Company: TBMC
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001213900-25-075720
Chunk: 20

Company: Trailblazer Merger Corp I
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 1
Chunk 20
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 portion of deferred tax assets will not be realized. As of June 30, 2025 and
December 31, 2024, the Company reported a net deferred tax liability of $0, and the deferred tax asset of $352,764 and $291,092, respectively,
was fully offset by a valuation allowance. The Company’s effective tax rate was (49.14)% and (26.37)% for the three and six months
ended June 30, 2025, respectively, and 47.49% and 39.53% for the three and six months ended June 30, 2024, respectively. The effective
tax rate differs from the statutory tax rate of 21% for the three and six months ended June 30, 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 June 30, 2025 and December 31, 2024,
the Company incurred $46,687 and $75,181, respectively, for interest and penalties related to underpayment of income taxes. There were
no unrecognized tax benefits as of June 30, 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 total amount of unrecognized tax benefits
will materially change over the next