components of the Company’s tax provision as of and is as follows:

’s income tax provision was computed using the federal statutory rate and average state statutory rates, net of related federal benefit. The provision differs from the amount computed by applying the statutory federal income tax rate to pretax income, as follows:

the Company has a federal net operating loss (NOL) carryforward of approximately million that expires on various dates through Internal Revenue Code Section places a limitation on the amount of taxable income which can be offset by NOL carryforwards after a change in control of a loss corporation. Due to these “change of ownership” provisions, utilization of NOL carryforwards be subject to an annual limitation in future periods. The Company has performed a Section analysis. However, if performed, Section be found to limit potential future utilization of the Company’s NOL carryforwards. The Company also has approximately million in state NOLs which expire on various dates through

deferred tax assets that are available to offset future taxable income. A valuation allowance is established if it is more likely than that all or a portion of the deferred tax assets will be realized. Management believes that it is more likely than that all deferred tax assets will be realized. Accordingly, the Company has established a valuation allowance against its deferred tax assets at and For the years ended and the valuation allowance for deferred tax assets increased and respectively, which was mainly due to the increases in the net operating losses.

incurred, are recognized as a component of tax expense.

not

on with income taxes. The tax periods from to generally remain open to examination by the IRS and state authorities.

’s deferred tax assets and liabilities are as follows:

ndistributed losses of the Company’s foreign subsidiary amounted to approximately $() and $() at and respectively. These losses are considered to be indefinitely reinvested; accordingly, provision for US federal and state income taxes has been provided thereon. Upon repatriation of those losses, in the form of dividends or otherwise, the Company would be subject to both US income taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable to the applicable foreign tax authority. Determination of the amount of unrecognized deferred US income tax liability is material and the detailed calculations have been performed. As of there would be minimal withholding taxes upon remittance of all previously unremitted earnings.

ccounting for uncertain income tax positions, the impact of uncertain tax positions are recognized in the financial statements if they are more likely than of being sustained upon examination, based on the technical merits of the position. The Company’s management has determined that the Company has uncertain tax positions requiring recognition as of and The Company does expect any change to this determination in the next months.