16. Income Taxes

The primary components of the net deferred tax assets at December 31, 2011 and 2010 were as follows:

	2011			2010
Deferred tax assets:
Net operating loss carryforwards	$	32,580,000		$	27,435,000
Research & development and other credits		1,764,000			1,915,000
Other, net		596,000			418,000
Total		34,940,000			29,768,000
Valuation allowance		(34,940,000	)		(29,768,000	)
Net deferred tax assets	$	-		$	-

Income taxes differed from the amounts computed by applying the U.S. federal income tax of 34% to pretax losses from operations as a result of the following:

	Year EndedDecember 31,
	2011	2010	2009

Computed tax benefit at federal statutory rate	(34%)	(34%)	(34%)
Permanent differences	(1%)	8%	0%
Losses for which no benefit has been recognized	41%	32%	41%
State tax benefit, net of effect on federal income taxes	(6%)	(6%)	(6%)
Research and development and other credits	-	-	(1%)
	0%	0%	0%

As of December 31, 2011, BioTime has net operating loss carryforwards of approximately $67,000,000 for federal and $42,000,000 for state tax purposes, which expire through 2031. In addition, BioTime has tax credit carryforwards for federal and state tax purposes of $892,000 and $872,000, respectively, which expire through 2031. As of December 31, 2011, BioTime's subsidiaries have foreign net operating loss carryforwards of approximately $42,000,000 which carry forward indefinitely.

No tax benefit has been recorded through December 31, 2011 because of the net operating losses incurred and a full valuation allowance has been provided. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized. BioTime established a 100% valuation allowance for all periods presented due to the uncertainty of realizing future tax benefits from its net operating loss carryforwards and other deferred tax assets.

Internal Revenue Code Section 382 places a limitation (“Section 382 Limitation”) on the amount of taxable income that can be offset by net operating loss (“NOL”) carryforwards after a change in control (generally greater than 50% change in ownership within a three-year period) of a loss corporation. California has similar rules. Generally, after a control change, a loss corporation cannot deduct NOL carryforwards in excess of the Section 382 Limitation. Due to these “change in ownership” provisions, utilization of the NOL and tax credit carryforwards may be subject to an annual limitation regarding their utilization against taxable income in future periods.

BioTime files an income tax return in the U.S. federal jurisdiction, and may file income tax returns in various U.S. states and foreign jurisdictions. Generally, BioTime is no longer subject to income tax examinations by major taxing authorities for years before 2008.

BioTime may be subject to potential examination by U.S. federal, U.S. states or foreign jurisdiction authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with U.S. federal, U.S. state and foreign tax laws. BioTime's management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.