| INCOME TAXES [Text Block] |
The Company has $8,450,000 in non-capital losses in Canada that relate to discontinued operations. These losses may be applied against future taxable income within KIQ X, if any, and expire between 2039 and 2045. As of December 31, 2025, the Company had current income tax obligations of $92,104 in the United States, consisting of federal income tax and Texas franchise tax.
The tax effect items that give rise to significant portions of the deferred income tax assets and deferred income tax liabilities at December 31, 2025 and 2043 are as follows:
| |
|
December 31, 2025 |
|
|
December 31, 2024 |
|
| Deferred income tax assets (liabilities) |
|
|
|
|
|
|
| Non-capital loss carry-forwards |
$ |
54,777 |
|
$ |
110,785 |
|
| Deferred income tax assets - investment credits |
$ |
160,902 |
|
$ |
0 |
|
| Excess of carrying value over tax value of property, plant and equipment |
$ |
-54,777 |
|
$ |
-110,785 |
|
| Total net deferred tax asset (liability) |
$ |
160,902 |
|
$ |
0 |
|
Significant unrecognized tax benefits and unused tax losses for which no deferred tax assets is recognized as of December 31, 2025 and 2024 are as follows:
| |
|
December 31, 2025 |
|
|
December 31, 2024 |
|
| Non-capital losses carried forward |
$ |
2,378,160 |
|
$ |
2,631,428 |
|
| Intangible assets |
|
235,980 |
|
|
235,980 |
|
| Lease liability |
|
20,233 |
|
|
31,294 |
|
| Unrecognized deductible temporary differences |
$ |
2,634,373 |
|
$ |
2,898,702 |
|
Income tax expense differs from the amount that would be computed by applying the Canadian statutory income tax rate to loss before income taxes as follows:
| |
|
December 31, |
|
| |
|
2025 |
|
|
2024 |
|
|
2023 |
|
| Pretax Income (loss) |
$ |
380,838 |
|
$ |
-4,622,297 |
|
$ |
-2,101,886 |
|
| Statutory income tax rate |
|
27.00% |
|
|
27.00% |
|
|
27.00% |
|
| Income tax benefit computed at statutory tax rate |
|
102,826 |
|
|
-1,248,020 |
|
|
-567,509 |
|
| Items not deductible for income tax purposes |
|
17,271 |
|
|
413,516 |
|
|
263,791 |
|
| Under provision of taxes in prior years |
|
-100,730 |
|
|
63,706 |
|
|
-174,600 |
|
| Change in timing differences |
|
-12,621 |
|
|
79,743 |
|
|
242,678 |
|
| Impact of foreign exchange on tax assets and liabilities |
|
-20,958 |
|
|
59,914 |
|
|
-18,970 |
|
| Investment Credits (SRED) |
|
-160,902 |
|
|
0 |
|
|
0 |
|
| Unused tax losses and tax offsets not recognized |
|
86,755 |
|
|
847,064 |
|
|
399,572 |
|
| Income tax expense (recovery) |
|
-88,359 |
|
|
215,923 |
|
|
144,962 |
|
| Texas margin tax and branch tax |
|
21,800 |
|
|
20,530 |
|
|
25,513 |
|
| Income tax expense (recovery) |
$ |
-66,559 |
|
$ |
236,453 |
|
$ |
170,475 |
|
|