The components of the pretax income (loss) from continuing operations are presented in the following table (in thousands):

	Year Ended December 31,
	2018			2017
U.S. Domestic	$	(30,169	)	$	(4,536	)
Foreign		—			(38	)
Pretax loss from operations	$	(30,169	)	$	(4,574	)

The components of the (benefit) provision for income taxes from continuing operations are presented in the following table (in thousands):

	Year Ended December 31,
	2018			2017
Current income tax (benefit) provision:
Federal	$	(64	)	$	(102	)
State		86			101
Foreign		4			3
Total current		26			2
Deferred income tax benefit:
Federal		(1,140	)		(36	)
State		(247	)		—
Total deferred		(1,387	)		(36	)
Total income tax benefit	$	(1,361	)	$	(34	)

The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory federal income tax rate to pretax income (loss) from continuing operations as a result of the following differences:

	December 31,
	2018			2017
Federal statutory rate		21.00	%		35.00	%
Adjustments for tax effects of:
State taxes, net		0.47	%		7.40	%
Stock-based compensation		(4.29	)%		(16.10	)%
Foreign taxes		—			(1.20	)%
Tax law change		—			(459.10	)%
Fair market value adjustments		(0.59	)%		92.10	%
Other permanent adjustments		(0.56	)%		(1.30	)%
Tax rate adjustment		—			19.10	%
Uncertain tax positions		0.30	%		4.90	%
NOL expiration		—			(21.80	)%
Other		(1.57	)%		—
Valuation allowance		(10.25	)%		341.80	%
Effective income tax rate		4.51	%		0.80	%

Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2018 and 2017 are as follows (in thousands):

	December 31,
	2018			2017
Deferred tax assets:
Accruals and reserves	$	1,133		$	1,783
Income tax credit carryforwards		3,150			3,182
Interest		1,351			(126	)
Inventory		4,959			4,302
Legal settlement		4,693			6,881
Net operating losses		45,092			34,376
Stock-based compensation		1,182			1,542
Total deferred tax assets		61,560			51,940
Valuation allowance		(46,578	)		(42,236	)
Total deferred tax assets, net of valuation allowance		14,982			9,704
Deferred tax liabilities:
Property and equipment		(21	)		1,249
Goodwill and intangibles		(1,972	)		3,945
Investment in foreign partnership		(13,370	)		(14,859	)
Total deferred tax liabilities		(15,363	)		(9,665	)
Net deferred tax assets (liabilities)	$	(381	)	$	39

The realization of deferred tax assets is dependent on the Company’s ability to generate sufficient taxable income in future years in the associated jurisdiction to which the deferred tax assets relate. As of December 31, 2018, a valuation allowance of $46.6 million has been established against the net deferred tax assets as realization is uncertain. During the years ended December 31, 2018 and 2017, the federal and state valuation allowances collectively increased by $4.3 million and decreased by $13.8 million, respectively.

In determining the need for a valuation allowance, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and recent financial performance. Based on the review of all positive and negative evidence, including a three-year cumulative pre-tax loss, the Company determined that a full valuation allowance should be recorded against its definite life deferred tax assets. As a result of the acquisition of SafeOp, the Company recorded an indefinite life deferred tax liability reduced to the extent of indefinite life deferred tax assets related to net operating loss and interest expense carryforward.

At December 31, 2018, the Company has unrecognized tax benefits of $4.3 million of which $3.9 million will affect the effective tax rate if recognized when the Company no longer has a valuation allowance offsetting its deferred tax assets.

The following table summarizes the changes to unrecognized tax benefits (in thousands):

	Year ended December 31,
	2018			2017
Unrecognized tax benefit at the beginning of the year		4,440			9,331
(Deduction) additions based on tax positions related to the current year		—			(1,981	)
Additions based on tax positions related to the prior year		—			—
Reductions as a result of lapse of applicable statute of limitations		(106	)		(551	)
Reductions as a result of tax rate changes		—			(236	)
Reductions as a result of foreign exchange rates and other		—			(2,123	)
Unrecognized tax benefits at the end of the year	$	4,334		$	4,440

The Company and its subsidiaries are subject to federal income tax as well as income tax of multiple state and foreign jurisdictions. With few exceptions, the Company is no longer subject to income tax examination by tax authorities in major jurisdictions for years prior to 2014. However, to the extent allowed by law, the taxing authorities may have the right to examine prior periods where net operating losses and tax credits were generated and carried forward and make adjustments up to the amount of the carryforwards. The Company is not currently under examination by the Internal Revenue Service, foreign or state and local tax authorities.

The Company recognizes interest and penalties related to uncertain tax positions as a component of the income tax provision. As of December 31, 2018, there were no accrued interest and penalties.

At December 31, 2018, the Company had federal and state net operating loss carryforwards of $172.2 million and $106.7 million, respectively, expiring at various dates beginning in 2018 through 2038. Net operating losses generated in years ending after December 31, 2017 can be carried forward indefinitely for federal and some states. At December 31, 2018, the Company had federal and state research and development tax credit carryforwards of $3.4 million and $3.1 million, respectively. The federal research and development tax credits expire at various dates beginning in 2018 through 2038, while the state credits do not expire. Utilization of the net operating loss and tax credit carryforwards may become subject to annual limitations due to ownership change limitations that could occur in the future as provided by Section 382 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), as well as similar state provisions. These ownership changes may limit the amount of the net operating loss and tax credit carryforwards that can be utilized annually to offset future taxable income.

The Tax Cuts and Jobs Act ("Act") was enacted on December 22, 2017. The tax impact of the Act was estimated in the year ended December 31, 2017. This mainly included the corporate tax rate reduction from 35% to 21% which resulted in a remeasurement of deferred tax assets which was fully offset by a full valuation allowance. The tax impact of the Act has not materially changed in the year ending December 31, 2018.