(10) Income Taxes

The Company’s U.S. and foreign loss before income taxes are set forth below:


	Year ended December 31,
	2016		2015		2014
United States	$	(18,803,227)	$	(12,145,964)	$	(5,669,577)
Foreign		(4,612,823)		(377,843)		—
Total	$	(23,416,050)	$	(12,523,807)	$	(5,669,577)

The Company had $36.5 million and $17.7 million of federal net operating loss carryforwards and $1.3 million and $0.4 million of research tax credit carryforwards as of December 31, 2016 and 2015, respectively. The U.S. federal net operating loss carryforwards and research tax credit carryforwards begin to expire in 2028 and 2027, respectively. The Company has $34.4 million and $21.6 million of state net operating loss carryforwards as of December 31, 2016 and 2015, respectively. The state net operating loss carryforwards begin to expire in 2028 and 2027, respectively. The Company had $1.2 million of Australia net operating loss carryforwards as of December 31, 2016, which have an indefinite life.

The Tax Reform Act of 1986 (the Act) provides for limitation on the use of net operating loss and research and development tax credit carryforwards following certain ownership changes (as defined by the Act) that could limit the Company’s ability to utilize these carryforwards. The Company may have experienced various ownership changes, as defined by the Act, as a result of past financings. Accordingly, the Company’s ability to utilize the aforementioned carryforwards may be limited. Additionally, U.S. tax laws limit the time during which these carryforwards may be applied against future taxes; therefore, the Company may not be able to take full advantage of these carryforwards for federal income tax purposes.

The components of the net deferred income tax asset as of December 31, 2016 and 2015 are as follows:


	December 31, 2016		December 31, 2015
Deferred tax assets:
Net operating loss carry‑forwards	$	14,877,358	$	6,531,375
Startup costs		—		817,052
Research and development credit carry‑forwards		1,337,748		425,282
Deferred revenue		—		304,264
Stock-based compensation		1,576,280		227,093
Other		43,004		—
Gross deferred tax assets		17,834,390		8,305,066
Deferred tax liabilities:
Accumulated depreciation		(21,632)		(18,519)
Gross deferred tax liabilities		(21,632)		(18,519)
Less valuation allowance		(17,812,758)		(8,286,547)
Net deferred tax asset	$	—	$	—

In assessing the realizability of deferred tax assets, the Company 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 the periods in which the temporary differences representing net future deductible amounts become deductible. After consideration of all the evidence, both positive and negative, the Company has recorded a full valuation allowance against its net deferred tax assets as of December 31, 2016 and 2015, respectively, because the Company has determined that is it more likely than not that these assets will not be fully realized due to historic net operating losses incurred. The valuation allowance increased by $9.5 million and $4.7 million during the years ended December 31, 2016 and 2015, respectively, due primarily to the generation of net operating loss carryforwards during those years.

The Company does not have unrecognized tax benefits as of December 31, 2016 and 2015, respectively. The Company recognizes interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense.

A reconciliation of income tax expense (benefit) at the statutory federal income tax rate and income taxes as reflected in the financial statements is as follows:


	Year ended December 31,
	2016		2015		2014
Federal income tax benefit at statutory rate	34.0	%	34.0	%	34.0	%
State income tax, net of federal benefit	7.8	%	2.9	%	(0.3)	%
Foreign tax rate differential	(0.2)	%	(0.1)	%	—	%
Nondeductible research and development expenses	(4.7)	%	(1.1)	%	—	%
Other permanent differences	—	%	(0.1)	%	(0.7)	%
Research and development credit benefit	3.9	%	2.0	%	1.6	%
Change in valuation allowance	(40.7)	%	(37.8)	%	(34.6)	%
Effective income tax rate	0.1	%	(0.2)	%	—	%

The Company and its subsidiaries are subject to income taxes in the U.S. federal jurisdiction, various state jurisdictions and Australia. The Company’s 2011 to 2016 tax years remain open and subject to examination.