v3.26.1
Income Taxes
 12 Months Ended
Jun. 30, 2026
Income Taxes [Abstract]  
INCOME TAXES
9.
INCOME TAXES
For the years ended June 30, 2025 and 2026, income (loss) before income taxes includes the following components:
 
     2026      2025  
     $      $  
United States
      (2,208,930 )       423,063  
Canada
      (10,351,920 )       (8,585,196 ) 
  
 
 
     
 
 
  
Net income (loss) before taxes
      (12,560,850 )       (8,162,133 ) 
  
 
 
     
 
 
  
The following table shows the principal reasons for the difference between the effective income tax rate and the statutory federal income tax rate for the year ended June 30, 2026, in accordance with ASU 2023-09.
 
     2026  
     $      %  
Canadian Federal/Provincial statutory tax rate
      (3,391,429 )       27 % 
State and local taxes, net of federal
      (89,602 )       1 % 
Foreign Tax Effects
      
United States
      
Statutory rate difference between United States and Canada
      132,536        (1 )% 
Changes in valuation allowance
      658,569        (5 )% 
Other
      (105,092 )       1 % 
Change in valuation allowance
      2,667,196        (21 )% 
Nontaxable or nondeductible items
      29,061         — % 
Other
      98,761        (1 )% 
  
 
 
     
 
 
  
Total
       —         — % 
  
 
 
     
 
 
  
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  
     $  
Net income (loss) before taxes
      (8,162,133 ) 
  
 
 
  
Income tax expense (recovery) at the statutory rate
      (2,229,159 ) 
Increase (reduction) in income taxes resulting from:
   
Change in valuation allowance
      4,167,827  
State taxes
      76,974  
Permanent differences
      34,335  
True up to the return
      2,982  
State Rate Change
      8,086  
Foreign exchange differences
      (1,589,832 ) 
Share issuance cost capitalized in equity
      (492,446 ) 
Other
      21,233  
  
 
 
  
Income tax expense
       —  
  
 
 
  
As of June 30, 2026, the Company has non-capital loss carry-forwards of approximately $99.9 million (June 30, 2025 — $89.2 million) available to offset future taxable income in Canada. These non-capital loss carryforwards begin to expire in 2026. As of June 30, 2026, the Company has US Federal net operating losses of $8.8 million and state net operating losses of $5.1 million. 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. 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:
 
     2026      2025  
     $      $  
Non-capital losses
      29,207,964      25,463,223  
Financing costs
      349,129        733,014  
Accrued expenses
      4,421        61,845  
Intangible assets, net
      403,432        496,440  
Tax credits
      241,270        221,406  
Lease liability
      7,009        108,525  
  
 
 
     
 
 
  
     30,213,224        27,084,453  
  
 
 
     
 
 
  
Intangible assets, net
      —         (57,977 ) 
Property and equipment, net
      (2,954 )       (98,627 ) 
Lease obligations
      (62,686 )       (106,029 ) 
  
 
 
     
 
 
  
     (65,640 )       (262,633 ) 
  
 
 
     
 
 
  
Net deferred tax asset
      30,147,584        26,821,820  
Valuation allowance
      (30,147,584 )       (26,821,820 ) 
  
 
 
     
 
 
  
     —       —   
  
 
 
     
 
 
  
For the years ended June 30, 2025 and 2026, the following table reflects the activity in the Company’s valuation allowance on deferred tax assets:
 
     Year ended June 30,  
     2025      2026  
Beginning Balance
      22,653,993        26,821,820  
Increase in valuation allowance
      4,167,827        3,325,765  
  
 
 
     
 
 
  
Total valuation allowance on deferred tax assets
      26,821,820        30,147,584  
  
 
 
     
 
 
  
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.