Income Taxes

12 Months Ended

Sep. 30, 2023

9. INCOME TAXES

The components of loss before income taxes consisted of the following:

	Year Ended September 30,			Year Ended September 30,
	2023			2022
US	$	(4,442,532	)	$	(686,588	)
Foreign		—			—
Total	$	(4,442,532	)	$	(686,588	)

Income tax expenses attributable to income for continuing operations consists of:

	Year Ended September 30,			Year Ended September 30,
	2023			2022
Federal:
Current		—			—
Deferred	$	(278,795	)	$	51,204

Foreign:
Current		—			—
Deferred		—			—

State and local:
Current		—			—
Deferred		735,045			(68,071	)

Change in valuation allowance		(456,250	)		16,866

Income tax (benefit)/expense	$	—		$	—

Deferred income taxes reflect the net tax effects of temporary differences between the carrying value of the asset and liabilities for financial reporting purposes and amounts used for income tax purposes. The temporary differences that gave rise to the deferred tax assets and liabilities are as follows:

	September 30,
	2023			2022
Deferred tax assets:
Accrued Compensation	$	119,356		$	96,608
Stock Compensation		463,465			403,180
Net operating losses		2,118,399			2,685,910
Intangible assets		40,107			39,441
Section 174 R&D		27,573			—
R&D Credit carryforward		88,715			88,715
Fixed assets		—			10
Total gross deferred tax asset		2,857,615			3,313,864

Less: valuation allowance		(2,857,615	)		(3,313,864	)

Net deferred tax asset		—			—

Deferred tax liabilities:
Intangible assets		—			—
Fixed assets		—			—
Total Deferred tax liabilities		—			—

Net Deferred Income Tax	$	—		$	—

At September 30, 2023 the Company had net operating loss carryforwards of approximately $9.8M for federal tax purposes.

In assessing the realizability of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, net operating loss carryback potential, and tax planning strategies in making these assessments.

Based upon the above criteria, the Company believes that it is more likely than not that the full amount of the remaining net deferred tax assets will not be realized. Accordingly, the Company has recorded a full valuation allowance of approximately $2.9 million against the deferred tax asset that is not expected to be realized for the periods ending September 30, 2023 and approximately $3.3 million for the period ended September 30, 2022.

The Company recognizes interest accrued to unrecognized tax benefits and penalties as income tax expense. The Company accrued no penalties or interest during the years ended September 30, 2023 and September 30, 2022.

A reconciliation of the statutory Federal Income tax rate and effective tax rate of the provision for income taxes is as follows:

	Year ended September 30,			Year ended September 30,
	2023			2022
Federal statutory rate		21.00	%		21.00	%
Permanent items		(18.20	)%		3.76	%
State taxes		3.44	%		7.83	%
State NOL Write down		(16.51	)%		-
Increase in valuation allowance		10.27	%		(2.46	)%
Stock Compensation		-			(4.03	)%
R&D Credit		-			(26.22	)%
Other		-			0.12	%
Effective income tax rate		0.00	%		0.00	%

The Company files tax returns as prescribed by the tax laws of the jurisdictions in which they operate. In the normal course of business, the Company is subject to examination by federal and foreign jurisdictions where applicable based on the statute of limitations that apply in each jurisdiction. As of September 30, 2023, open years related to the federal jurisdiction are fiscal years ending 2022, 2021, 2020 and 2019.

The Company has no open tax audits for the returns that were filed, with any tax authority as of September 30, 2023. Accordingly, there were no material uncertain tax positions in any of the jurisdictions that the Company operated in.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Name Accounting Standards Codification
-Section 50
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
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-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
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-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Name Accounting Standards Codification
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

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