NOTE 15 – INCOME TAXES
The provision (benefit) for income taxes for the years ended December 31, 2016 and 2015 consist of the following:
|
| 2016 |
| 2015 | ||
| Federal: |
|
|
|
|
|
| Current | $ | 0 |
| $ | 0 |
| Deferred |
| (26,093) |
|
| 548,820 |
| State: |
|
|
|
|
|
| Current |
| 0 |
|
| 0 |
| Deferred |
| (807) |
|
| 1,700 |
| Valuation allowance |
| 26,900 |
|
| (550,520) |
| Total | $ | 0 |
| $ | 0 |
Net deferred tax assets consist of the following components as of December 31, 2016 and 2015:
|
| 2016 |
| 2015 | ||
| Deferred tax assets (liabilities): |
|
|
|
|
|
|
|
|
|
|
|
|
| NOL Carryover | $ | 2,359,051 |
| $ | 2,233,958 |
| Stock Based Compensation |
| 158,854 |
|
| 89,485 |
| Depreciation and Amortization |
| (355,962) |
|
| (184,846) |
| Inventory Reserves |
| (3,800) |
|
| (7,354) |
| R&D Tax Credits |
| (39,667) |
|
| (39,667) |
| Debenture Interest Payable |
| (474,381) |
|
| (474,381) |
| Other Reserves |
| 19,884 |
|
| 19,884 |
| Valuation Allowance |
| (1,663,979) |
| $ | (1,637,079) |
| Net deferred tax asset (liability) | $ | 0 |
|
| 0 |
The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income from continuing operations for the years ended December 31, 2016 and 2015 due to the following:
|
| 2016 |
| 2015 | ||
| Tax at statutory rate | $ | (75,669) |
| $ | 292,578 |
| Effects of: |
|
|
|
|
|
| Debenture write-off |
| 0 |
|
| 225,019 |
| Meals and Entertainment |
| (3,506) |
|
| 0 |
| Stock Based Compensation |
| (69,369) |
|
| (89,485) |
| Depreciation and Amortization |
| 125,853 |
|
| 115,054 |
| Inventory Reserve |
| (3,553) |
|
| 7,354 |
| Other, net |
| (656) |
|
| 0 |
| Change in Valuation Allowance |
| 26,900 |
| $ | (550,520) |
| Total | $ | 0 |
|
| 0 |
At December 31, 2016, the Company had net operating loss carryforwards of approximately $6,740,147 that may be offset against future income from the year 2016 through 2036.
No tax benefit has been reported in the December 31, 2016 consolidated financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.
The valuation allowance increased by $26,900 to $1,663,979 as of December 31, 2016.