No

come taxes has been recorded due to the net operating losses incurred from inception to date, for which benefit has been recorded.

’s effective tax rate is as follows:

components of the Company’s net deferred tax assets and liabilities are as follows (in thousands):

project future taxable income. The valuation allowance increased by approximately and during the years ended and respectively.

December 31,

201

the Company has net operating loss (“NOL”) carryforwards for federal and state income tax purposes of approximately and respectively, which expire beginning in the year

.

and respectively. The federal research credits will begin to expire in and the California research and development credits have expiration date.

may

ubstantial annual limitation due to ownership changes that have occurred previously or that could occur in the future, as provided by Section of the Internal Revenue Code of as well as similar state provisions. Ownership changes limit the amount of NOL and tax credit carryforwards that can be utilized to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than percentage points over a -year period. If the Company has experienced a change of control, utilization of its NOL or tax credits carryforwards would be subject to an annual limitation under Section Any limitation result in expiration of a portion of the NOL or research and development credit carryforwards before utilization. Subsequent ownership changes could further impact the limitation in future years. Until a Section study is completed and any limitation known, amounts are being presented as an uncertain tax position. A full valuation allowance has been provided against the Company’s NOL carryforwards and research and development credit carryforwards and, if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance. Thus, there would be net impact to the consolidated balance sheets or the consolidated statements of operations if an adjustment were required.

December 31,

20

the Company had accrued any interest or penalties related to uncertain tax positions.

of unrecognized tax benefits as of were recognized, of the recognition would affect the income tax rate. The Company does anticipate any material change in its unrecognized tax benefits over the next months. The unrecognized tax benefits change during the next year for items that arise in the ordinary course of business.

on due to the carryover of unused net operating losses and tax credits.

December 22, 2017,

TCJA”) which makes widespread changes to the Internal Revenue Code, including a reduction in the federal corporate tax rate to

and repatriation of accumulated foreign accumulated earnings and profits

, effective

required to recognize the effect on deferred tax assets and liabilities of a change in tax rates be recognized in the period the tax rate change was enacted. The carrying value of our U.S. deferred taxes is determined by the enacted U.S. corporate income tax rate. Consequently, the reduction in the U.S. corporate income tax rate impacts the carrying value of our deferred tax assets. Under the new corporate income tax rate of the U.S. net deferred tax asset position will decrease as will the related valuation allowance

. The Company has also considered the impact of the transition tax for which it has estimated it does need to accrue a liability as the operations of Viveve BV are immaterial. Uncertainty regarding the impact of tax reform remains, as a result of factors including future regulatory and rulemaking processes, the prospects of additional corrective or supplemental legislation, potential trade or other litigation, and other factors. As such, while the Company believes that these adjustments are reasonable estimates of TCJA, they should be considered provisional.