Income Tax

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Tax

NOTE 9. INCOME TAX

The Company’s net deferred tax assets at December 31, 2021 and 2020 are as follows:

	December 31, 2021			December 31, 2020
Deferred tax assets
Net operating loss carryforward	$	42,160		$	—
Startup/Organization Expenses		63,590			—
Unrealized loss on marketable securities		(3,975	)		—
Total deferred tax assets		101,775			—
Valuation Allowance		(101,775	)		—
Deferred tax assets	$	—		$	—

The income tax provision for the year ended December 31, 2021 and for the Period from December 10, 2020 (Inception) through December 31, 2020 consists of the following:

	December 31, 2021			December 31, 2020
Federal
Current	$	—		$	—
Deferred		(101,775	)		—
State and Local
Current		—			—
Deferred		—			—
Change in valuation allowance		101,775			—
Income tax provision	$	—		$	—

As of December 31, 2021 and 2020, the Company had $200,764 and $0 of U.S. federal net operating loss carryovers available to offset future taxable income, respectively. The net operating loss carryforwards do not expire.

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 year ended December 31, 2021, the change in the valuation allowance was $101,775. For the period from December 10, 2020 (inception) through December 31, 2020, the change in the valuation allowance was $0.

A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2021 and 2020 are as follows:

	December 31, 2021			December 31, 2020
Statutory federal income tax rate		21.0	%		21.0	%
State taxes, net of federal tax benefit		0.0	%		0.0	%
Change in fair value of warrant liabilities		20.4	%		0.0	%
Transaction costs associated with the Initial Public Offering		-3.4	%		0.0	%
True-ups		0.0	%		0.0	%
Valuation allowance		-38.0	%		0.0	%
Income tax provision		0.0	%		21.0	%

The Company files income tax returns in the U.S. federal jurisdiction. The Company’s tax returns for the year ended December 31, 2021 and 2020 remain open and subject to examination.