Income Tax

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Income Tax

Note 9 – Income Tax

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

	December 31,			December 31,
	2022			2021
Deferred tax asset
Start-up costs	$	332,019		$	80,282
Federal net operating loss		—			36,498
Total deferred tax asset		332,019			116,781
Valuation allowance		(332,019	)		(116,781	)
Deferred tax asset, net of allowance	$	—		$	—

The income tax provision (benefit) consists of the following:

	Year Ended December 31,			For the period from February 18, 2021 (inception) through December 31,
	2022			2021
Federal
Current	$	253,660		$	—
Deferred		(215,237	)		(116,781	)
State and Local
Current		—			—
Deferred		—			—
Change in valuation allowance		215,237			116,781
Income tax provision	$	253,660		$	—

As of December 31, 2022 and 2021, the Company had $0 and $173,802 in U.S. federal net operating loss carryovers, respectively, which do not expire, and no state net operating loss carryovers available to offset future taxable income.

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 fiscal year ended December 31, 2022 and for the period from February 18, 2021 (inception) through December 31, 2021, the change in valuation allowance was $215,237 and $116,781, respectively.

A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2022 is as follows:

	December 31,			December 31,
	2022			2021
Statutory federal income tax rate		21.00	%		21.0	%
State taxes, net of federal tax benefit		—	%		—	%
Meals and entertainment		—	%		—	%
Transaction Costs		2.2	%		2.6	%
Change in fair value of warrants		(22.6	)%		(25.6	)%
Valuation allowance		3.5	%		2.0	%
Income tax provision		4.1	%		—	%

The Company’s effective tax rate for the period presented differs from the expected (statutory) rates due to the change in fair value of warrant liabilities, non-deductible offering costs, and the recording of a full valuation allowance on deferred tax assets.

The Company files income tax returns in the U.S. federal jurisdiction and Texas and is subject to income tax examinations by various taxing authorities.