Company: FGMCU
Filing Date: 2025-09-18
Form Type: S-4
Source: 0001104659-25-091249
Chunk: 540

Company: FG Merger II Corp.
Filing Date: 2025-09-18
Form: S-4
Chunk 540
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 tax asset will not be realized. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain. A full review of all positive and negative evidence needs to be considered. The Company has established a full valuation allowance against the net deferred tax assets as of December 31, 2024 due to historical losses and uncertainty surrounding the use of such assets. The valuation allowance increased by $11.1 million between December 31, 2023 and December 31, 2024 primarily due to the generation of net operating losses. Net Operating Loss and Tax Credit Carryforwards As of December 31, 2024, the Company has net operating loss carryforwards for federal income tax purposes of approximately $100.1 million. The federal net operating losses were all generated after 2017 and are not subject to expiration. The Company does not have any state net operating loss carryforwards. The Company has research credit carryforwards for federal income tax purposes of approximately $531.4 thousand as of December 31, 2024. The federal credits begin to expire in 2041. The Company does not have any state credit carryforwards. Utilization of some of the federal net operating loss and credit carryforwards may be subject to annual limitations due to the “change in ownership” provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitations may result in the expiration of net operating losses and credits before utilization. The Company has not performed a Section 382 study as of December 31, 2024. Unrecognized Tax Benefits The Company recognizes a tax benefit from uncertain tax positions when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. Due to

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the existence of the full valuation allowance, future changes in unrecognized tax benefits will not impact the Company’s effective tax rate. The Company does not foresee material changes to its liability for uncertain tax benefits within the next 12 months.

The Company files tax returns in the U.S. The Company is not currently under examination in any jurisdictions and all its tax years remain effectively open to examination due to net operating loss carryforwards.

During the years ended December 31, 2024 and 2023, no interest or penalties were required to be recognized relating for unrecognized tax benefits. In the event the Company should need to recognize interest and penalties related to unrecognized income tax liabilities, this amount