v2.4.1.9

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2014
Income Tax Disclosure [Abstract] |
Income Taxes | 12. INCOME TAXES The Company generated pretax net losses of $719,000, $3.5 million and $5.1 million for the years ended December 31, 2014, 2013 and 2012, respectively. The Company recorded a federal and state deferred tax benefit of $1.5 million and $0 for 2014, respectively, and no benefit for income taxes for 2013 and 2012. A reconciliation of the difference between the benefit for income taxes and income taxes at the statutory U.S. federal income tax rate is as follows:
|  | Year Ended December 31, |
|  | 2014 |  |  | 2013 |  |  | 2012 |
Federal tax at statutory rate |  |  | 34.0 | % |  |  | 34.0 | % |  |  | 34.0 | %
Stock based compensation |  |  | -9.5 | % |  |  | -11.4 | % |  |  | 0.0 | %
Change in valuation allowance |  |  | 190.6 | % |  |  | -8.6 | % |  |  | -30.9 | %
Change in unrecognized tax benefits |  |  | 0.0 | % |  |  | -8.4 | % |  |  | 0.0 | %
Preferred stock warrant revaluation |  |  | -0.7 | % |  |  | -5.0 | % |  |  | 0.0 | %
Interest expense |  |  | -5.8 | % |  |  | 0.0 | % |  |  | -2.3 | %
Contingent liability for IMX acquisition |  |  | 38.2 | % |  |  | 0.0 | % |  |  | 0.0 | %
IMX acquisition costs |  |  | -36.7 | % |  |  | 0.0 | % |  |  | 0.0 | %
Other |  |  | -1.3 | % |  |  | -0.6 | % |  |  | -0.8 | %
Effective income tax rate |  |  | 208.8 | % |  |  | 0.0 | % |  |  | 0.0 | %
In connection with the Company’s June 2014 acquisition of ImmuMetrix, Inc., a tax benefit of $1.5 million was recognized during the year ended December 31, 2014. This benefit resulted from the expectation that amortization of the in-process technology acquired, when completed and placed in service, is not expected to be deductible for tax purposes, as the transaction was structured as a tax-free reorganization. Accordingly, a deferred tax liability was recorded at the acquisition date for the difference between the financial reporting and tax basis of the acquired in-process technology. While the in-process technology is considered an indefinite lived intangible asset, this asset is expected to be amortized or impaired prior to the expiration of net operating loss carryforwards available to the Company. There were significant differences in several of the items affecting the rate reconciliation above. The difference for 2014 primarily relates to the release of a valuation allowance, and for 2013 and 2012 the differences primarily related to the IMX acquisition and to the cancellation of stock options for which deferred taxes were previously provided and an increase in unrecognized tax benefits which were netted against the respective deferred tax assets. These items are separately disclosed and not included with the change in the valuation allowance. The tax effects of temporary differences and carryforwards that give rise to significant deferred tax assets and liabilities are as follows (in thousands):
|  | As of December 31, |
|  | 2014 |  |  | 2013 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 63,116 |  |  | $ | 62,863 |
Tax credit carryforwards |  |  | 4,065 |  |  |  | 3,973 |
Accruals |  |  | 942 |  |  |  | 1,097 |
Property and equipment |  |  | — |  |  |  | 147 |
Other |  |  | 551 |  |  |  | 97 |
Gross deferred tax assets |  |  | 68,674 |  |  |  | 68,177 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Property and equipment |  |  | (8 | ) |  |  | — |
Purchased Intangible |  |  | (2,349 | ) |  |  | — |
Total deferred tax liabilities |  |  | (2,357 | ) |  |  | — |
Valuation allowance |  |  | (66,317 | ) |  |  | (68,177 | )
Net deferred tax assets |  | $ | — |  |  | $ | — |
The Company has recorded pretax net losses from operations since its inception. The Company believes that based on the history of such losses and other factors, the weight of available evidence indicates that it is more likely than not that it will not be able to realize its net deferred tax assets. Accordingly, the net deferred tax assets have been offset by a full valuation allowance. The valuation allowance decreased by $1.9 million and $0.5 million during the years ended December 31, 2014 and 2013, respectively. As of December 31, 2014, the Company had net operating loss carryforwards of approximately $164 million and $127 million available to reduce future taxable income, if any, for federal and state income tax purposes, respectively. The U.S. federal net operating loss carryforwards will begin to expire in 2018 while for state purposes, the net operating losses will begin to expire in 2015. As of December 31, 2014, the Company had credit carryforwards of approximately $3.1 million and $3.9 million available to reduce future taxable income, if any, for federal and California state income tax purposes, respectively. The Federal credit carryforwards begin to expire in 2021. California credits have no expiration date. Utilization of the Company’s net operating loss carryforwards and credits may be subject to a substantial annual limitation due to the ownership change limitations provided by the Tax Reform Act of 1986, as amended and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization. Based on a preliminary review of our equity transactions since inception, the Company believes a portion of its net operating loss carryforwards may be limited due to equity financings which occurred in 2000, 2004, 2007 and 2014. A reconciliation of the Company’s unrecognized tax benefits is as follows (in thousands):
|  | Year Ended December 31, |
|  | 2014 |  |  | 2013 |  |  | 2012 |
Balance at beginning of year |  | $ | 2,196 |  |  | $ | 1,159 |  |  | $ | 1,130 |
Additions based on tax positions related to current year |  |  | 83 |  |  |  | 177 |  |  |  | 53 |
Additions (reductions) based on tax positions related to prior years |  |  | (225 | ) |  |  | 860 |  |  |  | (24 | )
Balance at end of year |  | $ | 2,054 |  |  | $ | 2,196 |  |  | $ | 1,159 |
The unrecognized tax benefits, if recognized and in the absence of a full valuation allowance, would impact the income tax provision by $1.6 million and $1.5 million as of December 31, 2014 and 2013, respectively. Given the Company’s valuation allowance, the uncertain tax positions would not impact the effective tax rate. The Company has elected to include interest and penalties as a component of tax expense. During the years ended December 31, 2014, 2013 and 2012, the Company did not recognize accrued interest and penalties related to unrecognized tax benefits. The Company does not anticipate a significant change in the unrecognized tax benefits over the next twelve months. Because the Company has not utilized any of its net operating loss carryforwards, its federal and state income tax returns are subject to tax authority examination from inception.

X
- Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration