INCOME TAXES

12 Months Ended

Dec. 31, 2011

INCOME TAXES

INCOME TAXES

20. INCOME TAXES

        The provision (benefit) for income taxes consists of the following (in thousands):

	Years ended December 31,
	2011			2010		2009
Current:
Federal	$	(254	)	$	226	$	145
State		69			133		112
Foreign		43			—		—
Total current		(142	)		359		257
Deferred:
Federal	$	—		$	—	$	—
State		—			—		—
Total deferred		—			—		—
Total provision (benefit) for income taxes	$	(142	)	$	359	$	257

        The components of our deferred tax assets and liabilities as of December 31, 2011 and 2010 are as follows (in thousands):

	December 31,
	2011			2010
Deferred tax assets and liabilities:
Net operating loss carry-forwards	$	76,455		$	66,241
Temporary differences:
Accrued expenses		3,317			5,536
Reserves and other		5,705			6,369
Depreciation and amortization		(1,860	)		(1,095	)
		83,617			77,051
Valuation allowance		(83,617	)		(77,051	)
Net asset	$	—		$	—

        As a result of our history of losses, a valuation allowance has been provided for the full amount of our net deferred tax assets as we believe that it is more likely than not that these benefits will not be realized. We recorded a tax benefit of ($142,000) for the year ended December 31, 2011, for federal alternative minimum taxes, state and foreign taxes.

        At December 31, 2011 and 2010, we had U.S. federal net operating loss carry-forwards of approximately $192.5 million and $166.7 million and state net operating loss carry-forwards of approximately $176.1 million and $150.7 million, respectively, which may be used to offset future taxable income. We are currently reviewing whether we had any ownership changes. The result of having ownership changes under IRS Code Section 382 would limit the amount of net operating losses that could be used in any annual period. Our carry-forwards begin to expire in 2018.

        The income tax provision differs from the amount computed by applying the U.S. federal income tax rate of 35% to loss before income taxes for the following reasons (in thousands):

	Year ended December 31,
	2011			2010			2009
U.S. federal income tax provision (benefit) at statutory rate	$	(6,853	)	$	4,940		$	2,762
State income tax expense, net of federal benefit		45			86			112
Stock based compensation expense		70			484			781
Other		30			73			64
Change in valuation allowance		6,566			(5,224	)		(3,462	)
Income tax provision (benefit)	$	(142	)	$	359		$	257

        We are subject to audit by the IRS and various states for periods since inception. We do not believe there will be any material changes in our unrecognized tax positions over the next 12 months. Our policy is to recognize interest and penalties accrued on any unrecognized tax positions as a component of income tax expense.

        A reconciliation of the beginning and ending tax contingencies, excluding interest and penalties, is as follows (in thousands):

	Year ended December 31,
	2011		2010		2009
Beginning balance	$	191	$	112	$	—
Additions for tax positions related to the current year		—		—		112
Additions for tax positions taken in prior years		40		79		—
Ending balance	$	231	$	191	$	112

        The interest and penalties accrued on tax contingencies as of December 31, 2011 and 2010 were $82,000 and $53,000, respectively. Tax years beginning in 2007 are subject to examination by taxing authorities, although net operating loss and credit carryforwards from all years are subject to examinations and adjustments for at least three years following the year in which the attributes are used.