| Reconciliation of Income Tax Expense (Benefit) |
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Three Months Ended
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Nine Months Ended
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June 30,
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June 30,
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2020
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2019
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2020
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2019
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Income tax benefit at U.S. federal statutory rates
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$
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(584,825)
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$
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(582,652)
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$
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(1,493,179)
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$
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(1,856,337)
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State income tax benefit, net of federal benefits
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(45,268)
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(138,089)
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(115,615)
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(439,952)
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Non-deductible expenses
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332,230
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2,269
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335,869
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7,052
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Effect of foreign income tax rates
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(16,478)
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43
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49,908
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(3,484)
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Effect of global intangible low taxed income
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85,522
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2,554
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101,642
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66,182
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Change in valuation allowance
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415,449
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716,442
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1,097,900
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2,367,633
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Other, net
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53,872
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(1,025)
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54,094
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(23,887)
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Income tax expense (benefit)
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$
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240,502
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$
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(458)
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$
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30,619
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$
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117,207
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| Significant Components of Deferred Tax Assets and Liabilities |
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June 30,
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September 30,
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2020
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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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8,854,855
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$
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8,971,569
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State net operating loss carryforwards
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1,686,902
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1,689,536
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Foreign net operating loss carryforwards – U.K.
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10,600,648
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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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1,116,240
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804,378
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Interest expense
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757,141
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—
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Other, net – U.K.
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50,781
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50,781
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Other, net – U.S.
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592,237
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434,764
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Gross deferred tax assets
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23,762,204
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22,540,904
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Valuation allowance for deferred tax assets
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(10,928,109)
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(9,830,209)
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Net deferred tax assets
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12,834,095
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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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(383,092)
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(424,657)
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Covenant not-to-compete
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(53,872)
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(65,993)
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Other, net – Malaysia
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17,251
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(3,865)
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Other, net – U.S.
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(6,376)
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(6,376)
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Net deferred tax liabilities
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(4,498,829)
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(4,573,631)
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Net deferred tax asset
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$
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8,335,266
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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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June 30,
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September 30,
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2020
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2019
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Deferred tax asset – U.K.
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$
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8,610,759
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$
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8,433,669
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Deferred tax asset – Malaysia
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17,247
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—
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Total deferred tax asset
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$
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8,628,006
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$
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8,433,669
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Deferred tax liability – U.S.
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$
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(292,740)
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$
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(292,740)
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Deferred tax liability – Malaysia
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—
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(3,865)
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Total deferred tax liability
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$
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(292,740)
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$
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(296,605)
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