Nexentis Technologies Inc. Income Taxes Disclosure

NOTE 20 – INCOME TAX

 

A.

The Company is subject to taxation in multiple jurisdictions, primarily in the United States, Israel and Italy. The U.S. federal income tax rate of 21%, in addition to applicable state income taxes.

 

Income generated in Israel is subject to a statutory tax rate of 23%.

 

Income generated in Italy is subject to a statutory tax rate of 24%.

 

The Company, MitoCareX Bio Ltd, Save Foods Ltd and Storage 1 S.R.L. have not received final tax assessments since their inception although the tax reports of the Company for the years through December 31, 2015 and of Save Foods Ltd for the years through December 31, 2017 are deemed to be final. $771 (all attributable to the United States) will expire in 2037, while the remaining NOLs may be carried forward indefinitely, subject to applicable tax law limitations.

 

As of December 31, 2025 and 2024, the Company and subsidiaries have estimated carry forward losses for tax purposes of approximately $37,328 and $31,202, respectively. For 2025, the estimated carry forward losses consist of approximately $15,385 attributable to the United States, $21,493 attributable to Israel and $450 attributable to Italy of which $771 can be offset against taxable income generated until 2037 and $36,648 can be offset against future taxable income, if any.

 

For 2024, the estimated carry forward losses consist of approximately $14,667 attributable to the United States and $16,535 attributable to Israel.

 

B.

The following is a reconciliation between the theoretical tax on pre-tax loss, at the income tax rate applicable to the Company (federal tax rate) and the income tax expense reported in the financial statements:

 SCHEDULE OF INCOME TAX EXPENSES

		Year ended December 31
		2025				2024
		US Dollars
Loss from continuing operations before tax			3,613				4,319
Federal tax rate			21	%			21	%
Income tax computed at the federal income tax rate			759				907
Non-deductible expenses			-(*	)			-
Share-based compensation			(19	)			-
Differences in corporate income tax rates			28				-
Remeasurement of deferred taxes for foreign currency effects			(36	)			-
Changes in valuation allowance			(714	)			(907	)
Income tax benefit			18				-

 

(*)

Less than $1 thousand

 

 

NEXENTIS TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and per share data)

 

NOTE 20 – INCOME TAX (continued)

 

C.

Deferred taxes result primarily from temporary differences in the recognition of certain revenue and expense items for financial and income tax reporting purposes and for carryforwards. Significant components of the Company’s deferred assets and liabilities are as follows:

 SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

		2025			2024
		Year ended December 31
		2025			2024
		US Dollars
Composition of deferred tax assets:
Employees and related institutions			23			2
Operating loss carry-forwards			8,282			6,883
Operating lease liabilities			8			2
Share-based compensation			627			182
Others			560			47
Total deferred tax assets			9,500			7,116
Composition of deferred tax liabilities:
Right-of-use asset			(7	)		(2	)
Total deferred tax liabilities			(7	)		(2	)
Net deferred tax assets			9,493			7,114
Valuation allowance			(9,493	)		(7,114	)
Deferred tax assets and liabilities			-			-

 

The net change during the year ended December 31, 2025 in the total valuation allowance amounted to $2,379. The change in valuation includes amounts attributable to continuing operations, discontinued operations and the acquisition of a MitoCareX in October 2025.

 

 

NEXENTIS TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(USD in thousands, except share and per share data)