11. Income Taxes

As of December 31, 2015, the Company had available net operating loss carryforwards ("NOL") of approximately $151.8 million and $47.2 million for federal and state income tax reporting purposes, respectively, which are available to offset future federal and state taxable income, if any, through 2035. The Company also has research and development tax credit carryforwards of approximately $4.0 million and $0.5 million for federal and state income tax reporting purposes, respectively, which are available to reduce federal income taxes, if any, through 2035 and state income taxes, if any, through 2030.

The Internal Revenue Code of 1986, as amended (the "Code") provides for a limitation on the annual use of NOL and other tax attributes (such as research and development tax credit carryforwards) following certain ownership changes, as defined by the Code that could significantly limit the Company's ability to utilize these carryforwards. At this time, the Company has not completed a study to assess whether an ownership change under Section 382 of the Code has occurred, or whether there have been multiple ownership changes since the Company's formation, due to the costs and complexities associated with such a study. The Company may have experienced various ownership changes, as defined by the Code, as a result of past financings. Accordingly, the Company's ability to utilize the aforementioned carryforwards may be limited. Additionally, U.S. tax laws limit the time during which these carryforwards may be applied against future taxes. Therefore, the Company may not be able to take full advantage of these carryforwards for federal and state income tax purposes.

The Company does not have any significant unrecognized tax benefits.

As of December 31, 2015, the Company has not accrued interest or penalties related to uncertain tax positions. The Company's tax returns for the years ended December 31, 2012 through December 31, 2014 are still subject to examination by major tax jurisdictions.

For all years through December 31, 2015, the Company generated research credit but has not conducted a study to document the qualified activities. This study may result in an adjustment to the Company's research and development credit carryforwards; however, until a study is completed and any adjustment in known, no amounts are being presented as an uncertain tax position. A full valuation allowance has been provided against the Company's research and development credits and, if an adjustment is required, this adjustment would be offset by an adjustment to the deferred tax asset established for the research and development credit carryforwards and the valuation allowance.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets are presented below:

	December 31
	2015			2014
Deferred tax assets:
Net operating loss carryforwards	$	54,197		$	46,853
Research credit carryforward		4,527			3,683
Stock options and other		1,474			795

Total gross deferred tax assets		60,198			51,331
Valuation allowance for deferred tax assets		(60,198	)		(51,331	)

Net deferred tax assets	$	—		$	—

The gross deferred tax assets and the valuation allowance shown above represent the items which reduce the income tax benefit which would result from applying the federal statutory tax rate to the pretax loss and cause no income tax expense or benefit to be recorded for the years ended December 31, 2015 and 2014.

The net change in the valuation allowance for the years ended December 31, 2015 and 2014 was an increase of $8.9 million and $4.7 million, respectively, related primarily to net operating losses incurred by the Company which are not currently deductible.

A reconciliation of the U.S. statutory income tax rate to the Company's effective tax rate is as follows:

	December 31,
	2015			2014			2013
Federal income tax at statutory rate		34.0	%		34.0	%		34.0	%
State income tax benefit, net of federal benefit		6.0	%		6.0	%		5.7	%
Research and development tax credits		2.0	%		3.0	%		2.7	%
Other		(2.0	)%		—	%		(1.4	)%
Increase to valuation allowance		(24.0	)%		(24.0	)%		(41.0	)%

Effective income tax rate		16.0	%		19.0	%		0.0	%

Sale of New Jersey Net Operating Losses

The Company received approval to sell a portion of the Company's New Jersey net operating losses (NOLs) as part of the Technology Business Tax Certificate Program sponsored by The New Jersey Economic Development Authority. Under the program, emerging biotechnology companies with unused NOLs and unused research and development credits are allowed to sell these benefits to other companies. On November 30, 2015, the Company completed the sale of NOLs totaling approximately $59.8 million and research and development credits totaling $1.1 million for net proceeds of approximately $6.0 million. Such proceeds are reflected as a tax benefit for the year ended December 31, 2015. On February 27, 2014, the Company completed the sale of NOLs totaling approximately $39.1 million and research and development credits totaling approximately $0.4 million for net proceeds of approximately $3.6 million. Such proceeds are reflected as a tax benefit for year ended December 31, 2014.