Company: TBMC
Filing Date: 2025-11-21
Form Type: 10-Q
Source: 0001213900-25-113605
Chunk: 112

Company: Trailblazer Merger Corp I
Filing Date: 2025-11-21
Form: 10-Q
Item: Part I, Item 8
Chunk 112
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-50—the transaction qualifies as an
extinguishment. Accordingly, the original debt (Promissory Note – Related Party) was derecognized and the new debt was recognized
at fair value, with the resulting loss on debt extinguishment recorded in earnings. The Company established the initial fair value the
new debt as of July 29, 2025, using a calculation prepared by a third party valuation team which takes into consideration market assumptions
which are disclosed in Note 8. The Company had recorded a loss on extinguishment of promissory note amounting to $6,222,973 which was
presented in the condensed consolidated statements of operations.

As of September 16, 2025, the cash payment option
of the promissory note has expired and the settlement of the promissory note is through issuance of new class of preferred stock. As of
September 30, 2025, the Company entered into an amendment to the Second Amended and Restated Promissory Note with the Sponsor, pursuant
to which the amount of the Note was further increased by $300,000 to $4,330,000. The Company assessed that the amended agreement is a
freestanding ASC 480 liability (variable-share settlement for a predominantly fixed monetary amount), measured at fair value initially
and subsequently, with changes in earnings. The Company recognized a gain on change in fair value of promissory note of $2,856,375 during
the three and nine months ended September 30, 2025.

As of September 30, 2025, the second amended and
restated promissory note has a fair value of $7,393,329.

14

Related Party Loans

In order to finance transaction costs in connection
with a Business Combination, the Sponsor or an affiliate of the Sponsor or certain of the Company’s directors and officers may,
but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a
Business Combination, the Company would repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company.
Otherwise, the Working Capital Loans would be repaid only out of funds held outside the Trust Account. In the event that a Business Combination
does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds
held in the Trust Account would be used to repay the Working Capital Loans. Except for the foregoing