Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Income Tax

v3.24.1
Income Tax
 12 Months Ended
Dec. 31, 2023
Income Tax [Abstract]  
INCOME TAX

NOTE 9 - INCOME TAX

 

The Company and its Israeli subsidiary are taxed under Israel tax laws:

 

A. Tax rates

 

After the Company consummates its Net Operating Losses, the corporate tax rate applicable for the years 2021-2023, is 23%.

 

B. Tax assessments

 

The Company and its subsidiary have tax assessments that are considered to be final through tax year 2017.

 

C. Losses for tax purposes carried forward to future years

 

As of December 31, 2023, CollPlant Biotechnologies Ltd. and CollPlant Ltd had approximately $7,365, and $59,993, respectively, of net carried forward tax losses which are available to be offset against future taxable income in future with no limited period of use.

 

D. Deferred income taxes

 

       
    2023     2022  
Deferred tax assets            
Net operating loss carry forward   $ 15,492     $ 20,105  
Research and development expenses     1,993       1,736  
Offering costs    
-
       230  
Operating lease liabilities     726       670  
Share-based compensation     1,035       349  
Total gross deferred tax assets     19,246       23,090  
Less – valuation allowance     (18,540 )     (22,466 )
                 
Deferred tax liabilities:                
Operating lease assets     706       624  
Net deferred tax assets   $
-
     $
-
  

 

Realization of deferred tax assets is contingent upon sufficient future taxable income during the period that deductible temporary differences and carried forward losses are expected to be available to be offset against taxable income. As the achievement of required future taxable income is not likely, the Company recorded a full valuation allowance.

 

E. Reconciliation of theoretical tax expenses to actual expenses

 

The primary difference between the statutory tax rate of the Company and the effective rate results virtually from the changes in valuation allowance in respect of carried forward tax losses for tax purposes and research and development expenses due to the uncertainty of the realization of such tax benefits.

 

F. Uncertain tax positions

 

As of December 31, 2023 and 2022, the Company does not have a provision for uncertain tax positions.

 

G. Roll forward of valuation allowance:

 

Balance at December 31, 2022   $ 22,466  
Change     (3,926 )
Balance at December 31, 2023   $ 18,540