Annual report pursuant to Section 13 and 15(d)

Income Taxes

v3.24.1
Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes
Note 8 — Income Taxes
The Company’s net deferred tax assets for the year ended December 31, 2023 and 2022, follows:
 
    
December 31,
  
    
2023
     
2022
  
Deferred tax assets
      
Net operating loss carryforward
    $ —       $ —   
Startup costs
      496,505        320,609  
  
 
 
     
 
 
  
Total deferred tax assets
      496,505        320,609  
Valuation allowance
      (496,505 )       (320,609 ) 
  
 
 
     
 
 
  
Deferred tax assets, net of allowance
    $ —       $ —   
  
 
 
     
 
 
  
The income tax provision for the year ended December 31, 2023 and 2022, consists of the following:
 
    
December 31,
  
    
2023
     
2022
  
Federal
      
Current
    $ 936,959      $ 646,912  
Deferred
      (175,895 )       (320,609 ) 
State
      
Current
    $ —       $ —   
Deferred
      —         —   
Change in valuation allowance
      175,895        320,609  
  
 
 
     
 
 
  
Income tax provision
    $ 936,959      $ 646,912  
  
 
 
     
 
 
  
As of December 31, 2023 and 2022, the Company had no U.S. federal net operating loss carryovers available to offset future taxable income. The federal net operating loss can be carried forward indefinitely. As of December 31, 2023 and 2022, the Company did not have any 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 year ended December 31, 2023, the change in the valuation allowance was $175,895. For the year ended December 31, 2022, the change in the valuation allowance was $320,609.
A reconciliation of the federal income tax rate to the Company’s effective tax rate for the year ended December 31, 2023 and 2022, follows:
 
    
December 31,
  
    
2023
    
2022
  
Statutory federal income tax rate
      21.0 %      21.0 % 
Change in fair value of warrants
      (21.9 )%      (18.3 )% 
Business combination expenses
      115.0       0.0 % 
Change in valuation allowance
      26.4 %      2.6 % 
  
 
 
    
 
 
  
Income tax provision
      140.5  %     5.3  % 
  
 
 
    
 
 
  
 
The Company’s effective tax rates for the periods presented differ from the expected (statutory) rates due to changes in fair value in warrants and the recording of full valuation allowances on deferred tax assets.
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.