|12 Months Ended|
Dec. 31, 2016
|Income Tax Disclosure [Abstract]|
The Company files a consolidated U.S. federal income tax return and various state tax returns.
The following summarizes the income tax provision (benefit):
The Company has the following net deferred tax assets:
The reconciliation of the expected tax expense (benefit), based on statutory rates, with the actual expense, is as follows:
For the year ended December 31, 2016, transitional three months ended December 31, 2015, and year ended September 30, 2015, the Company had approximately $14.1 million, $5.3 million and $4.1 million of federal and state net operating loss carryovers (“NOLs”), respectively, which begin to expire in 2032. However, the Company has not yet filed its tax returns for its fiscal years ended September 30, 2013, September 30, 2014, September 30, 2015, September 30, 2016 or for December 31, 2016. Therefore, the Company’s NOLs will not be available to offset future taxable income, if any, until the returns are filed. These NOLs are subject to annual limitations under Internal Revenue Code Section 382 if there is a greater than 50% ownership change. In addition, Beacon had generated approximately $25 million of NOLs prior to the Beacon Merger, which the Company’s preliminary analysis indicates would be subject to significant limitations pursuant to Internal Revenue Code Section 382, such that no deferred tax asset has been reflected herein related to the Beacon NOLs.
The Company, after considering all available evidence, fully reserved its deferred tax assets since it is more likely than not that such benefits will not be realized in future periods. The Company will continue to evaluate its deferred tax assets to determine whether any changes in circumstances could affect the realization of their future benefit. If it is determined in future periods that portions of the Company’s deferred tax assets satisfy the realization standards, the valuation allowance will be reduced accordingly. During the year ended December 31, 2016, the transitional three months ended December 31, 2015, and the year ended September 30, 2015, the valuation allowance increased by $1,957,784, decreased by $202,260, and decreased by $1,087,899, respectively.
During the period of September 30, 2014 through December 31, 2016, the Company operated primarily in Nevada, North Carolina, Colorado, Texas, Iowa, Washington, Missouri, Georgia, and New York. If the Company is required to pay income taxes or penalties in the future, penalties will be recorded in general and administrative expenses and interest will be separately stated as interest expense. The Company has not yet filed its tax returns for its fiscal years ended September 30, 2012, September 30, 2013, September 30, 2014, September 30, 2015, September 30, 2016 or for December 31, 2016, but has engaged a tax professional to begin to compile the past due returns. The Company’s tax returns for the periods from October 1, 2012 through December 31, 2016 remain subject to examination and may be subject to penalties for late filing.
The Company does not have any uncertain tax positions for which it is reasonably possible that the total amount of gross unrecognized tax benefits will increase or decrease within 12 months of December 31, 2016. The unrecognized tax benefits may increase or change during the next year for items that arise in the ordinary course of business.
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.
Reference 1: http://www.xbrl.org/2003/role/presentationRef