10. INCOME TAXES

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

INCOME TAXES

The provision for income taxes is comprised of the following:

		Year Ended December 31,
		2015			2014
Federal:
Current	$	4		$	19
Deferred		34			(202	)
Total	$	38		$	(183	)
State:
Current	$	32		$	(9	)
Deferred		(34	)		202
Total	$	(2	)	$	193
Total income tax expense (benefit)	$	36		$	10

The provision for income taxes differs from the amount computed by applying the U.S. statutory income tax rate before income taxes for the reasons set forth below.

	Year Ended December 31,
	2015	2014
Income tax benefit at federal statutory rate	34.00%	34.00%
State taxes, net of federal expense	0.73%	(3.39)%
Return to provision adjustments	(1.08)%	2.06%
Goodwill impairment	0.00%	(28.86)%
Valuation allowance	(35.60)%	(9.16)%
Research and development credits	0.65%	6.49%
Other permanent differences	(0.70)%	(0.19)%
Other, net	0.00%	(1.12)%
Total effective rate	(2.00)%	(0.17)%

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, as well as operating loss and tax credit carry forwards.  The tax effects of the temporary differences and carry forwards are as follows:

		As of December 31,
		2015			2014
Deferred tax assets:
Allowance for doubtful accounts	$	61		$	172
Net operating loss		5,300			4,814
Share-based compensation		1,206			1,071
Investment in joint venture		3,972			4,063
Other		651			579
Total deferred tax assets	$	11,190		$	10,699
Deferred tax liabilities:
Depreciation and amortization on property, plant and equipment	$	(1,656	)	$	(1,797	)
Amortization of intangibles		70			58
Total deferred tax liabilities	$	(1,586	)	$	(1,739	)
Less: valuation allowance		(9,604	)		(8,960	)
Net deferred tax position	$	–		$	–

We have $15,356 in net operating loss (“NOL”) carry forwards and $513 in research and development credits available to offset future taxable income. These federal NOL’s will expire at various dates through 2035. Management analyzed its current operating results and future projections and determined that a full valuation allowance was needed due to our cumulative losses in recent years. We have no uncertain tax positions at December 31, 2015. Accordingly, we do not have any accruals for penalties or interest related to our tax returns. Should an examination or audit arise, we would evaluate the need for an accrual and record one, if necessary. Our tax returns from the tax years ended December 31, 2010 through December 31, 2014 are open to examination by the IRS.