INCOME TAXES FROM CONTINUING OPERATIONS

6 Months Ended

Jun. 30, 2015

INCOME TAXES FROM CONTINUING OPERATIONS

INCOME TAXES FROM CONTINUING OPERATIONS

NOTE 11—INCOME TAXES FROM CONTINUING OPERATIONS

There is no provision or benefit for federal, foreign or state income taxes for the three and six months ended June 30, 2015 other than income tax expense resulting from interest on uncertain tax positions of $53 and $106, respectively.

The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets. Based on the Company’s history of operating losses, the Company has concluded that it is more likely than not that the benefit of its deferred tax assets will not be realized. Accordingly, the Company has provided a full valuation allowance for deferred tax assets as of June 30, 2015 and December 31, 2014.

During the three and six months ended June 30, 2014, the Company recorded an income tax expense of $596 and $735, respectively resulting in an effective tax rate of (57.1)% and (13.3)%, respectively. The projected annual effective tax rate excluding discrete items primarily related to disallowed foreign losses and stock option cancellations was a benefit of 34.7% as compared to the U.S. federal statutory rate of 35.0%. During the three months ended June 30, 2014, the Company recorded a $448 accrual for potential adjustments relating to a state tax audit and had $563 of disallowed foreign losses. The six months ended June 30, 2014 was also negatively impacted from a $1,053 non-cash deferred tax asset write-off associated with stock option cancellations and $605 of additional disallowed foreign losses.

The Company is currently under routine examination in the United States by the Internal Revenue Service for tax year 2014 in which the Company has claimed a $8,252 income tax refund.