Annual report pursuant to Section 13 and 15(d)

Note 14 - Income Taxes

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Note 14 - Income Taxes
 12 Months Ended
Dec. 31, 2023
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

14.         Income Taxes

 

The Company has incurred net operating losses since inception. The Company has not reflected the benefit of net operating loss carryforwards in the accompanying consolidated financial statements and has established a full valuation allowance against its deferred tax assets.

 

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 as well as operating losses and tax credit carryforwards.

 

The significant components of our deferred tax assets and liabilities are as follows (in thousands):

 

   

December 31,

  
   

2023

    

2022

  

Deferred tax assets (liabilities):

                

Non-capital losses carried forward

   $ 26,044     $ 21,000  

Research and development expenditures

     817       817  

Share issue costs

     495       338  

Patents and other

     358       320  

Accruals

     214       213  

Share-based compensation

     212       166  

Property and equipment

     (102 )     (117 )

Total deferred tax asset, net

     28,038       22,737  

Valuation allowance

     (28,038 )     (22,737 )

Net deferred tax asset

   $ —     $ —  

 

Realization of the future tax benefits is dependent on our ability to generate sufficient taxable income within the carryforward period. Because of our history of operating losses, management believes that the deferred tax assets arising from the above-mentioned future tax benefits are currently not likely to be realized and, accordingly, we have provided a full valuation allowance.

 

The reconciliation of the Canadian statutory income tax rate applied to the net loss for the year to the income tax expense is as follows (in thousands):

 

   

December 31,

  
   

2023

    

2022

  

Statutory income tax rate

     27.0 %     27.0 %

Income tax recovery based on statutory rate

   $ (5,225 )   $ (3,685 )

Share-based compensation

     409       340  

Prior-year true-ups

     (388 )     (33 )

Share issuance costs

     (71 )     —  

Other

     17       62  

Change in valuation allowance

     5,301       3,344  

Income tax expense

   $ 43     $ 28  

 

Net operating losses and tax credit carryforwards as of December 31, 2023, are as follows:

 

   

Amount

(In thousands)

  

Expiration Years

Non-capital income tax losses, net

   $ 92,955  

Beginning 2026

Research and development expense carry forwards

     3,027  

Indefinitely

Tax credits

     474  

Beginning 2024