Annual report pursuant to Section 13 and 15(d)

INCOME TAXES

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INCOME TAXES
12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 13 – INCOME TAXES

 

At December 31, 2019, net operating loss carry forwards for Federal and state income tax purposes totaling approximately $13,997,000 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 Year Ended December 31,

2019

 

For the Year Ended December 31,

2018

Statutory U.S. federal rate     21.0 %     21.0 %
State income tax, net of federal benefit     7.0 %     7.0 %
Permanent differences     24.7 %     2.0 %
Valuation allowances     (52.7 )%     (30.0 )%
Provision for income taxes     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, 2019   December 31, 2018
Deferred tax assets:   $ 3,923,581     $ 2,302,880  
Net operating loss carry forwards     1,149,301       1,149,301  
Stock based compensation     (5,072,882 )     (3,452,181 )
Valuation allowances   $ —       $ —    

 

 

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.