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Income Taxes
 9 Months Ended
Jan. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes

(16) Income Taxes

 

Uncertain Tax Positions

 

The Company accounts for income taxes in accordance with ASC 740. The guidance requires the Company to recognize in its consolidated financial statements the impact of a tax position if that position is more likely than not to be sustained upon examination, based on the technical merits of the position. The Company has no current or deferred tax due to current and projected losses for the year. The Company previously appealed the results of the income tax audit in Spain for the period from 2011 to 2014, when the Company’s Spanish branch was closed (see Note 14). On February 3, 2025, the Spanish National Court denied the Company’s appeal, and the Company does not believe it has further available grounds to appeal this decision to the Spanish Supreme Court. Accordingly, this matter is closed. At January 31, 2025, the Company had no uncertain tax positions. The Company does not expect any material increase or decrease in its income tax expense or benefit in the next twelve months, related to examinations or uncertain tax positions. Net operating loss and credit carry forwards since inception remain open to examination by taxing authorities and will continue to remain open for a period of time after utilization.

 

Tax Preservation Plan

 

In June 2023, in order to protect the Company’s valuable tax assets related to its net operating losses from being limited or lost under Section 382 of the Internal Revenue Code, the Company adopted a Tax Benefits Preservation Plan (the “Plan”). Pursuant to the Plan, the Board declared a dividend of one preferred share purchase right (each, a “Right”) for each outstanding share of common stock of the Company. The dividend was distributed to stockholders of record as of the close of business on July 11, 2023. The Plan substantially diminishes the risk that the Company’s ability to utilize its net operating loss carryovers to reduce potential future federal income tax obligations may become substantially limited. The Plan is intended to act as a deterrent to any person or group acquiring beneficial ownership of 4.99% or more of the outstanding common stock without approval by potentially subjecting any such person or group to significant dilution. The Plan was approved by shareholders by a non-binding advisory vote at the Company’s Annual Meeting held on February 28, 2024.

 

The Company determined the grant date fair value of the Rights using an option-pricing model. The amount was immaterial to the consolidated financial statements and deemed to be de minimis, and accordingly was not recorded to the financial statements.

 

Sale of New Jersey NOL’s and R&D Tax Credits

 

In order to monetize their attributes, the Company has historically sold the Net Operating Losses (NOL’s) and R&D credit generated in New Jersey. In September 2024 the Company was notified that it received a preliminary award of approximately $1.1 million for New Jersey State for the sale of the fiscal year 2024 NOL. The final allocation is expected to be determined during the fourth quarter of OPT’s 2025 fiscal year when the sale of the NOL’s and credit are finalized. The Company has elected to recognize the gain on the sale as a component of tax expense at the time of the sale. Historically the Company has received over 90% of the amount of the preliminary award upon final sale.