NOTE 12 – INCOME TAXES

9 Months Ended

12 Months Ended

May 31, 2022

Aug. 31, 2021

Income Tax Disclosure [Abstract]

NOTE 12 – INCOME TAXES

NOTE 12 – INCOME TAXES

Components of net deferred tax assets, including a valuation allowance, are as follows:

	May 31, 2022			August 31, 2021
Deferred tax asset attributable to:
Net operating loss carry over	$	1,246,974		$	871,681
Less: valuation allowance		(1,246,974	)		(871,681	)
Net deferred tax asset	$	—		$	—

The valuation allowance for deferred tax assets was $1,246,974 as of May 31, 2022 and $871,681 as of August 31, 2021. In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not the deferred tax assets would not be realized as of May 31, 2022 and August 31, 2021

Reconciliation between the statutory rate and the effective tax rate is as follows:

	Nine months ended
	May 31,
	2022			2021
Federal statutory tax rate		21	%		21	%
Change in valuation allowance		(21	%)		(21	%)
Effective tax rate		0	%		0	%

The Company's future business will focus on local cinemas and websites in the United States. During the nine months ended May 31, 2022 and 2021, the Company and its subsidiary have incurred a consolidated net loss of $1,769,767 and $2,601,535, respectively and had net loss carryforward from prior years. As a result, the Company and its subsidiary did not incur any income tax during the three and nine months ended May 31, 2022 and 2021.

NOTE 14 – INCOME TAXES

On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (the “Act”) resulting in significant modifications to existing law. The Company has completed the accounting for the effects of the Act. The Company’s financial statements for the year ended August 31, 2019 reflect certain effects of the Act which includes a reduction in the corporate tax rate from 35% to 21% as well as other changes.

Components of net deferred tax assets, including a valuation allowance, are as follows as of August 31, 2021 and August 31, 2020:

	August 31, 2021			August 31, 2020
Deferred tax asset attributable to:
Net operating loss carry over	$	871,681		$	447,765
Less: valuation allowance		(871,681	)		(447,765)
Net deferred tax asset	$	—		$	—

The valuation allowance for deferred tax assets was $871,681 as of August 31, 2021 and $447,765 as of August 31, 2020. In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible. Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment. As a result, management determined it was more likely than not the deferred tax assets would not be realized as of August 31, 2021 and August 31, 2020.

Reconciliation between the statutory rate and the effective tax rate is as follows for the years ended August 31, 2021 and August 31, 2020:

	Years ended
	August 31,
	2021			2020
Federal statutory tax rate		21	%		21	%
Change in valuation allowance		(21	%)		(21	%)
Effective tax rate		0	%		0	%

The Company’s fully owned subsidiary App Board Limited registered and located in Hong Kong. It is governed by the income tax law of the Hong Kong and is subject to a tax rate of 16.5%.

During the years ended August 31, 2021 and August 31, 2020, the Company and its subsidiary have incurred a consolidated loss of $(3,608,097) and $(1,523,071), respectively. As a result, the Company and its subsidiary did not incur any income tax during the years ended August 31, 2021 and August 31, 2020.