Company: IPCX
Filing Date: 2025-06-09
Form Type: 10-Q
Source: 0001213900-25-052614
Chunk: 51

Company: Inflection Point Acquisition Corp. III
Filing Date: 2025-06-09
Form: 10-Q
Item: Part I, Item 8
Chunk 51
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 dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary shares and then
share in the earnings of the Company. As a result, diluted net loss per ordinary share is the same as basic net loss per ordinary share
for the period presented.

Income Taxes

The Company accounts for income taxes under ASC 740,
“Income Taxes” (“ASC 740”), which 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. The Company recognizes accrued interest
and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued
for interest and penalties 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 is subject to income tax examinations
by major taxing authorities since inception.

There is currently no taxation imposed on income
by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company.
Consequently, income taxes are not reflected in the Company’s financial statement. The Company’s management does not expect
that the total amount of unrecognized tax benefits will materially change over the next twelve months.

Derivative Financial Instruments

The Company evaluates its financial instruments
to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic
815, “Derivatives and Hedging”. For derivative financial instruments that are accounted for as liabilities, the derivative
instrument is initially recorded at its fair value on the grant date and is then re-valued at each reporting date, with changes in the
fair value reported in the unaudited condensed statement of operations. The classification of derivative instruments, including whether
such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities
are classified in the unaudited condensed balance sheets as current or non-current based on whether or not net cash settlement or conversion
of the instrument could be required within 12 months of the condensed balance sheet date. The underwriter’s over-allotment option
is deemed to be a freestanding financial instrument indexed on the contingently redeemable shares and