Income Tax

3 Months Ended

Mar. 31, 2022

Income Tax Disclosure [Abstract]

Income Tax

Note 9 —Income Tax

The Company’s net deferred tax assets are as follows:

	March 31, 2022			December 31, 2021
Deferred tax asset
Organizational costs/Start-up costs	$	617,042		$	537,146
Federal net operating loss		92,599			85,187
Total deferred tax asset		709,641			622,334
Valuation allowance		(709,641	)		(622,334	)
Deferred tax asset, net of allowance	$	-		$	-

The income tax provision consists of the following:

	March 31, 2022			March 31, 2021
Federal
Current	$	-		$	-
Deferred		709,641			-
State
Current		-
Deferred		-			-
Change in valuation allowance		(709,641	)		-
Income tax provision	$	-		$	-

The Company’s net no net operating loss carryforward at March 31, 2022 and of December 31, 2021 was $35,291 and $0, respectively.

In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of 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 liabilities, 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. During the three months ended March 31, 2022, the change in the Company’s deferred tax benefit was $87,307. At March 31, 2022, the Company’s deferred tax asset and the related valuation allowance was $709,641.  At December 31, 2021, the change in the Company’s deferred tax benefit was $622,334 and a valuation allowance of $622,334. 

A reconciliation of the federal income tax rate to the Company’s effective tax rate at March 31, 2022 and December 31, 2021 is as follows:

	March 31, 2022			December 31, 2022
Statutory federal income tax rate		21.00	%		21.00	%
State taxes, net of federal tax benefit		-			-
Permanent book/tax differences		(23.06	)%		(34.56	)%
Change in valuation allowance		16.73	%		13.57	%
Other		(14.67	)%		(0.01	)%
Income tax provision		-			-

The permanent book/tax differences relate to unrealized gains on warrant liability valuation change of $4,657,457 and $7,549,843 at March 31, 2022 and December 31, 2021, respectively. The Company files income tax returns in the U.S. federal jurisdiction in various state and local jurisdictions and is subject to examination by the various taxing authorities, since inception.