Annual report pursuant to Section 13 and 15(d)

Income Taxes

v3.22.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of pre-tax (losses) income before income taxes for the years ended December 31, 2021, 2020 and 2019 are as follows:
(in thousands) 2021 2020 2019
Canada $ (180,374) $ (61,024) $ (88,694)
Foreign 168  (41,750) 453 
$ (180,206) $ (102,774) $ (88,241)
Income tax expense (benefit) for the years ended December 31, 2021, 2020 and 2019 are as follows:
(in thousands) 2021 2020 2019
Current:
Canada $ —  $ —  $ — 
Foreign 760  (94) 144 
760  (94) 144 
Deferred:
Canada —  —  — 
Foreign —  —  — 
Total deferred —  —  — 
Income tax expense (benefit) $ 760  $ (94) $ 144 

The Company's parent entity is located in Canada and therefore the Canadian statutory rate is utilized. The provision for income taxes varied from the income taxes provided based on the Canadian statutory rate of 26.8%, 26.8%, and 25.4% for the years ending December 31, 2021, 2020 and 2019, respectively.
2021 2020 2019
Canada statutory income tax benefit 26.8  % 26.8  % 25.4  %
Effect of tax rates on foreign jurisdictions —  (2.4) — 
Impact of future rates and tax rate changes (0.1) 6.1  (0.9)
Non-deductible share-based compensation (4.5) (4.5) (2.1)
Change in valuation allowance (21.8) (26.0) (22.3)
Other (0.8) 0.1  (0.3)
Effective tax rate (0.4) % 0.1  % (0.2) %
The tax effects of the temporary differences giving rise to the Company's net deferred tax assets as of December 31, 2021 and 2020 are summarized as follows:
(in thousands) 2021 2020
Deferred tax assets:
Loss carry-forwards $ 120,274  $ 80,087 
Share issue costs 6,016  6,295 
Intangible assets 1,086  2,718 
SRED (Scientific Research and Experimental Development) 6,059  4,808 
Deferred compensation 3,980  4,006 
Other 6,126  5,243 
Total deferred tax assets 143,541  103,157 
Valuation allowance (141,348) (101,792)
Net deferred tax assets 2,193  1,365 
Deferred tax liabilities:
Other (1,356) (1,173)
Property and equipment and intangible assets (837) (192)
Deferred tax liabilities (2,193) (1,365)
Net deferred tax assets (liabilities) $ —  $ — 

The Company’s valuation allowance increased by $39.6 million in 2021 as compared to 2020 as a result of the additional pre-tax book losses.

As of December 31, 2021, the Company has $429.8 million of Canada gross net operating loss (NOL) carryforwards with an expiration period of 2029 through 2040. As of December 31, 2021, the Company has approximately $4.8 million of Canada Investment Tax Credits and British Columbia Scientific Research and Experimental Development (SRED) with an expiration period of 2029-2040. As of December 31, 2021 the Company has approximately $31.4 million of U.S. federal gross NOL carryforwards that carryforward indefinitely.

Uncertain Tax Positions

The Company is under examination by the Canadian Revenue Agency for years 2017 and 2018. The Company is subject to examination in the U.S., UK, Canada and tax periods remain open in the range of 2015 through 2020.