Entity information:
Note 9.  Income taxes:

Income taxes at the federal statutory rate are reconciled to the Company's actual income taxes as follows:

   
2016
    
2015
  
             
Federal income tax benefit at 34%
  
$
(1,453,000
)
  
$
(2,978,000
)
State income tax net of federal tax effect
    
(128,000
)
    
(263,000
)
Permanent items
    
259,000
      
424,000
  
Other
    
(20,000
)
    
(15,000
)
Valuation allowance
    
1,342,000
      
2,832,000
  
   
$
—
    
$
—
  

As of December 31, 2016, the Company has net operating loss carry forwards of approximately $99 million for federal and state tax purposes, which are available to offset future taxable income, if any, expiring through December 2035. As of December 31, 2016, the Company's subsidiary has net operating loss carry forwards of approximately $980,000 for federal and state tax purposes, which are available to offset future taxable income, if any, expiring through December 2035. A valuation allowance was recorded at December 31, 2016 due to the uncertainty of realization of deferred tax assets in the future.

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities at December 31, 2016 and 2015 are as follows:

   
2016
    
2015
  
             
Deferred tax assets (liabilities):
            
Net operating loss carry forwards
  
$
36,817,000
    
$
35,649,000
  
                 
Property and equipment
    
50,000
      
43,000
  
Other
    
(22,000
)
    
6,000
  
Capital loss carryforward
    
444,000
      
—
  
Research and development credit
    
1,103,000
      
1,103,000
  
                 
Deferred tax asset
    
38,392,000
      
36,801,000
  
Valuation allowance
    
(38,392,000
)
    
(36,801,000
)
                 
   
$
—
    
$
—