13

INCOME TAXES

 

A reconciliation of the U.S. Federal statutory income tax rate to the effective income tax rate is as follows:

 

 

Significant components of the Company’s deferred income tax assets are as follows:

 

 

The valuation allowance for deferred income tax assets as of December 31, 2016 and December 31, 2015 was $4,703,000 and $3,196,000, respectively. The net change in the deferred income tax assets valuation allowance was an increase of $1,507,000 and $1,018,000 for Fiscal 2016 and 2015, respectively. The increase includes a true up of the previous years estimate of net operating losses.

 

As of December 31, 2016, the prior three years remain open for examination by the federal or state regulatory agencies for purposes of an audit for tax purposes.

 

Our net operating loss carry-forwards of $11,974,000 begin to expire in 2031 and continue to expire through 2036. In assessing the realizability of deferred income tax assets, management considers whether or not it is more likely than not that some portion or all deferred income tax assets will be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the projected future taxable income and tax planning strategies in making this assessment.