XML 48 R26.htm IDEA: XBRL DOCUMENT
v3.19.2

Income Tax Provision | 12 Months Ended
--- | ---
Mar. 31, 2019
Income Tax Disclosure [Abstract] |
Income Tax Provision | Note 18 — Income Tax Provision On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was signed into law, making significant changes to the taxation of U.S. business entities. The Tax Act reduced the U.S. corporate income tax rate from 35% to 21%, imposed a one-time transition tax in connection with the move from a worldwide tax system to a territorial tax system, imposed limitations on certain tax deductions such as fringe benefits including employee parking, executive compensation in future periods, and included numerous other provisions. Since the Company is not in a current U.S. federal tax paying position, the U.S. tax provision consists primarily of deferred tax benefits calculated at the 21% tax rate. The Company’s income tax provision can be affected by many factors, including the overall level of pre-tax income, the mix of pre-tax income generated across the various jurisdictions in which the Company operates, changes in tax laws and regulations in those jurisdictions, further interpretation and legislative guidance regarding the new Tax Act, changes in valuation allowances on its deferred tax assets, tax planning strategies available to the Company, and other discrete items. The components of pretax loss and provision for income taxes are as follows (in thousands):
|  | Year Ended March 31, |
|  | 2019 |  |  | 2018 |
Loss before income taxes: |  |  |  |  |  |
Domestic |  | $ | (37,544 | ) |  | $ | (23,330 | )
Foreign |  |  | - |  |  |  | - |
Total loss before income taxes |  | $ | (37,544 | ) |  | $ | (23,330 | )
The provision for income taxes consisted of the following: |  |  |  |  |  |  |  |
Current |  |  |  |  |  |  |  |
U.S. Federal |  | $ | - |  |  | $ | - |
State |  |  | 7 |  |  |  | 6 |
Foreign |  |  | - |  |  |  | - |
Total Current |  |  | 7 |  |  |  | 6 |
Deferred: |  |  |  |  |  |  |  |
U.S. Federal |  |  | - |  |  |  | - |
State |  |  | 211 |  |  |  | - |
Foreign |  |  | - |  |  |  | - |
Total Deferred |  |  | 211 |  |  |  | - |
Total provision for income taxes |  | $ | 218 |  |  | $ | 6 |
The differences between income taxes expected at U.S. statutory income tax rates and the income tax provision are as follows (in thousands):
|  | Year Ended March 31, |
|  | 2019 |  |  | 2018 |
Income taxes computed at Federal statutory rate |  | $ | (7,884 | ) |  | $ | (7,360 | )
State tax — net of federal benefit |  |  | (1,555 | ) |  |  | (330 | )
State minimum taxes |  |  | 7 |  |  |  | 6 |
Change in valuation allowance |  |  | 8,987 |  |  |  | 6,311 |
Permanent differences |  |  | 663 |  |  |  | 1,379 |
Total provision for income taxes |  | $ | 218 |  |  | $ | 6 |
At March 31, 2019 and 2018, the Company had available federal and state net operating loss carryforwards to reduce future taxable income of approximately $70.5 million and $54.3 million, respectively. The federal and state net operating loss carryforwards begin to expire on various dates beginning in 2024. Of the $70.5 million of federal net operating loss carryforwards, $54.3 million was generated in tax years beginning before March 31, 2018 and is subject to the 20-year carryforward period (“pre-Tax Act losses”), the remaining $16.2 million (“post-Tax Act losses”) can be carried forward indefinitely but is subject to the 80% taxable income limitation. The Company obtained $136 million and $2.6 million of net operating loss and credit carryforwards, respectively, through the acquisition of Slacker, Inc. in December 2017. Utilization of these losses is limited by Section 382 and 383 of the Code in fiscal year end March 31, 2018 and each taxable year thereafter. The Company has estimated a limitation and revalued the losses and credits at $22 million and $0, respectively. It is possible that the utilization of these NOL carryforwards and tax credits may be further limited. The Company is undertaking a study to determine the applicable limitations, if any. Upon the attainment of taxable income by the Company, management will assess the likelihood of realizing the tax benefit associated with the use of the carryforwards and will recognize the appropriate deferred tax asset at that time. The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by the federal and state jurisdictions where applicable. There are currently no pending income tax examinations. The Company’s tax years for 2014 and forward are subject to examination by the federal and California tax authorities due to the carryforward of unutilized net operating losses. The Company’s policy is to record interest and penalties on uncertain tax provisions as income tax expense. As of March 31, 2019 and 2018, the Company has not accrued interest or penalties related to uncertain tax positions. Significant components of the Company’s deferred income tax assets and liabilities are as follows as of (in thousands):
|  | Year Ended March 31, |
|  | 2019 |  |  | 2018 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 18,005 |  |  | $ | 12,469 |
Property and equipment |  |  | 135 |  |  |  | 122 |
Accruals and reserves |  |  | 796 |  |  |  | 333 |
Stock compensation |  |  | 3,154 |  |  |  | 1,003 |
Tax credits |  |  | - |  |  |  | 2,618 |
Capital loss carryforward |  |  | 556 |  |  |  | 502 |
Gross deferred tax assets |  |  | 22,646 |  |  |  | 17,047 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Intangible assets |  |  | (6,832 | ) |  |  | (10,009 | )
Net deferred tax assets |  |  | 15,814 |  |  |  | 7,038 |
Valuation allowance |  |  | (16,025 | ) |  |  | (7,038 | )
Net deferred tax liability |  | $ | (211 | ) |  | $ | - |
As the ultimate realization of the potential benefits of the Company’s deferred tax assets is considered unlikely by management, the Company has offset the deferred tax assets attributable to those potential benefits through valuation allowances. Accordingly, the Company did not recognize any benefit from income taxes in the accompanying Consolidated Statements of Operations to offset its pre-tax losses. The valuation allowance is $16.0 million and $7.0 million for the years ended March 31, 2019 and 2018, respectively.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration