Pacira BioSciences, Inc. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, which are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Based on their evaluation as of December 31, 2024, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2024. Management’s Report on Internal Control over Financial Reporting Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2024, based on the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based upon the results of the evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2024. The effectiveness of our internal control over financial reporting as of December 31, 2024 was audited by KPMG LLP, our independent registered public accounting firm, which expressed an unqualified opinion on the effectiveness of our internal control over financial reporting as of December 31, 2024. Changes in Internal Control over Financial Reporting During the quarter ended December 31, 2024, there have been no changes in our internal control over financial reporting that occurred that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information During the quarter ended December 31, 2024, no director or executive officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections None. Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page 87 Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance Information required by this item will be included in the proxy statement for our 2025 annual stockholders’ meeting and is incorporated by reference into this report. Item 11. Executive Compensation Information required by this item will be included in the proxy statement for our 2025 annual stockholders’ meeting and is incorporated by reference into this report. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters Information required by this item will be included in the proxy statement for our 2025 annual stockholders’ meeting and is incorporated by reference into this report. Item 13. Certain Relationships and Related Transactions, and Director Independence Information required by this item will be included in the proxy statement for our 2025 annual stockholders’ meeting and is incorporated by reference into this report. Item 14. Principal Accountant Fees and Services Information required by this item will be included in the proxy statement for our 2025 annual stockholders’ meeting and is incorporated by reference into this report. PART IV Item 15. Exhibits, Financial Statement Schedules (a) Documents filed as part of this Annual Report on Form 10-K: (1) Financial Statements Index to the Consolidated Financial Statements Page # Consolidated Balance Sheets F-4 Consolidated Statements of Operations F-5 Consolidated Statements of Comprehensive (Loss) Income F-6 Consolidated Statements of Stockholders’ Equity F-7 Consolidated Statements of Cash Flows F-8 Notes to Consolidated Financial Statements F-10 The report of our independent registered accounting firm, KPMG LLP, with respect to the above-referenced financial statements and on internal control over financial reporting, is included in this Annual Report on Form 10-K. Their consent appears as Exhibit 23.1 of this Annual Report on Form 10-K. Report of Independent Registered Public Accounting Firm (2) Schedules All financial statement schedules have been omitted because they are not required, are not applicable or the information is included in the consolidated financial statements or related notes thereto. (3) Exhibits The following exhibits are filed with, or incorporated by reference in this Annual Report on Form 10-K. Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page 88 Table of Contents EXHIBIT INDEX Incorporation By Reference From Exhibit Number Description Form Exhibit Date Filed 2.1 Agreement and Plan of Merger, dated March 4, 2019, by and among Pacira Pharmaceuticals, Inc., PS Merger, Inc., MyoScience, Inc., and Fortis Advisors LLC, as the securityholders’ representative. # † 8-K 2.1 3/5/2019 2.2 Agreement and Plan of Merger, dated as of October 11, 2021, by and among Flexion Therapeutics, Inc., Pacira BioSciences, Inc. and Oyster Acquisition Company Inc. 8-K 2.1 10/12/2021 3.1 Amended and Restated Certificate of Incorporation. 8-K 3.1 2/11/2011 3.2 Certificate of Amendment to the Amended and Restated Certificate of Incorporation, dated April 9, 2019. 8-K 3.1 4/9/2019 3.3 Second Amended and Restated Bylaws. 8-K 3.2 4/9/2019 4.1 Specimen Certificate Evidencing Shares of Common Stock.* 4.2 Indenture (including form of 0.750% Convertible Senior Notes due 2025), dated July 10, 2020, between the Registrant and Computershare Corporate Trust, National Association, as trustee (formerly Wells Fargo Bank, National Association). 8-K 4.1 7/10/2020 4.3 Indenture (including form of 2.125% Convertible Senior Notes due 2029), dated May 14, 2024, between the Registrant and Computershare Corporate Trust, National Association, as trustee. 8-K 4.1 5/14/2024 4.4 Description of Securities. 10-K 4.3 2/21/2020 10.1 Amended and Restated 2011 Stock Incentive Plan.*** 8-K 10.1 6/20/2023 10.2 Form of Nonstatutory Stock Option Agreement under the Amended and Restated 2011 Stock Incentive Plan for grants made prior to February 1, 2022.*** 8-K 10.3 6/4/2014 10.3 Form of Nonstatutory Stock Option Agreement (Employees) under the Amended and Restated 2011 Stock Incentive Plan for grants made on or after February 1, 2022.*** 10-K 10.3 2/28/2022 10.4 Form of Nonstatutory Stock Option Agreement (Non-Employee Directors) under the Amended and Restated 2011 Stock Incentive Plan for grants made on or after February 1, 2022.*** 10-K 10.4 2/28/2022 10.5 Form of Restricted Stock Unit Award Agreement (Employees) under the Amended and Restated 2011 Stock Incentive Plan for grants made prior to February 1, 2022.*** 10-K 10.5 2/29/2024 10.6 Form of Restricted Stock Unit Award Agreement (Non-Employee Directors) under the Amended and Restated 2011 Stock Incentive Plan for grants made prior to February 1, 2022.*** 10-K 10.6 2/29/2024 10.7 Amended and Restated 2014 Inducement Plan.*** 8-K 10.1 1/21/2025 10.8 Form of Nonstatutory Stock Option Agreement under the Amended and Restated 2014 Inducement Plan.*** 8-K 10.2 1/21/2025 10.9 Form of Restricted Stock Unit Award Agreement under the Amended and Restated 2014 Inducement Plan.*** 8-K 10.3 1/21/2025 10.10 Amended and Restated 2014 Employee Stock Purchase Plan.*** 8-K 10.1 6/10/2022 10.11 Assignment Agreement, dated February 9, 1994, amended April 15, 2004, between the Registrant and Research Development Foundation. S-1/A 10.4 12/3/2010 10.12 Stock Purchase Agreement, dated January 8, 2007, between SkyePharma, Inc. and the Registrant. S-1/A 10.5 12/3/2010 10.13 Employment Agreement by and between Pacira Pharmaceuticals, Inc. and David Stack.*** S-1/A 10.21 12/3/2010 10.14 Amendment No. 1 to Executive Employment Agreement, dated March 13, 2013, by and between Pacira Pharmaceuticals, Inc. and David Stack.*** 8-K 99.3 3/18/2013 10.15 Amendment No. 2 to Executive Employment Agreement, dated June 30, 2015, by and between Pacira Pharmaceuticals, Inc. and David Stack.*** 10-Q 10.2 7/30/2015 10.16 Transition and Retirement Agreement, dated September 20, 2023, by and between Pacira Pharmaceuticals, Inc. and David Stack.*** 8-K 10.1 9/26/2023 Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page 89 Table of Contents Incorporation By Reference From Exhibit Number Description Form Exhibit Date Filed 10.17 Employment Agreement, dated December 20, 2023, by and between Pacira Pharmaceuticals, Inc. and Frank D. Lee.*** 8-K 10.1 12/21/2023 10.18 Employment Agreement, dated October 21, 2024, by and between Pacira Pharmaceuticals, Inc. and Shawn M. Cross.* *** 10.19 Employment Agreement, dated November 29, 2012, by and between Pacira Pharmaceuticals, Inc. and Kristen Williams.*** 10-Q 10.2 4/30/2015 10.20 Amendment No. 1 to Employment Agreement, dated March 13, 2013, by and between Pacira Pharmaceuticals, Inc. and Kristen Williams.*** 10-Q 10.3 4/30/2015 10.21 Amendment No. 2 to Employment Agreement, dated June 30, 2015, by and between Pacira Pharmaceuticals, Inc. and Kristen Williams.*** 10-Q 10.5 7/30/2015 10.22 Amendment No. 3 to Employment Agreement, dated as of October 31, 2024, by and between Pacira Pharmaceuticals, Inc. and Kristen Williams.*** 8-K 10.3 11/6/2024 10.23 Executive Employment Agreement, dated May 2, 2016, by and between Pacira Pharmaceuticals, Inc. and Charles A. Reinhart, III.*** 10-Q 10.1 8/4/2016 10.24 Non-Healthcare Professional Consulting Agreement, effective October 1, 2024, by and between Pacira Pharmaceuticals, Inc. and Charles. A. Reinhart, III* *** 10-Q 10.5 11/6/2024 10.25 Amended and Restated Executive Employment Agreement, dated as of November 4, 2024, by and between Pacira Pharmaceuticals, Inc. and Lauren Riker.*** 8-K 10.4 11/6/2024 10.26 Form of Indemnification Agreement between the Registrant and its directors and officers.*** 10-K 10.22 2/29/2024 10.27 Commercial Outsourcing Services Agreement entered into as of February 26, 2024 by the Registrant and Integrated Commercialization Solutions, Inc.†† 10-K 10.23 2/29/2024 10.28 Pacira BioSciences, Inc. Deferred Compensation Plan.*** 8-K 10.1 6/11/2020 10.29 Amendment No. 1 to Pacira BioSciences, Inc. Deferred Compensation Plan.*** 10-K 10.25 2/28/2023 10.30 Amendment No. 2 to Pacira BioSciences, Inc. Deferred Compensation Plan.* *** 10.31 Pacira BioSciences, Inc. Long-Term Incentive Plan.* *** 10.32 Strategic Co-Production Agreement dated April 4, 2014,by and between Pacira Pharmaceuticals, Inc. and Patheon UK Limited.† 10-Q 10.1 7/31/2014 10.33 Manufacturing and Supply Agreement dated April 4, 2014,by and between Pacira Pharmaceuticals, Inc. and Patheon UK Limited.† 10-Q 10.2 7/31/2014 10.34 First Amendment to Manufacturing and Supply Agreement dated April 2, 2019 by and between Pacira Limited and Patheon UK Limited.* †† ## 10.35 Second Amendment to Manufacturing and Supply Agreement dated October 31, 2024 by and between Pacira Limited and Patheon UK Limited.* †† ## 10.36 Technical Transfer and Service Agreement dated April 4, 2014, by and between by and between Pacira Pharmaceuticals, Inc. and Patheon UK Limited.† 10-Q 10.3 7/31/2014 10.37 First Amendment to Technical Transfer and Service Agreement dated November 15, 2016 by and between Pacira Pharmaceuticals, Inc. and Patheon UK Limited.* ## 10.38 Second Amendment to Technical Transfer and Service Agreement dated May 1, 2018 by and between Pacira Limited and Patheon UK Limited.* †† ## 10.39 Third Amendment to Technical Transfer and Service Agreement dated April 2, 2019 by and between Pacira Limited and Patheon UK Limited.* †† ## 10.40 Fourth Amendment to Technical Transfer and Service Agreement dated August 30, 2019 by and between Pacira Limited and Patheon UK Limited.* †† ## 10.41 Fifth Amendment to Technical Transfer and Service Agreement dated December 11, 2019 by and between Pacira Limited and Patheon UK Limited.* †† ## 10.42 Side Letter dated June 5, 2023, to the Manufacturing and Supply Agreement by and between Pacira Pharmaceuticals, Inc. and Patheon UK Limited.†† 10-Q 10.2 8/2/2023 Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page 90 Table of Contents Incorporation By Reference From Exhibit Number Description Form Exhibit Date Filed 10.43 Manufacturing and Supply Agreement dated July 31, 2015, between Flexion Therapeutics, Inc. and Patheon UK Limited, as amended to date.†† 10-K 10.36 2/28/2022 10.44 First Amendment to Manufacturing and Supply Agreement dated May 8, 2019, between Flexion Therapeutics, Inc. and Patheon UK Limited.†† 10-K 10.32 2/29/2024 10.45 Second Amendment to Manufacturing and Supply Agreement dated June 17, 2019, between Flexion Therapeutics, Inc. and Patheon UK Limited.†† 10-K 10.33 2/29/2024 10.46 Third Amendment to Manufacturing and Supply Agreement dated December 1, 2023, by and between by and between Pacira Pharmaceuticals, Inc. and Patheon UK Limited.†† 10-K 10.34 2/29/2024 10.47 Technical Transfer and Service Agreement dated July 31, 2015, between Flexion Therapeutics, Inc. and Patheon UK Limited, as amended to date.†† 10-K 10.37 2/28/2022 10.48 Side Letter to the Manufacturing and Supply Agreement between Flexion Therapeutics, Inc. and Patheon UK Limited, dated as of April 8, 2020.†† 10-K 10.38 2/28/2022 10.49 Amended and Restated Consulting Agreement, dated April 3, 2012, by and between Pacira Pharmaceuticals, Inc. and Gary Pace.*** 10-Q 10.1 5/9/2012 10.50 Second Amended and Restated Consulting Agreement, dated August 17, 2012, by and between Pacira Pharmaceuticals, Inc. and Gary Pace.*** 10-Q 10.1 11/1/2012 10.51 Third Amendment to Consulting Agreement, dated September 11, 2013, by and between Pacira Pharmaceuticals, Inc. and Gary Pace.*** 10-Q 10.3 10/31/2013 10.52 Fourth Amendment to Consulting Agreement, dated November 25, 2015, by and between Pacira Pharmaceuticals, Inc. and Gary Pace.*** 10-K 10.57 2/25/2016 10.53 Fifth Amendment to Consulting Agreement, dated June 12, 2024, by and between Pacira Pharmaceuticals, Inc. and Gary Pace.*** †† 10-Q 10.3 7/30/2024 10.54 Contingent Value Right Agreement, dated as of November 19, 2021, by and between the Registrant and American Stock Transfer & Trust Company, LLC. 8-K 10.1 11/19/2021 10.55 Credit Agreement, dated as of March 31, 2023, by and among the Registrant, the lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent.## 8-K 10.1 4/3/2023 10.56 First Amendment, dated as of May 8, 2024, to Credit Agreement, dated as of March 31, 2023, by and among the Registrant, the lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent.## 8-K 10.1 5/8/2024 10.57 Executive Employment Agreement, dated May 4, 2020, by and between Pacira Pharmaceuticals, Inc. and Jonathan Slonin.*** 10-Q 10.1 5/4/2022 10.58 Amendment No. 1 to Executive Employment, dated as of October 31, 2024, by and between Pacira Pharmaceuticals, Inc. and Jonathan Slonin.*** 8-K 10.2 11/6/2024 10.59 Executive Employment Agreement, dated June 17, 2019, by and between Pacira Pharmaceuticals, Inc. and Daryl Gaugler.*** 10-Q 10.1 5/3/2023 10.60 Amendment No. 1 to Executive Employment Agreement, dated as of October 31, 2024, by and between Pacira Pharmaceuticals, Inc. and Daryl Gaugler.*** 8-K 10.1 11/6/2024 10.61 Form of Capped Call Transaction Confirmation. 8-K 10.1 5/14/2024 19 Pacira BioSciences, Inc. Insider Trading Policy.* 21.1 Subsidiaries of the Registrant.* 23.1 Consent of KPMG LLP.* 31.1 Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a).* 31.2 Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a).* 32.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.** 97 Incentive Compensation Recovery Policy.*** 10-K 97 2/29/2024 Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page 91 Table of Contents Incorporation By Reference From Exhibit Number Description Form Exhibit Date Filed 101.INS* Inline XBRL Instance Document.* 101.SCH* Inline XBRL Taxonomy Schema Document.* 101.CAL* Inline XBRL Taxonomy Calculation Linkbase Document.* 101.LAB* Inline XBRL Taxonomy Label Linkbase Document.* 101.PRE* Inline XBRL Taxonomy Presentation Linkbase Document.* 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document.* 104* Cover Page Interactive Data File (Formatted as Inline XBRL and contained in Exhibit 101). * Filed herewith. ** Furnished herewith. *** Denotes management contract or compensatory plan or arrangement. † Confidential treatment has been requested or granted as to certain portions, which portions were omitted and filed separately with the Securities and Exchange Commission pursuant to a Confidential Treatment Request. †† Certain portions of the exhibit have been omitted pursuant to Rule 601(b)(10) of Regulation S-K. The omitted information (i) is not material and (ii) is the type that the Registrant treats as private or confidential. # Certain schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K under the Securities Exchange Act of 1934, as amended. The Company hereby undertakes to supplementally furnish copies of any omitted schedules to the Securities and Exchange Commission upon request. ## Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to supplementally furnish copies of any omitted schedules and exhibits to the Securities and Exchange Commission upon request. Item 16. Form 10-K Summary None. Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page 92 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PACIRA BIOSCIENCES, INC. /s/ FRANK D. LEE Date: February 27, 2025 By: Frank D. Lee Chief Executive Officer and Director Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated and on February 27, 2025. Principal Executive Officer Directors /s/ FRANK D. LEE /s/ MARCELO BIGAL /s/ ABRAHAM CEESAY Frank D. Lee Marcelo Bigal Abraham Ceesay Chief Executive Officer and Director /s/ CHRISTOPHER J. CHRISTIE /s/ MARK FROIMSON Principal Financial Officer Christopher J. Christie Mark Froimson /s/ SHAWN M. CROSS /s/ MARK KRONENFELD /s/ MICHAEL YANG Shawn M. Cross Mark Kronenfeld Michael Yang Chief Financial Officer /s/ ALETHIA YOUNG /s/ LAURA BREGE Principal Accounting Officer Alethia Young Laura Brege Chair of the Board of Directors /s/ LAUREN RIKER Lauren Riker Senior Vice President, Finance Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page 93 Table of Contents PACIRA BIOSCIENCES, INC. ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2024 INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS Page # Report of Independent Registered Public Accounting Firm F-2 Auditor Name: KPMG LLP Auditor Location: Short Hills, NJ Auditor Firm ID: 185 Consolidated Balance Sheets as of December 31, 2024 and 2023 F-4 Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022 F-5 Consolidated Statements of Comprehensive (Loss) Income for the years ended December 31, 2024, 2023 and 2022 F-6 Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2024, 2023 and 2022 F-7 Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022 F-8 Notes to Consolidated Financial Statements F-10 Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors Pacira BioSciences, Inc.: Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting We have audited the accompanying consolidated balance sheets of Pacira BioSciences, Inc. and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive (loss) income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-2 Table of Contents Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Fair value measurement of the contingent consideration liability associated with the acquisition of Flexion As discussed in Notes 2 and 11 to the consolidated financial statements, the Company recognized a contingent consideration liability at its estimated fair value on the acquisition date, in connection with the acquisition of Flexion Therapeutics, Inc. (Flexion). Subsequent changes to the fair value of the contingent consideration liability are recorded in the consolidated statement of operations in the period of change. The Company estimates the fair value using a Monte Carlo simulation. The fair value of the Flexion contingent consideration as of December 31, 2024 was $20.2 million. We identified the evaluation of the fair value measurement of the contingent consideration liability related to achieving commercial milestones associated with the acquisition of Flexion as a critical audit matter. Evaluating the fair value measurement of the contingent consideration liability required significant auditor judgment, due to the high degree of subjectivity inherent in certain assumptions with unobservable inputs that were used in the model. In particular, the fair value measurement was sensitive to management’s forecasts of revenues, volatility, and discount rates. In addition, the audit effort associated with the evaluation of the Company’s volatility and discount rates involved the use of valuation professionals with specialized skills and knowledge. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s fair value measurement process for the contingent consideration liability related to achieving commercial milestones. This included controls related to the development of the assumptions for forecasted revenues, volatility, and discount rates. We evaluated the forecasted revenues and certain commercial milestone assumptions used in the Company’s models by comparing them to historical data, industry benchmarks and other third-party market data that were assessed to be relevant and reliable. We involved valuation professionals with specialized skills and knowledge, who assisted in developing an independent estimate of the discount rates and volatility assumptions using inputs from publicly available market data and comparing the results to the Company’s discount rates and volatility assumptions. Impairment of Goodwill As discussed in Notes 2 and 8 to the consolidated financial statements, the Company performs goodwill impairment testing on an annual basis or upon the occurrence of a triggering event that could indicate a potential impairment. During the three months ended September 30, 2024, the Company determined that certain triggering events, combined with a subsequent decrease in common stock price, indicated that it was more likely than not that the fair value of goodwill may be less than its carrying value, which required the Company to perform a quantitative impairment test. The fair value of the Company’s reporting unit was calculated through a discounted cash flow model (or income approach), based on the present value of estimated future cash flows including assumptions around forecasted revenue growth rates and estimated discount rate. As a result of the quantitative impairment test, the goodwill balance of $163.2 million was fully impaired during the three months ended September 30, 2024. We identified the evaluation of the fair value of the Company’s reporting unit as a critical audit matter. Evaluating the fair value of the reporting unit was complex and required significant auditor judgment due to the high degree of subjectivity in evaluating certain assumptions used to estimate the fair value of the reporting unit. In particular, the fair value measurement was sensitive to management’s forecast of revenue growth rates and the discount rate assumptions. Changes in these assumptions could have a significant impact on the fair value of the reporting unit. In addition, the audit effort associated with the evaluation of the Company’s revenue growth rates and discount rate required specialized skills and knowledge. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s calculation of the fair value of its reporting unit. This included controls related to the development of assumptions for forecasted revenue growth rates and discount rate. We evaluated the Company’s forecasted revenue growth rates by comparing them to historical actual growth rates and industry Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-3 Table of Contents data that was assessed to be relevant and reliable. We involved valuation professionals with specialized skills and knowledge, who assisted in evaluating the projected revenue growth rates by comparing them to guideline public companies and developing an independent estimate of the discount rate using inputs from publicly available market data and comparing the results to the Company's discount rate assumption. /s/ KPMG LLP We have served as the Company’s auditor since 2015. Short Hills, New Jersey February 27, 2025 Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-4 Table of Contents PACIRA BIOSCIENCES, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) December 31, 2024 2023 ASSETS Current assets: Cash and cash equivalents $ 276,774 $ 153,298 Short-term available-for-sale investments 207,841 125,283 Accounts receivable, net 113,304 105,556 Inventories, net 125,282 104,353 Prepaid expenses and other current assets 21,929 21,504 Total current assets 745,130 509,994 Noncurrent available-for-sale investments — 2,410 Fixed assets, net 167,169 173,927 Right-of-use assets, net 49,222 61,020 Goodwill — 163,243 Intangible assets, net 425,970 483,258 Deferred tax assets 130,376 144,485 Investments and other assets 35,649 36,049 Total assets $ 1,553,516 $ 1,574,386 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 19,133 $ 15,698 Accrued expenses 80,124 64,243 Lease liabilities 8,887 8,801 Current portion of convertible senior notes, net 201,776 8,641 Total current liabilities 309,920 97,383 Convertible senior notes, net 279,334 398,594 Long-term debt, net 104,211 115,202 Lease liabilities 44,645 54,806 Contingent consideration 20,241 24,698 Other liabilities 16,817 13,573 Total liabilities 775,168 704,256 Commitments and contingencies (Note 19) Stockholders’ equity: Preferred stock, par value $ 0.001 ; 5,000,000 shares authorized; none issued and outstanding at December 31, 2024 and 2023 — — Common stock, par value $ 0.001 ; 250,000,000 shares authorized; 47,077,844 shares issued and 46,240,604 shares outstanding at December 31, 2024 and 46,481,174 shares issued and outstanding at December 31, 2023 47 46 Treasury stock, at cost, 837,240 and zero shares at December 31, 2024 and 2023, respectively, inclusive of excise tax ( 25,121 ) — Additional paid-in capital 1,009,435 976,633 Accumulated deficit ( 206,356 ) ( 106,796 ) Accumulated other comprehensive income 343 247 Total stockholders’ equity 778,348 870,130 Total liabilities and stockholders’ equity $ 1,553,516 $ 1,574,386 See accompanying notes to consolidated financial statements. Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-5 Table of Contents PACIRA BIOSCIENCES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) Year Ended December 31, 2024 2023 2022 Revenues: Net product sales $ 697,186 $ 672,245 $ 664,150 Royalty revenue 3,780 2,733 2,673 Total revenues 700,966 674,978 666,823 Operating expenses: Cost of goods sold 170,428 184,669 199,295 Research and development 81,577 76,257 84,797 Selling, general and administrative 294,099 269,441 254,516 Amortization of acquired intangible assets 57,288 57,288 57,288 Goodwill impairment 163,243 — — Contingent consideration gains, restructuring charges and other 7,702 ( 352 ) 10,903 Total operating expenses 774,337 587,303 606,799 (Loss) income from operations ( 73,371 ) 87,675 60,024 Other income (expense): Interest income 19,689 11,444 4,542 Interest expense ( 16,569 ) ( 20,306 ) ( 39,976 ) Gain (loss) on early extinguishment of debt 7,518 ( 16,926 ) — Other, net ( 373 ) ( 186 ) ( 11,288 ) Total other income (expense), net 10,265 ( 25,974 ) ( 46,722 ) (Loss) income before income taxes ( 63,106 ) 61,701 13,302 Income tax (expense) benefit ( 36,454 ) ( 19,746 ) 2,607 Net (loss) income $ ( 99,560 ) $ 41,955 $ 15,909 Net (loss) income per share: Basic net (loss) income per common share $ ( 2.15 ) $ 0.91 $ 0.35 Diluted net (loss) income per common share $ ( 2.15 ) $ 0.89 $ 0.34 Weighted average common shares outstanding: Basic 46,245 46,222 45,521 Diluted 46,245 51,979 46,538 See accompanying notes to consolidated financial statements. Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-6 Table of Contents PACIRA BIOSCIENCES, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (In thousands) Year Ended December 31, 2024 2023 2022 Net (loss) income $ ( 99,560 ) $ 41,955 $ 15,909 Other comprehensive income (loss): Net unrealized gain (loss) on investments, net of tax 66 647 ( 662 ) Foreign currency translation adjustments 30 ( 20 ) 115 Total other comprehensive income (loss) 96 627 ( 547 ) Comprehensive (loss) income $ ( 99,464 ) $ 42,582 $ 15,362 See accompanying notes to consolidated financial statements Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-7 Table of Contents PACIRA BIOSCIENCES, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022 (In thousands) Number of shares outstanding Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Common Shares Treasury Shares Common Stock Treasury Stock Balance at December 31, 2021 44,734 — $ 45 $ — $ 942,091 $ ( 211,895 ) $ 167 $ 730,408 Reclassification of the equity component of convertible senior notes to liabilities upon adoption of Accounting Standards Update 2020-06 — — — — ( 96,468 ) 47,235 — ( 49,233 ) Exercise of stock options 690 — 1 — 24,386 — — 24,387 Vested restricted stock units 331 — — — — — — — Common stock issued under employee stock purchase plan 71 — — — 2,954 — — 2,954 Stock-based compensation — — — — 48,092 — — 48,092 Issuance of common stock upon conversion of 2022 convertible senior notes 102 — — — 3,040 — — 3,040 Other comprehensive loss (Note 12) — — — — — — ( 547 ) ( 547 ) Net income — — — — — 15,909 — 15,909 Balance at December 31, 2022 45,928 — 46 — 924,095 ( 148,751 ) ( 380 ) 775,010 Exercise of stock options 63 — — — 1,939 — — 1,939 Vested restricted stock units 404 — — — ( 1 ) — — ( 1 ) Common stock withheld for employee withholding tax liabilities on vested restricted stock units ( 4 ) — — — ( 106 ) — — ( 106 ) Common stock issued under employee stock purchase plan 90 — — — 2,811 — — 2,811 Stock-based compensation — — — — 47,895 — — 47,895 Other comprehensive income (Note 12) — — — — — — 627 627 Net income — — — — — 41,955 — 41,955 Balance at December 31, 2023 46,481 — 46 — 976,633 ( 106,796 ) 247 870,130 Vested restricted stock units 501 — 1 — — — — 1 Common stock withheld for employee withholding tax liabilities on vested restricted stock units ( 19 ) — — — ( 491 ) — — ( 491 ) Common stock issued under employee stock purchase plan 115 — — — 2,298 — — 2,298 Stock-based compensation — — — — 51,171 — — 51,171 Purchase of treasury stock, inclusive of excise tax — ( 837 ) — ( 25,121 ) — — — ( 25,121 ) Purchase of capped call transaction, net of tax — — — — ( 20,176 ) — — ( 20,176 ) Other comprehensive income (Note 12) — — — — — — 96 96 Net loss — — — — — ( 99,560 ) — ( 99,560 ) Balance at December 31, 2024 47,078 ( 837 ) $ 47 $ ( 25,121 ) $ 1,009,435 $ ( 206,356 ) $ 343 $ 778,348 See accompanying notes to consolidated financial statements. Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-8 Table of Contents PACIRA BIOSCIENCES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year Ended December 31, 2024 2023 2022 Operating activities: Net (loss) income $ ( 99,560 ) $ 41,955 $ 15,909 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Goodwill impairment 163,243 — — Loss on lease terminations 2,165 — — Deferred taxes 20,621 15,615 ( 7,945 ) Depreciation of fixed assets and amortization of intangible assets 78,785 75,574 91,501 Amortization of debt issuance costs 3,130 2,996 4,400 Amortization of debt discount 92 752 2,807 (Gain) loss on early extinguishment of debt ( 7,518 ) 16,926 — Stock-based compensation 51,171 47,895 48,092 Changes in contingent consideration ( 4,457 ) ( 3,424 ) ( 29,476 ) Impairment of indefinite-lived intangible asset — — 26,134 Impairment of investment — — 10,000 Other net losses 236 2,137 285 Changes in operating assets and liabilities: Accounts receivable, net ( 7,748 ) ( 7,159 ) ( 2,079 ) Inventories, net ( 20,929 ) ( 8,290 ) 2,486 Prepaid expenses and other assets ( 7,360 ) ( 9,639 ) ( 2,699 ) Accounts payable 3,084 916 6,272 Accrued expenses and income taxes payable 11,720 ( 22,039 ) ( 19,857 ) Other liabilities 2,714 434 ( 556 ) Net cash provided by operating activities 189,389 154,649 145,274 Investing activities: Purchases of fixed assets ( 10,636 ) ( 15,161 ) ( 30,076 ) Purchases of available-for-sale investments ( 252,212 ) ( 137,608 ) ( 387,685 ) Sales of available-for-sale investments 179,572 237,068 237,576 Payment of contingent consideration — — ( 32,000 ) Purchases of debt and equity investments — ( 6,758 ) ( 13,000 ) Net cash (used in) provided by investing activities ( 83,276 ) 77,541 ( 225,185 ) Financing activities: Proceeds from exercises of stock options — 1,939 24,387 Proceeds from shares issued under employee stock purchase plan 2,298 2,811 2,954 Payment of employee withholding taxes on restricted stock unit vests ( 491 ) ( 106 ) — Purchase of treasury stock ( 25,000 ) — — Proceeds from 2029 convertible senior notes 287,500 — — Proceeds from Term loan A facility — 149,550 — Repayment of 2022 convertible senior notes — — ( 156,960 ) Repayment of 2024 convertible senior notes ( 8,641 ) — ( 192,609 ) Repayment of 2025 convertible senior notes ( 190,994 ) — — Repayment of Term loan B facility — ( 296,875 ) ( 78,125 ) Repayment of Term loan A facility ( 11,250 ) ( 33,437 ) — Purchase of capped call transactions ( 26,709 ) — — Debt extinguishment costs — ( 5,750 ) — Payment of debt issuance and financing costs ( 9,350 ) ( 1,163 ) ( 1,175 ) Net cash provided by (used in) financing activities 17,363 ( 183,031 ) ( 401,528 ) Net increase (decrease) in cash and cash equivalents 123,476 49,159 ( 481,439 ) Cash and cash equivalents, beginning of year 153,298 104,139 585,578 Cash and cash equivalents, end of year $ 276,774 $ 153,298 $ 104,139 See accompanying notes to consolidated financial statements. Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-9 Table of Contents PACIRA BIOSCIENCES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (In thousands) Year Ended December 31, 2024 2023 2022 Supplemental cash flow information: Cash paid for interest $ 15,418 $ 27,635 $ 33,295 Cash paid for income taxes, net of refunds $ 11,021 $ 4,366 $ 7,398 Non-cash investing and financing activities: Issuance of common stock from conversion of 2022 convertible senior notes $ — $ — $ 3,040 Fixed assets included in accounts payable and accrued liabilities $ 5,565 $ 1,982 $ 5,888 Excise tax on share repurchases included in accrued liabilities $ 121 $ — $ — See accompanying notes to consolidated financial statements. Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-10 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1— DESCRIPTION OF BUSINESS Pacira BioSciences, Inc. and its subsidiaries (collectively, the “Company” or “Pacira”) delivers innovative, non-opioid pain therapies to transform the lives of patients. The Company’s long-acting, local analgesic, EXPAREL ® (bupivacaine liposome injectable suspension), was commercially launched in the United States, or U.S., in April 2012 and approved in select European countries and the United Kingdom, or U.K., in November 2021. EXPAREL utilizes the Company’s proprietary multivesicular liposome, or pMVL, drug delivery technology that encapsulates drugs without altering their molecular structure and releases them over a desired period of time. EXPAREL is currently indicated to produce postsurgical local analgesia via infiltration in patients aged 6 years and older, and postsurgical regional analgesia via an interscalene brachial plexus block in adults, a sciatic nerve block in the popliteal fossa in adults, and an adductor canal block in adults for postsurgical pain management (the safety and effectiveness of EXPAREL have not been established to produce postsurgical regional analgesia via other nerve blocks besides an interscalene brachial plexus nerve block, a sciatic nerve block in the popliteal fossa, or an adductor canal block). In November 2021, the Company acquired Flexion Therapeutics, Inc., or Flexion (the “Flexion Acquisition”), and added ZILRETTA ® (triamcinolone acetonide extended-release injectable suspension) to its product portfolio. ZILRETTA is the first and only extended-release, intra-articular (meaning in the joint) injection indicated for the management of osteoarthritis, or OA, knee pain. In April 2019, the Company added iovera ® ° to its commercial offering with the acquisition of MyoScience, Inc., or MyoScience (the “MyoScience Acquisition”). The iovera° system is a handheld cryoanalgesia device that delivers immediate, long-acting, drug-free pain control using precise, controlled doses of cold temperature to a targeted nerve. The Company is also advancing the development of PCRX-201 (enekinragene inzadenovec), a novel gene therapy vector platform enabling local administration of genetic medicines with the potential to treat large prevalent diseases like OA. In February 2025, the Company acquired the remaining equity interest in GQ Bio Therapeutics GmbH, or GQ Bio (the “GQ Bio Acquisition”) a privately-held biopharmaceutical company with a novel, high-capacity, local-delivery platform that makes genetic medicines more efficient and enables the use of large and multiple gene constructs. PCRX-201 is the lead program from this platform. For more information on the GQ Bio Acquisition, see Note 21, Subsequent Events . Pacira is subject to risks common to companies in similar industries and stages, including, but not limited to, competition from larger companies and potential generic entrants, reliance on revenue from three products, reliance on a limited number of wholesalers, reliance on a limited number of manufacturing sites, new technological innovations, dependence on key personnel, reliance on third-party service providers and sole source suppliers, protection of proprietary technology, compliance with government regulations and risks related to cybersecurity. NOTE 2— SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP, and in accordance with the rules and regulations of the U.S. Securities and Exchange Commission, or SEC. The accounts of the Company’s wholly owned subsidiaries are included in these consolidated financial statements. All intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications from previously issued financial statements have been made to conform to the current presentation. Use of Estimates The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, including disclosure of contingent assets and contingent liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used for, among other things, revenue recognition, valuation of acquired assets and liabilities, stock-based compensation, inventory costs, impairments of equity investments, long-lived assets, goodwill and other intangible assets, liabilities and accruals, including contingent consideration, and the valuation of deferred tax assets. Because of the uncertainty of factors surrounding the estimates or judgments used in the preparation of the consolidated financial statements, actual results could differ from these estimates. Revenue From Contracts With Customers The Company’s net product sales consist of (i) EXPAREL in the U.S., European Union, or E.U., and the U.K.; (ii) ZILRETTA in the U.S.; (iii) iovera° in the U.S., Canada and Europe and (iv) sales of its bupivacaine liposome injectable suspension for veterinary use. Royalty revenues are related to a collaborative licensing agreement from the sale of the Company’s bupivacaine liposome injectable suspension product for veterinary use. See Note 4, Revenue , for further information on the Company’s accounting policies related to revenue from contracts with customers. Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-11 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Royalty Revenue Royalties are estimated and recognized as revenue when sales to the Company’s commercial partners occur, unless some constraint exists, as the royalties predominately relate to a supply agreement. Royalties are based on sales of the Company’s bupivacaine liposome injectable suspension product for veterinary use. Concentration of Major Customers The Company sells EXPAREL through a drop-ship program under which orders are processed through wholesalers (including AmerisourceBergen Health Corporation, Cardinal Health, Inc. and McKesson Drug Company), but shipments of the product are sent directly to individual accounts, such as hospitals, ambulatory surgery centers and individual physicians. The Company also sells EXPAREL directly to ambulatory surgery centers and individual physicians. The Company sells ZILRETTA primarily to specialty distributors and specialty pharmacies, who then subsequently resell ZILRETTA to physicians, clinics and certain medical centers or hospitals. The Company also contracts directly with healthcare providers and intermediaries such as Group Purchasing Organizations, or GPOs. The Company sells iovera° directly to end users and its bupivacaine liposome injectable suspension product for veterinary use to a third-party licensee in the U.S. The table below includes the percentage of revenues comprised by the Company’s three largest wholesalers in each period presented: Year Ended December 31, 2024 2023 2022 Largest wholesaler 34 % 33 % 31 % Second largest wholesaler 23 % 24 % 23 % Third largest wholesaler 20 % 20 % 22 % Total 77 % 77 % 76 % Revenue from outside the U.S. accounted for less than 1 % of the Company’s total revenue for each of the years ended December 31, 2024, 2023 and 2022. Research and Development Expenses Research and development expenditures are expensed as incurred. These include both internal and external costs, of which a significant portion of development activities are outsourced to third parties, including contract research organizations, or CROs. Clinical trial costs are accrued over the service periods specified in contracts and adjusted as necessary based on an ongoing review of the level of effort and actual costs incurred by the CROs. Research and development costs are presented net of any reimbursements from commercial partners. Income Taxes The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to basis differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The Company accrues interest and penalties on underpayments of income taxes, including those related to unrecognized tax benefits, as a component of income tax expense in its consolidated statements of operations. Stock-Based Compensation The Company’s stock-based compensation consists of grants of stock options and restricted stock units, or RSUs, to employees, consultants and non-employee directors, in addition to the opportunity for employees to participate in an employee stock purchase plan. The expense associated with these programs is recognized in the Company’s consolidated statements of operations based on their fair values as they are earned under their applicable vesting terms or the length of an offering period. In calculating the estimated fair value of stock options and employee stock purchase plan share options granted, the Company uses the Black-Scholes option valuation model, or Black-Scholes model, which requires the consideration of the Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-12 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) following variables for purposes of estimating fair value in addition to the closing price of the Company’s common stock on the date of grant: • Expected term of the option • Expected volatility • Expected dividends • Risk-free interest rate The Company utilizes its historical volatility data to determine expected volatility over the expected term of the option. The Company uses an expected term based on its historical stock option activity data for stock option grants and the length of an offering period for employee stock purchase plan share option grants. The risk-free interest rate is based on the implied yield on U.S. Department of the Treasury zero-coupon bonds for periods commensurate with the expected term of the options. The dividend yield on the Company’s common stock is estimated to be zero as the Company has not declared or paid any dividends since inception, nor does it have any intention to do so in the foreseeable future. Additionally, the Company’s ability to declare and pay a dividend in the future could be limited per the agreements governing its indebtedness. The Company records forfeitures of grants as they occur rather than estimating forfeitures during each reporting period. Cash and Cash Equivalents All highly liquid investments with maturities of 90 days or less when purchased are considered cash equivalents. Cash equivalents include money market funds. As of December 31, 2024, the carrying value of the Company’s money market funds was $ 269.4 million. As of December 31, 2023, the carrying value of money market funds was $ 26.1 million. The carrying values approximate fair value as of December 31, 2024 and 2023. Short-Term and Noncurrent Available-For-Sale Investments Available-for-sale investments may consist of asset-backed securities collateralized by credit card receivables, investment grade commercial paper, corporate bonds, federal agency bonds, government and Yankee bonds, and other bonds issued in the U.S. (and denominated in the U.S. dollar) by foreign entities. Current available-for-sale investments are those with maturities of greater than three months, but less than one year. Noncurrent available-for-sale investments hold maturities greater than one year. The Company evaluates the classification of its investments at the time of purchase and re-evaluates such determination at each balance sheet date, which includes an assessment of the intent to hold the available-for-sale securities. The Company’s investment policy sets minimum credit quality criteria and maximum maturity limits on its investments to provide for preservation of capital, liquidity and a reasonable rate of return. The Company classifies its investments as available-for-sale. Available-for-sale securities are recorded at fair value, based on current market valuations. Unrealized holding gains and losses on available-for-sale securities (except for credit losses) are excluded from net (loss) income and are reported as a separate component of accumulated other comprehensive income until realized. Realized gains and losses are included in interest income in the consolidated statements of operations and are derived using the specific identification method for determining the cost of the securities sold. The Company evaluates whether a credit loss exists, and in the event a credit loss does exist, the credit loss is recognized in the consolidated statements of operations based on the amount that the fair value is less than the amortized cost. Inventories Inventories consist of finished goods held for sale and distribution, raw materials and work in process. Inventories are stated at the lower of cost, which includes amounts related to material, labor and overhead, or net realizable value, and is determined using the first-in, first-out method. The Company periodically reviews its inventory to identify obsolete, slow-moving, or otherwise unsalable inventories, and establishes allowances for situations in which the cost of the inventory is not expected to be recovered. Fixed Assets Fixed assets are recorded at cost, net of accumulated depreciation and amortization. The Company reviews its property, plant and equipment assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Depreciation of fixed assets is provided over their estimated useful lives on a straight-line basis. The Company periodically reviews these useful lives relative to physical factors, economic factors and industry trends. If there are changes in the planned use of property or equipment, the useful lives assigned to these assets may need to be shortened, resulting in the Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-13 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) recognition of accelerated depreciation expense in future periods. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the related remaining lease terms. Useful lives by asset category are as follows: Asset Category Useful Life Computer equipment and software 1 to 3 years Office furniture and equipment 5 years Manufacturing and laboratory equipment 5 to 15 years Asset Retirement Obligations The Company has contractual obligations stemming from certain of its lease agreements to return leased space to its original condition upon termination of such lease agreements. The Company records its asset retirement obligations, or ARO, along with a corresponding capital asset in an amount equal to the estimated fair value of the ARO, based on the present value of expected future cash flows. In subsequent periods, the Company records expense to accrete the ARO to its full value. Each ARO capital asset is depreciated over the depreciable term of the associated fixed asset. Leases The Company recognizes right-of-use, or ROU, assets and lease liabilities at the commencement of its lease agreements. The leases are evaluated at commencement to determine whether they should be classified as operating or financing leases. Lease costs associated with operating leases are recognized on a straight-line basis, while lease costs for financing leases are recognized over the lease term using the effective interest method. The Company does not currently have any financing leases. The amount of ROU assets and lease liabilities to be recognized is impacted by the type of lease payments, the lease term and the incremental borrowing rate. Variable lease payments are not included at commencement and are recognized in the period in which they are incurred. The Company has elected to net the amortization of its ROU assets and the reduction of the lease liability principal in other liabilities in the consolidated statement of cash flows. The lease term is based on the contractual term and is adjusted for any renewal options or termination rights that are reasonably certain to be exercised. The incremental borrowing rate is based on the rate the Company estimates it would pay on a collateralized basis over a similar term in a similar economic environment. Acquisitions In a business combination, the acquisition method of accounting requires that the assets acquired and liabilities assumed be recorded as of the date of the acquisition at their respective fair values, with some exceptions. Assets acquired and liabilities assumed in a business combination that arise from contingencies are generally recognized at fair value. If fair value can be determined, the asset or liability is recognized; if fair value is not determinable, then no asset or liability is recognized. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an “exit price”) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Acquired in-process research and development, or IPR&D, is recognized at fair value and initially characterized as an indefinite-lived intangible asset, irrespective of whether the acquired IPR&D has an alternative future use. If the acquired net assets do not constitute a business under the acquisition method of accounting, the transaction is accounted for as an asset acquisition and no goodwill is recognized. In an asset acquisition, the amount allocated to acquired IPR&D with no alternative future use is recorded as an expense at the acquisition date. Any excess of the purchase price (consideration transferred) over the estimated fair values of net assets acquired is recorded as goodwill. Transaction costs and costs to restructure the acquired company are expensed as incurred. The operating results of the acquired business are reflected in the Company’s consolidated financial statements after the closing date of the acquisition. Contingent Consideration Subsequent to an acquisition, the Company measures contingent consideration arrangements at fair value at each reporting period, with changes in fair value recognized in the consolidated statements of operations. Changes in contingent consideration Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-14 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) can result from changes in the assumed achievement and timing of estimated sales and regulatory approvals. In the absence of new information, changes in fair value reflect the passage of time towards achievement or expiration of the milestones, and are accreted to the period in which payments are expected to be made. Goodwill Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired in a business combination and is subject to impairment testing at least annually or upon the occurrence of a triggering event that could indicate a potential impairment. The Company has historically tested goodwill for impairment by performing a qualitative assessment in order to determine whether facts and circumstances support a determination that reporting unit fair values are greater than their carrying values. This has historically been performed using readily available market data and company-specific factors. If the Company determines that it is more likely than not that the fair value of the Company is less than its carrying value, a quantitative test is required. This is performed by comparing the fair value of the Company with its carrying value. If the estimated fair value of the reporting unit is less than the carrying amount of the reporting unit, impairment is indicated, requiring recognition of a goodwill impairment charge up to the carrying value of goodwill. The fair value of the Company would be calculated through an income approach. Under the income approach, the Company calculates the fair value based on the present value of estimated future cash flows. Considerable management judgment is necessary to evaluate the impact of operating and macroeconomic changes and to estimate the future cash flows used to assume fair value. The Company’s estimates of future cash flows consider past performance, current and anticipated market conditions and internal projections and operating plans which incorporate estimates for sales growth and future margins. Additional assumptions would include forecasted growth rates, estimated discount rates and the probability of success for the Company’s product pipeline candidate products. The Company believes such assumptions would reflect current and anticipated market conditions and are consistent with those that would be used by other marketplace participants for similar valuation purposes. Such assumptions are subject to change due to changing economic and competitive conditions. Intangible Assets Intangible assets with definite useful lives are amortized on a straight-line basis over their estimated useful lives and are recorded at cost, net of accumulated amortization. Indefinite-lived intangible assets are tested for impairment at least annually or when a triggering event occurs that could indicate a potential impairment exists. Impairment charges are recognized to the extent the carrying value exceeds its fair value. Equity Investments The Company holds investments in equity securities without a readily determinable fair value which are recognized at cost less any impairments, plus or minus any changes resulting from observable price changes in orderly transactions for a similar investment. Impairments of Long-Lived Assets Management reviews long-lived assets, including fixed assets and finite-lived intangible assets, for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. Per Share Data Basic net (loss) income per common share is computed by dividing net (loss) income available (attributable) to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net (loss) income per common share is calculated by dividing net (loss) income available (attributable) to common stockholders as adjusted for the effect of dilutive securities, if any, by the weighted average number of shares of common stock and dilutive common stock outstanding during the period. Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-15 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Potential common shares include the shares of common stock issuable upon the exercise of outstanding stock options, the vesting of RSUs and the purchase of shares from the Company’s employee stock purchase plan (using the treasury stock method), if applicable. Potential common shares associated with convertible senior notes are treated under the if-converted method and adjustments are made to the diluted net (loss) income per common share calculation as if the Company had converted the convertible senior notes on the first day of each period presented. Adjustments to the numerator are made to add back the interest expense associated with the convertible senior notes on a post-tax basis. Adjustments to the denominator reflect the number of shares assumed to be convertible at the beginning of the period. Treasury Stock Repurchases of the Company’s common stock are accounted for at cost and recorded as treasury stock. The excise tax on repurchases of the Company’s common stock is recorded as a cost of acquiring treasury stock. Any reissued treasury stock is accounted for at average cost. Gains or losses on reissued treasury stock arising from the difference between the average cost and the fair value of the award is recorded in additional paid-in capital in the consolidated balance sheets. Foreign Currencies The balance sheet accounts of the Company’s foreign subsidiaries with functional currencies other than the U.S. Dollar are translated using the exchange rate at each respective balance sheet date. Revenues and expenses are translated using the average exchange rates for each calendar month during the year. Translation adjustments are recorded as a component of accumulated other comprehensive income in the consolidated financial statements. Gains or losses from foreign currency exchanges are recorded in other, net in the consolidated statements of operations. NOTE 3— RECENT ACCOUNTING PRONOUNCEMENTS Recently Adopted Accounting Pronouncements In November 2023, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures. The ASU amendment improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses on an interim and annual basis. The new segment disclosure requirements apply for entities with a single reportable segment. The Company adopted the standard for its annual reporting which was applied retrospectively for all prior years presented. The ASU's amendment is effective for interim periods in fiscal years beginning after December 15, 2024. Refer to Note 20, Segment Information , for more information. Recently Issued Accounting Pronouncements Not Adopted as of December 31, 2024 In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures . The ASU amendment addresses investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The ASU’s amendments are effective for fiscal years beginning after December 15, 2024 and may be adopted on a prospective or retrospective basis. The Company is currently evaluating the impact of adopting ASU 2023-09 on its consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses . The ASU amendment improves financial reporting by requiring public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. The ASU’s amendments are effective for annual reporting periods beginning after December 31, 2026 and interim periods beginning after December 15, 2027, with early adoption permitted. This ASU amendment can be applied on a prospective basis or retrospectively. The Company is currently evaluating the impact of adopting ASU 2024-03 on its footnote disclosures. Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-16 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE 4— REVENUE The Company’s sources of revenue are detailed in Note 2, Summary of Significant Accounting Policies . The Company does not consider revenue from sources other than sales of EXPAREL and ZILRETTA to be material sources of its consolidated revenue. As such, the following disclosure is limited to revenue associated with net product sales of EXPAREL and ZILRETTA. Net Product Sales The Company sells EXPAREL through a drop-ship program under which orders are processed through wholesalers based on orders of the product placed by end-users, namely hospitals, ambulatory surgery centers and healthcare provider offices. EXPAREL is delivered directly to the end-user without the wholesaler ever taking physical possession of the product. The Company primarily sells ZILRETTA to specialty distributors and specialty pharmacies, who then subsequently resell ZILRETTA to physicians, clinics and certain medical centers or hospitals. The Company also contracts directly with healthcare providers and intermediaries such as GPOs. Product revenue is recognized when control of the promised goods are transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring those goods. EXPAREL and ZILRETTA revenue is recorded at the time the products are transferred to the customer. Revenues from sales of products are recorded net of returns allowances, prompt payment discounts, service fees, government rebates, volume rebates and chargebacks. These reserves are based on estimates of the amounts earned or to be claimed on the related sales. These amounts are treated as variable consideration, estimated and recognized as a reduction of the transaction price at the time of the sale, using the most likely amount method, except for returns, which is based on the expected value method. The Company includes these estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized for such transaction will not occur, or when the uncertainty associated with the variable consideration is resolved. Chargebacks for fees and discounts represent the estimated obligations resulting from contractual commitments to sell products to Department of Veteran Affairs hospitals, participating GPO members, 340B qualified entities and other contracted customers at prices lower than the list price. The 340B Drug Discount Program is a U.S. federal government program that requires participating drug manufacturers to provide outpatient drugs to eligible health care organizations and covered entities at reduced prices. Customers claim the difference between the amount invoiced and the discounted selling price through a chargeback issued by a wholesaler. Reserves are established in the same period that the related revenue is recognized, resulting in a reduction of product revenue and trade receivables, net. Chargeback amounts are determined at the time of sale and the Company generally issues credits for such amounts within weeks of receiving notification from a wholesaler. Reserves for chargebacks consist of anticipated credits the Company expects to issue based on expected units sold and chargebacks that customers have claimed for which credits have not yet been issued. The calculation for some of these items requires management to make estimates based on sales data, historical return data, contracts, statutory requirements and other related information that may become known in the future. The adequacy of these provisions is reviewed on a quarterly basis. Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-17 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) The following table provides a summary of activity with respect to the Company’s sales related allowances and accruals related to EXPAREL and ZILRETTA for the years ended December 31, 2024, 2023 and 2022 (in thousands): Returns Allowances Prompt Payment Discounts Service Fees Volume Rebates and Chargebacks Government Rebates Total Balance at December 31, 2021 $ 3,361 $ 1,178 $ 3,636 $ 3,494 $ 761 $ 12,430 Provision 1,390 11,145 16,866 48,890 1,641 79,932 Payments ( 3,060 ) ( 11,136 ) ( 17,309 ) ( 46,932 ) ( 1,616 ) ( 80,053 ) Balance at December 31, 2022 1,691 1,187 3,193 5,452 786 12,309 Provision 1,335 11,970 18,129 92,009 2,176 125,619 Payments ( 1,158 ) ( 11,849 ) ( 17,625 ) ( 91,591 ) ( 1,787 ) ( 124,010 ) Balance at December 31, 2023 1,868 1,308 3,697 5,870 1,175 13,918 Provision 2,260 12,697 21,022 115,087 2,155 153,221 Payments ( 2,528 ) ( 12,697 ) ( 19,844 ) ( 116,094 ) ( 1,623 ) ( 152,786 ) Balance at December 31, 2024 $ 1,600 $ 1,308 $ 4,875 $ 4,863 $ 1,707 $ 14,353 Accounts Receivable The majority of accounts receivable arise from product sales and represent amounts due from wholesalers, hospitals, ambulatory surgery centers, specialty distributors, specialty pharmacies and individual physicians. Payment terms generally range from zero to four months from the date of the transaction, and accordingly, there is no significant financing component. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in Accounting Standards Codification, or ASC, 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. At contract inception, the Company assesses the goods promised in its contracts with customers and identifies a performance obligation for each promise to transfer to the customer a good that is distinct. When identifying individual performance obligations, the Company considers all goods promised in the contract regardless of whether explicitly stated in the customer contract or implied by customary business practices. The Company’s contracts with customers require it to transfer an individual distinct product, which represents a single performance obligation. The Company’s performance obligation with respect to its product sales is satisfied at a point in time, which transfers control upon delivery of EXPAREL and ZILRETTA to its customers. The Company considers control to have transferred upon delivery because the customer has legal title to the asset, physical possession of the asset has been transferred, the customer has significant risks and rewards of ownership of the asset and the Company has a present right to payment at that time. Disaggregated Revenue The following table represents disaggregated net product sales in the periods presented as follows (in thousands): Year Ended December 31, 2024 2023 2022 Net product sales: EXPAREL $ 548,962 $ 538,120 $ 536,899 ZILRETTA 118,089 111,098 105,517 iovera° 22,813 19,685 15,258 Bupivacaine liposome injectable suspension 7,322 3,342 6,476 Total net product sales $ 697,186 $ 672,245 $ 664,150 Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-18 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE 5— INVENTORIES The components of inventories, net are as follows (in thousands): December 31, 2024 2023 Raw materials $ 50,800 $ 54,099 Work-in-process 27,384 31,215 Finished goods 47,098 19,039 Total $ 125,282 $ 104,353 NOTE 6— FIXED ASSETS Fixed assets, net, summarized by major category, consist of the following (in thousands): December 31, 2024 2023 Machinery and equipment (1) (2) $ 160,643 $ 121,773 Leasehold improvements (2) 86,034 61,826 Computer equipment and software (2) 23,473 17,186 Office furniture and equipment 1,952 2,543 Construction in progress (2) 27,996 105,905 Total 300,098 309,233 Less: accumulated depreciation (1) ( 132,929 ) ( 135,306 ) Fixed assets, net $ 167,169 $ 173,927 For information on useful lives by asset category, refer to Note 2, Summary of Significant Accounting Policies . (1) During the year ended December 31, 2024, the Company disposed of $ 19.0 million of fully depreciated machinery and equipment associated with its 45-liter EXPAREL manufacturing process at its contract manufacturing facility located in Swindon, U.K. The Company continues to operate its enhanced, larger-scale EXPAREL manufacturing process at the same facility. (2) During the year ended December 31, 2024, an enhanced, large-scale EXPAREL manufacturing suite at the Company’s Science Center Campus in San Diego, California was placed into service, for which approximately $ 76.1 million was reclassified from construction in progress to machinery and equipment, leasehold improvements and computer equipment and software. Depreciation expense for the years ended December 31, 2024, 2023 and 2022 was $ 21.5 million, $ 18.3 million and $ 34.2 million, respectively. In 2022, the Company accelerated $ 10.5 million of depreciation expense for certain machinery and equipment for which no future economic benefit was identified. During the years ended December 31, 2024, 2023 and 2022, the Company capitalized interest on the construction of manufacturing sites of $ 2.1 million, $ 3.5 million and $ 4.1 million, respectively. As of December 31, 2024 and 2023, total fixed assets, net, includes manufacturing process equipment and leasehold improvements located outside of the U.S. in the amount of $ 51.1 million and $ 36.8 million, respectively. As of December 31, 2024 and 2023, the Company had AROs of $ 4.2 million and $ 4.3 million, respectively, included in accrued expenses and other liabilities on its consolidated balance sheets, for costs associated with returning leased spaces to their original condition upon the termination of their lease agreements. During the three months ended September 30, 2024, the U.S. Food and Drug Administration, or FDA, approved a generic competitor to EXPAREL and a U.S. District Court ruled that one of the Company’s patents was not valid (for more information, see Note 19, Commitments and Contingencies ). The Company determined that these events and a subsequent decrease in the Company’s common stock price constituted impairment indicators under ASC 360 Property, Plant and Equipment . As of September 30, 2024, the Company performed a quantitative recoverability test of the carrying values of its asset group. The Company estimated the undiscounted future cash flows expected to result from the use of its asset group and determined the carrying amount of the asset group was recoverable. Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-19 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE 7— LEASES The Company leases all of its facilities, including its EXPAREL and iovera° handpiece manufacturing facility at its Science Center Campus in San Diego, California. The Company also has two embedded leases with Thermo Fisher Scientific Pharma Services, or Thermo Fisher, for the use of their manufacturing facility in Swindon, U.K. for the production of EXPAREL and ZILRETTA. A portion of the associated monthly base fees has been allocated to the lease components based on a relative fair value basis. Since July 2022 and February 2023, the Company has recognized sublease income for laboratory space leased in Woburn, Massachusetts and a portion of office space leased in Burlington, Massachusetts, respectively, from leases that were assumed as part of the Flexion Acquisition. In February 2024, the lease and sublease term concluded for the laboratory space in Woburn, Massachusetts. During 2023, the Company partially exited its Burlington, Massachusetts office space lease that had been assumed as part of the Flexion Acquisition through a one-time termination fee of $ 0.8 million, which released its obligation of $ 1.6 million in future cash payments for the respective proportion of square footage exited. The partial lease termination resulted in a nominal gain which was recorded within contingent consideration gains, restructuring charges and other in the consolidated statements of operations. In December 2024, the Company exited a lease for a training facility in Houston, Texas. The Company recognized a loss of $ 2.2 million during the year ended December 31, 2024 associated with exiting the lease, which was recorded within contingent consideration gains, restructuring charges and other in the consolidated statements of operations. The loss resulted from the derecognition of the right-of-use asset, its related lease liability and a termination payment of $ 1.3 million. The operating lease costs for these facilities include lease and non-lease components, such as common area maintenance and other common operating expenses, along with executory costs such as insurance and real estate taxes. Total operating lease costs are as follows (in thousands): Year Ended December 31, Operating Lease Costs 2024 2023 2022 Fixed lease costs $ 13,876 $ 14,344 $ 13,949 Variable lease costs 1,889 1,952 1,988 Sublease income ( 304 ) ( 657 ) ( 253 ) Total $ 15,461 $ 15,639 $ 15,684 Supplemental cash flow information related to operating leases is as follows (in thousands): Year Ended December 31, 2024 2023 2022 Cash paid for operating lease liabilities, net of lease incentives $ 12,991 $ 14,259 $ 14,357 Right-of-use assets recorded in exchange for lease obligations $ — $ — $ 3,324 The weighted average remaining lease terms and the weighted average discount rates are summarized as follows: December 31, 2024 2023 Weighted average remaining lease term 5.19 years 6.04 years Weighted average discount rate 6.89 % 7.02 % Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-20 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) As of December 31, 2024, maturities of the Company’s operating lease liabilities are as follows (in thousands): Year Aggregate Minimum Payments Due 2025 $ 12,285 2026 12,319 2027 12,072 2028 10,924 2029 10,812 Thereafter 5,614 Total future lease payments 64,026 Less: imputed interest ( 10,494 ) Total operating lease liabilities $ 53,532 NOTE 8— GOODWILL AND INTANGIBLE ASSETS Goodwill The Company’s goodwill resulted from the acquisition of Pacira Pharmaceuticals, Inc. (the Company’s California operating subsidiary) from SkyePharma Holding, Inc. (now Vectura Group Limited, a subsidiary of Molex Asia Holdings Ltd.) in 2007, the MyoScience Acquisition in 2019 and the Flexion Acquisition in 2021. The goodwill balance at December 31, 2023 was $ 163.2 million. Goodwill represents the excess of the purchase price over the estimated fair value of the net assets acquired in a business combination and is subject to impairment testing at least annually or upon the occurrence of a triggering event that could indicate a potential impairment. During the three months ended September 30, 2024, the FDA approved a generic competitor to EXPAREL and a U.S. District Court ruled that one of the Company’s patents was not valid (for more information, see Note 19, Commitments and Contingencies ). The Company determined that these events, combined with a subsequent decrease in the Company’s common stock price, indicated that it was more likely than not that the fair value of goodwill may be less than its carrying value, which required the Company to perform a quantitative impairment test. This was performed by comparing the fair value of the Company with its carrying value. If the estimated fair value of the reporting unit is less than the carrying amount of the reporting unit, impairment is indicated, requiring recognition of a goodwill impairment charge up to the carrying value of goodwill. The fair value of the Company was calculated through an income approach, in which the Company calculated the fair value based on the present value of estimated future cash flows. Considerable management judgment is necessary to evaluate the impact of operating and macroeconomic changes and to estimate the future cash flows used to assume fair value. The Company’s estimates of future cash flows consider past performance, current and anticipated market conditions, internal projections and operating plans which incorporate estimates for sales growth and future margins. Additional assumptions include forecasted growth rates, estimated discount rates and the probability of success for the Company’s product pipeline candidate products. The assumptions also reflect current and anticipated market conditions and are consistent with those that would be used by other marketplace participants for similar valuation purposes. Such assumptions are subject to change due to changing economic and competitive conditions. The conclusion of the income approach as of September 30, 2024 resulted in the carrying value of the Company exceeding its fair value by more than the goodwill balance. As a result, the goodwill balance of $ 163.2 million was fully impaired during the three months ended September 30, 2024 and the Company had no remaining goodwill balance at December 31, 2024. Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-21 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Intangible Assets Intangible assets, net, consists of the developed technology and IPR&D from the Flexion Acquisition and developed technology and customer relationships from the MyoScience Acquisition and are summarized as follows (dollar amounts in thousands): December 31, 2024 Gross Carrying Value Accumulated Amortization Intangible Assets, Net Weighted-Average Useful Lives Developed technologies $ 590,000 $ ( 198,934 ) $ 391,066 10 years, 5 months Customer relationships 90 ( 52 ) 38 10 years Total finite-lived intangible assets, net 590,090 ( 198,986 ) 391,104 Acquired IPR&D 34,866 — 34,866 Total intangible assets, net $ 624,956 $ ( 198,986 ) $ 425,970 December 31, 2023 Gross Carrying Value Accumulated Amortization Intangible Assets, Net Weighted-Average Useful Lives Developed technology $ 590,000 $ ( 141,655 ) $ 448,345 10 years, 5 months Customer relationships 90 ( 43 ) 47 10 years Total finite-lived intangible assets, net 590,090 ( 141,698 ) 448,392 Acquired IPR&D 34,866 — 34,866 Total intangible assets, net $ 624,956 $ ( 141,698 ) $ 483,258 Amortization expense on intangible assets was $ 57.3 million for each of the years ended December 31, 2024 and 2023. Assuming no changes in the gross carrying amount of these intangible assets, the future estimated amortization expense on the finite-lived intangible assets will be $ 57.3 million each year from 2025 to 2030, $ 37.4 million in 2031, $ 7.9 million in 2032 and $ 2.2 million in 2033. The Company reviews its indefinite-lived intangible assets for impairment annually and whenever an event or change in circumstances arises that indicates the carrying amount of an indefinite-lived intangible asset is at risk of not being recoverable. During the year ended December 31, 2024 and 2023, the Company conducted the annual impairment assessment for its acquired IPR&D and concluded there was no impairment as of that date. During the year ended December 31, 2022, the annual impairment assessment of ZILRETTA acquired IPR&D for an indication for the treatment of OA pain of the shoulder was conducted through a recoverability test at December 31, 2022 by comparing the $ 60.0 million carrying value of the asset against the fair value through a discounted cash flow model of $ 33.9 million based on new facts and circumstances. The change in fair value was primarily driven by later timelines for the completion of clinical trials impacting revenue forecasts, among other factors. An impairment of $ 26.1 million was recognized within contingent consideration gains, restructuring charges and other in the consolidated statements of operations for the year ended December 31, 2022 based on the amount its previous carrying value exceeded its updated fair value. NOTE 9— ACCRUED EXPENSES Accrued expenses consist of the following (in thousands): December 31, 2024 2023 Accrued selling, general and administrative expenses $ 15,622 $ 12,811 Accrued research and development expenses 4,501 5,141 Accrued cost of goods sold 8,411 10,180 Other accrued operating expenses 9,301 3,953 Compensation and benefits 28,811 21,682 Accrued royalties 1,451 561 Accrued interest 1,418 1,389 Product returns and wholesaler service fees 10,609 8,526 Total $ 80,124 $ 64,243 Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-22 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE 10— DEBT The carrying value of the Company’s outstanding debt is summarized as follows (in thousands): December 31, 2024 2023 Term loan A facility maturing March 2028 $ 104,211 $ 115,202 2.125 % Convertible senior notes due May 2029 279,334 — 0.750 % Convertible senior notes due August 2025 201,776 398,594 3.375 % Convertible senior notes due May 2024 (1) — 8,641 Total $ 585,321 $ 522,437 (1) The 3.375 % convertible senior notes due May 2024 matured and were repaid on May 1, 2024. 2028 Term Loan A Facility On March 31, 2023, the Company entered into a credit agreement (as amended and/or restated to date, the “TLA Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent, and certain lenders, to refinance the indebtedness outstanding under the Company’s then-existing TLB Credit Agreement (as defined and discussed below). The term loan issued under the TLA Credit Agreement (the “TLA Term Loan”) was issued at a 0.30 % discount and provides for a single-advance term loan A facility in the principal amount of $ 150.0 million, which is secured by substantially all of the Company’s and any subsidiary guarantor’s assets. Subject to certain conditions, the Company may, at any time, on one or more occasion, add one or more new classes of term facilities and/or increase the principal amount of the loans of any existing class by requesting one or more incremental term facilities. The net proceeds of the TLA Term Loan were approximately $ 149.6 million after deducting an original issue discount of $ 0.4 million. On May 8, 2024, the Company, JPMorgan Chase Bank, N.A., as administrative agent, and certain lenders entered into a first amendment (the “First TLA Amendment”) to the TLA Credit Agreement. The First TLA Amendment, among other things, permits the Company’s $ 150.0 million share repurchase program and the Capped Call Transactions (as defined and described below). The total debt composition of the TLA Term Loan is as follows (in thousands): December 31, 2024 2023 Term loan A facility maturing March 2028 $ 105,313 $ 116,563 Deferred financing costs ( 821 ) ( 988 ) Discount on debt ( 281 ) ( 373 ) Total debt, net of debt discount and deferred financing costs $ 104,211 $ 115,202 The TLA Term Loan matures on March 31, 2028 and the TLA Credit Agreement requires quarterly repayments of principal in the amount of $ 2.8 million which commenced on June 30, 2023, increasing to $ 3.8 million commencing March 31, 2025, with a remaining balloon payment of approximately $ 85.3 million due at maturity. Due to voluntary principal prepayments, the Company is not required to make further principal payments until September 2026, although the Company retains the option to do so. The TLA Credit Agreement requires the Company to, among other things, maintain (i) a Senior Secured Net Leverage Ratio (as defined in the TLA Credit Agreement), determined as of the last day of each fiscal quarter, of no greater than 3.00 to 1.00 and (ii) a Fixed Charge Coverage Ratio (as defined in the TLA Credit Agreement), determined as of the last day of each fiscal quarter, of no less than 1.50 to 1.00. The TLA Credit Agreement requires the Company to maintain an unrestricted cash and cash equivalents balance of at least $ 300.0 million ($ 500.0 million less a $ 200.0 million prepayment of the 2025 Notes in the year ended December 31, 2024) less any additional prepayments of the 2025 Notes (as defined below) at any time from 91 days prior to the maturity date through the earlier of (i) the latest maturity date of the 2025 Notes and (ii) the date on which there is no outstanding principal amount of the 2025 Notes. The TLA Credit Agreement also contains customary affirmative and negative covenants, financial covenants, representations and warranties, events of default and other provisions. As of December 31, 2024, the Company was in compliance with all financial covenants under the TLA Credit Agreement. Pacira BioSciences, Inc. | 2024 Form 10-K | Page F-23 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) The Company may elect to borrow either (i) alternate base rate borrowings or (ii) term benchmark borrowings or daily simple SOFR (as defined in the TLA Credit Agreement) borrowings. Each term loan borrowing that is an alternate base rate borrowing bears interest at a rate per annum equal to (i) the Alternate Base Rate (as defined in the TLA Credit Agreement), plus (ii) a spread based on the Company’s Senior Secured Net Leverage Ratio ranging from 2.00 % to 2.75 %. Each term loan borrowing that is a term benchmark borrowing or daily simple SOFR borrowing bears interest at a rate per annum equal to (i) the Adjusted Term SOFR Rate or Adjusted Daily Simple SOFR (as each is defined in the Credit Agreement), plus (ii) a spread based on the Company’s Senior Secured Net Leverage Ratio ranging from 3.00 % to 3.75 %. During the year ended December 31, 2024, the Company made $ 11.3 million of voluntary principal prepayments. During the year ended December 31, 2023, the Company made a scheduled principal payment of $ 2.8 million as well as $ 30.6 million of voluntary principal prepayments. As of December 31, 2024, borrowings under the TLA Term Loan consisted entirely of term benchmark borrowings at a rate of 7.43 %. 2026 Term Loan B Facility In December 2021, the Company entered into a term loan credit agreement (the “TLB Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent and the initial lender. The term loan issued under the TLB Credit Agreement (the “TLB Term Loan”) was issued at a 3.00 % discount and allowed for a single-advance term loan B facility in the principal amount of $ 375.0 million, which was secured by substantially all of the Company’s and each subsidiary guarantor’s assets. The net proceeds of the TLB Term Loan were approximately $ 363.8 million after deducting an original issue discount of $ 11.2 million. On March 31, 2023, the Company used the $ 149.6 million of net borrowings under the TLA Credit Agreement and cash on hand to repay the $ 296.9 million then-outstanding principal under the TLB Credit Agreement and concurrently terminated the TLB Credit Agreement, which resulted in a $ 16.9 million loss on early extinguishment of debt. The Company incurred a prepayment fee of 2.00 % of the outstanding principal balance of the TLB Term Loan in connection with the termination. Convertible Senior Notes Due 2029 In May 2024, the Company completed a private placement of $ 287.5 million in aggregate principal amount of its 2.125 % convertible senior notes due 2029, or 2029 Notes, and entered into an indenture with Computershare Corporate Trust, N.A., or 2029 Indenture, with respect to the 2029 Notes. The 2029 Notes accrue interest at a fixed rate of 2.125 % per year, payable semiannually in arrears on May 15 th and November 15 th of each year. The 2029 Notes mature on May 15, 2029. The total debt composition of the 2029 Notes is as follows (in thousands): December 31, 2024 2.125 % convertible senior notes due May 2029 $ 287,500 Deferred financing costs ( 8,166 ) Total debt, net of deferred financing costs $ 279,334 Holders may convert the 2029 Notes prior to the close of business on the business day immediately preceding November 15, 2028, only if certain circumstances are met, including, but not limited to, if during the previous calendar quarter, the last reported sales price of the Company’s common stock was greater than 130 % of the conversion price then applicable for at least 20 out of the last 30 consecutive trading days of the quarter. During the quarter ended December 31, 2024, the conditions for conversion were not met. On or after November 15, 2028, until the close of business on the second scheduled trading day immediately preceding May 15, 2029, holders may convert their 2029 Notes at any time. Upon conversion, holders will receive the principal amount of their 2029 Notes and any excess conversion value, calculated based on the per share volume-weighted average price for each of the 50 consecutive trading days during the observation period (as more fully described in the 2029 Indenture). For the principal, the Company will settle in cash per the terms of the 2029 Notes. For any excess conversion value, holders may receive cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s option. The initial conversion rate for the 2029 Notes is 25.2752 shares of common stock per $1,000 principal amount, which is equivalent to an initial conversion price of $ 39.56 per share of the Company’s common stock. The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. The initial conversion price of the 2029 Notes represents a premium of approximately 32.5 % to the closing sale price of $ 29.86 per share of the Company’s common stock on the Nasdaq Global Select Market on May 9, 2024, the date that the Company priced the private offering of the 2029 Notes. Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-24 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) As of December 31, 2024, the 2029 Notes had a market price of $861 per $1,000 principal amount. In the event of conversion, holders would forgo all future interest payments, any unpaid accrued interest and the possibility of further stock price appreciation. Upon the receipt of conversion requests, the settlement of the 2029 Notes will be paid pursuant to the terms of the 2029 Indenture. In the event that all of the 2029 Notes are converted, the Company would be required to repay the $ 287.5 million in principal value in cash, whereas any conversion premium would be required to be repaid in any combination of cash and shares of its common stock (at the Company’s option). Prior to the close of business on the business day immediately preceding November 15, 2028, the 2029 Notes are convertible only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2024 (and only during such calendar quarter), if the last reported sale price of the Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is equal to or greater than 130 % of the conversion price on each applicable trading day; (2) during the five business-day period after any five consecutive trading-day period (the “measurement period”) in which the trading price per $1,000 principal amount of the 2029 Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; (3) upon the occurrence of specified corporate events; or (4) upon a Company redemption. On or after November 15, 2028, until the close of business on the second scheduled trading day immediately preceding May 15, 2029, holders of the 2029 Notes may convert all or a portion of their 2029 Notes, at any time. No sinking fund is provided for the 2029 Notes. On or after May 17, 2027 and on or before the 50 th scheduled trading day immediately before the maturity date, the Company may redeem for cash all or part of the 2029 Notes if (i) the 2029 Notes are “freely tradable” (as defined in the 2029 Indenture) and any accrued and unpaid additional interest has been paid as of the date the Company sends the related notice of the redemption and (ii) the last reported sales price of the Company’s common stock exceeds 130 % of the conversion price then in effect for (1) each of at least 20 trading days (whether or not consecutive) during any 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related notice of the redemption; and (2) the trading day immediately before the date the Company sends such notice. The redemption price of each 2029 Note to be redeemed will be the principal amount of such 2029 Note, plus accrued and unpaid interest, if any. In addition, calling any 2029 Notes for redemption will constitute a make-whole fundamental change, in which case the conversion rate applicable to those 2029 Notes, if converted in connection with the redemption, will be increased in certain circumstances. Upon the occurrence of a “make-whole fundamental change” (as defined in the 2029 Indenture), subject to a limited exception for certain cash mergers, holders may require the Company to repurchase all or a portion of their 2029 Notes for cash at a price equal to 100 % of the principal amount of the 2029 Notes to be repurchased plus any accrued and unpaid interest. While the 2029 Notes are currently classified on the Company’s condensed consolidated balance sheet at December 31, 2024 as long-term debt, the future convertibility and resulting balance sheet classification of this liability is monitored at each quarterly reporting date and is analyzed dependent upon market prices of the Company’s common stock during the prescribed measurement periods. In the event that the holders of the 2029 Notes have the election to convert the 2029 Notes at any time during the prescribed measurement period, the 2029 Notes would then be considered a current obligation and classified as such. On May 9, 2024, in connection with the pricing of the 2029 Notes, and on May 10, 2024, in connection with the exercise in full by the initial purchasers of the 2029 Notes (the “Initial Purchasers”) of their option to purchase additional 2029 Notes, the Company entered into privately negotiated capped call transactions (the “Capped Call Transactions”) with certain of the Initial Purchasers of the 2029 Notes and/or their respective affiliates and/or other financial institutions (the “Option Counterparties”). The Capped Call Transactions are expected to cover, subject to anti-dilution adjustments substantially similar to those applicable to the 2029 Notes, the number of shares of the Company’s common stock underlying the 2029 Notes. The Capped Call Transactions are expected to reduce the potential dilution to the Company’s common stock upon any conversion of the 2029 Notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of converted 2029 Notes, as the case may be, upon any conversion of the 2029 Notes, with such reduction and/or offset subject to a cap. The cap price of the Capped Call Transactions will initially be approximately $ 53.75 per share, representing a premium of approximately 80 % over the closing price of $ 29.86 per share of the Company’s common stock on May 9, 2024, and is subject to certain adjustments under the terms of the Capped Call Transactions. The capped call was recorded as a reduction to additional paid-in capital at its cost of $ 26.7 million, partially offset by a $ 6.5 million deferred tax asset. The Capped Call Transactions are separate transactions entered into by the Company with the Option Counterparties, are not part of the terms of the 2029 Notes and will not affect any holder’s rights under the 2029 Notes. Holders of the 2029 Notes will not have any rights with respect to the Capped Call Transactions. Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-25 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Convertible Senior Notes Due 2025 In July 2020, the Company completed a private placement of $ 402.5 million in aggregate principal amount of 0.750 % convertible senior notes due 2025, or 2025 Notes, and entered into an indenture with Computershare Corporate Trust, N.A. (formerly Wells Fargo Bank, N.A.), or 2025 Indenture, with respect to the 2025 Notes. The 2025 Notes accrue interest at a fixed rate of 0.750 % per year, payable semiannually in arrears on February 1 st and August 1 st of each year. The 2025 Notes mature on August 1, 2025. In May 2024, the Company used part of the net proceeds from the issuance of the 2029 Notes to repurchase $ 200.0 million aggregate principal amount of the 2025 Notes in privately negotiated transactions at a discount for $ 191.4 million in cash (including accrued interest). The partial repurchase of the 2025 Notes resulted in a $ 7.5 million gain on early extinguishment of debt. The total debt composition of the 2025 Notes is as follows (in thousands): December 31, 2024 2023 0.750 % convertible senior notes due August 2025 $ 202,500 $ 402,500 Deferred financing costs ( 724 ) ( 3,906 ) Total debt, net of deferred financing costs $ 201,776 $ 398,594 The net proceeds from the issuance of the 2025 Notes were approximately $ 390.0 million, after deducting commissions and the offering expenses paid by the Company. A portion of the net proceeds from the 2025 Notes was used by the Company to repurchase $ 185.0 million in aggregate principal amount of its then-outstanding 2.375 % convertible senior notes due 2022 in privately-negotiated transactions for a total of $ 211.1 million of cash (including accrued interest). The Company’s transaction costs of approximately $ 12.5 million related to the issuance of the 2025 Notes are amortized to interest expense over the five-year term of the 2025 Notes. Holders were able to convert the 2025 Notes at any time prior to the close of business on the business day immediately preceding February 3, 2025, only under the following circumstances: (i) during any calendar quarter (and only during such calendar quarter), if the last reported sales price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the conversion price on each applicable trading day; (ii) during the five -business day period immediately after any five consecutive trading day period (the “measurement period”) in which the trading price (as defined in the 2025 Indenture) per $1,000 principal amount of notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; (iii) upon the occurrence of specified corporate events, including a merger or a sale of all or substantially all of the Company’s assets; or (iv) if the Company calls the 2025 Notes for redemption, until the close of business on the business day immediately preceding the redemption date. The conditions for conversion were not met during the calendar quarter ended December 31, 2024. As of February 3, 2025, until the close of business on the second scheduled trading day immediately preceding August 1, 2025, holders may convert their 2025 Notes at any time. Upon conversion, holders will receive the principal amount of their 2025 Notes and any excess conversion value, calculated based on the per share volume-weighted average price for each of the 40 consecutive trading days during the observation period (as more fully described in the 2025 Indenture). For both the principal and excess conversion value, holders may receive cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s option. The initial conversion rate for the 2025 Notes is 13.9324 shares of common stock per $1,000 principal amount, which is equivalent to an initial conversion price of $ 71.78 per share of the Company’s common stock. The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. The initial conversion price of the 2025 Notes represents a premium of approximately 32.5 % to the closing sale price of $ 54.17 per share of the Company’s common stock on the Nasdaq Global Select Market on July 7, 2020, the date that the Company priced the private offering of the 2025 Notes. As of December 31, 2024, the 2025 Notes had a market price of $971 per $1,000 principal amount. In the event of conversion, holders would forgo all future interest payments, any unpaid accrued interest and the possibility of further stock price appreciation. Upon the receipt of conversion requests, the settlement of the 2025 Notes will be paid pursuant to the terms Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-26 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) of the 2025 Indenture. In the event that all of the 2025 Notes are converted, the Company would be required to repay the remaining $ 202.5 million in principal value and any conversion premium in any combination of cash and shares of its common stock (at the Company’s option). Since August 1, 2023 (but, in the case of a redemption of less than all of the outstanding 2025 Notes, no later than the 40 th scheduled trading day immediately before the maturity date), the Company may redeem for cash all or part of the 2025 Notes if the last reported sale price (as defined in the 2025 Indenture) of the Company’s common stock has been at least 130 % of the conversion price then in effect for (i) each of at least 20 trading days (whether or not consecutive) during any 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related notice of redemption and (ii) the trading day immediately before the date the Company sends such notice. The redemption price will equal the sum of (i) 100 % of the principal amount of the 2025 Notes being redeemed, plus (ii) accrued and unpaid interest, including additional interest, if any, to, but excluding, the redemption date. In addition, calling the 2025 Notes for redemption will constitute a “make-whole fundamental change” (as defined in the 2025 Indenture) and will, in certain circumstances, increase the conversion rate applicable to the conversion of such notes if it is converted in connection with the redemption. No sinking fund is provided for the 2025 Notes. If the Company undergoes a fundamental change, as defined in the 2025 Indenture, subject to certain conditions, holders of the 2025 Notes may require the Company to repurchase for cash all or part of their 2025 Notes at a repurchase price equal to 100 % of the principal amount of the 2025 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, if a make-whole fundamental change occurs prior to August 1, 2025, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its notes in connection with the make-whole fundamental change. The 2025 Notes are the Company’s general unsecured obligations that rank senior in right of payment to all of its indebtedness that is expressly subordinated in right of payment to the 2025 Notes, and equal in right of payment to the Company’s unsecured indebtedness. The 2025 Notes are also effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness, and are structurally subordinated to any debt or other liabilities (including trade payables) of the Company’s subsidiaries. Prior to January 1, 2022, under the previous ASC 470-20, Debt with Conversion and Other Options , an entity used to separately account for the liability and equity components of convertible debt instruments that may be settled entirely or partially in cash upon conversion in a manner that reflects the issuer’s economic interest cost. The liability component of the instrument used to be valued in a manner that reflected the market interest rate for a similar nonconvertible instrument at the date of issuance. The initial carrying value of the liability component of $ 314.7 million was calculated using a 5.78 % assumed borrowing rate. The equity component of $ 87.8 million, which represented the conversion option, was determined by deducting the fair value of the liability component from the par value of the 2025 Notes and was recorded in additional paid-in capital on the consolidated balance sheet at the issuance date. The equity component used to be treated as a discount on the liability component of the 2025 Notes, which was amortized over the five-year term of the 2025 Notes using the effective interest rate method. Resulting from ASU 2020-06, ASC 470-20 was revised effective January 1, 2022 which eliminated the requirement to separately account for the embedded conversion features that are not clearly and closely related to the debt, that meet the definition of a derivative and that do not qualify for the scope exception from derivative accounting and convertible debt instruments issued with substantial premiums for which the premiums were recorded as paid in capital. Effective January 1, 2022, the 2025 Notes debt discount carrying value of $ 64.7 million was eliminated and there was a $ 1.7 million increase in deferred financing costs offset by additional paid-in capital, accumulated deficit and deferred tax assets. The 2025 Notes do not contain any financial or operating covenants or any restrictions on the payment of dividends, the issuance of other indebtedness or the issuance or repurchase of securities by the Company. The 2025 Indenture contains customary events of default with respect to the 2025 Notes, including that upon certain events of default, 100 % of the principal and accrued and unpaid interest on the 2025 Notes will automatically become due and payable. Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-27 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Convertible Senior Notes Due 2024 Assumed from the Flexion Acquisition Prior to the Flexion Acquisition, in May 2017, Flexion issued an aggregate of $ 201.3 million principal amount of 3.375 % convertible senior notes due May 1, 2024 (the “Flexion 2024 Notes”), pursuant to an indenture between Flexion and Computershare Corporate Trust, N.A. (formerly Wells Fargo Bank, N.A.), as trustee (the “Flexion Trustee”), as supplemented by the First Supplemental Indenture, dated as of November 19, 2021, between Flexion and the Flexion Trustee. Interest was payable semi-annually on May 1 st and November 1 st of each year. Upon the Flexion Acquisition, the principal was assumed and recorded at fair value by the Company. In December 2021, as a result of the Flexion Acquisition and in accordance with the indenture governing the Flexion 2024 Notes, Flexion provided a Fundamental Change Company Notice (as defined in this indenture) and offered to repurchase all of the outstanding Flexion 2024 Notes at a repurchase price in cash equal to 100 % of the principal amount plus accrued and unpaid interest. On January 7, 2022, following the expiration of the offer to purchase, the Company accepted the $ 192.6 million aggregate principal amount of Flexion 2024 Notes that were validly tendered (and not validly withdrawn). No Flexion 2024 Notes were converted in connection with the Notice. The remaining principal of $ 8.6 million was repaid at maturity on May 1, 2024. Convertible Senior Notes Due 2022 In March 2017, the Company completed a private placement of $ 345.0 million in aggregate principal amount of 2.375 % convertible senior notes due 2022, or 2022 Notes, and entered into an indenture with respect to the 2022 Notes. On April 1, 2022, the 2022 Notes matured and the Company settled the remaining outstanding principal balance of $ 160.0 million and a conversion premium of $ 4.8 million through a cash payment of $ 156.9 million and the issuance of 101,521 shares of the Company’s common stock, which increased additional paid-in capital by $ 3.0 million. Interest Expense The following table sets forth the total interest expense recognized in the periods presented (dollar amounts in thousands): Year Ended December 31, 2024 2023 2022 Contractual and other interest expense $ 15,447 $ 20,082 $ 36,880 Amortization of debt issuance costs 3,130 2,996 4,400 Amortization of debt discount 92 752 2,807 Capitalized interest and other (Note 6) ( 2,100 ) ( 3,524 ) ( 4,111 ) Total $ 16,569 $ 20,306 $ 39,976 Effective interest rate on total debt 2.97 % 3.74 % 5.47 % NOTE 11— FINANCIAL INSTRUMENTS Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or be paid to transfer a liability in the principal or most advantageous market in an orderly transaction. To increase consistency and comparability in fair value measurements, the FASB established a three-level hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of fair value measurements are: • Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. • Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. • Level 3: Unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-28 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) The carrying value of financial instruments including cash and cash equivalents, accounts receivable and accounts payable approximate their respective fair values due to the short-term nature of these items. The fair value of the Company’s convertible senior notes and its TLA Term Loan are calculated utilizing market quotations from an over-the-counter trading market for these notes (Level 2). The fair value of the Company’s acquisition-related contingent consideration is reported at fair value on a recurring basis (Level 3). The carrying amounts of equity investments and convertible notes receivable without readily determinable fair values have not been adjusted for either an impairment or upward or downward adjustments based on observable transactions, whereas an equity investment was fully impaired during the year ended December 31, 2022. At December 31, 2024, the carrying values and fair values of the Company’s financial assets and liabilities were as follows (in thousands): Carrying Value Fair Value Measurements Using Level 1 Level 2 Level 3 Financial Assets and Financial Liabilities Measured at Fair Value on a Recurring Basis: Financial Assets: Equity investments $ 15,877 $ — $ — $ 15,877 Convertible notes receivable $ 11,898 $ — $ — $ 11,898 Financial Liabilities: Acquisition-related contingent consideration $ 20,241 $ — $ — $ 20,241 Financial Liabilities Measured at Amortized Cost: Term loan A facility due March 2028 $ 104,211 $ — $ 104,786 $ — 2.125 % convertible senior notes due 2029 (1) $ 279,334 $ — $ 247,609 $ — 0.750 % convertible senior notes due 2025 (2) $ 201,776 $ — $ 196,678 $ — (1) The closing price of the Company’s common stock as reported on the Nasdaq Global Select Market was $ 18.84 per share on December 31, 2024, compared to a conversion price of $ 39.56 per share. At December 31, 2024, as the conversion price was above the stock price, the requirements for conversion have not been met. (2) The closing price of the Company’s common stock as reported on the Nasdaq Global Select Market was $ 18.84 per share on December 31, 2024, compared to a conversion price of $ 71.78 per share. At December 31, 2024, as the conversion price was above the stock price, the requirements for conversion have not been met. The maximum conversion on the principal that could have been due on the 2025 Notes is 2.8 million shares of the Company’s common stock, which assumes no increase in the conversion rate for certain corporate events. Certain assets and liabilities are measured at fair value on a non-recurring basis, including assets and liabilities acquired in a business combination and long-lived assets, which would be recognized at fair value if deemed impaired or if reclassified as assets held for sale. The fair value in these instances would be determined using Level 3 inputs. Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis Equity and Convertible Note Investments The Company holds strategic investments in clinical and preclinical stage privately-held biotechnology companies in the form of equity and convertible note investments. The following investments have no readily determinable fair value and are recorded at cost minus impairment, if any, plus or minus observable price changes of identical or similar investments (in thousands): Equity Investments Convertible Notes Receivable Total Balance at December 31, 2022 $ 15,877 $ 5,315 $ 21,192 Purchases — 6,758 6,758 Foreign currency adjustments — 61 61 Balance at December 31, 2023 15,877 12,134 28,011 Foreign currency adjustments — ( 236 ) ( 236 ) Balance at December 31, 2024 $ 15,877 $ 11,898 $ 27,775 Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-29 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) During the year ended December 31, 2022, an impairment of an equity investment of $ 10.0 million was recorded in other, net in the consolidated statements of operations. Acquisition-Related Contingent Consideration The Company has recognized contingent consideration related to the Flexion Acquisition in the amount of $ 20.2 million and $ 24.7 million as of December 31, 2024 and 2023, respectively. Refer to Note 17, Contingent Consideration Gains, Restructuring Charges and Other, for more information. The Company’s contingent consideration obligations are recorded at their estimated fair values and are revalued each reporting period if and until the related contingencies are resolved. The Company has measured the fair value of its contingent consideration using a Monte Carlo simulation. These inputs include, as applicable, estimated forecasts of revenue and costs and the discount rates used to calculate the present value of estimated future payments. Significant changes may increase or decrease the probabilities of achieving the related commercial and regulatory events, shorten or lengthen the time required to achieve such events, or increase or decrease estimated forecasts. In November 2021, the Company completed the Flexion Acquisition, which provided for contingent consideration related to contingent value rights that were issued to Flexion shareholders and certain equity award holders which could aggregate up to a total of $ 372.3 million if certain regulatory and commercial milestones are met. The aggregate amount was initially $ 425.5 million prior to the Company’s September 2022 decision to formally discontinue further development of Flexion’s investigational product candidate, PCRX-301. The Company’s obligation to make milestone payments is limited to those milestones achieved through December 31, 2030, and are to be paid within 60 days of the end of the fiscal quarter of achievement. For the year ended December 31, 2024, the Company recorded gai ns of $ 4.5 million due to adjustments reflecting the probability of achieving the remaining Flexion regulatory milestone by December 31, 2030—the milestone expiration date, partially offset by revisions to the Company’s weighted average cost of capital and the latest discount rates. For the year ended December 31, 2023 , the Company recorded gai ns of $ 3.4 million due to a decrease in the fair value of the Flexion contingent consideration. The decrease was primarily due to adjustments in the assumption for the long-term forecasts which reduced the probability of meeting the sales-based contingent consideration milestones by December 31, 2030—the expiration date for achieving the milestones. The impact of this assumption on the fair value was partially offset by a decrease to the assumed discount rate based on a significant improvement in the Company’s incremental borrowing rate resulting from the TLA Credit Agreement entered into in March 2023. These gains were recorded as contingent consideration gains, restructuring charges and other in the consolidated statements of operations. At December 31, 2024, the weighted average discount rate was 7.9 %. The following table includes the key assumptions used in the valuation of the Company’s contingent consideration: Assumption Ranges Utilized as of December 31, 2024 Discount rates 7.8 % to 8.1 % Probability of payment for remaining regulatory milestones 0 % The change in the Company’s contingent consideration recorded at fair value using Level 3 measurements is as follows (in thousands): Contingent Consideration Fair Value Balance at December 31, 2022 $ 28,122 Fair value adjustments and accretion ( 3,424 ) Balance at December 31, 2023 24,698 Fair value adjustments and accretion ( 4,457 ) Balance at December 31, 2024 $ 20,241 Available-for-Sale Investments Short-term investments consist of asset-backed securities collateralized by credit card receivables, investment grade commercial paper and corporate, federal agency, government and Yankee bonds with maturities greater than three months, but less than one year. Noncurrent investments consist of asset-backed securities collateralized by credit card receivables and contain maturities greater than one year but less than three years . Net unrealized gains and losses (excluding credit losses, if Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-30 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) any) from the Company’s short-term investments are reported in other comprehensive (loss) income. At December 31, 2024 and 2023, all of the Company’s short-term and noncurrent investments are classified as available-for-sale investments and are determined to be Level 2 instruments, with the exception of U.S. government bonds, which are measured at fair value using standard industry models with observable inputs. The fair value of the commercial paper is measured based on a standard industry model that uses the three-month U.S. Treasury bill rate as an observable input. The fair value of the asset-backed securities and corporate bonds is principally measured or corroborated by trade data for identical issues in which related trading activity is not sufficiently frequent to be considered a Level 1 input or that of comparable securities. The fair value of U.S. government bonds is based on level 1 trading activity. At the time of purchase, all available-for-sale investments had an “A” or better rating by Standard & Poor’s. The following summarizes the Company’s available-for-sale investments at December 31, 2024 and 2023 (in thousands): December 31, 2024 Investments: Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (Level 2) Current: Asset-backed securities $ 21,626 $ 43 $ — $ 21,669 Commercial paper 142,556 120 ( 55 ) 142,621 Corporate bonds 32,502 25 ( 5 ) 32,522 U.S. federal agency bonds 5,996 8 — 6,004 Yankee bond 5,012 13 — 5,025 Total $ 207,692 $ 209 $ ( 60 ) $ 207,841 December 31, 2023 Investments: Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (Level 1) Fair Value (Level 2) Current: Asset-backed securities $ 9,539 $ 1 $ — $ — $ 9,540 Commercial paper 77,941 103 — — 78,044 U.S. federal agency bonds 22,849 — ( 29 ) — 22,820 U.S. government bonds 14,899 — ( 20 ) 14,879 — Subtotal 125,228 104 ( 49 ) 14,879 110,404 Noncurrent: Asset-backed securities 2,403 7 — — 2,410 Subtotal 2,403 7 — — 2,410 Total $ 127,631 $ 111 $ ( 49 ) $ 14,879 $ 112,814 At December 31, 2024, there were no investments available for sale that were materially less than their amortized cost. The Company elects to recognize its interest receivable separate from its available-for-sale investments. At December 31, 2024 and 2023, the interest receivable from its available-for-sale investments recognized in prepaid expenses and other current assets was $ 0.5 million and $ 0.4 million, respectively. Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term and long-term available-for-sale investments and accounts receivable. The Company maintains its cash and cash equivalents with high-credit quality financial institutions. Such amounts may exceed federally-insured limits. As of December 31, 2024, three wholesalers each accounted for over 10% of the Company’s accounts receivable, at 34 %, 18 % and 16 %. As of December 31, 2023, three wholesalers each accounted for over 10% of the Company’s accounts receivable, at 37 %, 19 % and 16 %. For additional information regarding the Company’s wholesalers, see Note 2 , Summary of Significant Accounting Policies . EXPAREL and ZILRETTA revenues are primarily derived from major wholesalers and specialty distributors that generally have significant cash resources. The Company performs ongoing credit evaluations of its customers as warranted and generally does not require collateral. Allowances for credit losses on the Company’s accounts receivable are maintained based on historical payment patterns, current and estimated future economic conditions, aging of Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-31 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) accounts receivable and its write-off history. As of December 31, 2024, there were $ 0.4 million of allowances for credit losses on its accounts receivable. As of December 31, 2023, the Company did not deem any allowances for credit losses on its accounts receivable necessary. NOTE 12— STOCKHOLDERS’ EQUITY Common Stock The Company is authorized to issue up to 250,000,000 shares of common stock, of which 47,077,844 shares were issued and 46,240,604 shares were outstanding at December 31, 2024 and 46,481,174 shares were issued and outstanding at December 31, 2023. Preferred Stock The Company is authorized to issue up to 5,000,000 shares of preferred stock. No preferred stock was issued or outstanding at either December 31, 2024 or 2023. Accumulated Other Comprehensive Income (Loss) The following table illustrates the changes in the balances of the Company’s accumulated other comprehensive income (loss) for the periods presented (in thousands): Net Unrealized Gains (Losses) From Available-For-Sale Investments Unrealized Foreign Currency Translation Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2021 $ 139 $ 28 $ 167 Net unrealized loss on investments, net of tax (1) ( 662 ) — ( 662 ) Foreign currency translation adjustments — 115 115 Balance at December 31, 2022 ( 523 ) 143 ( 380 ) Net unrealized gain on investments, net of tax (1) 647 — 647 Foreign currency translation adjustments — ( 20 ) ( 20 ) Balance at December 31, 2023 124 123 247 Net unrealized gain on investments, net of tax (1) 66 — 66 Foreign currency translation adjustments — 30 30 Balance at December 31, 2024 $ 190 $ 153 $ 343 (1) Net of a nominal tax expense for the year ended December 31, 2024, and a $( 0.2 ) million and $ 0.2 million tax (expense) benefit for the years ended December 31, 2023 and 2022, respectively. Stock Repurchase Program On May 7, 2024, the Company announced that its board of directors approved a share repurchase program, effective immediately, which authorizes the Company to repurchase up to an aggregate of $ 150.0 million of its outstanding common stock. Repurchases under this program may be made at management’s discretion on the open market or through privately negotiated transactions. The share repurchase program may be suspended or discontinued at any time by the Company and has an expiration date of December 31, 2026. On May 9, 2024, concurrently with the pricing of the offering of the 2029 Notes, the Company entered into separate, privately negotiated agreements with certain of the initial purchasers of the 2029 Notes or their respective affiliates and/or certain other financial institutions to repurchase 837,240 shares of the Company’s common stock for a total cost of $ 25.1 million, inclusive of $ 0.1 million of accrued excise tax. The repurchase occurred on May 10, 2024. Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-32 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE 13— STOCK PLANS Stock Incentive Plans The Pacira BioSciences, Inc. Amended and Restated 2011 Stock Incentive Plan, or 2011 Plan, was originally adopted by its board of directors and approved by its stockholders in June 2011 and was amended and restated in June 2014, June 2016, June 2019, June 2021 and June 2023. The June 2023 amendment and restatement and approval by the Company’s stockholders increased the number of shares of common stock authorized for issuance as equity awards under the 2011 Plan by 3,300,000 shares, which allows for the granting of incentive stock options, non-statutory stock options, restricted stock units and other stock-based awards. In April 2014, the Company’s board of directors approved and adopted the Company’s 2014 Inducement Plan (the “2014 Inducement Plan”), pursuant to which awards could be made to new employees under the 2014 Inducement Plan for up to 175,000 shares of the Company’s common stock as a material inducement to such persons entering into employment with the Company. In December 2023, the board of directors, upon recommendation of the compensation committee of the board of directors, adopted the Pacira BioSciences, Inc. Amended and Restated 2014 Inducement Plan (as amended and restated, the “First A&R Inducement Plan”) such that, among other things, an additional 642,093 shares of the Company’s common stock would be available for grant. In September 2024, the board of directors, upon the recommendation of the compensation committee of the board of directors, adopted the Pacira BioSciences, Inc. Amended and Restated 2014 Inducement Plan (as amended and restated, the “Second A&R Inducement Plan”) to add an additional 707,907 shares of the Company’s common stock to bring the total amount of shares reserved for issuance under the Inducement Plan to 1,525,000 , of which, as of December 31, 2024, 125,107 shares remained available for issuance, and the term of the Inducement Plan was extended such that it will now expire on September 3, 2034. In January 2025, the board of directors, upon the recommendation of the compensation committee of the board of directors, adopted the Pacira BioSciences, Inc. Amended and Restated 2014 Inducement Plan (as amended and restated to date, the “Inducement Plan”) to add an additional 785,000 shares of the Company’s common stock to bring the total amount of shares reserved for issuance under the Inducement Plan to 2,310,000 and extend the term of the Inducement Plan such that it will now expire on January 18, 2035. The Inducement Plan allows for the granting of nonstatutory stock options, restricted stock awards and other stock-based awards. The Inducement Plan was adopted by the board of directors without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules. In accordance with Rule 5635(c)(4) of the Nasdaq Listing Rules, awards under the Inducement Plan may only be made to an employee who has not previously been an employee or member of the board of directors or the board of directors or any parent or subsidiary, or following a bona fide period of non-employment by the Company or a parent or subsidiary, if he or she is granted such award in connection with his or her commencement of employment with the Company or a subsidiary and such grant is an inducement material to his or her entering into employment with the Company or such subsidiary. Inducement Awards From time to time, the board of directors, upon recommendation of the compensation committee, has approved individually negotiated grants of options and restricted stock units for certain of the Company’s officers in connection with their respective appointments, in each case, pursuant to the inducement plan in effect at such time. Equity Grants The Company’s stock option grants have an exercise price equal to the closing price of the Company’s common stock on the date of grant, generally have a 10-year contractual term and vest in increments (typically over four years from the date of grant, although the Company may occasionally grant stock options with different vesting terms, including grants made to its non-employee directors). The Company also grants RSUs to employees generally vesting in equal, annual increments over four years from the date of grant, except for such grants made to non-employees and non-employee directors. The Company uses authorized but unissued shares of its common stock to satisfy its obligations under these plans. Employee Stock Purchase Plan The Company’s Amended and Restated 2014 Employee Stock Purchase Plan, or ESPP, was originally adopted by its board of directors in April 2014, approved by the Company’s stockholders in June 2014 and amended and restated in June Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-33 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 2022. The June 2022 amendment and restatement increased the number of shares of common stock that may be sold under the plan by an additional 500,000 shares from the originally provided 500,000 shares. The purpose of the ESPP is to provide a vehicle for eligible employees to purchase shares of the Company’s common stock at a discounted price and to help retain and motivate current employees as well as attract new talent. Under the ESPP, up to 1,000,000 shares of common stock may be sold. The ESPP expires in June 2032. The ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code, or IRC. The maximum fair market value of stock which can be purchased by a participant in a calendar year is $ 25,000 . Six-month offering periods begin on January 1 st and July 1 st of each year. During an offering period, eligible employees have the opportunity to elect to purchase shares of the Company’s common stock on the purchase dates of June 30 and December 31 (or the last trading day of an offering period). The per share purchase price is equal to 85 % of the fair market value of the Company’s common stock on either the offering date or the purchase date, whichever is lesser. During the year ended December 31, 2024, 114,405 shares were purchased and issued through the ESPP. The following tables contain information about the Company’s stock incentive plans at December 31, 2024: Stock Incentive Plan Awards Reserved For Issuance Awards Issued Awards Available For Grant 2011 Plan 17,731,701 15,659,387 2,072,314 2014 Inducement Plan (1) 1,525,000 1,399,893 125,107 Total 19,256,701 17,059,280 2,197,421 Employee Stock Purchase Plan Shares Reserved For Purchase Shares Purchased Shares Available For Purchase ESPP 1,000,000 685,071 314,929 (1) In January 2025, the board of directors approved an amendment to the 2014 Inducement Plan to authorize an additional 785,000 shares reserved for issuance. Stock-Based Compensation Compensation expense for stock options and RSUs is based on the estimated grant date fair value of an award recognized over the requisite service period on a straight-line expense attribution method. Compensation expense for ESPP share options is based on the estimated grant date fair value of the ESPP shares and the number of shares that can be purchased as of the grant date, which is recognized as expense on a straight-line expense attribution method over the length of an offering period. The Company recognized stock-based compensation expense in its consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022 as follows (in thousands): Year Ended December 31, 2024 2023 2022 Cost of goods sold $ 5,331 $ 5,537 $ 5,967 Research and development 7,381 8,694 6,594 Selling, general and administrative 34,857 33,664 35,531 Contingent consideration gains, restructuring charges and other 3,602 — — Total $ 51,171 $ 47,895 $ 48,092 Stock-based compensation from: Stock options $ 21,730 $ 24,005 $ 26,800 RSUs 28,656 22,974 20,310 ESPP share options 785 916 982 Total $ 51,171 $ 47,895 $ 48,092 Related income tax benefit $ 10,506 $ 10,186 $ 10,219 Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-34 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) The following table summarizes the Company’s stock option activity and related information for the year ended December 31, 2024: Number of Stock Options Weighted Average Exercise Price (Per Share) Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in Thousands) Outstanding at December 31, 2023 7,079,748 $ 49.40 6.03 $ 863 Granted 1,472,223 27.81 Forfeited ( 292,061 ) 44.61 Expired ( 1,414,292 ) 59.15 Outstanding at December 31, 2024 6,845,618 $ 42.95 5.72 $ 804 Exercisable at December 31, 2024 4,420,578 $ 47.50 4.32 $ — Vested and expected to vest as of December 31, 2024 6,845,618 $ 42.95 5.72 $ 804 As of December 31, 2024, $ 30.8 million of total unrecognized compensation cost related to unvested stock options is expected to be recognized over a remaining weighted average period of 2.4 years. The Company’s stock options have a maximum expiration date of ten years from the date of grant. The weighted average fair value of stock options granted for the years ended December 31, 2024, 2023 and 2022 was $ 11.77 , $ 15.92 and $ 25.60 per share, respectively. The fair values of stock options granted were estimated using the Black-Scholes model with the following weighted average assumptions: Year Ended December 31, Black-Scholes Weighted Average Assumption 2024 2023 2022 Expected dividend yield None None None Risk-free interest rate 3.55 % - 4.58 % 3.05 % - 4.81 % 1.37 % - 4.17 % Expected volatility 40.6 % 41.3 % 45.1 % Expected term of options 5.15 years 4.90 years 4.92 years The following table summarizes the Company’s RSU activity and related information for the year ended December 31, 2024: Number of Restricted Stock Units Weighted Average Grant Date Fair Value (Per Share) Aggregate Intrinsic Value (in Thousands) Unvested at December 31, 2023 1,364,618 $ 47.66 $ 46,042 Granted 2,198,365 27.29 Vested ( 500,785 ) 48.78 Forfeited ( 292,470 ) 40.04 Unvested and expected to vest as of December 31, 2024 2,769,728 $ 32.07 $ 52,182 As of December 31, 2024, $ 70.6 million of total unrecognized compensation cost related to unvested RSUs is expected to be recognized over a weighted average period of 1.7 years. The Company’s RSUs have a maximum vest date of four years from the date of grant. The fair values of RSUs awarded are equal to the closing price of the Company’s common stock on the date of grant. The fair values of the ESPP share options granted were estimated using the Black-Scholes model with the following weighted average assumptions: Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-35 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Year Ended December 31, Black-Scholes Weighted Average Assumption 2024 2023 2022 ESPP share option fair value $ 8.20 - $ 8.25 $ 10.00 - $ 10.34 $ 15.26 - $ 15.86 Expected dividend yield None None None Risk-free interest rate 5.33 % - 5.26 % 4.77 % - 5.53 % 0.22 % - 2.52 % Expected volatility 40.5 % 35.4 % 39.5 % Expected term of ESPP share options 6 months 6 months 6 months NOTE 14— NET (LOSS) INCOME PER COMMON SHARE Potential common shares are excluded from the diluted net (loss) income per common share computation to the extent that they would be antidilutive. Since the Company reported a net loss for the year ended December 31, 2024, no potentially dilutive securities were included in the computation of diluted net loss per share for that period. As discussed in Note 10, Debt , the Company has the option to pay cash for the aggregate principal amount due upon the conversion of its 2025 Notes. For additional information on the Company’s computation of its net (loss) income per common share, see Note 2, Summary of Significant Accounting Policies . The following table sets forth the computation of basic and diluted net (loss) income per common share for the years ended December 31, 2024, 2023 and 2022 (in thousands, except per common share amounts): Year Ended December 31, 2024 2023 2022 Numerator: Net (loss) income—basic $ ( 99,560 ) $ 41,955 $ 15,909 2025 Notes if-converted method adjustment — 4,114 — Adjusted net (loss) income—diluted $ ( 99,560 ) $ 46,069 $ 15,909 Denominator: Weighted average common shares outstanding—basic 46,245 46,222 45,521 Computation of diluted securities: 2025 Notes if-converted method adjustment — 5,608 — Dilutive effect of stock options — 51 787 Dilutive effect of RSUs — 96 226 Dilutive effect of ESPP share options — 2 4 Weighted average common shares outstanding—diluted 46,245 51,979 46,538 Net (loss) income per common share: Basic net (loss) income per common share $ ( 2.15 ) $ 0.91 $ 0.35 Diluted net (loss) income per common share $ ( 2.15 ) $ 0.89 $ 0.34 The following table summarizes the outstanding stock options, RSUs, ESPP share options and convertible senior notes that were excluded from the diluted net (loss) income per common share calculation because the effects of including these potential shares were antidilutive in the periods presented (in thousands): Year Ended December 31, 2024 2023 2022 Weighted average number of stock options 7,217 6,251 2,821 2025 Notes 3,843 — 6,206 Weighted average number of RSUs 2,139 1,033 417 Weighted average ESPP share options 54 20 7 Total 13,253 7,304 9,451 Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-36 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE 15— INCOME TAXES (Loss) income before income taxes and the related tax expense (benefit) is as follows (in thousands): Year Ended December 31, 2024 2023 2022 (Loss) income before income taxes: Domestic $ ( 65,325 ) $ 66,257 $ 21,068 Foreign 2,219 ( 4,556 ) ( 7,766 ) Total (loss) income before income taxes $ ( 63,106 ) $ 61,701 $ 13,302 Current taxes: Federal $ 9,295 $ 1,686 $ — State 6,527 2,444 5,309 Foreign 11 1 29 Total current taxes $ 15,833 $ 4,131 $ 5,338 Deferred taxes: Federal $ 18,784 $ 16,790 $ ( 2,781 ) State 1,837 ( 1,175 ) ( 5,164 ) Total deferred taxes $ 20,621 $ 15,615 $ ( 7,945 ) Total income tax expense (benefit) $ 36,454 $ 19,746 $ ( 2,607 ) A reconciliation of income tax expense (benefit) at the U.S. federal statutory rate to the provision for income taxes is as follows (dollars in thousands): Year Ended December 31, 2024 2023 2022 Amount Tax Rate Amount Tax Rate Amount Tax Rate U.S. statutory rate applied to (loss) income before taxes $ ( 13,252 ) 21.00 % $ 12,957 21.00 % $ 2,793 21.00 % State taxes 7,028 ( 11.14 ) % 1,770 2.87 % 508 3.82 % Foreign taxes ( 104 ) 0.16 % ( 1,798 ) ( 2.91 ) % 248 1.86 % Change in valuation allowance ( 589 ) 0.93 % 2,192 3.55 % 2,871 21.58 % Executive compensation 2,426 ( 3.84 ) % 3,171 5.14 % 2,188 16.45 % Stock-based compensation 9,918 ( 15.72 ) % 4,070 6.60 % ( 2,715 ) ( 20.41 ) % Tax credits ( 5,674 ) 8.99 % ( 3,327 ) ( 5.39 ) % ( 3,245 ) ( 24.39 ) % Reserves 2,661 ( 4.22 ) % 389 0.63 % 984 7.40 % Goodwill impairment 34,281 ( 54.32 ) % — — % — — % Non-Taxable or Nondeductible Items: Interest expense — — % — — % ( 3,477 ) ( 26.14 ) % Contingent consideration ( 936 ) 1.48 % ( 719 ) ( 1.17 ) % ( 3,841 ) ( 28.88 ) % Nondeductible expenses 564 ( 0.89 ) % 975 1.58 % 1,164 8.75 % Other 131 ( 0.20 ) % 66 0.10 % ( 85 ) ( 0.64 ) % Income tax expense (benefit) and effective tax rate $ 36,454 ( 57.77 ) % $ 19,746 32.00 % $ ( 2,607 ) ( 19.60 ) % Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-37 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Deferred taxes reflect the tax effects of the differences between the amounts recorded as assets and liabilities for financial reporting purposes and the comparable amounts recorded for income tax purposes. At each reporting date, the Company considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. The Company records a valuation allowance on U.S. capital losses and on foreign net deferred tax balances as it is more-likely-than-not the tax benefits are not realizable. Significant components of the Company’s deferred tax assets and liabilities at December 31, 2024 and 2023 are as follows (in thousands): December 31, 2024 2023 Deferred tax assets: Net operating loss carryforwards $ 124,536 $ 132,265 Federal and state credits 12,351 24,018 Accruals and reserves 16,114 18,936 Stock based compensation 23,078 27,520 Inventory reserves 2,639 2,149 Interest 5,716 — Other 5,126 7,143 Total deferred tax assets 189,560 212,031 Deferred tax liabilities: Depreciation and amortization ( 34,368 ) ( 42,026 ) Total deferred tax liabilities ( 34,368 ) ( 42,026 ) Deferred tax assets, net of deferred tax liabilities 155,192 170,005 Less: valuation allowance ( 24,816 ) ( 25,520 ) Net deferred tax assets $ 130,376 $ 144,485 On May 9, 2024, and on May 10, 2024, the Company entered into privately negotiated Capped Call Transactions related to the 2029 Notes. See Note 10, Debt, for further discussion of the Capped Call Transactions. The capped call was recorded as a reduction to additional paid-in-capital at its cost of $ 26.7 million. A related deferred tax asset of $ 6.5 million was recorded with an offset to additional paid-in-capital and will be amortized as a current tax deduction over a 60-month period. As of December 31, 2024, $ 5.7 million of the related capped call deferred tax asset remains in the Company’s deferred tax balances. As of December 31, 2024, the Company’s federal net operating losses, or NOLs, and federal tax credit carryforwards totaled $ 451.2 million and $ 4.9 million, respectively. The Company also had state NOLs and state tax credit carryforwards of $ 499.4 million and $ 7.5 million, respectively, which are subject to change on an annual basis due to variations in the Company’s annual state apportionment factors. The state NOLs will begin to expire in 2028. The Company had non-U.S. NOLs of $ 3.5 million at December 31, 2024, which do not expire. Since the Company had cumulative changes in ownership of more than 50 % within a three-year period, under IRC sections 382 and 383, the Company’s ability to use certain NOLs, tax attributes and credit carryforwards to offset taxable income or tax will be limited. Such ownership changes were triggered by the initial acquisition of the Company’s stock in 2007 as well as cumulative ownership changes arising as a result of the completion of the Company’s initial public offering, other financing transactions and the Flexion Acquisition in 2021. As a result of these ownership changes, the Company has $ 451.2 million of federal NOLs subject to annual limitations and are available as follows: $ 32.5 million will become available in 2025, $ 28.3 million in 2026, $ 6.9 million in 2027 and thereafter. In accordance with ASC Topic 740, the Company establishes a valuation allowance for deferred tax assets that, in its judgment, are not more-likely-than-not realizable. These judgments are based on projections of future income—including tax-planning strategies—by individual tax jurisdictions. In each reporting period, the Company assesses the likelihood that its deferred tax assets will be realized and determines if adjustments to its valuation allowance are appropriate. The Company had a net decrease in its valuation allowance of $ 0.7 million in the year ended December 31, 2024 and a net increase of $ 2.6 million for the year ended December 31, 2023. The $ 0.7 million net decrease in the current year valuation allowance is primarily Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-38 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) related to foreign net deferred tax assets. The Company continues to maintain a full valuation allowance against foreign net deferred tax assets since it is more-likely-than-not the tax benefit related to the foreign losses are not realizable. In 2024 , the Company recorded a $ 2.7 million net increase to unrecognized tax benefits, or UTBs of which a $ 1.5 million increase is related to tax credit and filing positions taken during the year, and a $ 1.2 million increase related to prior year tax credit and filing positions. The Company’s UTB liability at December 31, 2024 was $ 9.4 million. The change in the Company’s UTBs for the year ended December 31, 2024 is summarized as follows (in thousands): Unrecognized Tax Benefit Balance at December 31, 2022 $ 6,322 Additions for current year positions 553 Reduction for prior year positions ( 164 ) Balance at December 31, 2023 6,711 Additions for prior year positions 1,189 Additions for current year positions 1,472 Balance at December 31, 2024 $ 9,372 The UTBs as of December 31, 2024, 2023 and 2022 would, if subsequently recognized, favorably impact the effective income tax rate. The Company regularly assesses the likelihood of additional tax assessments by jurisdiction and, if necessary, adjusts its reserve for UTBs based on new information or developments. Of the UTB balance at December 31, 2024, $ 4.3 million was recorded as a reduction to the Company’s deferred tax assets. The remaining $ 5.1 million of the UTB balance at December 31, 2024 was recorded to long-term income taxes payable within other liabilities on the consolidated balance sheet and relates to both the utilization of tax credits and filing positions. Any potential deficiency would not result in a tax liability, therefore, no interest or penalties were recognized in income tax expense for the years ended December 31, 2024, 2023 and 2022 for positions recorded to the Company’s deferred tax assets and long-term income taxes payable. The Company is currently subject to audit by the U.S. Internal Revenue Service, or IRS, for the years 2019 through 2024, and state tax jurisdictions for the years 2018 through 2024. However, the IRS or states may still examine and adjust an NOL arising from a closed year to the extent it is utilized in a year that remains subject to audit. The Company’s previously filed income tax returns are not presently under audit by the IRS. The Company is under a state audit for the years 2020 through 2021. As of December 31, 2024, $ 0.7 million of current federal income taxes payable were recorded to other accrued operating expenses within the accrued expenses line item of the consolidated balance sheets. NOTE 16— EMPLOYEE BENEFIT PLANS 401(k) Salary Savings Plan The Company’s 401(k) Salary Savings Plan, or 401(k) Plan, is a deferred salary arrangement under section 401(k) of the IRC. Under the 401(k) Plan, participating U.S. employees may defer a portion of their pre-tax earnings which are eligible for a discretionary percentage match as defined in the 401(k) Plan and determined by the Company’s board of directors (up to the maximum amount permitted by the IRC). The Company recognized $ 5.8 million, $ 4.8 million and $ 3.4 million of related compensation expense for its 401(k) Plan discretionary match for the years ended December 31, 2024, 2023 and 2022, respectively. Deferred Compensation Plan The Company intends that its Deferred Compensation Plan, or DCP, constitute, and be construed and administered as, an unfunded plan of deferred compensation within the meaning of the Employee Retirement Income Security Act of 1974, as amended, and the IRC of 1986, as amended, under which eligible participants may elect to defer the receipt of current compensation. Eligible participants include select management and highly compensated employees of the Company, including the Company’s named executive officers. Pursuant to the DCP, subject to any minimum and maximum deferral requirements that the administrator of the DCP may establish, participants may elect to defer their base salary and annual incentive awards. In Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-39 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) addition to elective deferrals, the DCP permits the Company to make matching and certain other discretionary contributions to the participants. The company contributes assets to a rabbi trust to accumulate funds to pay benefits under the DCP. Funds held in the rabbi trust must be used to pay benefits to DCP participants, except in the case of the Company’s bankruptcy or insolvency, in which case, they become subject to claims by the Company’s creditors. The Company recognized a $ 0.1 million credit to the related compensation expense for the Company’s discretionary match due to forfeitures related to the departure of executives exceeding its discretionary match for the year ended December 31, 2024. The Company recognized $ 0.3 million of related compensation expense for its DCP discretionary match for each of the years ended December 31, 2023 and 2022. The carrying value of assets held in the rabbi trust equaled the DCP liability as of both December 31, 2024 and 2023. As of December 31, 2024, the carrying value of the assets held in the rabbi trust was $ 7.2 million, of which $ 1.0 million is classified as current. As of December 31, 2023, the carrying value of the assets held in the rabbi trust was $ 6.9 million, of which $ 0.7 million was classified as current. The rabbi trust’s current and noncurrent assets are classified within prepaid expenses and other assets and investments and other assets, respectively, within the consolidated balance sheets. The DCP current and noncurrent liabilities are classified within accrued expenses and other liabilities, respectively, within the consolidated balance sheets. Cash Long-Term Incentive Plan The Company’s cash long-term incentive plan, or LTIP, is focused on pre-determined and objective performance goals during each applicable performance period from January 1 through December 31 of each calendar year. Award amounts ranging from 0 % to 225 % of the target cash award can be earned based on achievement of two equally weighted financial metrics: net revenue and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), with a relative total shareholder return modifier based on the Company’s stock price performance relative to the companies comprising the S&P Pharmaceuticals Select Industry Index. The performance period for these metrics is one year , with an additional three years of time-vesting following the performance period. For the years ended December 31, 2024 and 2023, the Company recognized $ 1.8 million and $ 0.5 million of related compensation expense under the LTIP, respectively. Amounts recognized in 2024 related to the 2024 and 2021 performance periods, and amounts recognized in 2023 only related to the 2021 performance period. Amounts earned for the 2024 performance year are payable to eligible participants in January 2028 after a three-year vesting period concludes. As of December 31, 2024 and 2023, there was $ 1.5 million and $ 2.7 million included in other liabilities in the condensed balance sheets, respectively. At December 31, 2024, $ 3.0 million was included in accrued expenses in the consolidated balance sheets, which was paid to eligible participants in January 2025 for the 2021 performance period after their three-year vesting period concluded. Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-40 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE 17— CONTINGENT CONSIDERATION GAINS, RESTRUCTURING CHARGES AND OTHER Contingent consideration gains, restructuring charges and other for the years ended December 31, 2024, 2023 and 2022 are summarized below (in thousands): Year Ended December 31, 2024 2023 2022 Contingent consideration gains: Flexion contingent consideration $ ( 4,457 ) $ ( 3,424 ) $ ( 18,292 ) MyoScience contingent consideration — — ( 11,184 ) Total contingent consideration gains ( 4,457 ) ( 3,424 ) ( 29,476 ) Acquisition-related charges: Acquisition-related expenses 1,462 1,963 1,032 Severance-related expenses — — 4,494 Other acquisition expenses — — 5,719 Total acquisition-related charges 1,462 1,963 11,245 Restructuring charges 8,532 1,109 — Loss on lease termination 2,165 — — Impairment of acquired IPR&D — — 26,134 Termination of license agreement — — 3,000 Total contingent consideration gains, restructuring charges and other $ 7,702 $ ( 352 ) $ 10,903 Flexion Acquisition Contingent Consideration For the years ended December 31, 2024, 2023 and 2022 the Company recognized contingent consideration gains of $ 4.5 million, $ 3.4 million and $ 18.3 million, respectively, due to a decrease in the fair value of its contingent consideration related to the Flexion Acquisition. See Note 11, Financial Instruments , for information regarding the method and key assumptions used in the fair value measurements of the Company’s contingent consideration and more information regarding the changes in fair value. MyoScience Acquisition Contingent Consideration The Company recognized contingent consideration gains related to the MyoScience Acquisition of $ 11.2 million for the year ended December 31, 2022. See Note 11, Financial Instruments , for information regarding the method and the changes in fair value. Acquisition-Related Charges The Company recognized acquisition-related charges of $ 1.5 million and $ 2.0 million during the years ended December 31, 2024 and 2023 primarily related to vacant and underutilized Flexion leases that were assumed from the Flexion Acquisition. The Company recognized acquisition-related charges and other costs of $ 11.2 million during the year ended December 31, 2022 primarily for severance, legal fees, third-party services and other one-time charges related to the Flexion Acquisition. Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-41 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Restructuring Charges In February 2024, the Company initiated a restructuring plan to ensure it is well positioned for long-term growth. The restructuring plan includes: (i) reshaping the Company’s executive team, (ii) reallocating efforts and resources from the Company’s ex-U.S. and certain early-stage development programs to its commercial portfolio in the U.S. market and (iii) reprioritizing investments to focus on commercial readiness for the implementation of separate Medicare reimbursement for EXPAREL at average sales price plus 6 percent in outpatient settings and iovera° up to an additional $ 255.85 when providers administer iovera° in ambulatory surgical centers and outpatient settings beginning in January 2025 as part of the Non-Opioids Prevent Addiction In the Nation (“NOPAIN”) Act and broader commercial initiatives in key areas, such as strategic national accounts, marketing and market access and reimbursement. The Company recognized $ 8.5 million of restructuring charges for the year ended December 31, 2024, related to employee termination benefits, such as the acceleration of share-based compensation, severance, and, to a lesser extent, other employment-related termination costs, as well as contract termination costs. The Company’s restructuring charges as of December 31, 2024, including the beginning and ending liability balances, are summarized below (in thousands): Employee Termination Benefits (1) Contract Termination Costs Total Balance at December 31, 2023 $ — $ — $ — Charges incurred (1) 3,220 1,709 4,929 Cash payments made / settled ( 1,985 ) ( 20 ) ( 2,005 ) Balance at December 31, 2024 $ 1,235 $ 1,689 $ 2,924 (1) During the year ended December 31, 2024, there were $ 3.6 million of employee termination benefits related to share-based compensation excluded from the table above as they are non-cash and recorded against additional paid-in capital. In J une 2023, t he Company implemented a restructuring plan in an effort to improve its operational efficiencies. The restructuring charges were predominantly related to one-time employee termination benefits through a reduction of headcount, such as severance and related costs. During the year ended December 31, 2023, t he Company recognized $ 1.1 million of restructuring charges. Loss on Lease Termination The Company recognized a loss of $ 2.2 million during the year ended December 31, 2024 associated with exiting a lease for a training facility in Houston, Texas. The loss resulted from the derecognition of the right-of-use asset, its lease liability and a termination payment of $ 1.3 million. Impairment of Acquired IPR&D For the year ended December 31, 2022, an impairment of $ 26.1 million for an acquired IPR&D intangible asset related to ZILRETTA for the treatment of OA pain of the shoulder was recognized based on the amount its previous carrying value of $ 60.0 million exceeded its fair value of $ 33.9 million. See Note 8, Goodwill and Intangible Assets , for more information. Termination of License Agreement The Company recognized expense of $ 3.0 million during the year ended December 31, 2022 related to the termination of a license agreement. See Note 19, Commitments and Contingencies , for more information. NOTE 18— COMMERCIAL PARTNERS AND OTHER AGREEMENTS Thermo Fisher Scientific Pharma Services In April 2014, the Company and Thermo Fisher entered into a Strategic Co-Production Agreement, a Technical Transfer and Service Agreement (the “EXPAREL Technical Transfer and Service Agreement”) and a Manufacturing and Supply Agreement to collaborate in the manufacture of EXPAREL. Under the terms of the EXPAREL Technical Transfer and Service Agreement, Thermo Fisher undertook certain technical transfer activities and construction services needed to prepare its Swindon, U.K. facility for the manufacture of EXPAREL in dedicated manufacturing suites. The Company is now utilizing a second, larger-scale dedicated manufacturing suite. Under these agreements, the Company makes monthly base fee payments to Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-42 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Thermo Fisher. Unless earlier terminated by providing 18 months’ notice (other than termination by the Company in the event of a material breach by Thermo Fisher), this agreement will expire in May 2028. Prior to the Flexion Acquisition, in July 2015, Flexion and Thermo Fisher entered into a Manufacturing and Supply Agreement (the “ZILRETTA Manufacturing and Supply Agreement”) and a Technical Transfer and Service Agreement related to the manufacture of ZILRETTA at the same Thermo Fisher site in Swindon, U.K where the Company’s EXPAREL manufacturing suite is located. Thermo Fisher agreed to undertake certain transfer activities and construction services needed to prepare its facility for the commercial manufacture of ZILRETTA in dedicated manufacturing suites. Flexion provided Thermo Fisher with certain equipment and materials necessary to manufacture ZILRETTA. The Company pays a monthly base fee to Thermo Fisher for the operation of the manufacturing suites and a per product fee for each vial of ZILRETTA based upon a forecast of commercial demand. The Company also reimburses Thermo Fisher for purchases of materials and equipment made on its behalf, certain nominal expenses and additional services. Unless earlier terminated (other than termination by the Company in the event that Thermo Fisher does not meet specified milestones or for a breach by Thermo Fisher), the Company will be obligated to pay for the costs incurred by Thermo Fisher associated with the removal of its manufacturing equipment and for Thermo Fisher’s termination costs up to a specified capped amount. The initial term of the ZILRETTA Manufacturing and Supply Agreement that the Company assumed as part of the Flexion Acquisition expires in October 2027. The ZILRETTA Manufacturing and Supply Agreement will remain in full effect unless and until it expires or is terminated. The Company may terminate this agreement upon one month ’s notice if a regulatory authority causes the withdrawal of ZILRETTA from the U.S. or any other market that represents 80 percent of its overall sales, or at any time for convenience by providing 24 months’ notice. Either party may terminate the ZILRETTA Manufacturing and Supply Agreement in the event of the breach or bankruptcy of the other party. Aratana Therapeutics, Inc. In December 2012, the Company entered into a worldwide license, development and commercialization agreement with Aratana Therapeutics, Inc., a wholly owned subsidiary of Elanco Animal Health, Inc., or Aratana. Under the agreement, the Company granted Aratana an exclusive royalty-bearing license, including the limited right to grant sublicenses, for the development and commercialization of the Company’s bupivacaine liposome injectable suspension product for veterinary use. Under the agreement, Aratana developed and obtained FDA approval for the use of the product in veterinary surgery to manage postsurgical pain. The Company is eligible to receive from Aratana up to an aggregate of $ 40.0 million upon the achievement of commercial milestones. Aratana is required to pay the Company a tiered double-digit royalty on certain net sales made in the U.S. If the product is approved by foreign regulatory agencies for sale outside of the U.S., Aratana will be required to pay the Company a tiered double-digit royalty on such net sales. Royalty rates will be reduced by a certain percentage upon the entry of a generic competitor for animal health indications into certain jurisdictions or if Aratana must pay royalties to third parties under certain circumstances. Unless terminated earlier pursuant to its terms, the license agreement is effective until July 2033, after which Aratana has the option to extend the agreement for an additional five-year term, subject to certain requirements. Aratana began purchasing bupivacaine liposome injectable suspension product in 2016, which they market under the trade name NOCITA ® (a registered trademark of Aratana) for veterinary use. Carlisle Companies, Inc. In January 2020, the Company and Carlisle Companies, Inc., or Carlisle, entered into a Manufacturing and Supply Agreement (the “Carlisle Agreement”) to collaborate in the manufacture of iovera° Smart Tips at Carlisle’s Tijuana, Mexico facility. The initial term of the Carlisle Agreement is five years with automatic one-year extensions unless either party provides prior notice in writing. Under the Carlisle Agreement, the Company pays fees based on the amount of iovera° Smart Tips delivered by Carlisle. Since April 2022, all iovera° Smart Tips have been produced by Carlisle. The Carlisle Agreement may be terminated by either party upon one year s’ written notice without cause. The Company may terminate the Carlisle Agreement upon thirty days ’ written notice in the event that iovera° is withdrawn from the market or no longer sold by us. Either party may terminate the Carlisle Agreement in the event of the breach or bankruptcy of the other party. Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-43 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) NOTE 19— COMMITMENTS AND CONTINGENCIES Legal Proceedings From time to time, the Company has been and may again become involved in legal proceedings arising in the ordinary course of its business, including those related to its patents and intellectual property, product liability and government investigations. Except as described below, the Company is not presently a party to any legal proceedings that it believes to be material, and is not aware of any pending or threatened litigation against the Company which it believes could have a material adverse effect on its business, operating results, financial condition or cash flows. The Company is not in a position to assess the likelihood of any potential losses or adverse effect on its financial condition or to estimate the amount or range of potential losses, if any, from the following actions at this time. MyoScience Milestone Litigation In August 2020, the Company and its subsidiary, Pacira CryoTech, Inc. (“Pacira CryoTech”), filed a lawsuit in the Court of Chancery of the State of Delaware against Fortis Advisors LLC (“Fortis”), solely in its capacity as representative for the former securityholders of MyoScience, and certain other defendants, seeking declaratory judgment with respect to certain terms of the merger agreement for the MyoScience Acquisition (the “MyoScience Merger Agreement”), specifically related to the achievement of certain milestone payments under the MyoScience Merger Agreement. In addition, the Company and Pacira CryoTech sought general, special and compensatory damages against the other defendants related to breach of fiduciary duties in connection with the purported achievement of milestone payments under the MyoScience Merger Agreement, and breach of the MyoScience Merger Agreement and certain other agreements with the defendants. In October 2020, Fortis filed an answer and counterclaim against the Company and Pacira CryoTech seeking to recover certain milestone payments under the MyoScience Merger Agreement. A trial was conducted in September 2023. In January 2025, the Court issued its decision, finding that the disputed milestones were not met and therefore granted judgment to the Company in full. A final order will be entered in the coming months. eVenus Pharmaceutical Laboratories Litigations In October 2021, the Company received a Notice Letter advising that eVenus Pharmaceutical Laboratories, Inc., or eVenus, of Princeton, New Jersey, submitted to the FDA an Abbreviated New Drug Application, or ANDA with a Paragraph IV certification seeking authorization for the manufacturing and marketing of a generic version of EXPAREL (266 mg/20 mL) in the U.S. prior to the expiration of U.S. Patent No. 11,033,495 (the ’495 patent). In November 2021, the Company filed a patent infringement suit against eVenus and its parent company (Jiangsu Hengrui Pharmaceuticals, Co. Ltd., or Jiangsu Hengrui) in the U.S. District Court for the District of New Jersey (21-cv-19829) asserting infringement of the ’495 patent. This triggered an automatic 30-month stay of final approval of the eVenus ANDA which expired on July 1, 2024. On January 6, 2022, eVenus filed an Answer with counterclaims to the Complaint, alleging the ’495 patent is invalid and/or not infringed through the manufacture, sale, or offer for sale of the product described in product described in eVenus’s ANDA submission. In December 2021, the Company received a second Notice Letter advising that eVenus submitted to the FDA an amendment to its ANDA with a Paragraph IV Certification seeking authorization for the manufacturing and marketing of a generic version of EXPAREL (133 mg/10 mL) in the U.S. prior to the expiration of the ’495 patent. In the second Notice Letter, eVenus also advised that it submitted a Paragraph IV Certification to the FDA seeking authorization for the manufacturing and marketing of a generic version of EXPAREL (266 mg/20 mL and 133 mg/10 mL) in the U.S. prior to the expiration of U.S. Patent No. 11,179,336 (the ’336 patent). eVenus further alleges in the Notice Letter that both the ’495 patent and the ’336 patent are invalid and/or not infringed. In February 2022, the Company filed a second patent infringement suit against eVenus and its parent company in the U.S. District Court for the District of New Jersey (22-cv-00718) asserting that the 133 mg/10 mL ANDA product will infringe the ’495 and ’336 patents and that the 266 mg/20 mL ANDA product will infringe the ’336 patent. This filing triggered a second automatic 30-month stay of final approval for the 133 mg/10 mL ANDA product which expired on July 1, 2024. The first and second patent infringement suits were consolidated. In February 2023, eVenus filed its first amended answer to the first amended complaint, alleging patent invalidity, non-infringement and inequitable conduct. The Company has denied the allegations in eVenus’s first amended answer. The Company has subsequently voluntarily dismissed its claims with respect to the ’336 Patent. The trial on the remaining patent Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-44 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) was conducted in February 2024, and in August 2024,the U.S. District Court for the District of New Jersey issued its ruling in the patent infringement suit for the ‘495 patent. The ruling found that claim 7 of the ‘495 patent is not valid on the grounds of obviousness and anticipation. A notice of appeal was filed in September 2024 and is ongoing. In April 2023, the Company filed a third patent infringement suit against eVenus, its parent company, and Fresenius Kabi USA, LLC, or Fresenius, in the U.S. District Court for the District of New Jersey (23-cv-2367) asserting that the 133 mg/10 mL and 266 mg/20 mL ANDA products will infringe U.S. Patent No. 11,426,348 (the ’348 patent). In July 2023, eVenus filed its answer with claims for declaratory judgment, alleging patent invalidity, non-infringement and inequitable conduct with respect to the ’348 patent as well as the Company’s other patents, U.S. Patent Nos. 11,278,494; 11,304,904; 11,311,486; 11,357,727 and 11,452,691. The parties have subsequently dismissed all patents other than the ’348 patent from this litigation. This action has been stayed pending resolution of the appeal of the U.S. District Court’s ruling on the ‘495 patent. In May 2024, the Company filed a fourth patent infringement suit against eVenus, its parent company and Fresenius in the U.S. District Court for the District of New Jersey (24-cv-6294) asserting that the 133 mg/10 mL and 266 mg/20 mL ANDA products will infringe U.S. Patent Nos. 11,819,574 (the ‘574 patent) and 11,819,575 (the ‘575 patent). The Company subsequently filed a First Amended Complaint alleging infringement only with respect to the ‘574 patent. The Defendants filed an answer and counterclaim on September 25, 2024, with counterclaims alleging non-infringement and invalidity of the ‘574 patent, invalidity of the ‘575 patent and U.S. Patent No. 11,925,706 (the ‘706 patent) and inequitable conduct with respect to the ‘574, ‘575 and ‘706 patents. This action is in the discovery stage. In July 2024, the Company filed a fifth patent infringement suit against eVenus, its parent company and Fresenius in the U.S. District Court for the District of New Jersey (24-cv-7680) asserting that the 133 mg/10 mL and 266 mg/20 mL ANDA products will infringe the ‘706 patent. The Company voluntarily filed a stipulation of dismissal without prejudice on September 9, 2024. In July 2024, eVenus received FDA approval of a generic version of EXPAREL—the Company’s bupivacaine liposome injectable suspension product. In December 2024, the Company filed a sixth patent infringement suit against Fresenius and eVenus’s parent company in the Northern District of Illinois (24-cv-12416) asserting that the 133 mg/10 mL and 266 mg/20 mL ANDA products will infringe U.S. Patent No. 12,156,940 (the ‘940 patent). This patent is the first patent from a new family of patents related to EXPAREL produced by the Company’s enhanced larger-scale manufacturing process in San Diego, California. This action is in the pleadings stage. Also in December 2024, eVenus, its parent company, and Fresenius filed an action for declaratory judgment of non-infringement and invalidity with respect to the ‘940 patent in the District Court of New Jersey (24-cv-11014). This action is in the pleadings stage. The Company is unable to predict the outcome of these litigations at this time. Argentum Request for Ex Parte Reexamination of ‘495 Patent On October 3, 2024, Argentum Pharmaceuticals LLC, or Argentum, filed a Request for Ex Parte Reexamination of the ‘495 patent. Specifically, Argentum alleged that claims 1, 7 and 8 of the ‘495 patent are obvious and cite to U.S. Patent No. 9,585,838 and the Physician’s Desk Reference in support of its allegation. The Company is unable to predict the outcome of this proceeding at this time. Securities Class Action On January 13, 2025, Leandro Alvarez filed a putative class action on behalf of Company shareholders between August 2, 2023 and August 8, 2024 against the Company and certain of its officers, in the District Court of New Jersey (25-cv-322). The complaint alleges that the Company made materially false and misleading statements and/or concealed material adverse facts concerning EXPAREL patents. The case is in the pleadings stage and the Company is unable to predict the outcome of this litigation at this time. Research Development Foundation Pursuant to an agreement with the Research Development Foundation, or RDF, the Company was required to pay RDF a low single-digit royalty on the collection of revenues from certain products, for as long as certain patents assigned to the Company under the agreement remain valid. RDF has the right to terminate the agreement for an uncured material breach by Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-45 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) the Company, in connection with its bankruptcy or insolvency or if it directly or indirectly opposes or disputes the validity of the assigned patent rights. The Company’s ’495 patent was issued on June 15, 2021. Thereafter, RDF asserted that the issuance of that patent extends the Company’s royalty obligations under the agreement until 2041. The Company believes that the royalty period under the agreement ended on December 24, 2021 with the expiration of its U.S. Patent No. 9,585,838. Because of the disagreement over the interpretation of the agreement, in December 2021, the Company filed a declaratory judgment lawsuit in the U.S. District Court for the District of Nevada (21-cv-02241). The lawsuit seeks a declaration from the court that the Company owes no royalties to RDF with respect to its EXPAREL product after December 24, 2021. On August 8, 2023, the U.S. District Court, District of Nevada, granted the Company’s motion for partial summary judgment in respect to the Company’s claim for a declaration that it no longer owes royalties for EXPAREL made under the 45-liter manufacturing process as of December 24, 2021. As a result, the Company expects to receive $ 14.5 million from RDF, representing the royalties that the Company paid to RDF under protest after December 24, 2021 for EXPAREL made from the 45-liter manufacturing process. Once it becomes probable that the settlement amount will be received, the Company will record a settlement gain within other operating expenses in the condensed consolidated statement of operations. In November 2023, the United States District Court, District of Nevada conducted a mediation that did not result in a settlement. During the pendency of the remaining lawsuit, the Company will continue to pay royalties associated with an enhanced, large-scale manufacturing process to RDF under protest. The Company is unable to predict the outcome of this action at this time. Purchase Obligations The Company has approximately $ 59.9 million of minimum, non-cancelable contractual commitments for contract manufacturing services as of December 31, 2024, of which $ 20.3 million is due in each of 2025 and 2026, $ 17.9 million is due in 2027 and the remaining $ 1.4 million is due in 2028. The Company has approximately $ 6.5 million of minimum, non-cancelable contractual commitments for the purchase of certain raw materials as of December 31, 2024, all of which are due in 2025. The Company has $ 1.8 million of other minimum, non-cancelable contractual commitments as of December 31, 2024, of which $ 1.4 million is due in 2025 and the remaining $ 0.4 million is due thereafter. Other Commitments and Contingencies Termination of License Agreement Prior to the Flexion Acquisition, in March 2020, Flexion entered into an exclusive license agreement with Hong Kong Tainuo Pharma Ltd., or HK Tainuo, and Jiangsu Tainuo Pharmaceutical Co. Ltd., a subsidiary of China Shijiazhuang Pharmaceutical Co, Ltd., for the development and commercialization of ZILRETTA in Greater China (consisting of mainland China, Hong Kong, Macau and Taiwan). Under the terms of the agreement, HK Tainuo paid Flexion an upfront payment of $ 10.0 million during the year ended December 31, 2020 which was recorded as deferred revenue as of December 31, 2021. The Company was also eligible to receive up to $ 32.5 million in aggregate development, regulatory and commercial sales milestone payments under the exclusive license agreement. HK Tainuo was responsible for the clinical development, product registration and commercialization of ZILRETTA in Greater China. The Company was solely responsible for the manufacture and supply of ZILRETTA to HK Tainuo for all clinical and commercial activities. The terms related to product manufacturing and supply, including pricing and minimum purchase requirements agreed to in the license agreement, were to be covered by a separate supply agreement which was never finalized. In July 2022, the Company submitted notice to HK Tainuo of its intent to pursue termination of the license agreement. The $ 13.0 million related to the termination of the license agreement was paid in January 2023. Pediatric Trial Commitments The FDA, as a condition of EXPAREL approval, has required the Company to study EXPAREL for infiltration and as a brachial plexus block in pediatric patients. The Company was granted deferrals for the required pediatric trials until after the indications were approved in adults. Similarly, in Europe, the Company agreed with the European Medicines Agency, or EMA, on a Pediatric Investigation Plan as a prerequisite for submitting a Marketing Authorization Application (MAA) in the E.U. Despite the U.K.’s withdrawal from the E.U., the agreed pediatric plan is applicable in the U.K. The Company received notification from the FDA that its pediatric studies requirement had been waived for the indications of brachial plexus interscalene nerve block, lower extremity nerve block, sciatic nerve block in the popliteal fossa and adductor canal block indications to produce postsurgical regional analgesia in pediatric patients. The Company is still working with the FDA, EMA and Medicines and Healthcare Regulatory Agency (MHRA) to finalize the regulatory pathways for its remaining pediatric commitments. Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-46 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Contingent Milestone Payments Refer to Note 11 , Financial Instruments , for information on potential contingent milestone payments related to the Flexion Acquisition. PCRX-201 PCRX-201 (enekinragene inzadenovec) is a novel, locally administered gene therapy vector platform product candidate that boosts cellular production of the anti-inflammatory protein interleukin-1 receptor antagonist (IL-1Ra) for treating OA pain in the knee, was added to the Company’s portfolio as part of the Flexion Acquisition in November 2021. Prior to the Flexion Acquisition, in 2017, Flexion entered into an agreement with GQ Bio to acquire the global rights to PCRX-201, a gene therapy product candidate. As part of the agreement, up to an aggregate of $ 56.0 million of payments could have become due upon the achievement of certain development and regulatory milestones, including up to $ 4.5 million through initiation of a Phase 2 clinical trial and up to an additional $ 51.5 million in development and global regulatory approval milestone payments. In February 2025, Pacira Therapeutics, Inc., a wholly-owned subsidiary of the Company, completed the GQ Bio Acquisition and acquired the remaining 81 % of GQ Bio that was not already owned by the Company. For more information on the GQ Bio Acquisition, see Note 21, Subsequent Events . As of the date hereof, GQ Bio is a wholly-owned subsidiary of the Company. Also in 2017, in an agreement between The Baylor College of Medicine, or BCM, and GQ Bio, the Company (through the Flexion Acquisition) became the direct licensee of certain underlying BCM patents and other proprietary rights related to PCRX-201. The license agreement grants the Company an exclusive, royalty-bearing, world-wide right and license under its patent and other proprietary rights directly related to PCRX-201. The license agreement with BCM includes a low single-digit royalty on net product sales of PCRX-201. Milestone payments range from $ 0.1 million up to $ 0.6 million based on the completion of a Phase 1 FDA trial up to a Phase 3 clinical trial. In February 2024, the FDA granted a Regenerative Medicine Advanced Therapy (RMAT) designation to PCRX-201 for the treatment of OA pain of the knee. NOTE 20— SEGMENT INFORMATION The Company is managed and operated as a single business focused on the development, manufacture, marketing, distribution and sale of non-opioid pain management and regenerative health solutions. The Company is managed by a single management team, and, consistent with its organizational structure, the Chief Executive Officer—who is the Company’s chief operating decision maker, or CODM—manages and allocates resources at a consolidated level. Accordingly, the Company views its business as one operating segment and one reportable segment to evaluate its performance, allocate resources, set operational targets and forecast its future financial results. The key measure of the Company is GAAP net income. The CODM uses this measure to evaluate its performance, allocate resources, set operational targets and forecast its future financial results. There are significant expense categories and amounts that are regularly provided to the CODM. These expense categories differ from what is disclosed in the Company’s financial results. The table below reconciles the significant expense categories provided to the CODM to the Company’s expenses as disclosed under U.S. GAAP (in thousands): Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-47 Table of Contents PACIRA BIOSCIENCES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Year Ended December 31, 2024 2023 2022 Revenues $ 700,966 $ 674,978 $ 666,823 Less: Adjusted cost of goods sold 165,097 173,980 174,856 Adjusted research and development 74,196 67,563 78,203 Adjusted selling and marketing 172,015 153,040 144,996 Adjusted general and administrative 86,385 82,737 73,989 Goodwill impairment 163,243 — — Stock-based compensation 51,171 47,895 48,092 Amortization of acquired intangible assets 57,288 57,288 57,288 Changes in the fair value of contingent consideration ( 4,457 ) ( 3,424 ) ( 29,476 ) Impairment of acquired IPR&D — — 26,134 Accelerated depreciation — — 10,545 Other (1) 9,399 8,224 22,172 Total operating expenses 774,337 587,303 606,799 Adjusted other income (expense) 2,747 ( 9,048 ) ( 46,722 ) Gain (loss) on early extinguishment of debt 7,518 ( 16,926 ) — Total other income (expense), net 10,265 ( 25,974 ) ( 46,722 ) (Loss) income before income taxes ( 63,106 ) 61,701 13,302 Income tax (expense) benefit ( 36,454 ) ( 19,746 ) 2,607 Net (loss) income $ ( 99,560 ) $ 41,955 $ 15,909 (1) During the year ended December 31, 2024, the remaining other operating expenses relates to restructuring charges, a loss on lease termination and acquisition-related charges. During the years ended December 31, 2023 and 2022, the remaining other operating expenses relates to step-up of acquired Flexion fixed assets and inventory to fair value and acquisition-related charges. The Company’s long-lived assets are primarily located in the U.S. For information on the Company’s fixed assets located outside of the U.S., refer to Note 6, Fixed Assets . NOTE 21— SUBSEQUENT EVENTS (UNAUDITED) Acquisition of GQ Bio Therapeutics GmbH As of December 31, 2024, the Company owned approximately 19 % of GQ Bio. On February 25, 2025, Pacira Therapeutics, Inc., a wholly-owned subsidiary of the Company, entered into a securities purchase agreement to acquire the remaining 81 % of GQ Bio for approximately $ 32 million, net of working capital and other transaction adjustments. The net purchase price includes $ 8 million to be paid over three years pursuant to a key employee holdback agreement and a post-closing indemnity holdback of $ 6 million, whereas the remaining $ 18 million was paid at closing using cash on hand. Brisbane, California Office Lease In February 2025, the Company signed a lease for an office in Brisbane, California to be used for selling, general and administrative purposes. As a result, the Company recorded $ 0.5 million of right-of-use assets in exchange for lease obligations in the first quarter of 2025. Pacira BioSciences, Inc. | 2024 Annual Report on Form 10-K | Page F-48