Quarterly report pursuant to Section 13 or 15(d)

TAXES ON INCOME

v3.22.2.2
TAXES ON INCOME
 9 Months Ended
Sep. 30, 2022
Income Tax Disclosure [Abstract]  
TAXES ON INCOME

NOTE 7 - TAXES ON INCOME

 

A. Deferred income taxes reflect the net tax effects of net operating loss and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows:

 

    2022     2021  
   

As of

September 30,

  
    2022     2021  
Composition of deferred tax assets:   Unaudited     Unaudited  
Net operating loss carry-forward   $ 8,817     $ 6,330  
Research and development credits     -       1,879  
Allowance for Bad Debt     -       90  
Others     -       -  
Net deferred tax asset before deferred tax liabilities and valuation allowance     8,817       8,299  
                 
Composition of deferred tax liabilities:                
Intangible assets upon acquisition of subsidiary     (315 )     (315 )
Depreciation costs     (120 )     (128 )
Net deferred tax asset before valuation allowance     8,383       7,856  
                 
Valuation allowance     (8,067 )     7,541  
Net deferred tax assets     (315 )     (315 )

 

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that all or some portion of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences are deductible and net operating losses are utilized. Based on consideration of these factors, the Company recorded a full valuation allowance as of September 30, 2022.

 

B. For the period of nine months ended September 30, 2022, the following table reconciles the statutory income tax rate to the effective income tax rate:

 

    2022     2021  
    Nine months ended September 30,  
    2022     2021  
    Unaudited     Unaudited  
             
Tax rate     23 %     23 %
                 
Tax expense (benefit) at statutory rate   $ (4,640 )   $ (5,646 )
Tax rate differential     53       31  
Permanent differences with respect to stock-based compensation     630       146  
Permanent differences with respect to derivative warrants liabilities, bifurcated conversion feature and convertible loans     1,334       3,605  
Loss carryforwards and others     2,623       1,864  
Income tax expense (benefit)   $ -     $ -  

 

 

TODOS MEDICAL LTD.

 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Cont.)

(U.S. dollars in thousands)