Company: TBMC
Filing Date: 2025-11-21
Form Type: 10-Q
Source: 0001213900-25-113605
Chunk: 58

Company: Trailblazer Merger Corp I
Filing Date: 2025-11-21
Form: 10-Q
Item: Part I, Item 1
Chunk 58
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2025 through the issuance of the second amended and restated promissory note agreement (as
described below).

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 the Unaudited Notes to Condensed Consolidated Financial Statements. 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