Income Taxes

11 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Note 7 — Income Taxes

The Company’s general and administrative expenses are generally considered start-up costs and are not currently deductible. During the period from January 21, 2021 (inception) to December 31, 2021, no income tax expense was recorded. The Company’s effective tax rate for the period from January 21, 2021 (inception) through December 31, 2021 was zero percent, which differs from the expected income tax rate due predominantly to the start-up costs which are not currently deductible.

The income tax provision consisted of the following as of December 31, 2021:

Federal
Current	$	—
Deferred		(96,461	)
State
Current		—
Deferred		—
Change in valuation allowance		96,461
Income tax provision	$	—

The Company’s net deferred tax assets consist of the following as of December 31, 2021:

Deferred tax assets:
Net operating loss carryforwards	$	33,531
Organizational costs/startup expenses		62,930
Total deferred tax asset		96,461
Valuation allowance		(96,461	)
Deferred tax asset, net of valuation allowance	$	—

As of December 31, 2021, the Company has U.S. federal net operating loss carryovers of $159,673 that 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 $96,461.

There were no unrecognized tax benefits as of December 31, 2021. No amounts were accrued for the payment of interest and penalties at December 31, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

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	%
Change in fair value of overallotment liability	8.3
Change in valuation allowance	(29.3	)
Effective tax rate	—	%

The Company files U.S. federal income tax returns and is subject to examination since inception.