The following table provides reconciliation between the statutory income tax rate and the Company’s effective tax rate for the years ended

 

		2016				2015
Tax expense at statutory rate			-34.0	%			-34.0	%
Stock-based compensation			8.6	%			19.3	%
Amortization of goodwill			-0.9	%			-3.5	%
Meals and entertainment			2.3	%			3.1	%
Deferred tax asset adjustment			0.0	%			0.0	%
Valuation allowance			24.0	%			15.1	%
Net Tax expense			0.0	%			0.0	%

 

Onvia’s deferred tax asset consists of the following as of (in thousands):

 

		2016				2015
Deferred tax assets
Net operating loss carryforward		$	26,352			$	26,109
Accrued expenses not currently deductible			671				652
Depreciation different for tax purposes			123				100
Deferred tax asset total		$	27,146			$	26,861
Deferred tax liability
Prepaid expenses			(262	)			(305	)
Depreciation different for tax purposes			(1,863	)			(1,731	)
Deferred tax liabilities total			(2,125	)			(2,036	)
Net deferred tax asset before valuation allowance			25,021				24,825
Valuation allowance			(25,021	)			(24,825	)
Net deferred tax asset after valuation allowance		$	-			$	-

 

The Company had approximately million in net deferred tax assets, before valuation allowance, as of Realization of net deferred tax assets ultimately depends on the existence of sufficient taxable income, including taxable income in prior carryback years, as well as future taxable income. Management regularly reviews the net deferred tax assets for usability based on a history of earnings, expectations for future earnings and expected timing of reversals of temporary differences. In particular, the Company considers its -year earnings trend to determine if it has generated cumulative net income or net losses over that period, which the accounting guidance considers significant evidence to evaluate in determining the existence and amount of any valuation allowance.

 

Based upon the analysis of all positive and negative evidence, it is management’s current judgment that due to the recent pattern of net losses, the Company has concluded that it is more-likely-than-not that some or all of the deferred tax assets will not be realized. Therefore, the Company has maintained its valuation allowance at of its net deferred tax assets as of

 

The Company reverse all or a portion of our valuation allowance in the future if it is determined that realization of these benefits is more likely than not. The Company will continue to evaluate the appropriateness of its valuation allowance in consideration of future operating results.

 

As of and Onvia had available U.S. federal net operating losses in the amount of and which expire at various times from through

 

Utilization of the NOL carryforwards be subject to a substantial annual limitation due to an ownership change that could occur in the future provided by Section of the Internal Revenue Code of as amended (the “Code”). These ownership changes limit the amount of NOL carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section of the Code, results from transactions increasing the ownership of certain stockholders or public groups in the stock of a corporation by more than percentage points over a -year period.

 

Onvia performed a Section analysis and identified an ownership change that occurred in The Company believes that, as a result of the annual Section limitation that resulted from the change in control that occurred in it will permanently be unable to use a significant portion of our NOL carryforwards that arose before the change in control to offset future taxable income. As such, the Company reduced its NOL deferred tax asset by the amount of NOLs that it will permanently be unable to utilize, which in turn resulted in a reduction to its valuation allowance.