7. INCOME TAXES

12 Months Ended

May 31, 2012

Income Tax Disclosure [Abstract]

7. INCOME TAXES

The Company has net operating loss carry forwards of approximately $5,246,000 available to reduce future taxable income, which expire in various years through 2037.

The utilization of net operating loss carryforwards may be limited as a result of cumulative changes in the Company's stock ownership.

Deferred income taxes reflect the impact of net operating loss carryforwards. In recognition of the uncertainty regarding the ultimate amount of income tax benefits to be derived from the Company's net operating loss carryforwards, the Company has recorded a valuation allowance for the entire deferred tax asset.

The deferred income tax asset is comprised of the following at May 31, 2012 and 2011 respectively:

	2012			2011
Gross deferred tax assets	$	1,784,000		$	1,721,000
Valuation allowance		(1,784,000	)		(1,721,000	)
Net deferred income tax asset	$	-0-		$	-0-

A reconciliation of the effective income tax rate to the statutory rate is as follows:

Year ended May 31,	2012	2011
Tax benefit at federal statutory rate	(34)%		(34)%
Increase in valuation allowance	34		34
	-0-%		-0-%

 Effective January 1, 2007, the Company adopted the provisions of FASB ASC 740, "Accounting for Uncertainty in Income Taxes—An Interpretation of FASB Statement No. 109." FIN 48 provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in the financial statements in accordance with SFAS No. 109. Tax positions must meet a "more-likely-than-not" recognition threshold at the effective date to be recognized upon the adoption of ASC 740 and in subsequent periods. Upon the adoption of ASC 740, the Company had no unrecognized tax benefits.

Income taxes are computed using the asset and liability method of accounting. Under the asset and liability method, a deferred tax asset or liability is recognized for estimated future tax effects attributable to temporary differences and carryforwards. The measurement of deferred income tax assets is adjusted by a valuation allowance, if necessary, to recognize future tax benefits only to the extent, based on available evidence; it is more likely than not such benefits will be realized. The Company recognizes interest and penalties, if any, related to uncertain tax positions in selling, general and administrative expenses. No interest and penalties related to uncertain tax positions were accrued at May 31, 2012.

The tax years 2008 through 2011 remain open to examination by the major taxing jurisdictions in which the Company operates. The Company expects no material changes to unrecognized tax positions within the next twelve months.