Note K - Income Taxes

The components of income tax (benefit) expense for each of the years ended December 31, 2016 and 2015 are as follows:

As of December 31, 2016 and 2015, the Company has a net operating loss carryforward of approximately $306,000 and $289,000, respectively, to offset future taxable income. The amount and availability of any net operating loss carryforwards will be subject to the limitations set forth in the Internal Revenue Code. Such factors as the number of shares ultimately issued within a three year look-back period; whether there is a deemed more than a 50 percent change in control; the applicable long-term tax exempt bond rate; continuity of historical business; and subsequent income of the Company all enter into the annual computation of allowable annual utilization of any net operating loss carryforward(s).

The Company's income tax expense (benefit) for each of the years ended December 31, 2016 and 2015 varied from the statutory rate of 34% as follows:

The Company's only temporary difference due to statutory requirements in the recognition of assets and liabilities for tax and financial reporting purposes, as of December 31, 2016 and 2015, respectively, relate solely to the Company's net operating loss carryforward(s). This difference gives rise to the financial statement carrying amounts and tax bases of assets and liabilities causing either deferred tax assets or liabilities, as necessary, as of December 31, 2016 and 2015, respectively:

During the each of the years ended December 31, 2016 and 2015, respectively, the valuation allowance for the deferred tax asset increased by approximately $6,000 and $27,000, respectively. Open tax years that are subject to IRS examination start from 2013.