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Income taxes
12 Months Ended
Dec. 31, 2015
Income Tax Disclosure [Abstract]  
Income taxes
Income taxes
For the year ended December 31, 2015 and for the period from February 26, 2014 (inception) to December 31, 2014, the Company did not record a current or deferred income tax provision or benefit. The Company's losses before income taxes for the periods presented consisted solely of domestic losses.
The following table presents a reconciliation of income tax expense (benefit) computed at the statutory federal income tax rate to the effective income tax rate as reflected in the consolidated financial statements:
 
 
Year Ended December 31, 2015
 
Period from
February 26, 2014
(Inception) to
December 31,
2014
Federal income tax expense at statutory rate
35.0
 %
 
35.0
 %
State income tax, net of federal benefit
3.4
 %
 
3.7
 %
Permanent differences
(0.2
)%
 
(0.3
)%
Stock-based compensation
(6.3
)%
 
(5.3
)%
Research credits
1.8
 %
 
1.2
 %
Prior year true ups
0.4
 %
 
n/a

Change in valuation allowance
(34.1
)%
 
(34.3
)%
Effective tax rate
0.0
 %
 
0.0
 %
 
Deferred income tax assets and liabilities are determined based upon temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.
The following table presents the significant components of the Company's deferred tax assets and liabilities:
 
 
December 31, 2015
 
December 31, 2014
Deferred tax assets:
 

 
 
U.S. and state net operating loss carryforwards
$
11,118,289

 
$
2,708,861

Accruals and other temporary differences
510,897

 
23,829

Amortization
33,824

 
36,742

Stock-based compensation
473,801

 
57,120

Tax credit carryforward
671,012

 
87,762

Total deferred tax assets
12,807,823

 
2,914,314

Less valuation allowance
(12,688,401
)
 
(2,751,295
)
Deferred tax assets
119,422

 
163,019

Deferred tax liabilities:
 

 
 

Stock-based compensation
(110,366
)
 
(162,779
)
Depreciation
(9,056
)
 
(240
)
Accruals and other temporary differences

 

Deferred tax liabilities
(119,422
)
 
(163,019
)
Net deferred tax assets
$

 
$

 
As of December 31, 2015, the Company has U.S. federal net operating loss carryforwards of approximately $28,200,000 and U.S. state net operating loss carryforwards of approximately $24,100,000, which are available to reduce future taxable income. Approximately $100,000 of the federal and state net operating loss carryforwards will result in an increase to additional paid-in capital if and when these carryforwards are used to reduce federal and state income taxes payable. The Company also had federal research and development tax credit carryforwards of $500,000 and state research and development tax credit carryforwards of $200,000, which may be used to offset future tax liabilities.
These federal and state operating loss carryforwards and tax credit carryforwards will expire at various dates through 2035. Under the provisions of the Internal Revenue Code, 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 shareholders over a three-year period in excess of 50 percent, as defined under Sections 382 and 383 of the Internal Revenue Code, respectively, as well as similar state provisions. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. The Company has completed financings since its inception which may have resulted in a change in control as defined by Sections 382 and 383 of the Internal Revenue Code, or could result in a change in control in the future. The Company has not conducted an assessment to determine whether there may have been a Section 382 or 383 ownership changes.
ASC 740 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. After considerations of all the evidence, both positive and negative, the Company continues to maintain a valuation allowance for the full amount of the 2015 deferred tax asset because it is more likely than not that the deferred tax asset will not be realized. The valuation allowance increased by $9,900,000 from December 31, 2014 to December 31, 2015, primarily due to an increase in net operating losses.
The Company has no unrecognized tax benefits. Interest and penalty charges, if any, related to uncertain tax positions would be classified as income tax expenses in the accompanying consolidated statement of operations. At December 31, 2015 and 2014, the Company had no accrued interest or penalties related to uncertain tax positions.
In November 2015, the FASB issued ASU No. 2015-17 Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes.  ASU 2015-17 simplifies the presentation of deferred income taxes by eliminating the separate classification of deferred income tax liabilities and assets into current and noncurrent amounts in the consolidated balance sheet. The amendments in the update require that all deferred tax liabilities and assets be classified as noncurrent in the consolidated balance sheet. The amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods therein and may be applied either prospectively or retrospectively to all periods presented. Early adoption is permitted. The Company has early adopted this standard in the fourth quarter of 2015 on a prospective basis. As a result, the Company’s deferred taxes are presented as noncurrent in the consolidated financial statements as of December 31, 2015, which after application of the valuation allowance, results in no noncurrent deferred taxes presented in the consolidated financial statements.