Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Schedule of Components of Income Tax Expense (Benefit)

Income tax expense was as follows:


(in thousands)	For the Year Ended December 31,
	2023		2022
Current tax expense
Federal	$	61	$	204
State	639		(89)

Total current tax expense	$	700	$	115

Deferred tax expense
Federal	$	64	$	(71)
State	136		260
Total deferred tax expense	200		189
Total tax expense	$	900	$	304

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


(in thousands)	For the Year Ended December 31,
	2023		2022
Stock-based compensation expense	$	151	$	385
Income tax benefit	$	—	$	87

Reconciliation of Effective Tax Rate to the Statutory Rate

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


(in thousands)	For the Year Ended December 31,
	2023				2022
	Amount		Percent		Amount		Percent
Income tax expense at federal statutory rate	$	5,713	21.0	%	$	2,430	21.0	%
State income tax, net of federal benefit	1,486		5.5	%	140		1.2	%


Other permanent differences	22		0.1	%	88		0.7	%
Research and development tax credits	(601)		(2.2)	%	(393)		(3.4)	%
Other tax credits	277		1.0	%	(612)		(5.3)	%
Tax reserve reassessment	158		0.6	%	79		0.7	%

Change in valuation allowance	(5,366)		(19.7)	%	(497)		(4.3)	%
Return adjustment	(673)		(2.5)	%	(1,147)		(9.9)	%

Other, net	(116)		(0.5)	%	216		1.9	%
Income tax expense	$	900	3.3	%	$	304	2.6	%

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,
	2023		2022
Deferred tax assets:
Net operating loss carryforwards	$	18,067	$	25,541
Capital loss carryforwards	195		194
Research and development credits	6,167		5,565
Other state credits	2,244		3,671
Inventory	2,569		2,407
Allowances and bad debts	1,646		1,195
Accrued warranty	5,165		6,048
Accrued wages and benefits	353		1,294
Other accrued expenses	6,505		5,749
Stock-based compensation	240		188
Capitalized research and development costs	8,078		4,658
163(j) disallowed interest	2,868		1,343

Contract liabilities	698		1,057
Operating lease liability	7,917		2,820
Other	804		1,685
Total deferred tax assets	63,516		63,415
Valuation allowance	(54,314)		(59,680)
Total deferred tax assets, net of valuation allowance	$	9,202	$	3,735

Deferred tax liabilities:
ROU operating lease asset	$	(7,274)	$	(2,612)
Intangible amortization	(1,006)		(110)
Depreciation on property, plant and equipment	(2,400)		(2,291)
Total deferred tax liabilities	$	(10,680)	$	(5,013)

Net deferred tax liability	$	(1,478)	$	(1,278)

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,
	2023		2022
Balance at beginning of year	$	1,660	$	1,588
Additions based on tax positions related to the current year	117		74
Additions for tax positions of prior years	43		5
Reduction for tax positions of prior years	(1)		$	(7)
Balance at end of year	$	1,819	$	1,660

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	2023
U.S. States	2013	to	2023
Canada	2019	to	2020