CVRx, Inc. Income Taxes Disclosure

As of December 31, 2025 and 2024, a valuation allowance was recorded against all deferred tax assets due to our cumulative net loss position.

The components of our loss from continuing operations before income taxes are as follows for the periods indicated:

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The components of our provision for income taxes are as follows for the periods indicated:

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The reconciliation of taxes at the federal statutory rate to our provision for income taxes are as follows for the periods indicated:

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As of December 31, 2025 and 2024, the U.S. federal corporate income tax rate of 21% was used as the applicable statutory rate. Minnesota makes up the majority (greater than 50 percent) of the state income tax expense, net of federal income tax effect.

Significant components of net deferred tax assets were as follows for the periods indicated:

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As of December 31, 2025, we had federal and state net operating loss carryforwards (“NOLs”) of approximately $483.7 million and $9.7 million, respectively. The federal NOLs began expiring in 2021 and the state NOLs began expiring in 2020. As of December 31, 2025, we had federal and state tax credit carryforwards of approximately $10.3 million and $1.9 million, respectively. The federal tax credit carryforwards began expiring in 2021 and the state tax credits will begin expiring in 2028.

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Utilization of NOLs may be subject to an annual limitation due to the ownership change limitations provided by Section 382 of the Internal Revenue Code of 1986, as amended, and similar state provisions. We have not performed a detailed analysis to determine whether an ownership change has occurred. Such a change of ownership would limit our utilization of the NOLs and could be triggered by subsequent sales of securities by us or our stockholders.

The changes to our gross unrecognized tax benefits were as follows for the periods indicated:

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All of these unrecognized tax benefits, if recognized, would impact the effective tax rate before taking consideration of the valuation allowance. The amount of unrecognized tax benefits subjected to the valuation allowance was $1.8 million for the each of the years ended December 31, 2025 and 2024. We recognized a nominal amount and approximately $0.1 million of interest or penalties for each of the years ended December 31, 2025 and 2024. Total accrued interest and penalties were $0.6 million and $0.5 million for the years ended December 31, 2025 and 2024, respectively. We recognize accrued interest and penalties related to unrecognized tax positions as a component of income tax expense. We do not expect a significant change in the amount of unrecognized tax benefits in the next year.

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We are subject to U.S. federal income tax as well as income tax of multiple state and foreign jurisdictions. Tax years from 2006 through present remain open for audit under the applicable statute of limitations due to the carryover of the unused NOLs and tax credit carryforwards. We do not have any tax audits or other proceedings pending.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant tax-related provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions, including the deduction of certain R&D costs. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The impacts of the OBBBA were taken into account in our provision for income taxes for fiscal year 2025. Because a valuation allowance has been recorded against all deferred tax assets, the impacts of the OBBBA were not material to our consolidated financial statements or related disclosures.