Annual report pursuant to Section 13 and 15(d)

12. INCOME TAXES

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12. INCOME TAXES
 12 Months Ended
Apr. 30, 2014
Income Tax Disclosure [Abstract]  
12. INCOME TAXES

Net deferred tax assets consist of the following components as of April 30:

 

    2014     2013  
NOL   $ (36,638,304 )   $ (35,372,287 ) 
Net Loss     (27,254,020 )     (1,598,102 )
Shares issued for services     17,928,309       984,696  
Shares issued for interest expense     –       102,203  
Amortization of Debt Discount     –       (5,695 )
Loss on conversion of debt     3,993,295       39,000  
Loss on conversion of preferred stock     5,895,000       –  
Gain on forgiveness of debt     (1,633,380 )     (277,085 )
NOL   $ (37,709,100 )   $ (36,638,304 ) 
Effective Rate     0.34       0.34  
Deferred Tax Asset     (12,821,094 )     (12,457,023 )
Valuation Allowance     12,821,094       12,457,023  
Deferred Tax Asset   $ –     $ –  

 

The FASB's interpretation had no material impact on the Company's financial statements for the year ended April 30, 2014. As of April 30, 2014, the Company had a net operating loss carry forward for income tax reporting purposes of approximately $37,700,000 that may be offset against future taxable income through 2033. Furthermore, during the year ended April 30, 2014 there was an increase in the valuation allowance of $364,071. Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited. No tax benefit has been reported in the financial statements, because the Company believes there is a 50% or greater chance the carry forwards will expire unused. Accordingly, the potential tax benefits of the loss carry forwards are offset by a valuation allowance of the same amount.