NOTE 6 - INCOME TAXES

On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (the “Act”) resulting in significant modifications to existing law including lowering the corporate tax rate from 35% to 21%. The new rate is effective for tax years beginning after December 31, 2017. In accordance with the new tax law, the Company has applied a transition blended U.S. statutory deferral income tax rate of 24.5% for the year ended September 30, 2018. Since the entire net operating loss at September 30, 2017 was used up in the year ending September 30, 2018, the new tax legislation does not affect the way the Company can use and carry forward its previous net operating losses.

The reconciliation of income tax expense at the U.S. statutory rate of 21% in 2019 and the blended U.S. statutory rate of 24.5% in 2018, to the Company’s effective tax rate is as follows:

	Three Months Ended						Year Ended
	December 31,						September 30,
	2019			2018			2019			2018
Income tax expense (benefit) at statutory rate	$	(15,933	)	$	(19,941	)	$	(93,202	)	$	124,269
Income tax adjustment
Expense not deductible in current period		—			—			69,319			—
Imputed interest		92			—			476			—
Adjustment of prior year income tax		—			—			(73,071	)		—
Change of valuation allowance		15,841			—			23,407			(32,042	)
Income tax expense (benefit)	$	—		$	(19,941	)	$	(73,071	)	$	92,227

Net deferred tax assets consist of the following components as of:

		September 30,			September 30,			December 31,			December 31,
		2019			2018			2019			2018
Operating loss carry forward	$	23,407		$	32,042		$	39,248		$	19,941
Net operating losses utilized					(32,042	)
Valuation allowance		(23,407	)		(32,042	)		(39,248	)		—
Deferred tax asset	$	—		$	—		$	—		$	19,941

Due to uncertainties surrounding the Company’s ability to generate future taxable income to realize deferred income tax assets arising as a result of net operating losses carried forward, 100% valuation allowance on deferred tax assets was recorded on December 31, 2019 and September 30, 2019. As of December 31, 2019, the Company has approximately $186,900 net operating loss carryforwards available in the U.S. to reduce future taxable income which can be carryforward indefinitely.