12.

Income Taxes

For the three- and six-month periods ended June 30, 2015, the Company had income before taxes of $4,351,388 and $8,549,861, respectively. The Company recorded income tax provisions of $738,831 and $2,007,817, respectively, for the three- and six-month periods ended June 30, 2015. This results in a year to date effective tax rate of 23.5% for the six-month period ended June 30, 2015. The anticipated movement in the effective tax rate between the interim period and year end is a result of the expected change in the income position in the U.S. The effective income tax rate is based upon the estimated income for the year and the composition of the income in different jurisdictions. The effective tax rate differs from the U.S. statutory tax rate primarily due to the lower statutory tax rate in Sweden.

For the three- and six-month periods ended June 30, 2014, the Company had income before taxes of $3,243,249 and $8,641,354, respectively. The Company recorded income tax provisions of $417,827 and $1,538,829, respectively, for the three- and six-month periods ended June 30, 2014. This is based on a year to date effective tax rate of 17.8% for the six-month period ended June 30, 2014 and an expected effective tax rate of 24.23% for the year ending December 31, 2014. The anticipated movement in the effective tax rate between the interim period and year end is a result of the expected change in the income position in the U.S. The effective income tax rate is based upon the estimated income for the year and the composition of the income in different jurisdictions. The effective tax rate differs from the U.S. statutory tax rate primarily due to the lower statutory tax rate in Sweden, as well as year-to-date income for the U.S. entity as compared to a projected loss in the U.S. for the full year.

The Company has net operating loss carryforwards of approximately $43,387,000 and business tax credits carryforwards of approximately $1,782,000 available to reduce future federal income taxes, if any. The net operating loss and business tax credits carryforwards will continue to expire at various dates through December 2032. Net operating loss carryforwards and available tax credits are subject to review and possible adjustment by the Internal Revenue Service and may be limited in the event of certain changes in the ownership interest of significant stockholders.

As of December 31, 2014, the Company concluded that realization of deferred tax assets beyond December 31, 2014 is not more likely than not, and as such, as of December 31, 2014 it maintained a valuation allowance against the majority of its remaining deferred tax assets. As of June 30, 2015, the Company concluded that realization of deferred tax assets beyond June 30, 2015 is not more likely than not, and as such, as of June 30, 2015 it maintained a valuation allowance against the majority of its remaining deferred tax assets.

The fiscal years ended March 31, 2007 through March 31, 2011 as well as the nine-month fiscal year ended December 31, 2011 and the years ended December 31, 2012, 2013 and 2014 are subject to examination by the Commonwealth of Massachusetts (“the Commonwealth”) taxing authorities. A corporate excise tax audit was recently completed in the Commonwealth for the fiscal years ended March 31, 2008 through 2011, and the nine-month period ended December 31, 2011. As a result of this audit, the Company has appealed the Commonwealth’s position with respect to the March 31, 2008 and 2009 years and has paid $140,626 to the Commonwealth in July 2015 in respect of assessments for the March 31, 2010, 2011 and December 31, 2011 tax years. The amount paid was previously accrued by the Company. Fiscal years ended December 31, 2012, 2013 and 2014 are subject to examination by other states, U.S. federal and Sweden taxing authorities.