Note 7 - Income Taxes

12 Months Ended

Jun. 30, 2016

Notes

Note 7 - Income Taxes

NOTE 7 – INCOME TAXES

Deferred taxes represent the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes. Temporary differences result primarily from the recording of tax benefits of net operating loss carry forwards and stock-based compensation.

As of June 30, 2016, the Company has an insufficient history to support the likelihood of ultimate realization of the benefit associated with the deferred tax asset. Accordingly, a valuation allowance has been established for the full amount of the net deferred tax asset.

The Company’s effective income tax rate differs from the amount computed by applying the federal statutory income tax rate to loss before income taxes for the years ended June 30, 2016 and 2015 as follows:

	June 30, 2016		June 30, 2015
Income tax benefit at federal statutory rate		(34.0)%		(34.0)%
State income tax benefit, net of federal benefit		(6.0)%		(6.0)%
Change in valuation allowance for deferred tax assets		40.0%		40.0%
Income taxes at effective income tax rate		-%		-%

The components of deferred taxes consist of the following at June 30, 2016 and 2015:

	June 30, 2016		June 30, 2015
Stock based compensation	$	210,000	$	-
Net operating loss carryforwards		647,306		400,000
Less: Valuation allowance		(857,306)		(400,000)
Net deferred tax assets	$	-	$	-

As of June 30, 2016, the Company had federal and California income tax net operating loss carryforwards of approximately $2.0 million. These net operating losses will begin to expire 20 years from the date the tax returns will be filed. Currently, no tax returns have been filed for the Company, but the Company believes no taxes will be due because of the operating losses.