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Income Taxes
9 Months Ended
Dec. 31, 2017
Income Tax Disclosure [Abstract]  
Income Taxes

NOTE 5 — INCOME TAXES

At December 31, 2017, the Company had $3.1 million of U.S. federal net operating loss (“NOL”) carry forwards and approximately $5.6 million of U.S. state net operating loss carry forwards included in net deferred tax assets that are available to offset future taxable income and can be carried forward for 20 years. Management believes it is less than likely that all of the net deferred tax assets will be realized through tax planning strategies available in future periods and through future profitable operating results, therefore management has increased its valuation allowance by $712,000 to a total of $1,000,700 as of December 31, 2017. The gross amount of the Company’s deferred tax assets at December 31, 2017 was $1,570,000 as compared to $1,080,000 as of March 31, 2017.

Due to a change in ownership of Grande by Wealth Warrior Global Limited, as disclosed in a Schedule 13D filing on October 10, 2017, the Company’s ability to use a portion of its domestic NOL and tax carryforwards may be limited in future periods under the change of ownership provisions of the Tax Reform Act of 1986 (Internal Revenue Code Section 382). Furthermore, a portion of the carryforwards may expire before being applied to reduce future income tax liabilities (see Item 1A. Risk Factors).

The Company’s effective tax rate differs from the federal statutory rate primarily due to income and losses incurred in foreign jurisdictions and taxed at locally applicable tax rates, subpart F income included in the Company’s tax expense, expenses that are not deductible for federal income tax purposes, increases to the valuation allowance and state income taxes.

The Company is subject to examination and assessment by tax authorities in numerous jurisdictions. As of December 31, 2017, the Company’s open tax years for examination for U.S. federal tax are fiscal 2015-fiscal 2017 and for U.S. states tax are fiscal 2012-fiscal 2016.

Based on the outcome of tax examinations or due to the expiration of statutes of limitations, it is reasonably possible that the unrecognized tax benefits related to uncertain tax positions taken in previously filed returns may be different from the liabilities that have been recorded for these unrecognized tax benefits. As a result, the Company may be subject to additional tax expense.

On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act tax reform legislation. This legislation makes significant change in U.S. tax law including a reduction in the corporate tax rates, changes to net operating loss carryforwards and carrybacks, and a repeal of the corporate alternative minimum tax. The legislation reduced the U.S. corporate tax rate from the current rate of 35% to 21%. As a result of the enacted law, the Company was required to revalue its deferred tax assets and liability at the rate in effect during their scheduled reversal. This revaluation resulted in an addition of $665,600 on a gross basis, to income tax expense in continuing operations and a corresponding reduction in the deferred tax asset. However, the net impact of the revaluation resulted in income tax expense of $223,000, after adjustments to the valuation allowance against the Company’s deferred tax assets. The new legislation will require the Company to pay tax on the unremitted earnings of its foreign subsidiaries though December 31, 2017. Because of the complexities involved in determining the previously unremitted earnings and profits of all our foreign subsidiaries, the Company is still in the process of obtaining, preparing, and analyzing the required information and expects to record an initial estimate of the impact on our Consolidated Financial Statements in the 4th quarter. The other provisions of the Tax Cuts and Jobs Act are not expected to have a material impact on the fiscal 2018 consolidated financial statements.