Note

. Income Taxes

The provision for income taxes consists of

the following components:

	As of December 31,
	2017		2016
Current	$	-	$	-
Deferred		-		-
Net income tax expense	$	-	$	-

The components of deferred income tax assets and liabilities are as follows:

	As of December 31,
	2017			2016

Long-term deferred tax assets:
Stock compensation benefit	$	187,030		$	219,778
Net operating loss carryforward		1,938,103			2,618,411
Total long-term deferred tax assets		2,125,133			2,838,189
Valuation allowance		(2,125,133	)		(2,838,189	)
Net deferred tax assets		-			-

The Company

’s federal net operating loss (“NOL”) carryforward balance as of

December 31, 2017

was

$7,989,620,

which expire in varying amounts through December

31,

2037.

The Company

’s net deferred tax assets before valuation allowance as of

December 31, 2017

was

$2,125,133,

most of which relates to net operating loss carryforwards. The Company recorded an operating loss for the year and has a history of operating losses. After assessing the realization of the net deferred tax assets, we have recorded a valuation allowance of

100%

of the value of the net deferred tax assets as we believe it more likely than

not

that the Company will

not

realize operating profits and taxable income so as to utilize all of the net operating losses in the future. During the year ended

December 31, 2017,

the Company recorded a reduction in the valuation allowance of

$713,056.

The Company is subject to income taxes in the U.S. federal jurisdiction and Florida state jurisdiction.

With few exceptions, the Company is

longer subject to U.S. federal, state and local examinations by taxing authorities for the years before

2014.

The income tax provision differs from the expense that would result from applying statutory rate to income before income taxes principally because of permanent differences, state income taxes, the release of the valuation allowance, and the effect of the change in tax rate. The following is a reconciliation of the federal income tax provision at the federal statutory rate to the Company's tax provision attributable to continuing operations:

	Year ended December 31,
	2017			2016

Statutory Federal Rate		34.00	%		34.00	%
State Income Taxes		3.61	%		5.50	%
Change in Tax Rate		-149.08	%		0.00	%
True-ups		12.02	%		0.00	%
Permanent Differences		-0.17	%		-12.00	%
Valuation Allowance		99.62	%		-27.50	%
		0.00	%		0.00	%

December 22, 2017,

the Tax Cuts and Jobs Act (the "Tax Act") was enacted in the United States, resulting in significant changes from previous tax law. The Tax Act reduced the federal corporate income tax rate to

21%

from

35%

effective

January 1, 2018.

Our federal income tax expense for periods beginning in

2018

will be based on the new rate. The Tax Act also provides for immediate deduction of

100%

of the costs of qualified property that have been incurred and the property placed in service during the period from

September 27, 2017

December 31, 2022.

This provision will begin to phase down each year beginning

January 1, 2023

and will be completely phased out as of

January 1, 2027.

In connection with the initial analysis of the impact of the Tax Act, we remeasured our deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally

21%.

As a result, we recorded a decrease in our deferred tax assets of approximately

$1,067,000

with a corresponding adjustment to deferred income tax expense. This adjustment was fully offset by a decrease in the valuation allowance for the year ended

December 31, 2017.