Annual report pursuant to Section 13 and 15(d)

Income Tax

v3.22.1
Income Tax
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
INCOME TAX

NOTE 9. INCOME TAX

 

The Company’s net deferred tax assets (liabilities) as of December 31, 2021 is as follows:

 

Deferred tax assets:      
Start-up costs   $ 252,290  
Net operating loss carryforwards     20,412  
Total deferred tax assets     272,702  
Valuation allowance     (271,562 )
Deferred tax liabilities:        
Unrealized gain on investments     (1,140 )
Total deferred tax liabilities     (1,140 )
Deferred tax assets, net of allowance   $
—
  

 

The income tax provision for the year ended December 31, 2021 consists of the following:

 

Federal      
Current   $
—
  
Deferred     (271,562 )
         
State        
Current    
—
  
Deferred    
—
  
Change in valuation allowance     271,562  
Income tax provision   $
—
  

 

As of December 31, 2021, the Company has available U.S. federal operating loss carry forwards of approximately $990,823 that may be carried forward indefinitely.

 

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred 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 temporary differences representing future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax assets, projected future taxable income and tax planning strategies in making this assessment. After consideration of all the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the year ended December 31, 2021, the valuation allowance was $271,562.

 

A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2021 is as follows:

 

Statutory federal income tax rate     21.0 %
State taxes, net of federal tax benefit     0.0 %
Change in fair value of derivative warrant liabilities     61.1 %
Non-deductible transaction costs     (8.8 )%
Change in valuation allowance     (73.3 )%
Income tax provision     0.0 %

 

Deferred tax assets were deemed to be de minimis as of December 31, 2020.