Income Tax Disclosure

12 Months Ended

May. 31, 2015

Notes

Income Tax Disclosure

Note 13. INCOME TAXES

The Company has experienced losses during most years since its inception. As a result, it has incurred no Federal income tax. The Internal Revenue Code allows net operating losses (NOL’s) to be carried forward and applied against future profits for a period of twenty years; an NOL of $3,912,371 had accumulated at May 31, 2015 on U.S. operations and has been carried forward. The potential tax benefit of the NOL’s has been recognized on the books of the Company, but offset by a valuation allowance. If not used, the carryforwards will expire as detailed below.

Year Ended May 31,	Amount
2017	$102,907
2018	154,637
2019	72,578
2020	28,123
2021	124,157
2022	137,570
2023	80,079
2024	161,194
2025	217,636
2026	156,448
2027	55,133
2028	32,333
2030	8,065
2032	230,874
2033	1,605,369
2034	240,051
2035	505,217

Under current accounting guidance, recognition of deferred tax assets is permitted unless it is more likely than not that the assets will not be realized. The Company has recorded deferred tax assets using statutory rates, as presented below. The valuation reserve increased by $92,638 during the year ended May 31, 2015.

	Total
Deferred Tax Assets	$ 586,856
Realization Allowance	(586,856)
Balance Recognized	$             0

The effective tax rate is as follows:

Statutory Federal Rate	15%
Effect of Valuation Allowance	(15)%
Effective Rate	0%

The financial statements include a charge for income tax of AIVN de Mexico, despite the fact that the Mexican company sustained losses during the current fiscal year.  Costs incurred by the Mexican subsidiary include costs that are deductable for income tax purposes in Mexico and some that are not so deductable.  As a result, there was a taxable profit.