Annual report pursuant to Section 13 and 15(d)

17. Income Taxes (Tables)

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17. Income Taxes (Tables)
 12 Months Ended
Sep. 30, 2017
Income Tax Disclosure [Abstract]  
Reconciliation of income tax expense
    2017     2016
(Restated)		  
Current expense:                
Federal   $ 313,405     $ 103,704  
State     243,841       52,745  
      557,246       156,449  
Deferred expense:                
Federal     3,397,732       (15,114,529 )
State     126,841       (609,764 )
      3,524,573       (15,724,293 )
Total income tax expense   $ 4,081,819     $ (15,567,844 )
Reconciliation between effective and statutory income tax rates

A reconciliation of the differences between the effective and statutory income tax rates for years ended September 30:

 

    2017     2016
(Restated)		  
    Amount     Percent     Amount     Percent  
                         
Federal statutory rates   $ 3,598,424       34%     $ 1,830,150       77%  
State income taxes     299,216       3%       161,484       7%  
Permanent differences     71,908       1%       (1,798,450 )     -75%  
Net operating loss adjustment     –               (1,194,004 )     -50%  
Property & equipment adjustment     –               742,854       31%  
Equity compensation adjustment     –               (2,872,210 )     -120%  
Valuation allowance against net deferred tax assets     –               (12,284,278 )     -515%  
Other     112,271       1%       (153,390 )     -6%  
Effective rate   $ 4,081,819       39%     $ (15,567,844 )     -652%  

  

The Company restated the prior year deferred income taxes related to the Marquis acquisition. Certain deferred tax items were not recorded by the Company. The Company has adjusted the deferred taxes associated with property and equipment and stock compensation.

 

    September 30, 2016  
    As previously              
    Reported     Adjustment     As restated  
                   
Income tax expense (benefit):                        
Federal statuary rate   $ 1,830,150     $ –     $ 1,830,150  
State taxes, net of federal benefit     161,484       –       161,484  
Permanent difference     (852,646 )     (945,804 )     (1,798,450 )
Net operating loss adjustment     (1,083,866 )     (110,138 )     (1,194,004 )
Property and equipment adjustment     –       742,854       742,854  
Equity compensation adjustment     –       (2,872,210 )     (2,872,210 )
Valuation allowance     (12,284,278 )     –       (12,284,278 )
Other     (264,065 )     110,675       (153,390 )
    $ (12,493,221 )   $ (3,074,623 )   $ (15,567,844 )

 
Schedule of deferred income tax assets and liabilities
             
    2017     2016
(Restated)		  
Deferred income tax asset, current:                
Allowance for bad debts   $ 401,867     $ 406,733  
Accrued expenses     31,183       241,536  
Inventory     772,657       414,575  
Accrued compensation     –       –  
Total deferred income tax asset, current     1,205,706       1,062,844  
Less: valuation allowance     –       –  
Deferred income tax asset, current, net     1,205,706       1,062,844  
                 
Deferred income tax asset (liability), long-term:                
Net operating loss     7,804,948       9,915,371  
Tax credits     377,776       –  
Other     3,743       –  
Stock compensation     2,982,009       –  
Intangibles     13,126       794,455  
Property & equipment     (3,387,298 )     751,912  
Total deferred income tax asset, long-term     7,794,304       11,461,738  
                 
Less: valuation allowance     –       –  
Deferred income tax asset, net     7,794,304       11,461,738  
                 
Total deferred income tax asset   $ 9,000,010     $ 12,524,582