8. Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Taxes Tables

Schedule of income tax expense/benefit

	Years Ended December 31,
	2017			2016
Current:
Federal	$	(11	)	$	61
State		10			11
		(1	)		72
Deferred:
Federal		(1,780	)		1,296
State		(43	)		215
Impact of rate change		665			—
		(1,158	)		1,511
	$	(1,159	)	$	1,583

Schedule of effective income tax rate

	Years Ended December 31,
	2017			2016
Statutory U.S. income tax rate		(34.00	)%		34.00	%
State taxes, net of federal benefit		(1.37	)%		2.33	%
Non-deductible items		0.52	%		0.54	%
Change in valuation allowance		(0.25	)%		1.78	%
Change in net operating loss carryforwards and tax credits		(3.27	)%		(1.65	)%
Other		0.25	%		0.13	%
Effective income tax rate		(38.12	)%		37.13	%

Schedule of deferred tax assets and liabilities

	Years Ended December 31,
	2017			2016
Deferred tax assets:
Operating loss carryforwards	$	1,874		$	1,035
R&D Tax Credit		1,478			1,310
AMT Tax Credit		352			364
Section 263A costs		315			502
R&D costs		335			690
Amortization		24			34
Asset reserves:
Bad debts		12			18
Inventory allowance		182			574
Accrued expenses:
Non-qualified stock options		86			86
Compensation		165			261
Warranty		465			415
Deferred tax assets		5,288			5,289
Less state valuation allowance		(64	)		(76	)
Total deferred tax assets		5,224			5,213
Deferred tax liabilities:
Depreciation		(338	)		(626	)
Total deferred tax liabilities		(338	)		(626	)
Net deferred tax assets (before unrealized gain)		4,886			4,587
Deferred tax liability: unrealized gain		(1,569	)		(1,169	)
Net deferred tax assets	$	3,317		$	3,418