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Income Taxes | 12 Months Ended
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Dec. 31, 2014
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income (loss) before taxes for the years ended December 31, 2014, 2013 and 2012 is comprised of the following (in thousands):
| Year Ended December 31,
| 2014 |  | 2013 |  | 2012
Domestic | $ | (39,513 | ) |  | $ | (44,142 | ) |  | $ | (88,945 | )
Foreign | 408 |  |  | 812 |  |  | 290 |
Loss before taxes | $ | (39,105 | ) |  | $ | (43,330 | ) |  | $ | (88,655 | )
The provision (benefit) for income taxes for the years ended December 31, 2014, 2013 and 2012 is comprised of the following (in thousands):
| Year Ended December 31,
| 2014 |  | 2013 |  | 2012
Current: |  |  |  |  |
Federal | $ | — |  |  | $ | (248 | ) |  | $ | — |
State | 21 |  |  | 33 |  |  | 29 |
Foreign | 16 |  |  | (229 | ) |  | 74 |
Total Current | 37 |  |  | (444 | ) |  | 103 |
Deferred: |  |  |  |  |
Federal | — |  |  | 53 |  |  | 14 |
State | — |  |  | — |  |  | — |
Foreign | 87 |  |  | 474 |  |  | 494 |
Total Deferred | 87 |  |  | 527 |  |  | 508 |
Provision or income taxes | $ | 124 |  |  | $ | 83 |  |  | $ | 611 |
The Company’s net deferred tax assets consist of the following (in thousands):
| December 31,
| 2014 |  | 2013
Deferred tax assets: |  |  |
Accrued expenses | $ | 4,566 |  |  | $ | 11,292 |
Inventory obsolescence provision | 2,352 |  |  | 3,539 |
Depreciation and amortization | 4,137 |  |  | 4,136 |
Deferred rent | 555 |  |  | 559 |
Net operating loss and tax credit carryforwards | 76,346 |  |  | 55,010 |
Stock-based compensation | 1,910 |  |  | 4,518 |
Unrecognized tax benefits | 1,296 |  |  | 1,190 |
Deferred tax assets | 91,162 |  |  | 80,244 |
Deferred tax liabilities: |  |  |
Amortization of acquired intangibles | (388 | ) |  | (699 | )
Net deferred tax assets | 90,774 |  |  | 79,545 |
Valuation allowance | (90,774 | ) |  | (79,458 | )
Net deferred tax assets | $ | — |  |  | $ | 87 |
The Company recognizes federal, state and foreign current tax liabilities or assets based on its estimate of taxes payable to or refundable by tax authorities in the current fiscal year. The Company also recognizes federal, state and foreign deferred tax liabilities or assets based on the Company’s estimate of future tax effects attributable to temporary differences and carryforwards. The Company records a valuation allowance to reduce any deferred tax assets by the amount of any tax benefits that, based on available evidence and judgment, are not expected to be realized. The Company assesses whether a valuation allowance should be recorded against its deferred tax assets based on the consideration of all available evidence, using a “more likely than not” realization standard. The four sources of taxable income that must be considered in determining whether deferred tax assets will be realized are: (1) future reversals of existing taxable temporary differences (i.e., offset of gross deferred tax assets against gross deferred tax liabilities); (2) taxable income in prior carryback years, if carryback is permitted under the applicable tax law; (3) tax planning strategies; and (4) future taxable income exclusive of reversing temporary differences and carryforwards. After a review of the four sources of taxable income described above and after being in a three year cumulative loss position at the end of 2014, the Company recognized a full valuation allowance. During 2014 and 2013, the Company recognized valuation allowances of $11.3 million and $15.6 million, related to its U.S.-based and Canadian deferred tax assets created in those respective years. As a result, no net income tax benefits resulted in the Company’s statements for operations from the operating losses created during those years. At December 31, 2014, the deferred tax asset valuation allowance consisted of $86.0 million relating to the Company’s domestic deferred tax assets and $4.8 million related to the Company’s Canadian deferred tax assets. At December 31, 2013, the valuation allowance consisted of $74.7 million relating to the Company’s domestic deferred tax assets and $4.7 million related to the Company’s Canadian deferred tax assets. The provision (benefit) for income taxes reconciles to the amount computed by applying the statutory federal income tax rate of 34% in 2014, 2013 and 2012 to income (loss) before provision for income taxes as follows (in thousands):
| Year Ended December 31,
| 2014 |  | 2013 |  | 2012
Federal tax benefit, at statutory rate | $ | (13,447 | ) |  | $ | (14,732 | ) |  | $ | (30,142 | )
State benefit, net of federal benefit | (1,054 | ) |  | (922 | ) |  | (757 | )
Change in valuation allowance | 11,316 |  |  | 15,577 |  |  | 27,486 |
Change in fair value of warrant | 1,203 |  |  | — |  |  | — |
Beneficial conversion feature | 163 |  |  | — |  |  | — |
Research and development credits | 3 |  |  | (1,084 | ) |  | (856 | )
Share-based compensation | 2,402 |  |  | 2,433 |  |  | 1,616 |
Uncertain tax positions | (62 | ) |  | (307 | ) |  | (46 | )
Goodwill impairment | — |  |  | — |  |  | 3,700 |
Change in state apportionment | (347 | ) |  | (767 | ) |  | — |
Other | (53 | ) |  | (115 | ) |  | (390 | )
| $ | 124 |  |  | $ | 83 |  |  | $ | 611 |
At December 31, 2014, the Company has U.S. federal net operating loss carryforwards of approximately $174.3 million. Federal net operating loss carryforwards expire at various dates from 2029 through 2034. The Company has California net operating loss carryforwards of approximately $67.1 million, which expire at various dates from 2017 through 2034. The Company has California research and development tax credit carryforwards of approximately $5.4 million. The California tax credits have no expiration date. The Company also has federal research and development tax credit carryforwards of approximately $4.3 million. The federal tax credits expire at various dates from 2027 through 2034. Pursuant to Internal Revenue Code (IRC) Sections 382 and 383, annual use of the Company’s net operating loss and research and development credit carryforwards may be limited in the event a cumulative change in ownership of more than 50% occurs within a three-year period. The Company is in the process of completing an IRC Section 382/383 analysis and expects to have this analysis completed within the next three months. Due to the existence of the valuation allowance, future changes in the Company’s unrecognized tax benefits will not impact the Company’s effective tax rate. It is the Company’s intention to reinvest undistributed earnings of its foreign subsidiaries and thereby indefinitely postpone their remittance. Accordingly, no provision has been made for foreign withholding taxes on United States income taxes which may become payable if undistributed earnings of the foreign subsidiary were paid as dividends to the Company. The Company follows the accounting guidance related to financial statement recognition, measurement and disclosure of uncertain tax positions. The Company recognizes the impact of an uncertain income tax position on an income tax return at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. During the years ended December 31, 2014 and 2013, the Company recognized approximately $61,000 and $71,000, respectively, of income tax benefit plus $0 and $236,000, respectively, of associated interest due to expiration of the applicable statutes of limitations applicable to certain tax years. As of December 31, 2014 and 2013, the total liability for unrecognized tax benefits was $0 and $61,000, respectively, and is included in other long-term liabilities. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows (in thousands):
| Amount
Unrecognized tax benefits balance at December 31, 2012 | $ | 33,220 |
Increases related to current and prior year tax positions | 2,653 |
Settlements and lapses in statutes of limitations | (373 | )
Unrecognized tax benefits balance at December 31, 2013 | 35,500 |
Increases related to current and prior year tax positions | 204 |
Settlements and lapses in statutes of limitations | (61 | )
Unrecognized tax benefits balance at December 31, 2014 | $ | 35,643 |
There are no tax benefits that, if recognized, would affect the effective tax rate that are included in the balances of unrecognized tax benefits at December 31, 2014. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. As of December 31, 2014, the same as in 2013, the Company recorded $0 of accrued interest related to uncertain tax positions. The Company and its subsidiaries file U.S., state, and foreign income tax returns in jurisdictions with various statutes of limitations. In the fourth quarter of 2014, the Company reduced its uncertain tax liability by approximately $61,000, due to the expiration of the statute of limitations applicable to the 2009 taxable year. The Company is also subject to various federal income tax examinations for the 2003 through 2013 calendar years due to the availability of net operating loss carryforwards. The Company believes appropriate provisions for all outstanding issues have been made for all jurisdictions and all open years. However, because audit outcomes and the timing of audit settlements are subject to significant uncertainty, the Company’s current estimate of the total amounts of unrecognized tax benefits could increase or decrease for all open years.

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- 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
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