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Taxes | 12 Months Ended
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Dec. 31, 2016
Taxes |
Taxes | 13. Taxes (Loss) income from continuing operations before taxes is comprised of the following components for the years ended December 31, 2015 and 2016 (in thousands):
​ | ​ | ​ | Year Ended December 31, | ​
​ | ​ | ​ | 2015 | ​ | ​ | 2016 | ​
Domestic | ​ | ​ | ​ | $ | (2,520) | ​ | ​ | ​ | ​ | $ | (2,011) | ​ | ​
Foreign | ​ | ​ | ​ | ​ | (13,966) | ​ | ​ | ​ | ​ | ​ | (11,763) | ​ | ​
Loss from continuing operations before taxes | ​ | ​ | ​ | $ | (16,486) | ​ | ​ | ​ | ​ | $ | (13,774) | ​ | ​
​
The benefit (provision) for income taxes from continuing operations consists of the following (in thousands):
|  |  | Year Ended December 31, |
|  |  | 2015 |  |  | 2016 |
Current – domestic |  |  |  | $ | — |  |  |  |  | $ | — |  |
Current – foreign |  |  |  |  | 2,144 |  |  |  |  |  | 1,983 |  |
Current – total |  |  |  |  | 2,144 |  |  |  |  |  | 1,983 |  |
Deferred – domestic |  |  |  |  | — |  |  |  |  |  | — |  |
Income tax benefit |  |  |  | $ | 2,144 |  |  |  |  | $ | 1,983 |  |
The Company has incurred a taxable loss in each of the operating periods since incorporation. The income tax credits of $2.1 million and $ 2.0 million for the years ended December 31, 2015 and 2016, respectively, represent UK research and development (“R&D”) tax credits for expenditures in the United Kingdom that are refundable. A reconciliation of the (benefit) provision for income taxes from continuing operations with the amount computed by applying the statutory federal tax rate to loss from continuing operations before income taxes is as follows (in thousands):
​ | ​ | ​ | Year Ended December 31, | ​
​ | ​ | ​ | 2015 | ​ | ​ | 2016 | ​
Loss from continuing operations before taxes | ​ | ​ | ​ | $ | (16,486) | ​ | ​ | ​ | ​ | $ | (13,774) | ​ | ​
Income tax expense computed at statutory federal tax rate | ​ | ​ | ​ | ​ | (5,605) | ​ | ​ | ​ | ​ | ​ | (4,683) | ​ | ​
Disallowed expenses and non-taxable income | ​ | ​ | ​ | ​ | 27 | ​ | ​ | ​ | ​ | ​ | 12 | ​ | ​
Loss surrendered to generate R&D credit | ​ | ​ | ​ | ​ | 2,479 | ​ | ​ | ​ | ​ | ​ | 1,945 | ​ | ​
Additional research and development tax relief | ​ | ​ | ​ | ​ | (3,402) | ​ | ​ | ​ | ​ | ​ | (2,827) | ​ | ​
Change in valuation allowance | ​ | ​ | ​ | ​ | (4,189) | ​ | ​ | ​ | ​ | ​ | 2,029 | ​ | ​
Foreign items, including change in tax rates, and other | ​ | ​ | ​ | ​ | 6,882 | ​ | ​ | ​ | ​ | ​ | 1,238 | ​ | ​
Other foreign items | ​ | ​ | ​ | ​ | 1,664 | ​ | ​ | ​ | ​ | ​ | 303 | ​ | ​
​ | ​ | ​ | ​ | $ | (2,144) | ​ | ​ | ​ | ​ | $ | (1,983) | ​ | ​
​
Significant components of the Company’s deferred tax assets are shown below (in thousands):
​ | ​ | ​ | Year Ended December 31, | ​
​ | ​ | ​ | 2015 | ​ | ​ | 2016 | ​
Net operating loss carryforwards | ​ | ​ | ​ | $ | 41,003 | ​ | ​ | ​ | ​ | $ | 42,851 | ​ | ​
Depreciation, amortization and impairment of property and equipment | ​ | ​ | ​ | ​ | 101 | ​ | ​ | ​ | ​ | ​ | 137 | ​ | ​
Stock options | ​ | ​ | ​ | ​ | 2,193 | ​ | ​ | ​ | ​ | ​ | 2,365 | ​ | ​
Research and development credits | ​ | ​ | ​ | ​ | 4,021 | ​ | ​ | ​ | ​ | ​ | 4,021 | ​ | ​
Other | ​ | ​ | ​ | ​ | 38 | ​ | ​ | ​ | ​ | ​ | — | ​ | ​
Deferred tax assets | ​ | ​ | ​ | ​ | 47,356 | ​ | ​ | ​ | ​ | ​ | 49,374 | ​ | ​
Valuation allowance for deferred tax assets | ​ | ​ | ​ | ​ | (47,356) | ​ | ​ | ​ | ​ | ​ | (49,374) | ​ | ​
Net deferred tax assets | ​ | ​ | ​ | $ | — | ​ | ​ | ​ | ​ | $ | — | ​ | ​
​
Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting and tax purposes. A valuation allowance has been established, as realization of such assets is uncertain. The Company’s management evaluated the positive and negative evidence bearing upon the realizability of its deferred assets, and has determined that, at present, the Company may not be able to recognize the benefits of the deferred tax assets under the more likely than not criteria. Accordingly, a valuation allowance of approximately $49.4 million has been established at December 31, 2016. The valuation allowance has increased by approximately $2.0 million in 2016. In certain circumstances, as specified in the Tax Reform Act of 1986, due to ownership changes, the Company’s ability to utilize its net operating loss (“NOL”) carryforwards may be limited. The benefit of deductions from the exercise of stock options is included in the NOL carryforwards. The benefit from these deductions will be recorded as a credit to additional paid-in capital if and when realized through a reduction of cash taxes. As of December 31, 2015 and 2016, the Company had federal NOLs of  $26.7 million and $ 28.4 million and foreign NOLs of $171.7 million and $178.2 million, respectively. The Company’s federal NOLs will start to expire in 2026, and the state NOLs totaling $18.7 million will start expiring in 2023. The Company’s foreign NOL’s do not expire under UK tax law. As of December 31, 2016, the Company had a US R&D credit carryforward of  $4.0 million which will start expiring in 2019. Utilization of the NOLs may be subject to a substantial annual limitation under Section 382 of the Internal Revenue Code of 1986 due to ownership change limitations that have occurred previously or that could occur in the future. These ownership changes may limit the amount of NOL and R&D credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. The Company completed a Section 382 study as of June 30, 2014 noting there was no ownership change since the Company’s formation. Management has evaluated all significant tax positions at December 31, 2015 and 2016 and concluded that there are no material uncertain tax positions. The Company would recognize both interest and penalties related to unrecognized benefits in income tax expense. The Company has not recorded any interest and penalties on any unrecognized tax benefits since its inception. Tax years 2014, 2015 and 2016 remain open to examination by major taxing jurisdictions to which the Company is subject, which are primarily in the United Kingdom and the United States, as carryforward attributes generated in years past may still be adjusted upon examination by the United Kingdom’s H.M. Revenue & Customs, the Internal Revenue Service (“IRS”) or state tax authorities. The Company is currently not under examination by the IRS or any other jurisdictions for any tax years. We have not provided a deferred tax liability on the cumulative amount of unremitted foreign earnings of international subsidiaries because it is our intent to permanently reinvest such earnings outside of the United States. We would recognize this deferred tax liability if we were to experience a change in circumstances producing a change in that intention. The United States foreign tax credits which would arise upon such a distribution have also not been recognized.

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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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