Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

The provision (benefit) for income taxes consisted of the following (in thousands):


	December 31, 2023		December 31, 2022
Current expense (benefit):
Federal	$	20,694	$	9,655
State	5,001		4,844
Foreign	24		12
Total	25,719		14,511
Deferred expense (benefit):
Federal	(21,454)		(14,073)
State	(4,088)		(3,707)
Total	(25,542)		(17,780)
Provision (benefit) for income taxes	$	177	$	(3,269)

Schedule of Components of Deferred Tax Assets and Deferred Tax Liabilities

The Company measures deferred tax assets and liabilities based on the difference between the financial statement and tax bases of assets and liabilities at the applicable tax rates. Components of the Company’s deferred tax asset and liability are as follows (in thousands):


	December 31, 2023		December 31, 2022
Deferred tax assets:
Lease liabilities	$	12,119	$	9,587
Bad debt reserve	608		593
Accrued employee related expenses	1,029		901
Capitalized research and development costs	37,957		18,670
Restricted stock units	3,052		1,701
Performance stock units	1,738		672
Acquisition related transaction costs	890		392
Intangible asset amortization	–		680
Other	2		2
	57,395		33,198
Deferred tax liabilities:
Fixed asset depreciation	(4,833)		(5,286)
Lease assets	(10,387)		(7,733)
Intangible asset amortization	(1,775)		–
Prepaid expenses	(1,102)		(622)
Section 481(a) adjustment	(3,343)		(4,229)
Goodwill amortization	(2,175)		(1,569)
	(23,615)		(19,439)
Net deferred tax assets (liabilities)	$	33,780	$	13,759

Schedule of Reconciliation of Income Tax Expense

Income tax expense (benefit) differed from the amounts computed by applying the federal statutory income tax rate of 21% to pretax income due to the following adjustments (in thousands):


	December 31, 2023		December 31, 2022
Statutory rate	$	(1,354)	$	351
State income taxes, net of federal benefit	(138)		225
Section 162(m) compensation differences	1,381		773
Other permanent differences	269		107
Stock compensation	(1,770)		(1,348)
Foreign taxes	24		12
Other	–		1
Research & development credit	(3,098)		(3,664)
Uncertain tax positions	4,863		274
Provision (benefit) for income tax	$	177	$	(3,269)

Reconciliation of Beginning Balance and Ending Amounts of Unrecognized Tax Benefits

A reconciliation of the beginning balance and ending amounts of unrecognized tax benefits (excluding interest and penalties) is as follows for the year ended December 31, 2023, and 2022 (in thousands):


	2023		2022
Balances at January 1	$	716	$	2,269
Additions based on tax positions related to the prior year	14,485		396
Decreases based on tax positions related to prior year	–		(1,960)
Additions based on tax positions related to the current year	23,698		153
Settlements	–		(142)


Balances at December 31	$	38,899	$	716