4. INCOME TAXES	9 Months Ended
Dec. 31, 2015
Income Taxes
NOTE 4-INCOME TAXES	NOTE 4—INCOME TAXES The current portion of the Company’s unrecognized tax benefits was $0 at both December 31, 2015 and March 31, 2015. The long-term portion at December 31, 2015 and March 31, 2015 was $101,000 and $780,000, respectively, of which the timing of the resolution is uncertain. As of December 31, 2015, $1,731,000 of unrecognized tax benefits had been recorded as a reduction to net deferred tax assets. As of December 31, 2015 and March 31, 2015, the Company’s net deferred tax assets of $7.2 million and $6.0 million, respectively, were subject to a full valuation allowance. The Company recorded a net deferred tax liability of $821,000 associated with the estimated fair value adjustments of the intangible assets acquired in its acquisition of MikaMonu in the quarter ended December 31, 2015. During the three months ended December 31, 2015, the Company recorded a tax benefit of $698,000 due to the reduction of uncertain tax benefits as a result of the lapse of applicable statutes of limitations. Management believes that it is reasonably possible that within the next twelve months the Company could have a reduction in uncertain tax benefits of up to $438,000, including interest and penalties, related to positions taken with respect to credits and loss carryforwards on previously filed tax returns. The Company’s policy is to include interest and penalties related to unrecognized tax benefits within the provision for income taxes in the Condensed Consolidated Statements of Operations. The Company is subject to taxation in the United States and various state and foreign jurisdictions. Fiscal years 2013 through 2015 remain open to examination by federal tax authorities, and fiscal years 2012 through 2015 remain open to examination by California tax authorities. The Company’s estimated annual effective income tax rate was approximately 9.6% and 5.1% as of December 31, 2015 and 2014, respectively. The annual effective tax rate as of December 31, 2015 and 2014 varies from the United States statutory income tax rate primarily due to valuation allowances in the United States whereby pre-tax losses do not result in the recognition of corresponding income tax benefits and expenses and the foreign tax differential.

NOTE 4—INCOME TAXES

The current portion of the Company’s unrecognized tax benefits was $0 at both December 31, 2015 and March 31, 2015. The long-term portion at December 31, 2015 and March 31, 2015 was $101,000 and $780,000, respectively, of which the timing of the resolution is uncertain. As of December 31, 2015, $1,731,000 of unrecognized tax benefits had been recorded as a reduction to net deferred tax assets. As of December 31, 2015 and March 31, 2015, the Company’s net deferred tax assets of $7.2 million and $6.0 million, respectively, were subject to a full valuation allowance.

The Company recorded a net deferred tax liability of $821,000 associated with the estimated fair value adjustments of the intangible assets acquired in its acquisition of MikaMonu in the quarter ended December 31, 2015.

During the three months ended December 31, 2015, the Company recorded a tax benefit of $698,000 due to the reduction of uncertain tax benefits as a result of the lapse of applicable statutes of limitations.

Management believes that it is reasonably possible that within the next twelve months the Company could have a reduction in uncertain tax benefits of up to $438,000, including interest and penalties, related to positions taken with respect to credits and loss carryforwards on previously filed tax returns.

The Company’s policy is to include interest and penalties related to unrecognized tax benefits within the provision for income taxes in the Condensed Consolidated Statements of Operations.

The Company is subject to taxation in the United States and various state and foreign jurisdictions. Fiscal years 2013 through 2015 remain open to examination by federal tax authorities, and fiscal years 2012 through 2015 remain open to examination by California tax authorities.

The Company’s estimated annual effective income tax rate was approximately 9.6% and 5.1% as of December 31, 2015 and 2014, respectively. The annual effective tax rate as of December 31, 2015 and 2014 varies from the United States statutory income tax rate primarily due to valuation allowances in the United States whereby pre-tax losses do not result in the recognition of corresponding income tax benefits and expenses and the foreign tax differential.