4. INCOME TAXES	3 Months Ended
Jun. 30, 2014
Income Taxes
NOTE 4-INCOME TAXES	NOTE 4—INCOME TAXES The current portion of the Company’s unrecognized tax benefits was $0 at both June 30, 2014 and March 31, 2014. The long-term portion at June 30, 2014 and March 31, 2014 was $1,477,000 and $1,462,000, respectively, of which the timing of the resolution is uncertain. As of June 30, 2014, $1,082,000 of unrecognized tax benefits had been recorded as a reduction to net deferred tax assets. As of June 30, 2014 and March 31, 2014, our net deferred tax assets of $4.3 million and $3.7 million, respectively, were subject to a full valuation allowance. 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 $775,000, 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 2011 through 2014 remain open to examination by federal tax authorities, and fiscal years 2010 through 2014 remain open to examination by California tax authorities The Company’s estimated annual effective income tax rate was approximately 5.05% and 3.3% as of June 30, 2014 and 2013, respectively. The annual effective tax rate as of June 30, 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. The difference between the effective income tax rate and the applicable United States statutory income tax rate as of June 30, 2013 was primarily due to the effects of tax credits, foreign tax rate differentials and tax free interest income, offset by stock-based compensation expense.

4. INCOME TAXES

3 Months Ended

Jun. 30, 2014

NOTE 4—INCOME TAXES

The current portion of the Company’s unrecognized tax benefits was $0 at both June 30, 2014 and March 31, 2014. The long-term portion at June 30, 2014 and March 31, 2014 was $1,477,000 and $1,462,000, respectively, of which the timing of the resolution is uncertain. As of June 30, 2014, $1,082,000 of unrecognized tax benefits had been recorded as a reduction to net deferred tax assets. As of June 30, 2014 and March 31, 2014, our net deferred tax assets of $4.3 million and $3.7 million, respectively, were subject to a full valuation allowance.

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 $775,000, 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 2011 through 2014 remain open to examination by federal tax authorities, and fiscal years 2010 through 2014 remain open to examination by California tax authorities

The Company’s estimated annual effective income tax rate was approximately 5.05% and 3.3% as of June 30, 2014 and 2013, respectively. The annual effective tax rate as of June 30, 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. The difference between the effective income tax rate and the applicable United States statutory income tax rate as of June 30, 2013 was primarily due to the effects of tax credits, foreign tax rate differentials and tax free interest income, offset by stock-based compensation expense.