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Note 8 - Income Taxes | 12 Months Ended
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Dec. 31, 2016
Notes to Financial Statements |
Income Tax Disclosure [Text Block] | NOTE 8 – INCOME TAXES The components of (loss) income before income taxes are as follows:
|  | 201 6 |  |  | 201 5 |
Domestic |  |  | (2,182,114 | ) |  |  | (747,693 | )
Foreign |  |  | (93,712 | ) |  |  | (275,729 | )
(Loss) income before income taxes |  |  | (2,275,826 | ) |  |  | (1,023,422 | )
The Company had no income tax expense due to operating losses incurred for the years ended December 31, 2016 and 2015. For the years ended December 31, 2016 and 2015, a reconciliation of the Company’s effective tax rate to the statutory U.S. Federal rate is as follows:
|  | 201 6 |  |  | 201 5 |
Income taxes at Federal statutory rate |  |  | (34.0 | %) |  |  | (34.0 | %)
State income taxes, net of Federal income tax effect |  |  | (16.0 | % ) |  |  | (13.0 | %)
Perm difference |  |  | (7.0 | % ) |  |  | 0.0 | %
Foreign tax rate differential |  |  | (0.2 | % ) |  |  | 2.4 | %
Change in valuation allowance |  |  | 50.4 | % |  |  | 43.5 | %
Other |  |  | 6.8 | % |  |  | 1.1 | %
Income tax provision |  |  | 0.0 | % |  |  | 0.0 | %
The tax effects of temporary differences that give rise to the Company’s deferred tax assets and liabilities are as follows:
|  | 201 6 |  |  | 201 5 |
U.S. net operating loss carryforwards |  |  | 1,733,000 |  |  |  | 563,000 |
Stock compensation |  |  | (29,000 | ) |  |  | 206,000 |
Canadian Provincial income tax losses |  |  | 116,000 |  |  |  | 402,000 |
Canadian Provincial scientific investment tax credits |  |  | 56,000 |  |  |  | 201,000 |
|  |  | 1,876,000 |  |  |  | 1,372,000 |
Valuation allowance |  |  | (1,876,000 | ) |  |  | (1,372,000 | )
Net deferred tax assets |  |  | - |  |  |  | - |
As of December 31, 2016 and 2015, the Company had federal net operating loss carryforwards (“NOL”) of approximately $4,035,000 and $1,310,000, respectively. The losses expire beginning in 2024. The Company has not performed a detailed analysis to determine whether an ownership change under IRC Section 382 has occurred. The effect of an ownership change would be the imposition of annual limitation on the use of NOL carryforwards attributable to periods before the change Any limitation may result in expiration of a portion of the NOL before utilization. As of December 31, 2016 and 2015, the Company had state and local net operating loss carryforwards of approximately $4,027,000 and $1,303,000, respectively, to reduce future state tax liabilities also through 2035. As of December 31, 2016 and 2015, the Company had Canadian NOL of approximately $1,174,000 and $1,256,000, respectively. The Canadian losses expire in stages beginning in 2026. As of December 31, 2016 and 2015, the Company also has unclaimed Canadian federal scientific research and development investment tax credits, which are available to reduce future federal taxes payable of approximately $56,000 and $201,000, respectively. As a result of losses and uncertainty of future profit, the net deferred tax asset has been fully reserved. The net change in the valuation allowance during the years ended December 31, 2016 and 2015 was an increase of $242,000 and $445,000, respectively. Foreign earnings are assumed to be permanently reinvested. U.S. Federal income taxes have not been provided on undistributed earnings of our foreign subsidiary. The Company recognizes interest and penalties related to uncertain tax positions in selling, general and administrative expenses. The Company has not identified any uncertain tax positions requiring a reserve as of December 31, 2016 and 2015. The Company is required to file U.S. federal and state income tax returns. These returns are subject to audit by tax authorities beginning with the year ended December 31, 2013.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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