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Note 9 - Income Taxes | 12 Months Ended
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Dec. 31, 2016
Notes to Financial Statements |
Income Tax Disclosure [Text Block] |
9 . | Income Taxes
For the years ended December 31, 2016, 2015 and 2014, we did not record a provision for income taxes because we have incurred operating losses for all three years. Deferred income tax assets and liabilities arising from differences between accounting for financial statement purposes and tax purposes, less valuation allowance at year-end are as follows (in thousands):
|  | December 31, |
|  | 201 6 |  |  | 201 5 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryforward |  | $ | 138,727 |  |  | $ | 94,465 |
Research and development credits |  |  | 16,687 |  |  |  | 11,181 |
Stock-based compensation |  |  | 10,272 |  |  |  | 6,726 |
Other, net |  |  | 3,204 |  |  |  | 1,345 |
Total deferred tax assets |  |  | 168,890 |  |  |  | 113,717 |
Valuation allowance for net deferred tax assets |  |  | (168,890 | ) |  |  | (113,717 | )
Net deferred taxes |  | $ | — |  |  | $ | — |
Taxes on income vary from the statutory federal income tax rate applied to earnings before tax on income as follows (in thousands):
|  | December 31, |
|  | 201 6 |  |  | 201 5 |  |  | 201 4 |
Statutory federal income tax rate of 34% |  | $ | (58,868 | ) |  | $ | (33,181 | ) |  | $ | (25,965 | )
Stock-based compensation expense |  |  | 2,694 |  |  |  | 894 |  |  |  | 551 |
NOL not benefitted |  |  | 53,798 |  |  |  | 31,935 |  |  |  | 25,085 |
Non-deductible compensation |  |  | 1,864 |  |  |  | — |  |  |  | — |
Other, net |  |  | 512 |  |  |  | 352 |  |  |  | 329 |
Provision for taxes |  | $ | — |  |  | $ | — |  |  | $ | — |
A valuation allowance is provided when it is more likely than not that the deferred tax assets will not be realized. We have established a valuation allowance to offset net deferred tax assets at December 31, 2016 and 2015 due to the uncertainty of realizing future tax benefits from our net operating loss carryforwards and other deferred tax assets. The net change in the total valuation allowance for the year ended December 31, 2016 and 2015 was an increase of $55.2 million and $40.4 million, respectively. At December 31, 2016, we had federal and California state net operating loss (“NOL”) carryforwards of $387.6 million and $268.5 million, respectively, expiring beginning in 2018 for federal and 2017 for California state purposes. Federal NOLs of $10.0 million and state NOLs of $4.2 million relate to stock-based compensation deductions in excess of book expense, the tax effect of which would be to credit additional paid-in capital, if realized. At December 31, 2016, we had federal and California state research credit carryforwards of $11.6 million and $7.6 million, respectively, expiring beginning in 2022 for federal. The California state credits can be carried forward indefinitely. Internal Revenue Code section 382 places a limitation on the amount of taxable income that can be offset by NOL carryforwards after a change in control (generally greater than 50% change in ownership) of a loss corporation. California has similar rules. Generally, after a change in control, a loss corporation cannot deduct NOL carryforwards in excess of the Section 382 limitation. We have performed an IRC Section 382 analysis and determined there were ownership changes in 2007, 2011, and 2013. We are currently in the process of completing the IRC Section 382 analysis for 2016 and we do not expect an ownership change for the year ended December 31, 2016. The limitation in the Federal and state carryforwards associated with the NOL and credit carryforwards reduce the deferred tax assets, which are further offset by a full valuation allowance. The limitation can result in the expiration of the NOLs and credit carryforwards available as of December 31, 2016, before utilization. We file U.S. and state income tax returns with varying statutes of limitations. The tax years from 1997 to 2016 remain open to examination due to the carryover of unused NOL carryforwards and tax credits. For benefits to be realized, a tax position must be more likely than not to be sustained upon examination. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement. It is our policy to recognize interest and penalties related to income tax matters in income tax expense. As of December 31, 2016 and 2015, we had no accrued interest and penalties related to uncertain tax positions. As of December 31, 2016 and 2015, we had unrecognized tax benefits of $0.1 million, and the amount that would impact our effective tax rate, before the consideration of the valuation allowance, is $0.1 million. We do not expect any material changes to the estimated amount of liability associated with its uncertain tax positions within the next 12 months.

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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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