Company: TBMC
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001213900-25-043357
Chunk: 80

Company: Trailblazer Merger Corp I
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 8
Chunk 80
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 and for the expected future tax benefit
to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when
it is more likely than not that all or a portion of deferred tax assets will not be realized. As of March 31, 2025 and December 31, 2024,
the Company reported a net deferred tax liability of $0, and the deferred tax asset of $349,844 and $291,092, respectively, was fully
offset by a valuation allowance. The Company’s effective tax rate was (16.86)% and 33.66% for the three months ended March 31, 2025
and 2024, respectively. The effective tax rate differs from the statutory tax rate of 21% for the three months ended March 31, 2025 and
2024, due to interest and penalties related to income taxes, merger and acquisition related costs, and the valuation allowance on the
deferred tax assets related to organization expenses.

ASC
740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes
a recognition threshold and measurement process for financial statement recognition and measurement of a tax position 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. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim
period, disclosure and transition.

The
Company recognizes accrued interest and penalties related to unrecognized tax benefits and underpayment of income tax as income tax expense.
As of March 31, 2025 and December 31, 2024, the Company incurred $16,779 and $75,181, respectively, for interest and penalties related
to underpayment of income taxes. There were no unrecognized tax benefits as of March 31, 2025 and December 31, 2024. 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 has identified the United States as its only “major” tax jurisdiction. The Company is subject to income taxation
by major taxing authorities since inception. These examinations may include questioning the timing and amount of deductions, the nexus
of income among various tax jurisdictions and compliance with federal and state tax laws. The Company’s management does not expect
that the