Income Taxes

3 Months Ended

May 31, 2022

Income Tax Disclosure [Abstract]

Income Taxes

(13) Income Taxes

The Company’s provision for income taxes consists of federal, foreign, and state taxes necessary to align the Company’s year-to-date tax provision with the annual effective rate that it expects to achieve for the full year. At each interim period, the Company updates its estimate of the annual effective tax rate and records cumulative adjustments, as necessary.

For the three months ended May 31, 2022, the Company recorded an income tax benefit of $1,092, which includes a discrete income tax benefit of $164 related primarily to the reversal of uncertain tax position liabilities as a result of the lapse of the applicable statute of limitations. For the three months ended May 31, 2021, the Company recorded an income tax provision of $484, which includes a discrete income tax benefit of $74 related primarily to the reversal of uncertain tax position liabilities as a result of the lapse of the applicable statute of limitations.

The effective tax rates for the three months ended May 31, 2022 and 2021 were an income tax benefit of 12.2% on pre-tax loss of $8,939 and an income tax provision of 21.2% on pre-tax income of $2,281, respectively. The effective tax rate for the three months ended May 31, 2022 and 2021 differs from the U.S. statutory rate of 21% as a result of a number of factors, including the non-controlling interest related to EyeLock LLC, state and local income taxes, nondeductible permanent differences, income taxed in foreign jurisdictions at varying tax rates, and a decrease in valuation allowance.

At May 31, 2022, the Company had an uncertain tax position liability of $913, including interest and penalties. The unrecognized tax benefits include amounts related to various U.S. federal, state, and local, and foreign tax issues.