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Income Taxes | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
Income Taxes | Note 16. Income Taxes U.S and foreign components of consolidated loss before income taxes for the years ended December 31, 2016, 2015 and 2014, was as follows (in thousands):
|  | 2016 |  |  | 2015 |  |  | 2014 |
Loss before income taxes: |  |  |  |  |  |  |  |  |  |  |  |
U.S. |  | $ | (63,246 | ) |  | $ | (59,897 | ) |  | $ | (38,928 | )
Foreign |  |  | 515 |  |  |  | 358 |  |  |  | 368 |
Loss before income taxes |  | $ | (62,731 | ) |  | $ | (59,539 | ) |  | $ | (38,560 | )
The provision for income taxes for the years ended December 31, 2016, 2015 and 2014, was as follows (in thousands):
|  | 2016 |  |  | 2015 |  |  | 2014 |
Provision for income taxes: |  |  |  |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Foreign |  | $ | 147 |  |  | $ | 147 |  |  | $ | 168 |
Federal |  |  | — |  |  |  | — |  |  |  | — |
State |  |  | — |  |  |  | — |  |  |  | 1 |
Total current |  |  | 147 |  |  |  | 147 |  |  |  | 169 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Foreign |  |  | — |  |  |  | — |  |  |  | — |
Federal |  |  | 28 |  |  |  | (3,750 | ) |  |  | 22 |
State |  |  | — |  |  |  | (68 | ) |  |  | 4 |
Total deferred |  |  | 28 |  |  |  | (3,818 | ) |  |  | 26 |
Provision (benefit) for income taxes |  | $ | 175 |  |  | $ | (3,671 | ) |  | $ | 195 |
The difference between the provision for income taxes and the amount computed by applying the federal statutory income tax rate to loss before taxes for the years ended December 31, 2016, 2015 and 2014, was as follows (in thousands):
|  | 2016 |  |  | 2015 |  |  | 2014 |
Federal statutory tax |  | $ | (21,329 | ) |  | $ | (20,243 | ) |  | $ | (13,110 | )
Warrants |  |  | — |  |  |  | (3,565 | ) |  |  | (3,367 | )
Expiration of federal loss carryovers |  |  | — |  |  |  | 3,337 |  |  |  | — |
Change in valuation allowance |  |  | 13,589 |  |  |  | 11,754 |  |  |  | 16,576 |
Change in state apportionment |  |  | — |  |  |  | 4,085 |  |  |  | — |
Revision to prior year items |  |  | 7,551 |  |  |  | — |  |  |  | — |
Other |  |  | 364 |  |  |  | 961 |  |  |  | 96 |
Provision (benefit) for income taxes |  | $ | 175 |  |  | $ | (3,671 | ) |  | $ | 195 |
On December 31, 2015, the California Supreme Court issued a decision disallowing the use of an income apportionment method pursuant to the Multistate Tax Compact. On October 10, 2016, the U.S Supreme Court decided not to hear an appeal of this decision. Previously the Company had relied on lower court decisions allowing the use of this apportionment method to file its 2013 and 2014 tax returns and to determine its deferred tax balances. Based on the California Supreme Court decision, the Company adjusted the apportionment for its deferred tax balances and the respective valuation allowance as of December 31, 2015. During 2016 the Company reviewed its cumulative research tax credits and tax losses. As part of this review, revisions were made to the amounts as originally estimated which are reflected in the deferred tax balances and the respective valuation allowance as of December 31, 2016. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes at the enacted rates. The significant components of the Company’s deferred tax assets and liabilities at December 31, 2016 and 2015, were as follows (in thousands):
|  | December 31, |
|  | 2016 |  |  | 2015 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 176,490 |  |  | $ | 165,813 |
Research and development credit carryforwards |  |  | 31,777 |  |  |  | 35,131 |
Capitalized research and development |  |  | 22,575 |  |  |  | 17,916 |
Deferred compensation |  |  | 8,242 |  |  |  | 5,908 |
Other |  |  | 3,184 |  |  |  | 3,911 |
Total deferred tax assets |  |  | 242,268 |  |  |  | 228,679 |
Valuation allowance |  |  | (238,443 | ) |  |  | (224,854 | )
Net deferred tax assets |  | $ | 3,825 |  |  | $ | 3,825 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Unrealized gain on investments |  | $ | 3,825 |  |  | $ | 3,825 |
Amortization of goodwill |  |  | 150 |  |  |  | 122 |
Total deferred tax liabilities |  | $ | 3,975 |  |  | $ | 3,947 |
The valuation allowance increased by $13.6 million for the year ended December 31, 2016, compared to the increase of $11.8 million and $14.1 million for the years ended December 31, 2015 and 2014, respectively. The Company believes that, based on a number of factors, the available objective evidence creates sufficient uncertainty regarding the realizability of the deferred tax assets such that a valuation allowance has been recorded. These factors include the Company’s history of net losses since its inception, the need for regulatory approval of the Company’s products prior to commercialization, expected near-term future losses and the absence of taxable income in prior carryback years. The Company expects to maintain a valuation allowance until circumstances change. Undistributed earnings of the Company’s foreign subsidiary, Cerus Europe B.V., amounted to approximately $5.2 million at December 31, 2016. The earnings are considered to be permanently reinvested and accordingly, no deferred U.S. income taxes have been provided thereon. Upon distribution of those earnings in the form of dividends or otherwise, the Company would be subject to U.S. income taxes. The unrecognized deferred tax liability for unrepatriated earnings at December 31, 2016, was approximately $1.9 million. In the event all foreign undistributed earnings were remitted to the U.S., the Company believes any incremental tax liability would be offset by the Company’s domestic net operating losses and credits. For the year ended December 31, 2016, the Company reported pretax net losses of $62.7 million on its consolidated statement of operations and calculated taxable losses for both federal and state taxes. The difference between reported net loss and taxable loss are due to differences between book accounting and the respective tax laws. At December 31, 2016, the Company had federal and state net operating loss carryforwards of approximately $503 million and $94 million, respectively. The net operating loss carryforwards for federal and state expire at various dates beginning in 2017 through 2036. The Company’s net operating losses do not include $2.8 million related to windfall tax deductions associated with stock based compensation. The stock based compensation windfall deductions, if utilized, would serve to reduce any income taxes payable with a corresponding credit to additional paid in capital. At December 31, 2016, the Company had federal research and development credit carryforwards of approximately $23.9 million that expire in various years between 2018 and 2036. The California research and development credits are approximately $11.9 million as of December 31, 2016, and have an indefinite carryover period. The utilization of net operating loss carryforwards, as well as research and development credit carryforwards, is limited by current tax regulations. These net operating loss carryforwards, as well as research and development credit carryforwards, will be utilized in future periods if sufficient income is generated. The Company’s ability to utilize certain loss carryforwards and certain research credit carryforwards are subject to limitations pursuant to the ownership change rules in accordance with Section 382 of the Internal Revenue Code of 1986 and with Section 383 of the Internal Revenue Code of 1986, as well as similar state provisions. The Company’s unrecognized tax benefits relate to federal and California research tax credits. These tax credits have not been utilized on any tax return and currently have no impact on the Company’s tax expense due to the Company’s operating losses and the related valuation allowances. The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in thousands):
|  | December 31, |
|  | 2016 |
Unrecognized tax benefits at beginning of period |  | $ | — |
Increases related to prior year tax positions |  |  | 10,691 |
Increases related to current year tax positions |  |  | 145 |
Unrecognized tax benefits at beginning of period |  | $ | 10,836 |
The Company will recognize accrued interest and penalties related to unrecognized tax benefits in its income tax expense. To date, the Company has not recognized any interest and penalties in its consolidated statements of operations, nor has it accrued for or made payments for interest and penalties. The Company’s federal tax years 1998 through 2015 and California tax years through 2015 remain subject to examination by the taxing jurisdictions due to unutilized net operating losses and research credits. The Netherlands tax returns of our Cerus Europe B.V. subsidiary for the years 2013 through 2015 are still subject to examination. There was no income tax audit activity in 2015 nor has the Company been notified by any tax agency of any planned audits.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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