| Reconciliation of Income Tax Expense (Benefit) |
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Three Months Ended
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Six Months Ended
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March 31,
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March 31,
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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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(198,166)
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$
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(841,862)
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$
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(908,354)
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$
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(1,273,685)
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State income tax benefit, net of federal benefits
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(15,347)
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(199,521)
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(70,347)
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(301,863)
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Effect of foreign income tax rates
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23,832
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4,830
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66,386
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(3,527)
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Effect of deemed dividend and repatriation tax
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(34,331)
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32,318
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16,120
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63,627
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Change in valuation allowance
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89,741
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1,028,063
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682,451
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1,651,193
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Other, net
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1,131
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1,339
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3,861
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(18,080)
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Income tax (benefit) expense
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$
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(133,140)
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$
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25,167
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$
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(209,883)
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$
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117,665
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| Significant Components of Deferred Tax Assets and Liabilities |
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March 31,
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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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8,966,965
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$
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8,971,569
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State net operating loss carryforwards
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1,690,205
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1,689,536
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Foreign net operating loss carryforwards – U.K.
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10,622,504
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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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1,007,166
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804,378
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Interest expense
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524,852
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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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420,636
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434,764
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Gross deferred tax assets
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23,386,509
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22,540,904
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Valuation allowance for deferred tax assets
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(10,512,660)
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(9,830,209)
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Net deferred tax assets
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12,873,849
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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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(396,947)
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(424,657)
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Covenant not-to-compete
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(57,913)
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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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(6,376)
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(6,376)
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Net deferred tax liabilities
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(4,537,841)
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(4,573,631)
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Net deferred tax asset
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$
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8,336,008
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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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March 31,
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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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8,632,613
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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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8,632,613
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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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(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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