7.	Income Taxes

Income tax benefit reconciled to tax calculated at statutory rates is as follows:

	2016		2015
Federal tax (benefit) on consolidated net loss at statutory rate	$	(2,734,067)	$	(1,698,428)
Change in valuation allowance		38,090		1,430,291
Add back tax benefit on loss attributable to non-controlling interest in subsidiary		396,415		265,690
Book loss related to joint venture deconsolidation		900,910		––
Basis limited on joint venture loss		429,450		––
Basis difference related to investment in joint venture		705,500		––
Discrete due to joint venture deconsolidation		245,854		––
Other		17,848		2,447
Benefit for income taxes, net	$	––	$	––

At December 31, 2016 and 2015, the components of the Company’s deferred taxes are as follows:

	2016		2015
Deferred tax assets (liabilities)
Net operating loss carryforwards	$	11,956,967	$	11,080,303
Accrued compensation		35,249		120,344
Depreciation		46,975		21,835
Section 263a inventory adjustment		43,787		79,110
Stock-based compensation		765,928		565,349
Suspended loss in joint venture		––		246,241
Outside basis difference in joint venture		(705,500)		––
Other		33,189		25,323
Total		12,176,595		12,138,505
Less: Valuation allowance		(12,176,595)		(12,138,505)
Net deferred tax asset	$	––	$	––

The Company has the following net operating loss tax carryforwards available at December 31, 2016:

Year of Expiration	Net Operating Losses
2018	$	1,425,000
2019		1,234,000
2020		2,849,000
2021		4,168,000
2023		1,217,000
2024		646,000
2025		589,000
2026		873,000
2027		2,607,000
2028		2,512,000
2029		2,196,000
2030		1,232,000
2031		1,028,000
2032		437,000
2033		37,000
2034		6,409,000
2035		3,093,000
2036		2,616,000
Total	$	35,168,000

Based on historical losses and potential future changes in the ownership of the Company, the utilization of such loss and tax credit carryforwards could be substantially limited.