INCOME TAXES

12 Months Ended

Sep. 30, 2016

Income Tax Disclosure [Abstract]

INCOME TAXES

13. INCOME TAXES

The Company provides for income taxes under FASB ASC 740, Accounting for Income Taxes. FASB ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect currently.

FASB ASC 740 requires the reduction of deferred tax assets by a valuation allowance, if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In the Company’s opinion, it is uncertain whether they will generate sufficient taxable income in the future to fully utilize the net deferred tax asset. Accordingly, a valuation allowance equal to the deferred tax asset has been recorded. The total deferred tax asset is $565,057 which is calculated by multiplying a 34% estimated tax rate by the cumulative net operating loss (NOL) adjusted for the following items:

The components of the Company's deferred tax asset as of September 30, 2016 and 2015 are as follows:

For the period ended September 30,	2016		2015
Book loss for the year	$	(2,540,562)	$	(3,485,003)
Adjustments:
Non-deductible portion of meals and entertainment		6,068		1,035
Non-deductible portion of stock compensation		1,482,052		3,242,463
Non-deductible penalties		-		-
Tax loss for the year		(1,052,442)		(241,505)
Estimated effective tax rate		34%		34%
Deferred tax asset	$	(357,830)	$	(82,112)

As of September 30,	2016		2015
Deferred tax asset	$	565,057	$	207,257
Valuation allowance		(565,057)		(207,257)
Current taxes payable		-		-
Income tax expense	$	-	$	-

Below is a chart showing the total estimated corporate federal net operating loss (NOL) and the year in which it will expire.

Year		Amount		Expiration
	2016	$	358,000		2036
	2015	$	82,000		2035
	2014	$	1,000		2034
	2013	$	12,000		2033
	2012	$	7,000		2032
	2011	$	13,000		2031
	2010	$	6,000		2030
	2009	$	10,000		2029
	2008	$	7,000		2028
	2007	$	1,000		2027
	2006	$	1,000		2026
	2005	$	—		2025
	2004	$	61,000		2024
	2003	$	—		2023
	2002	$	4,000		2022
	2001	$	2,000		2021
	Total	$	565,000

The Company will file its U.S. federal return for the year ended September 30, 2016 upon the issuance of this filing. The tax years 2012-2015 remained open to examination for federal income tax purposes by the major tax jurisdictions to which the Company is subject. No tax returns are currently under examination by any tax authorities.