Jamba Juice 2014 Annual Report Download - page 80

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Reserves and accruals $ 10,595 $ 9,111
Total current deferred tax asset 10,595 9,111
Net operating losses 51,006 48,680
Deferred rent 1,654 1,881
Tax credit attributes 1,196 1,530
Basis difference in intangibles 3,982 3,918
Share-based compensation 2,541 2,153
Basis difference in fixed assets 8,513 11,164
Basis difference in investments 3 19
Reserves and accruals (6) —
Total non-current deferred tax asset 68,889 69,345
Valuation allowance (79,484) (78,456)
Total net deferred tax asset $ — $ —
Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carryforward period. A
valuation allowance is provided for deferred tax assets when it is “more likely than not” that some portion of the deferred tax asset will not be realized.
Because of the Company’s recent history of operating losses, management believes the recognition of the deferred tax assets arising from the above-
mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a valuation allowance. A valuation allowance has been
recorded for the net deferred tax assets at December 30, 2014, which increases the valuation allowance by $1.0 million for the fiscal year ended December 30,
2014.
At December 30, 2014, the Company has federal and state net operating loss carryovers (NOL) of $123.3 million and $131.8 million, respectively, which,
if not used earlier, will expire between 2018 and 2034. In addition, the Company also has tax credit carryforwards for federal and state purposes of $0.8
million and $0.6 million, respectively. Of the federal tax credit carryforwards, approximately $0.3 million will start to expire in 2031 if unused before that
year. The remaining federal tax credits and the state tax credits do not expire.
The Company underwent an “ownership change” as defined in section 382 of the Internal Revenue Code during the second quarter of our 2009 fiscal
year, as a result of our issuance of Series B-1 Convertible Preferred Stock and Series B-2 Convertible Preferred Stock and other prior trading in our stock. The
amount of our taxable income for tax years ending after our ownership change which may be offset by NOL and tax credits from pre-change years will be
subject to an annual limitation, known as a section 382 limitation. The section 382 limitation may cause NOL’s to expire unutilized. We have reduced our
NOL carryovers stated above for the anticipated expirations caused by our 2009 change. To the extent additional changes have occurred since 2009,
additional limitations may apply.
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