NOTE 10 - INCOME TAXES

A reconciliation between the income tax provision (benefit) at the US statutory tax rate and the Company’s income tax provision (benefit) on the condensed consolidated statements of operations and comprehensive loss is below:

	Successor Company												Predecessor Company
	Successor Company												Predecessor Company
	Three Months Ended September 30,						Nine Months Ended September 30, 2018			Period from February 1, 2017 to September 30, 2017			Period from January 1, 2017 to January 31, 2017


	2018			2017
	(Unaudited)

Loss before income taxes	$	(5,843,822	)	$	(765,408	)	$	(3,922,867	)	$	(6,008,986	)	$	(5,521,794	)
US statutory tax rate		21	%		34	%		21	%		34	%		34	%
Income tax expense (benefit) at statutory rate		(1,227,203	)		(260,239	)		(823,802	)		(2,043,055	)		(1,877,410	)

State tax expense (benefit), net of federal		1,354,628			(19,203	)		1,470,870			(10,628	)		(278,657	)
Foreign tax rates different from US statutory rate		113,891			3,155			147,154			93,158			(45,631	)
Non-deductible expenses		7,411,475			153,319			7,483,530			3,081,763			409
Change in tax rate		-			(51,994	)		-			(51,994	)		-
Credits		(86,275	)		-			(94,864	)		-			-
Other		2,658			(16,765	)		2,658			(16,765	)		(2,084	)
Total tax provision (benefit)	$	7,569,174		$	(191,727	)	$	8,185,546		$	1,052,479		$	(2,203,373	)

Effective income tax rates for interim periods are based upon our current estimated annual rate. The Company’s effective income tax rate varies based upon an estimate of taxable earnings as well as on the mix of taxable earnings in the various states and countries in which we operate. Changes in the annual allocation and apportionment of the Company’s activity among these jurisdictions results in changes to the effective rate utilized to measure the Company’s deferred tax assets and liabilities.

As presented in the income tax reconciliation above, the tax provision (benefit) recognized on the condensed consolidated statements of operations and comprehensive loss was impacted by state taxes, non-deductible expenses such as share-based compensation expense, transaction costs and foreign tax rates applicable to the Company’s foreign subsidiaries that are higher or lower than the U.S. statutory rate.

On December 22, 2017, the U.S. enacted tax reform legislation known as H.R. 1, commonly referred to as the “Tax Cuts and Jobs Act” (the “Act”), resulting in significant modifications to existing law. Due to the timing of the Act and the complexity involved in applying the provisions of the Act, the Company made a reasonable estimate of the effects and recorded provisional amounts in the fourth quarter of 2017, which primarily included the impact of the remeasurement of the Company’s deferred tax balances to reflect the change in the corporate tax rate. As a result of the changes to tax laws and tax rates under the Act, the Company reduced its deferred tax asset as of December 31, 2017 by $656,000.

As the Company collects and prepares necessary data and interprets the Act and any additional guidance issued by the U.S. Treasury Department, the IRS, and other standard-setting bodies, the Company may make adjustments to the provisional amounts recorded in December 2017. Those adjustments may materially impact the provision for income taxes and effective tax rate in the period in which the adjustments are made. During the nine months ended September 30, 2018, there were no such adjustments made to the provisional amounts recorded in December 2017.

As of September 30, 2018, the Company did not have any amounts accrued for interest and penalties or recorded for uncertain tax positions.