The income tax benefits are as follows:

The applicable U.S. statutory federal income tax rate was 34.00% for the year ended December 31, 2014. The applicable German statutory federal income tax rate was 29.13% for the year ended December 31, 2013 and December 31, 2014. The principal differences between income taxes computed at the U.S. statutory tax rate for the year ended December 31, 2014 and at the German statutory tax rate for the year ended December 31, 2013 and the respective effective tax rate are as follows:

The components of deferred tax assets and liabilities related to net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income taxes purposes were as follows:

The decrease in the valuation allowance of deferred tax assets is influenced by a foreign currency effect.

As of December 31, 2014 and 2013, the Company had net operating loss carryforwards on German corporate income tax of $34,168,814 and $57,795,357, respectively, and on trade tax of $34,168,814 and $56,420,412, respectively. The operating loss carryforwards generated are subject to restrictions under German tax law. These regulations may limit the future use of operating loss carryforwards if there is a change in ownership. As a result of the Acquisition, the Company has lost $22,915,150 of the unused German corporate income tax loss carryforwards and $21,582,596 of the unused German corporate trade tax loss carryforwards existing or realized at the time of the Acquisition.

Management of the Company has evaluated the evidence bearing upon the realizability of its deferred tax assets, including the Company’s history of operating losses, and has concluded that it is more likely than not that the Company may not realize the benefit of its deferred tax assets. Accordingly, the deferred tax assets have been fully reserved to the extent not offset by deferred tax liabilities at December 31, 2014 and 2013. The valuation allowance decreased by $7,137,214 during the year ended December 31, 2014 primarily as a result of the forfeiture of the net operating loss carryforwards. As there are currently no significant uncertain tax positions, no liability for unrecognized tax positions have been recognized. The Company files tax returns in the U.S., Germany and Australia. In Germany the Company is generally no longer subject to tax examinations for years prior to 2013.

Tax field audit

On July 11, 2014, a tax field audit for the years 2010 to 2012 in accordance with §193 paragraph 1 AO under German law was announced by the tax office Freising. The tax field audit took place in July 2014. The results of the audit lead to a reduction of the Company’s net operating loss carryforwards on German corporate income tax by a total of $619,820 and a reduction of the Company´s net operating loss carryforwards on German corporate trade tax by a total of $644,795 for the years under the tax audit.