BIOLASE, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Summary of Income Tax Current and Deferred Provision (Benefit)

The following table presents the current and deferred provision (benefit) for income taxes for the years ended December 31 (in thousands):


	2012			2011			2010
Current:
Federal	$	—		$	—		$	(19	)
State		18			16			4
Foreign		32			20			(3	)

		50			36			(18	)

Deferred:
Federal		57			66			55
State		12			(16	)		16
Foreign		(8	)		3			5

		61			53			76

	$	111		$	89		$	58

Federal Income Tax Provision Compared With Statutory Rates

The provision for income taxes differs from the amount that would result from applying the federal statutory rate as follows for the years ended December 31:


	2012			2011			2010
Statutory regular federal income tax rate		(34.0	)%		(34.0	)%		(34.0	)%
Change in valuation allowance		(13.0	)%		(2.3	)%		30.4	%
Tax return to prior year provision adjustments		16.2	%		2.0	%		2.7	%
Expiration of federal net operating losses		28.2	%		20.2	%		6.4	%
Reduction of net operating loss attributes		(3.7	)%		(2.3	)%		(1.3	)%
State tax benefit (net of federal benefit)		4.1	%		18.1	%		(6.9	)%
Research credits		—			(3.0	)%		(0.6	)%
Foreign amounts with no tax benefit		(0.6	)%		(0.2	)%		0.1	%
Non-deductible expenses		6.1	%		3.8	%		0.8	%
Stock option expenses with no tax benefit		—			—			3.8	%
Other		0.6	%		(0.1	)%		(0.9	)%

Total		3.9	%		2.2	%		0.5	%

Summary of Net Deferred Tax Assets and Net Deferred Tax Liabilities

The components of the deferred income tax assets and liabilities as of December 31 (in thousands):


	2012			2011
Capitalized intangible assets for tax purposes	$	405		$	576
Reserves not currently deductible		2,082			2,450
Deferred revenue		328			—
Stock options		2,348			1,959
State Taxes		45			41
Income tax credits		1,167			1,322
Inventory		868			906
Property and equipment		240			357
Other comprehensive income		127			144
Unrealized gain on foreign currency		160			99
Net operating losses		25,746			26,075

Total deferred tax assets		33,516			33,929
Valuation allowance		(33,341	)		(33,784	)

Net deferred tax assets		175			145
Capitalized intangible assets		(703	)		(630	)
State tax		—			—
Other		(119	)		(101	)

Total deferred tax liabilities		(822	)		(731	)

Net deferred tax liabilities	$	(647	)	$	(586	)

Summary of Unrecognized Tax Benefits

The following table summarizes the activity related to the Company’s unrecognized tax benefits during the year ended December 31, 2012 (in thousands):


Balance at January 1, 2012	$	1,066
Additions for tax positions related to the prior year		160
Lapse of statute of limitations		—

Balance at December 31, 2012	$	1,226

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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