Income Taxes

12 Months Ended

Aug. 31, 2025

Income Taxes

Income Taxes

11. Income Taxes

The following table reconciles the income tax benefit at the U.S. Federal statutory rate to income tax benefit at the Company’s effective tax rates as of August 31, 2025 and 2024:

	August 31 2025			August 31 2024
	$			$
Loss before taxes		(11,911,434	)		(5,808,654	)
Expected income tax recovery		(2,947,139	)		(1,255,377	)
Non-deductible items		(1,400,185	)		(532	)
Change in estimates		1,666,152			119,349
Effect of changes in foreign and long-term tax rates		-			-
Change in valuation allowance		2,681,172			1,138,779
Total income taxes		-			2,219

Deferred taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes. Deferred tax assets at August 31, 2025 and 2024 are comprised of the following:

	August 31 2025			August 31 2024
	$			$
Non-capital losses		10,187,630			8,738,277
Marketable securities		349,121			(14,051	)
Stock based compensation		934,641			754,147
R&D		1,943,235			1,348,082
PPE and intangibles		(6,392	)		(95,179	)
Accrued vacation		4,213			-
Total deferred tax assets		13,412,448			10,731,276
Valuation Allowance		(13,412,448	)		(10,731,276	)
Net Deferred tax assets		-			-

The Company has net operating loss carryforwards of approximately $47 million which may be carried forward to apply against future year income tax for U.S. tax purposes.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions in the Tax Cut and Jobs Act, modifications to the international tax framework, and restoration of favorable tax treatment for certain business provisions. The Company is currently assessing the OBBBA’s impact on its consolidated financial statements, which is expected to be immaterial.