NOTE

10.

INCOME TAX BENEFIT

The components of the income tax (provision) benefit for the years ended

December 31,

were as follows:

	December 31,
	2019			2018

Current tax benefit:
Federal	$	513,201		$	1,873,248
State		161,781			683,290

Total		674,982			2,556,538

Deferred tax benefit (expense):
Federal		1,470,099			29,152
State		463,432			10,634

Total		1,933,531			39,786

Total Income Tax Benefit Before Valuation Allowance		2,608,513			2,596,324
Valuation allowance		(2,608,513	)		(2,596,324	)

Total Income Tax Benefit	$	-		$	-

Deferred tax assets:
Net operating loss carryforward	$	8,576,397		$	5,967,884
Less valuation allowance		(6,642,866	)		(5,967,884	)

Total Deferred Tax Assets		1,933,531			-

Deferred tax liabilities:
Unrealized gains on securities		(1,732,696	)		-
Other		(200,835	)		-

Total Deferred Tax Liabilities		(1,933,531	)		-

Net Deferred Tax Assets/Liabilities	$	-		$	-

The Tax Cuts Jobs Act was signed into law on

December 22, 2017,

and changed many aspects of U.S. corporate income taxation. Included in those changes was a reduction of the corporate income tax rate from

34%

21%.

December 31, 2019,

we have available tax operating loss carry forwards of approximately

$26.4

million.

This amount takes into consideration the reduction of

$1.3

million that was the result of an IRS audit which concluded late summer of

2019.

Of the

$26.4

million,

$9.0

million arose in years beginning before

2018.

Tax operating loss carry forwards generated in years prior to

2018

may

be applied against future taxable income and expire in

2035

through

2037.

Tax operating loss carryovers arising in years after

2017

may

be carried forward indefinitely. Tax years open to examination by federal and state taxing authorities range from

2016

through

2019.

The amount and ultimate realization of the deferred tax assets for income tax purposes is dependent, in part, upon the tax laws in effect, our future earnings, and other future events, the effects of which cannot be determined. We continue to assess the impact of the

2018

private placement, our “at the market” offerings and other transactions to determine whether an “ownership change,” as defined in Section

382

of the Internal Revenue Code, has occurred and, if so, the limitations on our ability to utilize net operating losses, which we refer to as “NOLs” (See Note

). Additionally, it is possible that future transactions

may

cause us to undergo

one

or more ownership changes. Certain of these NOLs

may

also be at risk of limitation in the event of a future ownership change.

December 31, 2019

, we had recorded a valuation allowance of

$6,642,866

to fully offset the deferred tax asset. The change in the valuation allowance for the year ended

December 31, 2019

was

$674,982.