Income Taxes

3 Months Ended

Jan. 31, 2016

Income Tax Disclosure [Abstract]

Income Taxes

4. Income Taxes

Based on the Company’s evaluation, management has concluded that there are no significant tax positions requiring recognition in the condensed interim consolidated financial statements.

The Company has incurred losses in Canada since inception, which have generated net operating loss carryforwards for income tax purposes. The net operating loss carryforwards arising from Canadian sources as of January 31, 2016 approximated $7,730,000, which will expire from 2016 through 2035. All fiscal years except 2015 have been assessed as filed by Canadian tax authorities.

A research and development tax credit for 2012 for which the Company received a refund of $81,460 is being refuted by Canadian taxation authorities. The Company is disputing the position taken by the taxation authorities, but has established a reserve for possible repayment.

As of January 31, 2016, the Company had net operating loss carryforwards from US sources of approximately $45,409,000 available to reduce future Federal taxable income which will expire from 2019 through 2035. Returns for the years 2008 through 2015 are yet to be filed.

For the three months ended January 31, 2016 and 2015, the Company’s effective tax rate differs from the statutory rate principally due to the net operating losses for which no benefit was recorded.