Company: TBMC
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001213900-25-043357
Chunk: 19

Company: Trailblazer Merger Corp I
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 1
Chunk 19
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, 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 total amount of unrecognized tax benefits will materially change over the next twelve months.

While ASC 740 identifies usage of an effective annual tax rate for
purposes of an interim provision, it does allow for estimating individual elements in the current period if they are significant, unusual
or infrequent. Computing the effective tax rate for the Company is complicated due to the potential impact of the timing of any Business
Combination expenses and the actual interest income that will be recognized during the year. The Company has taken a position as to the
calculation of income tax expense in a current period based on ASC 740-270-25-3 which states, “If an entity is unable