19.

Income Taxes

The Company’s tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that are taken into account in the relevant period. Each quarter the Company updates its estimate of the annual effective tax rate and, if the Company’s estimated tax rate changes, it makes a cumulative adjustment in that period.

The effective income tax rate for the period ended December 31, 2016 and 2015 was (0.23%) and (0.51%), respectively, resulting in a $51 and $86 income tax expense, respectively. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considered the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on the consideration of these items, management determined that it is more likely than not that the Company will not realize the deferred income tax asset balances and therefore, recorded a full valuation allowance of $33,866 as of December 31, 2016.

As a result of the Merger, the Company has not completed an analysis whether an ownership change occurred under Internal Revenue Code Section 382, which if it did occur, could substantially limit the Company’s ability in the future to utilize its net operating losses and other tax carryforwards.