Note 5 – Income Taxes

The following summarizes the income tax provision (benefit) as of December 31, 2015 and 2014:

The Company has the following net deferred tax asset:

A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:

As of December 31, 2015, the Company had approximately $369,000 of federal and state net operating loss carryovers (“NOLs”), which begin to expire in 2034 and 2035. In 2015, the Company added approximately $363,000 of NOL to the approximately $6,000 NOL from 2014. The valuation allowance increased approximately $3,000 and $140,000 for the periods ended December 31, 2014 and 2015, respectively.

The Company, after considering all available evidence, fully reserved its deferred tax assets since it is more likely than not that such benefits may be realized in future periods. The Company has not yet established that it can generate taxable income. The Company will continue to evaluate its deferred tax assets to determine whether any changes in circumstances could affect the realization of their future benefit. If it is determined in future periods that portions of the Company’s deferred tax assets satisfy the realization standards, the valuation allowance will be reduced accordingly.

The Company does not have any tax positions for which it is reasonably possible that the total amount of gross unrecognized tax benefits will increase or decrease within twelve months of December 31, 2015. The unrecognized tax benefits may increase or change during the next year for items that arise in the ordinary course of business. The Company’s 2014 and 2015 Income Tax Returns remain open to audit by various Federal and State Taxing Authority.