Note 9 - Income Taxes
As at June 30, 2017 and 2016, the Company had no accrued interest and penalties related to uncertain tax positions. The income tax provision differs from the amount of income tax determined by applying the U.S. federal and state income tax rates of 35% (2016 - 35%) to pretax loss from operations for the years ended June 30, 2017 and 2016 due to the following:
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|
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| For the Years Ended | ||
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|
|
| June 30, | ||
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|
|
| 2017 |
| 2016 |
|
| Loss before income taxes | $ | 3,131,662 | $ | 2,497,765 |
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|
|
|
|
|
|
|
| Expected income tax recovery |
| (660,746) |
| (874,218) |
|
| Other permanent difference |
| (1,235,351) |
| 22,428 |
|
| Change in valuation allowance |
| 1,896,097 |
| 851,790 |
|
| Total | $ | 0 | $ | 0 |
Deferred tax assets and the valuation account are as follows:
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| For the Years Ended | ||
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|
|
| June 30, | ||
|
|
|
| 2017 |
| 2016 |
| Deferred tax asset: |
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|
|
| |
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| Net operating loss carry forward | $ | 4,095,349 | $ | 4,246,555 |
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| Other deferred tax assets |
| 1,756,480 |
| 941,639 |
|
| Valuation allowance |
| (5,851,829) |
| (5,188,194) |
|
| Total | $ | 0 | $ | 0 |
The components of income tax expense are as follows:
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| For the Years Ended | ||
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|
|
| June 30, | ||
|
|
|
| 2017 |
| 2016 |
|
| Current Federal tax | $ | 0 | $ | 0 |
|
| Current State tax |
| 0 |
| 0 |
|
| Change in NOL benefit |
| 1,896,097 |
| 851,790 |
|
| Change in valuation allowance |
| (1,896,097) |
| (851,790) |
|
| Total | $ | 0 | $ | 0 |
The potential income tax benefit of these losses has been offset by a full valuation allowance.
As of June 30, 2017, and 2016, the Company has an unused net operating loss carry-forward balance of $13,392,796 and $11,700,997 that is available to offset future taxable income. This unused net operating loss carry-forward balance begins to expire in 2031.
The Company did not have any tax positions for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly increase or decrease within the next 12 months.
The tax years that remain subject to examination by major taxing jurisdictions are those for the years ended June 30, 2017, 2016, 2015, 2014, 2013 and 2012.