10. INCOME TAXES (Tables)

12 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Schedule of income tax provision

The following table summarizes the Company’s consolidated provision/(benefit) for U.S. federal, state and foreign taxes on income:

	Fiscal 2020			Fiscal 2019
Current:
Federal	$	(4,000	)	$	(4,000	)
State		13,000			–
Foreign		–			–
Deferred:
Federal		414,000			(713,000	)
State		82,000			(127,000	)
Foreign		283,000			(46,000	)
		788,000			(890,000	)
Change in valuation allowance		(779,000	)		886,000
Income tax provision/(benefit)	$	9,000		$	(4,000	)

Schedule of deferred income taxes

The Company’s deferred tax assets and liabilities are comprised of the following:

	September 30,
	2020			2019
Deferred tax assets
Net operating losses	$	1,812,000		$	2,311,000
Capital loss carryforwards		–			38,000
Share-based compensation		180,000			169,000
Alternative minimum and other tax credits		5,000			9,000
Excess tax over book basis in inventory		20,000			32,000
Reserves and other allowances		155,000			535,000
Deferred rent		13,000			19,000
Accrued compensation		70,000			9,000
Accrued expenses		–			151,000
Depreciation		31,000			27,000
Charitable contributions		3,000			1,000
Total deferred tax assets		2,289,000			3,301,000
Deferred tax liabilities
Prepaid expenses		(58,000	)		(141,000	)
Intangible assets		(245,000	)		(298,000	)
481 Election (IPS)		(99,000	)		(196,000	)
Total deferred tax liabilities		(402,000	)		(635,000	)
Valuation allowance		(1,887,000	)		(2,666,000	)
Net deferred tax assets	$	–		$	–

Reconciliation of effective tax rate

The significant elements contributing to the difference between the U.S. federal statutory tax rate and the Company’s effective tax rate are as follows:

	Fiscal 2020			Fiscal 2019
U.S. federal statutory rate		21.0%			21.0%
State tax rate, net of federal benefit		(1.9%	)		2.8%
Foreign rate differential		(14.9%	)		1.4%
Other		(10.6%	)		1.9%
Change in tax credits		(0.2%	)		(0.1%	)
Effect of state tax rate change		1.5%			–
Capital loss - expiration		(2.1%	)		–
Change in valuation allowance		41.1%			(26.6%	)
State income taxes		(0.7%	)		–
Federal AMT		0.2%			0.1%
Permanent differences		(33.9%	)		(0.4%	)
Effective tax rate		(0.5%	)		0.1%