A reconciliation of the statutory federal rate and the effective rate, for operations, is as follows for the years ended March 31, 2020 and March 31, 2019 (in thousands):

	March 31, 2020				March 31, 2019
Tax computed at federal statutory rate	$	(3,929	)	21%	$	(5,593	)	21.0%
State income tax, net of federal benefit		(714	)	3.8%		(884	)	3.3%
Executive compensation		—		0.0%		—		0.0%
Stock based compensation		893		-4.8%		871		-3.3%
Research credits		(421	)	2.2%		(1,033	)	3.9%
Change in tax rate		(193	)	1.0%		(380	)	1.4%
Removal of net operating losses and research development credits		5,091		-27.2%		4,171		-15.7%
Rate adjustment - tax law		—		0.0%		14		-0.1%
Other		70		-0.3%		2,795		-10.5%
Valuation allowance		(797	)	4.2%		39		-0.1%
Provision (benefit) for income taxes	$	—		0.0%	$	—		0.0%

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 the Company’s net deferred tax assets are as follows as of March 31, 2020 and March 31, 2019 (in thousands):

	March 31, 2020			March 31, 2019
Deferred tax assets:
Net operating loss carry forwards	$	—		$	—
Research and development credits		—			—
Depreciation and amortization		5			28
Accrued expenses and reserves		173			886
Stock compensation		3,899			3,941
Other, net		1			20
Total deferred tax assets		4,078			4,875
Valuation allowance		(4,078	)		(4,875	)
	$	—		$	—

A full valuation allowance has been established to offset the deferred tax assets as management cannot conclude that realization of such assets is more likely than not. Under the Internal Revenue Code (“IRC”) Sections 382 and 383, annual use of our net operating loss and research tax credit carryforwards to offset taxable income may be limited based on cumulative changes in ownership. We have not completed an analysis to determine whether any such limitations have been triggered as of March 31, 2020. Until this analysis is completed, we have removed the deferred tax assets related to net operating losses and research credits from our deferred tax asset schedule. Further, until a study is completed and any limitation known, no amounts are being considered as an uncertain tax position or disclosed as an unrecognized tax benefit. Due to the existence of the valuation allowance, future changes in the Company’s unrecognized tax benefits will not impact its effective tax rate. Any carryforwards that will expire prior to utilization as a result of such limitations will be removed from deferred tax assets with a corresponding reduction of the valuation allowance. The valuation allowance decreased by approximately $798,000 and increased by approximately $39,000 for the years ended March 31, 2020 and 2019, respectively.

The Company had federal and state net operating loss carryforwards of approximately $183.8 million and $33.4 million, respectively, as of March 31, 2020. Federal net operating loss carryforwards of approximately $40.2 million will carryforward indefinitely and be available to offset up to 80% of future taxable income each year subject to revisions made by the CARES Act. The remaining federal net operating losses will begin to expire in 2028, unless previously utilized. The state net operating loss carryforwards (“NOLs”) will begin to expire in 2028, unless previously utilized.

The Company had federal and state research tax credit carryforwards of approximately $4.2 million and $3.7 million at March 31, 2020, respectively. The federal research tax credit carryforwards begin expiring in 2028. The state research tax credit carryforwards do not expire.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") was enacted in response to the COVID-19 pandemic. The CARES Act contains temporary taxpayer favorable provisions related to the use of net operating losses and the deductibility of interest expense, charitable contributions, and qualified improvement property. Due to the generation of losses, the Company does not expect to be materially impacted by the CARES Act.

On April 1, 2019, the Company adopted ASU 2016-02, Leases (“Topic 842”). There was no net tax impact recorded as a result of the adoption.

The Company did not record any accruals for income tax accounting uncertainties for the year ended March 31, 2020.

The Company did not accrue either interest or penalties from inception through March 31, 2020.

The Company does not expect its unrecognized tax benefits to significantly increase or decrease within the next 12 months.

The Company is subject to tax in the United States and in various state jurisdictions. As of March 31, 2020, the Company’s tax years from inception are subject to examination by the tax authorities due to the generation of net operating losses. The Company is not currently under examination by any jurisdiction.