Annual report pursuant to Section 13 and 15(d)

Income Taxes

v3.24.1
Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Taxes [Abstract]  
INCOME TAXES

NOTE 15 - INCOME TAXES:

 

  a. The Company and its Subsidiary are subject to U.S. and Israeli income tax laws.

 

  b. The US entity is subject to a federal income tax rate of 21% in 2019 and thereafter and State taxes of 9%. The Subsidiary is subject to ordinary corporate income tax rate of 23% in 2019 and thereafter.

 

  c. Carryforward tax losses:

 

As of December 31, 2023, the Company has net operating loss carry forwards of approximately $2,966. In addition, the Company has loss carry forward of approximately $4,410, which the Company did not perform a qualification test for and has certain doubts regarding their qualification, and therefore the Company has not recorded deferred tax assets due to these losses.

 

As of December 31, 2023, the Company’s subsidiary has net operating loss carry forwards of approximately $121.1 million. Net operating loss carry forwards relating to activity in Israel have an indefinite carry forward period.

 

Utilization of the U.S. federal and state net operating losses may be subject to a substantial limitation due to the change in ownership limitations provided by the Internal Revenue Code of 1986, as amended and similar to state provisions. The annual limitation may result in the expiration of the net operating losses and credits before their utilization.

 

  d. Loss before taxes on income are comprised as follows:

 

    Year Ended
December 31		  
    2023     2022  
    U.S. dollars in thousands  
Domestic     82     (4,535 )
Foreign Subsidiary     (6,368 )     (6,447 )
Total     (6,286 )     (10,982 )

 

  e. Reconciliation of the theoretical tax expense to actual tax expense:

 

The main reconciling item between the statutory tax rate of the Company and the effective rate is the provision for a full valuation allowance in respect of tax benefits from carry forward tax losses due to the uncertainty of the realization of such tax benefits.

 

  f. The Company’s major tax jurisdictions are the United States and Israel. Due to unutilized net operating losses and research credits, the tax years from 2017 remain open and subject to examinations by the appropriate governmental agencies in the United States. For the Company’s subsidiary, the tax years from 2017 and later remain open for examination by the tax authorities.

 

  g. The components of the Company’s net deferred tax assets were as follows:

 

    Year Ended
December 31		  
    2023     2022  
    U.S. dollars in thousands  
Deferred tax assets (liabilities):      
Loss carryforwards     28,746       27,932  
Valuation allowance     (28,746 )     (27,932 )
Total net deferred tax assets    
-
      
-
  

 

The valuation allowance could be reduced or eliminated based on future earnings and future estimates of taxable income.

 

Changes in valuation allowance for deferred tax assets were as follows:

 

    Year Ended
December 31		  
    2023     2022  
    U.S. dollars in thousands  
       
Valuation allowance at beginning of year     27,932       31,049  
Changes in valuation allowance     814       (3,117 )
Valuation allowance at end of year     28,746       27,932