INCOME TAX

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

INCOME TAX

NOTE 11. INCOME TAX

The Company’s net deferred tax assets are as follows:

	December 31,
	2017			2016
Deferred tax asset
Net operating loss carryforward	$	594,533		$	218,065
Business combination search expenses		—			87,310
Total deferred tax assets		594,533			305,375
Valuation allowance		(594,533	)		(305,375	)
Deferred tax asset, net of allowance	$	—		$	—

The income tax provision (benefit) consists of the following:

	Years Ended December 31,
	2017			2016
Federal
Current	$	—		$	—
Deferred		(289,158	)		(82,382	)
State
Current	$	—		$	—
Deferred					(20,789	)
Change in valuation allowance		289,158			103,171
Income tax provision	$	—		$	—

As of December 31, 2017, the Company had U.S. federal and state net operating loss carryovers (“NOLs”) of approximately $2,831,109 available to offset future taxable income. These NOLs expire beginning in 2034. In accordance with Section 382 of the Internal Revenue Code, deductibility of the Company’s NOLs may be subject to an annual limitation in the event of a change in control as defined under the regulations.

In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the year ended December 31, 2017, the change in the valuation allowance was $289,158.

A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2017 and 2016 is as follows:

	Year Ended December 31,
	2017			2016
Statutory federal income tax rate		(34.0	)%		(34.0	)%
State taxes, net of federal tax benefit		0.0	%		(8.6	)%
Deferred rate tax change		20.3	%		—
Change in valuation allowance		13.7	%		42.6	%
Income tax provision (benefit)		0.0	%		0.0	%

The Company files income tax returns in the U.S. federal jurisdiction in various state and local jurisdictions and is subject to examination by the various taxing authorities.