Income Taxes

12 Months Ended

Sep. 30, 2017

NOTE 11 – INCOME TAXES

The tax effects of temporary differences that give rise to deferred tax assets are presented below:

	For The Years Ended September 30,
	2017			2016
Deferred Tax Assets:
Net operating loss carryforward	$	9,170,789		$	5,412,924
Stock-based compensation		2,758,567			497,325
Marketable Securities		-			-
Total deferred tax assets		11,929,356			5,910,249

Valuation allowance		(11,929,356	)		(5,910,249	)

Deferred tax asset, net of valuation allowance	$	-		$	-

Changes in valuation allowance	$	(6,019,107	)	$	(4,322,689	)

	For The Years Ended September 30,
	2017			2016
Federal:
Current	$	-		$	-
Deferred		5,193,887			3,730,054

State and local:
Current		-			-
Deferred		825,220			592,632
		6,019,107			4,322,689
Change in valuation allowance		(6,019,107	)		(4,322,689	)
Income tax provision (benefit)	$	-		$	-

The income tax provision (benefit) consists of the following:

A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:

	For The Years Ended September 30,
	2017			2016
Tax benefit at federal statutory rate		(34.0	)%		(34.0	)%
State tax, net of federal benefit		-	%		-	%
Permanent differences		-	%		-	%
True up of deferred tax asset		-	%		-	%
Change in valuation allowance		34.0	%		34.0	%
Effective income tax rate		0	%		0	%

The Company assesses the likelihood that deferred tax assets will be realized. To the extent that realization is not likely, a valuation allowance is established. Based upon the Company’s history of losses since inception, management believes that it is more likely than not that future benefits of deferred tax assets will not be realized.

At September 30, 2017 and 2016, the Company had $9,170,789 and $5,412,924, respectively, of both federal and state net operating losses that may be available to offset future taxable income. The net operating loss carry forwards, if not utilized, will expire 20 years from the filing of the Company’s federal returns. In accordance with Section 382 of the Internal Revenue Code, the usage of the Company’s net operating loss carry forwards are subject to annual limitations in the event of a greater than 50% ownership change.

The Company anticipates filing income tax returns in the U.S. federal and Arizona jurisdictions and such returns will be subject to examination by taxing authorities, when filed. The Company has not filed any income taxes to date.

Avant Diagnostics, Inc 10-K