7. Income Taxes

        Income (loss) before income taxes by jurisdiction consists of the following:

        The provision for income tax expense consists of the following:

        The income tax provision increased by $0.1 million during the eleven months ended December 31, 2013 as a result of an increase in foreign taxes.

        The following table presents a reconciliation of the statutory federal rate and our effective tax rate:

        The major components of deferred tax assets and liabilities consist of the following:

        At December 31, 2013, we had federal net operating loss carryforwards of approximately $264.2 million and tax credit carryforwards of approximately $5.3 million. If realized, approximately $179.6 million of the net operating loss carryforwards will be recognized as a benefit through additional paid in capital. The federal net operating losses and tax credits expire in years beginning in 2021. At December 31, 2013, we had state net operating loss carryforwards of approximately $245.2 million which expire in years beginning in 2014. In addition, we had state tax credit carryforwards of approximately $5.1 million that do not expire and approximately $2.3 million of credits that will expire beginning in 2024.

        Under Section 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code, if a corporation undergoes an "ownership change," the corporation's ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes, such as research tax credits, to offset its post-change income may be limited. In general, an "ownership change" will occur if there is a cumulative change in our ownership by "5-percent shareholders" that exceeds 50 percentage points over a rolling three-year period. Similar rules may apply under state tax laws. Utilization of our net operating loss and tax credit carryforwards may be subject to annual limitations due to ownership changes. Such annual limitations could result in the expiration of our net operating loss and tax credit carryforwards before they are utilized.

        During the eleven months ended December 31, 2013 our valuation allowance increased by $12.2 million. At January 31, 2013 and December 31, 2013, we maintained a full valuation allowance on our net deferred tax assets. The valuation allowance was determined in accordance with the provisions of ASC 740, Accounting for Income Taxes, which requires an assessment of both positive and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable. Such assessment is required on a jurisdiction by jurisdiction basis. Our history of cumulative losses, along with expected future U.S. losses required that a full valuation allowance be recorded against all net deferred tax assets. We intend to maintain a full valuation allowance on net deferred tax assets until sufficient positive evidence exists to support reversal of the valuation allowance.

        At January 31, 2013 and December 31, 2013 we have unrecognized tax benefits of approximately $2.6 million and $5.2 million, respectively. The increase in our unrecognized tax benefits was primarily attributable to current year activities. The total unrecognized tax benefits, if recognized, would not affect our effective tax rate as the tax benefit would increase a deferred tax asset, which is currently offset with a full valuation allowance. We do not anticipate that the amount of existing unrecognized tax benefits will significantly increase or decrease within the next twelve months. Accrued interest and penalties related to unrecognized tax benefits are recorded as income tax expenses. We did not have such interest, penalties or tax benefits during the twelve months ended January 31, 2012 or 2013 or the eleven months ended December 31, 2013.

        We file income tax returns in the United States, California, other states and international jurisdictions. Tax years 2000 to 2013 remain subject to examination for U.S. federal, state and international purposes. All net operating losses and tax credits generated to date are subject to adjustment for U.S. federal and state purposes. We are not currently under examination in any federal, state or international jurisdictions.