XML 38 R19.htm IDEA: XBRL DOCUMENT
v3.26.1

Taxes on Income | 12 Months Ended
--- | ---
Dec. 31, 2025
Taxes on Income [Abstract] |
TAXES ON INCOME | NOTE 11: - TAXES ON INCOME
| a. | Israeli taxation:
Taxable income of the Company is subject to the Israeli corporate tax at the rate of 23% for all years presented. Tax benefits under the Law for the Encouragement of Capital Investments, 1959 (“the Law”): In August 2013, the Law for Changing National Priorities (Legislative Amendments for Achieving Budget Targets for 2013 and 2014), 2013 which includes Amendment 71 to the Law (“Amendment 71”) was enacted. Per Amendment 71, the tax rate on preferred income from a preferred enterprise in 2014-2016 will be 9% in certain areas in Israel (“Development Area A”) and 16% in other areas. In 2017, the tax rate at Development Area A was reduced to 7.5%. The Company may claim the tax benefits offered by Amendment 71 in its tax returns, provided that its facilities meet the criteria for tax benefits set out by Amendment 71. A company is also granted a right to approach the Israeli Tax Authorities for a pre-ruling regarding its eligibility for benefits under Amendment 71 (and in some cases is required to apply for such approval). In December 2016, the Economic Efficiency Law (Legislative Amendments for Applying the Economic Policy for the 2017 and 2018 Budget Years), 2016 which includes Amendment 73 to the Law (“Amendment 73”) was published. Amendment 73, which came into effect in January 2017, prescribes special tax tracks for technological enterprises, granting such enterprises a tax rate of 7.5% (in Development Area A) and 12% (in other areas). Under Amendment 73, any dividends distributed to “foreign companies”, as defined in such law, by companies having over 90% foreign (i.e., non-Israeli) ownership, deriving from income from the technological enterprises will be subject to tax at a rate of 4%. In order to comply with the new track determined in Amendment 73, a company must meet certain criteria defined within law (among others R&D expenses and employees at a certain rate). The Company has yet to claim the above-mentioned tax benefits offered and accordingly such reduced taxes were not considered in the computation of the deferred taxes and valuation allowance as of December 31, 2025. In accordance with the tax laws, tax returns submitted up to and including the 2020 tax year can be regarded as final. As of December 31, 2025, no final tax assessments have been received for such years. Tax loss carryforward: As of December 31, 2025, the Company’s estimated tax loss carryforward and capital loss were $27,607 and $1,726, respectively. Such losses can be carried forward indefinitely to offset any future taxable income of the Company. As of December 31, 2025, the Company’s research and development expenses carryforward for tax purposes in Israel amounted to approximately $1,138.
| b. | Foreign subsidiaries:
U.S. subsidiary:
| 1. | The U.S. subsidiary is taxed under United States federal and state tax rules. Income tax is calculated based on a U.S. federal tax rate of 21%.
| 2. | The U.S. subsidiary utilized the federal tax loss carryforward from previous years and has no tax loss carryforward as of December 31, 2025.
| 3. | The U.S. subsidiary has not received final tax assessments since incorporation. In accordance with the tax laws, tax returns submitted up to and including the 2021 tax year can be regarded as final.
Brazilian subsidiary:
| 1. | The Brazilian subsidiary is taxed under Brazilian tax rules. Income tax is calculated based on a 34% rate.
| 2. | The Brazilian subsidiary’s tax loss carryforward amounted to $2,746 as of December 31, 2025, for tax purposes. Tax losses may be carried forward indefinitely but can only be offset up to 30% of the subsidiary’s taxable income for a tax period.
| 3. | The Brazilian subsidiary has not received final tax assessments since incorporation. In accordance with the tax laws, tax returns submitted up to and including the 2020 tax year can be regarded as final.
Indian subsidiary:
| 1. | The Indian subsidiary is taxed under Indian tax rules. Income tax is calculated based on a 25% rate.
| 2. | The Indian subsidiary has not received final tax assessments since incorporation. In accordance with the tax laws, tax returns submitted up to and including the 2019 tax year can be regarded as final.
Canadian subsidiary:
| 1. | The Canadian subsidiary is taxed under Canadian tax rules. Income tax is calculated based on a 26.5% rate, as a non-Canadian controlled entity.
| 2. | The Canadian subsidiary has not received final tax assessments since incorporation. In accordance with the tax laws, tax returns submitted up to and including the 2023 tax year and not yet regarded as final.
| c. | Deferred taxes:
Deferred taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and for tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:
|  | December 31 |
|  | 2025 |  |  | 2024 |
Deferred tax assets: |  |  |  |  |  |
Carryforward tax losses |  | $ | 7,378 |  |  | $ | 10,093 |
Research and development |  |  | 262 |  |  |  | 1,423 |
Operating lease liabilities |  |  | 752 |  |  |  | 810 |
Share-based compensation |  |  | 3,124 |  |  |  | 2,500 |
Accrued social benefits and other |  |  | 699 |  |  |  | 520 |
Deferred tax assets before valuation allowance |  |  | 12,215 |  |  |  | 15,346 |
Less - valuation allowance |  |  | (11,434 | ) |  |  | (14,416 | )
Total deferred tax assets |  |  | 781 |  |  |  | 930 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Operating lease ROU assets |  | $ | (675 | ) |  | $ | (815 | )
Other |  |  | (106 | ) |  |  | (115 | )
Total deferred tax liabilities |  |  | (781 | ) |  |  | (930 | )
Net deferred tax assets |  | $ | - |  |  | $ | - |
The net change in the total valuation allowance for the year ended December 31, 2025 was a decrease of $2,982. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which those temporary differences and tax loss carryforward are deductible. Management considers the projected taxable income and tax-planning strategies in making this assessment. The Company recorded a valuation allowance for certain of its deferred tax assets. The Company concluded that, based on the weight of available positive and negative evidence, it was more likely than not that the deferred tax assets would not be recoverable due to uncertainty regarding future taxable income. In assessing the realizability of deferred tax assets, the key assumptions used to determine positive and negative evidence included the Company’s current trends related to actual taxable earnings or losses, and expected future reversals of existing taxable temporary differences, as well as projections for future annual results.
| d. | Taxes on income are mainly comprised from state tax accrual with regards to the U.S. subsidiary, withholding taxes that were deducted by the Company’s customers as well as tax expenses of the Indian subsidiary.
| e. | The components of income before income taxes are as follows:
|  | Year ended December 31, |
|  | 2025 |  |  | 2024 |  |  | 2023 |
Domestic (Israel) |  | $ | 11,106 |  |  | $ | 5,642 |  |  | $ | 2,610 |
Foreign |  |  | 1,480 |  |  |  | 1,560 |  |  |  | 1,285 |
Income (loss) before income taxes |  | $ | 12,586 |  |  | $ | 7,202 |  |  | $ | 3,895 |
| f. | The components of income tax expenses are as follows:
|  | Year ended December 31, |
|  | 2025 |  |  | 2024 |  |  | 2023 |
Current: |  |  |  |  |  |  |  |  |
Domestic (Israel) |  | $ | 286 |  |  | $ | - |  |  | $ | - |
Foreign |  |  | 309 |  |  |  | 234 |  |  |  | 182 |
Total Income tax expenses |  | $ | 595 |  |  | $ | 234 |  |  | $ | 182 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Domestic (Israel) |  | $ | - |  |  | $ | - |  |  | $ | - |
Foreign |  |  | - |  |  |  | - |  |  |  | - |
Total Income tax expenses |  | $ | 595 |  |  | $ | 234 |  |  | $ | 182 |
| g. | Uncertain tax benefits A reconciliation of the beginning and ending balances of uncertain tax benefits is as follows:
|  | Year ended December 31, |
|  | 2025 |
Balance at beginning of the year |  | $ | - |
Additions for taxes positions |  |  | 286 |
Balance at the end of the year |  | $ | 286 |
During the year 2025, the Company did not incur any interest or penalties related to its uncertain tax benefits.
| h. | A reconciliation of the Company’s theoretical income tax benefit to actual income tax expense (benefit) following the adoption of ASU 2023-09 is as follows:
|  | Year Ended December 31, |
|  | 2025 |
Tax at Israel statutory rate |  | $ | 2,895 |  |  |  | 23.0 | %
Foreign tax effects: |  |  | (29 | ) |  |  | (0.2 | )
Change in valuation allowances |  |  | (2,617 | ) |  |  | (20.8 | )
Nontaxable or nondeductible items: |  |  |  |  |  |  |  |
Share-based compensation |  |  | 39 |  |  |  | 0.3 |
Other |  |  | 23 |  |  |  | 0.2 |
Change in unrecognized tax benefits |  |  | 264 |  |  |  | 2.3 |
Other |  |  | 20 |  |  |  | 0.2 |
Effective tax rate |  | $ | 595 |  |  |  | 5.0 | %
|  | A reconciliation of the Company’s theoretical income tax benefit to actual income tax expense (benefit) before the adoption of ASU 2023-09 is as follows:
|  | Year ended December 31, |
|  | 2024 |  |  | 2023 |
Income (loss) before income taxes, as reported in the consolidated statements of income (loss) |  | $ | 7,202 |  |  | $ | 3,895 |
Statutory tax rate in Israel |  |  | 23 | % |  |  | 23 | %
Theoretical tax expense (benefit) |  | $ | 1,656 |  |  | $ | 896 |
Increase (decrease) in income taxes resulting from: |  |  |  |  |  |  |  |
Tax rate differential on foreign subsidiaries |  |  | (15 | ) |  |  | (25 | )
Non-deductible expenses and other permanent differences |  |  | (328 | ) |  |  | 654 |
Differences in taxes arising from foreign currency exchange, net |  |  | 218 |  |  |  | (81 | )
Changes in carry forward tax losses and other temporary differences for which valuation allowance was provided |  |  | (1,346 | ) |  |  | (1,267 | )
Other |  |  | 49 |  |  |  | 5 |
Income taxes |  | $ | 234 |  |  | $ | 182 |
| i. | Tax paid: Cash paid for income taxes, net of refunds received, by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025 is as follows:
|  | Year Ended December 31, |
|  | 2025 |
Israel |  | $ | 21 |
U.S. |  |  |  |
U.S. federal |  |  | 297 |
U.S. state |  |  | 33 |
Total U.S. |  |  | 330 |
India |  |  | 132 |
Other |  |  | 2 |
Effective tax rate |  | $ | 485 |

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income tax. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 740 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477617/942-740-50-1 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480738/235-10-S50-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 944 -SubTopic 740 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478822/944-740-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12 Reference 5: http://www.xbrl.org/2003/role/exampleRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 231 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482663/740-10-55-231 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12C -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12B -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12B Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147477891/740-270-50-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-1 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480990/946-20-50-13 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/740/tableOfContent Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-14 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-21 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-17 Reference 16: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2 Reference 17: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration