Annual report pursuant to Section 13 and 15(d)


12 Months Ended
Apr. 30, 2019
Income Tax Disclosure [Abstract]  



At April 30, 2019, the Company had federal and state net operating loss carryforwards of approximately $42,396,000 and $43,989,000, respectively, available to offset against future taxable income; these operating loss carryforwards expire in 2019 through 2038.


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,  
    2019     2018  
Deferred tax assets:                
Net operating loss carryforwards   $ 11,849,290       11,038,315  
Stock compensation     2,233,230       2,117,840  
Other     105,251       79,446  
Total deferred tax assets     14,187,771       13,235,601  
Net deferred tax assets                
Valuation allowance     (14,187,771 )     (13,235,601 )
    $     $  


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, 2019 and 2018 were increases of $952,170 and $1,714,306, 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,  
    2019     2018  
Federal benefit at statutory rate   $ (854,118 )     (2,321,806 )
State income taxes, net of Federal taxes     (274,538 )     (398,121 )
Permanent differences     170,032       286,005  
Tax rate change           887,749  
Provision related to change in valuation allowance     952,170       1,714,305  
Stock compensation           (20,393 )
Other, net     6,454       (147,739 )
    $     $  


There have been no changes to the Company’s liability for unrecognized tax benefits during the year ended April 30, 2019.


The Company files its income tax returns in the U.S. Federal jurisdiction and various state jurisdictions. As of the year ended April 30, 2019, the tax returns for 2013 through 2018 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, 2019 and 2018, the Company had accrued no interest or penalties related to uncertain tax positions.