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

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

The significant components of the Company’s deferred tax assets consisted of the following:

	As of December 31,
	2014		2013
($ in thousands)
Deferred tax assets:
Net operating loss carryforwards	$	38,974	$	31,450
Amortization of up-front fees		2,668		2,865
Amortization of in-process R&D		525		460
Stock compensation		4,512		2,827
Accruals and reserves		518		854
Tax credits		3,856		2,686
Total deferred tax assets		51,053		41,142
Valuation allowance		(50,567)		(41,142)
Net deferred tax assets	$	486	$
Deferred tax liabilities:
Unrealized gain/loss on investment	$	(486)	$
Total deferred tax assets, net	$		$

A reconciliation of the statutory tax rates and the effective tax rates is as follows:

	For the Year Ended December 31,
	2014			2013			2012
Percentage of pre-tax income:
U.S. federal statutory income tax rate		35	%		35	%		35	%
State taxes, net of federal benefit		5	%		4	%		4	%
Credits		6	%		4	%		1	%
Non-deductible items		(1)	%		(2)	%		(2)	%
Other (1)			%		(1)	%		(5)	%
Change in valuation allowance		(45)	%		(40)	%		(33)	%
Effective income tax rate			%			%			%

(1) Other consists of: in 2014 (0%), in 2013 state NOL true-up (1%), and in 2012 state rate change (5%).