(16)Income Taxes

Income tax expense (benefit) consists of the following:


	Year ended December 31,
	2019		2018
Deferred:
Federal	$	(276)	$	(3,586)
State		(867)		138
Deferred income tax benefit		(1,143)		(3,448)
Current:
Federal		—		—
State		18		1
Foreign		232		—
Total income tax benefit, net	$	(893)	$	(3,447)

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


	Year ended December 31,
	2019			2018
Income tax benefit at U.S. federal statutory rate		21.0	%		21.0	%
State income tax benefit, net of federal benefit		3.9	%		—	%
Other permanent differences		(14.9)	%		(0.4)	%
Goodwill impairment		—	%		(7.6)	%
Research and development credit		(0.2)	%		0.9	%
Change in state tax rate		—	%		(1.1)	%
Foreign rate differential		(0.1)	%		—	%
Other adjustments		0.3	%		—	%
Change in valuation allowance		(8.8)	%		(3.9)	%
Effective income tax rate		1.2	%		8.9	%

The components of deferred tax assets and liabilities are as follows:


	December 31,
	2019		2018
Deferred tax assets:
Start-up costs	$	1,208	$	1,239
Capitalized research and development costs		612		728
Reserves and accruals		8,180		7,465
Property and equipment		55		—
Research and development credit		1,194		1,334
Lease liability		118		—
State and local taxes		4		—
Net operating loss carryforwards		27,860		22,721
Total gross deferred tax assets		39,231		33,487
Valuation allowance		(36,349)		(29,904)
Deferred tax assets, net of valuation allowance		2,882		3,583
Intangible assets		(3,396)		(5,385)
Operating lease right-of-use assets		(188)		—
Property and equipment		—		(42)
Total gross deferred tax liabilities		(3,584)		(5,427)
Net deferred tax liability	$	(702)	$	(1,844)

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. Based on the level of historical losses, projections of losses in future periods and potential limitations pursuant to changes in ownership under Internal Revenue Code (“IRC”) Section 382, the Company provided a valuation allowance at both December 31, 2019 and 2018. The remaining net deferred tax liability at both December 31, 2019 and 2018 is the result of the deferred tax liability associated with the indefinite-lived intangible asset, which was $3.5 million and $5.1 million, respectively; less the deferred tax asset associated with U.S. federal net operating loss carryforwards that do not expire of $2.4 million and $3.3 million, respectively, and state net operating loss carryforwards that do not expire of $0.4 million for 2019.

As of December 31, 2019 and 2018, the Company had U.S. federal net operating loss carryforwards of $68.0 million and $47.5 million, respectively. Of the total U.S. federal net operating loss carryforwards at December 31, 2019, $1.2 million will be limited as a result of Section 382 as described below and will expire unused. Losses generated in 2019 and 2018 will carryover indefinitely. The Company had state net operating loss carryforwards at December 31, 2019 and $0.2 million at December 31, 2018, respectively and had foreign net operating loss carryforwards of $220.9 million and $198.3 million at December 31, 2019 and 2018, respectively. Net operating loss carryforwards of the Company are subject to review and possible adjustment by the taxing authorities. With certain exceptions (e.g. the net operating loss carryforwards), the Company is no longer subject to U.S. federal, state or local examinations by tax authorities for years prior to 2016. There are no tax examinations currently in progress.

The Company’s ability to utilize its net operating loss carryforwards, tax credits, and built-in items of deduction, including capitalized start-up costs and research and development costs, has been, and may continue to be substantially limited due to ownership changes. These ownership changes limit the amount of net operating loss carryforwards, credits and built-in items of deduction that can be utilized annually to offset future taxable income. In general, an ownership change, as defined in IRC Section 382, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50% of the outstanding stock of a company by certain stockholders or public groups. In 2018, the Company completed an IRC Section 382 review and determined that ownership changes had occurred, which resulted in the determination that $0.3 million of U.S. federal net operating loss carryforwards and $3.5 million of U.S. federal research and development credit will expire unused as a result of ownership changes and the resulting Section 382 limitations. Further, an aggregate of $40.8 million of other future tax deductible amounts have been reduced. Both the deferred tax assets and the deferred tax valuation allowance were reduced by $67.2 million for the tax effect of these lost benefits, with no net effect on results of operations for the year ended December 31, 2018. Due to the valuation allowance against deferred tax assets at December 31, 2019, the net effect of any further limitation will have no impact on results of operations.