For the years ended December 31, 2016 and 2015, the Company incurred net operating losses and, accordingly, no current provision for income taxes has been recorded. In addition, no benefit for net deferred tax assets has been recorded due to the uncertainty of their realization. At December 31, 2016, the Company had approximately $20,000,000 of federal and state net operating loss carryforwards which will begin to expire in 2026.
The components of the Company’s deferred tax asset are as follows:
| December
31, 2016 | December
31, 2015 | |||||||
| Deferred tax assets: | ||||||||
| Net operating loss carryforwards | $ | 6,736,907 | $ | 6,435,701 | ||||
| Total deferred tax assets | $ | 6,736,907 | $ | 6,435,701 | ||||
| Net deferred tax assets before valuation allowance | $ | 6,736,907 | $ | 6,435,701 | ||||
| Less: Valuation allowance | (6,736,907 | ) | (6,435,701 | ) | ||||
| Net deferred tax assets | $ | – | $ | – | ||||
The federal income tax benefit expected by the application of a 34% corporate income tax rate to pre-tax net loss differs from the actual benefit recorded due to the valuation allowance recorded for 2016 and 2015. Based on the available objective evidence, including the Company’s history of losses, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets at December 31, 2016 and 2015.