Note 5 - Income Taxes
The Company has established a valuation allowance against deferred tax assets due to the uncertainty surrounding the realization of such assets as evidenced by the cumulative losses from operations through December 31, 2017. Management periodically evaluates the recoverability of the deferred tax assets. At such time as it is determined that it is more likely than not that deferred assets are realizable, the valuation allowance will be reduced accordingly and recorded as a tax benefit.
A reconciliation of income taxes at statutory rates is as follows:
| Years Ended December 31, | ||||||||
| 2017 | 2016 | |||||||
| LOSS BEFORE INCOME TAXES | $ | (403,999 | ) | $ | (190,622 | ) | ||
| Statutory tax rate | 34 | % | 34 | % | ||||
| Expected recovery at statutory rate | (137,000 | ) | (65,000 | ) | ||||
| Non-deductible expenses | 4,000 | — | ||||||
| Effect of change in tax rate | 31,000 | 15,000 | ||||||
| Change in valuation allowance | 102,000 | 50,000 | ||||||
| $ | — | $ | — | |||||
The Company’s tax-effected deferred income tax assets and liabilities are estimated as follows:
| December 31, | ||||||||
| 2017 | 2016 | |||||||
| Non-capital losses | $ | 389,000 | $ | 287,000 | ||||
| Valuation allowance | (389,000 | ) | (287,000 | ) | ||||
| $ | — | $ | — | |||||
The Company has non-capital losses carried forward of approximately $1,500,000 which expire between 2028 and 2037.