XML 35 R14.htm IDEA: XBRL DOCUMENT v3.24.1.1.u2
Income taxes
 12 Months Ended
Mar. 31, 2024
Income Taxes - Open [Abstract]  
INCOME TAXES

NOTE 6 – INCOME TAXES

 

The income tax provision consisted of the following:

 

   Year Ended March 31, 
   2024   2023 
   (in thousands) 
Current portion:        
Federal  $
—
   $
—
 
State   2    2 
    2    2 
Deferred portion:          
Federal   (3,730)   (2,933)
State   (657)   (1,467)
    (4,387)   (4,400)
Change in valuation allowance   4,387    4,400 
Provision for income taxes  $2   $2 

 

At March 31, 2024, the Company had net operating loss carryforwards (NOLs) of approximately $35,000,000 for federal income tax purposes and $50,400,000 for state income tax purposes. These NOLs are available to reduce future taxable income and will expire at various times from 2037 through 2045, except federal NOLs from fiscal 2018 and later, which will never expire.

 

The Company also had federal research and development tax credit carryforwards of approximately $2,100,000, which will begin expiring at various times from 2038 through 2044, and state research and development credits of approximately $500,000, which do not have an expiration date.

 

A reconciliation of income taxes provided at the federal statutory rate to the actual income tax provision is as follows:

 

   Year Ended March 31, 
   2024   2023 
Federal statutory rate   (21)%   (21)%
State tax rate, net of federal benefit   (6)%   (6)%
Research and development tax credits   (7)%   (6)%
Change in valuation allowance   32%   29%
Other   2%   4%
Effective income tax rate   
—
%   
—
%

 

The losses before income tax provision for the years ended March 31, 2024 and 2023 were solely attributable to US operations. Significant components of the Company’s deferred tax assets and liabilities were (in thousands):

 

   March 31, 
   2024   2023 
Net operating loss carryforwards  $10,860   $8,742 
Capitalized research and development expense   3,058    1,933 
Stock-based compensation expense   2,818    2,587 
Research and development tax credits   2,568    1,658 
Property and equipment   193    105 
Total deferred tax assets   19,497    15,025 
Section 179 assets   (239)   (111)
Reserves, accruals and other   (49)   (92)
Total deferred tax liabilities   (288)   (203)
Less: valuation allowance   (19,209)   (14,822)
Deferred tax assets, net  $
—
   $
—
 

 

Based on the available information and other factors, management believes it is more likely than not that the net deferred tax assets at March 31, 2024 and 2023, will not be fully realizable. Accordingly, management has recorded a full valuation allowance against its net deferred tax assets at March 31, 2024 and 2023.

 

Management has evaluated and concluded that there were no material uncertain tax positions requiring recognition in the Company’s consolidated financial statements at March 31, 2024 and 2023. The Company does not expect any significant changes in its unrecognized tax benefits within twelve months of the reporting date.