Annual report pursuant to Section 13 and 15(d)

Income Taxes

v3.10.0.1
Income Taxes
12 Months Ended
Sep. 30, 2017
Income Tax Disclosure [Abstract]  
Income Taxes

NOTE 12 – INCOME TAXES

 

The tax effects of temporary differences that give rise to deferred tax assets are presented below:

 

    For The Years Ended September 30,  
    2018     2017  
Deferred Tax Assets:                
Net operating loss carryforward   $ 10,100,864     $ 9,170,789  
Stock-based compensation     2,758,273       2,758,567  
Marketable Securities     -       -  
Total deferred tax assets     12,859,137       11,929,356  
                 
Valuation allowance     (12,859,137 )     (11,929,356 )
                 
Deferred tax asset, net of valuation allowance   $ -     $ -  
                 
Changes in valuation allowance   $ (929,781 )   $ (6,019,107 )

 

The income tax provision (benefit) consists of the following:

 

    For The Years Ended September 30,  
    2018     2017  
Federal:                
Current   $ -     $ -  
Deferred     (802,309 )     (5,193,887 )
                 
State and local:                
Current     -       -  
Deferred     (127,472 )     (825,220 )
      (929,781 )     (6,019,107 )
Change in valuation allowance     929,781       6,019,107  
Income tax provision (benefit)   $ -     $ -  

 

A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:

 

    For The Years Ended September 30,  
    2018     2017  
             
Tax benefit at federal statutory rate     (34.0 )%     (34.0 )%
State tax, net of federal benefit     - %     - %
Permanent differences     - %     - %
True up of deferred tax asset     - %     - %
Change in valuation allowance     34.0 %     34.0 %
Effective income tax rate     0 %     0 %

 

The Company assesses the likelihood that deferred tax assets will be realized. To the extent that realization is not likely, a valuation allowance is established. Based upon the Company’s history of losses since inception, management believes that it is more likely than not that future benefits of deferred tax assets will not be realized.

 

At September 30, 2018 and 2017, the Company had $10,100,864 and $9,170,789, respectively, of both federal and state net operating losses that may be available to offset future taxable income. The net operating loss carry forwards, if not utilized, will expire 20 years from the filing of the Company’s federal returns. In accordance with Section 382 of the Internal Revenue Code, the usage of the Company’s net operating loss carry forwards are subject to annual limitations in the event of a greater than 50% ownership change.

 

The Company anticipates filing income tax returns in the U.S. federal, Colorado, and Arizona jurisdictions and such returns will be subject to examination by taxing authorities, when filed. The Company has not filed any income taxes to date.