740

(Topic ). 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.

December 22, 2017,

, commonly referred to as the Tax Cuts and Jobs Act (“Tax Act”). The Tax Act makes broad and complex changes to the U.S. tax code, including, but limited to, () reducing the U.S. federal corporate tax rate from to () requiring companies to pay a -time transition tax on certain unrepatriated earnings of foreign subsidiaries; () generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries; () requiring a current inclusion in U.S. federal taxable income of certain earnings of controlled foreign corporations; () eliminating the corporate AMT and changing how existing AMT credits can be realized; () creating the base erosion anti-abuse tax (“BEAT”), a new minimum tax; () creating a new limitation on deductible interest expense; and () changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after

201

we recorded an income tax benefit of approximately million, of which million related to the reduction in the federal and state tax rates, million related to the use of our naked credit as a source of income to release a portion of our valuation allowance and the remaining million related to a refundable AMT credit. Our effective tax rate for was In we recorded an income tax expense of approximately million as a result of an increase in our effective tax rate to Our effective tax rate in was impacted by our relocation to New York City, which has its own local tax rate and adds to the overall tax rate used for calculating the income tax provision. In we recorded an income tax benefit of approximately thousand as a result of the change in the temporary difference between carrying amounts of in process research and development assets for financial reporting purposes and the amounts used for income tax purposes. Our effective tax rate for was

under Internal Revenue Code Section the results of which indicate that past ownership changes will limit annual utilization of net operating losses (“NOLs”) in the future. Ownership changes subsequent to further limit the future utilization of net operating loss and tax credit carry-forwards as defined by the federal and state tax codes.

not

not

we have recorded provisional amounts pursuant to the guidance within SEC Staff Accounting Bulletin (“SAB ). Our accounting treatment is expected to be complete when our U.S. corporate income tax return is filed in

.

Reduction of U.S. federal corporate tax rate

: The Tax Act reduces the corporate tax rate to effective Consequently, we have adjusted our deferred tax asset, liability and corresponding valuation allowance based on the enacted tax rate, which resulted in a provisional income tax benefit of approximately million in

Deemed Repatriation Transition Tax

: The Deemed Repatriation Transition Tax (“Transition Tax”) is a tax on previously untaxed accumulated and current earnings and profits (“E&P”) of certain of our foreign subsidiaries. To determine the amount of the Transition Tax, we must determine, in addition to other factors, the amount of post- E&P of the relevant subsidiaries, as well as the amount of non-U.S. income taxes paid on such earnings.

each of the years ending consisted of the following:

and liabilities as of and consisted of the following:

maintain a tax valuation allowance on substantially all deferred tax assets considering our history of taxable losses and the uncertainty regarding our ability to generate sufficient taxable income in the future to utilize these deferred tax assets. For and we incurred net losses for tax purposes. We recognized a tax valuation against deferred tax assets at and In and we recognized deferred tax liabilities of million and million, respectively, to reflect the net tax effects of temporary differences between the carrying amounts of in process research and development assets for financial reporting purposes and the amounts used for income tax purposes.

the U.S. statutory income tax rate to our effective tax rate for the years ended and

December 31,

201

we had available, for tax return purposes, unused federal NOLs of approximately million, which will expire in various years from to Also, we had available, for tax return purposes, unused state NOLs of approximately million, which will expire in various years from to

tax liability under ASC if any, or require an additional liability to be recorded. We have as of yet, conducted a study of our research and experimental (“R&E”) credit carry-forwards. Such a study might result in an adjustment to our R&E credit carry-forwards, but until a study is completed and any adjustment is known, amounts are being presented as an uncertain tax position under ASC - except for uncertain tax positions acquired in connection with the Molecular Insight acquisition. A full valuation allowance has been provided against our R&E credits and, if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance. Thus, there would be impact to the statements of operations and comprehensive loss if an adjustment was required.

December 31,

we are subject to federal, foreign, and state income tax. Open tax years relate to years in which unused net operating losses were generated or, if used, for which the statute of limitation for examination by taxing authorities has expired. Our open tax years extend back to amounts of interest or penalties were recognized in our consolidated statements of operations or consolidated balance sheets as of and for the years ended and

and Orphan Drug tax credit carry-forwards of approximately million at expire in various years from to

and we have recognized any liability for uncertain tax positions, because of our full valuation allowance on net operating losses and R&E credits. We will recognize interest and penalties related to these positions, should such costs be assessed. The recognition of unrecognized tax benefits would affect our effective tax rate because the tax benefit would be offset by an increase in our valuation allowance.

December 31,

201

and