Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of Components of Income Tax Expense (Benefit)

Income tax benefit was as follows:


(in thousands)	For the Year Ended December 31,
	2021		2020
Current tax benefit
Federal	$	(418)	$	(2,299)
State	(17)		25
Foreign	—		13
Total current tax benefit	$	(435)	$	(2,261)

Deferred tax expense (benefit)
Federal	$	(106)	$	(1,710)
State	135		258
Total deferred tax expense (benefit)	29		(1,452)
Total tax benefit	$	(406)	$	(3,713)

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


(in thousands)	For the Year Ended December 31,
	2021		2020
Stock-based compensation expense	$	394	$	607
Income tax benefit	$	74	$	104

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,
	2021				2020
	Amount		Percent		Amount		Percent
Income tax benefit at federal statutory rate	$	(10,264)	21.0	%	$	(5,606)	21.0	%
State income tax, net of federal benefit	(2,185)		4.5	%	(1,979)		7.4	%


Other permanent differences	1		—	%	(185)		0.7	%
Research and development tax credits	(551)		1.1	%	(551)		2.1	%
Other tax credits	291		(0.6)	%	(555)		2.1	%
Tax reserve reassessment	157		(0.3)	%	(7)		—	%
Impact of CARES Act	—		—	%	(1,390)		5.2	%
Change in valuation allowance	12,361		(25.3)	%	6,348		(23.8)	%
Return adjustment	(278)		0.6	%	213		(0.8)	%
Stock-based compensation	74		(0.2)	%	104		(0.4)	%
Other, net	(12)		—	%	(105)		0.4	%
Income tax benefit	$	(406)	0.8	%	$	(3,713)	13.9	%

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,
	2021		2020
Deferred tax assets:
Net operating loss carryforwards	$	30,967	$	19,167
Research and development credits	5,168		4,982
Other state credits	3,090		3,372
Inventory	2,511		2,693
Allowances and bad debts	1,146		1,356
Accrued warranty	9,492		8,441
Accrued wages and benefits	107		240
Other accrued expenses	4,533		1,789
Stock-based compensation	182		223
Capitalized research and development costs	160		210
163(j) disallowed interest	1,634		2,305
Intangible amortization	668		1,357
Contract liabilities	1,005		3,307
Operating lease liability	3,862		4,934
Other	752		612
Total deferred tax assets	65,277		54,988
Valuation allowance	(60,177)		(48,056)
Total deferred tax assets, net of valuation allowance	$	5,100	$	6,932

Deferred tax liabilities:
ROU operating lease asset	$	(3,537)	$	(4,545)
Tax depreciation in excess of book depreciation on property, plant and equipment	(2,579)		(3,273)
Total deferred tax liabilities	$	(6,116)	$	(7,818)

Net deferred tax liability	$	(1,016)	$	(886)

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,
	2021		2020
Balance at beginning of year	$	1,431	$	1,430
Additions based on tax positions related to the current year	102		103
Additions (reductions) for tax positions of prior years	55		(102)
Balance at end of year	$	1,588	$	1,431

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	2021
U.S. States	2013	to	2021
Canada	2018	to	2020