Annual report pursuant to section 13 and 15(d)


12 Months Ended
Dec. 31, 2011
Notes to Financial Statements  


For the year ended December 31, 2011, we had a net loss, and therefore, do not have a tax liability for the year. We have a previous net operating loss carry-forward of $1,160,000. Any income will be netted against this loss carry-forward, with the remainder to be used through the year 2028 to offset future taxable income. The cumulative net operating loss carry-forward for income tax purposes may differ from the cumulative financial statement loss due to permanent differences and timing differences between book and tax reporting. Additionally, we have a foreign tax credit carry-forward of approximately $181,000 that can be used in the future to offset federal income tax owed.


We periodically review the need for a valuation allowance against deferred tax assets based upon earnings history and trends. We believe the valuation allowances provided are appropriate.


The cumulative tax effect at the expected rate of 34% of significant items comprising our net deferred tax amount is as follows:


Deferred tax asset attributable to:   2011   2010
Net operating loss carryover   $ 555,334     $ 394,400  
Valuation allowance     (555,334 )     (394,400 )
Net deferred tax asset   $ 0     $ 0