INCOME TAXES

The provision for income taxes consists of the following:



	Years ended January 31,
	2018			2017
Current
Federal	$	—		$	—
State	—			—
Deferred
Federal	2,301,519			(28,637		)
State	339,821			(4,433		)
Change in valuation allowance	(2,641,340		)	33,070
	$	—		$	—

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before the provision for income taxes. The sources and tax effects of the difference are as follows:



	Years ended January 31,
	2018		2017

Income tax at statutory rate ^(a)	32.92	%	34.00	%
State income taxes, net of federal benefit	3.69		3.30
Expiration of historical NOLs	(2,681.81	)	—
Impact of Tax Cuts and Job Act of 2017	(385.70	)	—
Change in valuation allowance	3,030.90		(37.30	)
Total	0.00	%	0.00	%

^{(a) For the year ended January 31,2018, represents the blended rate of 34% for 11/12 of the year and 21% for 1/12 of the year.}

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and tax liabilities are as follows:



	January 31,
	2018			2017

Net operating loss	$	714,315		$	3,355,655
Gross deferred tax assets:	714,315			3,355,655
Less: valuation allowance	(714,315		)	(3,355,655		)
Net deferred tax asset	$	—		$	—

On December 22, 2017 the Tax Cuts and Jobs Act of 2017 (the "Tax Act") was enacted in the United States. Among its many provisions, the Tax Act reduces the U.S. corporate income tax rate from 34% to 21%; eliminates the corporate alternative minimum tax (AMT); creates a new limitation on deductible interest expense; and changes rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017. As a result of the Tax Act, the Company remeasured its deferred tax assets and liabilities to reflect the new statutory federal rate of 21% which resulted in a net adjustment of $336,127 to deferred income tax expense for the year ended January 31, 2018. This adjustment was offset by a reduction in the valuation allowance of $336,127. There was no net impact as a result of the remeasurement of the Net Operating Losses deferred tax assets.

As of January 31, 2018 the Company had net operating loss carryforwards of approximately $2,818,000 which may be used to offset future taxable income and expire through the year 2038. Pursuant to Code Sec. 382 of the Internal Revenue Code, the utilization of net operating loss carryforwards may be limited as a result of a cumulative change in stock ownership of more than 50% over a three year period. The effect of such limitation on the utilization of net operating loss carryforwards has not been determined. Due to changes in control the availability of the net operating loss carryforwards to offset future taxable income may be limited. The tax years for the years ending January 31, 2014 through the current year remain open for federal income tax audits.