The Company’s U.S. and foreign loss before income taxes are set forth below:

There were no current or deferred income tax provision for the years ended December 31, 2017 and 2016 because the Company has incurred operating losses since inception.

The Company’s deferred tax assets consist of the following:

The Tax Cuts and Jobs Act (the "Act") was enacted on December 22, 2017. The Act reduces the U.S federal corporate tax rate from 35% to 21%. Accordingly, the Company has modified the value of the deferred tax assets and liabilities including the net operating loss carryover at December 31, 2017. Prior to enactment of the new tax reform, the Company had total net deferred tax assets of $51.4M before valuation allowance at December 31, 2017. Taking the new tax reform into consideration, the total net deferred tax assets was $36.3M before valuation allowance at December 31, 2017.

The Company had approximately the following potentially utilizable net operating loss tax carryforwards:

The net operating loss tax carryforwards will start to expire in 2026 for Federal purposes and have already begun to expire for state purposes. The foreign net operating loss tax carryforwards do not expire. Our federal and state operating loss carryforwards include windfall tax deductions from stock option exercises.

The utilization of the Company’s federal and state net operating losses may be subject to a substantial limitation due to the “change of ownership provisions” under Section 382 of the Internal Revenue Code and similar state provisions. Such limitation may result in the expiration of the net operating loss carryforwards before their utilization.

The Company’s foreign earnings are derived from its German subsidiary. The Company does not expect any foreign earnings to be repatriated in the U.S. in the near future.

The effective tax rate varied from the statutory rate as follows:

In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income of the appropriate character during the periods in which those temporary differences become deductible and the loss carryforwards are available to reduce taxable income. In making its assessment, the Company considered all sources of taxable income including carryback potential, future reversals of existing deferred tax liabilities, prudent and feasible tax planning strategies, and lastly, objectively verifiable projections of future taxable income exclusive of reversing temporary differences and carryforwards. At December 31, 2017 and 2016, the Company maintained a full valuation allowance against its net deferred tax assets. The Company will continue to assess all available evidence during future periods to evaluate the realization of its deferred tax assets.

As per the prior tax footnote, the tax benefit assumed the newly enacted Federal statutory tax rate of 21% and a state tax rate (net of federal) of 7.1% for the tax year ending December 31, 2017 and has been fully offset by the aforementioned valuation allowance.

The following table presents the changes in the deferred tax asset valuation allowance for the periods indicated:

Accounting for uncertainty in income taxes requires uncertain tax positions to be classified as non-current income tax liabilities unless they are expected to be paid within one year. The Company has concluded that there are no uncertain tax positions requiring recognition in its consolidated financial statements as of December 31, 2017 and 2016. The Company recognizes interest and penalties related to uncertain tax positions if any as a component of income tax expense.

The Company files income tax returns in the U.S. federal, state and foreign jurisdictions. Tax years 2013 to 2017 remain open to examination for both the U.S. federal and state jurisdictions. Tax years 2014 to 2016 remain open for Germany.