v3.26.1
Income Taxes
 12 Months Ended
Jun. 30, 2025
Income Taxes [Abstract]  
INCOME TAXES
10.
INCOME TAXES
The following is a reconciliation of income taxes calculated at the combined Canadian federal and provincial income statutory corporate tax rate of 27.0% to the tax expense:
 
    
2025
     
2024
  
    
$
     
$
  
US net income (loss) before taxes
      423,063        (1,756,965 ) 
Canada net income (loss) before taxes
      (8,585,196 )       (5,911,485 ) 
  
 
 
     
 
 
  
Net income (loss) before taxes
      (8,162,133 )       (7,668,450 ) 
  
 
 
     
 
 
  
Income tax expense (recovery) at the statutory rate
      (2,229,159 )       (1,966,981 ) 
Increase (reduction) in income taxes resulting from:
      
Change in valuation allowance
      4,167,827        1,625,998  
State taxes
      76,974        (21,942 ) 
Permanent differences
      34,335        39,252  
True up to the return
      2,982        (303,595 ) 
State Rate Change
      8,086        2,949  
Foreign exchange differences
      (1,589,832 )       618,907  
Share issuance cost capitalized in equity
      (492,446 )       (123,415 ) 
Other
      21,233        135,927  
  
 
 
     
 
 
  
Income tax expense
       —        7,100  
  
 
 
     
 
 
  
As of June 30, 2025, the Company has
non-capital
loss carry-forwards of approximately $89.2 million (June 30, 2024 — $72.7 million) available to offset future taxable income in Canada. These
non-capital
loss carryforwards begin to expire in 2026. As of June 30, 2025, the Company has US Federal net operating losses of $5.4 million and state net operating losses of $2.7 million. As of June 30, 2024, the Company has US Federal net operating losses of $7.5 million and state net operating losses of $3.7 million. The US Federal NOLs have an indefinite carryforward period, and the state NOLs begin to expire in 2042.
Deferred tax assets and liabilities are as follows:
 
    
2025
     
2024
  
    
$
     
$
  
Non-capital
losses
      25,463,223        21,501,476  
Financing costs
      733,014        861,867  
Accrued expenses
      61,845        12,831  
Intangible assets, net
      496,440        146,193  
Tax credits
      221,406        241,270  
Lease liability
      108,525        164,288  
  
 
 
     
 
 
  
     27,084,453        22,927,925  
  
 
 
     
 
 
  
Intangible assets, net
      (57,977 )        —  
Property and equipment, net
      (98,627 )       (116,231 ) 
Lease obligations
      (106,029 )       (157,701 ) 
  
 
 
     
 
 
  
     (262,633 )       (273,932 ) 
  
 
 
     
 
 
  
Net deferred tax asset
      26,821,820        22,653,993  
Valuation allowance
      (26,821,820 )       (22,653,993 ) 
  
 
 
     
 
 
  
      —         —  
  
 
 
     
 
 
  
A full valuation allowance has been applied against the net deferred tax assets because it is more likely than not that future taxable income will not be available against which the Company can utilize the benefits therefrom.
The Company recognizes tax benefits from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from any such position would be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. It is the Company’s policy to recognize interest and penalties accrued on any uncertain tax benefits as a component of income tax expense.
The Company files income tax returns in the U.S. federal jurisdiction, various state jurisdictions, and Canada. The Company’s U.S. Federal and State tax returns for the years 2021 through 2024 remain subject to examination by their respective taxing authorities.
The Company is subject to taxation at the federal, state, and local levels in the United States and Canada.