| INCOME TAXES |
| | A. | The Company files income tax returns in the U.S. federal jurisdiction and in state and local jurisdictions and is subject to examination by the various taxing authorities. The Company’s income tax returns since 2019 remain open and subject to examination. The statutory U.S. federal income tax rate is 21%. As of December 31, 2022, the Company had total net operating losses in the U.S. of approximately $13,578, which may be carried forward and offset against taxable income in the future. |
| | | |
| | B. | BiomX Ltd. And RondinX Ltd. file income tax returns in Israel. Their tax assessments through 2016 are deemed to be final. The statutory Israeli income tax rate is 23%. |
| | C. | As of December 31, 2022 and 2021, BiomX Israel had total net operating losses in Israel of approximately $90,878 and $78,542 respectively, which may be carried forward and offset against taxable income in the future for an indefinite period. |
| |
D. |
Management has considered the Company’s history of cumulative net losses incurred since inception and its lack of commercialization of any products or generation of any revenue from product sales since inception and has concluded that it is more likely than not that the Company will not realize the benefits of the deferred tax assets. Accordingly, a full valuation allowance has been established against the deferred tax assets as of December 31, 2022 and 2021. Management reevaluates the positive and negative evidence at each reporting period. |
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|
|
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E. |
The Company’s policy is to record estimated interest and penalties related to uncertain tax positions in income tax expense. The Company has no amounts recorded for any unrecognized tax positions, accrued interest or penalties as of December 31, 2022 and 2021. |
A reconciliation of the U.S. federal statutory tax rate
and the effective tax rate is as follow:
| |
|
As of December 31, |
|
| |
|
2022 |
|
|
2021 |
|
| |
|
|
|
|
|
|
| Statutory U.S. federal income tax rate |
|
|
(21 |
)% |
|
|
(21 |
)% |
| U.S. vs foreign tax rate differential |
|
|
(2 |
) |
|
|
(2 |
) |
| Change in deferred tax asset valuation allowance |
|
|
23 |
|
|
|
23 |
|
| Effective tax rate |
|
|
- |
% |
|
|
- |
% |
Loss before taxes on income, consists of the following:
| |
|
As of December 31, |
|
| |
|
2022 |
|
|
2021 |
|
| |
|
|
|
|
|
|
| United States |
|
|
6,645 |
|
|
|
4,571 |
|
| Israel |
|
|
21,607 |
|
|
|
31,588 |
|
| |
|
|
28,252 |
|
|
|
36,159 |
|
Net deferred tax assets as of December
31, 2022 and 2021 consisted of the following:
| |
|
As of December 31, |
|
| |
|
2022 |
|
|
2021 |
|
| |
|
|
|
|
|
|
| Deferred tax assets: |
|
|
|
|
|
|
| Net operating loss carryforwards |
|
|
24,509 |
|
|
|
20,180 |
|
| Research and development expenses, net |
|
|
3,183 |
|
|
|
4,563 |
|
| Lease liability |
|
|
1,031 |
|
|
|
1,280 |
|
| Other |
|
|
192 |
|
|
|
184 |
|
| Total deferred tax assets |
|
|
28,915 |
|
|
|
26,207 |
|
| Deferred tax liabilities: |
|
|
|
|
|
|
|
|
| Right of use assets |
|
|
(1,071 |
) |
|
|
(942 |
) |
| Fixed assets |
|
|
(12 |
) |
|
|
(25 |
) |
| Total deferred tax liabilities |
|
|
(1,083 |
) |
|
|
(967 |
) |
| Valuation allowance |
|
|
(27,832 |
) |
|
|
(25,240 |
) |
| Net deferred tax assets |
|
|
- |
|
|
|
- |
|
|