Income Taxes

3 Months Ended

Apr. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

9. Income Taxes

During the first quarter of fiscal 2022 and fiscal 2021, the Company recorded income tax expense of $103,000 and $28,000, respectively, primarily related to income tax in states where net operating loss ("NOL") usage is statutorily limited. The Company’s effective tax rate will generally differ from the U.S. federal statutory rate of 21% primarily due to the change in full valuation allowance recorded against its deferred tax assets, permanent items, and state taxes.

Since the end of fiscal 2013, the Company has maintained a full valuation allowance against its deferred tax assets. While the Company returned to profitability in fiscal 2021 and is projecting it will generate taxable income in fiscal 2022, given the limited history of profitability and uncertainty in future forecasts, at this time the Company believes that a full valuation allowance remains appropriate.

For federal income tax purposes, at the end of fiscal 2021, the Company had net operating loss carryforwards of approximately $100.7 million, which will expire from fiscal 2028 through fiscal 2037, and net operating loss carryforwards of $43.1 million, that are not subject to expiration. For state purposes, at the end of fiscal 2021, the Company had $90.0 million of net operating losses that are available to offset future taxable income, the majority of which will expire from fiscal 2028 through fiscal 2041.