Company: TBMC
Filing Date: 2025-11-21
Form Type: 10-Q
Source: 0001213900-25-113605
Chunk: 30

Company: Trailblazer Merger Corp I
Filing Date: 2025-11-21
Form: 10-Q
Item: Part I, Item 1
Chunk 30
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below).

Second Amended and Restated Promissory Note

On July 29, 2025, the Company entered into a second
amended and restated promissory note with the Sponsor, pursuant to which (i) the maturity date of the Note was amended to be the later
of September 15, 2025 or the closing of the Company’s initial business combination and (ii) the outstanding principal balance of
the Note will be converted into preferred stock of the Corporation at the closing of the initial business Combination. Upon completion
of an initial Business Combination, the outstanding principal balance of the promissory note will be converted into preferred stock with
a stated value equal to 200% of the outstanding principal amount.

The Company assessed whether the issuance of the
Second Amended and Restated Promissory Note constituted a debt modification or extinguishment. Because the revised terms are substantially
different from the original note—based on the 10% net present value test under ASC 470-50—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