Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Income (Loss) Before Income Taxes

There is no income tax provision for the years ended December 31, 2017, 2016 and 2015.

Income (loss) before income taxes consists of:


	Year Ended December 31,
(in thousands)	2017			2016			2015
Domestic	$	(41,313	)	$	(13,930	)	$	(11,276	)
Foreign		(3,804	)		(4,040	)		(3,428	)

Income (loss) before taxes	$	(45,117	)	$	(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)	2017			2016			2015
Income taxes using U.S federal statutory rate	$	(15,340	)	$	(6,110	)	$	(4,999	)
Tax Cuts and Jobs Act		143			—			—
Nondeductible interest		6,912			—			—
Loss on extinguishment of debt		10,174
Loss of tax benefit of federal net operating loss carryforwards		5,067			68,795			—
Loss of tax benefit of state net operating loss carryforwards		1,373			13,891			—
Loss of tax benefit of federal tax credit carryforwards		324			4,023			—
Amortization of gain on IP migration		767			767			767
State income taxes, net of federal benefit		(1,339	)		(2,576	)		380
Foreign rate differential		1,196			1,141			920
Valuation allowance		(1,423	)		(75,407	)		2,649
Derivative charge		(8,403	)		(4,345	)		(192	)
Stock option exercises and cancellations		841			53			674
Research and development costs		(295	)		(250	)		(199	)
Other		3			18			—

	$	—		$	—		$	—

Significant components of deferred tax assets

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


	Year Ended December 31,
(in thousands)	2017		2016		2015
Deferred tax assets:
Employee compensation accruals	$	292	$	1,386	$	1,279
Accrued liabilities		353		343		633
Research tax credits		17		22		3,796
Other		34		55		66
Net operating losses		5,289		6,194		77,906

Total deferred tax assets		5,985		8,000		83,680

Deferred tax liabilities:
Beneficial conversion feature		—		906		—
Other		13		—		—
Total deferred tax liabilities		13		906		—

Valuation allowance		5,972		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 2016 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, 2017			December 31, 2016
Beginning balance	$	7,094		$	83,680
Charged to costs and expenses		(1,423	)		(75,407	)
Charged to additional paid-in capital		—			(1,854	)
Charged to retained earnings		—			1,010
Charged to other comprehensive income		301			(335	)

Ending balance	$	5,972		$	7,094