  |  | 1,770 |  |  |  | 2,203 |
Accruals and other |  |  | 2,227 |  |  |  | 2,071 |
Capitalized R&E expenses |  |  | 3,893 |  |  |  | 1,916 |
Allowances |  |  | 199 |  |  |  | 237 |
Gross deferred tax assets |  |  | 25,647 |  |  |  | 22,671 |
Deferred tax liabilities |  |  |  |  |  |
Equipment |  |  | (216 | ) |  |  | (274 | )
Operating ROU assets |  |  | (619 | ) |  |  | (907 | )
Acquired intangible assets |  |  | (1,592 | ) |  |  | (1,736 | )
Gross deferred tax liabilities |  |  | (2,427 | ) |  |  | (2,917 | )
Less valuation allowance |  |  | 23,220 |  |  |  | 19,754 |
Net deferred tax assets and liabilities |  | $ | — |  |  | $ | — |
As of September 30, 2024, the Company had net deferred tax assets and liabilities of approximately $0 due to the establishment of a full valuation allowance against its net deferred tax assets. The deferred tax assets are primarily comprised of federal and state NOL carryforwards and federal and state research and development (“R&D”) tax credit carryforwards offset by valuation allowance. As of September 30, 2024, the Company had federal and California NOL carryforwards of approximately $42,940 and $5,288, respectively. The federal NOLs if not utilized will expire from tax years September 30, 2025 through 2037, except for $16,489 which have an indefinite carryforward period. The California NOLs if not utilized will expire from tax years September 30, 2043 through 2044. The Company also has an estimated $2,887 and $375 of federal and California R&D tax credits, respectively, as of September 30, 2024, where a portion of federal R&D tax credits will begin to expire next year. The California R&D tax credits do not expire. The Company reviews its ability to realize its deferred tax assets on a quarterly basis. In doing so, management considers historical and projected taxable income of the Company, along with any tax planning strategies and any other positive or negative evidence. Realization is dependent on generating sufficient taxable income prior to the expiration of the loss carryforwards and other deferred assets. As of September 30, 2024, the Company does not believe that it is more likely than not that its deferred tax assets will be realized; accordingly, a full valuation allowance has been established and no deferred tax asset is shown in the accompanying balance sheet. As of September 30, 2024, the Company had no unrecognized tax benefits. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. Pursuant to Internal Revenue Code (IRC) Sections 382 and 383, the annual use of the Company’s net operating loss and R&D tax credit carryforwards may be limited in the event a cumulative change in ownership of more than 50% occurs within a three-year period. The Company has not completed an IRC Section 382/383 analysis regarding the limitation of net operating loss and research and development credit carryforwards. Due to the existence of the valuation allowance, any permanent limitations on the use of the Company’s net operating loss and research and development credit carryforwards will not impact the Company’s effective tax rate. The Company is subject to taxation in the U.S. and various foreign jurisdictions. The Company’s U.S. federal tax returns since September 30, 2004 are subject to examination by the Internal Revenue Service due to the generation of U.S. federal NOL and credit carryforwards. The Company’s U.S. state returns are generally subject to examination for four years after the filing date.

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