Autonomix Medical, Inc. Income Taxes Disclosure
Note 6– Income Taxes
The Company files U.S. federal and various U.S. state income tax returns. Due to the Company’s losses, there was no income tax expense for the years ended March 31, 2026 and 2025.
The Company adopted ASU 2023-09 "Income Taxes (Topic 740): Improvements To Income Tax Disclosures" on a prospective basis beginning with the year ended March 31, 2026. The following table presents required disclosure pursuant to ASU 2023-09 and reconciles the U.S. federal statutory tax amount and rate to our actual global effective amount and rate for the year ended March 31, 2026 (in thousands):
| % | ||||||||
| Year Ended March 31, 2026 | ||||||||
| Amount | Percent | |||||||
| Federal benefit at statutory rate | $ | (3,510 | ) | 21.00 | % | |||
| Nontaxable or nondeductible items: | ||||||||
| Cancellation of prior stock compensation deferred tax asset | 1,360 | (8.13 | )% | |||||
| Equity-based compensation | 8 | (0.06 | )% | |||||
| State tax expense | (53 | ) | 0.32 | % | ||||
| Valuation allowance | 2,195 | (13.13 | )% | |||||
| Effective income tax rate | $ | — | — | % | ||||
The effective income tax rate varied from the statutory rate in 2026 primarily due to and the increase in the valuation allowance. The effective income tax rate varied from the statutory rate in 2025 primarily as a result of the increase in the valuation allowance.
The following table presents the Company’s effective income tax rate reconciliation for the year ended March 31, 2025, in accordance with the guidance prior to the adoption of ASU 2023-09 (in thousands):
| Year Ended March 31, 2025 | ||||||||
| Amount | Percent | |||||||
| Tax benefit at the U.S. federal statutory rate | $ | (2,396 | ) | 21.00 | % | |||
| Permanent differences | 5 | (0.05 | )% | |||||
| Return to provision | (44 | ) | 0.39 | % | ||||
| Change in state rate | 234 | (2.05 | )% | |||||
| State tax (net of federal benefit) | (63 | ) | 0.55 | % | ||||
| Valuation allowance | 2,264 | (19.84 | )% | |||||
| Effective income tax rate | $ | — | — | % | ||||
Deferred tax assets and liabilities consist of the following (in thousands):
| March 31, | March 31, | |||||||
| 2026 | 2025 | |||||||
| Deferred tax assets: | ||||||||
| Capitalized research and development expense | $ | 1,275 | $ | 1,380 | ||||
| Net operating loss carryforwards | 1,965 | 761 | ||||||
| Accrual expenses and other current liabilities | 4,677 | 3,438 | ||||||
| Stock-based compensation | — | 450 | ||||||
| Total deferred tax assets | 7,917 | 6,029 | ||||||
| Less: valuation allowance | (7,917 | ) | (5,723 | ) | ||||
| Net deferred tax assets | — | 306 | ||||||
| Deferred tax liabilities: | ||||||||
| Section 481A method change | — | (306 | ) | |||||
| Total deferred tax liabilities | — | (306 | ) | |||||
| Net deferred tax assets | $ | — | $ | — | ||||
At March 31, 2026, the Company had U.S. federal net operating loss ("NOL") carry forwards of $9.4 million. Approximately $0.6 million of the U.S. federal NOLs will start expiring in 2037. Additionally, the Company generated a U.S. federal NOL carry-forward of approximately $8.8 million post-2017 to 2025. Under the new Tax Act, post-2017 federal NOL carry forwards do not expire, but can only offset 80% of taxable income in the year the loss carry forward is used.
Sections 382 and 383 of the Internal Revenue Code limit the annual use of NOL carry-forwards and tax credit carry forwards, respectively, following an ownership change. NOL carry-forwards may be subject to annual limitations under Internal Revenue Code Section 382 (Section 382) (or comparable provisions of state law) if certain changes in ownership were to occur. Determination of ownership change, or limitation hasn’t been calculated; however, the Company will perform the NOL limitation analysis under Section 382 before any NOLs are expected to be utilized.
The Company is subject to income taxes in the U.S. federal jurisdiction and various state jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. As of March 31, 2026, all of the tax years remained open to examination by the federal and state taxing authorities, for three or four years from the tax year in which net operating losses or tax credits are utilized completely.
As of March 31, 2026, the Company has no uncertain tax positions.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | May 27, 2026 | Showing above |
| 2025 | May 29, 2025 | |
| 2024 | May 31, 2024 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.