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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | Note 11 - Income Taxes A.Tax rates Ordinary taxable income in Israel is subject to a corporate tax rate of 23%. The Company’s US subsidiary, Chemomab Therapeutics Inc. ("Chemomab Inc.) is taxed separately under the U.S. tax laws. Chemomab Inc. is subject to a federal flat tax rate of 21% and state tax as applicable. Capital gain is subject to capital gain tax according to the corporate tax rate in the year the assets are sold. B.Tax assessments As of December 31, 2021, the Company’s tax reports through December 31, 2016 are considered closed to audit inspections by the Israeli Tax Authority (“ITA”) due to statute of limitation rules effective in Israel. The Company has not yet been assessed by the ITA since inception. C.Losses for tax purposes carried forward to future years As of December 31, 2021, the Company and its subsidiaries had approximately $143 million (approximately $21 million as of December 31, 2020) of net operating loss carryforwards which are available to reduce future taxable income with no limitation on the period of use. F - 21
Chemomab Therapeutics Ltd. and its subsidiaries
Notes to the Financial Statements as at December 31, 2021
Note 11 - Income Taxes (cont’d) D.Deferred taxes In respect of:
|  | December 31, |  |  | December 31, |
|  | 2021 |  |  | 2020 |
|  | USD thousands |  |  | USD thousands |
Net operating loss carry-forwards |  |  | 33,396 |  |  |  | 4,874 |
Share-based compensation expense |  |  | 1,147 |  |  |  | 57 |
Research and development costs |  |  | 1,449 |  |  |  | 1,244 |
Other |  |  | 38 |  |  |  | 25 |
Gross deferred tax assets |  |  | 36,030 |  |  |  | 6,200 |
Less - Valuation allowance |  |  | (36,030 | ) |  |  | (6,200) |
Net deferred tax assets |  |  | - |  |  |  | - |
In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. A valuation allowance is provided when it is more likely than not that the deferred tax assets will not be realized. The Company has established a valuation allowance to offset deferred tax assets on December 31, 2021 and 2020 due to the uncertainty of realizing future tax benefits from its net operating loss carryforwards and other deferred tax assets. The net change in the total valuation allowance for the year ended at December 31, 2021 was an increase of approximately USD 2.6 million. E.Roll forward of valuation allowance
Balance at January 1, 2020 |  | $ | 4,248 |
Currency transaction loss |  |  | 583 |
Income tax expense |  |  | 1,369 |
Balance at December 31, 2020 |  | $ | 6,200 |
Currency transaction loss |  |  | 2,425 |
Tax assets acquired through merger |  |  | 24,535 |
Income tax expense |  |  | 2,870 |
Balance at December 31, 2021 |  | $ | 36,030 |
F - 22
Chemomab Therapeutics Ltd. and its subsidiaries
Notes to the Financial Statements as at December 31, 2021
Note 11 - Income Taxes (cont’d) F.Reconciliation of theoretical income tax expense to actual income tax expense A reconciliation of the Company’s theoretical income tax expense to actual income tax expense is as follows:
|  | December 31, |  |  | December 31, |
|  | 2021 |  |  | 2020 |
|  | USD thousands |  |  | USD thousands |
Loss before income taxes |  |  | (12,478 | ) |  |  | (5,951 | )
Statutory tax rate |  |  | 23 | % |  |  | 23 | %
Theoretical tax benefit |  |  | (2,870 | ) |  |  | (1,369 | )
Losses and other items for which a valuation allowance was provided or benefit from loss carryforwards |  |  | 2,870 |  |  |  | 1,369 |
Actual income tax expense |  |  | - |  |  |  | - |
G.Accounting for uncertainty in income taxes For the year ended December 31, 2021, the Company did not have any unrecognized tax benefits and does not expect that the amount of unrecognized tax benefits will change significantly within the next 12 months. The Company’s accounting policy is to accrue interest and penalties related to unrecognized tax benefits as a component of income tax expense.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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