Note

— Income Taxes

The reconciliation of the federal statutory income tax rate to our effective income tax rate is as follows:

	Year Ended
	December 31,
	2019			2018
U.S. federal statutory rate, beginning of year		21	%		21	%
Officers' compensation		7			(5	)
Other		(2	)		(1	)
Valuation allowance		(26	)		(15	)
Effective tax rate as reported		—	%		—	%

Significant components of our deferred tax assets and liabilities at

December 31, 2019

and

2018

are as follows (in thousands):

	Year Ended
	December 31,
	2019			2018
Deferred tax assets
Net operating loss carryforwards and credits	$	15,064		$	5,302
Share-based compensation expense		3,441			3,548
Property, plant and equipment		1,025			1,399
Common stock warrant liabilities		524			—
Operating lease liabilities		147			—
Other		21			51
Less: valuation allowance		(19,802	)		(10,300	)
Total deferred tax assets		420			—

Deferred tax liabilities
Operating lease right-of-use assets		(420	)		—
Total deferred tax liabilities		(420	)		—

Net deferred tax assets (liabilities)	$	—		$	—

The federal deferred tax assets presented above do

not

include the state tax benefits as our net deferred state tax assets are offset with a full valuation allowance.

December 31, 2019

, we had federal net operating loss (“NOL”) carryforwards of approximately

$71.7

million. Approximately

$7.9

million of these NOL carryforwards will expire between

2034

and

2037.

Due to our history of NOLs, current year NOLs and significant risk factors related to our ability to generate taxable income, we have established a valuation allowance to offset our deferred tax assets as of

December 31, 2019

and

2018

. We will continue to evaluate our ability to release the valuation allowance in the future. Due to our full valuation allowance, we have

not

recorded a provision for federal or state income taxes during the years ended

December 31, 2019

2018

. Deferred tax assets and deferred tax liabilities are classified as non-current in our Consolidated Balance Sheets.

The Tax Reform Act of

1986

(as amended) contains provisions that limit the utilization of NOL and tax credit carryforwards if there has been a change in ownership as described in Section

382

of the Internal Revenue Code (“Section

382”

). Substantial changes in the Company's ownership have occurred that

may

limit or reduce the amount of NOL carryforwards that the Company could utilize in the future to offset taxable income. The Company has

not

completed a detailed Section

382

study at this time to determine what impact, if any, that ownership changes

may

have had on its NOL carryforwards. In each period since its inception, the Company has recorded a valuation allowance for the full amount of its deferred tax assets, as the realization of the deferred tax asset is uncertain. As a result, the Company has

not

recognized any federal or state income tax benefit in its Consolidated Statement of Operations.

We remain subject to periodic audits and reviews by taxing authorities; however, we did

not

have any open income tax audits as of

December 31, 2019.

The federal tax returns for the years beginning

2015

remain open for examination.