8x8 1999 Annual Report Download - page 50

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8X8, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
reduction to operating expenses and aggregated $149,000 and $276,000 during the fiscal years ended March 31, 1998 and 1997, respectively.
During the fiscal years ended March 31, 1998, and 1997, the Company's product revenues included $355,000 and $2,415,000, respectively, in
ASCII was a member of the Company's Board of Directors until May 27, 1997.
During fiscal 1997, the Company and certain of its employees formed VidUs, Inc. (VidUs). The Company and VidUs merged in August 1998
resulting in the repurchase of all outstanding shares of VidUs common stock held by the Company's employees for approximately $85,000.
During fiscal 1999 and 1998, the Company paid a member of the Board of Directors approximately $85,000 and $50,000, respectively, for
technical consulting services provided on behalf of the Company.
NOTE 4 -- INCOME TAXES:
31, 1999, 1998 and 1997, respectively. The components of the consolidated (benefit) provision for income taxes consisted of the following (in
thousands):
Deferred tax assets are comprised of the following (in thousands):
Management believes that, based on a number of factors, the weight of objective available evidence indicates that it is more likely than not that
it will not be able to realize its deferred tax assets and thus a full valuation allowance has been recorded at March 31, 1999.
At March 31, 1999, the Company had net operating loss carryforwards for federal and state income tax purposes of approximately $19.9
million and $7.1 million, respectively, which expire at various dates beginning in 2005. The net operating loss carryforwards include
approximately $400,000 resulting from employee exercises of non-qualified stock options or disqualifying dispositions the tax benefits of
which, when realized, will be accounted for as an addition to additional paid-in capital rather than as a reduction of the provision for income
taxes. In addition, at March 31, 1999, the Company had research and development credit
45
YEAR ENDED MARCH 31,
---------------------
1999 1998 1997
---- ------- ----
Current:
Federal..................................................... $(26) $(1,018) $ --
State....................................................... -- -- --
Foreign..................................................... 26 36 182
---- ------- ----
$ -- $ (982) $182
==== ======= ====
MARCH 31,
------------------
1999 1998
-------- -------
Research and development credit carryforwards............... $ 2,403 $ 1,920
Net operating loss carryforwards............................ 7,165 1,839
Inventory valuation......................................... 3,037 1,020
Reserves and allowances..................................... 969 891
Other....................................................... 1,923 2,116
-------- -------
15,497 7,786
Valuation allowance......................................... (15,497) (7,786)
-------- -------
Total............................................. $ -- $ --
======== =======