13.

INCOME TAXES

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

	December 31,
	2015		2014
Current taxes
Federal	$	—	$	—
State		—		—
Current taxes		—		—
Change in deferred taxes		82,112		18,564
Change in valuation allowance		(82,069)		(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 December 31, 2015:

Deferred tax assets:
Equity based compensation	$	97,276
Allowance for doubtful accounts		9,520
Net operating loss carryforward		1,015,748
On-line training certificate reserve		818
Total deferred tax assets		1,123,362
Valuation allowance		(1,120,842)

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 December 31, 2015 was 34%. The Company has established a valuation allowance against deferred tax assets of $1,120,842 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:

	December 31,
	2015			2014
Statutory tax rate		34.00	%		34.00	%
State tax, net of Federal benefits		3.63	%		3.63	%
Change in valuation allowance		(37.63)	%		(37.63)	%
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, Restated:

Deferred tax assets:
Equity based compensation	$	97,276
Allowance for doubtful accounts		15,980
Depreciation and amortization timing differences		—
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 (Restated) 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.