Note 12 - Income Tax Provision

Deferred Tax Assets

At December 31, 2016, the Company had net operating loss (“NOL”) carry–forwards for Federal income tax purposes of $1,851,367 (2015: $913,899) that may be offset against future taxable income through 2035. No tax benefit has been reported with respect to these net operating loss carry-forwards in the accompanying financial statements because the Company believes that the realization of the Company’s net deferred tax assets of approximately $629,465 (2015: $310,726) was not considered more likely than not and accordingly, the potential tax benefits of the net loss carry-forwards are offset by a full valuation allowance.

Deferred tax assets consist primarily of the tax effect of NOL carry-forwards. The Company has provided a full valuation allowance on the deferred tax assets because of the uncertainty regarding its realizability. The valuation allowance increased approximately $318,739 and $228,375 for the years ended December 31, 2016 and 2015, respectively.

Components of deferred tax assets are as follows:

Income Tax Provision in the Statements of Operations

A reconciliation of the federal statutory income tax rate and the effective income tax rate as a percentage of income before income taxes is as follows:

The Company is neither under examination by any taxing authority, nor has it been notified of any impending examination. The Company’s tax years for its Federal and State jurisdictions which are currently open for examination are the years of 2013 - 2016.