Annual report pursuant to Section 13 and 15(d)

Income Taxes

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

Note 10 — Income Taxes

 

The income tax provision (benefit) consists of the following for the year ended December 31, 2021 and 2020:

 

    Year Ended
December 31,
2021
    For the period
from
October 7,
2020
(inception)
through
December 31,
2020
 
Current            
Federal   $
-
    $
-
 
State    
-
     
-
 
Deferred                
Federal     (457,429 )     (1,085 )
State    
-
     
-
 
Valuation allowance    

457,429

      1,085  
Income tax provision   $
-
    $
-
 

 

The Company’s net deferred tax assets are as follows as of December 31, 2021:

 

    December 31,  
    2021     2020  
Deferred tax assets:                
Start-up/Organization costs   $ 426,839     $ 958  
Net operating loss carryforwards     31,675       128  
Total deferred tax assets     458,514       1,085  
Valuation allowance     (458,514 )     (1,085 )
Deferred tax asset, net of allowance   $
-
    $
-
 

 

As of December 31, 2021, and December 31, 2020 the Company has available U.S. federal operating loss carry forwards of $150,832 and $609 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 net 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 of 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. The valuation allowance increased by approximately $457,000 and $1,000 during the year ended December 31, 2021 and during the period from October 7, 2020 (inception) through December 31, 2020, respectively.

  

A reconciliation of the statutory federal income tax rate (benefit) to the Company’s effective tax rate (benefit) is as follows:

 

    Year Ended
December 31,
2021
    For the period
from
October 7,
2020
(inception)
through
December 31,
2020
 
Statutory federal income tax rate     21.0 %     21.0 %
Change in fair value of derivative warrant liabilities     (33.7 )%     0.0 %
Transaction costs allocated to derivative warrant liabilities     5.1 %     0.0 %
Loss on promissory note – related party     0.1 %     0.0 %
Change in fair value of promissory note – related party     (0.5 )%     0.0 %
Change in valuation allowance     7.9 %     (21.0 )%
Income Taxes Benefit     0.0 %     0.0 %

 

The Company files income tax return in the U.S. federal and Delaware jurisdictions. The tax returns are subjection to examination since inception.