THEGLOBE COM INC

(7)

INCOME TAXES

The provision (benefit) for income taxes is summarized as follows:

	Year Ended December 31,
		2017		2016
Continuing operations	$	—	$	—
Discontinued operations		—		—
	$	—	$	—

The provision (benefit) for income taxes attributable to continuing operations was as follows:

	Year Ended December 31,
	2017		2016
Current:
Federal	$	—	$	—
State		—		—
	$	—	$	—
Deferred:
Federal	$	—	$	—
State		—		—

Provision for income taxes	$	—	$	—

The following is a reconciliation of the federal income tax provision at the federal statutory rate to the Company’s tax provision attributable to continuing operations:

	Year Ended December 31,
	2017			2016
Statutory federal income tax rate		34.00	%		34.00	%
Change in tax rate		(5,292.36)			—
Nondeductible items		—			—
State income taxes, net of federal benefit		3.96			3.96
Change in valuation allowance		16,233.74			(37.96)
Write-off of DTA under IRC 382 and 383		(10,979.35)			—
Other					—

Effective tax rate		0.00	%		0.00	%

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2017 and 2016 are presented below.

	December 31, 2017		December 31, 2016
Deferred tax assets (liabilities):
Net operating loss carryforwards	$	—	$	62,959,000
Issuance of warrants		982,000		1,447,000
AMT and other tax credits		—		352,000
Accrued expenses		29,000		335,000
Depreciation and amortization		10,000		15,000
Total gross deferred tax assets		1,021,000		65,108,000
Less: valuation allowance		(1,021,000)		(65,108,000)
Total net deferred tax assets	$	—	$	—

Because of the Company's lack of earnings history, the net deferred tax assets have been fully offset by a 100% valuation allowance. The valuation allowance for net deferred tax assets was $1,021,000 and $65,108,000 as of December 31, 2017 and 2016, respectively. The net change in the total valuation allowance was $(64,087,000) and $147,000 for the years ended December 31, 2017 and 2016, respectively.

In assessing the realizability of 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 during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.