INCOME TAXES |
9 Months Ended |
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Jan. 31, 2024 | |
| Income Tax Disclosure [Abstract] | |
| INCOME TAXES |
NOTE 10 – INCOME TAXES
At January 31, 2024, the Company had federal and state net operating loss carryforwards of approximately $58,018,000 and $49,924,000, respectively, available to offset against future taxable income. Approximately $39,336,000 of the federal operating losses expire in 2023 through 2038 and the state operating losses expire in 2035 through 2043. Internal Revenue Code Section 382 imposes an annual limitation for the utilization of tax attributes if there is an “ownership change”. Based upon the equity activity during the year ended April 30, 2022, the Company had an ownership change in August 2021. As a result of the change in-control that occurred in the Company’s shareholder base in August 2021, approximately $37,060,000 and $40,808,000 federal and state net operating loss carryforwards, respectively, became limited in their availability. The remaining net operating loss carryforwards were approximately $20,958,000 and $9,117,000 for federal and state purposes, respectively.
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.
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 nine months ended January 31, 2024 and 2023, the Company had accrued no interest or penalties related to uncertain tax positions.
See Note 9 of Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended April 30, 2023, for additional information regarding income taxes.
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