GSI TECHNOLOGY INC Income Taxes Disclosure

NOTE 6—INCOME TAXES

Loss before income taxes and the provision for income taxes consists of the following:

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The provision for income tax differs from the amount of income tax determined by applying the applicable U.S. statutory income tax rate to pre-tax loss as follows:

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Deferred tax assets and deferred tax liabilities consist of the following:

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The Company currently intends to indefinitely reinvest earnings in operations outside the United States. No provision has been made for state income taxes that might be payable upon remittance of such earnings, nor is it practicable to determine the amount of such potential liability.

As of March 31, 2025 and 2024, $3.4 million and $3.9 million, respectively, of unrecognized tax benefits had been recorded as a reduction to net deferred tax assets. It is possible, however, that some months or years may elapse

before an uncertain position for which the Company has established a reserve is resolved. A reconciliation of unrecognized tax benefits is as follows:

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There is no unrecognized tax benefit balance as of March 31, 2025 that would affect the Company’s effective tax rate if recognized after considering the valuation allowance. At March 31, 2025, due to the Company’s valuation allowance in the United States, there was no net income tax effect related to Global intangible low-taxed income (“GILTI”) in the Company’s fiscal year ended March 31, 2025.

The Company's federal and state net operating loss carryforwards for income tax purposes are approximately $21.3 million and $25.0 million, respectively, at March 31, 2025. The Company's federal net operating loss carryforwards do not expire and the Company’s state tax net operating loss carryforwards expire beginning in 2034. The Company's federal and state tax credit carryforwards for income tax purposes are approximately $5.6 million and $5.9 million respectively, at March 31, 2025. The Company's federal tax credit carryforwards expire beginning in 2033. The Company's state tax credit carryforwards have no expiration date. Utilization of the Company’s net operating loss carryforwards and research tax credit carryforwards may be subject to substantial annual limitations due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions. The annual limitation could result in the expiration of the net operating loss carryforwards and research tax credit carryforwards before utilization. The Company has not performed an analysis to determine if a limitation applies and whether the limitation would cause the net operating losses to expire unutilized.

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Due to historical losses in the U.S., the Company has a full valuation allowance on its U.S. federal and state deferred tax assets. As of March 31, 2025 and 2024, the Company’s net deferred tax assets of $22.8 million and $20.2 million, respectively, were subject to a valuation allowance of $22.8 million and $20.2 million, respectively. The net valuation allowance increased by $2.6 million and $2.7 million in fiscal 2025 and 2024, respectively. As of March 31, 2025 and 2024, the Company’s net deferred tax liabilities were $16,000 and $14,000, respectively. The deferred tax assets consist primarily of the tax credits and federal and state net operating losses. Realization of deferred tax assets is dependent upon future taxable income, if any, the amount and timing of which are uncertain. In assessing the realizability of deferred tax assets, management determined that it is more likely than not that no deferred tax assets will be realized. Therefore, the Company has provided a full valuation allowance against these deferred tax assets.

The Company is subject to taxation in the United States and various state and foreign jurisdictions. Fiscal years 2013 through 2024 remain open to examination by the federal tax authorities and fiscal years 2011 through 2024 remain open to examination by the state of California. Fiscal years 2020 through 2024 are generally subject to audit by foreign tax authorities.