Note 6 – Income Taxes

There was no income tax expense in fiscal 2017 and 2016 due to the Company’s net taxable losses.

The reconciliation of income tax expense (benefit) for the years ended September 30, 2017 and 2016 computed at the United States federal tax rate of 34% to income tax expense (benefit) is as follows:

The tax effect of temporary differences that give rise to significant portions of the deferred tax assets is as follows:

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. At September 30, 2017 the Company has net operating losses (NOL) of approximately $660,000 that will expire from 2035 to 2036. In the event that a significant change in ownership of the Company occurs as a result of the Company’s issuance of common stock, the utilization of the NOL carry forward will be subject to limitation under certain provisions of the Internal Revenue Code. Management does not presently believe that such a change has occurred.

A valuation allowance is established if it is more likely than not that all or a portion of the deferred tax asset will not be realized. Accordingly, a valuation allowance was established at September 30, 2017 and 2016 for the full amount of our deferred tax assets due to the uncertainty of realization. Management believes that based upon its projection of future taxable operating income for the foreseeable future, it is more likely than not that the Company will not be able to realize the benefit of the deferred tax assets at September 30, 2017 and 2016.