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Note 15 - Income Taxes | 12 Months Ended
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Sep. 30, 2024
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | NOTE 15 – INCOME TAXES The Company generated operating losses for the years ended September 30, 2024 and 2023 on which it has recognized a full valuation allowance. The Company accounts for is state franchise and minimum taxes as a component of its general and administrative expenses. The following table presents the components of the provision for income taxes from continuing operations for the fiscal years ended September 30, 2024 and 2023:
|  | Year Ended September 30, |
|  | 2024 |  |  | 2023 |
Current |  |  |  |  |  |  |  |
Federal |  | $ | - |  |  | $ | - |
State |  |  | - |  |  |  | - |
Total current |  |  | - |  |  |  | - |
Deferred |  |  |  |  |  |  |  |
Federal |  |  | - |  |  |  | - |
State |  |  | - |  |  |  | - |
Total deferred |  |  | - |  |  |  | - |
Total provision |  | $ | - |  |  | $ | - |
A reconciliation for the federal statutory income tax rate to the Company’s effective income tax rate is as follows:
|  | Year Ended September 30, |
|  | 2024 |  |  | 2023 |
Federal statutory income tax rate |  |  | 21.0 | % |  |  | 21.0 | %
State income taxes, net of federal benefit |  |  | 2.1 |  |  |  | 1.4 |
Permanent differences |  |  | 11.9 |  |  |  | (1.5 | )
Contingent derivative expense |  |  | 0.5 |  |  |  | 0.2 |
Change in value of convertible debt |  |  | (2.5 | ) |  |  | 0.0 |
Change in valuation allowance |  |  | (33.0 | ) |  |  | (21.1 | )
Provision for income taxes |  |  | 0.0 | % |  |  | 0.0 | %
Significant components of the Company’s deferred income taxes are shown below:
|  | Year Ended September 30, |
|  | 2024 |  |  | 2023 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 15,478,000 |  |  | $ | 14,784,000 |
ROU - Liability |  |  | 22,000 |  |  |  | 824,000 |
Capital loss carryforward |  |  | 702,000 |  |  |  | 702,000 |
Allowance for doubtful accounts |  |  | 77,000 |  |  |  | 9,000 |
Stock compensation |  |  | 481,000 |  |  |  | 521,000 |
Intangibles |  |  | 176,000 |  |  |  | 105,000 |
Investments |  |  | 573,000 |  |  |  | 180,000 |
Accrued expenses |  |  | 101,000 |  |  |  | 87,000 |
Fixed Assets |  |  | 57,000 |  |  |  | 45,000 |
Inventory reserve |  |  | 0 |  |  |  | 28,000 |
Capitalized expenses |  |  | 146,000 |  |  |  | 43,000 |
Charitable contributions |  |  | 13,000 |  |  |  | 39,000 |
Total deferred tax assets |  |  | 17,826,000 |  |  |  | 17,367,000 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Prepaid Expenses |  |  | (76,000 | ) |  |  | (107,000 | )
ROU - Assets |  |  | (19,000 | ) |  |  | (750,000 | )
Intangibles |  |  | - |  |  |  | - |
Total deferred tax liabilities |  |  | (95,000 | ) |  |  | (857,000 | )
Net deferred tax assets |  |  | 17,731,000 |  |  |  | 16,510,000 |
Valuation allowance |  |  | (17,731,000 | ) |  |  | (16,510,000 | )
Net deferred tax liability |  | $ | - |  |  | $ | - |
Net deferred tax liability The Company has established a valuation allowance against net deferred tax assets due to the uncertainty that such assets will be realized. The deferred tax liabilities that result from indefinite life intangibles cannot be offset by deferred tax assets. The Company periodically evaluates the recoverability of the deferred tax assets. At such time as it is determined that it is more likely than not that deferred tax assets will be realizable, the valuation allowance will be reduced. Under Internal Revenue Code (IRC) Section 382, the use of net operating loss (“NOL”) carryforwards may be limited if a change in ownership of a company occurs. During the year ending September 30, 2018, the company determined that a change of ownership under IRC Section 382 had occurred during the years ending September 30, 2017 and 2015. As a result of these ownership changes, the pre-ownership change NOL carryforwards would be limited and approximately $2.1 million of such NOLs will expire before being utilized. Therefore, at September 30, 2018 the Company reduced the deferred tax asset and related valuation allowance associated with these NOLs by approximately $0.5 million due to IRC Section 382. At September 30, 2024, the Company has utilizable NOL carryforwards of approximately $69.1 million which for federal purposes will carryforward indefinitely. The Company accounts for its state franchise and minimum taxes as a component of its general and administrative expenses. The Company files income tax returns in the United States, and various state jurisdictions. The Company’s policy is to recognize interest expense and penalties related to income tax matters as tax expense. At September 30, 2024 and 2023, there are no unrecognized tax benefits, and there are no significant accruals for interest related to unrecognized tax benefits or tax penalties. The Company has had a valuation allowance against the net deferred tax assets, with the exception of the deferred tax liabilities that result from indefinite-life intangibles ("naked credits"). During the year ended September 30, 2021, the Company generated enough indefinite life deferred tax assets from post-merger NOLs to reduce the naked credits to zero during the year and continue to record a valuation allowance on remaining deferred tax assets.

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