INCOME TAXES

The provision for income taxes consists of the following:



	Year ended January 31,
	2017			2016
Current
Federal	$	—		$	—
State	—			—
Deferred
Federal	(28,637		)	(25,740		)
State	(4,433		)	(3,984		)
Change in valuation allowance	33,070			29,724
	$	—		$	—

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before the provision for income taxes. The sources and tax effects of the difference are as follows:



	Year ended January 31,
	2017		2016

Income tax at statutory rate	34.00	%	34.00	%
State income taxes, net of federal benefit	3.30		3.30
Change in valuation allowance	(37.30	)	(37.30	)
Total	0.00	%	0.00	%

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and tax liabilities are as follows:



	January 31,
	2017			2016

Net operating loss	$	3,355,655		$	3,322,585
Gross deferred tax assets:	3,355,655			3,322,585
Less: valuation allowance	(3,355,655		)	(3,322,585		)
Net deferred tax asset	$	—		$	—

As of January 31, 2017 the Company had net operating loss carryforwards of approximately $8,903,000 which may be used to offset future taxable income and expire through the year 2037. Pursuant to Code Sec. 382 of the Internal Revenue Code, the utilization of net operating loss carryforwards may be limited as a result of a cumulative change in stock ownership of more than 50% over a three year period. The effect of such limitation on the utilization of net operating loss carryforwards has not been determined. Due to changes in control the availability of the net operating loss carryforwards to offset future taxable income may be limited. The tax years for the years ending January 31, 2013 through the current year remain open for federal income tax audits.