Annual report pursuant to Section 13 and 15(d)

Income Tax

v3.23.1
Income Tax
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Tax
NOTE 8. INCOME TAXES
The Company’s net deferred tax assets are as follows:
 
 
  
December 31,
 
  
December 31,
 
 
  
2022
 
  
2021
 
Deferred tax assets
  
  
Organizational costs/startup expenses
    $ 1,892,241      $ 1,234,633  
Federal net operating loss
      —          57,315  
    
 
 
     
 
 
  
Total deferred tax assets
      1,892,241        1,291,948  
Valuation allowance
      (1,892,241 )       (1,291,948 ) 
Deferred tax assets, net of allowance
   
$
—  
     
$
—  
  

 
 
 
 
 
 
 
 
 
 
The
income tax provision for the years ended December 31, 2022 and 2021 consists of the following:
 
 
  
December 31,
 
  
December 31,
 
 
  
2022
 
  
2021
 
Federal
  
  
Current
    $ 38,180      $ —    
Deferred
      (600,293 )       (1,291,948 )
State
                  
Current
      —          —    
Deferred
      —          —    
Change in valuation allowance
      600,293        1,291,948  
Income tax provision
   
$
38,180
 
   
$
—  
 

 
 
 
 
 
 
 
 
As of December 31, 2022 and 2021, the Company has $0 and $272,928 of U.S. federal net operating loss carryovers, which do not expire, and no state net operating loss carryovers available to offset future taxable income.
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 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. For the year ended December 31, 2022, the change in the valuation allowance was
$600,293. For the year ended December 31, 2021, the change in the valuation allowance was $1,291,948.
Reconciliations of the federal income tax rate to the Company’s effective tax rate for the years ended December 31, 2022 and 2021 are as follows:
 
 
  
December 31,
 
 
December 31,
 
 
  
2022
 
 
2021
 
Statutory federal income tax rate
      21.0 %      21.0 % 
State taxes, net of federal tax benefit
      0.0 %      0.0 % 
Permanent Book/Tax Differences
      (27.0 )%      (29.3 )% 
Change in valuation allowance
      6.4 %      8.5 % 
Other
      0.0 %      (0.2 )% 
    
 
 
    
 
 
  
Income tax provision
   
 
0.4
% 
  
 
—
% 
 
  
 
 
 
 
 
 
 
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.
The provision for income taxes for the year ended December 31, 2022 was $38,180. The provision for income taxes was deemed to be immaterial for the year ended December 31, 2021.