Note

Income Taxes

The provision for income taxes consists of the following components:

	As of December 31,
	2018		2017
Current	$	-	$	-
Deferred		-		-
Net income tax expense	$	-	$	-

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

	As of December 31,
	2018			2017
Long-term deferred tax assets:
Stock compensation benefit	$	187,030		$	187,030
Net operating loss carryforward		2,044,673			1,938,103
Total long-term deferred tax assets		2,231,703			2,125,133
Valuation allowance		(2,231,703	)		(2,125,133	)
		-			-

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

December 31, 2018

was

$8,407,165,

which expires in varying amounts through

December 31, 2038.

The Company’s net deferred tax assets before valuation allowance as of

December 31, 2018

was

$2,231,703,

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, 2018,

the Company recorded an increase in the valuation allowance of

$106,560.

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

2015.

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,
	2018			2017

Statutory Federal Rate		21.00	%		34.00	%
State Income Taxes		4.33	%		3.61	%
Change in Tax Rate		0.00	%		-149.08	%
True-ups		0.03	%		12.02	%
NOL Expiration		-7.63	%		0.00	%
Permanent Differences		-0.05	%		-0.17	%
Valuation allowance		-17.68	%		99.62	%
		0.00	%		0.00	%

In connection with the initial analysis of the impact of the Tax Cuts and Jobs Act (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.