Income Taxes

12 Months Ended

Dec. 31, 2023

Income Taxes [Abstract]

INCOME TAXES

NOTE 14: - INCOME TAXES

a. Tax rate applicable to Company:

The corporate tax rate in Israel in 2021, 2022 and 2023 was 23%.

The Company has the status of an “Preferred Company” and “Preferred Technological Enterprise”, as defined in the Law for the Encouragement of Capital Investments, 5719-1959 and is subject to a reduced tax rate. The reduced tax rates at development area A in which the Company’s offices are located is 7.5%, subject to various conditions.

b. Income taxes on non-Israeli subsidiaries:

The Company’s subsidiaries are separately taxed under the domestic tax laws of the jurisdiction of incorporation of each entity.

Tax rate applicable to ATM Inc.:

On December 22, 2017, the United States enacted the Tax Cuts and Jobs Act (the “U.S. Tax Reform” or “TCJA”); a comprehensive tax legislation that includes significant changes to the taxation of business entities. These changes include several key tax provisions that might impact the Company, among others: (i) a permanent reduction to the statutory federal corporate income tax rate from 35% to 21% effective for tax years beginning after December 31, 2017; (ii) a shift of the U.S. taxation of multinational corporations from a tax on worldwide income to a territorial system (along with certain new rules designed to prevent erosion of the U.S. income tax base - “BEAT”); (iii) establishing immediate deductions for certain new investments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions and credits; and (iv) providing a permanent deduction to corporations generating revenues from non-US markets (known as a deduction for foreign derived intangible income - “FDII”) .

Tax rate applicable to ATM KK (Japan):

The General Corporation tax (national tax in Japan) rate is 23.2% for fiscal years beginning after April 2018. Local taxes are also applicable in different rates and may result in a higher effective tax rate (for example, for Tokyo-based companies the effective statutory tax rate would generally be 30.62% for large companies, and 33.6% for small companies).

c. The components of the net loss (income) before tax on income were as follows:

	Year ended December 31,
	2021		2022		2023
Domestic (Israel)	$	27,089	$	33,100	$	28,224
Foreign		175		642		916
Total	$	27,264	$	33,742	$	29,141

Income tax expense was as follows:

	Year ended December 31,
	2021		2022		2023
Current:
Domestic (Israel)	$	-	$	-	$	-
Foreign		7		20		16
Total current income tax expense		7		20		16
Deferred:
Domestic (Israel)		-		-		-
Foreign		-		-		-
Total deferred income tax expense		-		-		-
Income tax expense	$	7	$	20	$	16

d. Net operating losses carry forward:

The Company has accumulated losses for tax purposes as of December 31, 2023 in the amount of approximately $56,012 which may be carried forward and offset against taxable income in the future for an indefinite period.

e. Deferred taxes:

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company’s deferred tax assets are comprised of operating loss carryforwards and other temporary differences.

Significant components of the Company’s deferred tax assets are as follows:

	December 31,
	2022			2023
Reserves and allowances	$	22		$	28
R&D expenses		1,018			1,363
Intangible assets		50			4
Stock-based compensation		94			140
Lease liability		473			1,041
Loss carryforward		3,950			4,372
Deferred tax assets before valuation allowance		5,607			6,948
Less - valuation allowance		(5,084	)		(5,837	)
ROU Asset		(523	)		(1,111	)
Net deferred tax assets, net	$	-		$	-

Management currently believes that since the Company has a history of losses, and there is uncertainty with respect to future taxable income of the Company, it is more likely than not that the deferred tax assets will not be utilized in the foreseeable future. Thus, a full valuation allowance was provided to reduce deferred tax assets to their realizable value.

In 2022 and 2023 the main reconciling item for the Company’s tax rate is tax loss carryforwards and temporary differences, for which a full valuation allowance was provided.

f. Tax assessment:

The Company has tax assessments through 2018 that are considered to be final.