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TAXES ON INCOME | 12 Months Ended
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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 $126 million. Under Israeli tax laws, the carry forward tax losses can be utilized indefinitely. The Company’s Israeli subsidiary is taxed in New Israeli Shekel (“NIS”), which is different from its functional currency (U.S. Dollar). The change in the Company’s Israeli subsidiary NOLs for tax purposes partly resulted by such rate differences.
| d. | Loss before income taxes
The components of loss before income taxes are as follows: SCHEDULE OF COMPONENTS OF LOSS BEFORE INCOME TAXES
|  | Year ended December 31 |
|  | 2025 |  |  | 2024 |
|  | ($ 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: SCHEDULE OF CHANGES IN VALUATION ALLOWANCE
|  | 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: SCHEDULE OF RECONCILIATION OF UNCERTAIN TAX POSITIONS
|  | 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: SCHEDULE OF OPEN TAX YEARS BY MAJOR JURISDICTION
Jurisdiction |  |  | Years |
U.S. |  |  | 2021-2025 |
Israel |  |  | 2021-2025 |
Germany |  |  | 2022-2025 |
| g. | Deferred income tax:
SCHEDULE OF DEFERRED INCOME TAX
|  | 2025 |  |  | 2024 |
|  | 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 |
Deferred tax assets noncurrent |  |  | 63,568 |  |  |  | 48,430 |
Less-valuation allowance |  |  | (63,568 | ) |  |  | (48,430 | )
Deferred tax assets |  |  | - |  |  |  | - |
| 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: SCHEDULE OF EFFECTIVE INCOME TAX RATE
|  |  | $ |  |  | % |  |  |  |  |  |  |  |
|  | 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)

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