QUANTUM X LABS INC. Income Taxes Disclosure

NOTE 13: INCOME TAX EXPENSE

 

A. Tax rates applicable to the income of the Company:

 

Viewbix Inc. is taxed according to U.S. tax laws.

 

On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act, which among other provisions, reduced the U.S. corporate tax rate from 35% to 21%, effective January 1, 2018.

 

Viewbix Israel is taxed according to Israeli tax laws. The Israeli corporate tax rate is 23% in the years 2025 and 2024.

 

Gix Media and Cortex are recognized as a “Preferred-Technology Enterprise” in accordance with Section 51 of the Encouragement of Capital Investments Law, 1959 and are taxed at a reduced corporate tax rate of 12%.

 

B. Tax assessments:

 

As of December 31, 2025, Gix Media has a final tax assessment for all tax year up to the year ended December 31, 2020.

 

Viewbix Israel has a final tax assessment for all tax year up to the year ended December 31, 2019.

 

C. Deferred taxes are comprised of the following components:

 

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.

 

Deferred taxes are comprised of the following components:

 SCHEDULE OF DEFERRED INCOME TAXES

		As of December 31				As of December 31
		2025				2024
Deferred tax assets
Deferred research and development expenses			12				57
Employee compensation and benefits			-				1
Operating loss carryforward			9,178				8,766
Total deferred tax assets			9,190				8,824
Deferred tax liabilities:
Intangible assets associated with business combinations			326				222
Total deferred tax liabilities			326				222
Net deferred tax assets before valuation allowance			8,864				8,602
Valuation allowance			(9,178	)			(8,768	)
Net deferred tax liabilities			314				166

 

 

VIEWBIX INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

U.S. dollars in thousands (except share data)

 

NOTE 13: INCOME TAX EXPENSE (Cont.)

 

C. Deferred taxes are comprised of the following components: (Cont.)

 

As of December 31, 2025 and 2024, the Company has recorded a valuation allowance of $9,178 and $8,768 respectively, in respect of the deferred tax assets resulting primarily from tax loss carryforward of Viewbix Inc. and Viewbix Israel, as management currently believes these deferred tax assets will not be realized in the foreseeable future.

 

Income tax expenses are comprised as follows:

 SCHEDULE OF INCOME TAX EXPENSES (BENEFITS)

		2025				2024
		Year ended December 31,
		2025				2024
Current tax expenses			29				171
Deferred tax income			(68	)			(40	)
Income tax expense (benefit)			(39	)			131

 

D. Reconciliation of the theoretical tax expenses to the actual tax expenses:

 

The Company adopted ASU 2023-09 for the year ended December 31, 2025, on a prospective basis. 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:

 SCHEDULE OF RECONCILIATION THEORETICAL TAX EXPENSES

		2025
		Year ended December 31, 2025
		Amount				Percent
US federal statutory tax rate		$	2,822				21	%
Foreign tax effects:
Statutory tax rate difference between Israel and the United States			26				(0.2	)%
Changes in Valuation Allowances:			410				(3.1	)%
Non-taxable or non-deductible items:
Stock-based payments awards			16				(0.1	)%
Change in the fair value of financial assets at fair value through profit or loss			2,126				(15.8	)%
Other			8				(0.1	)%
Other Adjustments:			197				(1.4	)%
Income tax benefit		$	(39	)			0.3	%

 

Reconciliation between the Company’s theoretical tax benefit to the actual tax expense prior to the adoption of ASU 2023-09:

 SCHEDULE OF RECONCILIATION THEORETICAL TAX BENEFIT

		Year ended December 31
		2024
Loss before income taxes as reported in the consolidated statements of operations			3,447
Statutory tax rate in the U.S.			21	%
Theoretical tax benefit			724
Increase (decrease) in tax expenses resulting from:
Lower tax rates for preferred technology enterprises			(27	)
Non-deductible expenses			35
Change in valuation allowance			835
Others			12
Income tax expense			131

 

 

VIEWBIX INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

U.S. dollars in thousands (except share data)

 

NOTE 13: INCOME TAX EXPENSE (Cont.)

 

E. Available carryforward tax losses:

 

As of December 31, 2025, Viewbix Israel incurred operating losses of approximately $14,506 which may be carried forward and offset against taxable income in the future for an indefinite period.

 

As of December 31, 2025, the Company incurred operating losses in the U.S. of approximately $27,532. Net operating losses in the U.S. are available through 2035. 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.

 

F. Loss before taxes includes the following components:

 SCHEDULE OF INCOME (LOSS) BEFORE TAXES ON INCOME

		2025				2024
		Year ended December 31,
		2025				2024
USA			13,342				3,711
Israel			95				(264	)
Total income (loss) before taxes on income			13,437				3,447