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Annual report pursuant to section 13 and 15(d)

Income Taxes

v2.4.0.6
Income Taxes
 12 Months Ended
Feb. 29, 2012
Notes to Financial Statements  
Income Taxes

 

Note 6. Income Taxes

 

The components of income tax expense (benefit) are as follows:

 

      For the   For the
      Year Ended   Year Ended
      February 29, 2012   February 28, 2011
Current:        
  Federal  $                             -    $                             -
  State                                 -                                   -
                                      -                                   -
Deferred:      
  Federal                                 -                                   -
  State                                 -                                   -
                                      -                                   -
  Total Income tax expense (benefit)  $                             -    $                             -

 

  

Significant components of the Company's deferred income tax assets and liabilities are as follows:

 

      February 29, 2012   February 28, 2011
Deferred tax assets:      
  Net operating loss  $                    14,152    $                      4,606
    Total deferred tax assets                        14,152                            4,606
           
Valuation allowance:      
  Beginning of year                        (4,606)                          (1,224)
  (Increase) decrease during year                        (9,546)                          (3,382)
    Ending balance                      (14,152)                          (4,606)
           
Net deferred tax asset  $                             -    $                             -

 

A valuation allowance is established if it is more likely than not that all or a portion of the deferred tax asset will not be realized.  The Company recorded a valuation allowance in fiscal 2012 and 2011 due to the uncertainty of realization.  Management believes that based upon its projection of future taxable operating income for the foreseeable future and its recent change in business and change in control, it is more likely than not that the Company will not be able to realize the tax benefit associated with deferred tax assets.  The net change in the valuation allowance during the years ended February 29, 2012 and February 28, 2011 was an increase of $9,546 and $3,382, respectively.

 

At February 29, 2012, the Company had $41,624 of net operating loss carryforwards which will expire from 2029 to 2031. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for unrecognized tax benefits. As of February 29, 2012, tax years 2010 through 2012 remain open for IRS audit. The Company has received no notice of audit from the Internal Revenue Service for any of the open tax years.

 

A reconciliation of income tax computed at the U.S. statutory rate to the effective income tax rate is as follows:

 

      For the   For the
      Year Ended   Year Ended
      February 29, 2012   February 28, 2011
Statutory  U.S. federal income tax rate 34.0%   34.0%
Change in valuation allowance                          (34.0)                            (34.0)
Effective income tax rate 0.0%   0.0%