Annual report pursuant to Section 13 and 15(d)


12 Months Ended
Apr. 30, 2022
Income Tax Disclosure [Abstract]  



At April 30, 2022, the Company had federal and state net operating loss carryforwards of approximately $52,382,000 and $48,619,000, respectively, available to offset against future taxable income; these operating loss carryforwards expire in 2021 through 2038. Internal Revenue Code section 382 imposes an annual limitation for the utilization of tax attributes if there is an “ownership changes.” Based upon the equity activity during the year ended April 30, 2022, the Company had an ownership change in August 2021. Accordingly, it is more likely than not that section 382 will impose a restrictive limitation on the utilization of the Company’s federal tax attributes and would require the net operating loss carryforward to be written down. The Company is currently working through its section 382 study.


Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited. Based on the assessment of all available evidence including, but not limited to, the Company’s limited operating history in its core business and lack of profitability, uncertainties of the commercial viability of its technology, the impact of government regulations and healthcare reform initiatives and other risks normally associated with biotechnology companies, the Company has concluded that is more likely than not that these operating loss carryforwards will not be realized. Accordingly, 100% of the deferred tax valuation allowance has been recorded against these assets.


Deferred income taxes reflect the net effect of temporary differences between the financial reporting carrying amounts of assets and liabilities and income tax carrying amounts of assets and liabilities. The components of the Company’s deferred tax assets and liabilities are as follows:  

    April 30,  
    2022     2021  
Deferred tax assets:                
Net operating loss carryforwards   $ 15,138,850       13,804,439  
Stock compensation     584,321       2,547,274  
Other     35,230       146,486  
Total deferred tax assets     15,758,401       16,498,199  
Valuation allowance     (15,758,401 )     (16,498,199 )
Net deferred tax assets   $     $  


For all years presented, the Company did not recognize any deferred tax assets or liabilities. The net change in valuation allowance for the years ended April 30, 2022, and 2021, was a decrease of $739,798 and an increase of $969,241, respectively.


The provision for income taxes differs from the provision computed by applying the Federal statutory rate to net loss before income taxes as follows: 

    Years Ended April 30,  
    2022     2021  
Federal benefit at statutory rate   $ (890,224 )     (745,760 )
State income taxes, net of Federal taxes     (362,448 )     (303,631 )
Permanent differences     20,508       78,258  
Provision related to change in valuation allowance     (739,798     969,241  
Expired stock options     1,976,324        
Net valuation allowance for state tax deductions            
Other, net     (4,362     1,892  
Provision for income taxes   $     $  


There have been no changes to the Company’s liability for unrecognized tax benefits during the year ended April 30, 2022.


The Company files its income tax returns in the U.S. Federal jurisdiction and various state jurisdictions. As of the year ended April 30, 2022, the tax returns for 2016 through 2021 remain open to examination by the Internal Revenue Service and various state tax authorities.


The Company’s policy is to recognize any interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of the years ended April 30, 2022, and 2021, the Company had accrued no interest or penalties related to uncertain tax positions.