Annual report pursuant to Section 13 and 15(d)

Income Taxes

v3.21.2
Income Taxes
 12 Months Ended
Dec. 31, 2020
Income Tax Disclosure [Abstract]  
Income Taxes

Note 9. Income Taxes

 

The Company’s financial statements include total net income (loss) before taxes of approximately $(36.5) million and $1.5 million for the years ended December 31, 2020 and 2019, respectively. The income tax provision consists of the following:

 

       
    December 31
    2020   2019
Federal                
Current   $ 248,554     $ 547,749  
Deferred     (648,423 )     (40,546 )
State and Local                
Current     —       —  
Deferred     —       —  
Change in Valuation allowance     520,318       168,651  
Income tax provision (benefit)   $ 120,449     $ 675,854  

 

 

Reconciliations of the differences between the provision/(benefit) for income taxes and income taxes at the statutory U.S. federal income tax rate is as follows (as restated):

 

                               
    2020   2019
    Amount   Percent of Pretax Income   Amount   Percent of Pretax Income
Current tax at U.S. statutory rate   $ (7,668,233 )     21 %   $ 318,421       21 %
Nondeductible/nontaxable items     7,254,149       (19.87 )%     198,030       13.06 %
State taxes, net of federal benefit     —       — %     —       — %
State effect of perm items     —       — %     —       — %
Valuation allowance activity     520,318       (1.42 )%     168,651       11.12 %
Deferred rate change     —       — %     —       — %
Federal payable true-up     16,652       (0.05 )%     (9,248 )     (0.61 )%
Other     (2,436 )     0.01 %     1       — %
Total Income Tax Provision/(Benefit)   $ 120,449       (0.33 )%   $ 675,854       44.57 %

 

The components of deferred tax assets and liabilities as of December 31, 2020 and 2019 are as follows: 

 

       
    December 31
    2020   2019
Deferred tax assets:                
Unrealized gain/loss   $ —     $ —  
Start-up cost     833,978       313,660  
Total deferred tax assets     833,978       313,660  
Valuation allowance     (833,978 )     (313,660 )
                 
Deferred tax liabilities                
Unrealized gain/loss     —       (128,105 )
Net Deferred tax assets/(liabilities), net of allowance   $ —     $ (128,105 )

 

As of December 31, 2020 and 2019, the Company has concluded that it is more likely than not that the Company will not realize the benefit of its deferred tax assets associated with start-up costs. Start-up costs cannot be amortized against future operating income until a business combination has occurred. Therefore, a full valuation allowance has been established prior to the company completing a business combination, as future events such as business combinations cannot be considered when assessing the realizability of Deferred Tax Assets. In addition, a reliable forecast of trust investment income and start-up costs expected to be incurred in the period/s prior to a business combination or a dissolution and liquidation is not practicable. Accordingly, the net deferred tax assets have been fully reserved.