Company: MDXG
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001376339-25-000009
Chunk: 44

Company: MIMEDX GROUP, INC.
Filing Date: 2025-02-26
Form: 10-K
Item: Item 8
Chunk 44
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.4)%Meals and entertainment0.6 %1.2 %(0.2)%Uncertain tax positions— %0.4 %(0.5)%Valuation allowance— %(123.5)%(12.5)%Tax credits(0.7)%(3.2)%4.9 %Share-based compensation(1.0)%2.8 %(6.1)%Other0.7 %(0.2)%0.6 %Effective tax rate26.7 %(120.2)%(1.0)%The effective tax rate for the year ended December 31, 2023 was significantly impacted by the reversal of a valuation allowance. In the period, the Company noted that it was no longer in a cumulative three-year loss on a continuing operations basis, after excluding the effects of permanent book-tax differences. The absence of such negative evidence, coupled with the Company’s expectation for future taxable income generation, led to a change in our assessment of the realizability of our deferred tax assets.Current and deferred income tax expense (benefit) is as follows (in thousands):Year Ended December 31,202420232022Current:Federal$703 $576 $— State2,121 422 206 Total current2,824 998 206 Deferred:Federal11,626 (31,633)— State846 (9,144)— Total deferred12,472 (40,777)— Income tax provision expense (benefit)$15,296 $(39,779)$206 Certain items of income and expense are not reported in tax returns and financial statements in the same year. The tax effects of such temporary differences are reported as deferred income tax assets and liabilities. The measurement of deferred tax assets is reduced, if necessary, by the amount of any tax benefit that, based on available evidence, is not expected to be realized. The Company establishes a valuation allowance for deferred tax assets for which realization is not more likely than not. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. A valuation allowance of $0.5 million and $0.9 million was recorded against the deferred tax asset balance as of December 31, 2024 and 2023, respectively. In the event that the weight of the evidence changes in the future, any increase or decrease in the valuation allowance would result in a income tax