Income Taxes (Tables)

12 Months Ended

Sep. 30, 2021

Components of loss before income taxes were as follows (in thousands):

	YEAR ENDED SEPTEMBER 30,
	2021			2020
United States	$	(10,628	)	$	(14,109	)
Foreign		(2,850	)		(2,484	)
	$	(13,478	)	$	(16,593	)

Computation of Provision for Income Taxes

The provision for income taxes consisted of the following (in thousands):

	YEAR ENDED SEPTEMBER 30,
	2021		2020
Current
Federal	$	14	$	(4	)
Foreign		561		2,467
State		—		5
		575		2,468
Deferred:
Federal		—		—
Foreign		3		181
		3		181
	$	578	$	2,649

Reconciliation of Actual Income Tax Expenses (Benefits)

Actual income tax expense (benefit) differs from income tax expense computed by applying the U.S. statutory federal tax rate of 21% for each of the fiscal years ended September 30, 2021 and 2020 as follows (in thousands):

	YEAR ENDED SEPTEMBER 30,
	2021			2020
Expense for U.S federal income tax at statutory rate	$	(2,834	)	$	(3,484	)
Effect of foreign income taxes		1			(64	)
Research and experimentation tax credit		(223	)		(1,201	)
State income taxes, net of federal income tax benefit		153			(158	)
Nondeductible expenses		44			63
Change in valuation allowance		2,893			4,882
Impact on deferred taxes due to change in tax rate		563			196
Change in fair value of contingent consideration		(569	)		214
Foreign income tax withholding		419			1,928
Disallowance of stock compensation adjustments in excess of book		334			255
Other items		(203	)		18
	$	578		$	2,649
Effective tax rate		(4.3	)%		(16.0	)%

Components of Net Deferred Income Tax Asset

The income tax expense for fiscal years 2021 and 2020 primarily reflects withholding tax on rental income earned in foreign jurisdictions. The Company is currently unable to record any tax benefits for its tax losses in the U.S., Canada and the Russian Federation due to the uncertainty surrounding its ability to utilize such losses in the future to offset taxable income.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred income tax asset were as follows (in thousands):

	AS OF SEPTEMBER 30, 2021									AS OF SEPTEMBER 30, 2020
	U.S.			Non U.S.			Total			U.S.			Non U.S.			Total
Deferred income tax assets:
Allowance for doubtful accounts	$	80		$	4		$	84		$	2,813		$	3		$	2,816
Inventories		8,042			—			8,042			7,809			33			7,842
Loss and tax credit carry-forwards		27,578			4,945			32,523			17,431			4,596			22,027
Stock-based compensation		398			—			398			506			—			506
Accrued product warranty		77			2			79			52			2			54
Contingent earn-out consideration		917			—			917			—			—			—
Accrued compensated absences		320			—			320			328			—			328
Property and equipment		—			487			487			—			501			501
Prepaid income taxes		—			266			266			—			517			517
Other reserves		114			11			125			1,009			9			1,018
		37,526			5,715			43,241			29,948			5,661			35,609
Deferred income tax liabilities:
Allowance for doubtful accounts		—			—			—			—			(11	)		(11	)
Inventories		—			(6	)		(6	)		—			—			—
Right-of-use assets		(131	)		—			(131	)		—			—			—
Intangible assets		(642	)		—			(642	)		(960	)		—			(960	)
Property, plant and equipment and other		(5,085	)		(36	)		(5,121	)		(3,271	)		(31	)		(3,302	)
Subtotal deferred income tax assets		31,668			5,673			37,341			25,717			5,619			31,336
Valuation allowance		(31,668	)		(5,704	)		(37,372	)		(25,717	)		(5,646	)		(31,363	)
Net deferred income tax assets (liabilities)	$	—		$	(31	)	$	(31	)	$	—		$	(27	)	$	(27	)

Net Classification of Deferred Income Tax Assets and Liabilities in Balance Sheet

Deferred income tax assets and liabilities are reported as follows in the accompanying consolidated balance sheets (in thousands):

	AS OF SEPTEMBER 30,
	2021			2020
Deferred income tax assets, net	$	—		$	—
Deferred income tax liabilities, net		(31	)		(27	)
	$	(31	)	$	(27	)