Keel Infrastructure Corp. Income Taxes Disclosure

NOTE 19: INCOME TAXES

 

Loss from continuing operations before income taxes is composed of the following:

 

		Year ended December 31,
		2025				2024				2023
Loss before income taxes from continuing operations:
Canada			(174,611	)			(1,135	)			(42,161	)
Foreign - United States			(33,802	)			(5,878	)			2,074
			(208,413	)			(7,013	)			(40,087	)

 

Current and deferred income tax (expense) recovery from continuing operations is composed of the following:

 

		Year ended December 31,
		2025				2024				2023
Current tax expense (recovery):
Canada - Federal			59				21				216
Canada - Provincial			(126	)			34				70
Foreign - United States			168				226				258
			101				281				544
Deferred tax expense (recovery):
Canada - Federal			—				—				(698	)
Foreign - United States			—				65				—
			—				65				(698	)
Total income tax expense (recovery)			101				346				(154	)

 

The following table summarizes the amount of income taxes paid (net of refunds received) from continuing operations:

 

		Year ended December 31,
		2025				2024				2023
Income taxes paid (net of refunds received):
Canada - Federal			9				61				—
Canada - Provincial			(40	)			47				—
Foreign - United States			458				458				295
Total income taxes paid (received)			427				566				295

The following table reconciles the Canadian Federal statutory tax rate to the Company’s effective tax rate:

 

		Year ended December 31,
		2025								2024								2023
Income tax recovery at federal statutory tax rate			(31,262	)			15.0	%			(1,052	)			15.0	%			(6,013	)			15.0	%
Increase (decrease) in taxes resulting from:
Provincial taxes*, net of federal effect			(126	)			0.1	%			34				(0.5	)%			(1,946	)			4.9	%
Foreign tax effects - United States
Tax rate differential			(2,028	)			1.0	%			(353	)			5.0	%			124				(0.3	)%
Change in valuation allowance			6,339				(3.0	)%			490				(7.0	)%			(281	)			0.7	%
Other			940				(0.5	)%			1,036				(14.8	)%			56				(0.1	)%
Non-taxable or non-deductible items
Stock based compensation			2,244				(1.1	)%			1,888				(26.9	)%			1,591				(4.0	)%
Non-deductible loss on derivatives			4,792				(2.3	)%			—				—	%			—				—	%
Prior year true-up non capital loss			(2,232	)			1.1	%			—				—	%			—				—	%
Other			557				(0.3	)%			(304	)			4.3	%			663				(1.7	)%
Change in valuation allowance			20,877				(10.0	)%			(1,393	)			19.9	%			5,652				(14.1	)%
Other			—				—	%			—				—	%			—				—	%
Income tax expense (recovery)			101				—	%			346				(5.0	)%			(154	)			0.4	%

 

*	The Company is subject to Canadian federal income tax and Québec makes up the majority (>50%) of the provincial taxes.

 

Deferred tax assets and liabilities

 

Deferred taxes are computed based on enacted tax rates expected to apply at the time of realization. Deferred taxes relate primarily to temporary timing differences arising from the recognition of expenses relating to the depreciation of fixed assets, loss carryforwards and professional fees relating to the Company’s equity activity that are recognized as a reduction of equity.

 

As at December 31, 2025, the Company has analyzed the recoverability of its deferred tax assets and has concluded that it is not more likely than not that sufficient taxable profit is expected to utilize these deferred tax assets.

The components of deferred tax assets and liabilities arising from temporary differences are summarized below:

 

		As of December 31,				As of December 31,
		2025				2024
Deferred tax assets:
Operating losses and interest limitation			111,611				52,724
Change in fair value of digital assets			8,998				—
Goodwill and intangibles			3,984				—
Stock-based compensation			2,852				—
Long-term debt			4,120				—
Financing fees			2,185				4,439
Investment in discontinued operations			18,252				9,038
Reserves and other			11,688				5,215
Total deferred tax assets			163,690				71,416
Less: valuation allowance			(160,201	)			(53,302	)
Net deferred tax assets			3,489				18,114
Deferred tax liabilities:
Property, plant and equipment			(3,554	)			(3,271	)
Change in fair value of digital assets			—				(14,001	)
Reserves and other			—				(907	)
Total deferred tax liabilities			(3,554	)			(18,179	)
Net deferred tax assets (liabilities)			(65	)			(65	)

 

The following table summarizes the Company’s valuation allowance movement:

 

		As of December 31,				As of December 31,				As of December 31,
		2025				2024				2023
Balance as of January 1,			53,302				50,857				30,324
Charged to income tax (expense) recovery			47,850				5,956				10,567
Charged to equity			(1,878	)			(717	)			1,448
Investment in discontinued operations			9,214				519				8,518
Business combination			64,716				—				—
Deductions			(4,197	)			(3,313	)			—
Property, plant and equipment			(8,806	)			—				—
Balance as of December 31,			160,201				53,302				50,857

The Company’s loss carryforward balances and expiration for continuing operations are summarized below:

 

		2031+
Non-capital loss carryforward
Canada			215,980
Foreign - United States			206,013
			421,993

 

The Company has not identified any uncertain tax positions requiring a reserve as of December 31, 2025 and 2024.