NOTE

– INCOME TAXES

We did

not

provide any current or deferred U.S. federal income tax provision or benefit for any of the periods presented because we have experienced operating losses since inception. When it is more likely than

not

that a tax asset cannot be realized through future income the Company must allow for this future tax benefit. We provided a full valuation allowance on the net deferred tax asset, consisting of net operating loss carry forwards, because management has determined that it is more likely than

not

that we will

not

earn income sufficient to realize the deferred tax assets during the carry forward period.

The Company has

not

taken a tax position that, if challenged, would have a material effect on the financial statements for the year ended

December 2018

applicable under FASB ASC

740.

We did

not

recognize any adjustment to the liability for uncertain tax position and therefore did

not

record any adjustment to the beginning balance of accumulated deficit on the balance sheet. All tax returns for the Company remain open for IRS inspection.

The

2017

Act reduces the corporate tax rate from

35%

21%

for tax years beginning after

December 31, 2017.

For net operating losses (NOLs) arising after

December 31, 2017,

the

2017

Act limits a taxpayer’s ability to utilize NOL carryforwards to

80%

of taxable income. In addition, NOLs arising after

2017

can be carried forward indefinitely, but carryback is generally prohibited. NOLs generated in tax years beginning before

January 1, 2018

will

not

be subject to the taxable income limitation. The

2017

Act would generally eliminate the carryback of all NOLs arising in a tax year ending after

2017

and instead would permit all such NOLs to be carried forward indefinitely.

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences for the periods presented are as follows:

	2017
Income tax provision at the federal statutory rate		35.00	%
Income tax provision at the state statutory rate		4.63	%
Effect on operating losses		(39.63%	)
Change in federal statutory tax rate		21.00	%
Net effect		(14%	)
		-

The net deferred tax assets consist of the following:

	2018			2017
Net operating loss carry forward	$	537,000		$	170,067
Change in statutory tax rate					(23,809	)
Valuation allowance		(537,000	)		(146,258	)
Net deferred tax asset	$	-		$	-

A reconciliation of income taxes computed at the statutory rate is as follows:

	2018			2017
Tax benefit at effective rate (25.63%)	$	391,000		$	43,588
Increase in valuation allowance		(391,000	)		(43,588	)
Net income tax benefit	$	-		$	-

The net federal operating loss carry forward will expire in

2034.

This carry forward

may

be limited upon the consummation of a business combination under IRC Section

381.