On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (the “TCJA”). This legislation makes broad and complex changes to the U.S. tax code, including, but not limited to, (i) reducing the U.S. federal statutory tax rate from a maximum of 35% to 21%; (ii) eliminating the corporate alternative minimum tax (AMT) and changing how existing AMT credits can be realized; (iii) changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017, (iv) limitations on the deductibility of interest expense and executive compensation; (v) creation of new minimum taxes such as the base erosion anti-abuse tax (“BEAT”) and Global Intangible Low Taxed Income (“GILTI”); and (vi) the transition of U.S. international taxation from a worldwide tax system to a modified territorial tax system, which requires a one-time U.S. tax liability on earnings which have not previously been repatriated to the U.S. (“transition tax”).

ASC 740, Income Taxes, requires companies to recognize the effect of the tax law changes in the period of enactment. However, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) which allowed companies to record provisional amounts during a measurement period not extending beyond one year from the TJCA enactment date. For the years ended December 31, 2018 and 2017, the Company recognized income tax detriment related to the TCJA of $113 and $24,196, respectively, associated with the impact of remeasuring deferred tax assets due to the decreased U.S. federal corporate income tax rate and a corresponding reduction to its valuation allowance. As of December 31, 2018, the Company has completed the accounting for all impacts of the TCJA. The Company finalized its policy and elected to use the period cost method for GILTI provisions, and therefore has not recorded deferred taxes for basis differences expected to reverse in future periods.

The Company was subject to taxes in both the U.S. and Switzerland in each of the years in the three-year period ended December 31, 2018. The Company incurred losses for both book and tax purposes for the year ended December 31, 2018, and, accordingly, no income taxes were provided.

	2018			2017			2016
U.S.	$	(6,696	)	$	(16,762	)	$	(24,229	)
Switzerland		181			19			(10	)
	$	(6,515	)	$	(16,743	)	$	(24,239	)

Effective tax rates differ from statutory income tax rates in the years ended December 31, 2018, 2017 and 2016 as follows:

	2018			2017			2016
Statutory income tax rate		(21.0	)%		(34.0	)%		(34.0	)%
State income taxes		(3.8	)		(6.1	)		(6.8	)
Valuation allowance increase		20.8			(102.0	)		35.9
Effect of foreign operations		(0.2	)		—			—
Change in unused net operating loss and credit carryforwards		(3.9	)		2.7			3.7
162(m) limitation		2.9			—			—
Nondeductible items		3.2			(5.1	)		1.6
Impact of Tax Cuts and Jobs Act		2.0			144.5			—
		0.0	%		0.0	%		0.4	%

Deferred tax assets (liabilities) as of December 31, 2018 and 2017 consist of the following:

	2018			2017
Gross deferred tax assets:
Net operating loss carryforward – U.S.	$	42,966		$	43,046
Net operating loss carryforward – Switzerland		7			67
Research and development tax credit carryforward		6,891			6,153
Deferred revenue		105			339
Stock-based compensation		2,324			1,882
Inventory reserve		440			140
Compensation accruals		904			662
163j interest expense limitation		438			—
Amortization		562			429
Other		1,631			575
Total deferred tax assets		56,268			53,293
Deferred tax liabilities:
Depreciation		(1,511	)		(1,255	)
Installment obligations		(1,363	)		—
Total deferred tax liabilities		(2,874	)		(1,255	)
Net deferred tax asset before valuation allowance		53,394			52,038
Less valuation allowance		(53,394	)		(52,038	)
Net deferred tax asset	$	—		$	—

The valuation allowance for deferred tax assets as of December 31, 2018 and 2017 was $53,394 and $52,038, respectively. The total valuation allowance increased $1,356 for the year ended December 31, 2018 and decreased $15,720 for the year ended December 31, 2017.

At both December 31, 2018 and 2017, the Company had deferred tax assets, net of valuation allowances, of zero. In assessing the realizability of deferred tax assets, management considered 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 during the periods in which temporary differences become deductible or in which net operating loss or tax credit carryforwards can be utilized. Both positive and negative evidence is considered in assessing the realizability of deferred tax assets and determining whether or not to record a valuation allowance. After considering the evidence with respect to the U.S. deferred tax assets, management determined that as of December 31, 2018, it continues to be more likely than not that the U.S. deferred tax assets will not be realized and has recorded a valuation allowance against all U.S. deferred tax assets.

The Company has a U.S. federal net operating loss carryforward at December 31, 2018 of $171,043, which, subject to limitations of Internal Revenue Code (“IRC”) Section 382, is available to reduce income taxes payable in future years. If not used, the portion of the carryforward generated before 2018 will expire in years 2019 through 2037, and the net operating loss carryforward generated in 2018 will carry forward indefinitely. Additionally, the Company has U.S. Research Credit carryforwards of $6,276. These credits expire in years 2019 through 2038.

Utilization of U.S. net operating losses and tax credits of the Company may be subject to annual limitations under IRC Sections 382 and 383, respectively. The annual limitations, if any, have not yet been determined. When a review is performed and if any annual limitations are determined, then the gross deferred tax assets for the net operating losses and tax credits would be reduced with a reduction in the valuation allowance of a like amount.

The Company also has a Swiss net operating loss carryforward at December 31, 2018, of $48, which is available to reduce income taxes payable in future years. If not used, $48 of this carryforward will expire in 2023.

As of December 31, 2018 and 2017, there were no unrecognized tax benefits. Accordingly, a tabular reconciliation from beginning to ending periods is not provided. The Company will classify any future interest and penalties as a component of income tax expense if incurred. To date, there have been no interest or penalties charged or accrued in relation to unrecognized tax benefits.

The Company does not anticipate that the total amount of unrecognized tax benefits will change significantly in the next twelve months. The Company is subject to federal and state examinations for the years 2013 and thereafter. There are no tax examinations currently in progress.