(11) Income Taxes

The components of provision for income taxes for all years presented were as follows (in thousands):


	Year Ended December 31,
	2014		2013		2012
Current:
Federal	$	—	$	—	$	—
State		15		37		2
Foreign		30		—		—
Deferred:
Federal		—		—		—
State		—		—		—
Total provision for income taxes	$	45	$	37	$	2

The provision for foreign taxes is based on intercompany revenue in one of the Company’s foreign subsidiaries. Intercompany revenue has been eliminated as described in Note 3 above.

A reconciliation of tax computed at the statutory federal income tax (34% rate) to the actual tax is as follows (in thousands):


		Year Ended December 31,
		2014	2013		2012

Tax computed at the statutory U.S. federal income tax rate	$	(8,922)	$	2,164	$	(2,008)
Net operating loss carrryforwards		8,851		(2,635)		1,488
Stock-based compensation		308		468		517
Other		(192)		40		5
Provision for income taxes	$	45	$	37	$	2

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of the Company’s deferred income taxes were as follows (in thousands):


	Year Ended December 31,
	2014		2013
Assets:
Net operating loss carryforwards	$	21,969	$	18,783
Stock based compensation		3,841		1,266
Other		2,894		723

Gross deferred tax assets		28,704		20,772
Valuation allowance		(28,577)		(20,762)

Total deferred tax assets		127		10
Liabilities:
Property, equipment and software, net		(127)		(10)

Net deferred tax assets	$	—	$	—

The Company has deferred tax assets comprised primarily of net operating losses, stock-based compensation, deferred rent, accruals and reserves. The Company continuously monitors the circumstances impacting the expected realization of its deferred tax assets. The Company has not benefited from any of its deferred tax assets and has established a full valuation allowance. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The amount of deferred tax asset considered realizable may increase or decrease in subsequent quarters as management reevaluates the underlying basis for the estimates of future taxable income. Significant judgment is required in making this assessment, and it is very difficult to predict when management’s assessment may conclude that the remaining portion of the deferred tax asset is realizable.

The Company has considered a number of factors in concluding that a full valuation allowance remains appropriate at December 31, 2014. These factors include a consideration of the Company’s future profitability, which may be affected by any unanticipated future expenses relating to the business e-mail compromise fraud loss in December 2014, expansion plans and future investments in the Company’s technology. Management believes it is more likely than not that the deferred tax assets will not be realized; accordingly, a full valuation allowance has been established and no deferred tax assets and related tax benefits have been recognized in the consolidated financial statements. Based on the Company’s historical and projected operating performance, and to the extent management expects that the Company’s operations will generate sufficient taxable income in future periods, the Company may partially or fully release the deferred tax valuation allowance in a future period.

As of December 31, 2014, the Company had net operating loss carryforwards for federal and state income tax purposes of approximately $94.9 million and $63.9 million, respectively. These net operating losses can be utilized to reduce future taxable income, if any. The federal net operating loss carryforwards expire beginning in 2022 through 2034 and the state net operating loss carryforwards began to expire in 2014 through 2034. Approximately $39.6 million and $9.3 million, if utilized, will be credited to additional paid in capital for federal and state net operating losses, respectively. The Company does not expect any substantial annual limitations due to ownership change provisions of the Internal Revenue Code of 1986, as amended, and similar state provisions with respect to the utilization of the net operating loss carryforwards. The annual limitations are not expected to result in the expiration of net operating loss carryforwards before utilization.

As of December 31, 2014, 2013 and 2012, the Company had no unrecognized tax benefits. The Company's policy for classifying interest and penalties associated with unrecognized income tax benefits is to include such items as tax expense. No significant interest or penalties were recorded during the years ended December 31, 2014, 2013 and 2012. The Company does not expect to have any significant changes to unrecognized tax benefits over the next twelve months.

The Company files income tax returns in the U.S. Federal jurisdiction, which is the Company’s primary tax jurisdiction, and various state and foreign jurisdictions. Among the state jurisdictions, California is the largest. Tax years from 2001 and forward remain open to examinations by federal authorities due to net operating loss carryforwards. State tax years from 2004 are open to examination due to net operating loss carryforwards. The Company is currently not under examination by the Internal Revenue Service or any other taxing authorities.