Annual report pursuant to Section 13 and 15(d)

INCOME TAX

v3.22.1
INCOME TAX
11 Months Ended
Dec. 31, 2021
INCOME TAX  
INCOME TAX

NOTE 9. INCOME TAX

The Company’s net deferred tax assets at December 31, 2021 is as follows:

Deferred tax assets

 

  

Net operating loss carryforward

$

35,810

Organizational/startup costs

 

141,779

Total deferred tax assets

177,589

Valuation Allowance

 

(177,589)

Deferred tax assets

$

The income tax provision for the period from February 12, 2021 (inception) through December 31, 2021 consists of the following:

Federal

Current

$

Deferred

(177,589)

State and Local

Current

Deferred

Change in valuation allowance

177,589

Income tax provision

$

As of December 31, 2021, the Company had $170,524 of U.S. federal net operating loss carryovers available to offset future taxable income and be carried forward indefinitely.

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 period from February 12, 2021 (inception) through December 31, 2021, the change in the valuation allowance was $177,589.

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

%

Transaction costs allocated to warrants

1.9

%

Change in fair value of warrants

(27.6)

%

Valuation allowance

4.8

%

Income tax provision

%

The Company files income tax returns in the U.S. federal jurisdiction and is subject to examination by the various taxing authorities. The Company’s tax returns for the year ended December 31, 2021 remain open and subject to examination.