12. Income Taxes

The expense (benefit) for income taxes is as follows (in thousands):


	Year Ended June 30,
	2017		2016		2015
Federal
Current	$	—	$	—	$	—
Deferred		—		—		—
Total Federal		—		—		—
State
Current		2		(5,054)		2
Deferred		—		—		—
Total State		2		(5,054)		2
Foreign
Current		19		—		56
Deferred		—		—		—
Total Foreign		19		—		56
Total Expense (Benefit)	$	21	$	(5,054)	$	58

A reconciliation of the statutory tax rates and the effective tax rates for each of the years ended June 30 is as follows:


	2017		2016		2015
Statutory rate	(34.0)	%	(34.0)	%	(34.0)	%
Foreign income tax	—	%	—	%	0.1	%
Change in valuation allowance	21.9	%	30.4	%	34.7	%
State income taxes, (net of federal tax benefit)	(4.8)	%	(2.8)	%	—	%
Permanent differences, (primarily warrant-related expenses)	15.3	%	—	%	—	%
Other	1.6	%	(1.6)	%	(0.7)	%
Effective rate	—	%	(8.0)	%	0.1	%

For fiscal year 2016, the Company sold certain State of New Jersey State Net Operating Losses (“NOL”) and Research and Development (“R&D”) tax credits through the New Jersey Economic Development Authority Technology Business Tax Certificate Transfer Program. Pursuant to such sale, for the year ended June 30, 2016, the Company recorded a tax benefit of $5.1 million, as a result of its sale of approximately $66.2 million, of New Jersey State NOL and $1.5 million of New Jersey R&D tax credits. There were no sales of NOL or R&D for the 2017 or 2015 fiscal years.

The tax effects of temporary differences that give rise to significant portions of the Company’s deferred tax assets as of June 30, 2017 and 2016 are presented below (in thousands):


	2017		2016
Deferred tax assets:
NOL carry forwards	$	134,476	$	103,171
Research and development credits		14,357		15,322
Property and equipment		3,406		3,693
Other		7,335		3,734
Total		159,574		125,920
Valuation allowance		(159,574)		(125,920)
Net deferred taxes	$	—	$	—

A valuation allowance is provided when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The valuation allowances for fiscal years 2017 and 2016 have been applied to offset the deferred tax assets in recognition of the uncertainty that such tax benefits will be realized as the Company continues to incur losses. The differences between book income and tax income primarily relate to the temporary differences from depreciation and stock compensation expenses.

At June 30, 2017, the Company has available net operating loss carry forwards for federal income tax reporting purposes of approximately $371.1 million and for state income tax reporting purposes of approximately $186.0 million, which expire at various dates between fiscal 2019 and 2037. Pursuant to Section 382 of the Internal Revenue Code of 1986, as amended, the annual utilization of a company’s net operating loss and research credit carry forwards may be limited if the Company experiences a change in ownership as defined in Section 382 of the Internal Revenue Code. The Company’s net operating loss carry forwards available to offset future federal taxable income arising before such ownership changes may be limited. Similarly, the Company may be restricted in using its research credit carry forwards arising before such ownership changes to offset future federal income tax expense.

At June 30, 2017, the Company did not have any material unrecognized tax benefits and the Company does not anticipate that its unrecognized tax benefits will significantly change in the next twelve months. The Company will recognize potential interest and penalties related to income tax positions as a component of the provision for income taxes on the Consolidated Statements of Comprehensive Loss in any future periods in which the Company must record a liability. The Company is subject to examination for U.S. Federal and Foreign tax purposes for 2012 and forward and for New Jersey 2013 and forward. The Company conducts business and files tax returns in New Jersey.