Annual report pursuant to Section 13 and 15(d)

11. Income Taxes (Tables)

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11. Income Taxes (Tables)
12 Months Ended
Dec. 31, 2016
Income Tax Disclosure [Abstract]  
Income tax provision
    2016     2015  
Current            
Federal   $ (735,028 )   $ (7,809,637 )
State     –       (850,251 )
      (735,028 )     (8,659,888 )
Deferred                
Federal     –       (331,408 )
State     –       (36,957 )
      –       (368,365 )
Tax provision (benefit)   $ (735,028 )   $ (9,028,253 )
Reconciliation of the statutory federal income tax rate
    2016     2015  
      %       %  
Federal statutory rate     34.0       35.0  
State net of federal tax     –       2.1  
Permanent and other items     5.4       (0.1 )
Other     (25.0 )     –  
Change in valuation allowance     (12.0 )     (16.4 )
      2.4       20.6  
Deferred Tax Liability
    2016     2015  
Deferred income tax assets:                
Net operating losses   $ 11,752,815     $ 1,144,633  
Goodwill and intangible assets     1,477,448       6,853,662  
Allowance for doubtful accounts     130,580       67,948  
Beneficial conversion feature     –       602,681  
Charitable contributions     891       505  
Stock options     1,010,164       709,375  
Accrued liabilities     254,165       –  
      14,626,063       9,378,804  
Deferred income tax liabilities:                
Property and equipment     969,933       344,356  
Derivative liabilities     –       1,121,138  
      969,933       1,465,494  
Deferred tax asset, net     13,656,130       7,913,310  
Less: valuation allowance     (13,656,130 )     (7,913,310 )
Net deferred tax assets   $ –     $ –