| Income Taxes |
13. Income Taxes
The income tax rate at March 31, 2023 and 2022, was 25.09% and 25.85%, respectively to the effective tax rate is as follows:
|
|
|
|
|
|
|
|
|
2023 |
|
2022 |
Net loss before recovery of income taxes |
|
$ |
(4,946,025) |
|
$ |
(10,407,994) |
Expected income tax (recovery) expense |
|
$ |
(1,239,580) |
|
$ |
(2,690,193) |
Tax rate changes and other adjustments |
|
|
320,920 |
|
|
990,363 |
Share based compensation |
|
|
77,270 |
|
|
99,348 |
Other non-deductible expenses |
|
|
228,430 |
|
|
99,585 |
Goodwill impairment |
|
|
— |
|
|
1,107,039 |
Change in valuation allowance |
|
|
612,960 |
|
|
393,858 |
Income tax (recovery) expense |
|
$ |
— |
|
$ |
— |
The following deferred tax assets have not been recognized. Deferred tax reflects the tax effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities and consisted of the following:
|
|
|
|
|
|
|
|
|
|
2023 |
|
|
2022 |
Equipment |
|
$ |
63,320 |
|
$ |
63,563 |
Intangible Assets |
|
|
12,530 |
|
|
— |
Lease liability |
|
|
65,010 |
|
|
— |
Non-capital losses – Canada |
|
|
2,946,130 |
|
|
2,923,625 |
Net operating losses – US |
|
|
10,685,250 |
|
|
10,174,122 |
SR&ED pool |
|
|
1,455,940 |
|
|
1,255,427 |
Other |
|
|
1,267,480 |
|
|
1,395,599 |
Valuation Allowance |
|
|
(16,425,300) |
|
|
(15,812,336) |
|
|
|
70,360 |
|
|
— |
|
|
|
|
|
|
|
Property and equipment |
|
|
(4,040) |
|
|
— |
Right-of-use asset |
|
|
(64.540) |
|
|
— |
Intangibles and other |
|
|
(1,780) |
|
|
— |
Net deferred tax asset |
|
$ |
— |
|
$ |
— |
The Company has non-capital losses in its Canadian subsidiary of $11.0 million which will expire between 2032 and 2043.
The Company has net operating losses in the U.S. of $42.7 million, of which $18.6 million will start to expire in 2028, and the remaining losses can be carried forward indefinitely.
Certain tax attributes are subject to an annual limitation as a result of the acquisition of the US subsidiary, which constitutes a change of ownership as defined under IRC Section 382.
The following describes the open tax years, by major tax jurisdiction, as of March 31, 2023:
|
|
United States – Federal 2019 – present |
United States – State 2019 – present |
Canada – Federal 2018 – present |
Canada – Provincial 2018 – present |
|