INCOME TAXES (Restated)

12 Months Ended

Dec. 31, 2022

NOTE 12. INCOME TAXES (Restated)

The Company’s net deferred tax assets (liabilities) as of December 31, 2022 and December 31, 2021 are as follows:

	December 31, 2022			December 31, 2021
Deferred tax assets:
Start-up costs	$	1,097,004		$	791,079
Accrued interest		100,569
Transaction costs		—			—
Net operating loss carryforwards		704,303			39,259
Total deferred tax assets		1,901,876			830,338
Valuation allowance		(1,862,617	)		(830,338	)
Deferred tax assets, net of allowance	$	39,259		$	—

The income tax provision for the year ended December 31, 2022 and December 31, 2021 consist of the following:

SCHEDULE OF INCOME TAX PROVISION

	December 31, 2022			December 31, 2021
Federal
Current	$	100,569		$	—
Deferred		(1,071,538	)		(824,916	)

State
Current	$	—		$	—
Deferred		—			—
Change in valuation allowance		1,032,279			824,916
Income tax provision	$	61,310		$	—

As of December 31, 2022 and 2021, the Company has available U.S. federal operating loss carry forwards of approximately $3,354,000 and $187,000, respectively that may be carried forward indefinitely.

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 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 the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a partial valuation allowance. For the year ended December 31, 2022 and December 31, 2021, the valuation allowance was $1,862,617 and 830,338, respectively.

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

	December 31, 2022 (As Restated)			December 31, 2021
Statutory federal income tax rate		21.0	%		21.0	%
State taxes, net of federal tax benefit		0.0	%		0.0	%
Change in fair value of derivative warrant liabilities		326.9	%		(55.5	)%
Non-deductible transaction costs		(30.3	)%		0	%
Stock compensation expense		0.0	%		1.3	%
Other permanent items, net		(0.1	)%		0	%
Warrant issuance costs		(139.0	)%		0.0	%
Change in valuation allowance		(189.8	)%		33.2	%
Income tax provision		(11.3	)%		0.0	%

ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were unrecognized tax benefits as of December 31, 2022 and December 31, 2021 of $765,613 and $0, respectively. The Company’s unrecognized tax benefits as of December 31, 2022 related to uncertain tax positions would impact the effective income tax rate if recognized. The Company’s management determined that the United States is the Company’s only major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. No amounts were accrued for the payment of interest and penalties for the year ended December 31, 2022 and December 31, 2021. 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.

Below is a tabular reconciliation of the total amount of unrecognized tax benefits as of the years:

SCHEDULE OF UNRECOGNIZED TAX BENEFITS

	2022		2021
	Year Ended December 31,
	2022		2021
Uncertain tax benefits - January 1	$	—	$	—
Gross increases - Tax positions in prior period		765,613		—
Uncertain tax benefits - December 31	$	765,613	$	—

The Company files income tax returns in the U.S. federal jurisdiction and Georgia. Tax returns since inception remain open and subject to examination.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
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-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482526/740-270-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

Viveon Health Acquisition Corp. 10-K/A