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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Taxes [Abstract] |
Income Taxes | NOTE 16. INCOME TAXES Consolidated income before income taxes consists of the following: Year Ended December 31, 2021 2020 2019 U.S. operations $ 16,947 $ 362 $ 8,553Foreign operations (3,068) 3,223 1,428Income before income tax $ 13,879 $ 3,585 $ 9,981 The components of the benefit for income taxes consist of the following: Year Ended December 31, 2021 2020 2019 Current: Federal$ 141 $ 34 $ (41)State and local 887 390 179Foreign 2,057 863 111 3,085 1,287 249Deferred: Federal 4,338 3,084 1,133State and local 353 44 (156)Foreign (2,020) (91) 3,273 2,671 3,037 4,250Change in valuation allowance for deferred income taxes (17,970) (6,284) (13,490) (15,299) (3,247) (9,240) Income tax benefit$ (12,214) $ (1,960) $ (8,991) The Company’s foreign operations that are considered to be permanently reinvested have statutory tax rates of approximately 25% to 30%. The following is a reconciliation of the statutory federal income tax rate to the effective rate reported in the Company’s financial statements: Year Ended December 31, 2021 2020 2019 Statutory income tax expense 21.0% 21.0% 21.0%Increase (decrease) in income taxes resulting from: Foreign taxes 1.3 3.6 0.2 State income taxes, net of federal income taxes 10.1 10.2 1.9 Income tax credits (14.1) (17.1) (5.6) Incentive stock options (5.5) 9.9 (3.7) Change in effective state rate (0.5) 2.3 (0.1) Deferred tax asset write-offs - 73.1 31.4 Executive compensation limitation 7.3 15.6 - Change in valuation allowance (129.5) (175.4) (135.9) Research and development expenditure 1.7 - - Fair value inventory step-up 4.8 - - Transactions costs 10.2 - - Other 5.2 2.1 0.7 Income tax benefit (88.0)% (54.7)% (90.1)% The deferred tax asset write-offs relate to historical research and development tax credits and certain investments that were fully offset by a release in the valuation allowance. Deferred income tax assets and liabilities are determined based on the difference between the financial reporting carrying amounts and tax bases of existing assets and liabilities and operating loss and tax credit carryforwards. Significant components of the Company’s existing deferred income tax assets and liabilities as of December 31, 2021 and 2020 are as follows: December 31, 2021 2020 Deferred tax assets: Net operating loss, capital loss amount and research & experimentation credit carryforwards$ 26,530 $ 37,206Non-cash compensation 2,576 1,528Accrued liabilities 1,944 274Reserves and other 6,885 1,462Depreciation 4 -Intangibles 245 68 38,184 40,538Valuation allowance (4,378) (22,348)Net deferred tax assets 33,806 18,190Deferred tax liabilities: Depreciation (1,737) (1,074)Intangibles (44,814) (7,529)Other (102) 299 (46,653) (8,304) Total$ (12,847) $ 9,886 Certain deferred income tax balances are not netted as they represent deferred amounts applicable to different taxing jurisdictions. The Company has provided a valuation allowance against a portion of the deferred tax assets as of December 31, 2021, because the ultimate realization of those assets does not meet the more-likely-than-not criteria. The majority of the Company’s deferred tax assets consist of net operating loss carryforwards for federal tax purposes. If a change in control were to occur, these could be limited under Section 382 of the Internal Revenue Code of 1986 (“Code”), as amended. In assessing the realizability of deferred income tax assets, management considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible and net operating loss and credit carryforwards expire. The estimates and judgments associated with the Company’s valuation allowance on deferred tax assets are considered critical due to the amount of deferred tax assets recorded by the Company on its consolidated balance sheets and the judgment required in determining the Company’s potential for future taxable income. The need for a valuation allowance is reassessed at each reporting period. The net change in the valuation allowance for deferred income tax assets was ($17,970), ($6,284), and ($13,490) during the years ended December 31, 2021, 2020, and 2019, respectively. A roll forward of our valuation allowance for deferred income tax assets for the years ended December 31, 2021, 2020, and 2019 is as follows: Balance at Beginning of Year Charged to Costs and Expenses Other Adjustments Balance at End of Year 2019$ 42,122 $ (13,473) $ (17) $ 28,6322020$ 28,632 $ (6,284) $ - $ 22,3482021$ 22,348 $ (17,970) $ - $ 4,378 As of December 31, 2021, the Company has net operating loss carryforwards (“NOLs”) and research and experimentation credit for U.S. federal income tax purposes of $60,712 and $2,289, respectively. The Company believes its U.S. Federal NOLs will substantially offset its future U.S. Federal income taxes until expiration. The majority of the Company’s pre-tax income is currently earned and expected to be earned in the U.S., or taxed in the U.S. as Subpart F. income and will be offset with the NOLs. There are $39,507 of NOLs that expire on December 31, 2022, which the Company expects to realize in their entirety in 2022. Therefore, the Company has eliminated any remaining valuation allowance associated with these NOLs during the year ended December 31, 2021. NOLs available to offset taxable income, subject to compliance with Section 382 of the Code, begin to expire based upon the following schedule: Net Operating Loss Carryforward Expiration DatesDecember 31, 2021 Expiration Dates December 31, Net Operating Loss Amount2022 $ 39,5072023 5,7122024 3,5662025 and beyond 11,927Total $ 60,712 Tax positions are recognized in the financial statements when it is more likely than not that the position will be sustained upon examination by the tax authorities. The Company conducts its business globally. As a result, the Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions and are subject to examination for the open tax years in the U.S. federal and state jurisdictions of 2015 through 2019 and in the foreign jurisdictions of 2007 through 2019. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. A reconciliation of the beginning and ending amount of total unrecognized tax benefits for the years ended December 31, 2021, 2020 and 2019 is as follows: December 31, 2021 2020 2019 Balance, beginning of year$ 427 $ 561 $ 545Additions for current year tax positions 143 87 77Additions for prior year tax positions 237 12 11Reductions for prior year tax positions (111) (233) (72)Balance, end of year$ 696 $ 427 $ 561 Included in the balance of total unrecognized tax benefits at December 31, 2021 and 2020, are potential benefits of $696 and $427, respectively, that if recognized, would affect the effective rate, subject to impact of valuation allowance, on income from continuing operations. Unrecognized tax benefits that reduce a net operating loss, similar tax loss or tax credit carryforward are presented as a reduction to deferred income taxes. As a result, the Company classified $250 and $292 of its unrecognized tax benefit as a reduction to deferred tax assets as of December 31, 2021 and 2020, respectively. Interest and penalty expense recognized related to uncertain tax positions were not significant during the years ending December 31, 2021, 2020, and 2019, respectively. Total accrued interest and penalties as of December 31, 2021 and 2020, were not significant.

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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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