Income Taxes

12 Months Ended

Sep. 30, 2011

Income Taxes [Abstract]

Income Taxes

7.  INCOME TAXES

  The provision for income taxes consisted of the following:

			Year Ended September 30,
			2011				2010
Currently payable:
Federal	$		13,030		$		29,599
State		(	40,402	)			260
Deferred (credit)			0			(	29,599	)
	$	(	27,372	)	$		260

A reconciliation of the statutory federal income tax rate and the Company's effective income tax rate is as follows:

			Year ended September 30,
		2011						2010
			Amount			%			Amount			%
Statutory tax rate		$	73,285			34.0	%	$	49,827			34.0	%
State income tax net of:
Federal benefit		(	26,665	)	(	12.4	%)		0			0	%
Research and experimentation
tax credits		(	27,865	)	(	12.9	%)	(	29,179	)	(	19.9	%)
Federal graduated rate differential		(	10,152	)	(	4.7	%)		0			0.0	%
Valuation allowance change		(	114,754	)	(	53.2	%)	(	20,560	)	(	14	%)
NOL true up			78,577			36.5	%		0			0.0	%
Permanent differences			202			0.0	%		0			0.0	%
	$	(	27,372	)	(	12.7	%)	$	260			0.1	%

The temporary differences which give rise to deferred tax assets and (liabilities) at September 30 are as follows:

			2011				2010
Inventory	$		139,354		$		143,816
Accrued warranty			4,250				4,250
Accrued vacation			98,286				96,454
Accounts receivable			8,895				6,043
Valuation allowance		(	250,785	)		(	250,563	)
Net deferred tax assets
(liabilities) - current			0				0
Accelerated depreciation	$	(	32,634	)	$		9,949
Research and experimentation
tax credit carry forward			197,403				191,219
AMT credit carry forward			39,399				39,399
NOL carry forward			0				78,577
Valuation allowance		(	204,168	)		(	319,144	)
Net deferred tax assets
(liabilities) – noncurrent	$		0		$		0
Net deferred tax assets	$		0		$		0

  As required by FASB ASC 740 (Prior Authoritative Literature: SFAS 109, Accounting for Income Taxes) the Company has evaluated the positive and negative evidence bearing upon the realization of its deferred tax assets.  The Company has determined that, at this time, it is more likely than not that the Company will not realize all of the benefits of federal and state deferred tax assets, and, as a result, a valuation allowance was established.  The research and experimentation tax credit carry forwards and NOL carry forwards expire in 2030.  At September 30, 2011, the Company's federal AMT credit can be carried forward indefinitely.