Company: SZZL
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001213900-25-044190
Chunk: 11

Company: Sizzle Acquisition Corp. II
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 11
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ASB ASC 470-20, “Debt with Conversion and Other Options,” addresses
the allocation of proceeds from the issuance of convertible debt into its equity and debt components. The Company applies this guidance
to allocate Initial Public Offering proceeds from the Units between Class A Ordinary Shares and Rights, using the residual method by allocating
Initial Public Offering proceeds first to the assigned value of the Rights and then to the Class A Ordinary Shares. Subsequently, in conjunction
with the Initial Public Offering, costs allocated to the Public Shares were charged to temporary equity, and offering costs allocated
to Public Rights and Private Placement Units were charged to shareholder’s deficit, as the Rights, after Management’s evaluation,
were accounted for under equity treatment.

Fair Value of Financial Instruments

The fair value of the Company’s assets and
liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement,” approximates the carrying
amounts represented in the accompanying condensed balance sheets, primarily due to their short-term nature.

Income Taxes

The Company accounts for income taxes under ASC
Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income
taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets
and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods
in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred
tax assets to the amount expected to be realized.

ASC Topic 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. The Company’s Management determined that the Cayman Islands is the Company’s major tax jurisdiction. The Company
recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of March 31, 2025 and December
31, 2024, there were no unrecognized tax benefits and no amounts accrued for interest and penalties. 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 considered to be an exempted Cayman
Islands company with no connection to any other taxable jurisdiction and is presently not subject to income