6. INCOME TAXES
The Company has incurred operating losses of approximately $3.9 million since inception, which, if unutilized, will begin to expire in 2027. Future tax benefits, which may arise as a result of these losses, have not been recognized in these financial statements, and have been offset by a valuation allowance. Details of future income tax assets are as follows:
|
|
| December 31, 2015 |
| December 31, 2014 |
| Future income tax assets: |
|
| ||
| Net operating loss from October 27, 2008 (inception) to December 31, 2015 less timing differences | $ | 3,912,420 | $ | 3,886,690 |
| Consulting, management fee and other non-cash accruals |
| 50,000 |
| 1,086,822 |
| Adjusted operating loss |
| 3,862,420 |
| 2,799,868 |
|
|
| |||
| Statutory tax rate (combined federal and state) |
| 37.9% |
| 37.9% |
| Non-capital tax loss |
| 1,464,070 |
| 1,062,028 |
| Valuation allowance |
| (1,464,070) |
| (1,062,028) |
|
| $ | - | $ | - |
The Company’s valuation allowance increased by $402,042 in 2015.
The potential future tax benefits of these losses have not been recognized in these financial statements due to uncertainty of their realization. When the future utilization of some portion of the carry forwards is determined not to be “more likely than not,” a valuation allowance is provided to reduce the recorded tax benefits from such assets. We are subject to taxation in the U.S. and the state of California. The Company is current in its state and Federal tax returns. The Company currently has no tax years subject to examination prior to December 31, 2013.