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Income Taxes

We have no income tax provision, current or deferred, relating to U.S. federal, state or local income taxes.

A reconciliation of income tax expense to the amount computed by applying the Federal income tax rate to loss before provision for income taxes as of December 31, 2013 and 2012 is as follows:


	2013			2012
Income tax credit at statutory rates	$	(842	)	$	(813	)
Nondeductible expenses		2			2
State income tax, net of federal benefits		(127	)		(122	)
Other		4			1
Increase in valuation allowance		963			932

	$	—		$	—

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred income taxes consist of the following:


	As of December 31,
	2013			2012
Deferred tax assets:
Net operating loss carryforwards	$	30,765		$	30,028
Capital loss carryforwards		109			109
Inventory and other allowances		31			34
Charitable contribution carryforwards		5			3
Excess (tax) book depreciation		492			361
Excess (tax) book amortization		62			60
Share-based compensation		1,253			1,159
Other accrued costs		279			279

Total deferred tax assets		32,996			32,033
Less: Valuation allowance		(32,996	)		(32,033	)

Deferred income taxes	$	—		$	—

The valuation allowance increased approximately $1.0 million and decreased $0.3 million for the years ended December 31, 2013 and 2012, respectively (net of approximately none and $1.2 million for 2013 and 2012, respectively, for expiring net operating loss carryforwards and credits) due principally to the change in the net operating loss carryforward and uncertainty as to whether future taxable income will be generated prior to the expiration of the carryforward period. Under the Internal Revenue Code, certain ownership changes, including the prior issuance of preferred stock and our public offering of common stock, may subject us to annual limitations on the utilization of our net operating loss carryforward. As of December 31, 2013, the amounts subject to limitations has not yet been determined.

We have net operating loss carryforwards for tax purposes of approximately $79 million on December 31, 2013, which expire between 2018 and 2033. We have capital loss carryforwards for tax purposes of approximately $0.3 million on December 31, 2013 which expire in 2014.

During 2011, the state of Illinois suspended the use of net operating loss carryforwards for a four year period beginning 2011, extending the term of all net loss carryforwards by a corresponding four years.