NOTE 4 - INCOME TAXES:

No current provision for Federal income taxes was required for the years ended December 31, 2011 and 2010, due to the Company's operating losses. At December 31, 2011 and 2010 the Company had unused net operating loss carry-forwards of approximately $1,300,000 and $1,700,000 which expire at various dates through 2030. Most of this amount is subject to annual limitations under certain provisions of the Internal Revenue Code related to "changes in ownership."

As of December 31, 2011 and 2010, the deferred tax assets related to the aforementioned carry-forwards have been fully offset by valuation allowances, since it is more likely than not that significant utilization of such amounts will not occur in the foreseeable future. During the year ended December 31, 2011, approximately $510,000 of net operating loss-carry forwards expired.

		2011		2010
				(Restated)
Deferred tax assets and valuation allowances consist of:

Deferred tax assets:
Net operating loss carry forwards	$	520,176	$	682,408

Less valuation allowance		(520,176)		(682,408)
Net deferred tax assets	$	-	$	-

We file income tax returns in the U.S. Federal and Texas state jurisdictions. Tax years for fiscal 2008 through 2011 are open and potentially subject to examination by the Federal and Texas state taxing authorities. Tax years 2007 through 2011 are open and potentially subject to examination by the New Jersey state taxing authority.

The following is a reconciliation of the tax derived by applying the statutory rate to the earnings before income taxes, and comparing that to the recorded income tax (expense) benefits:

	Year ended
	December 31,
	2011	2010
Tax benefits (expense) at statutory rate	35%	(35%)
Unrecognized tax benefits (expense) of current period tax losses	(35%)	35%
Effective tax rate	-	-

The Company had no uncertain tax positions that would necessitate recording of a tax related liability.