13. Income Taxes

For the years ended December 31, 2019, and 2018, the Company recorded income tax provision related to state minimum taxes due. A reconciliation of the federal statutory income tax rate and the Company's effective income tax rate is as follows:


	December 31,
	2019		2018
Tax computed at federal statutory rate	21.0	%	21.0	%
State income taxes, net of federal benefit	8.3	%	2.0	%
Other	(1.0)	%	(1.5)	%
Tax reform rate change	0.0	%	0.4	%
Change in valuation allowance	(30.4)	%	(24.2)	%
Credits	2.1		2.3	%
Effective income tax rate	0.0	%	0.0	%

Deferred income taxes result from the tax effect of transactions that are recognized in different periods for financial statement and income tax reporting purposes, as well as operating loss and tax credit carryforwards. Significant components of the Company's deferred income tax assets and liabilities are as follows (in thousands):


	As of December 31,
	2019		2018
Deferred tax assets:
Net operating loss carryforward	$	34,529	$	18,636
Tax credits		7,459		4,121
Intangibles		1,914		1,554
Other		1,379		366
Total deferred tax assets		45,281		24,677
Deferred tax liabilities:
Fixed assets		233		133
Total deferred tax liabilities		233		133
Valuation allowance		(45,048)		(24,544)
Total	$	—	$	—

The Company uses the "more likely than not" criterion for recognizing the income tax benefit of uncertain income tax positions and establishing measurement criteria for income tax benefits. The Company has evaluated the impact of these positions and has reserved an unrecognized tax benefit of $2.6 million and $1.4 million as of December 31, 2019 and 2018, respectively.

The following table summarizes the changes in the Company’s unrecognized tax benefits during the periods presented (in thousands):


	As of December 31,
	2019		2018
Beginning of period	$	1,396	$	915
Current period tax position increases		1,097		457
Prior period tax position increases		90		24
End of period		2,583		1,396

The increase in the unrecognized tax benefit in 2019 is primarily additions based on tax positions related to 2019. In the event the Company should need to recognize interest and penalties related to unrecognized income tax liabilities, this amount will be recorded as an accrued liability and an increase to income tax expense. No amounts of interest or penalties were recognized in the Company's consolidated financial statements for 2019 or 2018. The Company is not currently under examination by income tax authorities in federal, state or other foreign jurisdictions. The Company does not anticipate any significant changes within 12 months of this reporting date of its uncertain tax positions.

The net increase in the valuation allowance was $20.5 million and $9.2 million in 2019 and 2018, respectively.

At December 31, 2019, the Company has federal and state net operating loss carryforwards of $46.5 million and $46.2 million, respectively, which begin to expire in 2030 and $98.5 million of federal net operating loss carryforwards which do not expire but are subject to the 80% taxable income limitation. Additionally, the Company had federal tax credits totaling $5.7 million and $3.2 million at December 31, 2019 and 2018, respectively, and state tax credits totaling $5.3 million and $2.9 million, at December 31, 2019 and 2018, respectively. The federal tax credits begin to expire in 2032. The state tax credits may be carried forward indefinitely.

Section 382 of the Internal Revenue Code of 1986, as amended, limits the use of net operating losses and income tax credit carryforwards in certain situations where changes occur in stock ownership of a company. If the Company should have an ownership change of more than 50% of the value of the Company's capital stock, utilization of the carryforwards could be restricted.

The Company files income tax returns in the U.S. federal jurisdiction, various state jurisdictions and Singapore. The U.S. federal and state tax years from 2010 to 2019 remain open to examination due to the carryover of unused net operating loss carryforwards and tax credits.

In January 2018, the FASB released guidance on the accounting for tax on the global intangible low-taxed income (GILTI) provisions of the 2017 Tax Act. The GILTI provisions subject certain U.S. entities to current tax on GILTI earned by certain foreign subsidiaries. The Company has considered these new provisions as they are effective for tax years starting after December 31, 2017 and determined that none will likely apply for the year ended December 31, 2019 and 2018.