14.

INCOME TAXES

The components of the provision for income tax expense are as follows for the years ended:

	March 31, 2015		December 31, 2014,
Current taxes
Federal	$	—	$	—
State		—		—
Current taxes		—		—
Change in deferred taxes		26,757		18,564
Change in valuation allowance		(26,714)		(18,520)

Provision for income tax expense	$	43	$	44

The following is a summary of the significant components of the Company’s deferred tax assets and liabilities at March 31, 2015:

Deferred tax assets:
Equity based compensation	$	97,276
Allowance for doubtful accounts		15,640
Net operating loss carryforward		1,118,311
On-line training certificate reserve		960
Total deferred tax assets		1,232,187
Valuation allowance		(1,229,667)

Deferred tax assets net of valuation allowance		2,520

Less deferred tax assets – non-current, net of valuation allowance		2,330

Deferred tax assets – current, net of valuation allowance	$	190

The effective tax rate used for calculation of the deferred taxes as of March 31, 2015 was 34%. The Company has established a valuation allowance against deferred tax assets of $1,229,667 or 99.8%, due to the uncertainty regarding realization, comprised primarily of a 100% reserve against the net operating carryforward, 100% reserve against the allowance for doubtful accounts, and 97% reserve against the deferred tax assets attributable to the equity based compensation.

The significant differences between the statutory tax rate and the effective tax rates for the Company for the years ended are as follows:

	March 31, 2015			December 31, 2014,
Statutory tax rate		—	%		—	%
Increase (decrease) in rates resulting from:
Net operating loss carryforward or carryback		8	%		(35)	%
Equity based compensation and loss		—	%		—	%
Change in valuation allowance		(3)	%		32	%
Change in allowance for doubtful accounts		(5)	%		3	%
Effective tax rate		—	%		—	%

The following is a summary of the significant components of the Company’s deferred tax assets and liabilities at December 31, 2014:

Deferred tax assets:
Equity based compensation	$	97,276
Allowance for doubtful accounts		15,980
Net operating loss carryforward		1,091,064
On-line training certificate reserve		1,154
Total deferred tax assets		1,205,474
Valuation allowance		(1,202,911)

Deferred tax assets net of valuation allowance		2,563

Less deferred tax assets – non-current, net of valuation allowance		2,330

Deferred tax assets – current, net of valuation allowance	$	233

The effective tax rate used for calculation of the deferred taxes as of December 31, 2014 was 34%. The Company has established a valuation allowance against deferred tax assets of $1,202,911 or 99.8%, due to the uncertainty regarding realization, comprised primarily of a 100% reserve against the net operating carryforward, 100% reserve against the allowance for doubtful accounts, and 97% reserve against the deferred tax assets attributable to the equity based compensation.