INCOME TAX

3 Months Ended

Mar. 31, 2022

INCOME TAX [Abstract]

INCOME TAX

NOTE 9. INCOME TAX

The Company considers any tax activity for the period from March 1, 2021 (inception) through March 31, 2021 to be immaterial. The Company’s net deferred tax assets (liabilities) as of March 31, 2022 and December 31, 2021 are as follows:

	March 31, 2022			December 31, 2021
Deferred tax assets:
Start-up costs	$	187,314		$	140,508
Net operating loss carryforwards		45,722			35,096
Total deferred tax assets		233,036			175,604
Valuation allowance		(215,659	)		(169,370	)
Deferred tax liabilities:
Unrealized gain on investments		(17,377	)		(6,234	)
Total deferred tax liabilities		(17,377	)		(6,234	)
Deferred tax assets, net of allowance	$	—		$	—

The income tax provision for the three months ended March 31, 2022 consists of the following:

Federal
Current	$	—
Deferred		(46,289	)
State
Current	$	—
Deferred		—
Change in valuation allowance		46,289
Income tax provision	$	—

As of March 31, 2022 and December 31, 2021, the Company has available U.S. federal operating loss carry forwards of approximately $218,000 and $167,000 that may be carried forward indefinitely, respectively.

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 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 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 three months ended March 31, 2022, the valuation allowance was $46,289.

A reconciliation of the federal income tax rate to the Company’s effective tax rate as of March 31, 2022 and December 31, 2021 are as follows:

	March 31, 2022			December 31, 2021
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 derivative warrant liabilities		(23.8	)%		(25.6	)%
Non-deductible transaction costs		—	%		2.3	%
Change in valuation allowance		2.8	%		2.3	%
Income tax provision		0.0	%		0.0	%

The Company files income tax returns in the U.S. federal jurisdiction which remain open and subject to examination.