Entity information:
Note
 
1
4
Income Taxes
 
Income tax expense for the years ended
March
 
31,
2017,
2016
and
2015
consisted of:
 
   
201
7
    
201
6
    
201
5
  
   
(in thousands)
  
Current:
                        
Federal
   $
(2
)
   $
(1
)
   $
(12
)
State
    
(3
)
    
23
      
(78
)
Total current benefit (expense)
    
(5
)
    
22
      
(90
)
Deferred:
                        
Federal
    
—
      
(3,027
)
    
(170
)
State
    
—
      
(323
)
    
7
  
Total deferred expense
    
—
      
(3,350
)
    
(163
)
Income tax expense
   $
(5
)
   $
(3,328
)
   $
(253
)
 
The following table reconciles the amount of income taxes computed at the federal statutory rate of
3
4%
,
f
or all periods presented, to the amount reflected in the Company
’s consolidated statements of operations for the years ended
March 
31,
2017,
2016
and
2015:
 
   
201
7
    
201
6
    
201
5
  
   
(in thousands)
  
Tax provision at federal statutory income tax rate
   $
411
     $
363
     $
(78
)
Stock based compensation
    
(281
)
    
(128
)
    
(108
)
Increase in valuation allowance
    
(158
)
    
(3,564
)
    
—
  
State income taxes benefit (expense), net of federal income tax effect
    
49
      
25
      
(49
)
State rate adjustment
    
(1
)
    
1
      
(4
)
Other, net
    
(25
)
    
(25
)
    
(14
)
Income tax expense
   $
(5
)
   $
(3,328
)
   $
(253
)
 
The tax effects of temporary differences related to various assets, liabilities and carry forwards that give rise to deferred tax assets and deferred tax liabilities as of
March
 
31,
2017
and
2016
are as follows:
 
   
201
7
    
201
6
  
   
(in thousands)
  
Deferred tax assets:
                
Net operating loss carry forwards
   $
4,325
     $
3,862
  
Inventory
    
405
      
3
  
Compensation accrual
    
187
      
535
  
Tax credit carry forwards
    
147
      
147
  
Other
    
40
      
72
  
Gross deferred tax assets
    
5,104
      
4,619
  
Less valuation allowance
    
(3,722
)
    
(3,564
)
Net deferred tax assets
    
1,382
      
1,055
  
Deferred tax liability- Depreciation and amortization
    
(1,382
)
    
(1,055
)
Net deferred tax assets
   $
—
     $
—
  
 
In assessing the valuation allowance for deferred tax assets, management considers whether it is more likely than
not
that some portion or all of the deferred tax assets will
not
be realized. Ultimately, the realization of deferred tax assets will depend on the existence future taxable income during the periods. In making this assessment, management considers past operating results, the scheduled reversal of deferred tax liabilities, estimates of future taxable income and tax planning strategies.
 
In fiscal
2016,
the Company recorded a
$3,564,000
valuation allowance against deferred tax assets. The Company concluded that a valuation allowance was appropriate in light of the significant negative evidence, which was objective and verifiable, primarily the cumulative losses in recent years. While the Company
’s long-term financial outlook remains positive, the Company concluded that its ability to rely on its long-term outlook as to future taxable income was limited due to the relative weight of the negative evidence from its recent cumulative losses. The Company’s conclusion regarding the need for a valuation allowance against its deferred tax assets could change in the future based on improvements in operating performance, which
may
result in the full or partial reversal of the valuation allowance.
 
At
March
 
31,
2017,
the Company has net operating loss carry forwards and tax credit carry forwards available to offset future federal income tax as follows (in thousands):
 
Expires March 31,
  
Net Operating
Losses
    
Research and
Experimentation
Tax Credits
  
2020
   $
—
     $
8
  
2021
    
—
      
2
  
2022
    
2,839
      
—
  
2023
    
1,863
      
1
  
2026
    
159
      
—
  
2027
    
2,665
      
1
  
2028
    
1,612
      
16
  
2031
    
389
      
—
  
2032
    
44
      
—
  
2033
    
76
      
—
  
2034
    
392
      
—
  
2035
    
18
      
—
  
2037
    
1,705
      
—
  
    $
11,762
     $
28
  
 
In addition, at
March
 
31,
2017,
the Company has alternative minimum tax credit carry forwards of approximately
$120,000
available to reduce future federal regular income taxes over an indefinite period.
 
At
March
 
31,
2017,
the Company has state tax net operating loss carry forwards available to offset future California state taxable income of
$1,040,000.
These carry forwards expire
March 
31,
2037.
 At
March 
31,
2017,
the Company has state tax net operating loss carry forwards available to offset future Hawaii state taxable income of
$6,289,000.
These carry forwards expire
March 
31,
2030
through
2037.
 
The following represents the open tax years and jurisdictions that the Company used in its evaluation of tax positions:
 
Open tax years ending March 31,
 
Jurisdiction
201
4
-
201
7
 
U.S. Federal
201
4
-
201
7
 
State of Hawaii
201
3
-
201
7
 
State of California