IncomeTaxes
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Dec. 31, 2012
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Note 14—Income Taxes
For the years ended December 31, 2012 and 2011, the Company recorded no tax provision or benefit. While the Company has incurred losses from operations it has not recorded an income tax benefit for 2012 or 2011 as it has recorded a valuation allowance against net operating losses and other net deferred tax assets due to uncertainties related to the realizability of these tax assets.
Deferred tax assets and liabilities are determined based on the difference between financial statement and tax bases using enacted federal and state tax rates in effect for the year in which the differences are expected to reverse. As of December 31, 2012 and 2011, the approximate income tax effect of the Company’s deferred tax assets (liabilities) consisted of the following:
As of December 31, 2012, the Company had gross net operating loss (NOL) and research tax credit carryforwards of approximately $84.7 million and $1.5 million, respectively, for federal income tax purposes, expiring in varying amounts through the year 2032. Of the $84.7 million NOL carryforward, $2.5 million relates to stock-based compensation and has not been reflected in the deferred taxes and when the benefit of these losses, if any, is realized, the Company will credit additional paid in capital.
As of December 31, 2012, the Company had gross NOL and research tax credit carryforwards of approximately $8.1 million and $.9 million for state income tax purposes, expiring in varying amounts through the year 2032.
The Company’s ability to use its NOL and tax credit carryforwards to reduce future taxes is subject to the restrictions provided by Section 382 of the Internal Revenue Code of 1986. These restrictions provide for limitations on the Company’s utilization of its NOL and tax credit carryforwards following a greater than 50% ownership change during the prescribed testing period. On March 5, 2003, the Company had such a change. As a result, all of the Company’s NOL carryforwards as of that date are limited as to utilization. The annual limitation may result in the expiration of certain of the carryforwards prior to utilization.
The benefit for income taxes differs from the federal statutory rate due to the following:
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