Organogenesis Holdings Inc. Income Taxes Disclosure

17. Income Taxes

On a periodic basis, the Company reassesses the valuation allowance on its deferred income tax assets, weighing positive and negative evidence to assess the recoverability of the deferred tax assets. The Company determined that its net U.S. deferred tax assets did not require a valuation allowance as of December 31, 2024. As of December 31, 2025, the Company has established a valuation allowance on certain state research and development tax credits totaling $1,267, which the Company believes will more likely than not expire unutilized.

As of December 31, 2025, the Company had federal net operating loss carry-forwards of approximately $19,603, which do not expire. As of December 31, 2025, the Company had state net operating loss carry-forwards of approximately $16,270, expiring in the years 2027 through 2038. The Company had federal and state research and development tax credits of approximately $3,273 and $1,267, expiring in the years 2044 and 2038, respectively.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2025 and 2024 are as follows:

The Company has not recorded withholding taxes on the undistributed earnings of its Swiss subsidiary because it is the Company’s intent to reinvest such earnings indefinitely.

Ownership changes, as defined in the Internal Revenue Code, may limit the amount of net operating losses and research and development tax credit carryforwards that can be utilized annually to offset future taxable income. Subsequent ownership changes could further affect the limitation in future years. The Company completed an analysis in 2024 and determined that it had not experienced an ownership change during the periods 2001 through 2024.

For the year ended December 31, 2025, the Company adopted ASU 2023-09 on a prospective basis. The following table is a reconciliation of the U.S. federal statutory rate of 21.0% to the effective tax rate for the year ended December 31, 2025, in accordance with ASU 2023-09:

The Company recognizes the tax benefit from an uncertain tax position only if it is more-likely-than-not that the tax position will be sustained on examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. The amount of unrecognized tax benefits is $1,522, $2,030 and $2,837, as of December 31, 2025, 2024, and 2023, respectively.

The Company files income tax returns in the United States federal and state jurisdictions and Switzerland. With limited exceptions, the Company is no longer subject to federal, state, local or foreign examinations for years prior to December 31, 2021. However, carryforward attributes that were generated prior to December 31, 2021 may still be adjusted upon examination by state or local tax authorities if they either have been or will be used in a future period.

The Company recognizes interest and penalty-related expenses in tax expenses. The Company recorded $218 and $11 of interest for uncertain tax positions for the years ended December 31, 2025 and 2024, respectively, which is classified in accrued expenses and other current liabilities in the consolidated balance sheets. These amounts are not reflected in the reconciliation above.

The One Big Beautiful Bill Act (“OBBBA”) was enacted on July 4, 2025. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. There was not a significant impact to the Company’s income tax expense or effective tax rate for the year ended December 31, 2025, and the deferred tax balances have been adjusted to reflect the impacts of the OBBBA enactment.