Annual report pursuant to Section 13 and 15(d)

15. Income Taxes (Tables)

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15. Income Taxes (Tables)
 12 Months Ended
Mar. 31, 2014
Income Tax Disclosure [Abstract]  
Deferred tax assets

The Company has the following net deferred tax assets (in thousands):

 

    March 31,  
    2014     2013  
Deferred tax assets:                
Net operating loss carryforwards   $ 36,209     $ 34,880  
Research and development tax credit carryforwards     1,650       1,646  
Stock-based compensation     3,941       3,727  
Reserves and accruals     2,537       1,404  
Other deferred tax assets     13       13  
State income taxes     (1 )     1  
Basis difference in assets     35       37  
Total deferred tax assets   $ 44,384     $ 41,708  
Deferred tax liabilities:                
Unrealized gain on Ruthigen     (3,111 )     –  
Net deferred tax asset     41,273       41,708  
Valuation allowance     (41,273 )     (41,708 )
Net deferred tax asset   $ –     $ –  

 
Schedule of income tax expense

The Company’s recorded income tax expense, net of the change in the valuation allowance, for each of the periods presented is as follows (in thousands):

 

    Years Ended March 31,  
    2014     2013  
Income tax (benefit)   $ 436     $ (391 )
Change in valuation allowance     (436 )     391  
Net income tax expense   $ –     $ –  

  
Reconciliation of federal income tax rate to effective rate
    Years Ended March 31,  
    2014     2013  
Expected federal statutory rate     (34.0 )%     (34.0 )%
State income taxes, net of federal benefit     (6.6 )%     (3.8 )%
Research and development credit     0.1 %     (1.4 )%
Foreign earnings taxed at different rates     (2.6 )%     1.7 %
Recognition of change in estimate of state and foreign NOL carryforward benefits     0.0 %     0.0 %
Effect of permanent differences on Ruthigen deconsolidation     29.7 %     0.0 %
Effect of permanent differences     (19.5 )%     31.3 %
Impact of change in foreign deferred     14.9 %     (1.3 )%
Impact of change in foreign net operating loss     15.8 %     0.0 %
Cancellation of stock options and true-ups     (6.5 )%     0.9 %
Withholding tax     0.0 %     (0.9 )%
Foreign tax credit     0.0 %     0.9 %
Other     (3.1 )%     (0.7 )%
      (11.8 )%     (7.3 )%
Change in valuation allowance     11.8 %     7.3 %
Totals     0.0 %     0.0 %