Entity information:
NOTE
9
– INCOME TAX
 
The Company has
not
recognized an income tax benefit for its operating losses generated based on uncertainties concerning its ability to generate taxable income in future periods. The tax benefit for the period presented is offset by a valuation allowance established against deferred tax assets arising from the net operating losses, the realization of which could
not
be considered more likely than
not.
In future periods, tax benefits and related deferred tax assets will be recognized when management considers realization of such amounts to be more likely than
not.
 
The provision (benefit) for income taxes consists of the following for the years ended
December 31, 2017
and
2016:
 
     
December 31,
  
     
2017
    
201
6
  
Current
U.S.
   $
100
     $
100
  
                   
Deferred
U.S.
    
—
      
—
  
Total
   $
—
     $
—
  
 
A valuation allowance for the net deferred tax assets has been recorded as it is more likely than
not
that these benefits will
not
be realized through future operations.
 
Deferred tax assets consist of the following as of
December 31, 2017
and
2016:
   
December 31,
  
   
2017
    
2016
  
Net operating loss carryforward
   $
(25,871
)
   $
(14,786
)
general business tax credit
    
—
      
—
  
Accrued expenses
    
—
      
—
  
Other
    
—
      
—
  
     
(25,871
)
    
(14,786
)
Valuation allowance
    
25,871
      
14,786
  
Total
   $
—
     $
—
  
 
As of
December 31, 2017
and
2016,
the Company had net operating loss carryforwards (“NOL”) for federal and state reporting purposes of approximately
$25,871
and
$14,786,
respectively, which expire in various years through
2037.
The Federal and state tax codes provide for restrictive limitations on the annual utilization of NOLs to offset taxable income when the stock ownership of a company significantly changes, as defined.
 
The income tax provision effective rate of
0%
differs from that computed using the
31%
federal income tax rate, a
2.7%
federal benefit of state tax deduction, combined with an
8.84%
California state income tax rate, for a blended rate of
42.5%
.
During the
years ended
December 31, 2017
and
2016,
the valuation allowance increased by
$11,085
and
$9,662,
respectively.
 
   
December 31,
  
   
2017
    
201
6
  
Tax benefit at statutory federal rate
   $
(8,782
)
   $
(7,654
)
State taxes, net of federal tax benefit
    
(2,303
)
    
(2,008
)
Increase (decrease) in valuation allowance
    
11,085
      
9,662
  
Other
    
—
      
—
  
Permanent Items
    
—
      
—
  
General business tax credit
    
—
      
—
  
Total
   $
—
     $
—