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 as of December 31, 2021 and 2020 are as follows:

	December 31,			December 31,
	2021			2020
Deferred tax assets
Net operating loss carryforward	$	40,466		$	—
Startup costs		192,806			—
Total deferred tax assets		233,272			—
Valuation allowance		(233,272	)		—
Deferred tax assets	$	—		$	—

The income tax provision for the year ended December 31, 2021, and for the period from December 11, 2020 (inception) through December 31, 2020, consists of the following:

	December 31,			December 31,
	2021			2020
Federal
Current	$	—		$	—
Deferred		(233,272	)		—
State and Local
Current		—			—
Deferred		—			—
Change in valuation allowance		233,272			—
Income tax provision	$	—		$	—

As of December 31, 2021 and 2020, the Company had $192,697 and $0 of U.S. federal net operating loss carryovers available to offset future taxable income indefinitely, respectively.

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 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 $233,272.

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

	December 31, 2021			December 31, 2020
Statutory federal income tax rate		21.0	%		21.0	%
Offering costs allocated to warrant liabilities		2.1	%		0.0	%
Change in fair value of warrant liabilities		(27.7	)%		0.0	%
Fair value of private warrant liability in excess of proceeds		1.2	%		—	%
Valuation allowance		3.4	%		(21.0	)%
Income tax provision		0.0	%		0.0	%

The effective tax rate differs from the statutory tax rate of 21% for the year ended December 31, 2021 and 2020, due to the valuation allowance recorded on the Company’s net operating losses as well as the change in the fair value of the warrant liabilities and the offering costs allocated to warrant liabilities. 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 years ended December 31, 2021 and 2020 remain open and subject to examination.