Income Taxes

12 Months Ended

Dec. 31, 2019

INCOME TAXES

The Company has identified its federal and California and North Carolina state tax returns as “major” tax jurisdictions. The periods the Company's income tax returns are subject to examination for these jurisdictions are 2016 through 2019. The Company believes its income tax filing positions and deductions will be sustained on audit, and does not anticipate any adjustments that would result in a material change to our financial position. Therefore, no liabilities for uncertain income tax positions have been recorded.

At December 31, 2019, the Company had available net operating loss carry-forwards for federal income tax reporting purposes of approximately $344.0 million and had available tax credit carry-forwards for federal tax reporting purposes of approximately $10.1 million, which are available to offset future taxable income. Portions of these carry-forwards will expire

through 2039 if not otherwise utilized. The Company has not performed a formal analysis, but believes its ability to use such net operating losses and tax credit carry-forwards is subject to annual limitations due to change of control provisions under Sections 382 and 383 of the Internal Revenue Code, which significantly impacts its ability to realize these deferred tax assets.

The Company's net deferred tax assets, liabilities and valuation allowance as of December 31, 2019 and 2018 are summarized as follows:



	Years Ended December 31,
(in thousands)	2019			2018
Deferred tax assets:
Net operating loss carryforwards (a)	$	6,862		$	4,110
Inventory reserve	114			—
Depreciation and amortization	2,512			2,799
Share based compensation	597			436
Other	279			249
Total deferred tax assets	10,364			7,594
Valuation allowance	(10,364		)	(7,540		)
Net deferred tax assets	—			54
Deferred tax liabilities:
Intangible assets	—			(54		)
Net deferred tax liabilities	$	—		$	—

The Company records a valuation allowance in the full amount of our net deferred tax assets since realization of such tax benefits has been determined by our management to be less likely than not. The valuation allowance increased $2.8 million and $2.2 million during 2019 and 2018, respectively.

In 2019 and 2018, there was $800 in income tax expense due for IThena’s income tax liability to the state of California. In addition, the Company had other immaterial state taxes due for 2018.

As of the date of this filing, the Company has not filed its 2019 federal and state corporate income tax returns. The Company expects to file these documents by the extension due dates.