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.

As of June 30, 2019, 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, 2019 and 2018 as follows:

	Year Ended June 30,
	2019			2018

Income tax benefit at federal statutory rate		21	%		34	%
State tax, net of fed effect		7	%		6	%
Change in valuation allowance		-28	%		-40	%
		-	%		-	%

The components of deferred taxes consist of the following at June 30, 2019 and 2018:

	June 30, 2019			June 30, 2018

Net operating loss carryforwards	$	905,723		$	1,267,873
Less: valuation allowance		(905,723	)		(1,267,873	)
Net deferred tax assets	$	-		$	-

As of June 30, 2019, the Company had federal and California income tax net operating loss carryforwards of approximately $3.2 million. These net operating losses originating in tax years beginning prior to Jan. 1, 2018 will begin to expire 20 years from the date the tax returns are filed. The net operating losses originating in tax years beginning after Jan. 1, 2018 will be carry forwarded indefinitely.