NOTE 6 – INCOME TAXES

The reconciliation of the federal statutory income tax rate of 34% to the Company’s effective income tax rate is as follows as of December 31, 2017 and 2016, respectively:

The components of the Company’s deferred tax asset are as follows as of December 31, 2017 and 2016:

Due to the changes in ownership of the Company that occurred on November 29, 2016, approximately $2,700,000 in net operating loss carryforwards (computed in accordance with IRS section 382) were lost for future taxable income. In addition, losses incurred from the date of the change in control to December 31, 2016 were nominal due to limited transactions of the Company. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against all of the deferred tax assets for every period because it is more likely than not that all of the deferred tax assets will not be realized.

The Company has not filed 2012, 2013, 2014, 2015 and 2016 income tax returns. The Company’s tax returns are subject to examination by the federal tax authorities for years 2012 through 2016.