Annual report pursuant to Section 13 and 15(d)

INCOME TAXES

v3.21.4
INCOME TAXES
 12 Months Ended
Oct. 31, 2021
Income Tax Disclosure [Abstract]  
INCOME TAXES

8.       INCOME TAXES

 

Income tax provision (benefit) consists of the following:

 

   

Year Ended October 31,

  
   

2021

    

2020

  
Federal:                
Current   $ -     $ -  
Deferred     604,000       404,000  
State:                
Current     -       -  
Deferred     (129,000 )     (800,000 )

Adjustment to valuation allowance related to net deferred tax assets

     (475,000 )     396,000  
    $ -     $ -  

 

The tax effects of temporary differences that give rise to significant portions of the deferred tax asset, net, at October 31, 2021 and 2020, are as follows:

 

   

2021

    

2020

  
   

October 31,

  
   

2021

    

2020

  
Long-term deferred tax assets:                
Federal and state NOL and tax credit carryforwards   $ 20,230,000     $ 19,727,000  
Deferred compensation     7,502,000       8,009,000  
Intangibles     330,000       828,000  
Other     219,000       192,000  
Subtotal     28,281,000       28,756,000  
Less: valuation allowance     (28,281,000 )     (28,756,000 )
Deferred tax asset, net   $ -     $ -  

 

As of October 31, 2021, we had tax net operating loss and tax credit carryforwards of approximately $82,393,000 and $1,597,000, respectively, available within statutory limits (expiring at various dates between 2022 and 2041), to offset any future regular Federal corporate taxable income and taxes payable. If the tax benefits relating to deductions of option holders’ income are ultimately realized, those benefits will be credited directly to additional paid-in capital. Certain changes in stock ownership can result in a limitation on the amount of net operating loss and tax credit carryovers that can be utilized each year. As of October 31, 2021, management has not determined the extent of any such limitations, if any.

 

We had California tax net operating loss carryforwards of approximately $32,714,000 as of October 31, 2021, available within statutory limits (expiring at various dates between 2022 and 2041), to offset future corporate taxable income and taxes payable, if any, under certain computations of such taxes.

 

 

ANIXA BIOSCIENCES, INC. AND SUBSIDIARIES

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

We have provided a valuation allowance against our deferred tax asset due to our current and historical pre-tax losses and the uncertainty regarding their realizability. The primary differences from the Federal statutory rate of 21% and the effective rate of 0% is attributable to expiring net operating losses and a change in the valuation allowance. The following is a reconciliation of income taxes at the Federal statutory tax rate to income tax expense (benefit):

 

   

Year Ended October 31,

  
   

2021

    

2020

  

Income tax benefit at U.S. Federal statutory income tax rate

   $ (2,757,000 )     (21.00 )%   $ (2,119,000 )     (21.00 )%
State income taxes     (917,000 )     (6.98 )%     (705,000 )     (6.98 )%
Permanent differences     23,000       0.17 %     32,000       0.32 %

Expiring net operating losses, credits and other

     4,126,000       31.43 %     2,396,000       23.74 %
Change in valuation allowance     (475,000 )     (3.62 )%     396,000       3.92 %
Income tax provision   $ -       0.00 %   $ -       0.00 %

 

During the two fiscal years ended October 31, 2021, we incurred no Federal and no State income taxes. We have no unrecognized tax benefits as of October 31, 2021 and 2020 and we account for interest and penalties related to income tax matters in general and administrative expenses. Tax years to which our net operating losses relate remain open to examination by Federal and California authorities to the extent which the net operating losses have yet to be utilized.