NOTE 9 - INCOME TAXES
The reported income taxes differ from the amounts obtained by applying statutory rates to the loss before income taxes as follows:
|
| December 31, 2016 |
| December 31, 2015 | ||
| Net loss | $ | (5,162,063) |
| $ | (3,640,097) |
| Statutory tax rate |
| 35.0% |
|
| 35.0% |
| Expected income tax recovery |
| (1,806,722) |
|
| (1,274,034) |
| Permanent differences |
| 1,230,598 |
|
| 749,661 |
| Change in tax rates |
| -- |
|
| 5,359,346 |
| Difference in foreign tax rates |
| 29,364 |
|
| 31,778 |
| Change in valuation allowance |
| (546,760) |
|
| (4,866,751) |
| Income tax recovery | $ | -- |
| $ | -- |
The Company’s tax-effected future income tax assets and liabilities are estimated as follows:
|
| December 31, 2016 |
| December 31, 2015 | ||
| Deferred income tax assets |
|
|
|
|
|
| Non-capital losses carried forward | $ | 6,816,000 |
| $ | 4,862,000 |
| Intangible asset |
| 14,874,000 |
|
| 16,115,000 |
| Less: Valuation allowance |
| (21,690,000) |
|
| (20,977,000) |
| Net deferred income tax assets | $ | -- |
| $ | -- |
At December 31, 2016 and 2015, the Company had a deferred tax asset that related to net operating losses. A full valuation allowance has been established; as management believes it is more likely than not that the deferred tax asset will not be realized.
As at December 31, 2016, the Company has net operating loss carry forwards of approximately $19,151,000 (2015 - $13,900,000) to reduce future federal and state taxable income. These losses expire by 2036.
The Company is not currently subject to any income tax examinations by any tax authority. Should a tax examination be opened, management does not anticipate any tax adjustments, if accepted, that would result in a material change to its financial position.