Annual report pursuant to Section 13 and 15(d)

Income Tax (Tables)

v3.20.4
Income Tax (Tables)
12 Months Ended
Dec. 31, 2020
Income Tax Disclosure [Abstract]  
Reconciliation of Income Tax Attributable to Operations

Income tax expense/(recovery) consisted of the following (in thousands):

 

(In thousands)

 

2020

 

 

2019

 

 

2018

 

Income tax recovery at statutory rates (at a rate of 21% for all years presented)

 

$

(3,094

)

 

$

(3,490

)

 

$

(2,664

)

Expenses not deducted for tax purposes

 

 

118

 

 

 

116

 

 

 

70

 

Effect of tax rate changes on deferred tax assets and liabilities

 

 

34

 

 

 

(13

)

 

 

(1,416

)

Rate differential on foreign earnings

 

 

(103

)

 

 

(296

)

 

 

(165

)

Reduction in benefit of operating losses

 

 

 

 

 

 

 

 

 

Reduction in the benefit of other tax attributes

 

 

 

 

 

 

 

 

 

Investment tax credits

 

 

(23

)

 

 

(84

)

 

 

 

Change in valuation allowance

 

 

3,662

 

 

 

(3,246

)

 

 

4,182

 

Book to tax return adjustments

 

 

(518

)

 

 

(75

)

 

 

20

 

Unrecognized tax benefits

 

 

 

 

 

7,192

 

 

 

 

Reversal of previously accrued taxes due to IRS reassessment

 

 

 

 

 

(221

)

 

 

 

Other

 

 

(76

)

 

 

(104

)

 

 

(27

)

Income tax expense/(recovery)

 

$

 

 

$

(221

)

 

$

 

Summary of Investment Tax Credits and Non-Capital Losses and Net Operating Losses

The investment tax credits and non-capital losses and net operating losses for income tax purposes expire as follows (in thousands):

 

 

 

 

 

 

 

 

US

 

 

Canadian

 

 

UK

 

 

 

Investment

 

 

Net Operating

 

 

Non-capital

 

 

Net Operating

 

 

 

Tax Credits

 

 

Losses

 

 

Losses

 

 

Losses

 

2020

 

 

2

 

 

 

 

 

 

 

 

 

 

2021

 

 

2

 

 

 

 

 

 

 

 

 

 

2022

 

 

1

 

 

 

 

 

 

 

 

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

2025

 

 

244

 

 

 

 

 

 

 

 

 

 

2026

 

 

71

 

 

 

 

 

 

7,660

 

 

 

 

2027

 

 

 

 

 

 

 

 

6,082

 

 

 

 

2028

 

 

111

 

 

 

 

 

 

7,256

 

 

 

 

2029

 

 

237

 

 

 

9

 

 

 

1,712

 

 

 

 

2030

 

 

346

 

 

 

5

 

 

 

6,770

 

 

 

 

2031

 

 

486

 

 

 

17

 

 

 

12,354

 

 

 

 

2032

 

 

363

 

 

 

43

 

 

 

17,278

 

 

 

42

 

2033

 

 

193

 

 

 

2

 

 

 

23,240

 

 

 

54

 

2034

 

 

215

 

 

 

3

 

 

 

17,077

 

 

 

46

 

2035

 

 

122

 

 

 

654

 

 

 

3,112

 

 

 

27

 

2036

 

 

80

 

 

 

611

 

 

 

5,361

 

 

 

58

 

2037

 

 

22

 

 

 

8,763

 

 

 

(5,295

)

 

 

654

 

2038

 

 

202

 

 

 

7,207

 

 

 

(3,179

)

 

 

955

 

2039

 

 

220

 

 

 

7,982

 

 

 

4,443

 

 

 

869

 

2040

 

 

112

 

 

 

9,501

 

 

 

1,725

 

 

 

531

 

 

 

$

3,029

 

 

$

34,797

 

 

$

105,596

 

 

$

3,236

 

Significant Components of Company's Deferred Tax Assets and Deferred Tax Liabilities Significant components of our deferred tax assets as of December 31 are shown below (in thousands):

 

 

2020

 

 

2019

 

Deferred tax assets

 

 

 

 

 

 

 

 

Tax basis in excess of book value of assets

 

$

892

 

 

$

891

 

Non-capital loss carryforwards

 

 

35,596

 

 

 

33,166

 

Research and development deductions and credits

 

 

7,010

 

 

 

6,256

 

Stock options

 

 

466

 

 

 

315

 

§59(e) Capitalized R&D expenses

 

 

3,757

 

 

 

3,501

 

Accrued expenses

 

 

164

 

 

 

79

 

Other

 

 

183

 

 

 

181

 

Total deferred tax assets

 

 

48,068

 

 

 

44,389

 

Valuation allowance

 

 

(47,539

)

 

 

(43,875

)

Net deferred assets

 

 

529

 

 

 

514

 

Deferred tax liabilities

 

 

 

 

 

 

 

 

Right of use assets

 

 

(135

)

 

 

(79

)

Other

 

 

(394

)

 

 

(435

)

Total deferred tax liabilities

 

 

(529

)

 

 

(514

)

 

 

 

 

 

 

 

 

 

Net deferred tax assets

 

 

 

 

 

 

 

Reconciliation of Unrecognized Tax Benefits of Uncertain Tax Positions

A reconciliation of the unrecognized tax benefits of uncertain tax positions for the year ended December 31, 2020 is as follows (in thousands):

 

 

 

Year ended

 

 

 

December 31,

 

 

 

2020

 

 

2019

 

 

2018

 

Balance at January 1

 

$

724

 

 

$

717

 

 

$

715

 

Additions based on tax positions related to the current year

 

 

 

 

 

7

 

 

 

6

 

Deductions based on tax positions related to prior years

 

 

 

 

 

 

 

 

(4

)

Additions based on tax positions related to the prior years

 

 

5

 

 

 

 

 

 

 

Additions based on tax positions related to prior period adjustments

 

 

38

 

 

 

 

 

 

 

Balance at December 31

 

$

767

 

 

$

724

 

 

$

717

 

Summary of Years Open to Examination Under Different Jurisdiction

We are subject to taxes in Canada, the U.K. and the U.S. until the applicable statute of limitations expires. Tax audits by their very nature are often complex and can require several years to complete.

 

 

Tax

 

Years open to

Jurisdiction

 

examination

Canada

 

2012 to 2020

United Kingdom

 

2013 to 2020

US

 

2017 to 2020