NOTE 5 - TAXES

The provision for taxes is as follows (dollars in thousands):

			March 1, 2015
	Year Ended December		through December
	31, 2016		31, 2015

Current:
Federal	$	-	$	-
State		26		41
	$	26	$	41
Deferred:
Federal	$	-	$	-
State		-		-
	$	-	$	-
Provision for taxes	$	26	$	41

The following is a reconciliation of income taxes computed as the U.S. Federal statuary rate to the provision for income taxes:

				March 1, 2015
	Year Ended December			through December
	31, 2016			31, 2015

Statuary Federal income tax rate		35.0	%		35.0	%
State taxes		7.5	%		16.2	%
Non-taxable bargain purchase gain		-6.9	%		-7.4	%
Change of valuation allowance		-35.7	%		-44.4	%

Effective income tax rate		-0.1	%		-0.6	%

The composition of our deferred tax assets and liabilities is as follows (dollars in thousands):

	Year Ended		March 1, 2015
	December		through December
	31, 2016		31, 2015

Deferred tax assets:
Pension costs	$	1,801	$	2,589
Stock-based compensation reserves not currently deductible		(220)		71
Net operating loss carry forwards		88,968		83,486
Depreciation (including air rights)		1,685		2,058
AMT Credit		3,181		3,181
Accrued expenses		212		42

Total deferred tax assets	$	95,627	$	91,427
Valuation allowance		(95,327)		(91,277)
Deferred tax asset after valuation allowance	$	300	$	150

Deferred tax liabilities:
Intangibles	$	(300)	$	(150)
Other		-		-
Total deferred tax liabilities	$	(300)	$	(150)
Net deferred tax assets	$	-	$	-

Current deferred tax assets	$	-	$	-
Long term deferred tax assets		-		-
Total deferred tax assets	$	-	$	-

At December 31, 2016, we had federal net operating loss (“NOLs”) carry forwards of approximately $230.2 million. These net operating losses will expire in years through fiscal 2034. At December 31, 2016, we also had state NOL carry forwards of approximately $100.2 million. These NOL’s expire between 2029 and 2034. We also had the New York State and New York City prior net operating loss conversion (“PNOLC”) subtraction pools of approximately $31.1 million and $25.5 million, respectively. The conversion to the PNOLC under the New York State and New York City corporate tax reforms does not have any material tax impact.

Based on management’s assessment, it is more likely than not that the entire deferred tax assets will not be realized by future taxable income or tax planning strategy. Accordingly a valuation allowance of $91.3 million was recorded as of December 31, 2015. The valuation allowance was adjusted by approximately $4.0 million during the year ended December 31, 2016 to $95.3 million.