Prepaid foreign taxes, net, of $672,541 and $944,051 at December 31, 2014 and 2013, respectively, consists primarily of prepaid VAT. The ability to realize the prepaid VAT doesn’t expire, but it is dependent upon the generation of VAT collections on revenues that exceed VAT payments on eligible expenditures in an amount that offsets the prepaid VAT. Management considers the historical and projected revenues, expenses and capital expenditures in making this assessment.

 

In assessing the realization of the prepaid foreign taxes, management considers whether it is more likely than not that some portion or all of the prepaid foreign taxes will not be realized. Based on this assessment, management believes that prepaid foreign taxes as recorded on the balance sheet are fully realizable. Accordingly, there are no valuation allowances related to prepaid foreign taxes as of December 31, 2014 and 2013.