Company: TBMC
Filing Date: 2025-11-21
Form Type: 10-Q
Source: 0001213900-25-113605
Chunk: 22

Company: Trailblazer Merger Corp I
Filing Date: 2025-11-21
Form: 10-Q
Item: Part I, Item 1
Chunk 22
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 Class A common stock 
     (23,950,427)
  
    Plus: 

    Remeasurement of carrying value to redemption value 
     1,162,753 
  
    Class A Common Stock subject to possible redemption, September 30, 2025 
    $3,846,478 

Income Taxes

The Company accounts for income taxes under ASC 740, “Income
Taxes.” ASC 740, Income Taxes, requires the recognition of deferred tax assets and liabilities for both the expected impact of differences
between the condensed consolidated financial statements and tax basis of assets and liabilities and for the expected future tax benefit
to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when
it is more likely than not that all or a portion of deferred tax assets will not be realized. As of September 30, 2025 and December 31,
2024, the Company reported a net deferred tax liability of $0, and the deferred tax asset of $385,948 and $291,092, respectively, was
fully offset by a valuation allowance. The Company’s effective tax rate was (1.37)% and (4.63)% for the three and nine months ended
September 30, 2025, respectively, and 57.91% and 44.33% for the three and nine months ended September 30, 2024, respectively. The effective
tax rate differs from the statutory tax rate of 21% for the three and nine months ended September 30, 2025 and 2024, due to interest and
penalties related to income taxes, loss on debt extinguishment of promissory note, gain on change in fair value of promissory note, 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