10. INCOME TAXES

12 Months Ended

Apr. 30, 2012

Income Tax Disclosure [Text Block]

10. INCOME TAXES

We are primarily subject to U.S. federal and California state jurisdictions. To our knowledge, all tax years remain open to examination by U.S. federal and state authorities.

In addition, in accordance with authoritative guidance, we are required to recognize the impact of an uncertain tax position in the consolidated financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. An uncertain tax position will not be recognized if it has less than a 50% likelihood of being sustained upon examination by the tax authorities. We had no unrecognized tax benefits from uncertain tax positions as of April 30, 2012 and 2011. It is also our policy, in accordance with authoritative guidance, to recognize interest and penalties related to income tax matters in interest and other expense in our consolidated statements of operations. We did not recognize interest or penalties related to income taxes for fiscal years ended April 30, 2012, 2011, and 2010, and we did not accrue for interest or penalties as of April 30, 2012 and 2011.

At April 30, 2012, we had total deferred tax assets of $6,529,000. Due to uncertainties surrounding our ability to generate future taxable income to realize these tax assets, a full valuation has been established to offset our total deferred tax assets. Additionally, the future utilization of our net operating loss carry forwards to offset future taxable income may be subject to an annual limitation, pursuant to Internal Revenue Code Section 382, as a result of ownership changes that may have occurred previously or that could occur in the future. We have not yet performed a Section 382 analysis to determine the limitation of the net operating loss carry forwards. Until this analysis has been performed, we have removed the deferred tax assets for net operating losses of $97,372,000 generated through April 30, 2012 from our deferred tax asset schedule and have recorded a corresponding decrease to our valuation allowance. When this analysis is finalized, we plan to update our unrecognized benefits for uncertainty in income taxes. Due to the existence of the valuation allowance, future changes in our unrecognized tax benefits will not impact our effective tax rate.

At April 30, 2012, we had federal net operating loss carry forwards of approximately $254,394,000. The net operating loss carry forwards expire in fiscal years 2014 through 2033. Net operating losses of $806,000 applicable to Vascular Targeting Technologies, our wholly-owned subsidiary, can only be offset against future income of that subsidiary. We also have state net operating loss carry forwards of approximately $186,444,000 at April 30, 2012, which begin to expire in fiscal year 2014.

The provision for income taxes consists of the following for the three years ended April 30,:

	2012			2011			2010
Provision for federal income taxes at statutory rate	$	(14,321,000	)	$	(11,611,000	)	$	(4,929,000	)
State income taxes, net of federal benefit		20,000			(406,000	)		(799,000	)
Expiration and adjustment of loss carry forwards		13,980,000			9,174,000			7,448,000
Change in valuation allowance		(95,000	)		2,294,000			(1,997,000	)
Other, net		416,000			549,000			277,000
Income tax (expense) benefit	$	—		$	—		$	—

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts for income tax purposes. Significant components of our deferred tax assets at April 30, 2012 and 2011 are as follows:

	2012			2011
Share-based compensation	$	3,494,000		$	2,782,000
Deferred revenue		1,719,000			2,677,000
Depreciation and amortization		623,000			691,000
Accrued liabilities		693,000			474,000
Total deferred tax assets		6,529,000			6,624,000
Less valuation allowance		(6,529,000	)		(6,624,000	)
Net deferred tax assets	$	—		$	—