9. Income taxes

For the years ended December 31, 2024 and 2023, the total net loss and comprehensive loss is as follows:

	Year ended December 31,
	2024		2023
Loss attributed to US foreign operations	(4,968,344	)	(2,023,786	)
Loss attributed to Canadian operations	(6,187,172	)	(3,290,979	)
Loss before income taxes	(11,155,516	)	(5,314,765	)

A reconciliation from the US statutory income tax rate of 21% to the Company’s effective income tax rate, is as follows:

	Year ended December 31,
	2024		2023
Income tax recovery at the statutory tax rate	(2,956,212	)	(1,408,413	)
Permanent differences	189,075		796,707
Impact of tax rate changes	42,865		436,994
Change in valuation allowance	2,724,272		174,712
	-		-

The tax effect of temporary differences between US GAAP accounting and income tax accounting creating deferred income tax assets and liabilities were as follow:

	Year ended December 31,
	2024		2023
Non-capital losses carry forward - Canada	1,973,535		561,698
Net operating losses carry forward - US	2,678,919		2,208,235
Intangible assets	10,855		11,810
Accrued expenses	994,653		170,598
Research and Development Tax credits	242,190		242,190
Other	14,230		25,290
Financing charges and interest	668,701		-
Total deferred tax assets	6,583,083		3,219,821
Less: valuation allowance	(6,583,083	)	(3,219,821	)
Deferred tax assets, net	-		-

The Company has a valuation allowance on all of its deferred tax assets at December 31, 2024 and 2023, which based in the judgement of management are not more-likely than-not to be realized. In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that all or some portion of the deferred assets will not be realized. This ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those deductible temporary difference become deductible. Based on the history of losses and projections for future taxable income, management believes that it is not more-likely than-not that the Company will realize the benefits of these deductible temporary differences (e.g. deferred tax assets).

The Company has $242,190 of US Research and Development Tax Credits which are available to reduce future US taxes payable and begin to expire in 2036.

In addition, the Company has gross Canadian non-capital loss carryforwards of $7,447,301. To the extent that the non-capital loss carryforwards are not used, they begin to expire in 2028. The Company also has gross US Federal net operating loss carryforward of $11,037,837, of which approximately $1,253,000 begin to expire in 2035, while approximately $9,514,000 has an indefinite life.

In addition, the Company has approximately $11,222,000 of gross US State net operating losses, which begin to expire in 2035.

The US NOL carryforwards may be, or become subject to, an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, as well as similar state tax provisions. This could limit the amount of NOLs that the Company can utilize annually to offset future taxable income or tax liabilities. The amount of the annual limitation, if any, will be determined based on the value of the Company immediately prior to an ownership change. Subsequent ownership changes may further affect the limitation in future years. If and when the Company utilizes the NOL carryforwards in a future period, it will perform an analysis to determine the effect, if any, of these loss limitation rules on the NOL carryforward balances.

The Company files income tax returns with Canada and its provinces and territories and is generally subject to routine examinations by the Canada Revenue Agency ("CRA"). Income tax returns filed with various provincial jurisdictions are generally open to examination for periods of four to five years subsequent to the filing of the respective returns.

The Company also files income tax returns for our U.S. operations and subsidiary with the U.S. federal and state tax jurisdictions. Generally, we are subject to routine examination by taxing authorities in the U.S. jurisdictions, which all years since inception are open to examination due to net operating losses.

There are presently no examinations of our Canadian, U.S. federal and U.S. state jurisdictions.