Income Taxes

12 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Note 10. Income Taxes

The current income tax provision reflects the tax consequences of revenues and expenses currently taxable or deductible on various income tax returns for the years reported. The deferred income tax (provision) or benefit reflects the net change in deferred income tax assets and liabilities during the year. The components of the provision for income taxes for the years ended March 31 are as follows:

	Year ended March 31,
	2022			2021
Income tax (provision) benefit:
Current - Federal		100			(126	)
Deferred - Federal		(1,061	)		(1,128	)
		(961	)		(1,254	)

The statutory standard corporate income tax rate of the Company in Jersey is 0%.

In connection with the sale and leaseback transaction of the Company’s conventional reagents manufacturing facility, near Edinburgh, Scotland (the "Alan Robb Campus ("ARC") facility") that was completed in March 2018, the Company has agreed to transfer tax allowances related to certain other property, plant and equipment to the purchaser of the facility. An election to effect the transfer of these allowances to the purchaser has been made, but due to uncertainty regarding whether the election will be effective, the tax effect of the transfer of the allowances had not previously been recorded in the financial statements. The Company determined that during the year ended March 31, 2021 it is more likely than not that this election will be effective and accordingly a net deferred tax expense of $1,200 and an equivalent deferred tax liability have been recorded, including associated adjustments to valuation allowances.

A reconciliation of the income tax expense at the statutory rate to the provision for income taxes is as follows:

	Year ended March 31,
	2022			2021
Income tax expense at statutory rate	$	—		$	—
Impact of tax uncertainties	$	—			(1,200	)
Tax rate change	$	(335	)		—
Foreign tax rate differential		5,214			2,362
(Increase) decrease in valuation allowance against deferred    tax assets		(5,840	)		(2,416	)
Provision for income tax	$	(961	)	$	(1,254	)

Significant components of deferred tax assets are as follows:

	March 31, 2022			March 31, 2021
Provisions and reserves	$	716		$	1,022
Operating lease liability		4,640			4,100
Research and development		20			672
Net operating loss carry forwards		28,421			22,628
Gross deferred tax assets	$	33,797		$	28,422
Fixed asset basis difference	$	(2,252	)	$	(2,289	)
Operating lease right-of-use assets	$	(4,640	)	$	(4,100	)
Gross deferred tax liabilities	$	(6,892	)	$	(6,389	)
Net deferred tax asset	$	26,905		$	22,033
Valuation allowance		(28,770	)		(22,930	)
Net deferred taxes	$	(1,865	)	$	(897	)

The balance sheet classification of net deferred tax assets is as follows:

	March 31, 2022			March 31, 2021
Net noncurrent deferred tax assets	$	123		$	255
Net noncurrent deferred tax liabilities	$	(1,988	)	$	(1,152	)
Total	$	(1,865	)	$	(897	)

The Company maintains a valuation allowance on net operating losses and other deferred tax assets in jurisdictions for which it does not believe it is more-likely-than-not to realize those deferred tax assets based upon all available positive and negative evidence, including historical operating performance, carryback periods, reversal of taxable temporary differences, tax planning strategies, and earnings expectations.

As of March 31, 2022, the Company has net operating loss carry forwards of approximately $363 million which will be available to offset future taxable income. If not used, losses with a tax effect of approximately $28.4 million will expire between 2023 and 2029 and the remaining losses of approximately $0.2 would expire over the next 20 years.

During the fiscal year the United Kingdom government substantively enacted an increase to the rate of corporate income tax to 25%, effective from April 1, 2023. The change in income tax resulted in increase in deferred tax expense of $335 in the fiscal year ended March 31, 2022.

The following table summarizes the activity related to the Company’s uncertain tax positions (excluding interest and penalties and related tax attributes):

	Year ended
	March 31, 2022		March 31, 2021
Balance at beginning of period	$	1,216	$	1,216
Increases related to current year tax positions		—		—
Increases related to prior years tax positions		—		—
Balance at end of period	$	1,216	$	1,216

As of March 31, 2022 and 2021, the Company has an unrecognized benefit of $1,216 and $1,216, respectively, that if recognized would be recorded as a component of tax expense. The Company’s unrecognized tax benefits include exposures related to positions taken on all jurisdictions’ income tax returns. The Company has interest expense carryforward from March 31, 2017 that potentially would be disqualified as interest expense in the amount of $613. Additionally, the Company has reassessed its transfer pricing policies in certain jurisdictions from 2015 to 2017, the impact of which is $603. In the normal course of business, the Company’s tax returns are subject to examination by various taxing authorities. Such examinations may result in future tax and interest assessments by these taxing authorities and the Company has accrued a liability when it believes it is more likely than not that the tax position claimed on tax returns will not be sustained by the taxing authorities on the technical merits of the position. Changes in the recognition of the liability are reflected in the period in which the change in judgment occurs.

The Company files separate company income tax returns in its domestic and foreign jurisdictions. All necessary income tax filings in all jurisdictions have been completed for all years up to and including March 31, 2021 and there are no ongoing tax examinations in any jurisdiction.

The Company recognizes interest and penalties accrued related to unrecognized tax benefits in tax expense. During the fiscal years ended March 31, 2022 and March 31, 2021, the Company had no amounts accrued for interest and penalties. The Company does not currently anticipate that the total amount of unrecognized tax benefits will result in material changes to its financial position within the next 12 months.

No tax charge arose on any element of other comprehensive loss.