| 10. |
INCOME TAXES |
|
The Company has non-capital losses of approximately $16.6 million in the United States and $3.5 million (CDN$4.5 million) in Canada available, which may be applied against future taxable income and which expire as follows: |
| USA | Canada | Total | ||||||||
| 2025 | $ | 188,000 | $ | $ | 188,000 | |||||
| 2026 | 610,000 | 610,000 | ||||||||
| 2027 | 1,731,000 | 1,731,000 | ||||||||
| 2028 | 3,175,000 | 3,175,000 | ||||||||
| 2029 | 2,793,000 | 2,793,000 | ||||||||
| 2030 | 2,045,000 | 2,045,000 | ||||||||
| 2031 | - | - | ||||||||
| 2032 | 1,999,000 | 1,999,000 | ||||||||
| 2033 | 36,000 | 36,000 | ||||||||
| 2034 | 948,000 | 849,000 | 1,797,000 | |||||||
| 2035 | 561,000 | 1,099,000 | 1,660,000 | |||||||
| 2036 | 699,000 | 993,000 | 1,692,000 | |||||||
| 2037 | 1,803,000 | 555,000 | 2,358,000 | |||||||
| $ | 16,588,000 | $ | 3,496,000 | $ | 20,084,000 |
The reconciliation of income taxes at statutory income tax rates (U.S – 35% and Canada – 26.5% on their respective losses) to the income tax expense is as follows:
| November | November | ||||||
| 30, 2017 | 30, 2016 | ||||||
| Loss before income taxes | $ | (2,800,251 | ) | $ | (1,924,110 | ) | |
| Income tax recovery at statutory rate | (932,000 | ) | (592,000 | ) | |||
| Permanent differences | (74,000 | ) | 50,000 | ||||
| Tax benefit not recognized | 1,006,000 | 542,000 | |||||
| Income taxes – current and deferred | $ | - | $ | - |
Deferred tax asset components as of November 30, 2017 and 2016 are as follows:
| 2017 | 2016 | ||||||
| Non-capital losses available to offset future income-taxes | $ | 20,084,000 | $ | 19,265,000 | |||
| Expected income tax recovery at statutory rates | $ | (4,410,000 | ) | $ | (6,473,000 | ) | |
| Valuation allowance | $ | 4,410,000 | $ | 6,473,000 | |||
| Net deferred tax assets | - | - |
As the Company has recognized substantial cumulative losses from operations and has not earned significant revenues, it has provided a 100% valuation allowance on the net deferred tax assets as of November 30, 2017 and 2016. Management believes the Company has no uncertain tax positions that were material.