Annual report pursuant to Section 13 and 15(d)

INCOME TAXES

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INCOME TAXES
 12 Months Ended
Dec. 31, 2016
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 14 – INCOME TAXES

 

At December 31, 2016 (Successor), net operating loss carry forwards for Federal and state income tax purposes totaling approximately $2,914,000 available to reduce future income which, if not utilized, will begin to expire in the year 2032. There is no income tax affect due to the recognition of a full valuation allowance on the expected tax benefits of future loss carry forwards based on uncertainty surrounding realization of such assets.

 

A reconciliation of the statutory income tax rates and the effective tax rate is as follows:

  

    For the One
Month Ended
December 31,		     For the Eleven
Months Ended
November 30,		     For the Year
Ended
December 31,		  
    2016     2016     2015  
    Successor     Predecessor     Predecessor  
                   
Statutory U.S. federal rate     34.0 %     34.0 %     34.0 %
State income tax, net of federal benefit     5.9 %     5.9 %     5.9 %
Permanent differences     (8.3 )%     (2.8 )%     (2.1 )%
Valuation allowance     (31.6 )%     (37.1 )%     (37.8 )%
                         
Provision for income taxes     0.0 %     0.0 %     0.0 %

 

The tax effects of the temporary differences and carry forwards that give rise to deferred tax assets consist of the following:

 

    December 31,     December 31,  
    2016     2015  
    Successor     Predecessor  
             
Deferred tax assets:                
Net operating loss carry forwards   $ 1,161,751     $ 1,071,043  
Stock based compensation     1,043,626       -  
Valuation allowance     (2,205,377 )     (1,071,043 )
    $ -     $ -  

  

Major tax jurisdictions are the United States and California. All of the tax years will remain open three and four years for examination by the Federal and state tax authorities, respectively, from the date of utilization of the net operating loss. There are no tax audits pending.