Company: AIP
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001667011-25-000029
Chunk: 20

Company: Arteris, Inc.
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 1
Chunk 20
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 capital. Transchip's ability to continue its operations is dependent upon raising additional capital, which it is currently expected to be able to raise. After completing an impairment assessment based on the prevailing facts and circumstances, the Company determined that the impairment condition was not considered other than temporary. As such, no impairment charge was recognized during the three months ended June 30, 2025. If adequate funding is not obtained, an impairment charge may be recorded.

13. INCOME TAXES

The Company’s effective tax rate was (6.9)% and (8.2)% for the six months ended June 30, 2025 and 2024, respectively. The Company’s income tax provision was $1.1 million and $1.3 million for the six months ended June 30, 2025 and 2024, respectively. The change in forecasted foreign withholding tax, changes in the geographic mix of worldwide earnings which are taxed at different rates, and the impact of losses in jurisdictions with full valuation allowances, has resulted in a decrease in the income tax provision for the period ended June 30, 2025 compared to the period ended June 30, 2024.The Company’s management continuously evaluates the need for a valuation allowance and, as of June 30, 2025, concluded that a full valuation allowance on its federal, state, and certain foreign jurisdictions deferred tax assets was still appropriate.As of June 30, 2025 and 2024, the Company’s gross liability for unrecognized tax benefits was $3.6 million and $3.5 million, respectively. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of June 30, 2025 and 2024, the Company had immaterial accrued interest or penalties related to its unrecognized tax benefits. If any unrecognized tax benefits are realized, it would not result in any income tax benefit as the Company currently has a full valuation allowance against the deferred tax assets in which there is currently an uncertain tax benefit. On July 4, 2025, President Trump signed H.R. 1, the One Big Beautiful Bill Act, into law. The Company is currently in the process of analyzing the tax impacts of the law change. In accordance with GAAP, the Company will account for the tax effects of changes in tax law in the period of enactment which is the third quarter of calendar year 2025.

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14. RELATED PARTY TRANSACTIONS

The Company defines related