Note 9 - Taxes on Income

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Text Block]

NOTE 9:-       TAXES ON INCOME

a. Deferred income 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. Significant components of the Company's deferred tax asset and liabilities are as follows:

	December 31,
	2012			2011
Net operating loss carryforward	$	1,534		$	1,184
Reserves and allowances		276			436
Credit carryforward		116			106
Depreciation and amortization		39			56
Net deferred tax asset before valuation allowance		1,965			1,782
Valuation allowance		(1,965	)		(1,782	)
Net deferred tax asset	$	-		$	-

As of December 31, 2012 and 2011, the Company and its subsidiary provided a valuation allowance of $ 1,965 and $1,782, respectively, in respect of deferred tax assets resulting from short-term temporary differences and depreciation charged in advance of a capital allowance taken, as well as from carryforward losses.

Management currently believes that since the Company and its subsidiary have a history of losses, it is more likely than not that the deferred tax assets regarding the remainder of the tax loss carryforward and other temporary differences will not be realized in the foreseeable future.

b. Net operating tax losses carryforward:

As of December 31, 2012, the Company had approximately $3,439 in federal net operating loss carryforward for income tax purposes, which can be carried forward and offset against taxable income for 20 years and expire between 2023 and 2032.

Utilization of U.S. net operating losses may be subject to substantial annual limitation, due to the "change in ownership" provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of net operating losses before utilization. The Company believes that, as a result of having undergone an "Ownership Change" in 2002 within the meaning of section 382 of the Internal Revenue Code, its ability to use its net operating loss carryforward and other tax attributes to offset future U.S. taxable income, and thereby reduce its tax liability, is limited.

As of December 31, 2012, DPL had accumulated losses for income tax purposes in the amount of approximately $1,023. These net operating losses may be carried forward and offset against taxable income in the future for an indefinite period.

c. Income before income taxes consists of the following:

	Year ended December 31,
	2012		2011
Domestic (U.S.)	$	(224)	$	674
Foreign (UK)		(103)		491
	$	(327)	$	1,165

The Company is required to calculate and account for income taxes in each jurisdiction in which the Company or its subsidiary operate. Significant judgment is required in determining its worldwide provision for income taxes and recording the related assets and liabilities. In the ordinary course of the Company's business, there are many transactions and calculations where the ultimate tax determination is uncertain.

Our provision for income taxes consists of the following:

	Year ended December 31,
	2012		2011
Current:
Federal	$	-	$	9
State		-		29
Foreign		2		3
		2		41
Deferred:
Federal		-		-
State		-		-
Foreign		-		-
		-		-
Tax expenses	$	2	$	41

There is no provision in respect of unrecognized tax benefits for the years ended December 31, 2012 and 2011.

d. A reconciliation between the theoretical tax expense, assuming all income is taxed at the statutory tax rate applicable to income of the Company and the actual tax expense as reported in the statements of operations is as follows:

	Year ended December 31,
	2012		2011
Income (loss) before income taxes	$	(327)	$	1,165
Theoretical tax at U.S. statutory tax rate (34%)	$	(111)	$	396
Taxes in respect of prior years		(98)		(52	)
State taxes, net of federal benefit		-		29
Tax adjustment in respect of foreign subsidiary		(14)		(117	)
Nondeductible expenses		44		47
Operating carryforward losses, credits and temporary differences for which valuation allowance was (utilized) provided		181		(262	)
Tax expenses	$	2	$	41