Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Schedule of Components of Income Tax Expense (Benefit)

Income tax (benefit) expense was as follows:


(in thousands)	For the Year Ended December 31,
	2020		2019
Current tax benefit
Federal	$	(2,299)	$	(238)
State	25		91
Foreign	13		99
Total current tax benefit	$	(2,261)	$	(48)

Deferred tax (benefit) expense
Federal	$	(1,710)	$	329
State	258		128
Total deferred tax (benefit) expense	(1,452)		457
Total tax (benefit) expense	$	(3,713)	$	409

The following table represents stock-based compensation expense and the related income tax benefits:


(in thousands)	For the Year Ended December 31,
	2020		2019
Stock-based compensation expense	$	607	$	1,248
Income tax benefit	$	104	$	279

Reconciliation of Effective Tax Rate to the Statutory Rate

A reconciliation between the Company’s effective tax rate on income (loss) before income taxes and the statutory tax rate is as follows:


(in thousands)	For the Year Ended December 31,
	2020				2019
	Amount		Percent		Amount		Percent
Income tax (benefit) expense at federal statutory rate	$	(5,606)	21.0	%	$	1,818	21.0	%
State income tax, net of federal benefit	(1,979)		7.4	%	618		7.1	%
Non-deductible warrant expense	—		—	%	284		3.3	%

Other permanent differences	(185)		0.7	%	46		0.5	%
Research and development tax credits	(551)		2.1	%	(715)		(8.3)	%
Other tax credits	(555)		2.1	%	1		—	%
Tax reserve reassessment	(7)		—	%	25		0.3	%
Impact of CARES Act	(1,390)		5.2	%	—		—	%
Change in valuation allowance	6,348		(23.8)	%	(2,696)		(31.1)	%
Return adjustment	213		(0.8)	%	752		8.7	%
Stock-based compensation	104		(0.4)	%	279		3.2	%
Other, net	(105)		0.4	%	(3)		—	%
Income tax (benefit) expense	$	(3,713)	13.9	%	$	409	4.7	%

Schedule of Significant Components of the Deferred Income Tax Assets and Liabilities

Significant components of deferred income tax assets and liabilities consisted of the following:


(in thousands)	As of December 31,
	2020		2019
Deferred tax assets:
Net operating loss carryforwards	$	19,167	$	16,389
Research and development credits	4,982		4,398
Other state credits	3,372		1,922
Inventory	2,693		1,718
Allowances and bad debts	1,356		1,009
Accrued warranty	8,441		6,344
Accrued wages and benefits	240		1,294
Other accrued expenses	1,789		1,393
Stock-based compensation	223		205
Capitalized research and development costs	210		486
163(j) disallowed interest	2,305		1,688
Intangible amortization	1,357		1,855
Contract liabilities	3,307		3,583
Operating lease liability	4,934		5,989
Other	612		356
Total deferred tax assets	54,988		48,629
Valuation allowance	(48,056)		(41,709)
Total deferred tax assets, net of valuation allowance	$	6,932	$	6,920

Deferred tax liabilities:
ROU operating lease asset	$	(4,545)	$	(5,652)
Tax depreciation in excess of book depreciation on property, plant and equipment	(3,273)		(2,373)
Total deferred tax liabilities	$	(7,818)	$	(8,025)

Net deferred tax liability	$	(886)	$	(1,105)

Schedule of the Change in Unrecognized Tax Benefits

The change in unrecognized tax benefits excluding interest and penalties were as follows:


(in thousands)	For the Year Ended December 31,
	2020		2019
Balance at beginning of year	$	1,430	$	1,421
Additions based on tax positions related to the current year	103		144
Reductions for tax positions of prior years	(102)		(135)
Balance at end of year	$	1,431	$	1,430

Summary of Income Tax Examinations

With few exceptions, the major jurisdictions subject to examination by the relevant tax authorities and open tax years, stated as the Company’s fiscal years, are as follows:


Jurisdiction	Open Tax Years
U.S. Federal	2014	to	2020
U.S. States	2013	to	2020
Canada	2018	to	2020