Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income tax expense was as follows:



(in thousands)	For the Year Ended December 31,
	2019			2018
Current tax (benefit) expense
Federal	$	(238	)	$	198
State	91			27
Foreign	99			—
Total current tax (benefit) expense	$	(48	)	$	225

Deferred tax expense (benefit)
Federal	$	329		$	(149	)
State	128			93
Total deferred tax expense (benefit)	457			(56		)
Total tax expense	$	409		$	169

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



(in thousands)	For the Year Ended December 31,
	2019		2018
Stock-based compensation expense	$	1,248	$	2,663
Income tax benefit	$	279	$	96

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,
	2019					2018
	Amount			Percent		Amount			Percent
Income tax expense (benefit) at federal statutory rate	$	1,818		21.0	%	$	(11,457	)	21.0	%
State income tax, net of federal benefit	618			7.1	%	(1,762		)	3.2	%
Non-deductible warrant expense	284			3.3	%	2,184			(4.0	)%
Other permanent differences	46			0.5	%	70			(0.1	)%
Research and development tax credits	(715		)	(8.3	)%	(1,058		)	1.9	%
Other tax credits	1			—	%	(934		)	1.7	%
Tax reserve reassessment	25			0.3	%	196			(0.4	)%
Change in valuation allowance	(2,696		)	(31.1	)%	12,856			(23.5	)%
Return adjustment	752			8.7	%	—			—	%
Stock-based compensation	279			3.2	%	96			(0.2	)%
Other, net	(3		)	—	%	(22		)	0.1	%
Income tax expense	$	409		4.7	%	$	169		(0.3	)%

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,
	2019			2018
Deferred tax assets:
Net operating loss carryforwards	$	16,389		$	19,006
Research and development credits	4,398			3,858
Other state credits	1,922			1,923
Inventory	1,718			2,203
Allowances and bad debts	1,009			840
Accrued warranty	6,344			5,732
Accrued wages and benefits	1,294			413
Other accrued expenses	1,393			5,281
Stock-based compensation	205			649
Capitalized research and development costs	486			770
163(j) disallowed interest	1,688			1,643
Intangible amortization	1,855			2,240
Contract liabilities	3,583			495
Operating lease liability	5,989			—
Other	356			847
Total deferred tax assets	48,629			45,900
Valuation allowance	(41,709		)	(44,405		)
Total deferred tax assets, net of valuation allowance	$	6,920		$	1,495

Deferred tax liabilities:
ROU operating lease asset	$	(5,652	)	$	—
Tax depreciation in excess of book depreciation on property, plant and equipment	(2,373		)	(2,142		)
Total deferred tax liabilities	$	(8,025	)	$	(2,142	)

Net deferred tax liability	$	(1,105	)	$	(647	)

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,
	2019			2018
Balance at beginning of year	$	1,421		$	1,307
Additions based on tax positions related to the current year	144			193
Reductions for tax positions of prior years	(135		)	(79		)
Balance at end of year	$	1,430		$	1,421

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	2019
U.S. States	2013	to	2019
Canada	2018	to	2019