Income Taxes (Notes)

12 Months Ended

Dec. 31, 2015

INCOME TAXES

The components of the Company’s net deferred income taxes are as follows (rounded):



	December 31, 2015			December 31, 2014
Deferred tax assets:
Net operating loss carry forwards	$	15,649,000		$	10,643,000
Accrued expenses	187,000			92,000
Depreciation and amortization	(682,000		)	4,000
Stock option and warrant expenses	618,000			441,000
Accounts receivable	52,000			—
Deferred rent	44,000			40,000
Other	3,000			3,000
Gross deferred income tax assets	15,871,000			11,223,000
Valuation allowance	(15,871,000		)	(11,223,000		)
Total deferred income tax assets	$	—		$	—

The following summary reconciles differences from taxes at the federal statutory rate with the effective rate:



	Years Ended December 31,
	2015		2014
Federal income tax at statutory rates	(34.0	)%	(34.0	)%
Change in deferred tax asset valuation allowance	28.8	%	(52.3	)%
Deferred state taxes	(2.5	)%	4.6	%
Non-deductible expenses:
Meals & entertainment	0.3	%	(0.4	)%
Change in fair value of warrants	6.4	%	83.8	%
ISO stock compensation	0.7	%	(1.3	)%
Other	0.3	%	(0.4	)%
Income taxes (benefit) at effective rates	—	%	—	%

The Company has incurred net losses for tax purposes every year since inception. At December 31, 2015, the Company had approximately $42,035,000 in net operating loss carryforwards for U.S. federal and state income tax purposes that expire in various amounts between the years of 2026 and 2035. The Company's ability to deduct its historical net operating losses may be limited in the future due to IRC Section 382 limitations as a result of the substantial issuances of common stock in 2012 through 2015. The change in valuation allowance for the twelve months ended December 31, 2015 and 2014 was an increase of $4,648,000 and $1,665,000, respectively, resulting primarily from net operating losses generated during the periods.