INCOME TAXES

6 Months Ended

Jun. 30, 2022

INCOME TAXES

INCOME TAXES

7. INCOME TAXES

The Company’s effective tax rate (“ETR”) is calculated quarterly based upon current assumptions relating to the full year’s estimated operating results and various tax-related items. The Company’s ETR was 1.4% and 0% for the three months ended June 30, 2022 and 2021, respectively. The Company’s ETR was 1.4% and 0% for the six months ended June 30, 2022 and for the period from February 5, 2021 (inception) through June 30, 2021, respectively. The difference between the effective tax rate of 1.4% and the U.S. federal statutory rate of 21% for the three and six months ended June 30, 2022 was primarily due to the ETR adjustment, the change in the fair value of the warrant liability, utilization of net operating loss, and the change in the valuation allowance. The difference between the effective tax rate of 0% and the U.S. federal statutory rate of 21% for the three months ended June 30, 2021 and for the period from February 5, 2021 (inception) through June 30, 2021 was primarily due to recognizing a full valuation allowance on deferred tax assets.

The Company has no uncertain tax positions related to federal and state income taxes. The 2021 federal tax return for the Company remains open for examination. In the event that the Company is assessed interest or penalties at some point in the future, it will be classified in the financial statements as tax expense.