(8)

Income Taxes

Our net income tax provision, including both current and deferred, related to U.S. federal and state income taxes, is none.

A reconciliation of income tax expense to the amount computed by applying the Federal income tax rate to loss before provision for income taxes as of December 31, 2015 and 2014 is as follows:


	2015			2014
Income tax credit at statutory rates	$	(405	)	$	(587	)
Nondeductible expenses		3			3
State income tax, net of federal benefits		(61	)		(88	)
Other		(3	)		3
Increase in valuation allowance		466			669

	$	—		$	—

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred income taxes consist of the following:


	As of December 31,
	2015			2014
Deferred tax assets:
Net operating loss carryforwards	$	31,590		$	31,252
Inventory and other allowances		28			29
Charitable contribution carryforwards		6			6
Excess (tax) book depreciation		709			601
Excess (tax) book amortization		67			62
Share-based compensation		1,396			1,326
Other accrued costs		225			279

Total deferred tax assets		34,021			33,555

Less: Valuation allowance		(34,021	)		(33,555	)

Deferred income taxes	$	—		$	—

The valuation allowance increased approximately $0.5 million and $0.7 million for the years ended December 31, 2015 and 2014, respectively (with no expiring net operating loss carryforwards and credits for either period; a capital loss carryforward of approximately $0.3 million expired during 2014) due principally to the change in the net operating loss carryforward and uncertainty as to whether future taxable income will be generated prior to the expiration of the carryforward period. Under the Internal Revenue Code, certain ownership changes, including the prior issuance of preferred stock and our public offering of common stock, may subject us to annual limitations on the utilization of our net operating loss carryforward. As of December 31, 2015, the amount subject to limitations has not yet been determined.

We have net operating loss carryforwards for tax purposes of approximately $81 million on December 31, 2015, which expire between 2018 and 2035. During 2011, the state of Illinois suspended the use of net operating loss carryforwards for a four year period beginning 2011, extending the term of all net loss carryforwards by a corresponding four years.