Geographic sources of loss from continuing operations before income taxes are as follows:

The provision for income taxes as shown in the accompanying consolidated statements of operations includes the following:

	Year Ended
(In thousands)	February 2, 2019			February 3, 2018
Current:
Federal	$	—		$	(81	)
State		(11	)		(164	)
Foreign		941			1,639
		930			1,394
Deferred:
Federal		—			(150	)
State		37			13
Foreign		1,721			1,773
		1,758			1,636
	$	2,688		$	3,030

The provision for income taxes differs from the amounts computed using the statutory United States federal income tax rate as shown in the table below. Nondeductible transaction costs arose in the Hi-Tec Acquisition.

	Year Ended
(In thousands, except percentages)	February 2, 2019					February 3, 2018
Tax expense at U.S. statutory rate	$	(2,023	)	21.0	%	$	(17,329	)	32.8	%
State income taxes, net of federal income tax benefit		265		(2.8	)		(942	)	1.8
Change in U.S. federal statutory rate		—		—			7,350		(13.9	)
Stock-based compensation		262		(2.7	)		1,517		(2.9	)
Stock warrants		—		—			425		(0.8	)
Adjustments to unrecognized tax benefits		(380	)	3.9			(794	)	1.5
Nondeductible expenses		12		(0.1	)		18		—
Nondeductible transaction costs		21		(0.2	)		250		(0.5	)
Valuation allowance		4,616		(47.9	)		10,688		(20.3	)
Foreign Taxes		381		(4.0	)		562		(1.1	)
Exchange rate changes		—		—			1,427		(2.7	)
Other		(466	)	4.8			(142	)	0.4
	$	2,688		(28.0	)%	$	3,030		(5.7	)%

	February 2, 2019			February 3, 2018
(In thousands)	Non-Current			Non-Current
Deferred tax assets:
Deferred revenue	$	9		$	213
Amortization		3,855			5,967
Other		359			1,578
Employee compensation		242			543
Interest expense carryforward		1,277			—
Net operating loss and credit carryforwards		26,089			18,778
Valuation Allowance		(31,472	)		(27,079	)
Total deferred income tax assets		359			—
Deferred tax liabilities:
Amortization		(12,414	)		(10,466	)
Total deferred income tax liabilities		(12,414	)		(10,466	)
Net deferred income tax liabilities	$	(12,055	)	$	(10,466	)

The Company acquired various net operating loss and credit carryforwards as part of the Hi-Tec Acquisition, and generated additional net operating loss carryforwards in Fiscal 2018 and Fiscal 2019. Federal and state net operating loss carryforwards totaled $37.9 million and $22.1 million, respectively, at February 2, 2019. As a result of recent tax law changes, $20.8 million of the Company’s federal net operating loss carryforwards do not expire, while $17.1 million of the Company’s federal and all of the Company’s state net operating loss carryforwards expire beginning in 2026. Foreign net operating loss carryforwards were $61.8 million at February 2, 2019 and begin to expire in 2021. The Company has foreign tax and other credit carryforwards of $2.9 million at February 2, 2019 that begin to expire in 2023. The utilization of certain federal and state net operating loss and credit carryforwards acquired in connection with the Hi-Tec Acquisition are subject to annual limitations under Section 382 of the Internal Revenue Code of 1986 and similar state provisions.

Primarily as a result of impairment charges related to certain trademarks, the Company’s U.S. operations have sustained a cumulative pretax loss over the last three fiscal years. Accordingly, the Company has provided a valuation allowance of $12.3 million at February 2, 2019 to reduce the carrying value of the underlying deferred tax assets to zero. This valuation allowance will be maintained until there is sufficient positive evidence to conclude that it is more likely than not that these deferred tax assets will be realized. The Company continues to maintain a valuation allowance related to deferred tax assets of the foreign subsidiaries acquired in the Hi-Tec Acquisition, primarily due to the cumulative losses generated in these jurisdictions, and which amounted to $19.2 million at February 2, 2019.

The Company currently does not have unremitted earnings attributable to foreign subsidiaries.

The Tax Cuts and Jobs Act was enacted on December 22, 2017 and reduced U.S. corporate income tax rates to 21.0% as of January 1, 2018. The rate change became effective during Fiscal 2018, resulting in a blended statutory tax rate of 32.8% for fiscal 2018 and a decrease in the Company’s deferred tax assets and the associated valuation allowance of $7.4 million each. Accordingly, the rate change had no net impact on deferred income tax expense in Fiscal 2018. The Tax Cuts and Jobs Act created a new minimum tax on certain foreign earnings exceeding a deemed return on tangible assets. The Company treats this foreign minimum tax as period cost, but it had no net effect on the Company’s overall income tax provision as a result of an offsetting reduction in the Company’s net operating loss carryforwards. The Company’s provisional accounting for the Tax Cuts and Jobs Act in Fiscal 2018 was finalized in Fiscal 2019 with no significant changes in the Company’s current or deferred tax provisions.

The Company recorded a $3.9 million reserve for uncertain tax positions in Fiscal 2017 as part of Hi-Tec acquisition. Gross unrecognized tax benefits are reflected in the accompanying balance sheets as reductions in deferred tax assets or in other long-term liabilities if there are no net operating loss carryforwards available to offset them. A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, is as follows:

	Year Ended
(In thousands)	February 2, 2019			February 3, 2018
Gross unrecognized tax benefits at beginning of year	$	3,846		$	3,977
Additions:
Tax positions taken in prior years		—			315
Tax positions taken in the current year		426			1,609
Reductions:
Tax positions taken in prior years		(261	)		—
Settlement with taxing authorities		—			(38	)
Lapse in statute of limitations		(595	)		(2,017	)
Gross unrecognized tax benefits at year end	$	3,416		$	3,846

Interest and penalties related to unrecognized tax benefits are included within the provision for income taxes in the statements of operations. The total amount of interest recognized related to unrecognized tax benefits was $0.1 million for both Fiscal 2019 and Fiscal 2018.

Although we cannot predict the timing of resolution with taxing authorities, if any, we believe it is reasonably possible that $3.4 million of unrecognized tax benefits will be recognized in the next twelve months due to a retroactive change in the composition of a consolidated tax filing group or expiration of the applicable statute of limitations. At February 2, 2019, approximately $2.0 million of unrecognized tax benefits would, if recognized, impact the Company’s effective tax rate.

The Company files income tax returns in the U.S. federal, California and certain other state jurisdictions. For federal income tax purposes, the Fiscal 2016 and later tax years remain open for examination by the tax authorities under the normal three-year statute of limitations. For state tax purposes, the Fiscal 2015 and later tax years remain open for examination by the tax authorities under a four-year statute of limitations.