14.

Income Taxes

Loss before income taxes for the years ended December 31 consisted of the following (in thousands):


	2015			2014			2013
Domestic	$	(46,065	)	$	(50,455	)	$	(28,746	)
Foreign		650			417			(535	)

Loss before income taxes	$	(45,415	)	$	(50,038	)	$	(29,281	)

Significant components of our provision for income taxes for the years ended December 31 are as follows (in thousands):


	2015		2014		2013
Current:
Domestic	$	—	$	—	$	—
Foreign		166		—		—

Total current provision		166		—		—
Deferred:
Domestic		—		—		—
Foreign		—		—		—
Total deferred provision		—		—		—

Total provision for income taxes	$	166	$	—	$	—

Income tax expense (benefit) differed from the amounts computed by applying the statutory federal income tax rate of 34% to pretax loss as a result of the following for the years ended December 31 (in thousands):


	2015			2014			2013
Income tax provision at statutory rate	$	(15,662	)	$	(17,013	)	$	(9,955	)
Nondeductible items		401			456			(32	)
Change in tax credits		(792	)		(678	)		(893	)
Change in valuation allowance		16,706			17,911			10,965
Foreign tax and other		(487	)		(676	)		(85	)

	$	166		$	—		$	—

Net operating loss (“NOL”) carryforwards created by excess tax benefits from the exercise of non-qualified stock options are not recorded as deferred income tax assets. To the extent such NOL carryforwards are utilized, the benefit realized will increase stockholders’ equity. At December 31, 2015, for income tax return purposes the Company has gross federal and state NOL carryforwards totaling $165.4 million and tax credit carryforwards of $4.2 million. These carryforwards may be subject to limitations under the Internal Revenue Code and applicable state tax law. If not utilized, a portion of the carryforwards will begin to expire in 2025 through 2036.

The Company does not expect to utilize any of its net operating loss and tax credit carryforwards in the near term. The Company may have already experienced one or more ownership changes. Depending on the timing of any future utilization of its carryforwards, the Company may be limited as to the amount that can be utilized each year as a result of such previous ownership changes. However, the Company does not believe such limitations will cause its carryforwards to expire unutilized. Future changes in the Company’s stock ownership as well as other changes that may be outside the Company’s control could potentially result in further limitations on the Company’s ability to utilize its net operating loss and tax credit carryforwards.

The effect of temporary differences and carryforwards that give rise to deferred tax assets for the years ended December 31 were as follows (in thousands):


	2015			2014
Net operating loss carryforwards	$	57,158		$	47,444
Research and development tax credit carryforwards		3,124			2,332
Stock-based compensation		3,212			1,583
Other		7,135			2,564

Total deferred tax assets		70,629			53,923
Less: Valuation allowance		(70,629	)		(53,923	)

Net deferred tax assets	$	—		$	—

The Company has recorded a full valuation allowance related to its deferred tax assets due to the uncertainty of the ultimate realization of the future benefits from those assets.

The table below summarizes changes in the deferred tax asset valuation allowance (in thousands):


	Balance at Beginning of Year		Charged to Costs and Expenses		Write-offs		Balance at End of Year
Deferred tax valuation allowance:
For year ended December 31, 2013	$	25,047	$	10,965	$	—	$	36,012
For year ended December 31, 2014		36,012		17,911		—		53,923
For year ended December 31, 2015		53,923		16,706		—		70,629

The total balance of unrecognized gross tax benefits for the years ended December 31, resulting from R&D credits claimed on the Company’s annual tax return was as follows (in thousands):


	2015		2014		2013
Unrecognized tax benefits at beginning of year	$	777	$	551	$	253
Additions (reductions) based on current year tax positions		264		226		298

Unrecognized tax benefits at end of year	$	1,041	$	777	$	551

The Company classifies applicable interest and penalties on amounts due to tax authorities as a component of the provision for income taxes. The amount of accrued interest and penalties recorded in 2015, 2014 or 2013 was not significant. The Company does not anticipate that the amount of its existing unrecognized tax benefits will significantly increase or decrease within the next 12 months. Due to the presence of net operating loss carryforwards in most jurisdictions, the Company’s tax years remain open for examination by U.S. taxing authorities back to 2004.