Note 7 - Income Taxes

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE 7 – INCOME TAXES

Deferred taxes are recorded based upon differences between the financial statement and tax bases of assets and liabilities and available carryforwards. Temporary differences and carryforwards which gave rise to a significant portion of deferred tax assets and liabilities as of December 31, 2015 and 2014 are as follows (dollars in thousands):

	December 31,
	2015			2014
Deferred tax assets:
Net operating losses	$	71,215		$	62,719
Fixed asset basis difference		6,457			6,518
Contributions carryover		5			2
Deferred compensation		2,513			2,659
Accrued liabilities		315			41
Total deferred tax assets		80,505			71,939
Valuation allowance for deferred tax assets		(80,505	)		(71,939	)
Net deferred tax asset	$	-		$	-

The valuation allowance increased $8,566,000 and $6,667,000 in 2015 and 2014, respectively. The change in deferred tax assets resulted from current year net operating losses and changes to future tax deductions resulting from terms of stock compensation plans, fixed assets, and accrued liabilities.

As of December 31, 2015, the Company had net operating loss (NOL) carryforwards of approximately $242.9 million for federal income tax purposes and $149.0 million for California income tax purposes. Such carryforwards expire in varying amounts through the year 2035. Use of the carryforward amounts is subject to an annual limitation as a result of a previous ownership change.

As of December 31, 2015, the Company possessed unrecognized tax benefits totaling approximately $2.8 million. None of these, if recognized, would affect the Company's effective tax rate because the Company has recorded a full valuation allowance against these assets.

The Company's tax years 2012 through 2015 remain subject to examination by the Internal Revenue Service, and tax years 2011 through 2015 remain subject to examination by California tax jurisdictions. In addition, the Company's loss carryforward amounts are generally subject to examination and adjustment for a period of three years for federal tax purposes and four years for California purposes, beginning when such carryovers are utilized to reduce taxes in a future tax year.

A reconciliation of the income tax benefit to the statutory federal income tax rate is as follows (dollars in thousands):

	Year Ended December 31,
	2015			2014			2013
Expected federal income tax benefit at 34%	$	(8,163	)	$	(6,418	)	$	(7,698	)
Loss with no tax benefit provided		7,389			5,766			7,108
State income tax		4			4			6
Non-deductible expenses and other		774			652			590
Income tax expense	$	4		$	4		$	6

Because it is more likely than not that the Company will not realize its net deferred tax assets, it has recorded a full valuation allowance against these assets. Accordingly, no deferred tax asset has been recorded in the accompanying consolidated balance sheets.