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INCOME TAXES | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The foreign current and foreign deferred (benefits) expenses below represent our tax (benefit) expense from Canada, India, United Kingdom, Ireland, Portugal, and Germany jurisdictions. The Company is required to establish a valuation allowance for deferred tax assets if, based on the weight of all available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company considers the projected future taxable income and tax planning strategies in making this assessment. As of December 31, 2024 and 2023, the consolidated valuation allowance was $9.5 million and $0.4 million, respectively, primarily related to deferred tax assets for net operating losses in the UK and and U.S. state jurisdictions. The Company recorded a valuation allowance of approximately $7.5 million in connection with the acquisition of Alimera, and recorded an additional increase in the valuation allowance of approximately $1.5 million during the three months ended December 31, 2024. (Loss) income before taxes consisted of the following:
| As of December 31,
(in thousands) | 2024 |  | 2023 |  | 2022
Domestic | $ | (24,618) |  |  | $ | 19,124 |  |  | $ | (64,913) |
Foreign | 2,406 |  |  | 748 |  |  | 2,248 |
(Loss) income before income tax (benefit) expense | $ | (22,212) |  |  | $ | 19,872 |  |  | $ | (62,665) |
Total income tax (benefit) expense for income taxes consists of the following for the years ended December 31:
| As of December 31,
(in thousands) | 2024 |  | 2023 |  | 2022
Current income tax expense |  |  |  |  |
Federal | $ | 13,714 |  |  | $ | 9,117 |  |  | $ | 152 |
State | 2,231 |  |  | 3,534 |  |  | 249 |
Foreign | 1,876 |  |  | 26 |  |  | 66 |
Total | 17,821 |  |  | 12,677 |  |  | 467 |
Deferred income tax benefit |  |  |  |  |
Federal | (17,876) |  |  | (7,601) |  |  | (13,382) |
State | (3,906) |  |  | (3,946) |  |  | (1,722) |
Foreign | (1,217) |  |  | (29) |  |  | (128) |
Total | (22,999) |  |  | (11,576) |  |  | (15,232) |
Change in valuation allowance | 1,488 |  |  | (8) |  |  | (4) |
Total (benefit) expense for income taxes | $ | (3,690) |  |  | $ | 1,093 |  |  | $ | (14,769) |
The difference between the expected income tax (benefit) expense from applying U.S. Federal statutory tax rates to the pre-tax (loss) income and actual income tax (benefit) expense relates primarily to the effect of the following:
| As of December 31,
| 2024 |  | 2023 |  | 2022
US Federal statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State taxes, net of Federal benefit | 2.5 | % |  | 4.8 | % |  | 3.2 | %
Foreign taxes | (3.0) | % |  | 0.0% |  | 0.1 | %
Change in valuation allowance | (6.7) | % |  | 0.0% |  | — | %
Stock-based compensation | (6.5) | % |  | 10.8 | % |  | (1.4) | %
Non-deductible costs | (8.8) | % |  | 2.1 | % |  | (0.5) | %
Change in state apportionment factors, state and foreign rates | 4.0 | % |  | (11.8) | % |  | (0.1) | %
Research and experimentation and charitable credits | 14.1 | % |  | (19.0) | % |  | 1.4 | %
Transfer pricing and other | — | % |  | (2.4) | % |  | (0.1) | %
Effective income tax rate | 16.6 | % |  | 5.5 | % |  | 23.6 | %
Deferred income taxes reflect the net tax effects of differences between the bases of assets and liabilities for financial reporting and income tax purposes. Deferred income tax assets and liabilities consisted of the following:
| As of December 31,
(in thousands) | 2024 |  | 2023
Deferred tax assets: |  |  |
Accruals and advances | $ | 16,318 |  |  | $ | 12,470 |
Stock-based compensation | 7,373 |  |  | 6,013 |
Accruals for chargebacks and returns | 23,427 |  |  | 17,358 |
Inventories | 5,234 |  |  | 4,569 |
Intangible assets | — |  |  | 40,193 |
Net operating loss carryforwards | 27,254 |  |  | 2,900 |
Capitalized research expenditures | 19,836 |  |  | 11,294 |
Interest expense carryforwards | 6,400 |  |  | 5,132 |
Debt instruments | 9,590 |  |  | — |
Other assets | 5,305 |  |  | 2,318 |
Total deferred tax assets | $ | 120,737 |  |  | $ | 102,247 |
Deferred tax liabilities: |  |  |
Depreciation | $ | (6,710) |  |  | $ | (5,658) |
Intangible assets | (12,537) |  |  | — |
Other liabilities | (6,934) |  |  | (5,440) |
Total deferred tax liabilities | $ | (26,181) |  |  | $ | (11,098) |
Valuation allowance | (9,450) |  |  | (438) |
Deferred tax assets, net of deferred tax liabilities and valuation allowance | $ | 85,106 |  |  | $ | 90,711 |
As of December 31, 2024, U.S. federal net operating loss carryforwards were approximately $55.6 million and UK net operating losses of approximately $50.8 million, primarily arose as a result of the acquisition of Alimera and the 2013 merger with BioSante Pharmaceuticals, Inc. Net operating loss carryforwards related to the 2024 acquisition are indefinite lived. Net operating loss carryforwards related to the 2013 merger, if not used, expire in annual increments through 2033. All of the net operating loss carryforwards are limited on an annual basis as prescribed by Section 382 of the U.S. Internal Revenue Code; the current annual limitation is approximately $7.2 million per year. Additionally, as of December 31, 2024, the Company has total net operating losses in various states of $5.7 million which begin to expire through 2042. The Company is subject to income taxes in numerous jurisdictions in the U.S. and certain foreign jurisdictions. Significant judgement is required in evaluating tax positions and determining the expense for income taxes. The Company established liabilities for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These liabilities are established when the Company believe that certain positions might be challenged despite our belief that our tax return positions are fully supportable. We adjusts these liabilities in light of changing facts and circumstances, such as the outcome of a tax audit. The expense for income taxes includes the impact of changes to the liability that is considered appropriate. The Company has not identified any material uncertain income tax positions as of December 31, 2024 and 2023. The Company is subject to income tax audits in all jurisdictions for which tax returns are filed. Tax audits by their nature are often complex and can require several years to complete. All of the Company's income tax returns remain subject to examination by tax authorities due to the availability of net operating loss carryforwards.

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