INCOME TAXES	9 Months Ended
Jan. 31, 2018
INCOME TAXES
INCOME TAXES	NOTE 5—INCOME TAXES As of January 31, 2018, the federal tax returns for the fiscal years ended 2015 through 2017 are open to audit until the statute of limitations closes for the years in which our net operating losses are utilized. We would recognize interest and penalties accrued on unrecognized tax benefits as well as interest received from favorable tax settlements within income tax expense. The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, (1) reducing the U.S. federal corporate tax rate from 35% to 21% effective January 31, 2018; (2) extending bonus depreciation that will allow for full expensing of qualified property; and (3) eliminating the corporate alternative minimum tax (AMT) and changing how existing AMT credits can be realized. In the third quarter of the 2018 fiscal year, we revised our estimated annual effective rate to reflect a change in the federal statutory rate from 34% to 21%. The rate change is administratively effective at the beginning of our fiscal year, using a blended rate for the annual period. As a result, the blended statutory tax rate for the year is 30.40%, resulting in $198,000 of current income tax benefit. In addition, we recognized tax expense in our tax provision for the period related to adjusting our existing deferred tax balance to reflect the new corporate tax rate, resulting in $283,000 of current income tax expense. As a result, our total income tax expense reported for the first nine months of the 2018 fiscal year was an overall increase in income tax expense of $85,000 during the third quarter. We remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. However, we are still analyzing certain aspects of the Act and refining our calculations, which would potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The SEC issued Staff Accounting Bulletin No. 118 (‘SAB 118’) to address the application of accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. Pursuant to the guidance within SAB 118, at January 31, 2018, we recognized the provisional effects of the enactment of the Tax Act for which measurement could be reasonably determined. As we continue to analyze certain aspects of the Tax Act and refine our assessment, the ultimate impact of the Tax Act may differ from these estimates due to our continued analysis or further regulatory guidance that may be issued as a result of the Tax Act. Pursuant to SAB 118, adjustments to the provisional amounts recorded at December 31, 2017 that are identified within a subsequent measurement period of up to one year from the enactment date will be included as an adjustment to tax expense from continuing operations in the period the amounts are determined.

NOTE 5—INCOME TAXES

As of January 31, 2018, the federal tax returns for the fiscal years ended 2015 through 2017 are open to audit until the statute of limitations closes for the years in which our net operating losses are utilized. We would recognize interest and penalties accrued on unrecognized tax benefits as well as interest received from favorable tax settlements within income tax expense.

The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017. The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to, (1) reducing the U.S. federal corporate tax rate from 35% to 21% effective January 31, 2018; (2) extending bonus depreciation that will allow for full expensing of qualified property; and (3) eliminating the corporate alternative minimum tax (AMT) and changing how existing AMT credits can be realized.

In the third quarter of the 2018 fiscal year, we revised our estimated annual effective rate to reflect a change in the federal statutory rate from 34% to 21%. The rate change is administratively effective at the beginning of our fiscal year, using a blended rate for the annual period. As a result, the blended statutory tax rate for the year is 30.40%, resulting in $198,000 of current income tax benefit.

In addition, we recognized tax expense in our tax provision for the period related to adjusting our existing deferred tax balance to reflect the new corporate tax rate, resulting in $283,000 of current income tax expense. As a result, our total income tax expense reported for the first nine months of the 2018 fiscal year was an overall increase in income tax expense of $85,000 during the third quarter.

We remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. However, we are still analyzing certain aspects of the Act and refining our calculations, which would potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts.

The SEC issued Staff Accounting Bulletin No. 118 (‘SAB 118’) to address the application of accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements.

Pursuant to the guidance within SAB 118, at January 31, 2018, we recognized the provisional effects of the enactment of the Tax Act for which measurement could be reasonably determined. As we continue to analyze certain aspects of the Tax Act and refine our assessment, the ultimate impact of the Tax Act may differ from these estimates due to our continued analysis or further regulatory guidance that may be issued as a result of the Tax Act. Pursuant to SAB 118, adjustments to the provisional amounts recorded at December 31, 2017 that are identified within a subsequent measurement period of up to one year from the enactment date will be included as an adjustment to tax expense from continuing operations in the period the amounts are determined.