Income taxes

12 Months Ended

Dec. 31, 2024

Income taxes

Income taxes

12 Income taxes

A reconciliation between tax expense and the product of accounting income multiplied by the basic income tax rate for the years ended December 31, 2024 and 2023 is as follows:

	2024			2023
Loss before income taxes	$	(41,519)		$	(59,685)
Canadian statutory rate(1)		26.50	%		26.50	%
Computed income tax recovery		(11,003)			(15,817)
Effect on income tax rate resulting from
Accounting charges not deductible for tax purposes		—			4
Non‑deductible share‑based compensation		1,637			4,663
Other permanent differences		21			—
Tax benefits of current period losses and other tax assets, subject to full valuation allowance		8,074			10,945
Valuation allowance for prior year adjustment		136			—
Foreign income tax rate difference		1,114			—
Other		21			205
Income tax expense (recovery) reported in the consolidated statements of loss	$	—		$	—

⁽¹⁾ Our Canadian corporate tax rate is comprised of a basic Part I federal tax rate of 38%, net 15% after federal tax abatement and general tax reduction, plus the additional provincial tax of 11.5%.

The Company has incurred Canadian federal and provincial net operating losses (NOLs) from inception. As of December 31, 2024, the Company has NOL carry-forwards of approximately $220.0 million and $216.0 million, respectively, for Canadian federal and Québec purposes, available to reduce future taxable income, which expire beginning in 2027 through 2044. The Company also has scientific research and experimental development expenditures of approximately $29.5 million and $35.2 million, respectively, for Canadian federal and Québec income tax purposes, which have not been deducted. These expenditures are available to reduce future taxable income and have an unlimited carry-forward period. Research and development tax credits and expenditures are subject to verification by the tax authorities, and, accordingly, these amounts may vary.

The Company has incurred NOLs for U.S. tax purposes. As of December 31, 2024, the Company has carry-forwards of approximately $67.0 million related to U.S. NOLs that may be carried forward indefinitely and are available to reduce future taxable income.

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. The net deferred tax assets have not been recognized in these financial statements because the criteria for recognition of these assets were not met.

The Company’s deferred tax assets consist of the following for the years ended December 31, 2024 and 2023:

		2024		2023
Net operating loss carry‑forwards	$	72,775	$	66,656
Tax basis of property and equipment in excess of carrying values		78		67
Tax basis of right of use assets		(298)		(421)
Tax basis of lease liability		311		438
Tax basis of reserves		5		6
Federal SR&ED investment tax credits		4,170		3,735
Taxation of federal SR&ED investment tax credits		(1,105)		(990)
Research and development expenditures		8,472		7,643
Financing costs		447		186
Stock based compensation		3,752		2,850
Others		745		45
Total Net deferred tax assets		89,353		80,215
Less Valuation allowance		(89,353)		(80,215)
Net deferred tax assets	$	—	$	—

The Company files income tax returns in Canada and in the United States. The Company is subject to Canada Revenue Agency and Revenu Québec examination for fiscal years 2019 to 2024 due to unexpired statute of limitation periods and is subject to US Federal and state income tax examination for fiscal years 2021 to 2024.