Annual report pursuant to Section 13 and 15(d)

16. Tax (Tables)

16. Tax (Tables)

12 Months Ended

Dec. 31, 2014

A reconciliation of the provision (benefit) for income taxes with amounts determined by applying the statutory U.S. federal income tax rate to income before income taxes is as follows for the years ended December 31:

	2014			2013
Computed tax at the federal statutory rate of 34%	$	(1,703,000	)	$	(1,650,000	)
Return to provision adjustment		420,000			452,000
Debt discounts		(1,010,000	)		-
Other		7,000			6,000
Valuation allowance		2,286,000			1,192,000
Provision for income taxes	$	-		$	-

Deferred income tax assets

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows at December 31:

	2014			2013
Deferred tax assets:
Accrued Compensation	$	2,638,000		$	1,615,000
Net operating loss carryforwards		7,185,000			5,659,000
Property and equipment		38,000			302,000

Valuation Allowance		(9,861,000	)		(7,576,000	)

Det deferred tax assets	$	-		$	-