(11) Income Taxes

Components of Deferred Taxes are:

The Company has recorded various deferred tax assets and liabilities as reflected above. In assessing the ability to realize the deferred tax assets, management considers, whether it is more likely than not, that some portion, or all of the deferred tax assets and liabilities will be realized. The ultimate realization is dependent on generating sufficient taxable income in future years. The valuation allowance is equal to 100% of the Net deferred tax asset. Given recurring losses, the Company cannot conclude that it is more likely than not that such assets will be realized, therefore a full valuation allowance has been recorded.

The components of the provisions for income taxes for fiscal years 2017 and 2016 are as follows:

A reconciliation of the provisions for income taxes for the fiscal years ended September 2017 and 2016 as compared to statutory rates is as follows:

In December 2017, the United States Government passed new tax legislation that, among other provisions, will lower the corporate tax rate from 35% to 21%. In addition to applying the new lower corporate tax rate in 2018 and thereafter to any taxable income we may have, the legislation affects the way we can use and carryforward net operating losses previously accumulated and results in a revaluation of deferred tax assets and liabilities recorded on our balance sheet. Given that current deferred tax assets are offset by a full valuation allowance, these changes will have no net impact on the balance sheet. However, when we become profitable, we will receive a reduced benefit from such deferred tax assets. Had this legislation passed prior to our September 30 fiscal year-end, the effect of the legislation would have been a reduction in deferred tax assets and the corresponding valuation allowance of approximately $179,000, as of September 30, 2017.