TAXES AND NET OPERATING LOSS CARRYFORWARDS

12 Months Ended

Dec. 31, 2016

TAXES AND NET OPERATING LOSS CARYFORWARDS

TAXES AND NET OPERATING LOSS CARRYFORWARDS

Deferred income taxes reflect the impact of temporary differences between the amount of assets and liabilities recognized for financial reporting purposes and such amounts recognized for income tax purposes. The tax effects of these temporary differences representing the components of deferred tax assets (liabilities) were as follows:



(In thousands)	December 31, 2016			December 31, 2015
Deferred tax assets:
Loss and credit carry-forwards	$	9,169		$	6,578
Stock-based compensation	519			283
Inventory Reserve	534			466
Other	263			273
Total deferred tax assets	10,485			7,600
Valuation allowance	(10,185		)	(7,404		)
Total deferred tax assets, net of valuation allowance	300			196
Deferred tax liabilities:
State taxes (capital)	(19		)	(10		)
Property and equipment	(459		)	(413		)
Intangibles	(386		)	(337		)
Total deferred tax liabilities	(864		)	(760		)
Net deferred tax liabilities	$	(564	)	$	(564	)

We consider all positive and negative evidence regarding the realization of deferred tax assets, including past operating results and future sources of taxable income. U.S. net operating losses will begin to expire in years beginning in 2019.

We assess the financial statement impact of an uncertain tax position taken or expected to be taken on an income tax return at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized in the financial statements unless it is more likely than not of being sustained. All of our positions arise from taxable temporary differences and, as such, the liability has been recognized in the net deferred tax asset, current and non-current items to which they relate.

Below is a reconciliation of the statutory federal income tax rate to our effective tax rate:



	Year Ended December 31,
	2016		2015		2014
Federal tax provision	34.0	%	34.0	%	34.0	%
State taxes (net of federal benefit)	3.7	%	2.4	%	1.4	%
Warrant gains	31.4	%	(11.1	)%	(18.8	)%
Valuation allowance	(71.8	)%	(26.3	)%	(45.3	)%
Other	1.5	%	0.6	%	(1.6	)%
	(1.2	)%	(0.4	)%	(30.3	)%