Note 9 - Income Taxes

12 Months Ended

Sep. 30, 2014

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:

	2014			2013			2012
Income (Loss) Before Provision for Income Taxes	$	8,376		$	138,805		$	(783,966	)
Statutory rate		34	%		34	%		34	%
		2,848			47,194			(266,548	)
Permanent differences		1,200			1,200			2,500
Research and development credit - net		(46,300	)		(44,900	)		(8,500	)
Valuation allowance		44,400			-			274,600
Other		(2,148	)		(3,494	)		(2,052	)
	$	-		$	-		$	-

Deferred tax assets (liabilities) consist of the following:

	2014			2013
Current:
Inventories	$	128,900		$	277,300
Bad debts		3,400			3,400
Accrued liabilities		(11,700	)		63,000
Prepaid expense		(12,900	)		(9,500	)
		107,700			334,200
Valuation allowance		(107,700	)		(334,200	)
Total current deferred income taxes		-			-
Noncurrent:
Depreciation and amortization		45,100			42,700
Research and development and other credit carryforwards		1,903,800			1,830,600
Net operating loss carryforward		1,880,200			1,817,200
Contribution carryforward		8,900			8,900
Directors stock option plan		40,000			39,000
Acquisition costs		101,000			49,700
Accrued liabilities		80,000			-
		4,059,000			3,788,100
Valuation allowance		(4,059,000	)		(3,788,100	)
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 2010 through 2012. In addition, the Company is subject to state and local income tax examinations for the tax years 2010 through 2012.

The Company has available a net operating loss carryforward of approximately $5,500,000, and a research and development credit carryforward of approximately $1,800,000, and a contribution carryforward of approximately $26,000. The net operating loss, research and development credit and contribution carryforwards will begin to expire in fiscal 2025, 2016, and 2015 respectively.

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