5.	Income Taxes

The Company’s effective tax rate for the quarter ended September 30, 2017 and 2016 was 0.0% and 40.2%, respectively. For the quarter ended September 30, 2017, the Company recorded a full valuation allowance with respect to the increase of its deferred tax assets, primarily due to losses incurred for the quarter. The valuation allowance was recorded due to negative evidence of the Company’s recent years’ history of losses. For the quarter ended September 30, 2016, the Company calculated income tax expense based upon an annual effect tax rate forecast. The differences between the effective tax rate and the U.S. federal statutory tax rate of 35% principally resulted from state and local taxes, graduated federal tax rate reductions, changes in the valuation allowance and non-deductible expenses.

At September 30, 2017, the Company had a net deferred tax asset of approximately $11,848,000. Management has considered the realizability of the deferred tax assets and has concluded that a valuation allowance of approximately $26,800,000 should be recorded, related to net operating loss carryforwards that are not anticipated to be realized. Management determined that a valuation allowance was required with respect to the remaining net deferred tax assets. Realization of these assets is primarily dependent on achieving the forecast of future taxable income, as well as prudent and feasible tax planning strategies.