INCOME TAXES

12 Months Ended

Dec. 31, 2016

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 12 – INCOME TAXES

The Company accounts for income taxes in accordance with ASC 740 which prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim period, disclosure and transition. There were no unrecognized tax benefits as of December 31, 2016 and 2015.

The Company’s loss before income taxes from US and Foreign sources for the years ended December 31, 2016, are as follows:

	2016			2015
United States	$	(8,701,796	)	$	(35,853,893	)
Outside United States		(1,146,661	)		(825,276	)
Loss before income taxes	$	(9,848,457	)	$	(36,679,169	)

The following table summarizes the significant differences between the U.S. Federal statutory tax rate and the Company’s effective tax rate for financial statement purposes for the years ended December 31, 2016 and 2015:

	2016			2015
U.S. Federal Statutory Tax Rate		34.00	%		34.00	%
State taxes		3.63	%		3.63	%
Permanent items		35.71	%		(30.32	)%
Change in valuation allowance		(73.34	)%		(7.31	)%
Totals		0.00	%		0.00	%

The tax effects of temporary differences that give rise to deferred tax assets and liabilities as of December 31, 2016 and 2015 are summarized as follows:

	2016			2015
Deferred Tax Assets:
Net operating loss carry-forwards	$	2,669,107		$	1,086,609
Debt issuance costs		1,882			—
Charitable Contributions		290,528			—
Value of stock options and stock compensation		5,655,810			2,378,259
Total deferred tax assets		8,617,327			3,464,868
Less: Valuation allowance		(8,463,727	)		(2,621,446	)
Net deferred tax assets		153,600			843,422
Deferred Tax Liabilities:
Fixed and intangible assets		(1,625	)		(9,034	)
Debt issuance costs		(91,451	)		(165,704	)
Debt discounts		(60,524	)		(668,684	)
Total deferred tax liabilities		(153,600	)		(843,422	)
Total deferred tax assets and liabilities, net	$	—		$	—

As of December 31, 2016, the Company has available federal net operating loss carry forward of $7.1 million and state net operating loss carry forwards of $7.1 million, the most significant of which expire from 2020 until 2036. Additionally, the Company has income tax net operating loss carryforwards related to our international operations which have an indefinite life.

The Company assess the recoverability of its net operating loss carry forwards and other deferred tax assets and records a valuation allowance to the extent recoverability does not satisfy the “more likely than not” recognition criteria. The Company continues to maintain the valuation allowance until sufficient positive evidence exists to support full or partial reversal. As of December 31, 2016 the Company had a valuation allowance totaling $8.1 million against its deferred tax assets, net of deferred tax liabilities, due to insufficient positive evidence, primarily consisting of losses within the taxing jurisdictions that have tax attributes and deferred tax assets.