The Company has adopted the provisions of ASC 740, Income Taxes. Pursuant to ASC 740 the Company is required to compute tax asset benefits for net operating losses carried forward. The potential benefit of net operating losses have not been recognized in the financial statements because the Company cannot be assured that it is more likely than not that it will utilize the net operating losses carried forward in future years. The Company has approximately $8,174,543 (2015 - $4,270,350) of net operating losses to carry forward which are available to offset taxable income in future years which expire through fiscal 2036.
The components of the net deferred tax asset at December 31, 2016, and 2015, the statutory tax rate, the effective tax rate, and the amounts of the valuation allowance are indicated below:
2016 | 2015 $ | |||||||
| Net loss before taxes | (6,113,239 | ) | (3,077,016 | ) | ||||
| Statutory rate | 35 | % | 35 | % | ||||
| Computed expected tax (recovery) | (2,139,634 | ) | (1,076,956 | ) | ||||
| Amortization of beneficial conversion feature | 993,519 | 535,648 | ||||||
| Accretion of convertible debt | 571,916 | 393,108 | ||||||
| Other | (535,648 | ) | (481,078 | ) | ||||
| Change in valuation allowance | 1,109,847 | 629,278 | ||||||
| Reported income taxes | — | — | ||||||
| December 31, 2016 $ | December 31, 2015 $ | |||||||
| Potential deferred tax asset | ||||||||
| -Net operating losses | 2,861,090 | 1,494,622 | ||||||
| -Beneficial conversion feature and other | (792,269 | ) | (535,648 | ) | ||||
| -Less valuation allowance | (2,068,821 | ) | (958,974 | ) | ||||
| Net deferred tax assets | — | — | ||||||