| Reconciliation of Income Tax Expense (Benefit) |
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Three Months Ended
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December 31,
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2019
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2018
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Income tax benefit at U.S. federal statutory rates
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$
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(710,188)
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$
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(431,823)
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State income tax benefit, net of federal benefits
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(55,000)
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(102,342)
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Effect of foreign income tax rates
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42,554
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(8,357)
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Effect of deemed dividend and repatriation tax
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50,451
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31,309
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Change in valuation allowance
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592,710
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623,130
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Other, net
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2,730
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(19,419)
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Income tax (benefit) expense
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$
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(76,743)
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$
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92,498
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| Significant Components of Deferred Tax Assets and Liabilities |
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December 31,
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September 30,
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2019
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2019
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Deferred tax assets:
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Federal net operating loss carryforwards
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$
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9,178,717
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$
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8,971,569
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State net operating loss carryforwards
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1,708,787
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1,689,536
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Foreign net operating loss carryforwards – U.K.
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10,576,169
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10,486,476
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Foreign capital allowance – U.K.
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103,400
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103,400
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Share-based compensation
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928,679
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804,378
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Interest expense
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259,917
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—
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Other, net – U.K.
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50,780
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50,781
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Other, net – U.S.
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461,879
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434,764
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Gross deferred tax assets
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23,268,328
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22,540,904
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Valuation allowance for deferred tax assets
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(10,422,919)
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(9,830,209)
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Net deferred tax assets
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12,845,409
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12,710,695
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Deferred tax liabilities:
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In-process research and development
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(4,072,740)
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(4,072,740)
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Developed technology
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(410,802)
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(424,657)
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Covenant not-to-compete
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(61,953)
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(65,993)
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Other, net – Malaysia
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(3,865)
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(3,865)
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Other, net – U.S.
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(6,375)
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(6,376)
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Net deferred tax liabilities
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(4,555,735)
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(4,573,631)
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Net deferred tax asset
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$
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8,289,674
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$
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8,137,064
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| Schedule of Deferred Tax Amounts Classified in Balance Sheets |
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December 31,
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September 30,
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2019
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2019
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Deferred tax asset – U.K.
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$
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8,586,279
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$
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8,433,669
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Total deferred tax asset
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$
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8,586,279
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$
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8,433,669
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Deferred tax liability – U.S.
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(292,740)
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(292,740)
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Deferred tax liability – Malaysia
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(3,865)
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(3,865)
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Total deferred tax liability
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$
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(296,605)
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$
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(296,605)
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