Annual report [Section 13 and 15(d), not S-K Item 405]

Note 16 - Income Taxes

v3.25.1
Note 16 - Income Taxes
 12 Months Ended
Dec. 31, 2024
Notes To Financial Statements [Abstract]  
Income taxes
16.
Income taxes
(a)
Income taxes

For the years ended December 31, 2024 and 2023, the total comprehensive loss is as follows:

 

December 31,
2024

 

 

December 31,
2023

 

Loss attributed to U.S. foreign operations

 

$

(21,564

)

 

$

(45,652

)

Loss attributed to Canadian operations

 

 

(3,866

)

 

 

(5,555

)

Loss before income taxes

 

$

(25,430

)

 

$

(51,207

)

 

(b)
Tax rate reconciliation

Major items causing the Company’s income tax rate to differ from the statutory rate of approximately 26.5% (December 31, 2023 – 26.5%) are as follows:

 

Year ended December 31, 2024

 

 

Year ended December 31, 2023

 

Net loss

 

$

(25,430

)

 

$

(51,207

)

Statutory Canadian corporate tax rate

 

 

26.5

%

 

 

26.5

%

Computed expected tax recovery

 

$

(6,739

)

 

$

(13,570

)

Non-deductible permanent differences

 

 

(765

)

 

 

873

 

Change in valuation allowance

 

 

6,740

 

 

 

13,059

 

Foreign tax rate differential

 

 

(4

)

 

 

(677

)

Prior year true-up adjustments

 

 

734

 

 

 

355

 

Other

 

 

34

 

 

 

(40

)

 

$

—

 

 

$

—

 

 

(c)
Significant components of deferred taxes

The tax effects of temporary differences that give rise to significant portions of the unrecognized deferred tax assets are presented below:

 

 

December 31,
2024

 

 

December 31,
2023

 

Net operating losses carried forward

 

$

79,951

 

 

$

73,552

 

Research and development expenditures

 

 

5,016

 

 

 

5,025

 

Property, equipment, and other intangible assets

 

 

7,265

 

 

 

7,321

 

Research and development tax credits

 

 

4,864

 

 

 

4,930

 

Financing costs

 

 

909

 

 

 

431

 

Right-of-use assets

 

 

13

 

 

 

19

 

Total deferred tax assets

 

 

98,018

 

 

 

91,278

 

Valuation allowance

 

 

(98,018

)

 

 

(91,278

)

Net deferred tax asset

 

$

—

 

 

$

—

 

The valuation allowance at December 31, 2024 was primarily related to net operating loss carryforwards that, in the judgment of management, are not more-likely than-not to be realized. In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that all or some portion of the deferred assets will not be realized. This ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those deductible temporary difference become deductible. Based on the history of

losses and projections for future taxable income, management believes that it is not more-likely than-not that the Company will realize the benefits of these deductible temporary differences (e.g. deferred tax assets).

The Company has certain deductible Canadian research and development expenditures that have not been deducted for tax purposes, totaling $18.9 million, that can be carried forward indefinitely. The Company also has Canadian non‑refundable federal and provincial investment tax credits of approximately $2.3 million which are available to reduce future federal taxes payable and began to expire in 2025, as well as non‑refundable U.S. research and development tax credits of approximately $3.1 million which are available to reduce future U.S. taxes payable and begin to expire in 2038.

In addition, the Company has Canadian non-capital loss carryforwards of $292.7 million. To the extent that the non-capital loss carryforwards are not used, they begin to expire in 2026. The Company also has a U.S. non-capital loss carryforward of $1.2 million. To the extent that the non-capital loss carryforwards are not used, they begin to expire in 2034.

The Company files income tax returns with Canada and its provinces and territories. Generally, we are subject to routine examinations by the Canada Revenue Agency ("CRA"). Income tax returns filed with various provincial jurisdictions are generally open to examination for periods of four to five years subsequent to the filing of the respective return.

The Company also files income tax returns for our U.S. subsidiary with the U.S. federal and state tax jurisdictions. Generally, we are subject to routine examination by taxing authorities in the U.S. jurisdictions. There are presently no examination of our U.S. federal and U.S. state returns. We believe that our tax positions comply with the applicable tax law.