Income Taxes

At December 31, 2012 and 2011, the Company’s deferred tax assets and liabilities are comprised of the following:



	2012			2011
Deferred income tax assets:
Net operating losses	$	36,764,901		$	32,109,373
Deferred research and development costs	2,950,555			3,674,469
Amortization of intangible assets	1,572,281			1,814,271
Share-based compensation	1,768,990			1,417,093
Depreciation	709,184			777,957
Deferred revenue	4,403,266			—
Other	1,104,612			896,251
Deferred income tax assets	49,273,789			40,689,414
Less: valuation allowance	(4,328,233		)	(4,629,238		)
Deferred income tax assets, net of valuation allowance	$	44,945,556		$	36,060,176
Deferred income tax liabilities:
Amortization of goodwill	(203,682		)	(183,373		)
Capitalized contract costs	(1,017,269		)	—
Deferred income tax assets (liabilities), net	$	43,724,605		$	35,876,803

As of December 31, 2012, the Company generated federal net operating loss carryforwards of $103.8 million to offset future taxable income of which $0.7 million were attributable to excess tax deductions on stock option activity that will be realized as a benefit to Additional Paid-in Capital when they reduce income taxes payable. In 2012 and 2011, previously available NOLs of approximately $1.2 million and $0.9 million, respectively, expired. The remaining NOLs expire in various years between 2018 and 2031. As a result of a cumulative change in stock ownership occurring in a prior year, the annual utilization of the net operating loss carryforwards for years prior to 2004 may be subject to limitation.

For the year ended December 31, 2012, the Company incurred net losses for tax purposes and consequently, recognized an income tax benefit of $7.8 million. For the year ended December 31, 2011, the benefit from income taxes of $36.0 million mainly reflects net losses as well as a partial reduction of its valuation allowance as a significant portion of the Company’s deferred tax assets became realizable on a “more likely than not” basis primarily as a result of the execution of the BARDA Contract and forecasts of pre-tax earnings. Prior to June 30, 2011, the Company provided a tax valuation allowance on our United States federal and state deferred tax assets based on the Company’s evaluation that such assets were not “more likely than not” to be realized.

The recognition of a valuation allowance for deferred taxes requires management to make estimates and judgments about the Company’s future profitability which are inherently uncertain. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. If the current estimates of future taxable income are reduced or not realized, for example, based on an appellate ruling in the PharmAthene litigation described in Note 14, the Company’s assessment regarding the realization of deferred tax assets could change. Future changes in the estimated amount of deferred taxes expected to be realized will be reflected in the Company’s financial statements in the period the estimate is changed with a corresponding adjustment to operating results. Changes in estimates may occur often and can have a significant favorable or unfavorable impact on the Company’s operating results from period to period.

The Company’s effective tax rate differs from the U.S. Federal Statutory income tax rate of 35% as follows:



	2012 (Revised)		2011 (Restated)		2010 (Restated)
Statutory federal income tax rate	(35.0	)%	(35.0	)%	(34.0	)%
State tax benefit	(1.4	)%	0.3	%	—	%
Loss from fair value of common warrants	(1.3	)%	(123.4	)%	25.8	%
Share-based compensation	0.8	%	24.8	%	—	%
Other	0.5	%	1.4	%	1.0	%
Valuation allowance on deferred tax assets	0.5	%	(387.6	)%	7.5	%
Effective tax rate	(35.9	)%	(519.5	)%	0.3	%

For the year ended December 31, 2012, the Company's effective tax rate differs from the statutory rate principally due to state and local taxes and other permanent differences. For the year ended December 31, 2011, the Company's effective tax rate differs from the federal statutory rate due to the partial reversal of its valuation allowance as certain deferred tax assets became realizable on a more-likely-than basis as well as the decrease in the fair value of common stock warrants which is not deductible for tax purposes. For the year ended December 31, 2010, the Company's effective tax rate differs from the statutory rate principally due to losses for which no tax benefit was provided.

Other Income, net, for the year ended December 31, 2010, includes $648,000 awarded to the Company under the U.S. government’s Qualified Discovery Tax Credit program.