Annual report pursuant to section 13 and 15(d)

NOTE 9. INCOME TAXES (Tables)

v2.4.0.6
NOTE 9. INCOME TAXES (Tables)
 12 Months Ended
Dec. 31, 2012
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]
The provision for income taxes consists of the following:

   
Fiscal Year
   
Fiscal Year
 
   
Ended
   
Ended
 
   
December 31, 2012
   
December 31, 2011
 
             
Current
 
$
-
   
$
-
 
Deferred
   
-
     
-
 
                 
Total Federal
 
$
-
   
$
-
 
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]
The provision for income taxes differs from the amount computed by applying the federal statutory income tax rate (35%) on operations due primarily to permanent differences attributable to organizational expenses for the purchase of Art Design, Inc. (the shell company) in the amount of $148,014.

   
Fiscal Year
   
Fiscal Year
 
   
Ended
   
Ended
 
   
December 31, 2012
   
December 31, 2011
 
             
Income tax expense computed at statutory rates
 
$
(504,000
)
 
$
(40,169
)
Non-deductible items
   
55,732
     
-
 
Change in valuation allowance
   
448,268
     
40,169
 
                 
Total
 
$
-
   
$
-
 
Schedule of Deferred Tax Assets and Liabilities [Table Text Block]
The components of the net deferred tax asset were as follows:

   
December 31, 2012
 
   
Gross Values
   
Tax Effect
 
Deferred tax assets
           
Book Impairment
 
$
-
   
$
-
 
Net operating loss carryforwards
   
       2,303,816
     
806,336
 
Asset retirement obligation
   
                      -
     
-
 
Other
   
               6,000
     
2100
 
Total deferred tax assets
   
       2,309,816
     
   808,436
 
                 
Deferred tax liabilities
               
O&G Properties
   
(1,029,050
)     
(360,168)
 
Other
   
                      -
     
-
 
Total deferred tax liabilities
   
(1,029,050
)    
(360,168)
 
Less: Valuation allowance
   
                  (1,280,766)
     
 (448,268)
 
Net deferred tax assets (liabilities)
 
$
-
   
$
   -