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S-1
VITAE PHARMACEUTICALS, INC filed this Form S-1 on 08/12/2014
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Vitae Pharmaceuticals, Inc.

Notes to the Financial Statements (Continued)

For the Years Ended December 31, 2013 and 2012

11. Income Taxes (Continued)

valuation allowance of the same amount against the deferred tax asset at December 31, 2013 and 2012, as the realization of the asset is not assured.

        The 2012 federal R&D Tax Credit was retroactively extended to January 1, 2012 by the enactment of the American Taxpayer Relief Act in 2013. The tax benefit of the 2012 R&D Tax Credit was reflected in 2013 due to enactment of the law after December 31, 2012. The Company reported $528,000 in federal R&D Tax Credits on its 2012 federal income tax return.

        The timing and manner in which the Company can utilize its net operating loss carryforward and future tax deductions in any year may be limited by provisions of the Internal Revenue Code regarding changes in ownership of corporations. Such limitation may have an impact on the ultimate timing and realization of the Company's carryforwards and future tax deductions.

12. Related Party Transactions

        A member of the Company's Board is a partner/founder of a law firm that provided various legal services to the Company. The Company has incurred costs of $267,000 and $26,000 for the years ended December 31, 2013 and 2012, respectively. Additionally, $209,000 and $1,000 was due to the related party as of December 31, 2013 and 2012, respectively. BI, the Company's collaborative research partner (Note 10), is also a stockholder in the Company.

13. Commitments and Contingencies

        The Company currently leases office space pursuant to a noncancelable operating lease that will expire in January 2018. The Company has the right to extend the lease for one additional period of five years at fixed escalation amounts. In addition, the Company leases certain office equipment under operating leases. Rental expense under these leases was approximately $781,000 and $742,000 for the years ended December 31, 2013 and 2012, respectively. The following is a schedule by year of future minimum rental payments required under the noncancelable leases as of December 31, 2013:

2014

  $ 778,226  

2015

    789,717  

2016

    805,512  

2017

    821,622  

2018

    68,581  
       

Total minimum future rental payments

  $ 3,263,658  
       
       

14. Subsequent Events

        The Company has completed an evaluation of all subsequent events through June 27, 2014, the date on which these financial statements were available to be issued, to ensure that these financial statements include appropriate disclosure of events both recognized in the financial statements as of December 31, 2013 and events which occurred subsequently but were not recognized in the financial statements. The Company has concluded that no subsequent events have occurred that require disclosure, except as disclosed within these financial statements.

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