11. INCOME TAXES

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

INCOME TAXES

The Company accounts for income taxes in accordance with ASC Topic No. 740, “Income Taxes.”  This standard requires the Company to provide a net deferred tax asset or liability equal to the expected future tax benefit or expense of temporary reporting differences between book and tax accounting and any available operating loss or tax credit carry forwards.

A 100% valuation allowance has been provided for all deferred tax assets, as the ability of the Company to generate sufficient taxable income in the future is uncertain.

The unexpired net operating loss carry forward at December 31, 2015 is approximately $34,600,000 with various expiration dates between 2018 and 2035 if not utilized. All tax years starting with 2012 are open for examination.

Non-current deferred tax asset:

	2015			2014
34% of net operating loss carry forwards	$	11,776,321		$	10,968,027
Valuation allowance		(11,776,321	)		(10,968,027	)
Net non-current deferred tax asset		-			-

Reconciliations of the expected federal income tax benefit based on the statutory income tax rate of 34% to the actual benefit for the years ended December 31, 2015 and 2014 are listed below.

	2015			2014
Expected federal income tax benefit	$	450,287		$	774,580
Change in valuation allowance		(808,294	)		(1,019,040	)
Goodwill amortization		142,386			142,386
Derivative gain and loss on debt issued for warrants		(67,524	)		26,569
Amortization of beneficial conversion discount		-			(47,008	)
Other		298,303			300,706
Stock-based compensation		(15,158	)		(178,193	)
Income tax expense (benefit)	$	-		$	-

The Company has no tax positions at December 31, 2015 and 2014 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.

The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.  During the years ended December 31, 2015 and 2014, the Company recognized no interest and penalties.