Income taxes (Tables)

12 Months Ended

Dec. 31, 2019

For financial reporting purposes, losses before income taxes for the years ended December 31, 2019, 2018 and 2017 consisted of the following (in thousands):


	Year ended December 31,
	2019		2018		2017
United States	$	(7,886)	$	(604)	$	(121)
Foreign (Austria)		(35,151)		(15,609)		(12,598)
Net loss before tax	$	(43,037)	$	(16,213)	$	(12,719)

Schedule of effective income tax rate reconciliation


	Year ended December 31,
	2019			2018			2017
U.S. federal statutory income tax rate		(21.0)	%		(21.0)	%		(35.0)	%
State income taxes, net of federal benefit		—			—			—
Foreign tax rate differential(1)		(4.0)			(4.0)			10.0
Not taxable government grants(2)		(5.4)			(7.5)			(3.0)
Stock-based compensation(3)		(0.3)			(4.6)			(3.5)
other		(0.3)			(0.5)			—
Change in deferred tax asset valuation allowance(4)		31.0			37.5			31.5
Effective income tax rate		—	%		(0.1)	%		—	%

(1) The 4% increase for the years ended December 31, 2019 and 2018, respectively, and the 10% reduction for the year ended December 31, 2017 resulted from tax rate differences between U.S. and non-U.S. jurisdictions. Net loss before tax was principally generated in Austria, where the statutory tax rate is 25%.

(2) For the years ended December 31, 2019, 2018 and 2017, 5.4%, 7.5% and 3.0% increase, respectively, resulted from non-taxable research subsidies received from Austrian government agencies.

(3) For the years ended December 31, 2019, 2018 and 2017, 0.3% increase, 4.6% increase and 3.5% increase, respectively, resulted from non-taxable Stock-based compensation expense.

(4) For the years ended December 31, 2019, 2018 and 2017, 31.0% reduction, 37.5% reduction and 31.5% reduction, respectively, resulted from changes in valuation allowance on deferred tax assets. Deferred tax assets will only be recovered when the generation of future taxable income is more likely than not. Due to the nature of the Company's research activities and the inherent uncertainties the deferred tax assets have been fully impaired.

Components of the net deferred tax assets or liabilities

Components of the net deferred tax assets or liabilities as of the years ended December 31, 2019 and 2018 consisted of the following (in thousands):


	Year ended December 31,
	2019		2018
Deferred tax assets:
Net operating loss carryforwards	$	29,180	$	19,011
Credit carryforwards		180		—
Accrued expenses and other		669		94
Stock-based compensation		2,717		51
Operating lease liabilities		1,740		—
Other liabilities		132		—
Total deferred tax assets		34,618		19,156
Valuation allowance		(32,583)		(19,156)
Total deferred tax assets		2,035		—

Deferred tax liabilities:
Operating lease right of use asset		(1,808)		—
Finance lease right of use asset		(227)		—
Total deferred tax liabilities		(2,035)		—

Net deferred tax assets	$	—	$	—

Changes in the valuation allowance for deferred tax assets

Changes in the valuation allowance for deferred tax assets during the years ended December 31, 2019, 2018 and 2017 related primarily to the increases in net operating loss carryforwards as follows (in thousands):


	Year ended December 31,
	2019		2018		2017
Valuation allowance at beginning of period	$	(19,156)	$	(13,789)	$	(8,378)
Increases		(13,427)		(5,367)		(5,411)
Valuation allowance at end of period	$	(32,583)	$	(19,156)	$	(13,789)