Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

There is no income tax provision for the years ended December 31, 2016 and 2015. Income before income taxes consists of:


	Year Ended December 31,
(in thousands)	2016			2015
Domestic	$	(13,930	)	$	(11,276	)
Foreign		(4,040	)		(3,428	)

Income before taxes	$	(17,970	)	$	(14,704	)

Income tax reconciliation

The provision for income taxes differs from the amount computed by applying the statutory rate as follows:


	Year Ended December 31,
(in thousands)	2016			2015
Income taxes using U.S federal statutory rate	$	(6,110	)	$	(4,999	)
Loss of tax benefit of net operating loss carryforwards		68,795			—
Loss of tax benefit of state net operating loss carryforwards		13,891			—
Loss of tax benefit of tax credit carryforwards		4,023			—
Amortization of gain on IP migration		767			767
State income taxes, net of federal benefit		(2,576	)		380
Foreign rate differential		1,141			920
Valuation allowance		(75,407	)		2,649
Derivative charge		(4,345	)		(192	)
Stock option exercises and cancellations		53			674
Research and development costs		(250	)		(199	)
Other		18			—

	$	—		$	—

Significant components of deferred tax assets

Significant components of the Company’s deferred tax assets are as follows:


(in thousands)	December 31, 2016		December 31, 2015
Deferred tax assets:
Employee compensation accruals	$	1,386	$	1,279
Accrued liabilities		343		633
Research tax credits		22		3,796
Other		55		66
Net operating losses		6,194		77,906

Total deferred tax assets	$	8,000	$	83,680

Deferred tax liabilities:
Beneficial conversion feature		906		—

Total deferred tax liabilities	$	906	$	—

Valuation allowance		7,094		83,680

Net deferred tax assets	$	—	$	—

Summary of Change in Valuation Allowance

The primary reason for the significant decrease in the valuation allowance during the current year is due to the reduction of recognizable deferred tax assets related net operating loss and credit carryforwards resulting from the Sec. 382 ownership change. The change in valuation allowance is as follows:


(in thousands)	December 31, 2016			December 31, 2015
Beginning balance	$	83,680		$	81,223
Charged to costs and expenses		(75,407	)		2,649
Charged to additional paid-in capital		(1,854	)		—
Charged to retained earnings		1,010			—
Charged to other comprehensive income		(335	)		(192	)

Ending balance	$	7,094		$	83,680