Income Taxes |
3 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Income Taxes [Abstract] | |
| Income Taxes | Note 13 – Income Taxes The Company accounts for income taxes using the liability method, which requires the recognition of deferred tax assets or liabilities for the tax-effected temporary differences between the financial reporting and tax bases of its assets and liabilities, and for net operating loss (NOL) and tax credit carryforwards. As of September 30, 2021, the Company had U.S. federal and state NOL carryforwards of $38.6 million and $24.9 million, respectively, for income tax purposes with $29.5 million and $22.5 million, respectively, expiring in years 2022 to 2040 and $9.1 million and $2.4 million, respectively, which can be carried forward indefinitely. As of September 30, 2021, the Company also had U.S. federal research and development tax credit carryforwards of $4.2 million, expiring in 2038 to 2041. The Company’s U.K. subsidiary has U.K. NOL carryforwards of $63.5 million as of September 30, 2021, which can be carried forward indefinitely to be used to offset future U.K. taxable income. A reconciliation of income tax expense and the amount computed by applying the U.S. statutory rate of 21% to (loss) income before income taxes is as follows: Three Months Ended December 31, 2021 2020 Income tax (benefit) expense at U.S. federal statutory rates$ (1,315,724) $ 3,634,260State income tax (benefit) expense, net of federal (benefit) expense (101,875) 281,396Non-deductible expenses 257,196 —Effect of stock options exercised (23,350) (64,290)Effect of common stock purchase warrants exercised — (2,038,919)Effect of Paycheck Protection Program funds — (95,886)U.S. research and development tax credit (1,963,430) —Effect of foreign income tax rates (29,761) (32,570)Effect of global intangible low taxed income 88,267 125,145Change in valuation allowance 3,089,596 (1,732,786)Other, net 113,736 1,952Income tax expense$ 114,655 $ 78,302 Significant components of the Company’s deferred tax assets and liabilities are as follows: December 31, September 30, 2021 2021Deferred tax assets: Federal net operating loss carryforwards$ 8,615,379 $ 8,209,224State net operating loss carryforwards 1,690,488 1,646,827Foreign net operating loss carryforwards – U.K. 15,782,126 15,875,889Foreign capital allowance – U.K. 117,709 117,709U.S. research and development tax credit carryforwards 4,724,845 2,761,415Share-based compensation 2,417,046 2,071,838Interest expense 1,630,267 1,368,042Change in fair value of derivative liabilities 1,072,714 1,025,425Other, net – U.K. 83,344 83,344Other, net – Malaysia 100,995 100,654Other, net – U.S. 220,825 203,237Gross deferred tax assets 36,455,738 33,463,604Valuation allowance for deferred tax assets (22,669,607) (19,580,011)Net deferred tax assets 13,786,131 13,883,593Deferred tax liabilities: In-process research and development (882,427) (882,427)Covenant not-to-compete (29,630) (33,671)Other, net – U.S. (6,371) (6,371)Net deferred tax liabilities (918,428) (922,469)Net deferred tax asset$ 12,867,703 $ 12,961,124 The deferred tax amounts have been classified on the accompanying unaudited condensed consolidated balance sheets as follows: December 31, September 30, 2021 2021 Deferred tax asset – U.K.$ 12,830,135 $ 12,923,896Deferred tax asset – Malaysia 100,994 100,654Total deferred tax asset$ 12,931,129 $ 13,024,550 Deferred tax liability – U.S.$ (63,426) $ (63,426)Total deferred tax liability $ (63,426) $ (63,426) |