Note 10: Income Taxes

There was no income tax benefit recognized for the years ended December 31, 2016, 2015 and 2014 due to the Company’s history of net losses combined with an inability to confirm recovery of the tax benefits from the Company’s losses and other net deferred tax assets. The Company has established a valuation allowance against its deferred tax assets due to the uncertainty surrounding the realization of such assets. The reasons for the difference between actual income tax benefit for the years ended December 31, 2016, 2015 and 2014, and the amount computed by applying the statutory federal income tax rate to losses before income tax benefit are as follows:

	Year Ended December 31,
	2016			2015			2014
Income tax benefit at federal statutory rate	$	(20,298	)	$	(9,540	)	$	(3,872	)
State income taxes, net of federal benefit		(1,204	)		(741	)		(376	)
Non-deductible expenses		229			608			547
Distribution of intellectual property rights		—			657		—
Research and development tax credits		(1,692	)		(767	)		(478	)
Other		(124	)		283			(17	)
Change in valuation allowance		23,089			9,500			4,196
Total income tax provision	$	—		$	—		$	—

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and deferred tax liabilities are as follows:

	As of December 31,
	2016			2015
Deferred tax assets:
Deferred rent	$	—		$	9
Accrued compensation		618			16
Accrued liabilities		700			83
Tax loss carryforwards		37,857			17,692
Intangible assets		361			351
Share-based compensation		412			304
Tax credits		3,930			2,237
Facility financing lease obligation		2,881			—
Other		120			53
Total deferred tax assets		46,879			20,745
Less valuation allowance		(43,800	)		(20,711	)
Net deferred tax asset		3,079			34
Deferred tax liabilities:
Fixed assets		(3,079	)		(34	)
Net noncurrent deferred tax asset (liability)	$	—		$	—

As of December 31, 2016, the Company had federal and state net operating loss carryforwards of $105,051 and $106,671, respectively. The net operating loss carryforwards begin to expire in 2028 and 2023 for federal and state tax purposes, respectively. As of December 31, 2016, the Company had charitable contribution carryforwards of approximately $98 available to offset future federal taxable income which will begin to expire in 2017. As of December 31, 2016, the Company had government research and development tax credits of approximately $3,930 to offset future federal taxes which begin to expire in 2028.

The Company had no unrecognized tax benefits as of December 31, 2016 and 2015. The Company does not anticipate a significant change in total unrecognized tax benefits within the next 12 months.

The Tax Reform Act of 1986 contains provisions which limit the ability to utilize the net operating loss carryforwards in the case of certain events including significant changes in ownership interests. If the Company’s net operating loss carryforwards are limited, and the Company has taxable income which exceeds the permissible yearly net operating loss carryforwards, the Company would incur a federal income tax liability even though net operating loss carryforwards would be available in future years.