NOTE 6 - PROVISION FOR INCOME TAXES

The Company provides for income taxes under ASC 740, “Income Taxes”. ASC 740 requires the use of an asset and liability approach in accounting for income taxes. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax basis of assets and liabilities and the tax rates in effect when these differences are expected to reverse. It also requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. Certain tax attributes are subject to an annual limitation as a result of the acquisition of our subsidiaries, which constitute a change of ownership as defined under Internal Revenue Code Section 382.

The Company is subject to taxation in the United States and certain state jurisdictions.

The provision for income taxes differs from the amounts which would be provided by applying the statutory federal income tax rate of 21% to the net loss before provision for income taxes for the following reasons:

Net deferred tax assets consist of the following components as of:

Due to the change in ownership provisions of the Income Tax laws of United States of America, net operating loss carry forwards of approximately $4,428,618, for federal income tax reporting purpose, with a portion expiring from years 2034 to 2037 if not used. When a change in ownership occurs, net operating loss carry forwards may be limited as to use in future years. The tax years still left open are 2018, 2019 and 2020.