Company: JACS-RI
Filing Date: 2025-01-15
Form Type: 10-Q
Source: 0001213900-25-003881
Chunk: 42

Company: Jackson Acquisition Co II
Filing Date: 2025-01-15
Form: 10-Q
Item: Part I, Item 8
Chunk 42
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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 assigned value
of the rights and then to the Class A ordinary shares. On the date of the Initial Public Offering, on December 11, 2024, offering
costs allocated to the Class A ordinary shares were charged to temporary equity and offering costs allocated to the Public Share
Rights and Private Placement Rights were charged to shareholders’ equity as Public Share Rights and Private Placement Rights after
management’s evaluation were accounted for under equity treatment.

Income Taxes

The Company accounts for income taxes under ASC 740,
“Income Taxes” (“ASC 740”). ASC 740 requires the recognition of deferred tax assets and liabilities
for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected
future tax benefit to be derived from tax loss and tax credit carryforwards. 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.

ASC 740 also clarifies the accounting for
uncertainty in income taxes recognized in an enterprise’s financial statement 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. 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 September 30, 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 been subject to income tax
examinations by major taxing authorities since inception.

The Company is considered an exempted Cayman Islands
company and is presently not subject to income taxes or income tax filing requirements in the Cayman Islands or the United States.
As such, the Company’s tax provision was zero for the period presented.

Concentration of Credit Risk

Financial instruments that potentially subject
the Company to concentrations of credit