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Income Taxes (Tables)
12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Deferred tax assets and liabilities
Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands):
 
 
December 31,
 
 
2019
 
2018
Deferred Tax Assets:
 
 
 
 
Accrued expenses
$
3,759

 
$
3,572

 
Deferred revenue

 
13,719

 
Bad debts
4,859

 

 
Sales return and allowances
659

 
2,296

 
Accrued settlement costs
3,276

 
2,689

 
Research and development and other tax credits
2,349

 
2,326

 
Net operating loss
14,350

 
3,118

 
Share-based compensation
3,439

 
3,425

 
Lease obligation
1,044

 

 
Other
2,124

 
971

Deferred Tax Liabilities:
 
 
 
 
Prepaid expenses
(1,189
)
 
(1,823
)
 
Right of use asset
(868
)
 

 
Property and equipment
(1,582
)
 
(2,519
)
 
Unearned insurance refund
(894
)
 

 
Deferred costs of goods sold
(322
)
 

 
Intangible assets
(389
)
 
(443
)
Net Deferred Tax Assets
30,615

 
27,331

 
Less: Valuation allowance
(30,615
)
 
(27,331
)
Net Deferred Tax Assets after Valuation Allowance
$

 
$


Reconciliation of the Federal statutory income tax
The reconciliation of the federal statutory income tax rate of 21% for 2019 and 2018, and 35% for 2017 to the effective rate is as follows:
 
December 31,
 
2019
 
2018
 
2017
 
 
 
 
 
 
Federal statutory rate
21.00
 %
 
21.00
 %
 
35.00
 %
State taxes, net of federal benefit
(1.36
)%
 
3.52
 %
 
0.40
 %
Nondeductible compensation
(1.49
)%
 
(15.33
)%
 
0.66
 %
Meals and entertainment
(2.04
)%
 
(24.16
)%
 
1.93
 %
Keyman life insurance
(0.02
)%
 
(0.15
)%
 
0.02
 %
Inventory contribution deduction
0.06
 %
 
0.48
 %
 
(0.06
)%
Domestic production activities deduction
 %
 
 %
 
(1.54
)%
Fair value adjustment
 %
 
 %
 
(2.76
)%
Share-based compensation
(5.05
)%
 
10.82
 %
 
(9.90
)%
Tax credits
0.45
 %
 
19.75
 %
 
(3.37
)%
Uncertain tax position
1.22
 %
 
(2.35
)%
 
0.46
 %
Write-off of net operating losses
 %
 
(11.81
)%
 
 %
Payable true-up
0.52
 %
 
(2.69
)%
 
0.65
 %
Sale of Stability
 %
 
 %
 
(8.86
)%
Fixed asset true-up
 %
 
5.33
 %
 
 %
Federal provision to return
0.02
 %
 
1.58
 %
 
0.13
 %
Impact of federal rate change
 %
 
 %
 
26.79
 %
Other
(0.46
)%
 
(0.25
)%
 
(0.03
)%
Valuation allowance
(12.83
)%
 
(788.33
)%
 
(83.08
)%
 
0.02
 %
 
(782.59
)%
 
(43.56
)%

Schedule of current and deferred income tax expense (benefit)
Current and deferred income tax expense (benefit) is as follows (in thousands):
 
December 31,
 
2019
 
2018
 
2017
Current:
 
 
 
 
 
Federal
$
(53
)
 
$
614

 
$
5,868

State
48

 
427

 
1,163

Total current
(5
)
 
1,041

 
7,031

 
 
 
 
 
 
Deferred:
 
 
 
 
 
Federal

 
19,452

 
(19,441
)
State

 
6,089

 
(7,229
)
Total deferred

 
25,541

 
(26,670
)
 
 
 
 
 
 
Total expense (benefit)
$
(5
)
 
$
26,582

 
$
(19,639
)
Reconciliation of unrecognized tax benefits
The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in thousands) included in other liabilities in the consolidated balance sheets:
 
2019
 
2018
 
2017
Unrecognized tax benefits - January 1
$
938

 
$
847

 
$
336

 
 
 
 
 
 
Gross increases - tax positions in current period
56

 
91

 
130

 
 
 
 
 
 
Gross increases - tax positions in prior period

 

 
381

 
 
 
 
 
 
Gross decreases - lapse of statute of limitations
(367
)
 

 

 
 
 
 
 
 
Unrecognized tax benefits - December 31
$
627

 
$
938

 
$
847