7. INCOME TAXES

12 Months Ended

Dec. 31, 2016

Income Tax Disclosure [Abstract]

INCOME TAXES

The provision for income taxes on the statements of operations consists of $-0- and $-0- for the years ended December 31, 2016 and 2015, respectively. Deferred tax assets are comprised of the following at December 31:

	2016			2015
Net operating loss carryforward	$	5,510,000		$	6,034,000
Temporary differences		303,000			238,000
Less valuation allowance		(5,813,000	)		(6,272,000	)
Deferred tax asset, net	$	–		$	–

Deferred taxes arise from temporary differences in the recognition of certain expenses for tax and financial reporting purposes. At December 31, 2016 and 2015, management determined that realization of these benefits is not assured and has provided a valuation allowance for the entire amount of such benefits. At December 31, 2016 and 2015, net operating loss carryforwards were approximately $5,813,000 and $6,272,000, respectively, for federal tax purposes that expire at various dates from 2014 through 2031.

Utilization of net operating loss carryforwards may be subject to substantial annual limitations due to the "change in ownership" provisions of the Internal Revenue Code of 1986, as amended, and similar state regulations. The annual limitation may result in the expiration of substantial net operating loss carryforwards before utilization.

For December 31, 2016 and 2015, the provision for income taxes differs from the amount computed by applying the U.S. federal statutory tax rate (34% in 2016 and 2015) to income taxes as follows:

	2016			2015
Tax benefit computed at 34%	$	65,000		$	81,000
Change in valuation allowance		460,000			(323,000	)
Change in carryovers and tax attributes		(525,000	)		242,000
Income tax provision	$	–		$	–