Income Taxes

12 Months Ended

Dec. 31, 2012

Income Taxes [Abstract]

Income Taxes

9. INCOME TAXES

     We had federal income tax net operating loss ("NOL") carry-forwards of approximately $363 million at December 31, 2012. Our NOLs generally begin to expire in 2018.

     We recognize the tax benefit of NOL carry-forwards as assets to the extent that management concludes that the realization of the NOL carry-forwards is "more likely than not." Realization of the future tax benefits is dependent on the Company's ability to generate taxable income within the carry-forward period. The Company's management has concluded that, based on the historical results of the Company, a valuation allowance should be provided for the entire balance of the net deferred tax asset.

     We have not recorded an income tax provision for the year ended December 31, 2012 or 2011. This differs from the amount of income tax benefit that would result from applying the 35 percent statutory federal income tax rate to the pretax loss due to the increase in the valuation allowance in each period. The valuation allowance increased by approximately $404,000, $6,529,000, and $3,411,000 for the years ended December 31, 2012, 2011 and 2010, respectively. Deferred taxes arise primarily from NOL carry-forwards and the recognition of revenues and expenses in different periods for financial and tax purposes.

Deferred taxes consist of the following (in thousands):

		December 31,
		2012			2011
Deferred tax assets:
NOL carry-forwards	$	137,870		$	124,695
Research and development credit		8,085			8,085
Deferred revenue		3,808			7,227
Investments		-			4,266
Stock-based compensation		2,831			3,108
Other		2,375			2,262
		154,969			149,643
Deferred tax liabilities:
Investments		(4,953	)		-
Other		(389	)		(420	)
Net deferred tax asset before valuation allowance		149,627			149,223
Valuation allowance		(149,627	)		(149,223	)
Net deferred tax assets	$	-		$	-

     Open tax years are December 31, 2010 forward for both federal and state jurisdictions, except for years in which net operating losses originated and are subsequently utilized.