Income Taxes

12 Months Ended

Aug. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Note 15 – Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

	August 31, 2021			August 31, 2020
Expected federal income tax benefit at statutory rate	$	1,608,855		$	1,041,213
Nondeductible items		(1,158,130	)		(127,358	)
Change in valuation allowance		(450,725	)		(913,855	)
Income tax benefit	$	—		$	—

Significant components of the Company’s deferred tax assets at August 31, 2021 and 2020 are as follows: 

	August 31, 2021			August 31, 2020
Deferred tax assets:
Net operating loss carryforwards	$	1,577,198		$	1,126,473
Research and development credit carry forward		1,963			1,963
Total deferred tax assets		1,579,161			1,128,436
Less: valuation allowance		(1,579,161	)		(1,128,436	)
Net deferred tax asset	$	—		$	—

The Company evaluates its valuation allowance on an annual basis based on projected future operations. When circumstances change and this causes a change in management’s judgment about the realizability of deferred tax assets, the impact of the change on the valuation allowance is reflected in current operations.

For federal income tax purposes, the Company has net U.S. operating loss carry forwards at August 31, 2020 available to offset future federal taxable income, if any, of approximately $7,483,000 which are available to offset future income.  Accordingly, there is no current tax expense for years ended August 31, 2021 and 2020. In addition, the Company has research and development tax credit carry forwards of $1,963 at August 31, 2021, which are available to offset federal income taxes and fully expire by August 31, 2040. The utilization of the tax net operating loss carry forwards may be limited due to ownership changes that have occurred as a result of sales of common stock.

The effects of state income taxes were insignificant for the twelve months ended August 31, 2021 and August 31, 2020.