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Income Taxes
 9 Months Ended
Sep. 30, 2012
Income Taxes
10. Income Taxes

For the three and nine-month periods ended September 30, 2012, the Company had income before taxes of approximately $1,790,000 and $4,854,000, respectively. The Company recorded an income tax benefit of $16,000 for the three-month period ended September 30, 2012 and a provision of $251,000 for the nine-month period ended September 30, 2012 based on an effective tax rate of approximately 5.17%. The effective income tax rate is based upon the estimated income for the year and the composition of the income in different jurisdictions. The effective tax rate differs from the statutory tax rates primarily due to the utilization of prior year net operating losses and credits earned in the U.S.

For the three-month period ended September 30, 2011, we did not record a tax provision as the effective income tax rate was 0%. For the nine-month period ended September 30, 2011, we did not record a tax provision as no taxable income was generated in the period.

The Company has net operating loss carryforwards of approximately $53,972,000 and business tax credit carryforwards of approximately $2,312,000 available to reduce future federal income taxes, if any. Additionally, the Company has net operating loss carryforwards of approximately $4,361,000 and business tax credit carryforwards of approximately $2,934,000 available to reduce future state income taxes, if any. The net operating loss and business tax credit carryforwards will continue to expire at various dates through December 2031. The net operating loss and business tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and may be limited in the event of certain changes in the ownership interest of significant stockholders.

At September 30, 2012 and December 31, 2011, a full valuation allowance has been provided against the U.S. deferred tax assets, as it is uncertain if the Company will realize the benefits of such deferred tax assets.