Note 9 - Income Taxes

12 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

9. INCOME TAXES 

A reconciliation of the provision (recovery) of income taxes to the statutory Federal income tax rate is as follows:

		2013			2012			2011
Income (Loss) Before Provision for Income Taxes		$	138,805		$	(783,966	)	$	(672,535	)
	Statutory rate		34	%		34	%		34	%
			47,194			(266,548	)		(228,662	)
	Permanent differences		1,200			2,500			2,500
	Research and development credit - net		(44,900	)		(8,500	)		(27,500	)
	Valuation allowance		-			274,600			255,600
	Other		(3,494	)		(2,052	)		(1,938	)
		$	-		$	-		$	-

 
Deferred tax assets (liabilities) consist of the following:

		2013			2012
Current:
	Inventories	$	277,300		$	295,300
	Bad debts		3,400			3,400
	Accrued liabilities		63,000			45,600
	Prepaid expense		(9,500	)		(11,500	)
			334,200			332,800
	Valuation allowance		(334,200	)		(332,800	)
	Total current deferred income taxes		-			-
Noncurrent:
	Depreciation and amortization		42,700			53,400
	Research and development and other credit carryforwards		1,830,600			1,716,300
	Net operating loss carryforward		1,817,200			1,934,200
	Contribution carryforward		8,900			163,200
	Directors stock option plan		39,000			36,800
	Acquisition costs		49,700			-
			3,788,100			3,903,900
	Valuation allowance		(3,788,100	)		(3,903,900	)
	Total long-term deferred income taxes		-			-
	Total	$	-		$	-

The Company did not incur any material impact to its financial condition or results of operations due to the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

The Company is subject to U.S federal jurisdiction income tax examinations for the tax years 2009 through 2011. In addition, the Company is subject to state and local income tax examinations for the tax years 2009 through 2011.

The Company has available a net operating loss carryforward of approximately $5,345,000 and a contribution carryforward of approximately $26,000. The net operating loss and research and development credit carryforwards will begin to expire in fiscal 2016.

Management has recorded a valuation allowance on the entire balance of deferred tax assets due to the continued losses during the past several years, the current economic uncertainties, the negative effects of the current economic crisis on all the Company's markets and concern that a more likely than not expiration of the Company's net operating loss and research and development credit carryforwards could occur before they can be used.

The Company's ability to realize the entire benefit of its deferred tax assets requires that the Company achieve certain future earning levels prior to the expiration of its net operating loss and research and development credit carryforwards. Because of the uncertainties involved with this significant estimate, it is reasonably possible that the Company's estimate may change in the near term.