NOTE 4- Income Taxes:

The provision for taxes on income includes the following:

The total tax provision differs from the amount computed by applying the statutory federal income tax rate to income before income taxes as follows:

Deferred income taxes result from differences in the bases of assets and liabilities for tax and accounting purposes.

The Company has determined, based on available evidence, that it is more likely than not that the deferred tax assets will be realized. No valuation allowance was provided against deferred tax assets in the accompanying statements. The Company recognized a net operating loss carry-forward (before tax effect) in the fiscal year ended October 28, 2005 in the amount of $912 which expires in fiscal year 2025.

NOTE 5- Line of Credit:

Under the terms of a revolving line of credit with Bank of America, the Company may borrow up to $2,000 through April 30, 2006. The interest rate is at the bank’s reference rate unless the Company elects an optional interest rate. The borrowing agreement contains various covenants, the more significant of which require the Company to maintain certain levels of shareholders’ equity and working capital. The Company was in compliance with all provisions of the agreement during the year. There were no borrowings under this line of credit during the year.