Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 14. INCOME TAXES

Total provision (benefit) for income taxes for the years ended December 31, 2023, 2022 and 2021:

	December 31,
	2023			2022			2021
	(As Restated)			(As Restated)
(Loss) income before taxes
Domestic	$	(56,342	)	$	(64,071	)	$	(17,030	)
Foreign		(979	)		(1,642	)		4,050
Total loss before taxes		(57,321	)		(65,713	)		(12,980	)
Current tax expense (benefit):
Federal		105			—			(165	)
State		58			96			(36	)
Foreign		730			315			744
Total current tax expense		893			411			543
Deferred tax expense (benefit):
Federal		(11,309	)		(15,900	)		(3,506	)
State		(1,402	)		(1,939	)		(464	)
Foreign		(1,099	)		(909	)		170
Change in valuation allowance		13,129			18,273			3,970
Total deferred tax (benefit) expense		(681	)		(475	)		170
Total tax (benefit) expense:
Federal		(11,204	)		(15,900	)		(3,671	)
State		(1,344	)		(1,843	)		(500	)
Foreign		(368	)		(594	)		914
Change in valuation allowance		13,129			18,273			3,970
Total income tax expense (benefit)	$	213		$	(64	)	$	713

We account for income taxes under the asset and liability method, which required the recognition of deferred tax assets and liabilities for the expected future consequences of events that have been included in the financial statements. Under this method, we determine deferred tax assets and liabilities on the basis of differences between the financial statement and tax bases of the assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse.

We file income tax returns in the U.S. federal jurisdiction, various state jurisdictions and applicable foreign jurisdictions. We are no longer subject to U.S. federal or state tax examinations for the years prior to 2020. The 2018 year is open in a limited scope as a result of the 2020 NOL carryback.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred taxes as of December 31, 2023 and 2022 were:

	December 31,
	2023			2022
	(As Restated)			(As Restated)
Deferred tax assets:
Receivable allowances	$	253		$	356
Accrued expenses		1,262			5,351
S263A capitalizable costs		2,923			461
Inventory reserves		4,635			3,436
Research and development credits		3,974			3,615
Net operating losses		25,176			13,505
Interest expense		2,407			906
Stock-based compensation		4,496			3,324
Lease liability		356			384
R&D IRC 174(b) capitalized costs		5,161			3,433
Other		764			651
Total deferred tax assets		51,407			35,422
Valuation allowance		(41,671	)		(28,543	)
Net deferred tax assets		9,736			6,879
Deferred tax liabilities:
Property and equipment		(6,808	)		(5,391	)
Section 481 adjustment		(821	)		—
Patents and trademarks		(1,343	)		(1,304	)
Right of use asset		(292	)		(378	)
Total deferred tax liabilities		(9,264	)		(7,073	)
Total net deferred tax asset (liability)	$	472		$	(194	)

A valuation allowance is established when it is “more likely than not” that all, or a portion, of net deferred tax assets will not be realized. As a result, the Company has concluded based on all available evidence and determined that valuation allowances of $41,671 and $28,543 should be provided for certain deferred tax assets at December 31, 2023, and 2022, respectively. As of December 31, 2023 and 2022 we had federal US net operating loss carryforwards of $97,490 and $52,009 respectively which have an indefinite carryforward period and $52,211 of combined U.S state net operating loss carryforwards in various states that will begin to expire in 2033. Additionally, the Company has foreign net operating loss carryforwards of $10,368 that will begin to expire in 2034.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	2023		2022
Gross unrecognized tax benefits - beginning of period	$	1,431	$	1,337
Increases related to current year tax positions		92		92
Increases related to prior year tax positions		—		2
Gross unrecognized tax benefits - end of period	$	1,523	$	1,431

The unrecognized tax benefits of $1,523, if recognized, will impact the Company’s effective tax rate. In accordance with the Company’s accounting policy, accrued interest and penalties are recognized related to unrecognized tax benefits as a component of tax expense. As of December 31, 2023, the Company recorded $106 of interest or penalties associated with unrecognized tax benefits. The Company expects the total amount of tax contingencies will not decrease in 2024 based on statute of limitation expiration.

A reconciliation of the provision for income taxes at the federal statutory rate compared to the effective tax rate for the years ended December 31, 2023, 2022 and 2021 is:

	2023			2022			2021
	(As Restated)			(As Restated)
Statutory U.S. federal tax rate	$	(12,037	)	$	(13,800	)	$	(2,726	)
State taxes net of federal benefit		(1,356	)		(1,863	)		(492	)
Non-U.S. earnings taxed at rates different than the U.S. statutory rate		5			(80	)		(150	)
Foreign source earnings, net of associated foreign tax credits		628			486			601
Benefit of tax credits		(501	)		(458	)		(1,569	)
Stock based compensation		27			(2,852	)		(212	)
Change in valuation allowance		13,129			18,273			3,970
Change in unrecognized tax benefits		175			92			710
Other		143			138			581
Total provision (benefit) for income taxes	$	213		$	(64	)	$	713

As of December 31, 2023, our foreign operations held cash totaling $10,293. We have not provided for a U.S. deferred tax liability or foreign withholding tax on the undistributed earnings from our non-U.S. subsidiaries that are considered to be indefinitely reinvested. If such earnings were to be distributed, any U.S. deferred tax liability or foreign withholding tax would not be significant.