Income Taxes

12 Months Ended

Feb. 28, 2022

Income Tax Disclosure [Abstract]

Income Taxes

9. Income Taxes

The following table reconciles the U.S. federal statutory income tax rate in effect for the years ended February 28, 2022, February 28, 2021, and the Company’s effective tax rate:

	Year Ended February 28, 2022			Year Ended February 28, 2021
U.S. federal statutory income tax	$	(490,375	)	$	(1,240,198	)
PPP loan forgiveness		(21,362	)		-
Meals & Entertainment		46			3,947
Stock expense related to warrant modifications		-			569,135
True-up of prior year permanent items		-			417,242
Change in valuation allowance		511,691			249,874
Effective income tax rate	$	-		$	-

The significant components of deferred income tax assets and (liabilities) at February 28, 2022 and February 28, 2021 are as follows:

	February 28, 2022			February 28, 2021
Capitalized geological/geophysical & other intangibles	$	2,848		$	8,285
Debt discount & related amortization		744,577			486,060
Federal net operating loss		1,967,758			1,709,147
Less: valuation allowance		(2,715,183	)		(2,203,492	)
Net deferred tax asset	$	-		$	-

The amount taken into income as deferred income tax assets must reflect that portion that is more likely-than-not to be realized from future operations. The Company has chosen to provide a full valuation allowance against net deferred tax assets. The Company has recognized a valuation allowance for the net deferred income tax asset since the Company cannot be assured that it is more likely than not that such benefit will be utilized in future years. The valuation allowance is reviewed annually. When circumstances change and which cause a change in management’s judgment about the realize-ability of deferred income tax assets, the impact of the change on the valuation allowance is generally reflected in current income.

The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. Management has considered the likelihood and significance of possible penalties associated with its current and intended filing positions and has determined, based on their assessment, that such penalties, if any, would not be expected to be material.

No provision for income taxes has been provided in these financial statements due to the net loss for the years ended February 28, 2022 and February 28, 2021. An NOL carryforward of $9,370,277 has accumulated as of February 28, 2022 with portions beginning to expire in 2032, of which under the CARES Act a portion can be carried back up to five years but also, can be carried forward indefinitely, limited to 80% of a given year’s taxable income. Since 2018, the accumulated total that can be carried forward indefinitely amount to $5,431,958. NOLs may be limited for future use to the extent there has been a Section 382 limitation resulting from a certain percentage ownership change in a year or years. At this time, Management has not determined whether the threshold ownership change has occurred for any year, or whether a Section 382 limitation applies.