Note 6 — Income Taxes

For the six months ended June 30, 2015 and 2014, there are no provisions for income taxes or corporate taxes payable due to the net operating losses of $2,183,856, and $505,614, respectively, incurred in each period.

Deferred income taxes, if applicable, are provided for the differences between the basis of assets and liabilities for financial reporting and income tax purposes. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company has approximately $3,933,000 net operating losses that expire through 2035 and if realized would have a tax benefit of approximately $1,710,000. The Company has recorded a full valuation allowance against this deferred tax benefit since the Company believes it is more likely than not that the Company will not utilize the losses in the future, and accordingly, it has not been recorded as a deferred tax asset. As a result of the merger with Lindblad on July 8, 2015, the Company has not completed an analysis whether an ownership change occurred under Internal Revenue Code Section 382, which, if it did occur, could substantially limit its ability in the future to utilize its net operating losses and other tax carryforwards.

A reconciliation of the provision for income taxes with the amounts computed by applying the statutory Federal income tax rate to income from continuing operations before provision for income taxes is as follows:

	For the Six Months Ended June 30, 2015			For the Six Months Ended June 30, 2014

Tax provision at statutory rate – federal		(34.0	%)		(34.0	%)
Tax provision at effective state and local rates		(9.5	%)		(9.5	%)
Effect of valuation allowance on deferred tax asset		43.5	%		43.5	%

Effective tax rate		0.0	%		0.0	%