INCOME TAXES

12 Months Ended

Jul. 31, 2021

Income Tax Disclosure [Abstract]

INCOME TAXES

13. 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. Significant components of the Company’s deferred tax assets as of July 31, 2021 are summarized below.

	Federal			State (Arizona)
Net Operating Loss Carryforward	$	555,578		$	129,635
Valuation Allowance		(555,578	)		(129,635	)
Net deferred tax assets	$	0		$	0

In assessing the potential realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the Company attaining future taxable income during the periods in which those temporary differences become deductible. As of July 31, 2021, management was unable to determine if it is more likely than not that the Company’s deferred tax assets will be realized and has therefore recorded an appropriate valuation allowance against deferred tax assets at such dates.

No federal or state tax provision has been provided for the period from August 1, 2020, through July 31, 2021, due to the losses incurred during such periods. The reconciliation below presents the difference between the income tax rate computed by applying the U.S. federal and state statutory rates and the effective tax rate for the period from August 1, 2020, through July 31, 2021.

	Federal			State (Arizona)
Statutory Tax Rate		(21	)%		(4.90	)%
Change in valuation allowance		21	%		4.90	%
Effective tax rate		0			0

At July 31, 2021, the Company has available net operating loss carryforwards for federal income tax purposes of approximately $555,578 and for state income tax purposes of approximately $129,635. Federal net operating losses, if not utilized earlier, expire through 2041. The state net operating losses expire through 2026.

Additionally, at July 31, 2020, the Company had available net operating loss carryforwards for federal income tax purposes which were acquired from the accounting acquiree in connection with the reverse acquisition transaction. Under Internal Revenue Code Section 382, the Company’s ability to use these net operating loss carryforwards is severely limited because of statutory change in control provisions, as a result of which they are not material and are therefore not included in the deferred tax assets described herein.

As the Company’s net operating losses have yet to be utilized, all tax years remain open to examination by federal authorities and other jurisdictions in which the Company currently operates or has operated in the past.