Message: For Fiscal Year Ending March 31st, 2010
The Company paid $206,250 of foreign taxes during the year ended March 31, 2010 and received a refund of $264,000 of foreign taxes withheld and paid in the prior year in connection with patent licensing agreements. In the year ended March 31, 2009 the Company also generated a tax liability to the state of California due to the suspension of the net operating loss (“NOL”) carryforwards for the 2008 and 2009 tax years. The state tax liability of $157,500 was after a reduction of 50% from the use of allowable research and development (“R&D”)credits generated in prior years.
The Company has U.S. federal NOL carryforwards available at March 31, 2010 of approximately $51,800,000 (2009 - $50,900,000) that will begin to expire in 2011. The Company has state net operating loss carryforwards of $18,500,000 (2009 - $18,600,000) that will begin to expire in 2012. The difference between federal and state net operating loss carryforwards is due to certain percentage limitations of California loss carryforwards and to expired California carryforwards. The foreign taxes paid create a foreign tax credit carryover that will be available to offset federal tax expense in future years, subject to certain limitations. The foreign tax credit carryover expires beginning in 2021.
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