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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | 6. Income taxes The components of the Company’s income (loss) before provision for income taxes are as follows:
|  | Years ended December 31, |
(amounts in thousands) |  | 2021 |  |  | 2020 |  |  | 2019 |
United States |  | $ | 7,621 |  |  | $ | (6,464 | ) |  | $ | 22,553 |
Foreign |  |  | 1,038 |  |  |  | 1,184 |  |  |  | 1,719 |
Income (loss) before provision for income taxes |  | $ | 8,659 |  |  | $ | (5,280 | ) |  | $ | 24,272 |
The provision for income taxes consists of the following:
|  | Years ended December 31, |
(amounts in thousands) |  | 2021 |  |  | 2020 |  |  | 2019 |
Current tax expense (benefit) |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | — |  |  | $ | (74 | ) |  | $ | (330 | )
State |  |  | 271 |  |  |  | 198 |  |  |  | 136 |
Foreign |  |  | 266 |  |  |  | 381 |  |  |  | 560 |
Total current tax expense |  |  | 537 |  |  |  | 505 |  |  |  | 366 |
Deferred tax expense (benefit) |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | 10,263 |  |  |  | 309 |  |  |  | 3,497 |
State |  |  | 4,194 |  |  |  | (193 | ) |  |  | (396 | )
Foreign |  |  | (22 | ) |  |  | (72 | ) |  |  | (145 | )
Total deferred tax expense |  |  | 14,435 |  |  |  | 44 |  |  |  | 2,956 |
Interest and penalties |  |  | 20 |  |  |  | — |  |  |  | — |
Provision for income taxes |  | $ | 14,992 |  |  | $ | 549 |  |  | $ | 3,322 |
The components of deferred tax assets and liabilities consist of the following:
(amounts in thousands) |  | As of December 31, |
Deferred tax assets (liabilities) |  | 2021 |  |  | 2020 |
Accrued expenses |  | $ | 10,575 |  |  | $ | 8,346 |
Net operating loss and credit carryforward |  |  | 21,138 |  |  |  | 20,145 |
Allowance, reserves and other |  |  | 2,668 |  |  |  | 1,381 |
Stock-based compensation |  |  | 2,665 |  |  |  | 3,379 |
Lease liability |  |  | 6,507 |  |  |  | 2,427 |
Deferred tax assets |  |  | 43,553 |  |  |  | 35,678 |
Property, plant, and equipment |  |  | (7,664 | ) |  |  | (4,805 | )
Intangible amortization |  |  | (12,389 | ) |  |  | (14,292 | )
Right-of-use asset |  |  | (6,077 | ) |  |  | (2,139 | )
Deferred tax liabilities |  |  | (26,130 | ) |  |  | (21,236 | )
Valuation allowance |  |  | (17,423 | ) |  |  | — |
Total |  | $ | — |  |  | $ | 14,442 |
Reconciliation of the federal statutory income tax rate to the effective income tax rate for the years ended December 31, 2021, 2020 and 2019 is as follows:
|  | Years ended December 31, |
|  | 2021 |  |  | 2020 |  |  | 2019 |
U.S. Statutory rate |  |  | 21.00 | % |  |  | 21.00 | % |  |  | 21.00 | %
State income taxes, net of federal benefit |  |  | -1.39 | % |  |  | -3.86 | % |  |  | 3.70 | %
Stock-based compensation |  |  | -21.72 | % |  |  | -16.80 | % |  |  | -0.81 | %
R&D credit, net of reserve |  |  | -5.95 | % |  |  | -8.11 | % |  |  | -8.97 | %
Change in fair value |  |  | -28.19 | % |  |  | -4.19 | % |  |  | 0.70 | %
Nondeductible compensation |  |  | 7.04 | % |  |  | — |  |  |  | — |
Valuation allowance |  |  | 201.69 | % |  |  | — |  |  |  | — |
Other |  |  | 0.63 | % |  |  | 1.57 | % |  |  | -1.94 | %
Effective income tax rate |  |  | 173.11 | % |  |  | -10.39 | % |  |  | 13.68 | %
The Company operates in several taxing jurisdictions, including U.S. federal, multiple U.S. states and the Netherlands. The statute of limitations has expired for all tax years prior to 2018 for federal and prior to 2016 for various state tax purposes. However, the net operating loss generated on the Company’s federal and state tax returns in prior years may be subject to adjustments by the federal and state tax authorities. As of December 31, 2021, the Company had $60,239 and $26,193 of federal and state net operating loss carryforwards, respectively, and $52,443 of the total federal net operating loss carryforwards have an indefinite life while the remaining federal and state net operating loss carryforwards begin to expire in 2033 and 2028, respectively, if not utilized. As of December 31, 2021, the Company had federal and California research and development credit carryforward of $4,365 and $4,327, respectively. The federal credit will begin to expire in 2022; the California credit has indefinite carryforward. Utilization of the Company’s net operating loss and tax credit carryforwards may be subject to annual limitations arising from ownership change limitations provided by the Internal Revenue Code and similar state provisions. Such annual limitations could result in the expiration of the net operating loss and tax credit carryforwards before their utilization. The Company recognizes deferred tax assets to the extent it believes these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. The amount of deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income are reduced. As of December 31, 2021, the Company determined that net deferred tax assets are not more likely than not realizable based on projected future taxable losses primarily due to planned strategic investments in future periods and the impact of the COVID-19 pandemic, including related supply chain impacts on parts availability and cost inflation. Accordingly, the Company recorded a valuation allowance of $17,423 as of December 31, 20 2 1. The Company’s valuation allowance may increase or decrease during the next 12 months based on future operating results. The Company recognizes interest and penalties on taxes, within its income tax provision on its consolidated statements of comprehensive income (loss). Included in the balance of unrecognized tax benefits as of December 31, 2021, 2020 and 2019, were $2,078, $1,932 and $1,889, respectively, of tax benefits that, if recognized, would affect the effective tax rate. The Company believes that there will be no significant increases or decreases to unrecognized tax benefits within the next 12 months. A reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows:
(amounts in thousands) |  | December 31, |
Reconciliation of liability for unrecognized tax benefits |  | 2021 |  |  | 2020 |  |  | 2019 |
Balance at beginning of period |  | $ | 1,932 |  |  | $ | 1,889 |  |  | $ | 1,294 |
Additions based on tax positions related to current year |  |  | 146 |  |  |  | 70 |  |  |  | 595 |
Reductions based on tax positions related to prior year |  |  | — |  |  |  | (181 | ) |  |  | — |
Additions based on tax positions related to prior year |  |  | — |  |  |  | 154 |  |  |  | — |
Balance at end of period |  | $ | 2,078 |  |  | $ | 1,932 |  |  | $ | 1,889 |

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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