For the years ended December 31, 2016 and 2015, the Company incurred a net profit of $102,243 and $437,945, respectively. The net deferred tax asset generated by the loss carry-forward has been fully reserved. Based upon management’s evaluation, a valuation allowance of 100% has been establish, since it is more likely than not that the deferred tax assets will not be realized. The cumulative net operating loss carry-forward is $39,311,214 as of December 31, 2016 and will expire beginning in the year 2033.The provision for income tax consists of the following:
| December 31, 2016 | December 31, 2015 | |||||||||||||||
| Tax Loss (Gain) | Deferred Assets | Tax Loss (Gain) | Deferred Assets | |||||||||||||
| Net income (loss) | $ | 102,243 | $ | 35,785 | $ | 437,935 | $ | 153,277 | ||||||||
| NOL | (40,867,272 | ) | (42,827,184 | ) | ||||||||||||
| Bad debt expense | 48,554 | 16,994 | 59,311 | 20,759 | ||||||||||||
| Accounts payable | 151,305 | 52,957 | 152,804 | 53,481 | ||||||||||||
| Accrued expenses | 112,020 | 39,207 | 204,939 | 71,729 | ||||||||||||
| Deferred revenue | 1,430,206 | 500,572 | 1,601,432 | 560,501 | ||||||||||||
| Accounts receivable | (113,316 | ) | (39,661 | ) | (349,859 | ) | (122,451 | ) | ||||||||
| Prepaid expense | (175,065 | ) | (61,273 | ) | (151,874 | ) | (53,156 | ) | ||||||||
| Stock-based compensation | — | (3,649 | ) | (1,277 | ) | |||||||||||
| Meals & entertainment (50%) | 112 | 39 | 8,873 | 3,106 | ||||||||||||
| Tax loss (gain) for the year | $ | (39,311,214 | ) | $ | 544,620 | $ | (40,867,272 | ) | $ | 685,969 | ||||||
The cumulative tax effect at the expected rate of 35% of significant items comprising our net deferred tax amount is as follows:
| December 31, | December 31, | |||||||
| 2016 | 2015 | |||||||
| Deferred tax asset attributable to: | ||||||||
| Net operating loss carryover | $ | (13,758,925 | ) | $ | (14,303,545 | ) | ||
| Non-deductible entertainment | 39 | 3,106 | ||||||
| Bad debt expenses | 16,994 | 20,759 | ||||||
| Deferred revenue | 500,572 | 560,501 | ||||||
| Stock-based compensation | — | (1,277 | ) | |||||
| Others | (8,770 | ) | (50,397 | ) | ||||
| Valuation allowance | 13,250,089 | 13,770,853 | ||||||
| Net deferred tax asset | $ | — | $ | — | ||||
The Company has their tax years 2015 to 2013 open by statute for Federal, State and Local purposes.