NOTE 4 – Income Taxes
We have incurred operating losses of $3,121,469, which, if not utilized, will begin to expire in 2019. 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. There are additional limitations due to our change in control. Therefore, we believe we will be unable to utilize these loss carryforwards.
The effective income tax rate for the years ended September 30, 2017 and 2016 consisted of the following:
| September 30, | ||||||||
| 2017 | 2016 | |||||||
| Federal statutory income tax rate | 34.00 | % | 34.00 | % | ||||
| State income taxes | 0 | % | 0 | % | ||||
| Change in valuation allowance | (34.00 | )% | (34.00 | )% | ||||
| Net effective income tax rate | — | — | ||||||
Current year added tax asset from net loss for the years ended September 30, 2017 and 2016 are as follows:
| September 30, | ||||||||
| 2017 | 2016 | |||||||
| Net operating loss | $ | (3,121,469 | ) | $ | (2,658,295 | ) | ||
| Statutory tax rate (combined federal and state) | 34 | % | 34 | % | ||||
| Non-capital tax (income) loss | (1,061,300 | ) | (903,820 | ) | ||||
| Valuation allowance | 1,061,300 | 903,820 | ||||||
| $ | — | $ | — | |||||
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 carryforwards is determined not to be “more likely than not,” a valuation allowance is provided to reduce the recorded tax benefits from such assets.
The Company annually conducts an analysis of its tax positions and has concluded that it has no uncertain tax positions as of September 30, 2017.