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INCOME TAXES | 12 Months Ended
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Jan. 01, 2017
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The following table presents the U.S. and foreign components of consolidated income (loss) before income taxes and the provision for (benefit from) income taxes (in thousands):
| Fiscal Years
| 2016 |  |  | 2015 |  |  | 2014 |
Income (loss) before income taxes: |  |  |  |  |
U.S. | $ | (19,340 | ) |  | $ | (17,897 | ) |  | $ | (13,172 | )
Foreign | 257 |  |  | 195 |  |  | 161 |
Income (loss) before income taxes | $ | (19,083 | ) |  | $ | (17,702 | ) |  | $ | (13,011 | )
Provision for (benefit from) income taxes: |  |  |  |  |
Current: |  |  |  |  |
Federal | $ | — |  |  | $ | 37 |  |  | $ | — |
State | (3 | ) |  | 2 |  |  | — |
Foreign | 75 |  |  | 99 |  |  | 95 |
Subtotal | 72 |  |  | 138 |  |  | 95 |
Deferred: |  |  |  |  |
Federal | — |  |  | — |  |  | — |
State | — |  |  | — |  |  | — |
Foreign | (7 | ) |  | 8 |  |  | (27 | )
Subtotal | (7 | ) |  | 8 |  |  | (27 | )
Provision for income taxes | $ | 65 |  |  | $ | 146 |  |  | $ | 68 |
Based on the available objective evidence, management believes it is more likely than not that the U.S. net deferred tax assets will not be fully realizable. Accordingly, the Company has provided a full valuation allowance against its U.S. federal and state deferred tax assets at January 1, 2017. Any future release of the valuation allowance may be recorded as a tax benefit increasing net income or as an adjustment to paid-in capital, based on tax ordering requirements. The Company believes it is more likely than not it will be able to realize its foreign deferred tax assets. Deferred tax balances are comprised of the following (in thousands):
| January 1, 2017 |  | January 3, 2016
Deferred tax assets: |  |  |
Net operating losses | $ | 53,924 |  |  | $ | 45,148 |
Capital losses | 2,938 |  |  | 2,938 |
Accruals and reserves | 1,875 |  |  | 1,732 |
Credits carryforward | 5,080 |  |  | 5,831 |
Depreciation and amortization | 14,415 |  |  | 12,738 |
Stock-based compensation | 968 |  |  | 1,012 |
| 79,200 |  |  | 69,399 |
Valuation allowances | (79,150 | ) |  | (69,349 | )
Deferred tax asset | $ | 50 |  |  | $ | 50 |
Deferred tax liability | — |  |  | — |
A rate reconciliation between income tax provisions at the U.S. federal statutory rate and the effective rate reflected in the consolidated statements of operations is as follows:
| Fiscal Years
| 2016 |  | 2015 |  | 2014
Income tax (benefit) at statutory rate | $ | (6,489 | ) |  | $ | (5,962 | ) |  | $ | (4,423 | )
State taxes | (3 | ) |  | 2 |  |  | — |
Stock compensation and other permanent differences | 211 |  |  | 286 |  |  | 6 |
Foreign taxes | (19 | ) |  | 41 |  |  | 22 |
Benefit allocated from other comprehensive income (loss) | — |  |  | — |  |  | — |
Future benefit of deferred tax assets not recognized | 6,365 |  |  | 5,779 |  |  | 4,463 |
Provision for income taxes | $ | 65 |  |  | $ | 146 |  |  | $ | 68 |
As of January 1, 2017, the Company had net operating loss carryforwards of approximately $148.7 million for federal and $57.4 million for state income tax purposes. If not utilized, these carryforwards will expire beginning in 2017 for federal and state purposes. The Company has decided to early adopt ASU 2016-09 in Q4 2016 and has elected to continue to estimate their forfeiture rate rather than recognizing forfeitures as they occur. The ASU 2016-09 is considered to be effective from the beginning of the year of adoption. In the year of adoption, ASU 2016-09 requires that the cumulative effect adjustment be recorded to retained earnings. Due to the full valuation allowance, there is no cumulative effect adjustment to record. Excess windfall net operating loss carryforwards are converted into deferred tax net operating losses with a corresponding increase in valuation allowance as of the beginning of 2016; the year of adoption. The Company has research credit carryforwards of approximately $4.0 million for federal and $4.1 million for state income tax purposes as of January 1, 2017. If not utilized, the federal carryforwards will expire in various amounts beginning in 2018. The California credit can be carried forward indefinitely. Under the Tax Reform Act of 1986, the amount of and the benefit from net operating loss carryforwards and credit carryforwards may be impaired or limited in certain circumstances. Events which may restrict utilization of a company's net operating loss and credit carryforwards include, but are not limited to, certain ownership change limitations as defined in Internal Revenue Code Section 382 and similar state provisions. In the event the Company has had a change of ownership, utilization of carryforwards could be restricted to an annual limitation. The annual limitation may result in the expiration of net operating loss carryforwards and credit carryforwards before utilization. The Company has not undertaken a study to determine if its net operating losses are limited. In the event the Company previously experienced an ownership change, or should experience an ownership change in the future, the amount of net operating losses and research and development credit carryovers available in any taxable year could be limited and may expire unutilized. U.S. income taxes and foreign withholding taxes associated with the repatriation of earnings of foreign subsidiaries were not provided for on a cumulative total of $500,000 of undistributed earnings for certain foreign subsidiaries as of the end of fiscal 2016. The Company intends to reinvest these earnings indefinitely in the Company's foreign subsidiaries. The Company believes that future domestic cash generation will be sufficient to meet future domestic cash needs. The Company has not recorded a deferred tax liability on the undistributed earnings of non-U.S. subsidiaries. If these earnings were distributed to the United States in the form of dividends or otherwise, or if the shares of the relevant foreign subsidiaries were sold or otherwise transferred, the Company would be subject to additional U.S. income taxes (subject to an adjustment for foreign tax credits) and foreign withholding taxes. The additional net taxes due would be immaterial or would not have a material impact on the Company’s financial position and results of operation. If the Company decides to repatriate foreign earnings, the Company would need to adjust its income tax provision in the period in which it is determined that the earnings will no longer be indefinitely reinvested outside the United States. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
| January 1, 2017 |  | January 3, 2016 |  | December 28, 2014
Beginning balance of unrecognized tax benefits | $ | 696 |  |  | $ | 516 |  |  | $ | 79 |
Additions for tax positions related to the prior year | 1,204 |  |  | (3 | ) |  | 330 |
Additions for tax positions related to the current year | 150 |  |  | 199 |  |  | 162 |
Lapse of statues of limitations | (36 | ) |  | (16 | ) |  | (55 | )
Ending balance of unrecognized tax benefits | $ | 2,014 |  |  | $ | 696 |  |  | $ | 516 |
Out of $2.0 million of unrecognized tax benefits, there were no unrecognized tax benefits that would result in a change in the Company's effective tax rate if recognized in future years. For the twelve month period ended January 1, 2017, the Company does not have any interest accrued related to uncertain tax positions. As of January 1, 2017 and January 3, 2016 the Company had approximately $0 and $17,000, respectively, of accrued interest and penalties related to uncertain tax positions. The Company is not currently under exam and the Company's historical net operating loss and credit carryforwards may be adjusted by the Internal Revenue Service, or IRS, and other tax authorities until the statute closes on the year in which such attributes are utilized. The Company estimates that its unrecognized tax benefits will not change significantly within the next twelve months. The Company is subject to U.S. federal income tax as well as income taxes in many U.S. states and foreign jurisdictions in which the Company operates. As of January 1, 2017, fiscal years 2012 onward remain open to examination by the U.S. taxing authorities. The U.S. tax years from 1990 forward remain effectively open to examination due to the carryover of unused net operating losses and tax credits.

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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 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 2: 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 Reference 3: 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 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 + Details
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