TAXES ON INCOME

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

TAXES ON INCOME

NOTE 10 - TAXES ON INCOME:

a. Tax laws applicable to the Company and its subsidiaries

Taxation in the United States

The Company is subject to U.S. federal income tax at a statutory rate of 21% and state income taxes at varying rates.

Taxation in Israel

InspireMD Ltd., the Company’s Israeli subsidiary, is subject to Israeli corporate income tax at a statutory rate of 23%.

Taxation in Germany

InspireMD GmbH is taxed according to the tax laws in Germany. Accordingly, the applicable tax rates are corporate tax rate of 15.825% and trade tax rate of 17.15% in 2025 and 2024.

b. Tax benefits under the Law for the Encouragement of Capital Investments, 1959 (the “Law”):

The Israeli subsidiary may qualify for tax benefits under the Law for the Encouragement of Capital Investments, 1959. As of December 31, 2025 and 2024 the Company has not recognized any material tax benefit related to such incentives due to cumulative losses and the existence of a full valuation allowance.

c. Carry forward tax losses

As of December 31, 2025, the Company had U.S. federal net operating loss (“NOLs”) carryforwards of approximately $66 million. Of this amount, approximately $35 million arose prior to January 1, 2018 and expire through 2038. Net operating losses generated after December 31, 2017 may be carried forward indefinitely but are limited to offsetting 80% of taxable income in the year utilized.

As of December 31, 2025, and 2024, InspireMD Ltd., the Company’s Israeli subsidiary, had a net carry forward tax loss of approximately $180 and $126 million. Under Israeli tax laws, the carry forward tax losses can be utilized indefinitely.

The Company’s Israeli subsidiary is taxed in New Israeli Shekel (“NIS”), which is different from its functional currency (U.S. Dollar). The change in the Company’s Israeli subsidiary NOLs for tax purposes partly resulted by such rate differences.

d. Loss before income taxes

The components of loss before income taxes are as follows:

	Year ended December 31
	2025			2024
	($ in thousands)
Loss before taxes on income:
InspireMD, Inc.	$	(10,834	)	$	(10,385	)
Subsidiaries		(37,889	)		(21,561	)
	$	(48,723	)	$	(31,946	)

INSPIREMD, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

e. Changes in valuation allowance

The changes in the valuation allowance for the years ended December 31, 2025, and 2024 were as follows:

	Year ended December 31
	2025		2024
	($ in thousands)
Balance at the beginning of the year	$	48,430	$	42,651
Changes during the year		15,138		5,779
Balance at the end of the year	$	63,568	$	48,430

f. Accounting for Uncertain Tax positions

The following is a reconciliation of the total amounts of the Company’s uncertain tax positions during the years ended December 31, 2025, and 2024:

	Year ended December 31,
	2025		2024
	($ in thousands)
Balance at beginning of the year	$	225	$	168
Additions related to uncertain tax positions taken this year		61		57
Balance at end of the year	$	286	$	225

A summary of open tax years by major jurisdiction is presented below:

Jurisdiction	Years
U.S.	2021-2025
Israel	2021-2025
Germany	2022-2025

g. Deferred income tax:

	December 31,
	2025			2024
	($ in thousands)
Carry forward tax losses		55,346			41,699
Provision for vacation and recreation pay		98			82
R&D expenses		2,843			2,204
Operating lease right of use assets		(613	)		(525	)
Operating lease liabilities		735			554
Share-based compensation		5,174			4,489
Marketable securities		(41	)		(100	)
Accrued severance pay, net		26			27
		63,568			48,430
Less-valuation allowance		(63,568	)		(48,430	)
		-			-

h. Reconciliation of Statutory Federal Income Tax Rate to the Effective Income Tax Rate:

The provision for income taxes differs from the expected amount calculated by applying the Company’s federal statutory rate to loss before tax expenses for 2025 and 2024 as follows:

	2025					2024
	($ in thousands)
		$		%
US federal statutory		(10,232	)	21			(6,709	)	21
Foreign tax effects
Israel
Statutory tax rate differences between United States and Israel		(758	)	1.6			(428	)	1.3
Difference resulting from using NIS as the measurement basis for tax purposes		(4,627	)	9.5			223		(0.7	)
Changes in valuation allowance		13,096		(26.9	)		3,590		(11.2	)
Non- taxable or non-deductible items		1,171		(2.4	)		1,020		(3.2	)
Other adjustments		(254	)	(0.5	)		-		-
Changes in valuation allowance		2,043		(4.2	)		2,189		(6.9	)
Non- taxable or non-deductible items		27		(-0.1)			1		(0.0	)
Changes in unrecognized tax benefits		61		(-0.1)			57		(0.2	)
Other adjustments		(464	)	1.0			116		(0.4	)
Effective tax expense		63		-			59		-

INSPIREMD, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)