Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Components of income (loss) before taxes

Components of income (loss) from continuing operations before taxes are as follows for the years ended December 31, (in thousands):



	2010			2011			2012
Income (loss) from continuing operations before taxes:
U.S.	$	(7,448	)	$	(6,229	)	$	(7,211	)
Foreign	429			(2,106		)	(2,442		)
Total income (loss) from continuing operations before taxes	$	(7,019	)	$	(8,335	)	$	(9,653	)

Components of income tax provision

Components of the income tax provision (benefit) are as follows for the years ended December 31, (in thousands):



	2010		2011		2012
Current:
Federal	$	—	$	—	$	—
State, local and foreign	213		129		749
	213		129		749
Deferred:
Federal	—		—		—
State, local and foreign	—		—		—
	—		—		—
Total income tax provision	$	213	$	129	$	749

Reconciliation of the income tax provision

The reconciliation of the income tax provision computed using the federal statutory income tax rate to the recognized income tax provision (benefit) is as follows for the years ended December 31, (in thousands):



	2010			2011			2012
Federal statutory rate	$	(2,386	)	$	(2,834	)	$	(3,282	)
State and local income taxes, net of federal benefit	(153		)	(85		)	(16		)
State rate change and other adjustments	737			160			531
Increase in valuation allowance	1,400			1,490			597
Foreign tax differential	70			816			915
Research and development credits	(48		)	(49		)	127
Share based compensation	378			402			518
Uncertain tax positions	(2		)	(46		)	767
Adjustments to deferred tax assets	—			—			525
Other	217			275			67
Income tax provision	$	213		$	129		$	749

The tax effect of temporary differences that give rise to deferred income taxes

The tax effect of temporary differences that give rise to deferred income taxes are as follows as of December 31, (in thousands):



	2011			2012
Deferred tax assets:
Net operating loss and tax credit carry forwards	$	88,675		$	93,547
Inventory reserve and uniform capitalization	1,959			2,016
Stock options and warrants	2,807			2,330
In-process research and development	241			237
Allowance for bad debts	265			232
Vacation accrual	354			386
Deferred rent	283			429
Landlord provided leasehold improvements	—			317
Deferred revenue	—			376
Warranty accrual	494			937
Depreciation and amortization	1,579			695
Other accruals and reserves	4,252			701
Acquired intangibles	1,386			1,336
Total deferred tax assets	102,295			103,539
Deferred tax liabilities:
State taxes	(3,568		)	(3,603		)
Cloverleaf intangibles	(456		)	—
Other	—			(205		)
Total deferred income tax liabilities	(4,024		)	(3,808		)
Valuation allowance	(98,271		)	(99,731		)
Net deferred tax assets	$	—		$	—

Summary of the activity related to unrecognized tax benefits

The following table summarizes the activity related to our unrecognized tax benefits (in thousands):



	2010			2011			2012
Balance, January 1	$	4,842		$	5,111		$	5,025
Increase related to prior period positions	367			—			583
Increase related to current year tax positions	91			124			241
Decrease related to prior period positions	(101		)	(210		)	(123		)
Decrease related to change in prior year estimate	(88		)	—			—
Balance, December 31	$	5,111		$	5,025		$	5,726