v3.26.1
INCOME TAXES
 12 Months Ended
Mar. 31, 2026
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Beginning with the fiscal year ended March 31, 2026 annual reporting period, the Company adopted ASU 2023-09 prospectively. See Note 2 — Summary of Significant Accounting Policies – Recently Adopted Accounting Pronouncements for additional details. A reconciliation of the Company’s effective tax rate to the statutory federal
income tax rate pursuant to the disclosure requirements of ASU 2023-09 for the fiscal year ended March 31, 2026 is as follows (in thousands, except percentages):
March 31,
2026
Federal statutory rate$(8,192)21.00 %
State taxes, net of federal benefits
— — 
Change in valuation allowance4,203 (10.77)%
Nontaxable and Nondeductible items
Stock Compensation
3,970 (10.18)%
Other
151 (0.39)%
Other Adjustments(132)0.34 %
Total$— — %
A reconciliation of the Company’s effective tax rate to the statutory federal income tax rate for the fiscal years ended March 31, 2025 and 2024 is as follows:
March 31,
20252024
Federal statutory rate21.00 %21.00 %
Permanent differences(0.22)(0.19)
State taxes, net of federal benefits3.51 (0.27)
Change in valuation allowance(17.34)(14.08)
Interest expense(1.47)(2.06)
Warrant mark-to-market(0.34)1.56 
Stock-based compensation(5.01)(5.71)
Other deferred adjustments(0.13)(0.25)
Total— %— %
The components of the Company’s deferred taxes are as follows (in thousands):
As of March 31,
20262025
Net operating loss carryforwards$84,368 $73,456 
Charitable contributions1,166 1,132 
Interest expense63 499 
UNICAP3,225 3,725 
Lease Liabilities12,625 10,819 
Stock compensation1,308 3,583 
Accruals and other1,748 4,932 
Depreciation1,370 888 
Total deferred tax assets105,873 99,034 
Valuation allowance(95,931)(91,258)
Net deferred tax assets9,942 7,776 
Lease right-of-use asset(9,942)(7,776)
Total deferred tax liabilities(9,942)(7,776)
Net deferred tax assets$— $— 
As of March 31, 2026, the Company had federal net operating loss carryforwards (“NOLs”) of approximately $348.4 million, of which $60.5 million begin to expire in 2031 and $288.0 million can be carried forward indefinitely. The Company also had state NOLs of approximately $217.3 million, of which $183.4 million begin to expire at various times in 2027 through 2031 and $34.0 million can be carried forward indefinitely. In addition, the Company has foreign NOLs of approximately $0.7 million, of which less than $0.1 million begin to expire in 2028 and approximately $0.7 can be carried forward indefinitely.
As of March 31, 2025, the Company had federal NOLs of approximately $303.3 million, of which $60.5 million begin to expire in 2031 and $242.8 million can be carried forward indefinitely. The Company also had state NOLs of approximately $190.5 million, of which $160.6 million begin to expire at various times in 2026 through 2031 and $30.0 million can be carried forward indefinitely. The Company had foreign NOLs which were de minimis and begin to expire in 2028.
The utilization of NOLs and tax credit carryforwards to offset future taxable income may be subject to an annual limitation as a result of ownership changes that have occurred previously or may occur in the future. Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (“IRC”), a corporation that undergoes an ownership change may be subject to limitations on its ability to utilize its pre-change NOLs and other tax attributes otherwise available to offset future taxable income and/or tax liability. An ownership change is defined as a cumulative change of 50% or more in the ownership positions of certain stockholders during a rolling three-year period. The Company has completed a formal study through March 31, 2025 to determine if any ownership changes within the meaning of IRC Section 382 and 383 have occurred. As a result of the study, it was determined that BarkBox, Inc. experienced an ownership change on July 8, 2014; however, the limitation from the ownership change will not result in any of the NOLs or tax credits expiring unutilized. The Company has not completed a formal study related to Northern Star Acquisition Corp. and its separate NOLs from periods prior to the Merger. However, any potential ownership change is not expected to result in any of the NOLs expiring unutilized.
The Company has recorded a valuation allowance against its deferred tax assets in each of the fiscal years ended March 31, 2026 and 2025, because the Company’s management believes that it is more likely than not that these assets will not be realized. As a result of generating additional net operating losses, the valuation allowance increased by approximately $4.7 million, from $91.3 million as of March 31, 2025 to $95.9 million as of March 31, 2026.
The Company had no unrecognized tax benefits or related interest and penalties accrued for the years ended March 31, 2026, 2025 and 2024. The Company will recognize interest and penalties related to uncertain tax positions in income tax expense.
The Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. Tax years from 2021 forward remain open to examination by the respective taxing authorities. Currently, no federal, state, or foreign income tax returns are under examination. To the extent the Company utilizes tax attribute carryforwards generated in prior years, such years remain subject to adjustment by the relevant taxing authorities.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”), which includes a broad range of tax reform provisions, was signed into law in the United States. The enactment of OBBBA did not have a material impact on our effective tax rate or consolidated financial statements, but the Company continues to evaluate its provisions.