Income Taxes

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Note 9 - Income Taxes

The components of the Company’s deferred tax asset are as follows:

	December 31,
	2018			2017
Net operating loss carryforwards	$	6,836,322		$	6,140,045
Equity-based instruments		6,465,537			6,458,977
Accrued liabilities		112,795			133,105
Deferred Revenue		96,311			96,311
Pass-through losses		92,634			78,682
Valuation allowance		(13,603,599	)		(12,907,120	)
Deferred tax asset	$	--		$	--

Effective January 1, 2018, the Federal corporate income tax rate has been decreased from 34% to 21%. The effect of this change on deferred taxes and the valuation allowance at December 31, 2017 was approximately $6.5 million. The NOLs that have been generated 12/31/2017 and prior are going to be 100% allowable against future income, provided that they do not expire. NOLs generated 1/1/2018 and forward will be subject to the 80% limitation.

A reconciliation of income taxes computed at the statutory rate to the income tax amount recorded is as follows:

	Year ended December 31,
	2018			2017
Income tax benefit at statutory rate	$	(970,386	)	$	(1,724,214	)
State income tax, net of Federal benefit		(200,777	)		(184,085	)
Tax Jobs and Cuts Act		--			6,256,223
Convertible debt		486,168			988,938
Other adjustments		(11,686	)		40,037
Meals and entertainment		202			235
Increase in valuation allowance		696,479			(5,377,133	)
Income tax benefit	$	--		$	--

Cool Technologies had no gross unrecognized tax benefits that, if recognized, would favorably affect the effective income tax rate in future periods. It has not accrued any interest or penalties associated with income taxes. The Company files income tax returns in the United States federal jurisdiction. With few exceptions, it is no longer subject to U.S. federal, state or non-U.S. income tax examination by tax authorities on tax returns filed before January 31, 2012. No tax returns are currently under examination by any tax authorities.