Item 9A. Controls and Procedures
Item
9A. Controls and Procedures.
Management’s
Conclusions Regarding Effectiveness of Disclosure Controls and Procedures
We
conducted an evaluation of the effectiveness of our “disclosure controls and procedures”, as defined by Rules 13a-15(e) and
15d-15(e) of the Securities Exchange Act of 1934, as amended, as of December 31, 2025, the end of the period covered by this Annual Report
on Form 10-K. The disclosure controls and procedures evaluation was done under the supervision and with the participation of management,
including our chief executive officer and chief financial officer. There are inherent limitations to the effectiveness of any system
of disclosure controls and procedures. Accordingly, effective disclosure controls and procedures can only provide reasonable assurance
of achieving their control objectives. Based upon this evaluation, our chief executive officer and chief financial officer have concluded
that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2025.
Management’s
Report on Internal Control Over Financial Reporting
Management
is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and
15d-15(f) under the Securities Exchange Act of 1934, as amended. Our internal control over financial reporting is designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of the consolidated financial statements for
external reporting purposes in accordance with generally accepted accounting principles.
Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of
any evaluation of effectiveness of internal control over financial reporting to future periods are subject to the risk that controls
may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate
over time.
Management,
including our chief executive officer and our chief financial officer, assessed the effectiveness of our internal control over financial
reporting as of December 31, 2025. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations
of the Treadway Commission in Internal Control—Integrated Framework 2013 . Based on its assessment and those criteria, management
has concluded that we maintained effective internal control over financial reporting as of December 31, 2025.
Changes
in Internal Control over Financial Reporting
There
have been no changes in our internal control over financial reporting during the fiscal quarter ended December 31, 2025, that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item
9B. Other Information.
Insider
Trading Plans and Arrangements
During
the quarter ended December 31, 2025, none of our directors or officers notified us that they adopted , modified or terminated any Rule
10b5-1 trading arrangement or any non-Rule 10b5-1 trading arrangement as defined in Item 408(a) of Regulation S-K.
Item
9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not
applicable.
79
PART
III
Item
10. Directors, Executive Officers and Corporate Governance.
Code
of Ethics
We
have adopted a code of ethics and business conduct that applies to our officers, directors and employees, including our principal executive
officer, principal financial officer and principal accounting officer, which is posted on our website at www.inspiremd.com . We
intend to disclose future amendments to certain provisions of the code of ethics, or waivers of such provisions granted to executive
officers and directors, on this website within four business days following the date of such amendment or waiver.
Insider
Trading Policy
We
have adopted a statement of trading policies that governs the trading in our securities by our directors, officers and certain other
covered persons, and which is reasonably designed to promote compliance with applicable insider trading laws, rules and regulations,
and any listing standards applicable to the Company. A copy of the Insider Trading Policy is included as Exhibit 19.1 to this annual
report. In addition, with regard to any trading in our own securities, it is our policy to comply with the federal securities laws and
the applicable exchange listing requirements.
Clawback
Policy
We
have adopted an Executive Officer Clawback Policy (the “Clawback Policy”), in accordance with the Nasdaq listing standards
and Exchange Act Rule 10D-1, which applies to our current and former executive officers. Under the Clawback Policy, we are required to
recoup the amount of any Erroneously Awarded Compensation (as defined in the Clawback Policy) on a pre-tax basis within a specified lookback
period in the event of any Accounting Restatement (as defined in the Clawback Policy), subject to limited impracticability exception.
Other
Information
The
remaining information required by this Item 10 will be included in our definitive Proxy Statement for the 2026 Annual Meeting of Stockholders
and is incorporated herein by reference.
Item
11. Executive Compensation.
The
information required by this Item 11 will be included in our definitive Proxy Statement for the 2026 Annual Meeting of Stockholders and
is incorporated herein by reference.
Item
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The
information required by this Item 12 will be included in our definitive Proxy Statement for the 2026 Annual Meeting of Stockholders and
is incorporated herein by reference.
Item
13. Certain Relationships and Related Transactions, and Director Independence.
The
information required by this Item 13 will be included in our definitive Proxy Statement for the 2026 Annual Meeting of Stockholders and
is incorporated herein by reference.
Item
14. Principal Accountant Fees and Services.
The
information required by this Item 14 will be included in our definitive Proxy Statement for the 2026 Annual Meeting of Stockholders and
is incorporated herein by reference.
80
PART
IV
Item
15. Exhibits and Financial Statement Schedules.
Documents
filed as part of report:
1.
Financial Statements
The
following financial statements are included herein:
●
Report of Kesselman & Kesselman, Independent Registered Public Accounting Firm (PCAOB name: Kesselman & Kesselman C.P.A.s and
PCAOB ID: 1309)
●
Consolidated Balance Sheets as of December 31, 2025 and 2024
●
Consolidated Statements of Operations for the Years Ended December 31, 2025 and 2024
●
Consolidated Statements of Changes in Equity for the Years Ended December 31, 2025 and 2024
●
Consolidated Statements of Cash Flows for the Years Ended December 31, 2025 and 2024
●
Notes to Consolidated Financial Statements
2.
Financial Statement Schedules
None
3.
Exhibits
See
Index to Exhibits
Item
16. Form 10-K Summary
Not
applicable.
81
Index
to Exhibits
Exhibit
No.
Description
3.1
Amended
and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to Quarterly Report on Form 10-Q filed with the
Securities and Exchange Commission on November 9, 2015)
3.2
Amended
and Restated Bylaws (incorporated by reference to Exhibit 3.2 to Current Report on Form 8-K filed with the Securities and Exchange
Commission on June 29, 2021).
3.3
Certificate
of Amendment to Amended and Restated Certificate of Incorporation of InspireMD, Inc. (incorporated by reference to Exhibit 3.1 to
the Current Report on Form 8-K filed on May 25, 2016)
3.4
Certificate
of Amendment to Amended and Restated Certificate of Incorporation of InspireMD, Inc. (incorporated by reference to Exhibit 3.1 to
the Current Report on Form 8-K filed on September 29, 2016)
3.5
Certificate
of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock (incorporated by reference to Exhibit
3.1 to the Current Report on Form 8-K filed on March 15, 2017)
3.6
Certificate
of Amendment to Certificate of Designation of Preferences, Rights and Limitation of Series C Convertible Preferred Stock (incorporated
by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on November 29, 2017)
3.7
Certificate
of Amendment to Amended and Restated Certificate of Incorporation of InspireMD, Inc. (incorporated by reference to Exhibit 3.1 to
the Current Report on Form 8-K filed on February 7, 2018)
3.8
Certificate
of Amendment to Amended and Restated Certificate of Incorporation of InspireMD, Inc., dated March 27, 2019 (incorporated by reference
to Exhibit 3.1 to the Current Report on Form 8-K filed on March 28, 2019)
3.9
Certificate
of Amendment to Amended and Restated Certificate of Incorporation of InspireMD, Inc., dated April 14, 2021 (incorporated by reference
to Exhibit 3.1 to Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 10, 2021)
3.10
Certificate of Amendment to Amended and Restated Certificate of Incorporation of InspireMD, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on September 13, 2023)
3.11
Form
of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to Amendment No. 3 to Registration Statement on Form S-1 filed
with the Securities and Exchange Commission on March 5, 2013)
4.1*
Description of Securities
10.1+
Form
of Indemnity Agreement between InspireMD, Inc. and each of the directors and executive officers thereof (incorporated by reference
to Exhibit 10.22 to Amendment No. 1 to Registration Statement on Form S-1 filed with the Securities and Exchange Commission on August
26, 2011)
10.2+
InspireMD,
Inc. 2013 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed with the Securities
and Exchange Commission on December 20, 2013)
82
10.3+
Form
of Incentive Stock Option Award Agreement under the InspireMD, Inc. 2013 Long-Term Incentive Plan (incorporated by reference to Exhibit
99.2 to Registration Statement on Form S-8 filed with the Securities and Exchange Commission on June 5, 2014)
10.4+
Form
of Nonqualified Stock Option Award Agreement under the InspireMD, Inc. 2013 Long-Term Incentive Plan (incorporated by reference to
Exhibit 99.3 to Registration Statement on Form S-8 filed with the Securities and Exchange Commission on June 5, 2014)
10.5+
Form
of Restricted Stock Award Agreement under the InspireMD, Inc. 2013 Long-Term Incentive Plan (incorporated by reference to Exhibit
99.4 to Registration Statement on Form S-8 filed with the Securities and Exchange Commission on June 5, 2014)
10.6+
Form
of Restricted Stock Unit Award Agreement under the InspireMD, Inc. 2013 Long-Term Incentive Plan (incorporated by reference to Exhibit
99.5 to Registration Statement on Form S-8 filed with the Securities and Exchange Commission on June 5, 2014)
10.7+
Form
of Section 3(i) Stock Option Award Agreement under the InspireMD, Inc. 2013 Long-Term Incentive Plan (Israeli) (incorporated by reference
to Exhibit 99.6 to Registration Statement on Form S-8 filed with the Securities and Exchange Commission on June 5, 2014)
10.8+
Form
of Section 102 Capital Gain Stock Option Award Agreement under the InspireMD, Inc. 2013 Long-Term Incentive Plan (Israeli) (incorporated
by reference to Exhibit 99.7 to Registration Statement on Form S-8 filed with the Securities and Exchange Commission on June 5, 2014)
10.9+
Form
of Section 102 Capital Gain Restricted Stock Award Agreement under the InspireMD, Inc. 2013 Long-Term Incentive Plan (Israeli) (incorporated
by reference to Exhibit 99.8 to Registration Statement on Form S-8 filed with the Securities and Exchange Commission on June 5, 2014)
10.10+
Form
of Stock Option Award Agreement under the InspireMD, Inc. 2013 Long-Term Incentive Plan (European) (incorporated by reference to
Exhibit 99.9 to Registration Statement on Form S-8 filed with the Securities and Exchange Commission on June 5, 2014)
10.11+
Form
of Restricted Stock Award Agreement under the InspireMD, Inc. 2013 Long-Term Incentive Plan (European) (incorporated by reference
to Exhibit 99.10 to Registration Statement on Form S-8 filed with the Securities and Exchange Commission on June 5, 2014)
10.12+
Form
of Stock Option Award Agreement outside the InspireMD, Inc. 2013 Long-Term Incentive Plan (incorporated by reference to Exhibit 99.11
to Registration Statement on Form S-8 filed with the Securities and Exchange Commission on June 5, 2014)
10.13+
First
Amendment to the InspireMD, Inc. 2013 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Current Report on
Form 8-K filed on September 9, 2015)
10.14+
Second
Amendment to the InspireMD, Inc. 2013 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Current Report on
Form 8-K filed on May 25, 2016)
10.15+
Third
Amendment to the InspireMD, Inc. 2013 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Current Report on
Form 8-K filed on September 29, 2016)
10.16+
Fourth
Amendment to the InspireMD, Inc. 2013 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Current Report on
Form 8-K filed on October 26, 2018)
83
10.17+
Fifth
Amendment to the InspireMD, Inc. 2013 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Current Report on
Form 8-K filed on March 21, 2019)
10.18+
Employment
Agreement, dated December 9, 2019, by and between the Company and Marvin Slosman (incorporated by reference to Exhibit 10.2 to the
Current Report on Form 8-K filed on December 10, 2019).
10.19+
First
Amendment to Employment Agreement, dated December 31, 2019, by and between the Company and Marvin Slosman (incorporated by reference
to Exhibit 10.2 to the Current Report on Form 8-K filed on January 6, 2020).
10.20+
Nonqualified
Stock Option Agreement, by and between the Company and Marvin Slosman (incorporated by reference to Exhibit 10.60 to the Annual Report
on Form 10-K filed on March 10, 2020)
10.21+
Restricted
Stock Unit Award agreement, by and between the Company and Marvin Slosman (incorporated by reference to Exhibit 10.61 to the Annual
Report on Form 10-K filed on March 10, 2020)
10.22
Form
of Series F Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S-1, Amendment
No. 1, filed with the SEC on June 1, 2020 (File No. 333-238247)).
10.23
Form
of Series G Warrant (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S-1, Amendment
No. 1, filed with the SEC on February 3, 2021 (File No. 333-238247))
10.24+
Sixth
Amendment to the InspireMD, Inc. 2013 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Current Report on
Form 8-K filed on August 31, 2020)
10.25+
Seventh
Amendment to the InspireMD, Inc. 2013 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Quarterly Report
on Form 10-Q filed on August 9, 2021)
10.26+
First
Amendment to Employment Agreement, dated November 8, 2021, by and between InspireMD, Inc. and Marvin Slosman (incorporated by reference
to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed on November 8, 2021).
10.27+
2021
Equity Compensation Plan (incorporated by reference to Annex A to the registrant’s Proxy Statement on Schedule 14A filed with
the Commission on August 12, 2021).
10.28+
Form
of Nonqualified Stock Option Agreement for U.S. employees under the 2021 Equity Incentive Plan (incorporated by reference to Exhibit
10.53 to the Annual Report on Form 10-K filed on March 7, 2022)
10.29+
Form
of Nonqualified Stock Option Agreement for European employees under the 2021 Equity Incentive Plan (incorporated by reference to
Exhibit 10.54 to the Annual Report on Form 10-K filed on March 7, 2022)
84
10.30+
Form
of Nonqualified Stock Option Agreement for consultants under the 2021 Equity Incentive Plan (incorporated by reference to Exhibit
10.55 to the Annual Report on Form 10-K filed on March 7, 2022)
10.31+
Form
of Nonqualified Stock Option Agreement for Israeli employees under the 2021 Equity Incentive Plan (incorporated by reference to Exhibit
10.56 to the Annual Report on Form 10-K filed on March 7, 2022)
10.32+
Form
of Nonqualified Stock Option Agreement for U.S. directors under the 2021 Equity Incentive Plan (incorporated by reference to Exhibit
10.57 to the Annual Report on Form 10-K filed on March 7, 2022)
10.33+
Form
of Restricted Stock Award Agreement for U.S. employees under the 2021 Equity Incentive Plan (incorporated by reference to Exhibit
10.58 to the Annual Report on Form 10-K filed on March 7, 2022)
10.34+
Form
of Restricted Stock Award Agreement for U.S. directors under the 2021 Equity Incentive Plan (incorporated by reference to Exhibit
10.59 to the Annual Report on Form 10-K filed on March 7, 2022)
10.35+
Form
of Restricted Stock Award Agreement for Israeli employees under the 2021 Equity Incentive Plan (incorporated by reference to Exhibit
10.60 to the Annual Report on Form 10-K filed on March 7, 2022)
10.36+
Form
of Restricted Stock Award Agreement for European employees under the 2021 Equity Incentive Plan (incorporated by reference to Exhibit
10.61 to the Annual Report on Form 10-K filed on March 7, 2022)
10.37+
Form
of Restricted Stock Unit Award Agreement under the 2021 Equity Incentive Plan (incorporated by reference to Exhibit 10.62 to the
Annual Report on Form 10-K filed on March 7, 2022)
10.38+
Third
Amendment to Employment Agreement, dated January 5, 2023, by and between InspireMD, Inc. and Marvin Slosman (incorporated by reference
to Exhibit 10.64 to the Annual Report on Form 10-K filed on March 30, 2023)
10.39+^
Employment
Agreement, dated November 2, 2020, by and between the Company and Andrea Tommasoli (incorporated by reference to Exhibit 10.66 to
the Annual Report on Form 10-K filed on March 30, 2023)
10.40
Form
of Securities Purchase Agreement dated as of May 12, 2023 between the Company and purchasers identified therein (incorporated by
reference to Exhibit 10.1 of the Current Report on Form 8-K dated May 15, 2023)
10.41
Form
of Pre-Funded Warrant dated May 15, 2023 (incorporated by reference to Exhibit 10.2 of the Current Report on Form 8-K dated May 15,
2023)
10.42
Form
of Series J Warrant dated May 15, 2023 (incorporated by reference to Exhibit 10.5 of the Current Report on Form 8-K dated May 15,
2023)
85
10.43
Form
of Series K Warrant dated May 15, 2023 (incorporated by reference to Exhibit 10.6 of the Current Report on Form 8-K dated May 15,
2023)
10.44
Form
of Registration Rights Agreement dated as of May 12, 2023 between the Company and purchaser identified therein (incorporated by reference
to Exhibit 10.7 of the Current Report on Form 8-K dated May 15, 2023)
10.45+
Fourth
Amendment to Employment Agreement, dated April 1, 2024, by and between InspireMD, Inc. and Marvin Slosman (incorporated by reference
to Exhibit 10.1 of the Current Report on Form 8-K dated April 2, 2024)
10.46
Equity
Distribution Agreement by and between InspireMD, Inc. and Piper Sandler & Co., dated May 31, 2024 (incorporated by reference
to Exhibit 10.1 of the Current Report on Form 8-K dated May 31, 2024)
10.47
InspireMD,
Inc. 2024 Inducement Plan (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K dated October 1, 2024)
10.48
Form
of Inducement Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.2 of the Current Report on Form 8-K dated
October 1, 2024)
10.49
Form
of Inducement Nonqualified Stock Option Agreement (incorporated by reference to Exhibit 10.3 of the Current Report on Form 8-K dated
October 1, 2024)
10.50
Form
of Inducement Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.4 of the Current Report on Form 8-K
dated October 1, 2024)
10.51
Lease
Agreement, dated October 9, 2024, by and between InspireMD, Inc. and ROIB Waterford, LLC (incorporated by reference to Exhibit 10.1
of the Current Report on Form 8-K dated October 15, 2024)
10.52+
Employment Agreement, dated February 12, 2023, by and between InspireMD, Inc. and Shane Gleason (incorporated by reference to Exhibit 10.68 to the Annual Report on Form 10-K filed on March 12, 2025)
10.53+
Employment Agreement, dated June 2, 2025, by and between the Company and Michael Lawless (incorporated by reference to Exhibit 99.2 of the Current Report on Form 8-K dated June 3, 2025)
10.54
Form of Securities Purchase Agreement dated as of July 30, 2025 between the Company and purchasers identified therein (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K dated July 31, 2025)
10.55
Form of Pre-Funded Warrant (incorporated by reference to Exhibit 10.2 of the Current Report on Form 8-K dated July 31, 2025)
10.56
Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.3 of the Current Report on Form 8-K dated July 31, 2025)
10.57+
Amended and Restated Employment Agreement, dated May 5, 2014, by and between InspireMD, Inc. and Craig Shore (incorporated by reference to Exhibit 10.2 to Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 7, 2014)
10.58+
First Amendment to Amended and Restated Employment Agreement, dated January 5, 2015, by and between InspireMD, Inc. and Craig Shore (incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K filed with the Securities and Exchange Commission on January 6, 2015)
10.59+
Second Amendment to Amended and Restated Employment Agreement, dated July 25, 2016, by and between InspireMD, Inc. and Craig Shore agent (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on July 29, 2016)
86
10.60+
Third Amendment to Amended and Restated Employment Agreement, dated March 25, 2019, by and between InspireMD, Inc. and Craig Shore (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on March 28, 2019)
10.61+
Fourth Amendment to Employment Agreement, dated August 14, 2020, by and between InspireMD, Inc. and Craig Shore (incorporated by reference to Exhibit 10.62 to the Annual Report on Form 10-K filed on March 5, 2024)
10.62+
Fifth Amendment to Employment Agreement, dated November 4, 2021, by and between InspireMD, Inc. and Craig Shore (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q filed on November 8, 2021).
10.63+
Sixth Amendment to Employment Agreement, dated January 17, 2022, by and between InspireMD, Inc. and Craig Shore (incorporated by reference to Exhibit 10.51 to the Annual Report on Form 10-K filed on March 7, 2022)
10.64+
Seventh Amendment to Employment Agreement, dated January 18, 2023, by and between InspireMD, Inc. and Craig Shore (incorporated by reference to Exhibit 10.65 to the Annual Report on Form 10-K filed on March 30, 2023)
10.65+
Eighth Amendment to Employment Agreement, dated April 1, 2024, by and between InspireMD, Inc. and Craig Shore (incorporated by reference to Exhibit 10.2 of the Current Report on Form 8-K dated April 2, 2024)
10.66+
Ninth Amendment to Employment Agreement, dated December 10, 2024, by and between InspireMD, Inc. and Craig Shore (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K dated December 12, 2024)
19.1*
Insider Trading Policy
21.1
List of Subsidiaries (incorporated by reference to Exhibit 21.1 to Current Report on Form 8-K filed with the Securities and Exchange Commission on April 6, 2011)
23.1*
Consent of Kesselman & Kesselman, Certified Public Accountants
31.1*
Certification of Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002
31.2*
Certification of Chief Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002
32.1*
Certification of Chief Executive Officer Pursuant to Section 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*
Certification of Chief Financial Officer Pursuant to Section 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
97.1
InspireMD, Inc. Executive Officer Clawback Policy (incorporated by reference to Exhibit 97.1 to the Annual Report on Form 10-K filed on March 5, 2024)
101.INS*
Inline
XBRL Instance Document (the Instance Document does not appear in the interactive data file because its XBRL tags are embedded within
the Inline XBRL document)
101.SCH*
Inline
XBRL Taxonomy Extension Schema Document
101.CAL*
Inline
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*
Inline
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*
Inline
XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*
Inline
XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover
Page Interactive Data File (embedded within the Inline XBRL document)
*
Filed herewith.
+
Management contract or compensatory plan or arrangement.
^
Portions of this exhibit (indicated by asterisks) have been omitted under rules of the U.S. Securities and Exchange Commission permitting
the confidential treatment of select information.
87
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
INSPIREMD,
INC.
Date:
March 18, 2026
By:
/s/
Marvin Slosman
Marvin
Slosman
President
and Chief Executive Officer
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/
Marvin Slosman
President,
Chief Executive Officer and Director
March
18, 2026
Marvin
Slosman
(principal
executive officer)
/s/
Michael Lawless
Chief
Financial Officer, Chief Administrative Officer, Secretary and Treasurer
March
18, 2026
Michael
Lawless
(principal
financial and accounting officer)
/s/
Paul Stuka
Chairman
of the Board of Directors
March
18, 2026
Paul
Stuka
/s/
Michael Berman
Director
March
18, 2026
Michael
Berman
/s/
Raymond Cohen
Director
March
18, 2026
Raymond
Cohen
/s/
Dan Dearen
Director
March
18, 2026
Dan
Dearen
/s/
Gary Roubin
Director
March
18, 2026
Gary
Roubin
/s/
Scott R. Ward
Director
March
18, 2026
Scott
R. Ward
88
INSPIREMD,
INC.
CONSOLIDATED
FINANCIAL STATEMENTS
AS
OF AND FOR THE YEAR ENDED DECEMBER 31, 2025
TABLE
OF CONTENTS
Page
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB name: Kesselman & Kesselman C.P.A.s and PCAOB ID: 1309 )
F-2
CONSOLIDATED
FINANCIAL STATEMENTS:
Consolidated
Balance Sheets
F-3
- F-4
Consolidated
Statements of Operations
F-5
Consolidated
Statements of Changes in Equity
F-6
- F-7
Consolidated
Statements of Cash Flows
F-8
Notes
to the Consolidated Financial Statements
F-9
- F-27
F- 1
Report
of Independent Registered Public Accounting Firm
To
the board of directors and shareholders of InspireMD Inc.
Opinion
on the Financial Statements
We
have audited the accompanying consolidated balance sheets of InspireMD Inc. and its subsidiaries (the “Company”) as of December
31, 2025 and 2024, and the related consolidated statements of operations, changes in equity and cash flows for the years then ended,
including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated
financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024,
and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted
in the United States of America.
Substantial
Doubt About the Company’s Ability to Continue as a Going Concern
The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed
in Note 1b to the consolidated financial statements, the Company has suffered recurring losses from operations and cash outflows from
operating activities that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard
to these matters are also described in Note 1b. The consolidated financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
Basis
for Opinion
These
consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion
on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial
reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement
of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical
Audit Matters
Critical
audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required
to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial
statements and (ii) involved our especially challenging, subjective, or complex judgments. We determined there are no critical audit
matters.
/s/
Kesselman & Kesselman
Certified
Public Accountants (Isr.)
A
member firm of PricewaterhouseCoopers International Limited
Tel-Aviv,
Israel
March
18, 2026
We
have served as the Company’s auditor since 2010.
F- 2
INSPIREMD,
INC.
CONSOLIDATED
BALANCE SHEETS
(U.S.
dollars in thousands, except share and per share data)
2025
2024
December
31,
2025
2024
ASSETS
CURRENT ASSETS:
Cash and cash
equivalents
$ 8,939
$ 18,916
Marketable securities
45,272
15,721
Accounts receivable:
Trade, net
2,168
1,572
Other
400
682
Prepaid expenses
1,296
1,060
Inventory
3,396
2,570
TOTAL CURRENT ASSETS
61,471
40,521
NON-CURRENT ASSETS:
Long term deposit
442
426
Property, plant and equipment,
net
3,584
2,371
Operating lease right of
use assets
2,758
2,360
Fund in respect of employee
rights upon retirement
1,149
1,129
TOTAL NON-CURRENT ASSETS
7,933
6,286
TOTAL ASSETS
$ 69,404
$ 46,807
F- 3
INSPIREMD,
INC.
CONSOLIDATED
BALANCE SHEETS
(U.S.
dollars in thousands, except share and per share data)
December
31,
2025
2024
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable and
accruals:
Trade
1,255
1,254
Other
9,457
6,424
TOTAL CURRENT LIABILITIES
10,712
7,678
LONG-TERM LIABILITIES:
Operating lease liabilities
net of current maturities
2,224
1,796
Liability for employee
rights upon retirement and others
1,267
1,247
TOTAL LONG-TERM LIABILITIES
3,491
3,043
TOTAL LIABILITIES
14,203
10,721
COMMITMENTS AND CONTINGENT
LIABILITIES
-
-
EQUITY:
Common stock, par value
$ 0.0001 per share; 150,000,000 shares authorized at December 31, 2025 and 2024; 43,532,281 and 26,611,033 shares issued and outstanding
at December 31, 2025 and 2024, respectively
4
3
Preferred C shares,
par value $ 0.0001 per share; 1,172,000 shares authorized at December 31, 2025 and 2024; 1,718 shares issued and outstanding
at December 31, 2025 and 2024, respectively
- *
- *
Additional paid-in capital
357,489
289,589
Accumulated deficit
( 302,292 )
( 253,506 )
Total equity
55,201
36,086
Total liabilities and
equity
$ 69,404
$ 46,807
* Represents an amount
less than $1thousand
The
accompanying notes are an integral part of the consolidated financial statements.
F- 4
INSPIREMD,
INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
(U.S.
dollars in thousands, except share and per share data)
2025
2024
Year
Ended December 31,
2025
2024
REVENUES
$ 8,979
$ 7,009
COST OF REVENUES
6,330
5,503
GROSS PROFIT
2,649
1,506
OPERATING EXPENSES:
Research and development
15,003
13,634
Selling and marketing
16,553
6,069
General and administrative
20,707
15,306
Total operating expenses
52,263
35,009
LOSS FROM OPERATIONS
( 49,614 )
( 33,503 )
FINANCIAL INCOME, net:
891
1,557
LOSS BEFORE TAX EXPENSES
( 48,723 )
( 31,946 )
TAX EXPENSES
63
59
NET LOSS
$ ( 48,786 )
$ ( 32,005 )
NET LOSS PER SHARE -
basic and diluted
( 0.76 )
( 0.76 )
WEIGHTED
AVERAGE NUMBER OF COMMON STOCK USED IN COMPUTING NET LOSS PER SHARE - basic and diluted
64,325,810
41,928,360
The
accompanying notes are an integral part of the consolidated financial statements.
F- 5
INSPIREMD,
INC.
CONSOLIDATED
STATEMENTS OF CHANGES IN EQUITY
(U.S.
dollars in thousands, except share data)
Shares
Amount
Shares
Amount
capital
deficit
equity
Common
stock
Preferred
C shares
Additional
paid-in
Accumulated
Total
Shares
Amount
Shares
Amount
capital
deficit
equity
BALANCE as
of January 1, 2025
26,611,033
3
1,718
- *
289,589
( 253,506 )
36,086
Net
loss
( 48,786 )
( 48,786 )
Exercise
of pre-funded warrants **
3,381,651
- *
-
-
- *
-
- *
Issuance
of common stock, included at the market offering and pre-funded warrants net of $ 3,148 issuance costs
7,510,293
1
-
-
38,713
-
38,714
Exercise
of Warrants Series I to 10,561,685 pre-funded warrants and 2,352,393 common stock, net of $ 1,000 issuance costs
2,352,393
- *
-
-
16,855
-
16,855
Share-based
compensation related to restricted stock, restricted stock units and stock options award, net of forfeitures of 256,170 shares
3,676,911
- *
-
-
12,332
-
12,332
BALANCE
as of December 31, 2025
43,532,281
4
1,718
- *
357,489
( 302,292 )
55,201
* Represents an amount
less than $1 thousand
** Until June 30,
2025, pre-funded warrants were exercised on a cashless basis; from July 1 through December 31, 2025, pre-funded warrants were exercised
for cash.
The
accompanying notes are an integral part of the consolidated financial statements.
F- 6
INSPIREMD,
INC.
CONSOLIDATED
STATEMENTS OF CHANGES IN EQUITY
(U.S.
dollars in thousands, except share data)
Common
stock
Preferred
C shares
Additional
paid-in
Accumulated
Total
Shares
Amount
Shares
Amount
capital
deficit
equity
BALANCE as
of January 1, 2024
21,841,215
2
1,718
- *
261,000
( 221,501 )
39,501
Balance
21,841,215
2
1,718
- *
261,000
( 221,501 )
39,501
Net loss
( 32,005 )
( 32,005 )
Exercise
of pre-funded warrants
1,728,382
- *
-
-
-
-
- *
Exercise
of Warrants Series H to 12,621,090 pre-funded warrants and 292,996 common stock, net of $ 1,000 issuance costs
292,996
1
-
-
16,853
-
16,854
Issuance
of common stock, included at the market offering net of $ 81 issuance costs
647,277
- *
-
-
1,598
-
1,598
Share-based
compensation related to restricted stock, restricted stock units and stock options award, net of forfeitures of 128,660 shares
2,101,163
- *
-
-
10,138
-
10,138
BALANCE
as of December 31, 2024
26,611,033
3
1,718
- *
289,589
( 253,506 )
36,086
Balance
26,611,033
3
1,718
- *
289,589
( 253,506 )
36,086
* Represents an amount
less than $1 thousand
The
accompanying notes are an integral part of the consolidated financial statements.
F- 7
INSPIREMD,
INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(U.S.
dollars in thousands)
2025
2024
Year
ended December 31,
2025
2024
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss
$ ( 48,786 )
$ ( 32,005 )
Adjustments required
to reconcile net loss to net cash used in operating activities:
Depreciation
476
280
Gain from sale of property,
plant and equipment
( 14 )
-
Change in fair value
of marketable securities, net of interest received
( 359 )
( 894 )
Change in liability
for employees rights upon retirement
20
163
Other financial income
( 133 )
( 51 )
Change in operating
right of use asset and operating leasing liability
554
( 144 )
Share-based compensation
expenses
12,332
10,138
Gain on amounts funded
in respect of employee rights upon retirement, net
( 299 )
( 91 )
Changes in operating
asset and liability items:
Increase in prepaid
expenses
( 236 )
( 482 )
Decrease (increase)
in trade receivables
( 596 )
232
Decrease (increase)
in other receivables
282
( 34 )
Increase in inventory
( 826 )
( 464 )
Increase in trade payables
1
315
Increase in other payables
2,481
1,169
Net cash used in operating
activities
( 35,103 )
( 21,868 )
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of property,
plant and equipment
( 1,662 )
( 1,402 )
Proceeds from sale of
property, plant and equipment
15
-
Investment in long-term
deposit
-
( 426 )
Investments in marketable
securities
( 56,840 )
( 14,444 )
Proceeds from matured
marketable securities
27,648
29,000
Amounts funded in respect
of employee rights upon retirement
( 91 )
( 87 )
Amounts withdrawn in
respect of employee rights upon retirement
370
-
Net cash provided by
(used in) investing activities
( 30,560 )
12,641
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from exercise
of warrants, net of $ 1,000 issuance costs
16,855
16,854
Proceeds from issuance
of shares and pre-funded warrants, net of $ 3,148 and $ 81 issuance costs, respectively
38,714
1,598
Net cash provided by
financing activities
55,569
18,452
EFFECT OF EXCHANGE RATE
CHANGES ON CASH AND CASH EQUIVALENTS
117
51
INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS
( 9,977 )
9,276
BALANCE OF CASH AND CASH
EQUIVALENTS AT BEGINNING OF YEAR
18,916
9,640
BALANCE OF CASH AND CASH
EQUIVALENTS AT END OF YEAR
8,939
$ 18,916
SUPPLEMENTAL NON-CASH
INVESTING AND FINANCING ACTIVITIES:
Acquisition of right-of-use
assets by means of lease liabilities
994
1,344
Non-cash purchase of
property and equipment
28
189
The
accompanying notes are an integral part of the consolidated financial statements.
F- 8
INSPIREMD,
INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE
1 - DESCRIPTION OF BUSINESS
a.
General
InspireMD,
Inc., a Delaware corporation (the “Company”), together with its subsidiaries
in Israel and Germany, is a medical device company specializing in the development and commercialization
of products for the treatment of carotid artery disease and other vascular conditions. The
Company’s portfolio includes two commercial products based on its proprietary CGuard™
carotid stent technology, designed to provide market-leading embolic protection during and
after stenting procedures. A stent is an expandable scaffold-like metallic device placed
in an artery to widen the lumen and restore blood flow.
The
Company’s first product, the CGuard™ Carotid Embolic Prevention System (“CGuard EPS”), integrates a self-expanding
nitinol stent with a MicroNet™ mesh sleeve as a single device for carotid artery revascularization. In January 2024, the Company
received CE Mark recertification for CGuard EPS under the EU Medical Device Regulation (“MDR”). The Company’s CGuard
EPS previously held CE Mark approval under the former Medical Device Directive (“MDD”). CGuard EPS is marketed in over
30 countries outside the United States, mainly in Europe, through a network of distributors.
The
Company’s second product, the CGuard™ Prime Carotid Stent System (“CGuard Prime”), uses the same stent and
MicroNet mesh with a differentiated deployment mechanism. CGuard Prime received premarket approval (“PMA”) by the U.S.
Food and Drug Administration (“FDA”) on June 23, 2025, and is marketed exclusively in the United States through the Company’s
direct salesforce. It also received MDR CE Mark approval on June 12, 2025.
b.
Liquidity
The
Company has an accumulated deficit as of December 31, 2025, as well as a history of net losses and negative operating cash flows.
The Company expects to continue incurring losses and negative cash flows from operations until the Company expands its commercial
revenue to a scale that funds its commercial resources, development activities and support functions. As a result of these expected
losses and negative cash flows from operations, along with the Company’s current cash position, the Company does not have sufficient
resources to fund operations for at least the next 12 months. Therefore, there is substantial doubt about the Company’s ability
to continue as a going concern. These consolidated financial statements have been prepared assuming that the Company will continue
as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.
Management’s
plans include the continued commercialization of the Company’s products and raising capital through the sale of additional
equity securities, debt or capital inflows from strategic partnerships and exercises of warrants. There are no assurances, however,
that the Company will be successful in obtaining the level of financing needed for its operations. If the Company is unsuccessful
in commercializing its products and raising capital, it may need to reduce activities, curtail or cease operations.
c.
Risks
Related to the Company’s Operations in Israel
In recent years, Israel has been engaged in sporadic armed conflicts with neighboring countries and terrorist organizations active in
the region, including Iran, Hamas, an Islamist terrorist group that controls the Gaza Strip, with Hezbollah, an Islamist terrorist group
that controls large portions of southern Lebanon, and with Iranian-backed military forces in Syria. As of October 9, 2025, Israel, Hamas,
the United States and other countries in the region agreed to a framework for a ceasefire in Gaza between Israel and Hamas. However, there
are no assurances that such agreement will hold. In June 2025, following escalating threats and intelligence reports of imminent attacks,
Israel conducted preemptive strikes on military and nuclear infrastructure in Iran. Iran responded with drones and missiles attacks, some
of which caused civilian casualties and infrastructure damage. After 12 days of hostilities, a ceasefire between Israel and Iran was reached
in June 2025. While a ceasefire was reached between Israel and Iran in June 2025 after 12 days of hostilities, on February 28, 2026, the
United States and Israel launched coordinated military strikes against Iran, including attacks on strategic military infrastructure and
leadership targets, with the stated aim of degrading Iran’s capacity to conduct or support hostile operations against them. In response,
Iran has fired missiles and drones toward population centers and military installations in Israel, Europe and neighboring countries in
the Gulf region, and also launched counter-strikes against U.S. forces and allied bases throughout the Gulf region. In addition, in March
2026, hostilities resumed along Israel’s northern border with Lebanon, when Hezbollah resumed its attacks as part of a broader regional
escalation. In response, Israel resumed military operations against Hezbollah in Lebanon. A broader regional conflict involving additional
state and non-state actors remains a significant risk. The intensity and duration of the security situation in Israel have been difficult
to predict, as are the economic implications on our business and operations and on Israel’s economy in general. As of the date of
these consolidated financial statements, conflict continues in parts of the region. The Company’s operations, including its current
production facility, are located in Israel. At this time, these activities remain largely unaffected.
During the years ended December 31, 2025 and 2024, the impact of this war on the Company’s results of operations and financial condition
was immaterial, but such impact may increase, which could be material, as a result of the continuation, escalation or expansion of such
war.
F- 9
INSPIREMD,
INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE
2 - SIGNIFICANT ACCOUNTING POLICIES
a.
Use
of estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates using assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
As applicable to these consolidated financial statements, the most significant estimates and assumptions relate to the determination of the lease terms in operating leases.
b. Functional currency
The currency of the primary economic environment in which the operations of the Company and its subsidiaries are conducted is the U.S. dollar (“$” or “dollar”). Accordingly, the functional currency of the Company and its subsidiaries is the U.S. dollar.
The dollar figures are determined as follows: transactions and balances originally denominated in dollars are presented in their original amounts. Balances in foreign currencies are translated into dollars using historical and current exchange rates for non-monetary and monetary balances, respectively. The resulting translation gains or losses are recorded as financial income or expense, as appropriate. For transactions reflected in the statements of operations in foreign currencies, the exchange rates at transaction dates are used. Depreciation and changes in inventories and other changes deriving from non-monetary items are based on historical exchange rates.
c. Principles of consolidation
The consolidated financial statements include the accounts of the Company and of its subsidiaries. Intercompany transactions and balances have been eliminated upon consolidation.
d. Cash and cash equivalents
The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. As of December 31, 2025 and 2024, cash and cash equivalents consisted of cash, short-term deposits (up to three months from the date of deposit) and money market funds.
e. Marketable securities
Marketable securities consist of debt securities. The Company elected the fair value option to measure and recognize its investments in debt securities in accordance with ASC 825, Financial Instruments as the Company manages its portfolio and evaluates the performance on a fair value basis. Changes in fair value, realized gains and losses on sales of marketable securities, are reflected in the consolidated statements of operation as finance expense (income), net. Marketable securities are classified under current assets in the consolidated balance sheets as they represent the investment of funds available for the Company’s current operations.
F- 10
INSPIREMD,
INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE
2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
f. Concentration of credit risk and allowance for doubtful accounts
Financial
instruments that may potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents,
marketable securities and long-term deposits, which are deposited in major financially sound institutions in the U.S, Israel and
Germany, and trade accounts receivable and other receivables. The Company’s marketable securities include investments in
highly-rated U.S governmental bonds. The financial institutions that hold the Company’s debt marketable securities are major
financial institutions located in the United States. The Company’s trade accounts receivable are derived from revenues earned
from customers from various countries. The Company performs ongoing credit evaluations of its customers’ financial condition
and requires no collateral from its customers. The Company also has a credit insurance policy for some of its customers. The
Company maintains the allowance for estimated losses resulting from the inability of the Company’s customers to make required
payments. The allowance represents the current estimate of lifetime expected credit losses over the remaining duration of existing
accounts receivable considering current market conditions and supportable forecasts when appropriate. The estimate is a result of
the Company’s ongoing evaluation of collectability, customer creditworthiness, historical levels of credit losses, and future
expectations. The allowance for expected credit losses was immaterial during the periods presented.
g. Inventory
Inventories are stated at the lower of cost (cost is determined on a “first-in, first-out” basis) or net realizable value. The Company’s inventories generally have a limited shelf life and are subject to impairment as they approach their expiration dates. The Company regularly evaluates the carrying value of its inventory and when, based on such evaluation, factors indicate that impairment has occurred, the Company impairs the inventories’ carrying value. There were no impairments or inventory allowances during the years ended December 31, 2025 and 2024.
h. Leases
Operating
leases are included in operating lease right-of-use (“ROU”) assets. Short-term balances regarding lease liabilities are included
in accounts payable and accruals - Other and long-term balances regarding lease liabilities are included in operating lease liabilities.
ROU assets represent Company’s right to use an underlying asset for the lease term and lease liabilities represent obligation to
make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date
based on the present value of lease payments over the lease term. In determining the present value of lease payments, the Company uses
the incremental borrowing rate based on the information available at the lease commencement date as the rate implicit in the lease is
not readily determinable. The determination of the incremental borrowing rate requires management judgment based on information available
at lease commencement. The lease terms may include periods covered by options to extend the lease when it is reasonably certain that
the Company will exercise such options, and periods covered by options to terminate the lease when it is reasonably certain that the
Company will not exercise such options. Operating lease cost is recognized on a straight-line basis over the lease term. Lease agreements
that include lease and non-lease components are accounted for as a single lease component. The Company elected the short-term lease recognition
exemption for leases with a lease term of 12 months or less.
i. Property, plant and equipment
Property, plant and equipment are stated at cost, net of accumulated depreciation and amortization. Cost includes expenditures
that are directly attributable to placing an asset in the location and condition necessary for its intended use. Depreciation is calculated
using the straight-line method over the estimated useful lives of the related assets: over three
years for computers and other electronic equipment,
and seven 7
to fifteen
years for office furniture and equipment and machinery
and equipment (mainly seven
years ). Assets under construction or not yet
placed into service are not depreciated until they are ready for their intended use. Leasehold improvements are amortized on a straight-line
basis over the shorter of the lease term, or the estimated useful life of the improvements.
j. Impairment in value of long-lived assets
The Company tests long-lived tangible assets for impairment whenever events or circumstances present an indication of impairment. If the sum of expected future cash flows (undiscounted and without interest charges) of the long-lived assets is less than the carrying amount of such assets, an impairment would be recognized, and the assets would be written down to their estimated fair values, based on expected future discounted cash flows. There were no impairments in value of long-lived assets during the years ended December 31,2025 and 2024.
F- 11
INSPIREMD,
INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE
2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
k. Revenue recognition
A contract with a customer exists only when: 1) the parties to the contract have approved it and are committed to perform their respective obligations, 2) the Company can identify each party’s rights regarding the distinct goods or services to be transferred (“Performance Obligations”), 3) the Company can determine the transaction price for the goods or services to be transferred, 4) the contract has commercial substance and 5) it is probable that the Company will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. Revenues are recorded in the amount of consideration to which the Company expects to be entitled in exchange for Performance Obligations upon transfer of control to the customer, excluding sales taxes.
Revenue from sales of goods, including sales to distributors and direct sales to medical centers, is recognized at the point in time when control of the product transfers to the customer. Control generally transfers upon shipment or delivery of the product to the customer, depending on the contractual shipping terms, at which point the Company has a present right to payment and the customer has obtained legal title and the significant risks and rewards of ownership are obtained by the customer.
The Company recognizes the incremental costs of obtaining contracts as an expense since the amortization period of the assets that the Company otherwise would have recognized is one year or less. The costs are recorded under selling and marketing expenses. Disaggregated revenue is disclosed in Note 12.
Revenue is recognized net of sales taxes and value added taxes collected on behalf of governmental authorities.
l. Research and development costs
Research and development costs are charged to the consolidated statements of operations as incurred.
m. Share-based compensation
The Company has equity incentive plans under which the Company grants equity awards, including stock options, restricted stock and restricted stock units (“RSUs”) to employees, directors and service providers. Employee and service providers equity awards are accounted for using the grant-date fair value method. The Company determines compensation expense associated with restricted stock and RSUs based on the fair value of our common stock on the date of grant. The fair value of option awards is estimated using the Black-Scholes valuation model and expensed over the requisite service period. The Company elected to account for forfeitures as they occur.
The Company elected to recognize compensation expenses for awards to employees with only service conditions that have graded
vesting schedules using the accelerated multiple option approach. The attribution for nonemployee awards is in the same manner as if
the Company had paid cash for the goods or services. In addition, some of our share-based awards to service providers are
performance based, i.e., the vesting of these awards depends upon achieving certain goals. The Company recognizes compensation
expenses for awards with performance conditions when the company concludes that it is probable that the performance condition will
be achieved.
n. Uncertain tax positions
The Company follows a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit. If under the first step a tax position is assessed to be more likely than not to be sustained on audit, the second step is performed, under which the tax benefit is measured as the largest amount that is more than 50% likely to be realized upon ultimate settlement. Such liabilities are classified as long-term, unless the liability is expected to be resolved within twelve months from the balance sheet date. The Company’s policy is to include interest related to unrecognized tax benefits within “Financial income - net”.
o. Deferred income taxes
Deferred taxes are determined utilizing the “asset and liability” method based on the estimated future tax effects of differences between the financial accounting and tax bases of assets and liabilities under the applicable tax laws, and on tax rates anticipated to be in effect when the deferred taxes are expected to be paid or realized. The Company assesses realization of deferred income tax assets and, based on all available evidence, concludes whether it is more likely than not that the net deferred income tax assets will be realized. A valuation allowance is provided for the amount of deferred income tax assets not considered to be realizable.
The Company may incur an additional tax liability in the event of intercompany dividend distributions by its subsidiaries. Such additional tax liability in respect of these foreign subsidiaries has not been provided for in these consolidated financial statements as it is the Company’s policy to permanently reinvest the subsidiaries’ earnings and to consider distributing dividends only in connection with a specific tax opportunity that may arise.
Taxes that would apply in the event of disposal of investments in a foreign subsidiary have not been taken into account in computing the deferred taxes, as it is the Company’s intention to hold, and not to realize, these investments.
F- 12
INSPIREMD,
INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE
2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
p. Advertising
Costs related to advertising and promotion of products are charged to sales and marketing expenses as incurred. Advertising expenses were approximately $ 1,595 and $ 691 thousand for the years ended December 31, 2025, and 2024, respectively.
q. Net loss per share
Basic
and diluted net loss per share is computed by dividing the net loss for the period by the weighted average number of shares of common
stock, pre-funded warrants and fully vested restricted stock units outstanding during the period. The calculation of diluted net loss
per share excludes the effect of potential dilution of share options, warrants, and unvested restricted stocks, unvested restricted stock
units and Series C preferred stock as the effect is anti-dilutive. For the purpose of calculating basic net loss per share, the
additional shares of common stock that are issuable upon exercise of the Pre-funded Warrants have been included since the shares are
issuable for negligible consideration, as determined by the Company according to ASC 260-10-45-13, and have no vesting or other contingencies
associated with them. The total number of shares of common stock related to outstanding options, warrants, unvested restricted
stock, unvested restricted stock units and Series C Preferred Stock, which were excluded from the calculations of diluted loss per share
were 37,498,531
and 48,681,495
for the years ended December 31, 2025 and 2024, respectively.
This amount includes 5,177,186
and 4,073,966
unvested restricted stock included
in the number of issued and outstanding shares as of December
31, 2025, and 2024, respectively. For the years ended December 31, 2025 and 2024 the weighted average number of common stock used
in computing net loss per share - basic and diluted was as follows:
SCHEDULE OF WEIGHTED AVERAGE NUMBER OF SHARES
2025
2024
Weighted average number of common stock
30,116,091
20,501,816
Weighted average Vested restricted stock units
979,078
306,731
Weighted average Pre-funded Warrants
33,230,641
21,119,813
Total Weighted average number of common stock
used in computing net loss per share - basic and diluted
64,325,810
41,928,360
r. Segment reporting
The Company has one operating and reportable segment, see note 13.
s. Fair value measurement
The Company measures fair value and discloses fair value measurements for financial assets and liabilities. Fair value is based on the price that would be received to sell an asset or paid to transfer liability in an orderly transaction between market participants at the measurement date.
F- 13
INSPIREMD,
INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE
2 - SIGNIFICANT ACCOUNTING POLICIES (continued):
The accounting standard establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
Level 2: Observable prices that are based on inputs not quoted on active markets but corroborated by market data.
Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.
In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considers counterparty credit risk in its assessment of fair value.
t New accounting pronouncements
Recently adopted accounting pronouncements
1) In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This guidance is intended to enhance the transparency and decision-usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to disclosure regarding rate reconciliation and income taxes paid both in the U.S. and in foreign jurisdictions. ASU 2023-09 is effective for the Company’s annual reporting period beginning January 1, 2025. The Company has adopted this update on a retrospective basis. The adoption of this guidance resulted in expanded disclosures in its consolidated financial statements. (see note 10).
2) In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient when estimating credit losses on accounts receivable and contract assets arising from transactions accounted for under ASC 606, Revenue from Contracts with Customers. Under this practical expedient, an entity is allowed to assume that the current conditions it has applied in determining credit loss allowances for current accounts receivable and current contract assets remain unchanged for the remaining life of those assets. The ASU is effective for annual periods beginning after December 15, 2025, and interim periods within those annual reporting periods. The Company early adopted ASU 2025-05 on a prospective basis, effective January 1, 2025, and did not apply the standard in interim (quarterly) reporting periods prior to that date. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements and related disclosures.
Recently issued accounting pronouncement, not yet adopted:
1) In November 2024, the FASB issued ASU No. 2024-03 Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). The ASU improves the disclosures about a public business entity’s expense and provides more detailed information about the types of expenses in commonly presented expense captions. The amendments require that at each interim and annual reporting period an entity will, inter alia, disclose amounts of purchases of inventory, employee compensation, depreciation and amortization included in each relevant expense caption (such as cost of sales, G&A, S&M and research and development) as well as disclosures about selling expenses. The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating this ASU to determine its impact on the Company’s financial statements and disclosures.
2) In December 2025, the FASB issued ASU 2025-12 “Codification Improvements” to address suggestions received from stakeholders on the Accounting Standards Codification and to make other incremental improvements to U.S. GAAP. The update represents changes to the Codification that (1) clarify, (2) correct errors, or (3) make minor improvements. The amendments make the Codification easier to understand and apply. The guidance is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements.
F- 14
INSPIREMD,
INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE
3 – FAIR VALUE MEASUREMENTS
As
of December 31, 2025 and 2024, the carrying amounts of accounts payable, accounts receivable and other receivables approximate their
fair values due to the short-term maturities of these instruments.
The
carrying amount of the long-term deposit approximates its fair value since it is measured at its present value applying prevailing interest
rates, see note 7.
The
Company’s financial assets subject to fair value measurements on a recurring basis and the level of inputs used in such measurements
were as follows:
SCHEDULE
OF FINANCIAL ASSETS SUBJECT TO FAIR VALUE MEASUREMENTS
Total
Level
1
Level
2
Level
3
As
of December 31, 2025
($
in thousands)
Total
Level
1
Level
2
Level
3
Assets:
Cash equivalents-
Money
market funds
$ 5,116
$ 5,116
$ -
$ -
Marketable securities-
U.S
government bonds
$ 45,272
$ -
$ 45,272
$ -
Total
Level
1
Level
2
Level
3
As
of December 31, 2024
($
in thousands)
Total
Level
1
Level
2
Level
3
Assets:
Cash equivalents-
Money market
funds
$ 6,281
$ 6,281
$ -
$ -
Marketable securities-
U.S. government bonds
$ 15,721
$ -
$ 15,721
$ -
The
Company’s cash equivalents and marketable securities are classified within Level 1 and Level 2 because it uses quoted market prices
or alternative pricing sources and models utilizing market observable inputs to determine their fair value.
The
cost of marketable securities as of December 31, 2025, and 2024 is $ 45,091 and $ 15,277 thousand, respectively.
F- 15
INSPIREMD,
INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE
4 - MARKETABLE SECURITIES
As
of December 31, 2025, and 2024, all of the Company’s investment in marketable securities had contractual maturity of less than
one year.
The
following table sets forth the Company’s marketable securities for the indicated period:
SCHEDULE
OF MARKETABLE SECURITIES
2025
2024
December
31,
2025
2024
($
in thousands)
U.S. government bonds
$ 45,272
$ 15,721
Marketable securities
$ 45,272
$ 15,721
The
table below sets forth a summary of the changes in the fair value of the Company’s marketable securities for the years ended December
31, 2025, and 2024:
SCHEDULE
OF FAIR VALUE OF MARKETABLE SECURITIES CLASSIFIED BY MATURITY
2025
2024
($
in thousands)
Balance at beginning of the year
$ 15,721
$ 29,383
Additions
56,840
14,444
Maturity
( 27,648 )
( 29,000 )
Interest received
( 253 )
( 299 )
Changes in fair value during the year
612
1,193
Balance at end of the period
45,272
15,721
NOTE
5 - PROPERTY, PLANT AND EQUIPMENT
a.
Composition
of assets, grouped by major classifications, is as follows:
SCHEDULE
OF PROPERTY PLANT AND EQUIPMENT
2025
2024
December
31,
2025
2024
($
in thousands)
Cost:
Computer equipment
$ 949
$ 726
Office furniture and equipment
595
464
Machinery and equipment
3,678
2,640
Leasehold improvements
1,087
861
Property plant and equipment, gross
6,309
4,691
Less - accumulated depreciation
( 2,725 )
( 2,320 )
Net carrying amount
$ 3,584
$ 2,371
b.
Depreciation
and amortization expenses totaled approximately $ 476,000 and $ 280,000 for the years ended
December 31, 2025, and 2024, respectively, excluding fixed assets that the company purchased
that are not yet ready for use and, therefore not depreciated.
NOTE
6 - LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT AND OTHERS
Defined
Contribution Plans
Under
Israeli labor law, the Company’s subsidiary Israeli employees are generally entitled to severance pay upon dismissal or certain
other termination events.
Pursuant
to Section 14 of the Israeli Severance Compensation Act, 1963, most of the employees of the Company’s subsidiary in Israel employees
are entitled to have monthly deposits, at a rate of 8.33 % of their monthly salary, made in their name with insurance companies. Payments
in accordance with section 14 relieve the Company from any future severance payments to these employees. The severance pay expenses for
such employees were approximately $ 376,000 and $ 293,000 for the years ended December 31, 2025, and 2024, respectively.
The
Company sponsors a defined contribution retirement plan for its U.S. employees under Section 401(k) of the Internal Revenue Code. The
plan is structured as a Qualified Automatic Contribution Arrangement (QACA) Safe Harbor plan, which includes automatic enrollment and
requires the Company to make mandatory employer contributions in accordance with IRS Safe Harbor regulations. Employer contributions
under the plan were immaterial for the year ended December 31, 2025. The Company has no further obligation to fund benefits beyond these
required contributions.
Postemployment
Benefit Plans
The
severance pay liability of the Company for the rest of its subsidiary Israeli employees not covered under Section 14 amounting to $ 1,082
thousand and $ 1,224 thousand as of December 31, 2025, and 2024, respectively, reflects the undiscounted amount of the liability and is
based upon the number of years of service and the latest monthly salary. The severance pay liability is partly covered by insurance policies
and by regular deposits with recognized severance payment funds. The Company may only withdraw funds previously deposited for savings
in connection with the payment of severance. The severance pay expenses for such employees were approximately $ 126,000 and $ 124,000 for
the years ended December 31, 2025, and 2024, respectively.
F- 16
INSPIREMD,
INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE
7 – LEASE AGREEMENTS
1)
U.S. Lease
On
October 9, 2024, the Company entered into a lease agreement in Miami, Florida (the “U.S. Lease”) for the establishment of
its global headquarters. The U.S. Lease provides for the phased delivery of the leased premises located in Suites 215 and
280 at 6303 Waterford District Drive, Miami, Florida 33126. Rent commencement and lease recognition occur upon the Company
obtaining control of each portion of the premises, in accordance with the lease terms. The lease term extends through September 30, 2030
and includes an option to extend the lease for an additional five years. The Company has determined that the renewal option is not reasonably
certain to be exercised due to operational and strategic considerations.
The
Company took possession of Suite 215 on November 1, 2024, which represented the commencement date for that portion of the leased premises.
On May 18, 2025, the Company took possession of Suite 280 following the landlord’s completion of construction, which represented
the commencement date for Suite 280. As a result of obtaining possession of Suite 280, during the year ended December 31, 2025, the Company
recognized an increase of $ 302 thousand in operating lease right-of-use assets and a corresponding increase of $ 302 thousand in operating
lease liabilities.
Under
the U.S. Lease, the Company paid a security deposit of $ 500 thousand. Provided the Company does not default under the lease, the security
deposit is refundable at specified intervals throughout the lease term. The present value of the deposit as of
November 1, 2024, was $ 422 thousand and is classified as a long-term deposit. The remaining balance was assigned to
operating lease right-of-use assets.
2) Israeli
Lease
The
Company’s Israeli subsidiary leases a facility in Israel under an operating lease (the “Israeli Lease”). The Israeli
Lease was amended multiple times in prior years to extend the lease term and modify the leased premises. In prior periods, management
concluded that optional extension periods through December 31, 2027 were reasonably certain to be exercised and were included in the
lease term for accounting purposes.
On
May 28, 2025, the Company amended the Israeli Lease, extending the lease term through December 31, 2028 and leasing additional space
within the facility. As a result of this amendment, the Company recognized an increase of $ 692 thousand in operating lease right-of-use
assets and a corresponding increase of $ 692 thousand in operating lease liabilities.
As
of December 31, 2025, the Israeli Lease remains in effect through December 31, 2028.
3) Lease
Cost
Operating
lease cost for the years ended December 31, 2025 and 2024 was $ 470 thousand and $ 423 thousand, respectively, related to the Israeli Lease,
and $ 251 thousand and $ 34 thousand, respectively, related to the U.S. Lease.
In
addition to fixed lease payments under the U.S. Lease, the Company incurred variable lease costs, primarily related to utilities, maintenance,
and other common area costs, totaling approximately $ 103 thousand for the year ended December 31, 2025.
4) Supplemental
Lease Information
Supplemental
balance sheet information related to leases was as follows:
SCHEDULE OF SUPPLEMENTAL INFORMATION RELATED TO LEASES
2025
2024
December
31,
2025
2024
($
in
thousands)
Operating
lease right-of-use assets
2,758
2,360
Current Operating lease
liabilities
( 1,066 )
( 542 )
Non-current operating
lease liabilities
( 2,224 )
( 1,796 )
Other
information:
Operating
cash flows from operating leases (cash paid in thousands)
( 820 )
( 745 )
Weighted Average Remaining
Lease Term
3.57
3.93
Weighted Average Discount
Rate
11.72 %
11.82 %
5) Maturities
of Operating Lease Liabilities
Maturities
of lease liabilities as of December 31, 2025, are as follows:
SCHEDULE OF MATURITIES OF LEASE LIABILITIES
Amount
($
in thousands)
2026
1,133
2027
1,141
2028
1,150
2029
306
2030
236
Total lease payments
3,966
Less imputed interest
( 676 )
Total
3,290
F- 17
INSPIREMD,
INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE
8 – EQUITY
a. Stockholders’
Equity
1. Share
capital and listing
The
Company’s authorized share capital consists of common stock and preferred stock. The Company’s shares of common stock are
listed on the Nasdaq Capital Market.
2. May
2023 private placement financing
In
May 2023, the Company entered into a securities purchase agreement pursuant to which it issued and sold in a private placement offering
(the “May 2023 Private Placement Offering”) shares of its common stock, pre-funded warrants to purchase shares of common
stock (the “May 2023 Pre-Funded Warrants”), Series H warrants to purchase shares of common stock (the “Series H Warrants”),
Series I warrants to purchase shares of common stock (the “Series I Warrants”), Series J warrants to purchase shares of common
stock (the “Series J Warrants”) and Series K warrants to purchase shares of common stock (the “Series K Warrants”
and together with the Series H Warrants, Series I Warrants and Series J Warrants, the “May 2023 Warrants”). The May 2023
Private Placement Offering closed on May 16, 2023 and resulted in aggregate gross proceeds of approximately $ 42.2 million. Fees payable
to the placement agent and other offering expenses amounted to approximately $ 4.6 million, resulting in net proceeds to the Company of
approximately $ 37.6 million.
The
May 2023 Pre-Funded Warrants are immediately exercisable at an exercise price of $ 0.0001 per share and will not expire until they are
exercised in full. The May 2023 Warrants are immediately exercisable upon issuance at an exercise price of $ 1.3827 per share. The May
2023 Warrants have a term of the earlier of (i) five years from the date of issuance and (ii) (A) in the case of the Series H Warrants,
20 trading days following the Company’s public release of primary and secondary end points related to one year follow up study
results from the Company’s C-Guardians pivotal trial, (B) in the case of the Series I Warrants, 20 trading days following the Company’s
announcement of receipt of PMA from the FDA, for CGuard Prime (135 cm), (C) in the case of the Series J Warrants, 20 trading days following
the Company’s announcement of receipt of FDA approval for SwitchGuard and CGuard Prime 80 cm and (D) in the case on the Series
K Warrants, 20 trading days following the end of the fourth fiscal quarter after the fiscal quarter in which the first commercial sales
of CGuard Prime in the U.S. begin. The May 2023 Warrants may be exercised on a cashless basis if there is no effective registration statement
registering the shares underlying the warrants.
3. Exercise
of Series H Warrant
Following
the Company’s announcement on May 28, 2024 of the one-year follow-up study results from the Company’s C-GUARDIANS pivotal
trial, which constituted the applicable contractual milestone under the Series H Warrants, the Series H Warrants were exercised in full
into 292,996 shares of common stock and pre-funded warrants exercisable into 12,621,090 shares of common stock. The exercise resulted
in gross proceeds of approximately $ 17.9 million. After deduction of placement agent fees and other issuance costs of approximately $ 1.0
million, net proceeds to the Company amounted to approximately $ 16.9 million.
4. Exercise
of Series I Warrant
Following
the Company’s announcement on June 24, 2025 that the FDA approved the PMA of CGuard Prime in the U.S., which constituted the applicable
contractual milestone under the Series I Warrants, the Series I Warrants were exercised in full into 2,352,393 shares of common stock
at an exercise price of $ 1.3827 per share and 10,561,685 pre-funded warrants at an exercise price of $ 1.3826 per pre-funded warrant.
The exercise resulted in gross proceeds of approximately $ 17.9 million. After deduction of issuance costs of approximately $ 1.0 million,
net proceeds to the Company amounted to approximately $ 16.9 million.
F- 18
INSPIREMD,
INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
5. August
2025 private placement financing
On
July 30, 2025, the Company entered into a securities purchase agreement with investors pursuant to which it issued and sold in a private
placement offering (the “August 2025 Private Placement Offering”) an aggregate of 6,791,380 shares of common stock and pre-funded
warrants to purchase up to 9,764,804 shares of common stock, at an offering price of $ 2.42 per share and $ 2.4199 per pre-funded warrant
(the “August 2025 Pre-Funded Warrants”). The August 2025 Private Placement Offering closed on August 1, 2025. The August
2025 Pre-Funded Warrants are immediately exercisable at an exercise price of $ 0.0001 per share and will not expire until exercised in
full. The August 2025 Private Placement Offering resulted in gross proceeds to the Company of approximately $ 40.1 million. Issuance costs
amounted to approximately $ 3.1 million.
6. Pre-funded
warrants
During
the years ended December 31, 2025 and 2024, the Company issued 3,381,651
and 1,728,382
shares of its common stock, respectively, in connection with
the exercise of pre-funded warrants originally issued in the May 2023 Private Placement Offering and August 2025 Private Placement Offering.
As of December 31, 2025, and 2024, pre-funded warrants to purchase an aggregate of 43,092,107
and 26,147,323
shares of common stock, respectively, were outstanding.
7. Preferred
stock
As
of December 31, 2025 and 2024, there were 1,718 shares of Series C Preferred Stock outstanding, convertible into an aggregate of 7,952
shares of the Company’s common stock, with an aggregate stated value of $ 10,997 .
8. At-the-market
equity offering
On
May 31, 2024, the Company entered into an at-the-market equity distribution agreement with Piper Sandler & Co., pursuant to which
the Company was initially able to offer and sell shares of its common stock having an aggregate offering price of up to $ 17.0 million.
On April 10, 2025, the Company amended the agreement to increase the aggregate offering capacity to $ 75.0 million, exclusive of any prior
sales made under the facility. During the years ended December 31, 2025 and 2024, the Company issued 718,913 and 647,277 shares of common
stock, respectively, under the at-the-market facility. Net proceeds to the Company from these issuances amounted to approximately $ 1.7
million and $ 1.6 million for the years ended December 31, 2025 and 2024, respectively, after deduction of issuance costs of $ 64 and $ 81
thousand for the years ended December 31, 2025, and 2024, respectively.
F- 19
INSPIREMD,
INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
9. Outstanding
warrants
As
of December 31, 2025, the Company had outstanding warrants to purchase an aggregate of 26,920,508 shares of common stock, as follows:
SCHEDULE OF ISSUANCE OF WARRANTS TO PURCHASE COMMON STOCK
Number
of
underlying
Common stock
Exercise
price
Expiration
date
Series G Warrants
1,092,344
$ 10.230
February 8, 2026
Series J Warrants
12,914,086
$ 1.3827
- *
Series K Warrants
12,914,078
$ 1.3827
- *
Total Warrants
26,920,508
*
The
Series J Warrants and Series K Warrants have a term of the earlier of (i) May 15, 2028 and
(ii) (A) in the case of the Series J Warrants, 20 trading days following the Company’s
announcement of receipt of FDA approval for the SwitchGuard and CGuard Prime 80 cm and (B)
in the case on the Series K Warrants, 20 trading days following the end of the fourth fiscal
quarter after the fiscal quarter in which the first commercial sales of CGuard Prime in the
U.S. begins.
During
the years ended December 31, 2025 and 2024, a total of 433,878 and 213,458 warrants expired unexercised, respectively.
On
February 8, 2026, a total of 1,092,344 Series G warrants expired unexercised.
b.
Share-Based
Compensation
1) Equity
Incentive Plans
2021
Equity Incentive Plan
On
September 30, 2021, at the Company’s 2021 annual meeting of stockholders, the Company’s
stockholders approved the 2021 Equity Incentive Plan.
The
Company’s 2021 Equity Incentive Plan provides for the granting of incentive stock options, non-qualified stock options, stock
appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalent rights, and other awards,
which may be granted singly, in combination, or in tandem.
As
of December 31, 2025, the Company had 5,098,395 shares of common stock available for future issuance under the 2021 Equity Incentive
Plan.
2024
Inducement Plan
On
September 30, 2024, the compensation committee of the Company’s board of directors approved the InspireMD, Inc. 2024 Inducement
Plan (the “2024 Inducement Plan”) to be used exclusively for grants of equity-based awards to individuals who were not previously
employees or directors of the Company, as an inducement material to the individual’s entry into employment with the Company.
As
of December 31, 2025, the Company had 703,315 shares of common stock available for future issuance under the 2024 Inducement Plan.
2) Stock
Options – Employees
The
following table summarizes information about stock options granted to employees:
SCHEDULE OF STOCK OPTIONS GRANTED
Year
ended December 31
2025
Number
of
options
Weighted
average
exercise
price
Outstanding - beginning of the
year
2,154,143
2.76
Granted
1,119,127
2.63
Forfeited
( 79,541 )
3.25
Outstanding- end
of year
3,193,729
2.70
Exercisable at the
end of the year
1,612,755
2.79
F- 20
INSPIREMD,
INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
3) Stock
Options – Non-Employees
The
following table summarizes information about stock options granted to non-employees:
Year
ended December 31
2025
Number
of
options
Weighted
average
exercise price
Outstanding - beginning of the
year
916,669
2.10
Granted
-
-
Outstanding - end
of year
916,669
2.10
Exercisable at the
end of the year
639,003
2.19
4) Restricted
Stock – Employees and non-employees
The
following table summarizes information about restricted stock granted to employees and non-employees:
Year ended
December 31
2025
Number
of
restricted stock
Outstanding - beginning of the
year
4,073,966
Granted
3,933,081
Forfeited
( 256,170 )
Vested
( 2,573,691 )
Outstanding - end of the year
5,177,186
5) Restricted
Stock Units (RSUs) – Employees
The
following table summarizes information about RSUs granted to employees:
Year ended
December 31
2025
Number
of RSUs
Outstanding - beginning of the
year
1,845,727
Granted
558,417
Outstanding - end of
the year
2,404,144
F- 21
INSPIREMD,
INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
6) Options
Outstanding and Exercisable
The
following table provides additional information about all options outstanding and exercisable:
SCHEDULE OF ADDITIONAL INFORMATION ABOUT ALL OPTIONS OUTSTANDING AND EXERCISABLE
Outstanding as of December 31, 2025
Exercise
price
Options outstanding
Weighted average
remaining
contractual life
(years)
Options exercisable
$ 1.15 - 3.14
3,772,718
6.98
1,926,991
$ 3.30 - 4.12
181,352
5.28
168,439
$ 4.95 - 10.05
152,275
4.27
152,275
$ 16.50
4,053
4.01
4,053
4,110,398
6.80
2,251,758
The
weighted average of the remaining contractual life of total vested and exercisable options as of December 31, 2025 was 5.53 years.
The
aggregate intrinsic value of the total exercisable options as of December 31, 2025 was approximately $ 46 thousand.
7) Fair
Value of Awards
The
weighted average fair value of options granted to employees was $ 1.96 and $ 2.54 for the years ended December 31, 2025 and 2024, respectively.
The weighted average fair value of options granted was estimated using the Black-Scholes option-pricing model.
The
weighted average fair value of options granted to consultants was $ 1.87 for the year ended December 31, 2024. The weighted average fair
value of options granted was estimated using the Black-Scholes option-pricing model.
The
weighted average fair value of restricted stock granted was $ 2.56 and $ 2.94 for the years ended December 31, 2025 and 2024, respectively.
The
weighted average fair value of RSU granted was $ 2.76 and $ 3.14 for the years ended December 31, 2025 and 2024, respectively.
No
stock options were exercised during the year.
The
total fair value of shares vested during the year was $ 6,325,416 .
The
vesting period for outstanding stock options, restricted stock, and RSUs is typically 3 three years, with one-third of the awards vesting
annually. The options and restricted stock to directors are subject to a 1 one-year vesting period. Additionally, some of our share-based
awards to service providers are performance-based, vesting upon the achievement of specified performance criteria related to clinical
or marketing activities.
F- 22
INSPIREMD,
INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
8) Valuation
Assumptions (Black-Scholes)
The
following table sets forth the assumptions that were used in determining the fair value of options granted to employees and consultants
for the year December 31, 2025 and 2024:
SCHEDULE OF FAIR VALUE OF OPTIONS GRANTED TO EMPLOYEES
Year
ended December 31
2025
2024
Expected life
2 ;
5.5 - 6.5
5.125 - 10
years
Risk-free interest rates
3.45 %
- 3.64 %; 3.64 %- 4.68 %
3.93 %- 4.44 %
Volatility
38.69 %-
49.34 %; 75.74 %- 92.69 %
91.82 %- 119.38 %
Dividend yield
-
-
● During
2025, the Company modified certain outstanding stock options held by retired directors, including
accelerated vesting and an extension of the post-retirement exercise period. The Company
recognized the incremental compensation cost resulting from the modifications in accordance
with ASC 718.
The
Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term. Accordingly,
as to ordinary course options granted, the expected term was determined using the simplified method, which takes into consideration the
option’s contractual life and the vesting periods (for non-employees, the expected term is equal to the option’s contractual
life).
The
annual risk-free rates are based on the yield rates of zero-coupon non-index linked U.S. Federal Reserve treasury bonds as both the exercise
price and the share price are in dollar terms. The Company’s expected volatility is derived from its historical data.
9) Unrecognized
Compensation Cost
As
of December 31, 2025, the total unrecognized compensation cost on employee and non-employee
stock options, restricted stock and RSUs, related to unvested stock-based compensation, amounted
to approximately $ 7,926 thousand. This cost is expected to be recognized over a weighted-average
period of approximately 0.94 years. This expected cost does not include the impact of any
future stock-based compensation awards.
10)
Share-Based
Compensation Expense
The
following table summarizes the allocation of total share-based compensation expense in the consolidated statements of operations:
SCHEDULE OF ALLOCATION OF TOTAL SHARE-BASED COMPENSATION EXPENSE
Year
ended December 31
2025
2024
($
in thousands)
Cost of revenues
$ 218
$ 256
Research and development
2,559
2,412
Sales and marketing
1,888
1,025
General and administrative
7,667
6,445
$ 12,332
$ 10,138
F- 23
INSPIREMD,
INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE
9 – RELATED PARTIES TRANSACTIONS
On
September 15, 2023, the Company’s board of directors approved the Company’s entry into a consultancy agreement (the “Consultancy
Agreement”) with a member of the immediate family of the Company’s Chief Executive Officer to provide services related to
certain administrative projects in connection with the Company’s expansion into the United States until a full-time employee is
retained in such capacity.
Under
the original terms of the Consultancy Agreement, the Company paid a fixed hourly fee of $ 50 for up to 20 hours per week, plus reimbursement
of customary expenses.
On
July 1, 2024, the audit committee of the Company’s board of directors approved an amendment to the Consultancy Agreement pursuant
to which the consultant was paid a fixed hourly fee of $ 100 for up to 95 hours per month, in an aggregate amount not to exceed $ 120,000 ,
including expenses, for the twelve-month period ending June 30, 2025.
Consulting
expenses recognized for the years ended December 31, 2025 and 2024 were $ 56 thousand and $ 76 thousand, respectively.
The
engagement was terminated in July 2025.
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 )
F- 24
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
-
F- 25
INSPIREMD,
INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE
11 - SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION :
Balance
sheets:
a
Inventory:
SCHEDULE
OF INVENTORIES
2025
2024
December
31,
2025
2024
($
in thousands)
Finished goods
$ 352
$ 18
Work in process
930
638
Raw materials and supplies
2,114
1,914
Total
inventory
$ 3,396
$ 2,570
b
Accounts
payable and accruals-other:
SCHEDULE
OF ACCOUNTS PAYABLE AND ACCRUALS - OTHER
2025
2024
December
31,
2025
2024
($
in thousands)
Employees and employee institutions
$ 4,925
$ 3,414
Accrued vacation and recreation pay
430
369
Accrued expenses
1,545
1,325
Clinical trial accrual
1,155
519
Current Operating lease liabilities
1,066
542
Other
336
255
Accounts
Payable and Accruals - Other
$ 9,457
$ 6,424
NOTE
12 – DISAGGREGATED REVENUE AND ENTITY WIDE DISCLOSURES :
Revenues
are attributed to geographic areas based on the location of the customers. The following is a summary of revenues:
SCHEDULE OF REVENUES ATTRIBUTED TO GEOGRAPHIC AREAS
2025
2024
Year
ended December 31,
2025
2024
($
in thousands)
USA
$ 1,417
$ 32
Germany
1,233
926
Italy
1,232
1,223
Russia
-
713
Poland
1,036
694
Other *
4,061
3,421
Revenues
$ 8,979
$ 7,009
* Other individual
countries do not exceed 10% in the year ended December 31, 2025 and 2024.
By
principal customers (part of revenues):
SCHEDULE
OF REVENUES ATTRIBUTED TO GEOGRAPHIC AREAS BY PRINCIPAL CUSTOMERS
2025
2024
Year
ended December 31,
2025
2024
Customer A
14 %
13 %
Customer B
12 %
10 %
Customer C
-
10 %
Sales percentage
-
10 %
The
following table presents the Company’s long-lived assets by geographic region, which consist of property, plant and equipment,
net and operating lease right of use assets:
SCHEDULE
OF LONG-LIVED ASSETS BY GEOGRAPHIC REGION
2025
2024
December
31,
2025
2024
($
in thousands)
Israel
3,899
2,750
United States
2,443
1,981
Total
long-lived assets
$ 6,342
4,731
F- 26
INSPIREMD,
INC.
NOTES
TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE
13 – SEGMENT INFORMATION
The
Company has one operating and reporting segment, that develops, manufactures and markets products for the treatment of carotid artery
disease and other vascular disease, including the Company’s proprietary CGuard™ stent platform. The Company’s Chief
Operating Decision Maker (“CODM”), who is the CEO evaluates the Company’s performance based on its internal reporting
which is consistent with the presentation in the Company’s consolidated financial statements. Accordingly, our CODM uses consolidated
net loss to measure segment profit or loss, allocate resources, and assess performance.
The
CODM examines, within each operational function, the employee salaries including the bonus and share based compensation. In addition,
the CODM examines the clinical trials expenses within the research and development operations.
SCHEDULE
OF SEGMENT REVENUE
2025
2024
Year
ended December 31,
2025
2024
Revenues
8,979
7,009
Cost of Revenues:
Material and Labor
5,200
4,698
Other cost of revenues
1,130
805
Total Cost of revenues
6,330
5,503
Research and development
(R&D)
Payroll and Benefits
4,052
2,858
Share based compensation
2,559
2,412
Clinical trials
4,488
3,815
Other R&D
3,904
4,549
Total Research and development
15,003
13,634
Selling and marketing (S&M)
Payroll and Benefits
11,346
3,769
Share based compensation
1,888
1,025
Other S&M
3,319
1,275
Total Selling and marketing
16,553
6,069
General and administrative
(G&A)
Payroll and Benefits
6,650
4,221
Share based compensation
7,667
6,445
Other G&A
6,390
4,640
Total General and administrative
20,707
15,306
Financial Income, net;
891
1,557
Tax Expenses
63
59
Segment net Loss
( 48,786 )
( 32,005 )
NOTE
14 - SUBSEQUENT EVENTS :
Subsequent
to December 31, 2025, the Company granted 3,455,519 restricted shares of the Company’s common stock to employees and directors.
The shares to employees are subject to a 3 three-year vesting period, with one-third of such awards vesting each year. The shares to directors
are subject to a 1 one-year vesting period.
Subsequent
to December 31, 2025, the Company granted 1,114,792 restricted share units of the Company’s common stock to the chief executive
officer. The shares are subject to a three-year vesting period, with one-third of such awards vesting each year.
F- 27