v3.22.2.2
INCOME TAXES
 12 Months Ended
Aug. 31, 2022
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 8 – INCOME TAXES

 

The following table sets forth a reconciliation of the federal income tax benefit to the United States federal statutory rate of 21% for the years ended August 31, 2022 and 2021:

Schedule of effective income tax rate reconciliation

   2022   2021 
Income tax benefit (expense) at 21% statutory rate  $609,785   $(429,282)
Stock-based compensation   (105,723)   (184,893)
(Increase) decrease in valuation allowance   (504,062)   614,175 
Reconciliation of the federal income tax benefit  $—   $— 

 

The tax effects of the temporary differences between reportable financial statement income and taxable income are recognized as a deferred tax asset and liability. Significant components of the deferred tax assets are set out below along with a valuation allowance to reduce the net deferred tax asset to zero.

 

Management has established a valuation allowance because, based on an analysis of the tax benefits underlying deferred tax assets, it is unable to establish that it is more-likely-than-not that a tax benefit will be realized. Significant components of deferred tax asset at August 31, 2022 and 2021 are as follows:

 

   2022   2021 
Net operating loss carryforward  $4,522,754   $4,341,024 
Difference in property and equipment basis   796,890    474,558 
Less valuation allowance   (5,319,644)   (4,815,582)
Net deferred tax asset  $—   $— 

 

As a result of a change in control effective in April 2007, net operating losses prior to that date may be partially or entirely unavailable under tax law, to offset future income and; accordingly, these net operating losses are excluded from deferred tax assets.

 

The net operating loss carryforward in the approximate amount of $13,692,000 began to expire in 2022. The Company files income tax returns in the United States and in one state jurisdiction. With few exceptions, the Company is no longer subject to United States federal income tax examinations for fiscal years ending before 2011 and no longer subject to state tax examinations for years before 2010.