NOTE 9 – INCOME TAXES:

At July 31, 2017 the Company had available net-operating loss carryforwards for Federal tax purposes of approximately $354,000, which may be applied against future taxable income, if any, through 2037. Certain significant changes in ownership of the Company may restrict the future utilization of these tax loss carryforwards.

At July 31, 2017 the Company had a deferred tax asset of approximately $120,000 representing the benefit of its net operating loss carryforwards. The Company has not recognized the tax benefit because realization of the tax benefit is uncertain and thus a valuation allowance has been fully provided against the deferred tax asset. The difference between the Federal Statutory Rate of 34% and the Company’s effective tax rate of 0% is due to an increase in the valuation allowance of approximately $10,000 and $36,000 for the years ended July 31, 2017 and 2016, respectively.

The Company’s subsidiary has estimated total available carryforward operating tax losses for Israeli income tax purposes of approximately $240,000 as of July 31, 2017, which may be carryforward to offset against future income for an indefinite period of time.

The Company has no uncertain tax positions that require the Company to record a liability.

The Company had no accrued penalties and interest related to taxes as of July 31, 2016.