Income Taxes

9 Months Ended

Sep. 30, 2017

The components of income tax (benefit) expense for the each of the Nine month periods ended September 30, 2017 and 2016, respectively, are as follows:

	Nine months		Nine months
	ended		ended
	September 30,		September 30,
	2017		2016
Federal:
Current	$	—	$	—
Deferred		—		—
		—		—
State:
Current		—		—
Deferred		—		—
		—		—

Total	$	—	$	—

As of September 30, 2017, after consideration of the change in control resulting from the Armada transaction, the Company will have an aggregate net operating loss carryforward(s) to offset future taxable income of approximately $179,000. The amount and availability of any net operating loss carryforward(s) will be subject to the limitations set forth in the Internal Revenue Code. Such factors as the number of shares ultimately issued within a three year look-back period; whether there is a deemed more than 50 percent change in control; the applicable long-term tax exempt bond rate; continuity of historical business; and subsequent income of the Company all enter into the annual computation of allowable annual utilization of any net operating loss carryforward(s).

The Company's income tax (benefit) expense for the each of the nine months ended September 30, 2017 and 2016, respectively, are as follows:

	Nine months			Nine months
	ended			ended
	September 30,			September 30,
	2017			2016

Statutory rate applied to income before income taxes	$	(61,000	)	$	(32,600	)
Increase (decrease) in income taxes resulting from:
State income taxes		—			—
Non-deductible charge for the effect of the partial conversion
of the note payable to common stock at less than “fair value”		—			—
Other, including reserve for deferred tax asset and application
of net operating loss carryforward(s)		61,000			32,600

Income tax expense	$	—		$	—

Temporary differences, consisting primarily of the prospective usage of net operating loss carryforwards give rise to deferred tax assets and liabilities as of September 30, 2017 and December 31, 2016, respectively:

	September 30,			December 31,
	2017			2016
Deferred tax assets
Net operating loss carryforwards	$	61,000		$	447,400
Less valuation allowance		(61,000	)		(447,400	)

Net Deferred Tax Asset	$	—		$	—

During the nine months ended September 30, 2017 and the year ended December 31, 2016, respectively, the valuation allowance against the deferred tax asset increased (decreased) by approximately $(386,400) and $62,400, respectively.

Mansfield-Martin Exploration Mining, Inc. 10-Q