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12. Income taxes

3 Months Ended

Mar. 31, 2015

12. Income taxes

Current or future U.S. federal income tax provision or benefits have not been provided for any of the periods presented because the Company has experienced operating losses since inception. Under ASC 740 “Income Taxes,” when it is more likely than not that a tax asset cannot be realized through future income the Company must allow for this future tax benefit. The Company has provided a full valuation allowance on the net future tax asset, consisting of net operating loss carry forwards, because management has determined that it is more likely than not that they will not earn income sufficient to realize the future tax assets during the carry forward period.

The Company has not taken a tax position that, if challenged, would have a material effect on the financial statements for the three month period ended March 31, 2015, applicable under ASC 740. As a result of the adoption of ASC 740, the Company did not recognize any adjustment to the liability for uncertain tax position and therefore did not record any adjustment to the beginning balance of accumulated deficit on the balance sheet.

The components of the Company’s future tax asset as at March 31, 2015 and December 31, 2015 are as follows:

	March 31, 2015			December 31, 2014

Net operating loss carry forward	$	12,259,149		$	11,934,958
Valuation allowance		(12,259,149	)		(11,934,958	)
Net future tax asset	$	—		$	—

A reconciliation of income taxes computed at the 35% statutory rate to the income tax recorded is as follows:

	March 31, 2015			December 31, 2014

Tax at statutory rate	$	113,467		$	570,870
Valuation allowance		(113,467	)		(570,870	)
Net future tax asset	$	—		$	—

The Company did not pay any income taxes during the three month period ended March 31, 2015 and the year ended December 31, 2014.

The net federal operating loss carry forwards will expire in 2024 through 2034. This carry forward may be limited upon the consummation of a business combination under IRC Section 381.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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