Note 10 – Income Taxes

The income tax provision for continuing operations reconciled to the tax computed at the statutory Federal rate follows:

	Year Ended December 31,
	2015		2014

Tax Expense at Statutory Rate	$	(781,497)	$	(211,318)
Valuation Allowance		779,308		182,154
Non-Deductible Expenses and Other		2,189		29,164
State Taxes, Net of Federal Benefit		31,802		65,417
Income tax expense	$	31,802	$	65,417

Current	$	31,802	$	65,417
Deferred		-		-
Total	$	31,802	$	65,417

Deferred income taxes are comprised of the following:

	December 31,
	2015		2014
Deferred tax assets (liabilities):
Inventories	$	103,909	$	82,274
Stock options and other		88,303		96,009
Alternative Minimum Tax credit carryforward		24,674		24,674
Contingencies and accruals		157,936		90,829
Property and equipment		(454,788)		(340,099)
Capital loss carryover		-		25,420
Net operating loss carryforward		11,136,538		10,499,884
Intangibles		(4,687)		179
Total deferred tax assets, net	$	11,051,885	$	10,479,170

Valuation allowance	$	(11,051,885)	$	(10,479,170)

As of December 31, 2015, the Company had $2,729,636 of net operating loss carry-forwards, related to the Superior Galleries acquisition which may be available to reduce taxable income in future years, subject to the applicable Internal Revenue Code Section 382 limitations. As of December 31, 2015, the Company had $34,900,327 of net operating loss carry-forwards related to Superior Galleries’ post acquisition operating losses and other operating losses incurred by the Company’s other operations. These carry-forwards will expire, starting in 2026 if not utilized. As of December 31, 2015 and 2014, the Company determined based on consideration of all available evidence, including but not limited to historical, current and future anticipated financial results as well as applicable IRS limitation and expiration dates related to the Company’s net operating losses a full valuation allowance should be recorded for its net deferred tax assets.