10.  INCOME TAXES

No federal income taxes were paid during the years ended January 31, 2017 and 2016 due to the Company’s net losses. The provision of income taxes consist of state minimum income taxes.

As of January 31, 2017, the Company had available federal net operating loss (“NOL”) carry-forwards of approximately $39.5 million which will begin to expire in 2030 and California state NOL carry-forwards of approximately $37.3 million which will begin to expire in 2030. As of January 31, 2017 and 2016, the net deferred tax assets of approximately $17.3 million and $8.8 million, respectively, generated primarily by NOL carry-forwards, have been fully reserved due to the uncertainty surrounding the realization of such benefits. The net valuation allowance increased by approximately $8.5 million and $5.2 million during the years ended January 31, 2017 and 2016,  respectively.

Current tax laws impose substantial restrictions on the utilization of net operating loss and credit carry-forwards in the event of an “ownership change,” as defined by the Internal Revenue Code. If there should be an ownership change, the Company’s ability to utilize its carry-forwards could be limited.

Significant components of the Company’s deferred tax assets were as follows (in thousands):

 

A reconciliation of income taxes provided at the federal statutory rate ( 34% ) to the actual income tax provision was as follows (in thousands):

 

As of January 31, 2017 and 2016, the Company did not have any material unrecognized tax benefits. The tax years from 2010 to 2017 remain open for examination by the federal and state authorities.