Note 5 - Income Taxes

12 Months Ended

Jun. 30, 2011

Notes

Note 5 - Income Taxes

NOTE 5 – INCOME TAXES

The net operating loss carry-forward and permanent differences are the components of deferred tax assets for income tax purposes as of June 30, 2011. Approximately $1,467,602 was reduced to zero after considering the valuation allowance of $1,467,602, since there is no assurance of future taxable income.

The net operating loss carry-forward as of June 30, 2011 expires as follows:

Expiring Year		Amount
2027	$	6,039
2028		48,195
2029		14,245
2030		1,058,324
2031		340,799
Total	$	1,467,602

These loss carryovers could be limited under the Internal Revenue Code should a significant change in ownership occur.

The following is an analysis of deferred tax assets as of June 30, 2011:

		Deferred Tax Assets		Valuation Allowance		Balance
Deferred tax assets at June 30, 2010	$	383,113	$	(383,113)	$	-
Additions for the year		115,871		(115,871)		-
Deferred tax assets at June 30, 2011	$	498,985	$	(498,985)	$	-

The following is reconciliation from the expected statutory federal income tax rate to the Company’s actual income tax rate for the years ended June 30:

		2011		2010
Expected income tax (benefit) at Federal statutory tax rate –34%	$	(408,515)	$	(809,423)
Permanent differences		292,644		449,592
Valuation allowance		115,871		359,830
Income tax expense	$	-	$	-

We currently have three years of tax returns that are subject to examination, based on their filing dates by taxing authorities. We currently have no uncertainty of the tax positions that we have taken and believe that we can defend them to any tax jurisdiction.