Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 9. INCOME TAXES

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

	December 31, 2022			December 31, 2021
Deferred tax asset
Organizational costs/Start-up costs	$	780,662		$	537,146
Federal net operating loss		(95	)		85,187
Total deferred tax asset		780,567			622,334
Valuation allowance		(780,567	)		(622,334	)
Deferred tax asset, net of allowance	$	-		$	-

The income tax provision consists of the following:

	December 31, 2022			December 31, 2021
Federal
Current	$	383,965		$	-
Deferred		(158,233	)		622,334
State
Current
Deferred		-			-
Change in valuation allowance		158,233			(622,334	)
Income tax provision	$	383,965		$	-

The Company had no net operating loss carryforward as of December 31, 2022 and 2021.

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. For the years ended December 31, 2022 and 2021, the change in the valuation allowance was $158,233 and $622,334, respectively.

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

	December 31,			December 31,
	2022			2021
Statutory federal income tax rate		21.00	%		21.00	%
Deferred tax liability change in rate
Permanent book/tax differences		(18.46	)%		-34.56	%
Acquisition facilitative expenses		0.34	%		0.00	%
Change in valuation allowance		2.00	%		13.56
Income tax provision		4.88	%		0.00	%

The permanent book/tax differences relate to unrealized gains on warrant liability valuation change of $6,837,333, acquisition facilitative expenses of $124,504 and tax interest and penalties of $7,173. 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.