Annual report pursuant to section 13 and 15(d)

Income Taxes

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Income Taxes
 12 Months Ended
Jun. 30, 2012
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]

Note 5 Income Taxes

 

The Company has a net operating loss carryforward for tax purposes of approximately $58,000 at June 30, 2012, expiring through 2032.

 

Significant deferred tax assets at June 30, 2012 and 2011 are approximately as follows:

 

    June 30, 2012     June 30, 2011  
Net operating loss carryforwards   $ 24,000     $ 7,000  
Total deferred tax assets     24,000       7,000  
Less: valuation allowance     (24,000 )     (7,000 )
Net deferred tax asset recorded   $ -     $ -  

 

The valuation allowance at June 30, 2011 was approximately $8,000. The net change in valuation allowance during the year ended June 30, 2012 was an increase of approximately $16,000. In assessing the reliability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of the deferred income tax asset balances to warrant the application of a full valuation allowance as of June 30, 2012.

 

The actual tax benefit differs from the expected tax benefit for the periods ended June 30, 2012 and 2011 (computed by applying the U.S. Federal Corporate tax rate of 34% to income before taxes and a state rate of 10%, due to the Company being headquartered in Israel, for a blended rate of 40.6%) approximately as follows:

 

    June 30, 2012     June 30, 2011  
Expected tax expense (benefit) - Federal   $ (15,000 )   $ (13,000 )
Expected tax expense (benefit) - State     (5,000 )     (4,000 )
Stock issued for services     3,000       10,000  
Impairment Loss     1,000       -  
Change in valuation allowance     16, 000       7,000  
Actual tax expense (benefit)   $ -     $ -