Quarterly report pursuant to Section 13 or 15(d)

Income Taxes

v3.7.0.1
Income Taxes
6 Months Ended
Jun. 30, 2017
Income Taxes [Abstract]  
Income Taxes
4. Income Taxes

 

The Company is not expected to have taxable income in 2017 and incurred a loss for the year ended December 31, 2016, and accordingly, no provision for federal income tax has been made in the accompanying financial statements. At June 30, 2017, the Company had available net operating loss carryforwards of approximately $4,260,600, expiring during various years through 2037.

 

A summary of the deferred tax asset using an approximate 34% tax rate is as follows:

 

  Net operating loss   $ 1,449,000  
  Accounts receivable reserves     15,000  
  Inventory reserves     7,000  
  Stock compensation     291,000  
  Net deferred tax asset     1,762,000  
  Valuation allowance     (1,762,000 )
  Total   $ -  

 

The net operating loss carryforwards could be subject to limitation in any given year in the event of a change in ownership as defined by IRC Section 382.

 

The difference between the statutory and the effective tax rate is primarily due to a change in valuation allowance on deferred taxes, as well as a permanent difference from the change in derivative liability. The Company has fully reserved the deferred tax asset resulting from available net operating loss carryforwards.