INCOME TAXES

12 Months Ended

Dec. 31, 2011

INCOME TAXES [Abstract]

INCOME TAXES

NOTE 9:- INCOME TAXES

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

The Israeli corporate tax rate was 25% in 2010 and 24% in 2011.

On December 5, 2011, the Israeli Parliament (the Knesset) passed the Law for Tax Burden Reform (Legislative Amendments), 2011 ("the Law") which, among others, cancels effective from 2012, the scheduled progressive reduction in the corporate tax rate. The Law also increases the corporate tax rate to 25% in 2012. In view of this increase in the corporate tax rate to 25% in 2012, the real capital gains tax rate and the real betterment tax rate were also increased accordingly.

b. The main reconciling item between the statutory tax rate of the Company and the effective tax rate is the recognition of a valuation allowance in respect of deferred taxes relating to accumulated net operating losses carried forward due to the uncertainty of the realization of such deferred taxes.

c. Net operating losses carry forward:

Metamorefix has estimated accumulated losses for tax purposes as of December 31, 2011, in the amount of approximately NIS 9,558 which may be carried forward and offset against taxable income in the future for an indefinite period.

Topspin has estimated accumulated losses for tax purposes as of December 31, 2011, in the amount of approximately NIS 148,000 which may be carried forward and offset against taxable income in the future for an indefinite period.

e. Deferred taxes:

Recognition of deferred tax assets is appropriate when realization of these assets is more likely than not. Based upon the weight of available evidence, which includes the Company's historical operating performance and the recorded cumulative net losses in all prior fiscal periods, the Company has provided a full valuation allowance against its deferred tax assets.

f. The Company followed the provisions of ASC 740 for uncertain tax positions since inception and to date it had no effect on the financial statements. As a result, the Company did not record a liability deriving from the implementation of ASC 740 for uncertain tax positions.