Annual report pursuant to Section 13 and 15(d)

Income Taxes

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Income Taxes
12 Months Ended
Dec. 31, 2016
Income Tax Disclosure [Abstract]  
Income Taxes

Note 9 - Income Taxes

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets as of December 31, 2016 and 2015 are summarized below.

 

    2016     2015  
             
Net operating loss carryforward   $ 3,837,00     $ 3,300,000  
Stock-based compensation     216,000       417,000  
Total deferred tax assets     4,053,000       3,717,000  
Valuation allowance     (4,053,000 )     (3,717,000 )
Net deferred tax asset   $ -     $ -  

 

In assessing the potential realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the Company attaining future taxable income during the periods in which those temporary differences become deductible. As of December 31, 2016 and 2015, management was unable to determine if it is more likely than not that the Company’s deferred tax assets will be realized, and has therefore recorded an appropriate valuation allowance against deferred tax assets at such dates.

 

No federal tax provision has been provided for the years ended December 31, 2016 and 2015 due to the losses incurred during such periods. Reconciled below is the difference between the income tax rate computed by applying the U.S. federal statutory rate and the effective tax rate for the years ended December 31, 2016 and 2015.

 

    2016     2015  
U.S federal statutory income tax     (34.00 )%     (34.00 )%
State tax, net of federal tax benefit     (5.80 )%     (5.80 )%
Change in valuation allowance     39.8 %     39.8 %
Effective tax rate     %     %

 

At December 31, 2016, the Company has available net operating loss carryforwards for federal and state income tax purposes of approximately $8.8 million and $8.3 million, respectively, which, if not utilized earlier, expire through 2036.