Company: APXIF
Filing Date: 2025-06-11
Form Type: 10-Q
Source: 0001213900-25-053185
Chunk: 98

Company: APx Acquisition Corp. I
Filing Date: 2025-06-11
Form: 10-Q
Item: Part I, Item 8
Chunk 98
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 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 recognizes accrued interest and penalties related to unrecognized tax benefits, if
any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31,
2025. 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 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.

Warrant Liability

The Company accounts
for warrants based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting
Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, “Distinguishing Liabilities from
Equity” (“ASC 480”), and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers
whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480,
and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed
to the Company’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the use
of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants
are outstanding.

For issued or modified
warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional
paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification,
the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter.
Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair
value of the warrants was estimated using a Monte Carlo simulation model-based approach (see Note 11).

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Derivative Financial Instruments

The Company evaluates
its financial instruments to determine