Income Taxes

12 Months Ended

Dec. 31, 2013

Income Taxes [Abstract]

Income Taxes

9. INCOME TAXES

We had federal income tax net operating loss (“NOL”) carry-forwards of approximately $380 million at December 31, 2013. 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 years ended December 31, 2013, 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 $5,587,000,  $404,000, and $6,529,000 for the years ended December 31, 2013, 2012 and 2011, 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,
	2013		2012
Deferred tax assets:
NOL carry-forwards	$	144,526	$	137,870
Research and development credit		8,085		8,085
Deferred revenue		3,808		3,808
Stock-based compensation		2,831		2,831
Other		1,276		2,375
		160,526		154,969
Deferred tax liabilities:
Investments		(4,889)		(4,953)
Other		(423)		(389)
Net deferred tax asset before valuation allowance		155,214		149,627
Valuation allowance		(155,214)		(149,627)
Net deferred tax assets	$	-	$	-

Open tax years are December 31, 2011 forward for both federal and state jurisdictions, except for years in which net operating losses originated and are subsequently utilized.