NOTE 5 – Income Taxes

The Company accounts for income taxes in accordance with ASC Topic No. 740. This standard requires the Company to provide a net deferred tax asset or liability equal to the expected future tax benefit or expense of temporary reporting differences between book and tax accounting methods and any available operating loss or tax credit carryforwards.

The Company has available at December 31, 2014, unused operating loss carryforwards of approximately $4,435,042, which may be applied against future taxable income and which expire in various years through 2034. However, if certain substantial changes in the Company’s ownership should occur, there could be an annual limitation on the amount of net operating loss carryforward which can be utilized. The amount of and ultimate realization of the benefits from the operating loss carryforwards for income tax purposes is dependent, in part, upon the tax laws in effect, the future earnings of the Company and other future events, the effects of which cannot be determined. Because of the uncertainty surrounding the realization of the loss carryforwards, the Company has established a valuation allowance equal to the tax effect of the loss carryforwards of approximately $2,255,520 and $1,044,923 at December 31, 2014 and 2013, respectively, and, therefore, no deferred tax asset has been recognized for the loss carryforwards. The change in the valuation allowance is approximately $1,210,597 and $314,037 for the years ended December 31, 2014 and 2013, respectively.

Deferred tax assets are comprised of the following:

	2014		2013

Deferred tax assets:
NOL carryover	$	1,723,014	$	1,010,992
Impairments		33,931		33,931
Warrants		498,575		-
Valuation allowance		(2,255,520)		(1,044,923)
Net deferred tax asset	$	0	$	0

The reconciliation of the provision for income taxes computed at the U.S. federal statutory tax rate to the Company’s effective tax rate for the period ended December 31, 2014 and 2013 is as follows:

	2014		2013

Book Loss	$	1,059,467	$	249,600
State taxes		151,130		35,605
Deductible differences		-		28,832
Change in valuation allowance		(1,210,597)		(314,037)

Provision for Income Taxes	$	-	$	-