The Company recorded provision for income taxes for the years ended and due to the reported net losses in each year and reported valuation allowance.

 

A reconciliation of the Company’s Canadian federal statutory income tax rate to the Company’s effective income tax rate is as follows for the years ended and

 

		2017				2016				2015
Income tax benefit computed at federal tax rate			26.0	%			26.0	%			26.0	%
Change in valuation allowance			(15.3	%)			(22.1	%)			(27.2	%)
Impacts of US tax reform			(13.4	%)			-				-
Stock compensation and other			2.7	%			(3.9	%)			1.2	%
Total			—	%			—	%			—	%

 

During the years ended and the Company had interest and penalties related to income taxes.

 

As of and the Company has unused net operating losses of approximately million (approximately million in Canada, million in the U.S., million in Germany and million in Switzerland and Japan) and million (approximately million in Canada, million in the U.S., million in Germany and million in Switzerland and Japan), respectively, available to reduce taxable income of future years. The tax benefit of net operating losses begin to expire in in Canada, in U.S., in Germany in Switzerland, and in Japan.

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company has established a valuation allowance due to uncertainties regarding the realization of deferred tax assets based upon the Company’s lack of earnings history. Significant components of the Company’s deferred tax assets and liabilities as of and as follows (in thousands):

 

		2017				2016				2015
Deferred tax assets:
Noncapital losses		$	41,551			$	35,064			$	23,038
Qualifying research and development credits			2,833				2,408				1,591
Stock based compensation			1,618				2,737				3,982
Share issue costs			42				27				30
Accrued liabilities			49				286				356
Deferred rent			4				8				6
Total deferred tax assets			46,097				40,530				29,003
Deferred tax liabilities:
Depreciation			282				31				13
Share issuance costs			35				16				23
Total deferred tax liabilities			317				47				36
Net deferred tax asset			45,780				40,483				28,967
Valuation allowance for deferred tax assets			(45,780	)			(40,483	)			(28,967	)
Net deferred tax asset including valuation allowance		$	—			$	—			$	—

 

On the President of the United States signed into law the Tax Cuts and Jobs Act, or TCJA, tax reform legislation. The TCJA makes significant changes in U.S. tax law including a reduction in the corporate tax rates, changes to net operating loss carryforwards and carrybacks, and a repeal of the corporate alternative minimum tax. The TCJA reduced the U.S. corporate tax rate from the current rate of percent down to percent starting on As a result of the TCJA, the Company was required to revalue deferred tax assets and liabilities at percent. This revaluation resulted in a provision of million to income tax expense in continuing operations and a corresponding reduction in the valuation allowance.  As a result, there was impact to the Company’s consolidated statements of comprehensive loss as a result of the reduction in tax rates.

 

As the Company does have all of the necessary information to analyze all income tax effects of the TCJA, the Company will continue to make and refine calculations and estimates as additional information is obtained, which could potentially affect the provisional amounts relating to the deferred income taxes, including but limited to deferred tax assets related to share-based compensation expenses. Where the Company has yet been able to make reasonable estimates of the impact of certain elements, the Company has recorded any amounts related to those elements and has continued accounting for them in accordance with ASC on the basis of the tax laws in effect immediately prior to the enactment of the TCJA.  The Company expects to complete a detailed analysis later than the quarter of

 

Due to additional current year losses, offset by the decrease of the U.S. tax rate from to in the valuation allowance increased by approximately million and million during the year ended and respectively.

 

The Company applies the accounting guidance in ASC related to accounting for uncertainty in income taxes. The Company’s reserves related to taxes are based on a determination of whether, and how much of, a tax benefit taken by the Company in its tax filings or positions is more likely than to be realized following resolution of any potential contingencies present related to the tax benefit. As of and the Company had unrecognized tax benefits.

 

The Company files federal income tax returns in Canada, U.S, Switzerland, Germany, and Japan. The Company also files income tax returns in the state of Texas in the U.S. The statute of limitations for assessment by local taxing authorities is open for tax years ended after There are currently federal or state income tax audits in progress.

 

The components of income before income taxes are as follows:

 

(In thousands)		Years Ended December 31,
		2017				2016				2015
Domestic		$	(5,765	)		$	(8,749	)		$	(6,544	)
Canada			(26,034	)			(41,625	)			(28,129	)
Other Foreign			(1,351	)			(2,387	)			(2,810	)
Total		$	(33,150	)		$	(52,761	)		$	(37,483	)

 

In the FASB issued ASU - “Balance Sheet Classification of Deferred Taxes”. The Company adopted these accounting changes on a prospective basis during the months ended To simplify the presentation of deferred income taxes, the amendments in this update require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The adoption of this standard did have a material effect on the Company’s financial statements or disclosures.