Quarterly report pursuant to Section 13 or 15(d)

16. Income Taxes

16. Income Taxes
9 Months Ended
Sep. 30, 2016
Income Tax Disclosure [Abstract]  
Income Taxes

The Company accounts for income taxes under ASC Topic 740, Income Taxes, which provides for an asset and liability approach of accounting for income taxes. Under this approach, deferred tax assets and liabilities are recognized based on anticipated future tax consequences, using currently enacted tax laws, attributed to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts calculated for income tax purposes.


We currently estimate that our effective tax rate for the year ending December 31, 2016 will be 0%. Losses incurred during the period from April 9, 2011 (inception) to September 30, 2016 could be used to offset future tax liabilities. Accounting standards require the consideration of a valuation allowance for deferred tax assets if it is “more likely than not” that some component or all of the benefits of deferred tax assets will not be realized. As of September 30, 2016, net deferred tax assets were $11,483,485, after an offsetting reduction in deferred tax liabilities of $5,735, primarily related to net operating loss carryforwards. A valuation allowance of approximately $11,483,485 was applied to the remaining net deferred tax assets. We have not provided any valuation allowance against our deferred tax liabilities, which were netted against our deferred tax assets.


The tax benefit for the nine months ended September 30, 2016 was $-0- as the Company utilized a portion of the Company’s deferred tax asset, which was offset by a corresponding reduction in the valuation allowance on the utilized deferred tax asset.


In accordance with FASB ASC 740, the Company has evaluated its tax positions and determined there are no significant uncertain tax positions as of any date on, or before September 30, 2016.