The Company earns non-income related refundable Australian research and development credits that are settled and paid to the Company annually. The associated income from the credits are an offset to research and development expenses.

The components of loss from continuing operations before provision for income taxes are as follows:

	Year Ended December 31,
	2017			2018			2019
Domestic	$	(47,523,183	)	$	(122,900,285	)	$	(297,127,180	)
Foreign		(3,482,911	)		(4,601,909	)		(7,579,433	)
Total	$	(51,006,094	)	$	(127,502,194	)	$	(304,706,613	)

The Company’s income tax provision is computed based on the federal statutory rate and the average state statutory rates, net of the related federal benefit. For the years ended December 31, 2018 and 2019, there was no current or deferred income tax expense or benefit due to the Company’s net losses and increases in its deferred tax asset valuation allowance.

The Company’s effective income tax provision differs from the amount calculated using the statutory U.S. federal income tax rate, principally due to the following:

	Year Ended December
	2017						2018						2019
	Amount			Percentage of income before income taxes			Amount			Percentage of income before income taxes			Amount			Percentage of income before income taxes
Statutory U.S. federal income tax	$	(17,852,133	)		35.0	%	$	(26,775,461	)		21.0	%	$	(63,988,409	)		21.0	%
State income taxes, net of federal benefit		(1,634,924	)		3.3			(6,397,993	)		5.0			(16,423,857	)		5.4
Change in valuation allowances		11,176,291			(20.8	)		38,156,506			(29.9	)		90,300,408			(29.6	)
Re-measurement of deferred taxes		15,659,916			(31.9	)		—			—			—			—
Tax credits		(3,316,729	)		7.7			(6,149,021	)		4.8			(6,113,296	)		2.0
Change in state apportionment, Kentucky tax reform and other		—			—			873,508			(0.7	)		(16,861	)		0.0
Permanent and other		(4,032,421	)		6.7			292,461			(0.2	)		(3,757,985	)		1.2
Effective income tax provision	$	—			—	%	$	—			—	%	$	—			—	%

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. Significant components of the Company’s deferred tax assets and liabilities are as follows:

	December 31,
	2018			2019
Deferred tax assets:
Intangible assets	$	19,616		$	15,519
Share-based compensation		2,914,583			6,624,638
Deferred interest expense		135,585			—
Contribution carryforwards		36,759			41,409
Net operating loss carryforwards		64,296,165			102,623,330
Research and development credits		7,269,624			14,476,348
Orphan drug credits		7,165,354			9,380,475
Development derivative liability		—			35,874,491
Accruals		—			2,259,190
Other		—			11,250
Total deferred tax assets		81,837,686			171,306,650
Deferred tax liabilities:
Accrual to cash adjustment		(2,463,715	)		—
Unrealized gain		(12,094	)		—
Convertible debt		—			(11,479,891	)
481(a) adjustment		—			(2,891,490	)
Total deferred tax liabilities		(2,475,809	)		(14,371,381	)
Net deferred tax assets before allowance:		79,361,877			156,935,269
Less valuation allowance		(79,361,877	)		(156,935,269	)
Net deferred tax assets	$	—		$	—

At December 31, 2018, the Company had approximately $251,388,000 and $254,631,000 of Federal and state net operating loss carryforward, respectively. At December 31, 2019, the Company had approximately $392,878,000 and $358,345,000 of Federal and state net operating loss carryforwards, respectively. The Company also had $24,163,000 of federal research and development tax credit carryforwards as of December 31, 2019. The net operating loss and research and development tax credit carryforwards begin to expire in 2024.

The net operating loss and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. Net operating loss and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the IRC, respectively, as well as similar state provisions.

The Company’s net operating loss carryforwards (“NOLs”) and other deferred tax assets can generally be used to offset future taxable income and therefore reduce federal income tax obligations. However, the Company's ability to use its NOLs would be limited if there was an “ownership change” as defined by Section 382. This would occur if shareholders owning (or deemed to own under the tax rules) 5% or more of the Company's common stock increase their aggregate ownership of the common stock of the Company by more than 50 percentage points over a defined period of time. The Company had an ownership change on September 8, 2015. As a result, a portion of the NOL and tax credit carryforwards are subject to an annual utilization limitation.

The deferred tax asset includes approximately $99,955,000 of Federal and State NOLs and $24,163,000 of Federal and State research & development tax credit carryforwards. Of the $99,955,000 of Federal and State NOLs, approximately $10,716,000 is limited under Section 382. Of the $24,163,000 of Federal and State tax credit carryforwards, approximately $1,892,000 is limited under Section 383. Subsequent ownership changes may further affect the limitation in future years.

The Company’s estimate of the realizability of the deferred tax asset is dependent on its estimate of projected future levels of taxable income. In analyzing future taxable income levels, the Company considered all evidence currently available, both positive and negative. Based on its analysis, the Company recorded a valuation allowance for deferred tax assets, net of deferred tax liabilities, as of December 31, 2018 and 2019.

On December 22, 2017, the U.S. government enacted comprehensive federal tax legislation commonly referred to as the Tax Cuts and Jobs Act of 2017 (the "Tax Act"). The Tax Act significantly modifies the U.S. corporate income tax system by, among other things, reducing the federal income tax rate from 35% to 21% beginning in 2018, imposing a mandatory one-time deemed repatriation tax on accumulated foreign earnings and creating a territorial tax system that changes the manner in which future foreign earnings are subject to U.S. tax. The Tax Act also provides that undistributed and previously untaxed post-1986 foreign earnings will be deemed distributed in 2017 and be subject to tax at reduced effective rates (the “Transition Tax”). The Company has a net cumulative deficit in earnings and profits from its foreign subsidiaries and, consequently, will not be subject to the Transition Tax. The company re-measured certain net deferred tax assets and liabilities based on the tax rates at which they are expected to reverse in the future. The total impact to the gross deferred tax asset balance (before valuation allowance) upon enactment of the Tax Act is $15,659,916. As there is a valuation allowance recorded for all deferred tax assets as of December 31, 2017, there was no impact to the net deferred tax assets balance. The Company has completed its assessment of the U.S. Tax Reform Act and has determined no additional impacts during 2018.

The Company has generated research credits and orphan drug credits but has not conducted a detailed study to document its qualified activities. A detailed study could result in an adjustment to the Company’s research and development credit carryforwards; however, until such a study is completed and any adjustment is identified, no amounts are being presented as an uncertain tax position.

The Company does not have any unrecognized tax benefits during any periods presented and does not expect this to significantly change in the next twelve months.

There were no interest and penalties recorded in the statement of operations during any period and no amounts accrued for interest and penalties at December 31, 2018, or 2019.

The Company files income tax returns in the U.S. federal jurisdiction, and applicable state jurisdictions and in Australia’s and Switzerland’s federal jurisdiction. The Company’s earliest tax years open and subject to examination by taxing authorities are 2016, for the U.S. federal jurisdiction, and 2015, for U.S. states’ and Australia’s federal jurisdiction. Federal and state net operating losses are subject to review by taxing authorities in the year utilized.