v3.26.1
Income Taxes Disclosure
 12 Months Ended
May 31, 2026
Notes  
Income Taxes Disclosure

NOTE 8 - INCOME TAXES

 

The reported income taxes differ from the amounts obtained by applying statutory rates to the loss before income taxes as follows:

 

May 31, 2026

 

May 31, 2025

Net loss

$

(895,375)

 

$

(566,293)

Statutory tax rate

 

21%

 

 

21%

Expected income tax recovery

 

(188,000)

 

 

(119,000)

Effect of foreign exchange

 

4,000

 

 

1,000

Difference in statutory tax rate

 

(7,000)

 

 

(8,000)

Permanent difference and other

 

14,000

 

 

23,000

Change in unrecognized deductible temporary differences

 

177,000

 

 

103,000

Total income tax expense (recovery)

$

-

 

$

-

 

The Company’s tax-effected future income tax assets and liabilities are estimated as follows:

 

May 31, 2026

 

May 31, 2025

Deferred income tax assets (liabilities)

 

 

 

 

 

Net operating losses - US

$

1,638,000

 

$

1,487,000

Net-capital losses - Canada

 

518,000

 

 

492,000

Equipment

 

1,000

 

 

1,000

Less: Unrecognized deferred tax assets

 

(2,157,000)

 

 

(1,980,000)

Net deferred income tax assets

$

-

 

$

-

 

At May 31, 2026 and 2025, the Company has recorded a valuation allowance for the aggregate of its tax assets as management believes it is more likely than not that the deferred tax asset will not be realized.

 

At May 31, 2026, the Company had federal and state net operating loss carry forwards of approximately $7,801,000, $2,054,000 of which expire by 2037. The remaining balance of $5,747,000 will never expire but its utilization is limited to 80% of taxable income in any future year.

 

As at May 31, 2026, the Company also had non-capital loss carry forwards of approximately $2,000,000 (2025 - $1,886,000) to reduce future Canadian taxable income. These losses expire in 2038 to 2046.

 

The Company has evaluated all tax positions for open years and has concluded that they have no material unrecognized tax benefits or penalties. It is not anticipated that unrecognized tax benefits would significantly increase or decrease within 12 months of the reporting date. The Company recognizes interest and penalties related to unrecognized tax benefits in interest expense and penalties within operating expenses. The Company’s federal income tax returns for fiscal years 2023 through 2026 remain open and subject to examination. Tax attributes from prior years can be adjusted during an IRS audit.