Note 12 – Income taxes

For the years ended December 31, 2016 and 2015, the Company incurred net operating losses and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. At December 31, 2016 and 2015, the Company had approximately $4,718,279 and $3,224,320 of federal and state net operating losses. The net operating loss carry forwards, if not utilized, will begin to expire in 2028. The provision for income taxes consisted of the following components for the years ended December 31:

Components of net deferred tax assets, including a valuation allowance, are as follows at December 31:

The valuation allowance for deferred tax assets as of December 31, 2016 and 2015 was $1,651,398 and $1,128,512, respectively.  In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible.  Management considers the scheduled reversals of future deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment.  As a result, management determined it was more likely than not the deferred tax assets would not be realized as of December 31, 2016 and 2015 and recorded a full valuation allowance.

Reconciliation between the statutory rate and the effective tax rate is as follows at December 31: