Income Taxes

12 Months Ended

Dec. 31, 2021

Income Taxes

Income Taxes

Note 10 – Income Taxes

The Company’s taxable income primarily consists of gain on investments in the Trust Account. The Company’s general and administrative expenses are generally considered start-up costs and are not currently deductible. There was no income tax expense for the year ended December 31, 2021 and for the period from August 21, 2020 (inception) through December 31, 2020.

The income tax provision (benefit) consists of the following for the year ended December 31, 2021 and for the period from August 21, 2020 (inception) through December 31, 2020:

	December 31, 2021		December 31, 2020
Current
Federal	$	—	$	—
State		—		—
Deferred
Federal		(342,916)		(49,331)
State		(45,602)		(8,277)
Change in Valuation allowance		388,518		57,608
Income tax provision	$	—	$	—

The Company’s net deferred tax assets for the year ended December 31, 2021 and for the period from August 21, 2020 (inception) through December 31, 2020:

	December 31, 2021		December 31, 2020
Deferred tax assets:
Net operating loss carryover	$	51,528	$	14,167
Start-up/Organization costs		394,598		43,441
Total deferred tax assets		446,125		57,608
Valuation allowance		(446,125)		(57,608)
Deferred tax asset, net of allowance	$	—	$	—

As of December 31, 2021 and 2020, the Company had approximately $215,000 and $58,000 U.S. federal and Florida net operating loss carryovers which can 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.

A reconciliation of the statutory federal income tax rate (benefit) to the Company’s effective tax rate (benefit) is as follows for the year ended December 31, 2021 and for the period from August 21, 2020 (inception) through December 31, 2020:

	December 31, 2021		December 31, 2020
Statutory Federal income tax rate	21.0	%	21.0	%
State tax rate, net of federal benefit	2.8	%	3.5	%
Change in fair value of warrant liabilities and related financing costs	(28.1)	%	(18.9)	%
Change in Valuation Allowance	4.3	%	(5.6)	%
Income Taxes Benefit	0.00	%	0.00	%