11. Income Taxes

The significant components of the Company’s net deferred tax assets are as follows for the years ended December 31:

FASB ASC 740, Income Taxes, requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. After consideration of all the evidence, both positive and negative, management has determined that a full valuation allowance of $16,869,912 and $17,316,804 against its net deferred taxes is necessary as of December 31, 2016 and December 31, 2015, respectively. The change in valuation allowance for the years ended December 31, 2016 and 2015 is $446,892 and $294,436 respectively.

At December 31, 2016 and December 31, 2015, respectively, the Company had $43,669,900 and $44,969,819, respectively, of U.S. net operating loss carryforwards remaining, which expire beginning in 2017.

As a result of certain ownership changes, the Company may be subject to an annual limitation on the utilization of its U.S. net operating loss carryforwards pursuant to Section 382 of the Internal Revenue Code. A study to determine the effect, if any, of this change, has not been undertaken.

Tax returns for the years ended December 31, 2016, 2015, 2014, 2013, and 2012 are subject to examination by the Internal Revenue Service.

A reconciliation of the Company’s income taxes to amounts calculated at the federal statutory rate is as follows for the years ended December 31: