Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of Components of Income Tax Expense (Benefit)

Income tax expense (benefit) was as follows:


(in thousands)	For the Year Ended December 31,
	2022		2021
Current tax expense (benefit)
Federal	$	204	$	(418)
State	(89)		(17)

Total current tax expense (benefit)	$	115	$	(435)

Deferred tax expense
Federal	$	(71)	$	(106)
State	260		135
Total deferred tax expense	189		29
Total tax expense (benefit)	$	304	$	(406)

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


(in thousands)	For the Year Ended December 31,
	2022		2021
Stock-based compensation expense	$	385	$	394
Income tax benefit	$	87	$	74

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,
	2022				2021
	Amount		Percent		Amount		Percent
Income tax expense (benefit) at federal statutory rate	$	2,430	21.0	%	$	(10,264)	21.0	%
State income tax, net of federal benefit	140		1.2	%	(2,185)		4.5	%


Other permanent differences	1		—	%	1		—	%
Research and development tax credits	(393)		(3.4)	%	(551)		1.1	%
Other tax credits	(612)		(5.3)	%	291		(0.6)	%
Tax reserve reassessment	79		0.7	%	157		(0.3)	%

Change in valuation allowance	(497)		(4.3)	%	12,361		(25.3)	%
Return adjustment	(1,147)		(9.9)	%	(278)		0.6	%
Stock-based compensation	87		0.7	%	74		(0.2)	%
Other, net	216		1.9	%	(12)		—	%
Income tax expense (benefit)	$	304	2.6	%	$	(406)	0.8	%

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,
	2022		2021
Deferred tax assets:
Net operating loss carryforwards	$	25,541	$	30,967
Capital loss carryforwards	194		—
Research and development credits	5,565		5,168
Other state credits	3,671		3,090
Inventory	2,407		2,511
Allowances and bad debts	1,195		1,146
Accrued warranty	6,048		9,492
Accrued wages and benefits	1,294		107
Other accrued expenses	5,749		4,533
Stock-based compensation	188		182
Capitalized research and development costs	4,658		160
163(j) disallowed interest	1,343		1,634
Intangible amortization	—		668
Contract liabilities	1,057		1,005
Operating lease liability	2,820		3,862
Other	1,685		752
Total deferred tax assets	63,415		65,277
Valuation allowance	(59,680)		(60,177)
Total deferred tax assets, net of valuation allowance	$	3,735	$	5,100

Deferred tax liabilities:
ROU operating lease asset	$	(2,612)	$	(3,537)
Intangible amortization	(110)		—
Tax depreciation in excess of book depreciation on property, plant and equipment	(2,291)		(2,579)
Total deferred tax liabilities	$	(5,013)	$	(6,116)

Net deferred tax liability	$	(1,278)	$	(1,016)

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,
	2022		2021
Balance at beginning of year	$	1,588	$	1,431
Additions based on tax positions related to the current year	74		102
Additions for tax positions of prior years	5		56
Reduction for tax positions of prior years	(7)		$	(1)
Balance at end of year	$	1,660	$	1,588

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	2022
U.S. States	2013	to	2022
Canada	2019	to	2020