(8)

Income Taxes

During the three months ended June 30, 2015, the Company recorded a tax provision of $894,000 for U.S. federal income tax provision for the second quarter of 2015. During the three months ended June 30, 2014, the Company recorded no income tax expense.

During the six months ended June 30, 2015, the Company recorded $1,600,000 of net income tax benefit for U.S. federal income tax provision. This was substantially attributable to a reduction of a valuation allowance against the Company’s net deferred tax assets of approximately $2.5 million in the first quarter of 2015 (see below), as partially offset by the tax provision of $894,000 recorded in the second quarter of 2015. During the six months ended June 30, 2014, the Company recorded income tax expense of $55,000.

After reducing its valuation allowance by approximately $2.5 million during the six months ended June 30, 2015, the Company continues to provide a valuation allowance against its net deferred tax assets since the Company believes it is more likely than not its remaining deferred tax assets will not be realized. Management of the Company will continue to assess the need for this valuation allowance and will make adjustments to it when appropriate.