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INCOME TAXES | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
INCOME TAXES | NOTE 8 – INCOME TAXES As discussed in Note 1, the Company utilizes the asset and liability method of accounting for income taxes in accordance with FASB ASC 740. The income tax (benefit) provision consists of the following:
|  | 2019 |  |  | 2018 |
Current |  | $ | — |  |  | $ | — |
Deferred |  |  | (1,779,000 | ) |  |  | (1,503,000 | )
Change in valuation allowance |  |  | 1,779,000 |  |  |  | 1,503,000 |
|  | $ | — |  |  | $ | — |
The reconciliation of the statutory federal rate to the Company’s effective income tax rate is as follows:
|  | 2019 |  |  | 2018 |
|  | Amount |  |  | % |  |  | Amount |  |  | % |
Income tax benefit at U.S. federal income tax rate |  | $ | (1,413,000 | ) |  |  | (21 | ) |  | $ | (1,213,000 | ) |  |  | (21 | )
State tax benefit, net of federal tax effect |  |  | (404,000 | ) |  |  | (6 | ) |  |  | (346,000 | ) |  |  | (6 | )
Non-deductible share-based compensation |  |  | 38,000 |  |  |  | 1 |  |  |  | 56,000 |  |  |  | 1 |
Change in valuation allowance |  |  | 1,779,000 |  |  |  | 26 |  |  |  | 1,503,000 |  |  |  | 26 |
|  | $ | — |  |  |  | — |  |  | $ | — |  |  |  | — |
The components of deferred tax assets as of December 31, 2019 and 2018 are as follows:
|  | 2019 |  |  | 2018 |
Deferred tax asset for NOL carryforwards |  | $ | 13,524,000 |  |  | $ | 11,892,000 |
Share-based compensation |  |  | 2,020,000 |  |  |  | 1,873,000 |
Valuation allowance |  |  | (15,544,000 | ) |  |  | (13,765,000 | )
|  | $ | — |  |  | $ | — |
The valuation allowance for deferred tax assets as of December 31, 2019 and 2018 was $15,544,000 and $13,765,000, respectively. The change in the total valuation for the year ended December 31, 2019 was an increase of $1,779,000 and for the year ended December 31, 2018 was an increase of $1,503,000. In assessing the 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 not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the net operating losses and temporary differences become deductible. Management considered projected future taxable income and tax planning strategies in making this assessment. The value of the deferred tax assets was offset by a valuation allowance, due to the current uncertainty of the future realization of the deferred tax assets. As of December 31, 2019, the Company had net operating loss carry forwards of approximately $50,090,000, expiring through the year ending December 31, 2039. This amount can be used to offset future taxable income of the Company. The timing and manner in which the Company can utilize operating loss carryforwards in any year may be limited by provisions of the Internal Revenue Code regarding changes in ownership of corporations. Such limitation may have an impact on the ultimate realization of its carryforwards and future tax deductions. The Company follows FASB ASC 740.10, which provides guidance for the recognition and measurement of certain tax positions in an enterprise’s financial statements. Recognition involves a determination of whether it is more likely than not that a tax position will be sustained upon examination with the presumption that the tax position will be examined by the appropriate taxing authority having full knowledge of all relevant information. The adoption of FASB ASC 740.10 did not require an adjustment to the Company’s financial statements. The Company’s policy is to record interest and penalties associated with unrecognized tax benefits as additional income taxes in the statement of operations. As of January 1, 2019, the Company had no unrecognized tax benefits and no charge during 2019, and accordingly, the Company did not recognize any interest or penalties during 2019 related to unrecognized tax benefits. There is no accrual for uncertain tax positions as of December 31, 2019. The Company files U.S. income tax returns and a state income tax return. With few exceptions, the U.S. and state income tax returns filed for the tax years ending on December 31, 2016 and thereafter are subject to examination by the relevant taxing authorities.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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