9. INCOME TAXES

No provision or benefit for federal or state income taxes has been recorded as the Company has incurred a net loss for all of the periods presented and the Company has provided a full valuation allowance against its deferred tax assets.

At December 31, 2017, the Company had U.S. federal and Massachusetts net operating loss carryforwards of $117,298 and $109,183, respectively, of which federal carryforwards will expire in varying amounts beginning in 2026. Massachusetts net operating losses begin to expire in 2029. Utilization of net operating losses may be subject to substantial annual limitations due to the “change in ownership” provisions of the Internal Revenue Code, and similar state provisions. The annual limitations may result in the expiration of net operating losses before utilization. The Company has completed several financings since its inception, which may have resulted in a change in ownership, or could result in a change in ownership in the future, but has not yet completed an analysis of whether an ownership change limitation exists. The Company will complete an appropriate analysis before its tax attributes are utilized. The Company also had federal and state research and development tax credits of $991 and $230, respectively, at December 31, 2017, which will begin to expire in 2022 unless previously utilized.

On December 22, 2017, the Tax Cuts and Jobs Act (“the Act”) was enacted in the United States. The Act reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and creates new taxes on certain foreign sourced earnings. At December 31, 2017, we have not completed our accounting for the tax effects of enactment of the Act, including the effects on our existing deferred tax balances. In addition to the reduction in the federal corporate tax rate, which we have accounted for with provision estimates at December 31, 2017, we continue to analyze the provisions of tax reform that become effective for the Company in 2018 including the provisions related to Global Intangible Low Taxed Income, Foreign Derived Intangible Income, Base Erosion Anti-Abuse Tax, as well as other provisions which would limit the deductibility of future expenses.

As a result of the Act, we remeasured certain deferred tax assets and liabilities based on the rates at which they are anticipated to reverse in the future, which is generally 21%. This resulted in a decrease to our gross deferred tax assets and a corresponding decrease in our valuation allowance of $15,521. Any items reported are done so using provisional amounts until the initial accounting required by the Act is complete. Additional time and resources are needed to ensure the correct implementation of the Act.

Significant components of the Company’s net deferred tax assets are as follows:


	December 31,
	2017		2016
Net operating loss carryforward	$	31,533	$	37,245
Research and development credit carryforward		1,173		1,065
Stock-based compensation		2,828		5,235
Depreciation and amortization		71		31
Accrued expenses		357		264
Charitable contributions		27		63
Subtotal		35,989		43,903
Valuation allowance		(35,989)		(43,903)
Net deferred taxes	$	—	$	—

The Company has maintained a full valuation allowance against its deferred tax assets in all periods presented. A valuation allowance is required to be recorded when it is more likely than not that some portion or all of the net deferred tax assets will not be realized. Since the Company cannot be assured of generating taxable income and thereby realizing the net deferred tax assets, a full valuation allowance has been provided. During the year ending December 31, 2017, the Company adopted ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. As part of the adoption, the Company recorded through retained earnings additional deferred tax assets of $642 related to previously unrecognized tax losses with an equal and offsetting adjustment to the Company's valuation allowance. The net impact of the adoption on the Company's deferred tax assets was $0. In the years ended December 31, 2017 and 2016, the valuation allowance decreased by $7,914 and increased $9,406, respectively.

The Company has no uncertain tax positions at December 31, 2017 and 2016 that would affect its effective tax rate. The Company does not anticipate a significant change in the amount of uncertain tax positions over the next twelve months. Since the Company is in a loss carryforward position, the Company is generally subject to U.S. federal and state income tax examinations by tax authorities for all years for which a loss carryforward is available.

Income tax benefits computed using the federal statutory income tax rate differ from the same benefits computed using the Company’s effective tax rate primarily due to the following:


	December 31,
	2017		2016		2015
Statutory rate	(34.0)	%	(34.0)	%	(34.0)	%
State taxes, net of benefit	(4.7)	%	(5.4)	%	(3.5)	%
Permanent differences:
Derivative losses	2.9	%	(0.9)	%	11.0	%
Other	1.1	%	0.2	%	0.3	%
Research and development tax credit	(0.2)	%	(0.5)	%	(0.4)	%
Other	1.4	%	0.5	%	0.4	%
Adoption of ASU 2016-09	7.4	%	—	%	—	%
Increase / (decrease) in valuation reserve	(32.0)	%	40.1	%	26.2	%
Change in federal tax rate	58.1	%	—	%	—	%
Effective tax rate	0.0	%	0.0	%	0.0	%