Entity information:
Note
5
. Income Taxes
 
As of
December 31,
201
7,
the Company had net federal operating loss carry forwards and state operating loss carry forwards of approximately
$235
million and
$222
million, respectively. The net federal operating loss carry forwards begin to expire in
2025,
and net state operating loss carry forwards begin to expire in
2017.
The majority of the foreign net operating loss carry forwards expire over the next
seven
years.
 
The primary components of temporary differences which give rise to our net deferred tax assets are as follows:
 
   
201
7
    
201
6
  
(in thousands
)
  
 
 
 
  
 
 
 
Federal, state and foreign net operating losse
s
   $
53,911
     $
78,466
  
Stock based compensatio
n
    
4,937
      
7,429
  
Accrued liabilitie
s
    
157
      
664
  
Other temporary difference
s
    
3,426
      
4,894
  
Valuation allowanc
e
    
(62,431
 )    
(91,453
 )
    $ -     $ -  
 
The Company has provided a valuation allowance in full on its net deferred tax assets in accordance with ASC
740
Income Taxes. Because of the Company's continued losses, management assessed the realizability of its net deferred tax assets as being less than the more-likely-than-
not
criteria set forth by ASC
740.
Furthermore, certain portions of the Company's net operating loss carryforwards were acquired, and therefore subject to further limitation set forth under the
federal tax code, which could further limit the Company's ability to realize its deferred tax assets.
 
A
reconciliation between the statutory federal income tax rate and the effective income tax rate for the years ended
December 31,
is as follows
 
   
201
7
    
201
6
  
Federal statutory rat
e
    
-34.0
 %    
-34.0
 %
State taxes, net of federal benefi
t
    
-5.5
 %    
26.2
 %
Non-deductible goodwil
l
    
0.0
 %    
0.0
 %
ISO / ESP
P
    
0.3
 %    
0.2
 %
Othe
r
    
249.6
 %    
-0.5
 %
Change in valuation allowanc
e
    
-210.4
 %    
8.0
 %
Tax provisio
n
    
0.0
 %    
-0.1
 %
 
 
Current accounting rules
require that companies recognize in the consolidated financial statements the impact of a tax position, if that position is more likely than
not
of being sustained on audit, based on the technical merits of the position. We file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. Tax years that remain subject to examinations by tax authorities are
2012
through
2016.
The federal and material foreign jurisdictions statutes of limitations began to expire in
2012.
There are
no
current income tax audits in any jurisdictions for open tax years and, as of
December 31, 2017,
there have been
no
material changes to our tax positions.
 
The Company has adopted guidance issued by the FASB that clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements and prescribes a recognition threshold of more likely than
not
and a measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In making this assessment, a company must determine whether it is more likely than
not
that a tax position will be sustained upon examination, based solely on the technical merits of the position and must assume that the tax position will be examined by taxing authorities. Our policy is to include interest and penalties related to unrecognized tax benefits in income tax expense.
There were
no
interest and penalties for the years ended
December 31, 2017
and
2016,
respectively. The Company files income tax returns with the Internal Revenue Service (“IRS”) and the state of California. For jurisdictions in which tax filings are prepared, the Company is
no
longer subject to income tax examinations by state tax authorities for tax years through
2011,
and by the IRS for tax years through
2012.
The Company’s net operating loss carryforwards are subject to IRS examination until they are fully utilized and such tax years are closed.