Income Taxes

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Tax

NOTE 10. INCOME TAXES

The Company’s net deferred tax assets are as follows:

	December 31, 2022			December 31, 2021
Deferred tax assets:
Net operating losses	$	—		$	33,154
Startup/organizational costs		381,141			101,371
Total deferred tax assets		381,141			134,525
Valuation Allowance		(373,951	)		(134,525	)
Deferred tax asset, net of allowance		7,190			—
Deferred tax liabilities:
Unrealized gain		(7,190	)		—
Total deferred tax liabilities		(7,190	)		—
Deferred tax asset, net	$	—		$	—

Below is breakdown of the income tax provision.

	For the Year Ended December 31, 2022			For the Period From February 9, 2021 (Inception) Through December 31, 2021
Federal
Current	$	630,066		$	—
Deferred		(239,426	)		(134,525	)
State and local
Current		—			—
Deferred		—			—
Change in valuation allowance		239,426			134,525
Income tax provision	$	630,066		$	—

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, 2022 and period ended December 31, 2021, the change in the valuation allowance was $239,426 and $134,525, respectively.

A reconciliation of the federal income tax rate to the Company’s effective tax rate is as follows:

	For the Year Ended December 31, 2022			For the Period From February 9, 2021 (Inception) Through December 31, 2021
U.S. federal statutory rate		21.0	%		21.0	%
Change in fair value of warrants		(18.3	)%		—
Other		—			2.80	%
Valuation allowance		1.7	%		(23.80	)%
Income tax provision		4.4	%		—	%

The Company’s effective tax rates for the periods presented differ from the expected (statutory) rates due to changes in fair value of warrants, warrant issuance costs and the recording of full valuation allowances on deferred tax assets. 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 since inception remain open to examination by the taxing authorities. The Company considers New York to be a significant state tax jurisdiction. As of December 31, 2022 and December 31, 2021, the Company had $0 and $157,833, respectively, of U.S. federal net operating loss carryovers available to offset future taxable income. The Federal NOLs can be carried forward indefinitely.