INCOME TAXES

 

Income taxes are accounted for in accordance with the provisions of FASB ASC Accounting for Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts expected to be realized.

 

At the Company had approximately net deferred tax assets of The Company has provided a valuation allowance and it is unlikely the Company will benefit from these NOL and thus Management has determined a valuation reserve is required. The valuation reserve increased during by against the full amount of its deferred tax asset.

 

The following table illustrates the source and status of the Company's major deferred tax assets as of and

 

 

The provision for income taxes for year ended and differs from the amount computed by applying the statutory federal income tax rate to income before income taxes as follows:

 

 

The Company had net operating loss carry forwards for tax purposes of approximately at expiring at various dates from to A significant portion of these carry forwards are subject to limitations on annual utilization due to "equity structure shifts" or "owner shifts" involving percent stockholders" (as defined in the Internal Revenue Code of as amended), which resulted in more than a percent change in ownership.

 

The Company files federal and state income tax returns subject to statutes of limitations. The years ended and are subject to examination by federal and state tax authorities. After consideration of all the evidence, both positive and negative, management has recorded a full valuation allowance at due to the uncertainty of realizing the deferred income tax assets.

 

Management does believe that the Company has any material uncertain tax positions requiring recognition or measurement in accordance with the provisions of ASC Accordingly, the adoption of these provisions of ASC did not have a material effect on the Company’s financial statements. The Company’s policy is to record interest and penalties on uncertain tax positions, if any, as income tax expense. 

 

The Company operates through its subsidiaries in Armenia, Canada and Chile, the Company’s wholly-owned subsidiaries might be subject to income and other taxes in the jurisdictions in which a subsidiary operates. The Company has not determined, if any income or other taxes are due at the date of this statement, but does not expect the amount, if any, to be material. Significant judgement is required in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Company recognized liabilities for anticipated tax audit issues based on the Company’s current understanding of the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made.