9. Income taxes

        The Company did not record a provision or benefit for income taxes during the years ended December 31, 2015, 2014 and 2013. The components of loss before income taxes by U.S. and foreign jurisdictions are as follows (in thousands):

                                                                                                                                                                                    

        The following table presents a reconciliation of the tax expense computed at the statutory federal rate and the Company's tax expense for the periods presented:

                                                                                                                                                                                    

        The tax effects of temporary differences and carryforwards that give rise to significant portions of the deferred tax assets are as follows (in thousands):

                                                                                                                                                                                    

        The Company has established a full valuation allowance against its deferred tax assets due to the uncertainty surrounding realization of such assets. The valuation allowance increased by $30.8 million and $16.1 million during the years ended December 31, 2015 and 2014, respectively.

        As of December 31, 2015, the Company had net operating loss carryforwards of approximately $147.0 million and $96.0 million available to reduce future taxable income, if any, for Federal and California state income tax purposes, respectively. The Company tracks a portion of its deferred tax assets attributable to stock option benefits in a separate memo account. Therefore these amounts are not included in the Company's gross or net deferred tax assets. The benefit of these stock options will not be recorded in equity unless it reduces taxes payable. As of December 31, 2015, the portion of the Federal and state net operating loss related to stock option benefits is approximately $500,000. The U.S. Federal and California state net operating loss carryforwards will begin to expire in 2030.

        As of December 31, 2015, the Company had net operating loss carryforwards for foreign income tax purposes of $4.0 million which have no expiration date.

        As of December 31, 2015, the Company had research and development credit carryforwards of approximately $3.7 million and $3.3 million available to reduce its future tax liability, if any, for Federal and California state income tax purposes, respectively. The Federal credit carryforwards begin to expire in 2030. California credit carryforwards have no expiration date. As of December 31, 2015, the Company has other tax credits of $18,000 that have no expiration period for the majority of the credits.

        Utilization of the net operating loss carryforwards and credits may be subject to an annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization. No Section 382 study has been completed as of December 31, 2015.

        As of December 31, 2015, the Company had unrecognized tax benefits of $11.4 million, none of which would currently affect the Company's effective tax rate if recognized due to the Company's deferred tax assets being fully offset by a valuation allowance. The Company has not accrued interest and penalties related to the unrecognized tax benefits reflected in the financial statements for the years ended December 31, 2015, 2014 and 2013. Unrecognized tax benefits are not expected to change in the next 12 months.

        A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

                                                                                                                                                                                    

        The Company's policy is to include penalties and interest expense related to income taxes as a component of tax expense. There was no interest expense or penalties related to unrecognized tax benefits recorded through December 31, 2015.

        The Company's major tax jurisdictions are the United States and California. All of the Company's tax years will remain open for examination by the Federal and state tax authorities for three and four years, respectively, from the date of utilization of the net operating loss or research and development credit. The Company does not have any tax audits pending.