v3.26.1
Income taxes
 12 Months Ended
Mar. 31, 2026
Income taxes [Abstract]  
Income taxes
10. Income taxes
 
Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due. Deferred taxes relate to differences between the basis of assets and liabilities for financial and income tax reporting which will be either taxable or deductible when the assets or liabilities are recovered or settled.
 
For the years ended March 31, 2026 and 2025, the loss before income tax benefit was $9,493 and $12,767, respectively
 
The provision for income taxes consisted of the following:
 
         
     March 31, 2026      March 31, 2025  
    $    $ 
Current Provision
         
Federal
   —      —  
State
  —    3 
Total Current Provision
  —    3 
           
Deferred Provision
         
Federal
   (1,492)    (2,392) 
State
   (208)    (810) 
Total Deferred Provision
   (1,700)    (3,202) 
           
Total Provision for Income Taxes
   (1,700)    (3,199) 
 
The Company had an effective tax rate of 17.92% and 25.06% for the years ended March 31, 2026 and 2025, respectively.
 
During the current fiscal year the Company adopted ASU 2023-09 prospectively. See Note 2 for additional details on the adoption of ASU 2023-09. A reconciliation of the U.S. federal statutory income tax rate to the Company’s effective tax rate pursuant to the disclosure requirements of ASU 2023-09 for the year ended March 31, 2026 is as follows (in thousands, except for percentages):
 
 
For the year ended
    
March 31,
2026
     
March 31,
2026
     
March 31,
2025
     
March 31,
2025
  
    
$
           
$
        
U.S. federal statutory rate
    (1,993 )     21.00 %    (2,681 )     21.00 %
State taxes and local tax1, net of federal income tax effect
    (208 )     2.19 %    (770 )     6.03 %
Difference in foreign tax rates
    —        0.00 %    (105 )     0.82 %
Tax credits
    (318 )     3.35 %    (1,583 )     12.40 %
Change in valuation allowance
    870      (9.17 )%    2,347      (18.39 )%
Nontaxable or nondeductible items:
                            
Non-deductible stock-based compensation
    133      (1.40 )%    —        (0.00 )%
Change in fair value of warrant liabilities
    (189 )     1.99 %    (876 )     6.86 %
Other
    1      (0.01 )%    468      (3.67 )%
Other adjustments
    4      (0.03 )%    (1 )     0.00 %
Total tax (benefit) expense
    (1,700 )     17.92 %    (3,199 )     25.06 %
 
1 New Jersey and California account for 100% of the tax effect in this category.
 
Cash paid for income taxes, net of refunds received, by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for the year ended March 31, 2026 is as follows (in thousands):
 
     
March 31, 2026
 
Federal
    —  
State
      
New Jersey
     8 
California
     4 
Pennsylvania
     —  
Other States
     —  
Cash paid for income taxes, net of refunds received
     12 
The table below presents the effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities as of March 31, 2026 and 2025:
 
         
   
March 31, 2026
   
March 31, 2025
 
    
$
    
$
 
Deferred income tax assets
         
Tax losses carried forward
  51,132    43,049 
Research and development expenses
  7,434    10,298 
Property, plant and equipment
   —      —  
Intangible assets
  232    206 
Net federal investment tax credits
  2,882    2,882 
Other accruals and other
  215    131 
Orphan drug credit
  1,900    1,583 
Total deferred income tax assets
  63,795    58,779 
Valuation allowance
  (52,846)    (49,530) 
Total deferred income tax assets, net of valuation allowance
  10,949    9,249 
           
Deferred income tax liabilities
         
Intangible assets
  (11,561)    (11,561) 
Total deferred tax liabilities
  (11,561)    (11,561) 
           
Net deferred tax liabilities
  (612)    (2,312) 
 
The Company has U.S. Federal and State net operating loss carryforwards (“NOLs”) of approximately $40,438 and $67,873 and Canadian Federal and Quebec NOLs of $143,346 and $141,851, respectively, as of March 31, 2026. The Company’s U.S. Federal NOLs, generated after December 31, 2017, are available for indefinite carryforward; however, their utilization is limited to 80% of taxable income. State NOLs are subject to a 20-year carryforward period, with expirations beginning in 2038. The Company also has Orphan drug tax credits totaling $1,900, which may be carried forward for 20 years and are set to begin expiring in 2045. Canadian and Quebec NOLs are scheduled to begin expiring in 2028, while scientific research and experimental development expenditure investment tax credits totaling $3,922 are set to begin expiring in 2029. Additionally, the Company has research and development expenses of $25,708 in Canada and $27,887 in Quebec, both of which are available for indefinite carryforward.
 
The utilization of the Company’s net operating loss carryforwards and research tax credit carryovers could be subject to annual limitations under Section 382 and 383 of the Internal Revenue Code of 1986, as amended (the “Code”), and similar state tax provisions, due to ownership change limitations that may have occurred previously or that could occur in the future. These ownership changes limit the amount of net operating loss carryforwards and other deferred tax assets that can be utilized to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382 and 383 of the Code, results from transactions increasing ownership of certain stockholders or public groups in the stock of the corporation by more than 50 percent points over a three-year period. The Company has not completed an analysis of an ownership change under Section 382 of the Code. To the extent that a study is completed and an ownership change is deemed to occur, the Company’s net operating losses and tax credits could be limited.
 
In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a partial valuation allowance as of March 31, 2026 and March 31, 2025.
 
The Company’s policy is to recognize interest and penalties associated with uncertain tax benefits as part of the income tax provision and include accrued interest and penalties with the related income tax liability on the Company’s  Consolidated Balance Sheets. To date, the Company has not recognized any interest and penalties in its  Consolidated Statements of Operations, nor has it accrued for or made payments for interest and penalties. The Company has no unrecognized tax benefits as of March 31, 2026 and March 31, 2025.
 
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provision of the Tax Cuts and Jobs Act, modification to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and other implemented through 2027. Under OBBBA, the Company is permitted to claim 100% bonus depreciation and to immediately expense Section 174 costs. These provisions accelerate tax deductions but does not create a permanent tax difference; therefore, the impact is timing‑related only and does not materially affect the Company’s income tax provision.