Annual report pursuant to Section 13 and 15(d)

Income Taxes

v3.2.0.727
Income Taxes
12 Months Ended
Apr. 30, 2015
Income Taxes [Abstract]  
Income Taxes

Note 12. Income Taxes


The components of income tax expense (benefit) are as follows:


For the Years Ended

 

April 30,

 

2015

   

2014

 

 

 

 

 

 

Current:

           

Federal

  $     $  

State

           
             

Deferred:

               

Federal

           

State

           
             

Total Income tax expense (benefit)

  $     $  



Significant components of the Company's deferred income tax assets and liabilities are as follows:


April 30,

2015

2014 

 

 

 

 

 

Deferred tax assets:

   

Net operating loss

  $ 7,487,076     $ 6,021,134  

Allowance for doubtful accounts

    21,416       55,679  

Intangible assets

    304,062       294,284  

Deferred rent

    2,872       7,948  

Stock-based compensation

    580,672       411,374  

Contributions carryforward

    93       93  

Total deferred tax assets

    8,396,191       6,790,512  
                 

Deferred tax liabilities:

               

Property and equipment

    (155,991 )     (126,297 )

Total deferred tax liabilities

    (155,991 )     (126,297 )
                 

Deferred tax assets, net

    8,240,200       6,664,215  
                 

Valuation allowance:

               

Beginning of year

    (6,664,215 )     (4,684,841 )

(Increase) during period

    (1,575,985 )     (1,979,374 )

Ending balance

    (8,240,200 )     (6,664,215 )
                 

Net deferred tax asset

  $     $  


A valuation allowance is established if it is more likely than not that all or a portion of the deferred tax asset will not be realized. The Company recorded a valuation allowance at April 30, 2015 and 2014 due to the uncertainty of realization. Management believes that based upon its projection of future taxable operating income for the foreseeable future, it is more likely than not that the Company will not be able to realize the tax benefit associated with deferred tax assets. The net change in the valuation allowance during the year ended April 30, 2015 was an increase of $1,575,985.


At April 30, 2015, the Company had $20,204,869 of net operating loss carryforwards which will expire from 2030 to 2035. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for unrecognized tax benefits. As of April 30, 2015, tax years 2011 through 2014 remain open for IRS audit. The Company has received no notice of audit from the Internal Revenue Service for any of the open tax years.


A reconciliation of income tax computed at the U.S. statutory rate to the effective income tax rate is as follows:


April 30,

2015

 

2014 

 

 

 

 

Statutory U.S. federal income tax rate

34.0 %     34.0 %

State income taxes, net of federal tax benefit

    3.0       3.1  

Other

    (0.1 )     (0.1 )

Change in valuation allowance

    (36.9 )     (37.0 )

Effective income tax rate

    0.0 %     0.0 %