XML 41 R28.htm IDEA: XBRL DOCUMENT v3.24.1.1.u2
INCOME TAXES
 12 Months Ended
Dec. 31, 2023
INCOME TAXES [Text Block]

20. INCOME TAXES

The components of the income tax provision include the following. As the Company is domiciled in Canada, the Federal caption below represents the provision amount for Canada.

Thousands of United States dollars   For the year ended
December 31, 2023		     For the year ended
December 31, 2022		  
Current            
    Canada $ -   $ -  
    U.S. federal   17     -  
   U.S. state   5     -  
    Foreign   103     -  
Total current tax expense $ 125   $ -  
             
Deferred            
    Canada $ (1,767 ) $ (11 )
    U.S. federal   -     (1,055 )
    U.S. state   -     (316 )
    Foreign   14     (23 )
Total deferred tax expense $ (1,753 ) $ (1,405 )
             
Total income tax benefit $ (1,628 ) $ (1,405 )

The reconciliation of the combined Canadian federal and provincial statutory income tax rate of 26.5% for the year ended December 31, 2023 and 2022 to the effective rate is as follows. As the Company is domiciled in Canada, the reconciliation is to the Company's home country income tax rate rather than the applicable statutory rates in the United States. The statutory tax rate as of December 31, 2023 in other countries relevant to the Company's subsidiaries include the following: United States 21%, Colombia 33%, Germany 27.73%, Denmark 22%, and United Kingdom 19%. The Colombian Government lowered the corporate income tax rate from 35% to 33% during the tax year 2023.

    For the year ended
December 31, 2023		     For the year ended
December 31, 2022		  
Statutory Canadian rate   26.5%     26.5%  
             
Earnings in jurisdictions taxed at different rates   -1.3%     0.5%  
Impairments   -1.9%     -12.9%  
Stock based compensation   -0.8%     -1.7%  
Loss on investments   -3.0%     0.0%  
Valuation allowance   -23.8%     -12.3%  
Other permanent items   1.3%     2.8%  
Prior year adjustments, change in tax rates   6.4%     0.0%  
    3.4%     2.9%  

 

The Components of the Company's deferred income tax assets and liabilities at December 31, 2023 and 2022 are as follows:

Thousands of United States dollars   2023     2022  
Deferred tax assets            
    Non-capital loss carryforwards $  19,725   $ 20,240  
    Share issuance costs   847     1,406  
    Unrealized gains (losses) on investments   5,858     823  
    Right of use assets   287     614  
    Fixed assets   77     -  
    Intangible assets   718     -  
    Goodwill   7,747     -  
    Sec 174 - R&D expense   263     -  
    Other   564     677  
    Allowance for doubtful accounts   64     -  
Gross deferred tax assets   36,150     23,760  
Valuation allowance   (36,150 )   (20,909 )
Total net deferred tax assets   -     2,851  
             
Deferred tax liabilities            
    Intangible assets   -     4,094  
    Lease obligations   -     469  
Total deferred tax liabilities   -     4,563  
             
Net deferred tax liabilities $ -   $ (1,712 )

Deferred taxes are a result of temporary differences that arise due to the differences between the income tax values and the carrying values of assets and liabilities. The Company's deferred tax asset valuation allowances are primarily the result of uncertainties regarding the future realization of recorded tax benefits on the tax loss carryforwards from operations in various jurisdictions. Current evidence does not suggest the Company will realize sufficient taxable income of the appropriate character within the carryforward period to allow the Company to realize the deferred tax benefits. If the Company were to identify and implement tax planning strategies to recover these deferred tax assets or generate sufficient income of the appropriate character in these jurisdictions in the future, it could lead to the reversal of these valuation allowances and income tax expense.

The Company asserts that the earnings of its foreign subsidiaries (outside Canada) will be indefinitely reinvested in those subsidiaries and earnings will not be repatriated. The Company may need to accrue and pay taxes if those earnings were repatriated to Canada. As at December 31, 2023, the amount of cash and cash equivalents related to foreign operations subject to these assertions is $1.7 million.

Unused loss carryforwards in Canada totaling $55.6 million expire beginning 2036. Unused loss carryforwards in Columbia totaling $0.9 million in Colombia expire beginning 2031. Unused loss carryforwards in the United States totaling $13.0 million have an indefinite carryforward period. Unused loss carryforwards in Denmark totaling $6.1 million have an indefinite carryforward period. Unused loss carryforwards in Germany of $0.7 have an indefinite carryforward period. Unused loss carryforwards in the United Kingdom of $0.7 have an indefinite carryforward period. Deferred tax assets have not been recognized for legal entities where it is not probable that future taxable profit will be available against which the Company can use the benefits. Tax attributes are subject to review, and potential adjustment, by tax authorities. The tax years that remain subject to examination by significant tax jurisdictions of the Company as of December 31, 2023 are as follows:  Canada 2020 to 2023, United States 2020 to 2023, Colombia 2020 to 2023, Germany 2019 to 2023, Denmark 2020 to 2023, and United Kingdom 2022 to 2023.

The amount of current income tax expense for the year ended December 31, 2023 was $0.1 million and deferred income tax benefit was $1.6 million within the consolidated statements of loss and comprehensive loss. The amount of current income tax expense recorded for the year ended December 31, 2022 was $nil and deferred income tax benefit was $1.4 million.

The Company had no unrecognized income tax benefits because of uncertain income tax positions for the years ended December 31, 2023 and 2022.
TruHC Pharma GmbH [Member]  
INCOME TAXES [Text Block]

11.  INCOME TAXES

The Components of the Company's deferred income tax assets and liabilities at December 31, 2023 and 2022 are as follows:

 

    2023     2022  
             
Property and equipment € 8,000   € 3,000  
ROU asset   (154,000 )   (179,000 )
Lease liability   165,000     183,000  
Non-capital losses available for future period   174,000     64,000  
    193,000     71,000  
Unrecognized deferred tax assets   (193,000 )   (71,000 )
Total net deferred tax assets   -     -  
             
             
Net deferred tax assets € -   € -  

Deferred taxes are a result of temporary differences that arise due to the differences between the income tax values and the carrying values of assets and liabilities. The Company's deferred tax asset valuation allowances are primarily the result of uncertainties regarding the future realization of recorded tax benefits on the tax loss carryforwards from operations in various jurisdictions. Current evidence does not suggest the Company will realize sufficient taxable income of the appropriate character within the carryforward period to allow the Company to realize the deferred tax benefits. If the Company were to identify and implement tax planning strategies to recover these deferred tax assets or generate sufficient income of the appropriate character in these jurisdictions in the future, it could lead to the reversal of these valuation allowances and income tax expense.

Unused loss carryforwards totaling €538,000 do not have an expiry date. Deferred tax assets have not been recognized for legal entities where it is not probable that future taxable profit will be available against which the Company can use the benefits. Tax attributes are subject to review, and potential adjustment, by tax authorities. The tax years that remain subject to examination by significant tax jurisdictions of the Company as of December 31, 2023 are as follows: 2022 to 2023.

The Company had no unrecognized income tax benefits because of uncertain income tax positions for the years ended December 31, 2023 and 2022.