XML 45 R16.htm IDEA: XBRL DOCUMENT
v3.19.3

INCOME TAXES | 12 Months Ended
--- | ---
Aug. 31, 2019
INCOME TAXES [Abstract] |
INCOME TAXES | NOTE 10 – INCOME TAXES Deferred income taxes reflect the tax effects of net operating loss carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets as of August 31 are as follows:
|  | For the Fiscal Years Ended August 31, |
|  | 2019 |  |  | 2018 |
Deferred tax assets (liabilities): |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 609,439 |  |  | $ | 2,009,800 |
AMT credit carryforward |  |  | — |  |  |  | 282,000 |
Accrued compensation |  |  | 113,559 |  |  |  | — |
Deferred revenues |  |  | 149,895 |  |  |  | 28,600 |
Depreciation and depletion |  |  | (46,408 | ) |  |  | (104,900 | )
NQ stock options |  |  | 410,633 |  |  |  | — |
Other |  |  | 46,128 |  |  |  | 80,500 |
Valuation allowance |  |  | — |  |  |  | (2,014,000 | )
Net deferred tax asset |  | $ | 1,283,246 |  |  | $ | 282,000 |
The Company maintained a valuation allowance on the net deferred tax asset other than AMT credit carryforwards as of August 31, 2018. For the fiscal year ended August 31, 2019, the Company has determined it is more likely than not that the Company will realize its deferred tax assets, which consist primarily net operating loss carryforwards. The Company assessed the realizability of its deferred tax assets using all available evidence; considering both historical results and projections of profitability for the reasonably foreseeable future periods. As a result of the Company’s annual reassessment of its conclusions regarding the realization of its deferred tax assets at each financial reporting date, the Company concluded that its deferred tax assets are realizable, and therefore, the valuation allowance is no longer necessary. By releasing the valuation allowance, the Company recognized a deferred tax benefit of approximately $1,284,100 which positively impacted the Company's results of operations and financial position. Income taxes computed using the federal statutory income tax rate differs from the Company’s effective tax rate primarily due to the following for the fiscal years ended August 31:
|  | For the Fiscal Years Ended August 31, |
|  | 2019 |  |  | 2018 |
Expected benefit from federal taxes at statutory rate of 21% and 34% for the years 2019 and 2018 |  | $ | 740,870 |  |  | $ | 34,100 |
State taxes, net of federal benefit |  |  | 129,123 |  |  |  | 4,600 |
Permanent and other differences |  |  | 10,388 |  |  |  | 97,800 |
Change in tax rate |  |  | — |  |  |  | 1,196,464 |
NOL true up |  |  | 225,067 |  |  |  | 17,589 |
Temporary difference true up |  |  | — |  |  |  | 240,352 |
NQ stock options adjustment |  |  | (348,441 | ) |  |  | — |
AMT credit carryforward |  |  | — |  |  |  | (282,000 | )
Other |  |  | (26,202 | ) |  |  | (17,705 | )
Change in valuation allowance |  |  | (2,014,000 | ) |  |  | (1,573,200 | )
Total income tax expense / (benefit) |  | $ | (1,283,195 | ) |  | $ | (282,000 | )
At August 31, 2019, the Company has $2.5 million of net operating loss carryforwards available for income tax purposes. The net operating loss carryforwards expire at various times beginning in 2036 and ending in 2038 for federal income tax purposes and expire at various times beginning in 2035 and ending in 2036 for state income tax purposes. No net operating loss carryforwards expired during the fiscal year ended August 31, 2019 or 2018. The Tax Act reduced the Company’s corporate federal tax rate from 34% to 21% effective January 1, 2018. As a result, the Company is required to re-measure its deferred tax assets and liabilities using the enacted rate at which it expects them to be recovered or settled. The effect of this re-measurement is recorded to income tax expense (benefit) in the year the tax law is enacted. The Company’s deferred tax asset and full valuation allowance was decreased by approximately $1.2 million as a result of the decreased corporate tax rate during the fiscal year ended August 31, 2018. In addition, the Company recorded a $282,000 AMT deferred tax asset for which it does not have a valuation allowance. The Company expects to receive the AMT deferred tax asset as a refund in future years. Most, if not all, of this credit will be refundable starting with the filing of the 2018 (fiscal year ending 2019) through 2021 (fiscal year ending 2022) tax returns, subject to limitations of the Internal Revenue Code. The Company will continue to evaluate the impact of the Tax Act and will record any resulting tax adjustments during 2019.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration