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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | 13. Income Taxes Loss before the provision for income taxes for the years ended December 31, 2020 and 2019 consisted of the following:
|  | Year Ended December 31, |
|  | 2020 |  |  | 2019 |
|  | (in thousands) |
Canada |  | $ | (55,446 | ) |  | $ | (27,355 | )
Foreign |  | $ | 704 |  |  | $ | 334 |
|  | $ | (54,742 | ) |  | $ | (27,021 | )
A reconciliation between tax expense and the product of accounting income multiplied by the statutory income tax rate for years ended December 31, 2020 and 2019 is as follows:
|  | Year Ended December 31, |
|  | 2020 |  |  | 2019 |
|  | (in thousands) |
Loss before income taxes |  | $ | (54,742 | ) |  | $ | (27,021 | )
Income tax at statutory rate |  |  | 26.5 | % |  |  | 26.5 | %
Computed income tax recovery |  |  | (14,507 | ) |  |  | (7,160 | )
Effect on income tax resulting from: |  |  |  |  |  |  |  |
Federal investment tax credit |  |  | (2,347 | ) |  |  | (985 | )
Accounting charges not deductible for tax purposes |  |  | 346 |  |  |  | 277 |
Other |  |  | (306) |  |  |  | (16 | )
Change in valuation allowance |  |  | 15,489 |  |  |  | 8,079 |
Tax (benefit) expense |  | $ | (1,325 | ) |  | $ | 195 |
During the year ended December 31, 2020, the Company applied operating loss carryforwards to offset taxable income in Canada, arising primarily from the upfront payment received from the collaboration agreement with Bristol Myers Squibb. As of December 31, 2020, the Company had tax losses of approximately $19.2 million, which are available to offset future taxable income in Canada. The Company has not recognized the tax benefit of these losses. These losses expire as follows:
|  | (in thousands) |
2040 |  | $ | — |
2039 |  |  | 11,395 |
2038 |  |  | 7,053 |
2037 |  |  | 750 |
2036 |  |  | — |
Total |  | $ | 19,198 |
As of December 31, 2020, the Company had Scientific Research and Experimental Development (“SR&ED”) expenditures of approximately $28.2 million, respectively, for Canadian federal and Quebec purposes, which have not been deducted. These expenditures are available to reduce future taxable income and have an unlimited carryforward period. SR&ED expenditures are subject to verification by the tax authorities and, accordingly, the amounts may vary. As of December 31, 2020, the Company had non-refundable Canadian federal investment tax credits of approximately $4.3 million, which may be utilized to reduce Canadian federal income taxes payable. The Company has not recognized the tax benefits related to the non-refundable investment tax credits. The investment tax credits expire as follows:
|  | (in thousands) |
2040 |  | $ | 1,687 |
2039 |  |  | 1,362 |
2038 |  |  | 776 |
2037 |  |  | 455 |
2036 |  |  | 24 |
Total |  | $ | 4,304 |
As at December 31, 2020, the Company had U.S. federal research and development credit carryforwards of approximately $0.8 million, which begin to expire in 2038. As of December 31, 2020, the Company also had U.S. state research and development credit carryforwards of approximately $0.2 million, which expire in 2038. The Company’s deferred tax assets for the years ended December 31, 2020 and 2019 consisted of the following:
|  | 2020 |  |  | 2019 |
|  | (in thousands) |
Net operating loss carryforwards |  | $ | 5,087 |  |  | $ | 8,442 |
Net research and development expenditures |  |  | 7,478 |  |  |  | 4,195 |
Share issuance costs |  |  | 4,506 |  |  |  | 78 |
Net federal investment tax credits |  |  | 3,181 |  |  |  | 1,877 |
U.S. research and development tax credits |  |  | 961 |  |  |  | — |
Tax basis of property and equipment in excess of carrying values |  |  | (86 | ) |  |  | (204 | )
Operating lease right-of-use assets |  |  | (1,240 | ) |  |  | (279 | )
Operating lease liability |  |  | 1,063 |  |  |  | 287 |
Accrued expense and other liabilities |  |  | 345 |  |  |  | 161 |
Deferred revenue |  |  | 15,372 |  |  |  | — |
Share-based compensation |  |  | 103 |  |  |  | — |
Total deferred tax assets |  |  | 36,770 |  |  |  | 14,557 |
Valuation allowance |  |  | (35,358 | ) |  |  | (14,425 | )
Net deferred tax assets |  | $ | 1,412 |  |  | $ | 132 |
The Company files income tax returns in Canada and in the United States. In the normal course of business, the Company could be subject to examination by federal and provincial or state jurisdictions, where applicable. There are currently no pending tax examinations. The Company may be subject to tax examination for 2016, 2017, 2018, 2019 and 2020 due to unexpired statute of limitation periods. The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations for both federal taxes and the provinces and states in which the Company operates or does business in. ASC 740 states that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits. The Company records uncertain tax positions as liabilities in accordance with ASC 740 and adjusts these liabilities when the Company’s judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available. As of December 31, 2020 and 2019, no uncertain tax positions have been recorded in the consolidated financial statements. The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of operations and comprehensive loss. As of December 31, 2020 and 2019, no accrued interest or penalties are included on the related tax liability line in the consolidated balance sheet.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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