v3.23.3
Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Taxes [Abstract]  
INCOME TAXES

NOTE 9. INCOME TAXES

The Company did not have any significant deferred tax assets or liabilities as of December 31, 2022 and 2021.

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

 

December 31,
2022

  

December 31,
2021

Deferred tax asset

  

 

  

 

  

 

  

 

Net operating loss carryforward

  

$

—

 

  

$

37,304

 

Startup/Organization Expenses

  

 

890,822

 

  

 

608,832

 

Total deferred tax asset

  

 

890,822

 

  

 

646,136

 

Valuation allowance

  

 

(890,822

)

  

 

(646,136

)

Deferred tax asset, net of allowance

  

$

—

 

  

$

—

 

The income tax provision consists of the following:

 

Year ended
December 31,
2022

  

Year ended
December 31,
2021

Federal

  

 

  

 

  

 

  

 

Current

  

$

750,410

 

  

$

—

 

Deferred

  

 

(244,686

)

  

 

(645,774

)
   

 

  

 

  

 

  

 

State

  

 

  

 

  

 

  

 

Current

  

 

—

 

  

 

—

 

Deferred

  

 

—

 

  

 

—

 
   

 

  

 

  

 

  

 

Change in valuation allowance

  

 

244,686

 

  

 

645,774

 

Income tax provision

  

$

750,410

 

  

$

—

 

As of December 31, 2022 and 2021, the Company had $0 and $175,916 of U.S. federal and state net operating loss carryovers available to offset future taxable income, respectively.

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 years ended December 31, 2022 and 2021, the change in the valuation allowance was $244,686 and $645,774, respectively.

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

 

December 31,
2022

  

December 31,
2021

Statutory federal income tax rate

  

21.00

%

  

21.00

%

State taxes, net of federal tax benefit

  

0.00

%

  

0.00

%

Change in fair value of warrant liabilities

  

(17.50

)%

  

(37.60

)%

Transaction costs allocable to warrant liabilities

  

0.00

%

  

3.30

%

Change in valuation allowance

  

1.70

%

  

13.30

%

Income tax provision

  

5.20

%

  

0.00

%

The Company files income tax returns in the U.S. federal jurisdiction in various state and local jurisdictions and is subject to examination by the various taxing authorities.