Entity information:
Note
8
 -
 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%
   $
(2,367,000
)
   $
(1,665,000
)
State income tax net of federal tax effect
    
(348,000
)
    
(245,000
)
Permanent items
    
13,000
      
8,000
  
Other
    
4,000
      
40,000
  
Valuation allowance
    
2,698,000
      
1,862,000
  
    $
0
     $
0
  
 
As of
December 31,
2016,
the Company has net operating loss carry forwards of approximately
$10.9
 million for federal and state tax purposes, which are available to offset future taxable income, if any, expiring through
December 2036.
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
   $
4,306,000
     $
2,375,000
  
Property and equipment
    
(19,000
)
    
(8,000
)
Debt discount related to warrants
    
89,000
      
41,000
  
Patent and trademarks net of amortization    
21,000
      
-
  
Accruals and other
    
33,000
      
5,000
  
Stock-based compensation
    
1,681,000
      
1,010,000
  
Deferred tax asset
    
6.111,000
      
3,423,000
  
Valuation allowance
    
(6,111,000
)
    
(3,423,000
)
    $
0
     $
0