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Income Taxes
 3 Months Ended 12 Months Ended
Mar. 31, 2025
Dec. 31, 2024
Income Taxes [Abstract]    
INCOME TAXES

14. INCOME TAXES

During the three months ended March 31, 2025, the Company had losses before income taxes of $48.9 million and a nominal amount of income tax expense. During the three months ended March 31, 2024, the Company had losses before income taxes of $0.9 million and a nominal amount of income tax expense. For the three months ended March 31, 2025, the Company recognized income tax expense instead of an income tax benefit at the expected federal tax rate of 21% due to certain losses that are not deductible for tax purposes and an increase in the valuation allowance, partially offset by the effect of state income taxes. For the three months ended March 31, 2024, the Company recognized income tax expense instead of an income tax benefit at the expected federal tax rate of 21% due to certain losses that are not deductible for tax purposes and an increase in the valuation allowance, partially offset by the effect of state income taxes.

As of March 31, 2025, the Company has federal and state net operating loss (NOL) carryforwards available to offset future taxable income. Section 382 imposes an annual limitation on the amount of taxable income that can be offset by NOLs following a greater than 50% ownership change by 5% shareholders over a rolling three-year period. As of March 31, 2025, the Company has not completed a study to assess Section 382. Until this analysis is complete, no assurance can be given that the Company will be able to fully utilize its NOL carryforwards. If a limitation is determined to apply, it could materially impact the Company’s ability to offset future taxable income and reduce future cash tax obligations. The Company will update this disclosure in future filings as more information becomes available.

NOTE 8. INCOME TAXES

The Company’s net deferred tax assets are as follows:

 

December 31,
   

2024

  

2023

Deferred tax asset

  

 

  

 

  

 

  

 

Organizational costs/Start-up costs

  

$

2,001,367

 

  

$

1,253,839

 

Federal net operating loss

  

 

—

 

  

 

—

 

Total deferred tax asset

  

 

2,001,367

 

  

 

1,253,839

 

Valuation allowance

  

 

(2,001,367

)

  

 

(1,253,839

)

Deferred tax asset, net of allowance

  

$

—

 

  

$

—

 

The income tax provision for the years ended December 31, 2024 and 2023 consists of the following:

 

December 31,
   

2024

  

2023

Federal

  

 

  

 

  

 

  

 

Current

  

$

628,508

 

  

$

2,325,087

 

Deferred

  

 

(747,528

)

  

 

(903,665

)

State

  

 

  

 

  

 

  

 

Current

  

$

—

 

  

$

—

 

Deferred

  

 

—

 

  

 

—

 

Change in valuation allowance

  

 

747,528

 

  

 

903,665

 

Income tax provision

  

$

628,508

 

  

$

2,325,087

 

As of December 31, 2024 and 2023, the Company had a total of $0 of U.S. federal net operating loss carryovers available to offset future taxable income. The federal net operating loss can be carried forward indefinitely. As of December 31, 2024 and 2023, the Company did not have any state net operating loss carryovers available to offset future taxable income.

In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the year ended December 31, 2024, the change in the valuation allowance was $747,528. For the year ended December 31, 2023, the change in the valuation allowance was $903,665.

A reconciliation of the federal income tax rate to the Company’s effective tax rate at December 31, 2024 and 2023 is as follows:

 

December 31,
   

2024

  

2023

Statutory federal income tax rate

  

21.00

%

  

21.00

%

M&A expenses

  

(11.4

)%

  

—

 

Change in valuation allowance

  

(60.28

)%

  

13.35

%

Income tax provision

  

(50.68

)%

  

34.35

%

The Company files income tax returns in the U.S. federal jurisdiction, in various state and local jurisdictions and is subject to examination by the various taxing authorities, since inception.

ASC Topic 280, “Segment Reporting,” establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker, or group, in deciding how to allocate resources and assess performance.

The Company’s chief operating decision maker has been identified as the Chief Financial Officer (“CODM”), who reviews the operating results for the Company as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined that the Company only has one reportable segment.

The CODM assess performance for the single segment and decides how to allocate resources based on net income or loss that also is reported on the statements of operations as net income or loss. The measure of segment assets is reported on the balance sheet as total assets. When evaluating the Company’s performance and making key decisions regarding resource allocation the CODM reviews several key metrics, which include the following:

 

For the Year
Ended
December 31,
2024

  

For the Year
Ended
December 31,
2023

General and administrative expenses

  

$

2,920,423

  

$

3,730,488

Interest earned on the Trust Account

  

$

2,953,920

  

$

11,207,609

The CODM reviews interest earned on the Trust Account to measure and monitor stockholder value and determine the most effective strategy of investment with the Trust Account funds while maintaining compliance with the trust agreement. General and administrative expenses are reviewed and monitored by the CODM to manage and forecast cash to ensure enough capital is available to complete a business combination within the business combination period. The CODM also reviews general and administrative costs to manage, maintain and enforce all contractual agreements to ensure costs are aligned with all agreements and budget. General and administrative costs, as reported on the statement of operations, are the significant segment expenses provided to the CODM on a regular basis.

All other segment items included in net income or loss are reported on the statement of operations and described within their respective disclosures.