Entity information:
NOTE K – INCOME TAXES
 
There is no provision for income taxes because the Company has incurred operating losses since inception and has a full valuation allowance on it deferred tax asset. At March 31, 2017 and 2016 the Company has concluded that it is more likely than not that the Company may not realize the benefit of its deferred tax assets due to losses generated and uncertainties surrounding its ability to generate future taxable income. Accordingly, the net deferred tax assets have been fully reserved.
 
Net deferred tax assets consist of the following components:
 
 
 
March 31, 2017
 
March 31, 2016
 
Deferred tax asset:
 
 
 
 
 
 
 
Net operating loss carryforwards
 
$
3,008,204
 
$
1,565,124
 
Stock compensation
 
 
181,206
 
 
56,811
 
Fixed assets
 
 
799,726
 
 
-
 
Intangible assets
 
 
25,524
 
 
9,953
 
Accrued liabilities
 
 
650,201
 
 
-
 
Charitable contributions
 
 
1,019
 
 
-
 
State taxes - current
 
 
1,120
 
 
560
 
Deferred tax liabilities:
 
 
 
 
 
 
 
State taxes - deferred
 
 
(169,157)
 
 
(123,689)
 
Valuation allowance
 
 
(4,497,843)
 
 
(1,508,759)
 
Net deferred tax asset
 
$
-
 
$
-
 
 
The income tax provision differs from the amount of income tax determined by applying the U.S. federal and state income statutory tax rates to pretax loss from continuing operations as follows:
 
 
 
March 31, 2017
 
 
 
 
 
 
Tax computed at federal statutory rate
 
$
(1,904,676)
 
State tax, net of federal tax benefit
 
 
(417,027)
 
Meals and entertainment
 
 
13,597
 
Debt discount amortization
 
 
53,600
 
Change in valuation allowance
 
 
2,256,356
 
Net provision for income taxes
 
$
1,850
 
 
The Company has accumulated federal net operating loss carryovers of approximately $ 7,477,470 and state accumulated net operating loss carryover of approximately $7,480,670 as of March 31, 2017 which are available to reduce future taxable income.  Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for federal income tax reporting purposes may be subject to annual limitations. A change in ownership may limit the utilization of the net operating loss carry forwards in future years. The federal and state tax losses begin to expire in 2033.