Company: AIP
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001667011-25-000029
Chunk: 264

Company: Arteris, Inc.
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 8
Chunk 264
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 with certain investors and Ningbo Transchip Information Consulting Partnership (Limited Partnership) (Management Co), pursuant to which, the Company, certain investors and Management Co subscribed to the registered capital of Transchip Technology (Nanjing) Co., Ltd. (Transchip). The Company’s ownership interest in Transchip’s registered capital was 35.0% on a fully diluted basis as of June 30, 2025. The Company’s loss from its proportionate share of its equity method investment in Transchip was $0.8 million and $0.7 million for the three months ended June 30, 2025 and 2024, respectively, and $1.6 million and $1.5 million for the six months ended June 30, 2025 and 2024, respectively. The Company reviews its investment in Transchip for impairment if and when circumstances indicate that a decline in fair value below its carrying amount may have occurred. Since Transchip’s formation, it has incurred losses financed primarily through investor 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