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Income taxes | 12 Months Ended
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Mar. 31, 2026
Income Tax Disclosure [Abstract] |
Income taxes | Income taxes Loss before income taxes for the years ended March 31, 2026 and 2025 were as follows:
| Year ended March 31,
| 2026 |  | 2025
United States | (66,042) |  |  | (25,870) |
United Kingdom | (248,449) |  |  | (220,959) |
Total | $ | (314,491) |  |  | $ | (246,829) |
Income tax (benefit) expense consisted of the following:
| Year ended March 31,
| 2026 |  | 2025
Current income tax (benefit) provision: |  |  |
Federal | $ | (313) |  |  | $ | 468 |
State | (238) |  |  | — |
Foreign (United Kingdom) | — |  |  | — |
Total current income tax (benefit) provision: | $ | (551) |  |  | $ | 468 |
During the year ended March 31, 2026 and 2025, the Company recorded an income tax benefit of $0.6 million and a provision of $0.5 million, respectively. Future realization of the tax benefits of existing temporary differences and net operating loss carryforwards ultimately depends on the existence of sufficient taxable income within the carryforward period. As of March 31, 2026 and 2025, the Company performed an evaluation to determine whether a valuation allowance was needed. The Company considered all available evidence, both positive and negative, which included the results of operations for the current and preceding years. It was determined that it was not possible to reasonably quantify future taxable income and determined that it is more likely than not that all of the deferred tax assets will not be realized. Accordingly, a full valuation allowance was maintained as of March 31, 2026 and 2025. A reconciliation of taxes at the U.S. federal statutory income tax rate to the Company’s benefit from income taxes for the year ended March 31, 2026 in accordance with the guidance upon adoption of ASU 2023-09 is as follows:
| Year Ended March 31,
| 2026
| Amount |  | Percent
Pre tax loss | $ | (314,491) |  |  |
U.S. Federal statutory tax rate | (66,043) |  |  | 21.0 | %
State and local income taxes, net of federal benefit | (2,516) |  |  | 0.8 | %
Foreign tax effects: |  |  |
United Kingdom |  |  |
Change in valuation allowance | 63,295 |  |  | (20.1) | %
Statutory tax rate difference between U.K. and U.S. | (9,938) |  |  | 3.2 | %
Other | (1,186) |  |  | 0.4 | %
Tax credits: |  |  |
Federal R&D credit | (15,381) |  |  | 4.9 | %
Change in valuation allowance | 20,265 |  |  | (6.4) | %
Nontaxable or nondeductible items: |  |  |
Other | (788) |  |  | 0.3 | %
Stock compensation | 2,204 |  |  | (0.7) | %
Changes in unrecognized tax benefits | 9,537 |  |  | (3.0) | %
Total | $ | (551) |  |  | 0.2 | %
The Company's effective tax rate includes the effects of state and local income taxes, net of the federal income tax benefit, which are primarily attributable to Massachusetts, where the Company has significant business activities. Massachusetts has a higher effective tax rate compared to other jurisdictions where the Company operates, and together, accounts for more than half of the Company's total state tax benefit. The reconciliation of taxes at the federal statutory rate to our provision for (benefit from) income taxes for the year ended March 31, 2025 in accordance with the guidance prior to the adoption of ASU 2023-09 was as follows:
|  | Year Ended March 31,
|  | 2025
U.S. federal statutory income tax rate |  | (21.0) | %
State taxes, net of federal benefit |  | (0.5) | %
Research and development |  | (1.6) | %
Stock compensation |  | 1.2 | %
Foreign tax rate differential |  | (3.6) | %
Change in tax rates |  | 0.4 | %
Change in valuation allowance |  | 24.3 | %
Other |  | 1.0 | %
|  | 0.2 | %
The components of the Company’s deferred tax assets as of March 31, 2026 and 2025 were as follows:
| Year Ended March 31,
| 2026 |  | 2025
Deferred tax assets: |  |  |
Net operating loss carryforwards | $ | 267,196 |  |  | $ | 192,909 |
Research and development credits | 15,144 |  |  | 2,676 |
Property, plant and equipment | 4,735 |  |  | 4,596 |
Capitalized start-up costs | 873 |  |  | 1,014 |
Stock compensation | 20,297 |  |  | 16,478 |
Accrued expenses | 5,595 |  |  | 6,397 |
Lease liability | 6,931 |  |  | 7,318 |
Other | 120 |  |  | — |
Total deferred tax assets | 320,891 |  |  | 231,388 |
Valuation allowance | (312,035) |  |  | (221,629) |
Net deferred tax assets | 8,856 |  |  | 9,759 |
Deferred tax liabilities: |  |  |
Right of use asset | (8,856) |  |  | (9,698) |
Other | — |  |  | (61) |
Total deferred tax liabilities | (8,856) |  |  | (9,759) |
Net deferred tax assets (liabilities) | $ | — |  |  | $ | — |
As of March 31, 2026, the Company had U.S. federal operating loss carryforwards of approximately $62.7 million, which can be carried forward indefinitely subject to 80% limitation of taxable income when utilized. As of March 31, 2026, the Company had U.S. state net operating loss carryforwards of $102.4 million, which will begin to expire in 2038. As of March 31, 2026, the Company had U.K. net operating loss carryforwards of approximately $987.2 million, which can be carried forward indefinitely. Such U.S. federal and state, as well as U.K., net operating loss carryforwards are based on tax returns filed and does not reflect uncertain tax positions in the U.S. and offsetting positions in the U.K. related to the transfer pricing arrangement between the U.S. and the U.K. As of March 31, 2026, the Company had U.S. federal research and development credit carryforwards of approximately $21.0 million, which begin to expire in 2040. Additionally, the Company has state research and development credit carryforwards of approximately $9.0 million, which will begin to expire in 2036. Utilization of the U.S. federal and state net operating loss as well as research and development credit carryforwards may be subject to a substantial annual limitation under Section 382 of the Internal Revenue Code of 1986, as amended, and corresponding provisions of state law, due to ownership changes that have occurred previously or that could occur in the future. These ownership changes may limit the amount of net operating loss carryforwards that can be utilized annually to offset future taxable income and tax liabilities, respectively. The Company has completed a study and determined that an ownership change occurred on July 19, 2018. Due to the ownership change, the utilization of certain net operating loss carryforwards to offset future taxable income and is limited under IRC Section 382; however, none of the net operating losses are expected to expire unutilized. Changes in the valuation allowance for deferred tax assets during the years ended March 31, 2026 and 2025 related primarily to the increase in net operating loss carryforwards were as follows:
| Year Ended March 31,
| 2026 |  | 2025
Valuation allowance as of beginning of year | $ | 221,629 |  |  | $ | 161,890 |
Increases recorded to income tax provision | 90,329 |  |  | 59,848 |
(Decreases) increases recorded to equity | 77 |  |  | (109) |
Valuation allowance as of end of year | $ | 312,035 |  |  | $ | 221,629 |
Changes in the Company's gross unrecognized tax benefits from uncertain tax positions, excluding interest and penalties, consisted of the following:
| Year Ended March 31,
| 2026 |  | 2025
Unrecognized tax benefits - beginning of year | $ | 10,443 |  |  | $ | 8,667 |
Increases for tax positions taken during current years | 4,874 |  |  | 921 |
Increases (decreases) for tax positions taken during prior years | 5,252 |  |  | 855 |
Unrecognized tax benefits - end of year | $ | 20,569 |  |  | $ | 10,443 |
The Company's unrecognized tax benefits primarily relate to the Company's transfer pricing arrangement between the U.S. and the U.K. and the impacts to the Company’s net operating loss as well as research and development credit carryforwards. The Company's unrecognized tax benefits, if recognized, would not have a material impact to the Company's effective tax rate and income tax provision due to the Company's full valuation allowance. As of March 31, 2026 and 2025, the Company had not accrued interest or penalties related to uncertain income tax positions. The Company files U.S. federal and state as well as U.K. income tax returns. In the normal course of business, the Company is subject to examination by U.S. federal and state as well as U.K. jurisdictions, where applicable. There are currently no pending income tax examinations. The Company is open to future U.S. federal income tax examination from 2022 to the present and in the U.K. from 2024 to the present. Although, carryforward attributes from earlier years may still be adjusted upon examination if they either have been used in an open year or will be used in a future period. As of March 31, 2026 and 2025, income taxes on outside basis differences, primarily related to undistributed earnings, of the Company’s subsidiary have not been provided for as the Company intends to indefinitely reinvest its outside basis differences, and the undistributed earnings were in a cumulative and overall deficit. The following summarizes the Company's income taxes paid, net of refunds received, for the year presented below:
| Year Ended March 31,
| 2026
Federal | $ | 130 |
State |
Massachusetts | (135) |
Foreign | — |
Total | $ | (5) |

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