Income Taxes

12 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

9.Income taxes

For the years ended June 30, 2024, and 2023, the Company did not record a provision for deferred income taxes due to a full valuation allowance against the deferred tax assets.

Significant components of the Company’s deferred tax assets and deferred tax liabilities are shown below:

	June 30, 2024 $			June 30, 2023 $
Deferred tax assets:
Non-capital losses carried forward		27,911			29,204
Stock-based compensation		1,149			982
Capital losses carried forward		—			18
Financing costs		—			326
Bonus - compensation		375			37
Scientific research and development		806			895
Scientific research and development – Investment    Tax Credits (“ITC”)		685			769
Capitalized research and development expenses		604			265
		31,530			32,496
Deferred tax liabilities:
Scientific research and development – ITC		(114	)		(127	)
Fixed Assets		(71	)		—
		31,345			32,369
Valuation allowance		(31,345	)		(32,369	)
Net future tax assets		—			—

The income tax benefit of these tax attributes has not been recorded in these consolidated financial statements because of the uncertainty of their recovery. The Company’s effective income tax rate differs from the statutory income tax rate of 21% (2023 – 21%).

The differences arise from the following items:

	June 30, 2024 $			June 30, 2023 $
Tax recovery at statutory income tax rates		(1,747	)		(3,076	)
Permanent differences		389			(1,095	)
Rate change		(17	)		—
Effect of rate differentials between jurisdictions		(110	)		(127	)
Effect of foreign exchange rates		441			66
Scientific research and development – ITC		—			(61	)
Adjustment to prior year's provision versus statutory tax returns		2,075			(106	)
Other		(7	)		13
Change in valuation allowance		(1,024	)		4,386
Current income tax expense		—			—

The Company does not have any current income tax expense for the year ended June 30, 2024, as there was a taxable loss for this period. The components of the Company’s loss before income taxes for the year ended June 30, 2024, were allocated as follows: $6,500 in the U.S. and $1,800 in Canada. As of June 30, 2024, the Company had combined U.S. and Canadian net operating loss (“NOL”) carryforwards of $109,300 (2023 – $109,300). The U.S. federal NOL carryforwards consist of $15,800 generated before July 1, 2018, which begin expiring on June 30, 2028, and $33,600 that can be carried forward indefinitely, but are subject to the annual 80% taxable income limitation. The Canadian NOL carryforwards of $59,900 begin expiring in 2030. In addition, the Company has non-refundable Canadian federal investment tax credits of $421 (2023 -$470) that expire between 2031 and 2042 and non-refundable British Columbia investment tax credits of $264 (2023 – $299) that expire between 2024 and 2032. The Company also has Canadian scientific research and development tax incentives of $3,100 (2023 – $3,300) that do not expire.

The Company files U.S. federal, state, and Canadian income tax returns with varying statutes of limitations. For U.S. federal income tax purposes, the tax years ending June 30, 2021, to June 30, 2023, remain open to federal examination and the state income tax years ending June 30, 2020 to June 30, 2023 remain open to state examination. Under Internal Revenue Code (“IRC”) section 7602(a), the IRS may redetermine NOLs generated in closed tax years if these NOLs are applied to an open tax year. For Canadian income tax purposes, the calendar tax years from 2020 to 2023 remain open to examination. The Company currently is not under examination by any tax authority.

IRC sections 382 and 383 place a limitation on the amount of taxable income that can be offset by NOL and credit carryforwards after a change in control (generally greater than 50% change in ownership within a three-year period) of a loss corporation. Generally, after a change in control, a loss corporation cannot deduct NOL and credit carryforwards in excess of the IRC section 382 and 383 limitations. The limitation in the federal and state NOL and research and development credit carryforwards do not impact the deferred tax assets but note that the deferred tax assets are offset by a full valuation allowance. The limitation can result in the expiration of the NOLs and research and development credit carryforwards available. The Company has performed an IRC section 382 and 383 analysis and determined there was an ownership change in 2013. The Company has not performed any IRC section 382 and 383 analyses since 2013. An assessed change in ownership subsequent to 2013 could limit future use of NOL and research and development credit carryforwards. The acquisition of Adgero Biopharmaceuticals Holdings, Inc. also triggers IRC section 382 on the pre-acquisition NOLs. An analysis for IRC section 382 has not been performed at this time on the pre-acquisition NOLs.