v3.26.1
Taxes
 3 Months Ended
Jul. 31, 2026
Income Tax Disclosure [Abstract]  
Taxes
Note 9 — Taxes
The Company is subject to taxation in the United States (federal and various state jurisdictions), Canada (federal and provincial), and the Cayman Islands. The Cayman Islands does not impose corporate income tax, and, accordingly, the statutory income tax rate for the Company's Cayman Islands subsidiary is zero percent. The U.S. federal statutory rate is 21.0%, and the Canadian combined federal and provincial statutory rate is approximately 27.0% (Manitoba).
Effective Income Tax Rate Reconciliation
The Company's income (loss) before income taxes, income tax expense (benefit), and effective income tax rate were as follows:
SuccessorPredecessor
Three Months Ended July 31, 2026Period from
June 7, 2025
through
July 31, 2025		Period from
May 1, 2025
through
June 6, 2025
Income (loss) before income tax expense (benefit)
$
(11,305)
$
(1,246)
$
21 
Income tax expense (benefit)
95 
(60)
2 
Effective income tax rate
(0.8)
%
4.8 
%
10.7 
%
The change in the effective tax rate for the three months ended July 31, 2026, compared to the period from June 7, 2025 through July 31, 2025 and the period from May 1, 2025 through June 6, 2025, was primarily due to (i) the impact of foreign earnings, including earnings of the Company's Canadian subsidiary that are taxed at the Canadian combined federal and provincial statutory rate (which is higher than the U.S. statutory rate) and earnings of the Company's Cayman Islands subsidiary that are not subject to income tax, and (ii) changes in the valuation of warrants treated as liabilities under U.S. GAAP
Net Operating Loss Carryforwards
At July 31, 2026, the Company had approximately $75.0 million of U.S. federal and state net operating loss ("NOL") carryforwards primarily related to its legacy U.S. operations. Approximately $11.2 million of these NOL carryforwards will expire, if not utilized, in calendar years 2034 through 2037. NOLs generated in tax years beginning after December 31, 2017 do not expire but may be used to offset no more than 80.0% of taxable income in any given year. State NOL carryforwards have varying expiration periods that range from 5 to 20 years, depending on the jurisdiction.
The Company's Canadian subsidiary had no material NOL carryforwards at July 31, 2026. The Company's Cayman Islands subsidiary is not subject to income tax and accordingly does not have NOL carryforwards.
Section 382 Considerations
Pursuant to Section 382 of the Internal Revenue Code of 1986, as amended, and applicable state law, the Company's ability to utilize its pre-change NOL carryforwards may be limited if the Company experiences an "ownership change," generally defined as a greater than 50.0% cumulative change in equity ownership by value over a rolling three-year period. The Company evaluated its equity transactions, including the PIPE Transaction, and determined that an ownership change occurred at the time of the PIPE Transaction. As a result, the Company’s ability to utilize a portion of its pre-change NOL carryforwards is subject to annual limitations under Section 382. Based on the application of these limitations and projected taxable income, management determined that approximately $3.0 million of such NOL carryforwards is expected to expire unutilized prior to expiration. Accordingly, the related tax benefits have not been recognized as deferred tax assets.
Valuation Allowance
The Company assesses, on a quarterly basis, whether it is more likely than not that its deferred tax assets will be realized. In making this determination, the Company considers all available positive and negative evidence, including its history of cumulative losses, projected future taxable income, the period over which deferred tax assets are expected to reverse, and the availability of tax-planning strategies. The weight given to each piece of evidence is commensurate with the extent to which it can be objectively verified.
At July 31, 2026, based primarily on the existence of cumulative losses in recent years and the inherent uncertainty of forecasting future taxable income for its U.S. operations, the Company concluded that it is more likely than not that its U.S. federal and state deferred tax assets will not be realized. Accordingly, the Company has recorded a full valuation allowance against its U.S. net deferred tax assets. The Company intends to maintain the valuation allowance until sufficient positive evidence exists to support its reversal. No valuation allowance has been recorded against the deferred tax assets of the Company's Canadian subsidiary, as the Company has determined it is more likely than not that those deferred tax assets will be realized.
Uncertain Tax Positions
At July 31, 2026 and April 30, 2026, the Company had no unrecognized tax benefits, and has recorded a $0.2 million reserve for Canadian excise taxes. The Company does not anticipate any significant change in its uncertain tax benefit balance during the twelve months following July 31, 2026.
The Company's policy is to recognize interest and penalties related to income tax matters in income tax expense. The Company has not accrued any interest or penalties related to uncertain tax positions at July 31, 2026.
Open Tax Years
The Company files income tax returns in U.S. federal, various U.S. state, and Canadian federal and provincial jurisdictions. The following tax years remain subject to examination by the relevant taxing authorities:
Open Tax Years Ended
April 30,
JurisdictionFromThrough
United States
Federal
2022
2027
State
2021
2027
Canada(A)
2023
2027
Cayman Islands(B)
n.a.
n.a.
A.Includes both federal and provincial tax years.
B.No income taxes assessed in jurisdiction.
Tax Legislation
One Big Beautiful Bill Act
On July 4, 2025, the President signed H.R. 1, the One Big Beautiful Bill Act ("OBBB Act"), into law. The OBBB Act includes several changes to U.S. federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in 2025, including the restoration of immediate expensing of domestic research and experimental expenditures, reinstatement of 100.0% bonus depreciation, and more favorable rules for determining the limitation on business interest expense.
The OBBB Act also includes certain changes to the U.S. taxation of foreign activity, including changes to foreign tax credits, the global intangible low-taxed income ("GILTI") regime, the foreign-derived intangible income ("FDII") regime, and the base erosion and anti-abuse tax ("BEAT"), among other changes. These foreign-related changes are generally effective for tax years beginning after December 31, 2025.
The Company has accounted for the impact of the OBBB Act, where required, in the period of enactment. The OBBB Act did not have a material impact on the Company's consolidated financial statements for the fiscal period ended July 31, 2026, and the Company does not currently expect the OBBB Act to have a material impact on its consolidated income tax provision in future periods.