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Income Taxes

12 Months Ended

Dec. 31, 2017

Income Taxes:

Income Taxes

Note 10 – Income Taxes

Deferred income taxes are provided based on the provisions of ASC Topic 740, “Accounting for Income Taxes”, to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

Significant components of the Company’s net deferred income taxes are as follows:

		December 31,
		2017				2016
Deferred tax assets:

Net operating loss carry forwards		$	1,557,027			$	2,484,406
Start-up cost			174,679				289,843
Goodwill			408,552				672,754
Stock based compensation			414,080				614,790
Other			2,972				1,644
Deferred tax assets			2,557,309				4,063,436
Less valuation allowance			(2,557,309	)			(4,063,436	)
Net deferred tax assets after valuation allowance		$	—			$	—

A reconciliation of the U.S. statutory federal income tax rate to the effective income tax rate (benefit) follows:

Rate Reconciliation

		December 31,
		2017				2016

Federal income tax at statutory rate		$	137,480			$	(42,079	)
State Tax			14,678				(4,493	)
Permanent Differences			433				120
Other			(1,285	)			127,755
Change in Valuation Allowance			(151,306	)			(81,304	)
		$	—			$	—

In assessing the ability to realize a portion of the deferred tax assets, management considers whether it is more than likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities and projected future taxable income in making the assessment. After consideration of the evidence, both positive and negative, management has determined that a $2,557,860 valuation allowance at December 31, 2017 is necessary. The change in the valuation allowance for the current year is $1,506,127, which represents the changes in the deferred items. At December 31, 2017, the Company has available net operating loss carry forwards for federal income tax purposes of $6,133,666 expiring at various times from 2027 through 2032.

Valuation and Qualifying Accounts

Description		Balance at Beginning of Period				Charged to Cost and Expenses				Write-offs				Other Charges				Balance at End of Period

Deferred tax asset valuation allowance

Year ended December 31, 2017		$	4,063,436			$	(1,506,127	)		$	—			$	—			$	2,557,309
Year ended December 31, 2016		$	4,144,741			$	(81,304	)		$	—			$	—			$	4,063,436