INCOME TAXES |
6 Months Ended |
|---|---|
Jun. 30, 2025 | |
| Income Tax Disclosure [Abstract] | |
| INCOME TAXES |
NOTE 13 – INCOME TAXES
The Company recorded a current income tax expense of $15.5 million for the three and six months ended June 30, 2025. The Company did not record an income tax expense for the three and six months ended June 30, 2024 as it generated sufficient tax losses, after consideration of discrete items, during each of the periods. The current income tax expense for the three and six months ended June 30, 2025 was driven by pre-tax income from the gain on sale of priority review voucher, resulting in $14.6 million of federal income tax expense and $0.9 million of state income tax expense.
As previously disclosed, the Company’s ability to utilize its net operating loss (“NOL”) carryforwards are subject to limitation under Section 382 of the Internal Revenue Code of 1986, as amended. Per Section 382, a change in ownership greater than 50% within a three-year period results in annual limitations on the utilization of NOL carryforwards. The Company is currently in the process of determining if a Section 382 change has occurred and to what extent the use of its NOL carryforwards may be limited. Preliminary results indicate that the Company has experienced multiple ownership changes and may have a material limitation on the use of its NOL carryforwards. The Company expects to complete its Section 382 analysis by December 31, 2025.
On July 4, 2025, the President signed the One Big Beautiful Bill Act into law. The legislation includes several changes to federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in 2025, including the restoration of immediate expensing of domestic R&D expenditures, reinstatement of 100% bonus depreciation, and more favorable rules for determining the limitation on business interest expense.
These changes were not reflected in the Company’s income tax provision for the period ended June 30, 2025, as the legislation was enacted after the balance sheet date. The Company is currently evaluating the impact of the One Big Beautiful Bill Act on future periods; however, the Company expects that the favorable changes from the new law will significantly reduce current tax due for 2025. The Company is also evaluating the impact of the legislation on its state income tax position, recognizing that certain states may follow different legislative processes or decouple from federal provisions.
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