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Income Taxes
 12 Months Ended
Dec. 31, 2011
Income Taxes [Abstract]  
Income Taxes
  13. Income Taxes

The Company adopted the provisions of ASC Topic 740, Accounting for Uncertainty in Income Taxes on January 1, 2007. ASC Topic 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Guidance also is provided on derecognition, classification, interest and penalties, accounting in interim periods, and disclosure and transition. Based on the Company’s evaluation, there are no significant uncertain tax positions requiring recognition in the Company’s financial statements. There was no effect on financial condition or results of operations as a result of implementing ASC Topic 740 to all tax positions for which the statute of limitation remained open, and the Company did not have any unrecognized tax benefits. At December 31, 2011, there have been no changes to the liability for uncertain tax positions, and there are no unrecognized tax benefits.

The Company files income tax returns in the United States federal jurisdiction, as well as in various states and foreign jurisdictions. With few exceptions, the Company is no longer subject to United States federal, state, and local, or non-United States income tax examinations by tax authorities for years before 2008.

The Company’s policy is to reflect interest expense related to uncertain income tax positions as part of income tax expense, when and if they become applicable.

 

The components of the benefit from (provision for) income taxes are as follows (in thousands):

 

                         
    Years ended December 31,  
    2011     2010     2009  

Current

                        

Federal

   $ —       $ —       $ —    

Foreign

     12       —         —    

State

     2       (10 )      (3 ) 
   

 

 

    

 

 

    

 

 

  
      14       (10 )      (3 ) 

Deferred

                        

Federal

     —         —         —    

Foreign

     (12 )      4       (4 ) 

State

     —         —         —    
   

 

 

    

 

 

    

 

 

  
      (12 )      4       (4 ) 
   

 

 

    

 

 

    

 

 

  

Benefit from (provision for) income taxes

   $ 2     $ (6 )    $ (7 ) 
   

 

 

    

 

 

    

 

 

  

The following table shows the geographic components of pretax income (loss) from continuing operations between United States and foreign subsidiaries (in thousands):

 

                         
    December 31,  
    2011     2010     2009  
       

United States

   $ (5,752 )    $ (8,410 )    $ (9,902 ) 

Foreign subsidiaries

     (305 )      (101 )      95  
   

 

 

    

 

 

    

 

 

  

Pretax loss from continuing operations

   $ (6,057 )    $ (8,511 )    $ (9,807 ) 
   

 

 

    

 

 

    

 

 

  

The principal items accounting for the difference between income taxes computed at the United States statutory rate and the benefit from (provision for) income taxes reflected in the statements of operations are as follows:

 

                         
    Years ended December 31,  
    2011     2010     2009  

United States statutory rate

     34.0 %      34.0 %      34.0 % 

State taxes (net of federal tax benefit)

     2.7 %      (0.1 %)      —   % 

Valuation allowance

     (34.4 %)      (33.7 %)      (35.7 %) 

Other

     (2.3 %)      (0.3 %)      1.6 % 
   

 

 

    

 

 

    

 

 

  
      0.0 %      (0.1 %)      (0.1 %) 
   

 

 

    

 

 

    

 

 

  

 

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets are as follows (in thousands):

 

                         
    December 31,  
    2011     2010     2009  

Allowance for doubtful accounts

   $ 60     $ 87     $ 75  

Accrued expenses and other reserves

     2,264       2,146       1,936  

Tax credits, deferred R&D, and other

     656       899       633  

Net operating loss

     24,931       22,088       19,576  

Valuation allowance

     (27,909 )      (25,206 )      (22,209 ) 
   

 

 

    

 

 

    

 

 

  

Total deferred tax asset

     2       14       11  

Deferred tax liabilities associated with indefinite-lived intangibles

     —         —         —    
   

 

 

    

 

 

    

 

 

  

Net total deferred taxes

   $ 2     $ 14     $ 11  
   

 

 

    

 

 

    

 

 

  

Since the Company believes that it is more likely than not that the benefit from net operating loss carry-forwards will not be realized, the Company has provided a full valuation allowance against its United States deferred tax assets. The net deferred tax assets for 2011 amounted to $2 thousand and were for the Company’s United Kingdom subsidiary, which has been profitable in prior years. The Company had no net deferred tax liabilities at December 31, 2011 and at December 31, 2010. There were no Federal tax expenses for the United States operations in 2011, as any expected benefits were offset by an increase in the valuation allowance.

As of December 31, 2011, the Company has a net operating loss carry-forward of approximately $66.9 million for federal, state and local income tax purposes. If not utilized, these carry-forwards will begin to expire in 2021 for federal and have begun to expire for state and local purposes.