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10-K/A
BIOTIME INC filed this Form 10-K/A on 03/29/2017
Entire Document
 

10. Income Taxes

Asterias early adopted ASU 2015-17, Income Taxes: Balance Sheet Classification of Deferred Taxes, effective December 31, 2016, on a retrospective basis. Accordingly, Asterias adjusted the December 31, 2015, balance sheet for noncurrent deferred tax assets and current deferred tax liabilities to conform to the presentation for the current year due to the early adoption of ASU 2015-17 as follows (in thousands):

   
December 31, 2015
 
   
As reported
   
Adjustment due to
retrospective adoption
of ASU 2015-17
   
As adjusted
 
Total  assets
 
$
66,978
   
$
(9,744
)
 
$
57,234
 
Total liabilities
   
21,879
     
(9,744
)
   
12,135
 
Total liabilities and stockholders' equity
   
66,978
     
(9,744
)
   
57,234
 
Working capital
   
19,535
     
5,274
     
24,809
 

The adoption of this standard had no impact on the statements of operations or cash flows.

The primary components of the deferred tax assets and liabilities at December 31, 2016 and 2015 were as follows (in thousands):

    December 31,  
   
2016
   
2015
 
Deferred tax assets:
       
Net operating loss carryforwards
 
$
16,844
   
$
9,939
 
Research and development credits
   
2,395
     
1,898
 
Stock based compensation and other
   
2,597
     
801
 
Valuation allowance
   
(8,081
)
   
(2,894
)
Total deferred tax assets
   
13,755
     
9,744
 
Deferred tax liabilities:
               
Patents and licenses
   
(7,564
)
   
(7,020
)
Securities held as available for sale
   
(6,191
)
   
(5,274
)
Total deferred tax liabilities
   
(13,755
)
   
(12,294
)
Net deferred tax liabilities
 
$
-
   
$
(2,550
)

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:

   
Years Ended December 31,
 
   
2016
   
2015
 
Computed tax benefit at federal statutory rate
   
34
%
   
34
%
Permanent differences
   
(10
%)
   
(3
%)
State tax benefit, net of effect on federal income taxes
   
(3
%)
   
13
%
Change in valuation allowance
   
(16
%)
   
(13
%)
Research and development credits
   
1
%
   
2
%
     
6
%
   
33
%

As of December 31, 2016, Asterias has net operating loss carryforwards of approximately $40.9 million and $33.4 million, respectively, for federal and California tax purposes, which expire between 2032 and 2036. In addition, as of December 31, 2016, Asterias has federal and California research tax credit carry forwards of $1.2 million and $1.2 million, respectively. The federal tax credits expire between 2032 and 2036, while the state tax credits have no expiration date.

A deferred income tax benefit of approximately $2.3 million was recorded for the year ended December 31, 2016 related to federal taxes.  No state tax provision or benefit was recorded for year ended December 31, 2016. A deferred income tax benefit of approximately $7.3 million was recorded for the year ended December 31, 2015, of which approximately $7.4 million was related to federal taxes and $0.1 million was related to state taxes. A deferred income tax benefit of approximately $7.4 million was recorded for the year ended December 31, 2014, of which approximately $5.2 million was related to federal taxes and $2.2 million was related to state taxes.
 
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