The Company operates in both U.S. and Canadian tax jurisdictions. Its income is subject to varying rates of tax and losses incurred in one jurisdiction cannot be used to offset income taxes payable in another.  A reconciliation of the combined Canadian federal and provincial income tax rate with the Company’s effective tax rate is as follows:

 

		Year Ended December 31,				Year Ended December 31,
		2017				2016
Domestic (loss)/gain		$	(5,277)			$	(1,771)
Foreign loss			(1,769)				(1,018)
Loss before income taxes			(7,046)				(2,789)
Expected statutory rate (recovery)			26.50	%			26.50	%
Expected provision for (recovery of) income tax			(1,867)				(739)
Permanent differences			636				156
Change in valuation allowance			328				583
Effect of foreign exchange rate differences			–				–
Effect of change in future enacted tax rates			843				–
Tax credits and other adjustments			(3)				1
Effect of tax rate changes and other			63				(1)
Provision for income taxes		$	–			$	–

 

 

The primary temporary differences which gave rise to future income taxes (recovery) at December 31, 2017 and December 31, 2016:

 

		December 31, 2017			December 31, 2016
Future tax assets:
SR&ED expenditures			2,195			2,195
Income tax loss carryforwards			19,431			19,098
Non-refundable investment tax credits			1,263			1,263
Share issue costs			–			4
Accrued expenses			–			–
Fixed and intangible assets			1,031			1,032
Harmonization credit			–			–
			23,920			23,592
Less: valuation allowance			(23,920)			(23,592)
Net future tax assets		$	–		$	–

 

 

On December 22, 2017, the United States government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and jobs Act (the “Tax Act”). The Tax Act reduces the corporate tax rate to 21%, effective January 1, 2018. The Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 (“SAB 118”) on December 23, 2017. SAB 118 provides a one-year measurement period from a registrant’s reporting period that includes the United States Tax Act’s enactment date to allow the registrant sufficient time to obtain, prepare and analyze information to complete the accounting required under ASC 740. The ultimate impact of the Tax Act on our reported results may differ from the estimates provided herein, possibly material, due to, among other things, changes in interpretations and assumptions we have made, guidance that may be issued, and other actions we may take as a result of the Tax Act different from presently contemplated.

 

There are no current income taxes owed, nor are any income taxes expected to be owed in the near term. At December 31, 2017 the Company has unclaimed Scientific Research and Experimental Development ("SR&ED") expenditures, income tax loss carry-forwards and non-refundable investment tax credits. The unclaimed amounts and their expiry dates are as listed below:

 

		Federal			Province/ State
SR&ED expenditures (no expiry)		$	8,283		$	-
Income tax loss carryforwards (expiry date):
2021			26			-
2022			233			-
2023			133			-
2024			1,536			1,455
2025			4,795			4,768
2026			20,562			20,550
2027			8,340			8,332
2028			10,840			10,823
2029			8,502			8,502
2030			2,608			2,499
2031			3,378			3,224
2032			3,491			3,383
2033			1,789			1,652
2034			1,812			1,606
2035			1,804			1,803
2036			2,208			2,202
2037			4,631			4,511
Investment tax credits (expiry date):
2018			10
2019			8
2020			96
2021			55
2022			548
2023			399
2024			178
2025			199
2026			86
2027			90
2028			50