INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Components of Income Tax Expense (Benefit)

The components of income tax (benefit) expense for the years ended December 31, 2017 and 2016 are as follows:



	December 31, 2017		December 31, 2016
Current federal tax (expense)/benefit	$	—	$	117,646
Deferred federal tax (expense)/benefit	274,423		—
Total federal tax (expense)/benefit	$	274,423	$	117,646

Schedule of Effective Income Tax Rate Reconciliation

Reconciliation between the amount determined by applying the U.S. federal income tax rate of 34% to pretax income from continuing operations as a result of the following for the years ended December 31, 2017 and 2016:



	December 31, 2017			December 31, 2016
Statutory tax on book income	$	(2,860,000	)	$	(1,344,000	)
Permanent differences	135,000			32,000
Change in derivative liability	(721,000		)	—
Change in expected tax rate	6,897,408			—
Change in valuation allowance	(3,672,000		)	(9,306,753		)
Prior year return true up	(53,831		)	10,501,107
Income tax expense (benefit)	$	(274,423	)	$	(117,646	)

Schedule of Deferred Tax Assets and Liabilities

The tax effect of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2017 and 2016 are presented below:



	December 31, 2017			December 31, 2016
Deferred tax assets:
Alternative minimum tax credits	$	274,000		$	274,000
Accrued bonus and stock based compensation	225,000			464,000
Intangible assets	1,013,000			1,990,000
Bad debt reserve	344,000			560,000
Contribution carryover	18,000			67,000
Net operating loss carry forwards	11,670,000			14,735,000
Less valuation allowance	(11,142,000		)	(14,814,000		)
Total deferred tax assets	$	2,402,000		$	3,276,000

	December 31, 2017			December 31, 2016
Deferred tax liabilities:
Accelerated tax depreciation	$	(2,128,000	)	$	(3,276,000	)
Net deferred tax liabilities	$	(2,128,000	)	$	(3,276,000	)

Net deferred tax assets and liabilities	$	274,000		$	—