INCOME TAXES

10 Months Ended

Dec. 31, 2021

INCOME TAXES

INCOME TAXES

NOTE 8 —INCOME TAXES

The Company’s net deferred tax assets as of December 31, 2021 is as follows:

	December 31, 2021
Deferred tax assets:
Net operating losses	$	31,451
Startup/organizational costs		114,913
Total deferred tax assets		146,364
Valuation Allowance		(146,364)
Deferred tax asset, net of allowance	$	—

As of December 31, 2021, the Company had $149,766 of U.S. federal net operating loss (‘NOL”) carryovers available to offset future taxable income. The Federal NOLs can be carried forward indefinitely.

Below is breakdown of the income tax provision for the period from March 15, 2021 (inception) through December 31, 2021.

	For the Period From
	March 15, 2021 (Inception)
	Through December 31,
	2021
Federal
Current	$	—
Deferred		(146,364)
State and local
Current		—
Deferred		—
Change in valuation allowance		146,364
Income tax provision	$	—

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 $146,364.

A reconciliation of the federal income tax rate to the Company’s effective tax rate for the period from March 15, 2021 (inception) through December 31, 2021 is as follows:

	For the Period From
	February 9, 2021 (Inception)
	Through December 31,
	2021
U.S. federal statutory rate	21.0	%
Valuation allowance	(21.0)	%
Income tax provision	—	%

The effective tax rate differs from the statutory tax rate of 21% for the year ended December 31, 2021, due to the valuation allowance recorded on the Company’s net operating losses. 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.