CHAMPIONS ONCOLOGY, INC.CSBR
CHAMPIONS ONCOLOGY, INC. Income Taxes Disclosure
Provision for (Benefit from) Income Taxes
The components of the (benefit) provision for income taxes are as follows (in thousands):
| Year Ended April 30, 2025 | |||||||||||||||||||||||
| Federal | State | Foreign | Total | ||||||||||||||||||||
| Current | $ | — | $ | 20 | $ | (95) | $ | (75) | |||||||||||||||
| Total | $ | — | $ | 20 | $ | (95) | $ | (75) | |||||||||||||||
| Year Ended April 30, 2024 | |||||||||||||||||||||||
| Federal | State | Foreign | Total | ||||||||||||||||||||
| Current | $ | — | $ | 7 | $ | (39) | $ | (32) | |||||||||||||||
| Total | $ | — | $ | 7 | $ | (39) | $ | (32) | |||||||||||||||
A reconciliation between the Company’s effective tax rate and the United States statutory tax rate for the years ended April 30, 2025 and 2024 is as follows:
| Year Ended April 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Federal income tax at statutory rate | 21.0 | % | 21.0 | % | |||||||
| US vs. foreign tax rate difference | 0.2 | (0.1) | |||||||||
| State income tax, net of federal benefit | 4.1 | (2.3) | |||||||||
| Permanent differences | (0.6) | 0.4 | |||||||||
| Decrease in uncertain tax position | (3.9) | — | |||||||||
| Deferred tax asset adjustment | 48.2 | — | |||||||||
| Change in valuation allowance | (70.6) | (18.5) | |||||||||
| Income tax expense | (1.6) | % | 0.5 | % | |||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities as of April 30, 2025 and 2024 consist of the following (in thousands):
| As of April 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Accrued liabilities | $ | 1,633 | $ | 1,269 | |||||||
| Operating leases | 250 | 279 | |||||||||
| Depreciation and amortization | (217) | (318) | |||||||||
| Stock-based compensation expense | 1,212 | 3,792 | |||||||||
| Capitalized research and development costs | 3,712 | 4,046 | |||||||||
| Net operating loss carry-forward | 8,248 | 9,038 | |||||||||
| Total deferred tax assets | 14,838 | 18,106 | |||||||||
| Less: Valuation allowance | (14,838) | (18,106) | |||||||||
| Net deferred tax asset | $ | — | $ | — | |||||||
Management has evaluated the available evidence about future tax planning strategies, taxable income, and other possible sources of realization of deferred tax assets and has established a full valuation allowance against its net deferred tax assets as
of April 30, 2025 and 2024. For the years ended April 30, 2025 and 2024, the Company recorded a valuation allowance of $14.8 million and $18.1 million, respectively. The net decrease in the valuation allowance of $3.3 million during the fiscal year ended April 30, 2025, was mainly due to decreases in the deferred tax assets related to the net operating loss carryforward, stock-based compensation, and capitalized research expenses. The net increase in the valuation allowance of $1.4 million during the fiscal year ended April 30, 2024 was mainly due to increases in the deferred tax assets related to capitalized research expenses and other timing differences. Management continues to assess the realizability of the deferred tax assets at each interim and annual balance sheet date based upon actual and forecasted operating results.
As of April 30, 2025 and 2024, the Company’s estimated U.S. net operating loss carry-forwards were approximately $35.1 million and $38.6 million, respectively. Net operating losses generated prior to May 1, 2018 have a 20-year carryforward and will begin expiring in 2034 for federal and 2031 for state purposes. Losses generated in the fiscal years since the year ended April 30, 2019 may be carried forward indefinitely. A valuation allowance has been recorded against all of these loss carryforwards.
Under the provisions of the Internal Revenue Code, certain substantial changes in the Company’s ownership may result in a limitation on the amount of net operating losses that may be utilized in future years. During the fiscal year ended April 30, 2013, approximately $12.0 million of the Company’s net operating losses became subject to limitation under Internal Revenue Code Section 382 in connection with an ownership change on January 28, 2013. As a result of the ownership change, the Company’s annual limitation on its use of net operating loss carry-forwards is approximately $432,000.
The Company files income tax returns in various jurisdictions with varying statutes of limitations. As of April 30, 2025, the earliest tax year still subject to examination for state purposes is fiscal 2021. The Company’s tax years for periods ending April 30, 2014 and forward are subject to examination by the United States and certain states due to the carry-forward of unutilized net operating losses.
The following table indicates the changes to the Company’s uncertain tax positions for the period and years ended April 30, 2025 and 2024 in thousands:
| Year Ended April 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Balance, beginning of the year | $ | 181 | $ | 181 | |||||||
| Addition based on tax positions related to prior years | — | — | |||||||||
| Payment made on tax positions related to prior years | — | — | |||||||||
| Expiration of statute of limitations | (181) | — | |||||||||
| Addition based on tax positions related to current year | — | — | |||||||||
| Balance, end of year | $ | — | $ | 181 | |||||||
As of April 30, 2024, the above amounts of $181,000 was included in other long-term liabilities.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Jul 23, 2025 | Showing above |
| 2024 | Jul 19, 2024 | |
| 2023 | Jul 24, 2023 | |
| 2022 | Jul 22, 2022 | |
| 2021 | Jul 26, 2021 | |
| 2020 | Jul 28, 2020 | |
| 2019 | Jul 29, 2019 | |
| 2018 | Jul 30, 2018 | |
| 2017 | Jul 28, 2017 | |
| 2016 | Jul 29, 2016 | |
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.