Annual report pursuant to Section 13 and 15(d)

INCOME TAXES

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INCOME TAXES
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
INCOME TAXES

NOTE 10 – INCOME TAXES

 

All of the Company’s operations are domestic and due to losses, no provision for income taxes for federal or state has been recorded for any period presented.

 

Deferred taxes are determined by applying the provisions of enacted tax laws and rates for the jurisdictions in which the Company operates to the estimated future tax effects of the differences between the tax basis of assets and liabilities and their reported amounts in the Company's financial statements. A valuation allowance is established to reduce deferred tax assets if it is more likely than not that the related tax benefits will not be realized. The components of income tax expense (benefit) for the year ended December 31, 2021 and the period from February 21, 2020 (inception) to December 31, 2020 are as follows:

               
    2021     2020  
             
Expected federal income tax benefit at statutory rate   $ 8,426,269     $ 288,600  
State income taxes (net of federal benefit)     –       –  
Nondeductible expenses     (224,189 )     (46,600 )
Research and development credit     537,705       –  
Return to provision true up     (94,707 )     –  
Change in valuation allowance     (8,834,492 )     (242,000 )
Income tax benefit     –       –  

 

Significant components of the Company's deferred tax assets and liabilities at December 31, 2021 and 2020 are as follows:

               
    2021     2020  
Deferred tax assets                
Net operating losses   $ 5,078,075     $ 242,000  
Depreciation and amortization     46,030       –  
Research & development credit     592,276       –  
Lease liability     466,980       –  
Stock-based compensation     2,872,973       –  
Accrued expenses     478,171       –  
Other     336       –  
Total     9,534,840       242,000  
Valuation allowance     (9,076,492 )     (242,000 )
Net deferred tax asset     458,348       –  
Deferred tax liabilities                
Right of use assets     (458,348 )     –  
Total net deferred taxes Deferred tax liabilities   $ –     $ –  

 

 

Management currently believes that since the Company has a history of losses it is more likely than not that the deferred tax regarding the loss carry forwards and other temporary differences will not be realized in the foreseeable future. The Company believes that carryforward limitations will be applied to the historical net operating losses due to the recent change of control transition. The Company's cumulative net operating loss carry forward of approximately $24,181,308 as of December 31, 2021, may be limited in future years depending on future taxable income in any given fiscal year. The net operating losses can be carried forward indefinitely.

  

The Company has recorded no liability for income taxes associated with unrecognized tax benefits at the date of adoption and has not recorded any liability associated with unrecognized tax benefits. Accordingly, the Company has not recorded any interest or penalty in regard to any unrecognized benefit.