Note 6 - Income Taxes

12 Months Ended

Oct. 31, 2013

Note 6 - Income Taxes

As of October 31, 2013 and 2012, the Company had a net operating loss (NOL) carryforward of approximately $3,216,469 and $2,596,974, respectively, adjusted for other non-deductible items available to reduce future taxable income, if any. The NOL carryforward begins to expire in 2029, and fully expires 2034. Because management is unable to determine that it is more likely than not that the Company will realize the tax benefit related to the NOL carryforward , by having taxable income, a valuation allowance has been established at October 31, 2013 and 2012 to reduce the tax benefit asset value to zero.

Components of net deferred tax assets, including a valuation allowance, are as follows at October 31:


	October 31,
	2013			2012
Deferred tax assets		1,087,161			822,971
Valuation allowance		(1,087,161	)		(822,971	)
Total deferred tax assets	$	-		$	-

The valuation allowance for deferred tax assets as of October 31, 2013 and 2012 was $264,190 and $226,914, respectively. In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not the deferred tax assets would not be realized as of October 31, 2013 and 2012, and recorded a full valuation allowance.

Reconciliation between the statutory rate and the effective tax rate is as follows at October 31, 2013 and 2012:


Federal statutory tax rate	(35.0	)%
Permanent difference and other	35.0	%
Effective tax rate	0.0	%

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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