INCOME TAXES

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 12 - 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 2017 through 2020. 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, 2020, the Company had available net operating loss carry-forwards for federal income tax reporting purposes of approximately $348 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, deferred tax liabilities and valuation allowance as of December 31, 2020 and 2019 are summarized as follows:

	Years Ended December 31,
(in thousands)	2020			2019
Deferred tax assets:
Net operating loss carryforwards	$	7,741		$	6,862
Inventory reserve		114			114
Depreciation and amortization		2,226			2,512
Share based compensation		599			597
Other		297			279
Total deferred tax assets		10,977			10,364
Valuation allowance		(10,977	)		(10,364	)
Net deferred tax assets		—			—
Deferred tax liabilities:
Intangible assets		—			—
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 $0.6 million and $2.8 million during 2020 and 2019, respectively.

As of the date of this filing, the Company has not filed its 2019 or 2020 federal and state corporate income tax returns. The Company expects to file the 2019 return in the second quarter of 2021 and the 2020 return by the extension due date.