General form of registration statement for all companies including face-amount certificate companies

Income Taxes

v3.22.2.2
Income Taxes
12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes

Note 9 — Income Taxes

 

The Company’s taxable income primarily consists of interest income on the Trust Account, less any franchise taxes. The Company’s formation and operating costs are generally considered start-up costs and are not currently deductible.

 

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

 

    December 31,
2021
    December 31,
2020
 
Current            
Federal   $
    $
 
State    
     
 
Deferred                
Federal     (226,816 )     (27,274 )
State    
     
 
Valuation allowance     226,816       27,274  
Income tax provision   $
    $
 

 

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

 

    December 31,
2021
    December 31,
2020
 
Deferred tax assets:            
Net operating loss carryover   $ 18,196     $ 15,315  
Start-up/Organization costs     208,620       11,959  
Total deferred tax assets     226,816       27,274  
Valuation allowance     (226,816 )     (27,274 )
Deferred tax asset, net of allowance   $
    $
 

 

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 net 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 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.

 

A reconciliation of the statutory federal income tax rate (benefit) to the Company’s effective tax rate for the year ended December 31, 2021 and 2020 is as follows:

 

Statutory Federal income tax rate     21.0 %     21.0 %
Financing costs    
      (2.9 )%
Change in fair value of warrant liabilities     46.3 %     (17.4 )%
Change in valuation Allowance     (67.3 )%     (0.7 )%
Effective Tax Rate     0.0 %     0.0 %

 

There were no unrecognized tax benefits as of December 31, 2021 and 2020. No amounts were accrued for the payment of interest and penalties as of December 31, 2021 and 2020. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.