v3.26.3
TAXES ON INCOME
 12 Months Ended
Jul. 31, 2026
Income Tax Disclosure [Abstract]  
TAXES ON INCOME

NOTE 11: TAXES ON INCOME

 

a. Components of income taxes excluding cumulative effects of changes in accounting principles, other comprehensive income, and equity in net results of affiliated companies accounted for on an after-tax basis for the years ended July 31 were as follows:

 

b. The Company recorded loss before taxes on income as follows:

 

   2026   2025 
   Year ended July 31, 
   2026   2025 
Domestic  $(29,759,513)  $(23,999,920)
Foreign   (5,565,779)   (2,556,220)
Loss before taxes on income  $(35,325,292)  $(26,556,140)

 

c. The reconciliation of the combined Canadian federal and provincial statutory income tax rate of 27% (2025 - 27%) to the effective tax rate is as follows:

 

   2026   2025 
   Year ended July 31, 
   2026   2025 
Net loss before recovery of income taxes  $(35,325,292)  $(26,556,140)
Expected income tax (recovery) expense   (9,537,829)   (7,170,160)
Tax rate changes and effect of taxes of subsidiaries at foreign rates   1,785,571    1,448,710 
Share-based compensation and other non-deductible expenses   531,294    240,070 
Share issuance costs booked directly to equity   (573,777)   (375,750)
Adjustments in respect of prior periods   81,843    868,490 
R&D credits   (2,227,411)   (1,284,010)
Valuation allowance   9,940,309    6,272,650 
Income tax (recovery)  $-   $- 

 

In accordance with ASU 2023-09, the following rate reconciliation presents the reconciling items between the Canadian federal statutory income tax rate and the Company’s effective income tax rate in both reporting-currency amounts and percentages.

          
   July 31, 2026 
Reconciling item  Amount   Percent 
Expected Income Tax (Recovery) Expense - Federal  $(5,298,794)   15.00%
Canadian Provincial Tax Net of Federal Income Tax Effect   (4,239,035)   12.00%
Foreign tax effects   1,785,571    (5.05)%
Tax Credits          
Research and development credit   (2,227,411)   6.31%
Changes in valuation allowances   9,940,309    (28.14)%
Nontaxable or Nondeductible Items          
Share-based compensation and other nondeductible expenses   531,294    (1.50)%
Other Adjustments          
Share issuance costs recorded directly in equity   (573,777)   1.62%
Adjustments in respect of prior periods   81,843    (0.24)%
Changes in unrecognized tax benefits   -    0.00%
Income tax recovery and effective income tax rate  $-    0.00%

 

 

BriaCell Therapeutics Corp

Notes to the Consolidated Financial Statements

For the Years Ended July 31, 2026 and 2025

(Expressed in US Dollars, unless otherwise indicated)

 

d. The Company had no income tax expense for the years ended July 31, 2026, and 2025, due to its history of operating losses and valuation allowances.

 

e. Significant components of the Company’s deferred tax assets are as follows:

 

   2026   2025 
   July 31, 
   2026   2025 
Deferred Tax Assets:          
Property and equipment  $731   $730 
Marketable securities   11,758    11,760 
Intellectual property   -    260,860 
Warrant liability   -    - 
Share issuance costs   688,831    310,230 
Investment in BC Therapeutics   67,766    44,650 
Operating tax losses carried forward   5,674,627    5,067,840 
Operating tax losses carried forward - USA   14,921,914    8,494,300 
Research and development   14,016,183    14,240,640 
Total deferred tax assets   35,381,810    28,431,010 
Valuation allowance   (35,075,129)   (24,329,720)
Net deferred tax assets  $306,681   $4,101,290 
Deferred Tax Liabilities:          
Warrant liability  $(43,272)  $(4,053,520)
Intellectual property   (206,654)   - 
Property, plant, and equipment   (56,755)   (47,770)
Total net deferred tax liabilities   (306,681)   (4,101,290)
Net deferred tax assets (liabilities)  $-   $- 

 

f. The Company has net deferred tax assets relating primarily to net operating loss (“NOL”) carryforwards, research and development, and share issuance costs. Subject to certain limitations, the Company may use these deferred tax assets to offset taxable income in future periods. Due to the Company’s history of losses and uncertainty regarding future earnings, a full valuation allowance has been recorded against the Company’s deferred tax assets, as it is more likely than not that such assets will not be realized. The net change in the total valuation allowance for the year ended July 31, 2026, was $9,940,309.

 

At July 31, 2026, the Company had US federal NOL carryforwards of approximately $79,433,000. The federal net operating losses have expiry periods ranging between 2033 and indefinitely. The Company also has Canadian net operating loss carryovers of approximately $21,017,000 as of July 31, 2026. The Canadian net operating losses have expiry periods ranging between 2035 and 2046.

 

The Company has adopted the provisions of ASC 740-10, which clarifies the accounting for uncertain tax positions. ASC 740-10 requires that the Company recognize the impact of a tax position in its financial statements if the position is more likely than not to be sustained upon examination based on the technical merits of the position. For the year ended July 31, 2026, the Company had no material unrecognized tax benefits, and based on the information currently available, no significant changes in unrecognized tax benefits are expected in the next 12 months.

 

The Company’s policy is to recognize interest and penalties related to uncertain tax positions as income tax expense. The Company has no accruals for interest or penalties on its accompanying consolidated balance sheets as of July 31, 2026, and 2025, and has not recognized interest or penalties in the consolidated statements of operations for the years ended July 31, 2026, and 2025.

 

 

BriaCell Therapeutics Corp

Notes to the Consolidated Financial Statements

For the Years Ended July 31, 2026 and 2025

(Expressed in US Dollars, unless otherwise indicated)