INCOME TAX

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

INCOME TAX

10.   INCOME TAX

The effective tax rate (income tax provision as a percentage of income before income tax provision) was 8.7% for the three months ended September 30, 2023, as compared to 4.1% for the three months ended September 30, 2022. The effective tax rate was 16.5% and 17.1% for the nine months ended September 30, 2023 and 2022, respectively. The effective tax rates vary, primarily as a result of the full valuation on our deferred tax assets in both the current and prior period and the tax benefit related to our stock-based compensation. As of September 30, 2023, management believes that it is more-likely-than-not that the Company’s net deferred tax assets would not be realized in the near future and the Company would continue to record a full valuation allowance on its deferred tax assets.

Under the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) signed into law in 2020 and the subsequent extension of the CARES Act through September 30, 2021, the Company was eligible for a refundable employee retention credit subject to certain criteria. The Company has elected an accounting policy to recognize the government assistance when it is probable that the Company is eligible to receive the assistance and present the credit as a reduction of the related expense. As of September 30, 2023 and December 31, 2022, the Company recorded $836,734 and $1,296,488, respectively in other receivables on the condensed consolidated balance sheet related to U.S. Federal Government refunds.